Votes and Vetoes: The Political Determinants of Commercial Openness

40 Pages Posted: 22 Jun 2004

See all articles by Witold J. Henisz

Witold J. Henisz

University of Pennsylvania - Management Department

Edward Mansfield

University of Pennsylvania - Department of Political Science

Date Written: April 25, 2004

Abstract

Societal theories of trade policy stress the importance of domestic interest groups, whereas statist theories focus on the effects of domestic institutions. Debates over the relative merits of these approaches have been fierce, but little systematic empirical research has been brought to bear on the relative merits of these theories. In this paper, we argue that, while societal and statist factors are generally regarded as having independent and competing effects, it is more fruitful to view the influence of each type of factor as conditional on the other. As societal explanations contend, deteriorating macroeconomic conditions are a potent source of protectionist pressures. The extent to which such conditions reduce commercial openness, however, depends centrally on the domestic institutions through which societal pressures must filter to influence policy.

Two institutional features stand out. First, in states marked by greater fragmentation and more "veto points," it is harder to change existing policies because any number of actors can block such change. Consequently, we expect the effects of macroeconomic conditions on trade policy to be weaker in fragmented states than in those characterized by a highly centralized national government. Second, we expect both fragmentation and the societal pressures stemming from the economy to have a more potent impact on trade policy in democracies than in other regimes, since the electoral constraints facing democratic leaders force them to respond to demands made by key segments of society. The results of our statistical tests covering more than one hundred countries during the period from 1980 to 2000 strongly support these arguments.

Keywords: Protectionism, openness, veto players, veto points, positive political theory, unemployment, trade

JEL Classification: F13, P16, P26

Suggested Citation

Henisz, Witold Jerzy and Mansfield, Edward, Votes and Vetoes: The Political Determinants of Commercial Openness (April 25, 2004). Available at SSRN: https://ssrn.com/abstract=557144 or http://dx.doi.org/10.2139/ssrn.557144

Witold Jerzy Henisz (Contact Author)

University of Pennsylvania - Management Department ( email )

The Wharton School
Philadelphia, PA 19104-6370
United States
215-898-0788 (Phone)
215-898-0401 (Fax)

HOME PAGE: http://www-management.wharton.upenn.edu/henisz/

Edward Mansfield

University of Pennsylvania - Department of Political Science ( email )

Stiteler Hall
Philadelphia, PA 19104
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
174
Abstract Views
1,873
Rank
323,372
PlumX Metrics