Chapter 11 examined the spatial configuration of trade cooperation through the process of spread. In this chapter, I show that the MFN norm also shapes the organization of the treaty network in time as well as in space: when each pair of countries negotiates over different tariff lines, negotiations will be randomly distributed over time: but when each pair negotiates over the same lines, that is, when bound by (effective) MFN, these negotiations will “cluster” in time. Interestingly, states did not agree to centralize their trade bargaining, yet negotiations nonetheless occurred simultaneously. This centralized bargaining, or “clustering,” provides the central topic of investigation for this chapter.

Clustering may characterize an individual country's trade negotiations, as a country signs a flurry of treaties at once. Examples of such clusters for México, the Ottoman Empire, and Russia are shown in Tables 12.2, 12.4, and 12.5. For reasons developed here, these country-level clusters create incentives for other countries to cluster at the same time, that is, clustering spreads to a country's trading partners. The result is a multicountry cluster, which attracts most of our attention here. The causal processes behind these mega-clusters help explain why trade cooperation often comes in waves.

Clustering among groups of countries can be found as early as 1863–1866, but became a central feature of the network in 1881–1884, 1890–1891, and 1904–1906. From a theory-testing standpoint, clustering makes life difficult by cramming treaties into a few years.

This chapter lays the foundation for the theoretical model used throughout this book, the theory of political support. Work in the political-support tradition has long been a common minority approach in economics, but for some reason has never caught on in political science.

We can consider the choice of model on theoretical, historical, or pragmatic grounds. Some models are theoretically attractive, perhaps because they are parsimonious or because they link up well with approaches to related topics. Marxism, rational-choice, and other similarly broad approaches to political economy share these advantages. At the other end of a spectrum of generalizability, some historical features compel us to a particular kind of model. One would not model the Hundred Years War with Weberian bureaucracies nor the Cold War through feudal patron-client relations in Washington (though this latter option is more tempting). Finally, pragmatic considerations might point in one direction or another.

The choice of the model developed here reflects such theoretical, historical, and pragmatic concerns. It would be shocking if all these considerations clearly favored one particular model. Let me argue more modestly that the theory of political support meets each concern reasonably well.

Explaining trade cooperation among 50 countries over the course of a century clearly requires a theory flexible enough to say something about countries of varying size, trade patterns, and political institutions.

Having examined autonomous trade policies in Part II, I now turn to cooperation, the central focus of this book. Part III examines the conditions that make a country more or less likely to engage in cooperation than other countries or that make it more or less willing to cooperate over time. The focus is on cross-national differences between countries, building on the country-level and intertemporal analyses of Part II.

Studying cooperation requires both a definition and an operationalization of the term. This chapter provides first a definition of cooperation and then discusses the Trade Agreements Database (TAD) that I use to operationalize cooperation. Many of the decisions here reflect the fact that cooperation is a dichotomous concept, not a continuous one, and that I wish to explain both cross-national and intertemporal variation in cooperation. These theoretical issues point toward count variables for each country in the trading system.

I next define several variables derived from TAD that I use throughout the rest of the book. Foremost among these are the number of treaties that a country initiates each year and the number of treaties that each country has in effect at a given moment.

Any network of international cooperation has some history, and we can trace how it has changed over time. One interesting kind of change is the spread of a network. Some international cooperation spreads, whereas other cooperation does not. This chapter extends the theory of Part III to explain such variations in spread among networks of trade treaties. The main principles of the analysis would extend to cooperation in other issue areas as well.

The key independent variable is the most-favored-nation (MFN) clause discussed in Chapter 10. MFN discourages the spread of cooperation by generalizing concessions even to nonsignatories. Generalizing concessions reduces the gains from cooperation and improves the reversion point, making cooperation by new actors, if they receive MFN, less likely. In contrast, trade regimes lacking MFN encourage the spread of cooperation. Excluded countries typically face trade diversion, lowering their reversion point and thereby making cooperation more likely. These discriminatory regimes provide incentives both for third parties to join the regime and for third parties to cooperate with one another to build an alternative network.

Whether or not they use MFN, this analysis also applies to customs unions and similar preferential trading agreements (PTAs). A customs union has a single tariff against outsiders and free trade within.

Economic relations between nations have grown increasingly cooperative in the last 200 years. Countries now depend on one another for staples, intermediate products, and consumer goods to an extent unimaginable 250 years ago. This cooperation rests on an extensive network of international organizations, less formal regimes, and treaties among states. Such institutions as the World Trade Organization (WTO), European Union (EU), North American Free Trade Area (NAFTA), and Southern Cone Common; Market (MERCOSUR) play a central role in managing these international trade relations. As a result, we live in a highly institutionalized global economy.

Though its highly institutionalized form today dates only to the 1940s, extensive economic cooperation has been an important feature of international life since the middle of the nineteenth century. Scattered trade treaties appeared even earlier, including the Methuen Treaty between England and Portugal (1703), the Vergennes Treaty between England and France (1789), and the Ottoman capitulations (see Chapter 12).

Trade policymaking touches on many different aspects of politics. Chapter 3's theory of political support emphasized the distributional side of policy – protection benefits some and harms others. Politicians balance these interests when setting the tariff.

Chapter 4 examined an administrative side of politics, the problem of revenue collection. I argued that exogenous revenue constraints had modest effects on tariff-making in the population of countries. More important were endogenous, politically chosen revenue needs that logically preceded the political choice to rely on tariffs instead of other revenue sources. So defined, these revenue needs may be seen in many countries, and even more often in the rhetoric of politicians. They reflect distributional concerns connected to the theory of political support.

This chapter turns to a third aspect of domestic politics, the question of political institutions. Politicians seek political support in a wide range of institutional contexts. Although this book focuses primarily on politicians' willingness to supply protection, some changes to the demand side will affect these calculations. Changes in electoral institutions, for example, will affect the relative strength of the various groups in a country.

This is, unfortunately, a long book, and it has taken too long to write. It began as a claim in a footnote in a previous book that such a thing could be done, at least in principle. For good or ill, it turns out that this thing can also be done in practice.

Besides being too long, this book tramples rather too freely in disciplines and subfields where I am not expert, doubtless making errors along the way that will offend the local specialists. My only defense is the trite hope that the whole is greater than the sum of its parts.

This wandering over time and space requires some comments on spelling, orthography, and translation. These present tricky problems for which many solutions are possible (see Kann 1974: xiii). For the modern nation-states I use the common English name. For other places, I normally use native names and spelling unless an English or international substitute enjoys wide currency (i.e., Vienna not Wien). This principle also guided my use of Zollverein (Customs Union) for the major German economic union because that name is familiar to the political economy community. In contrast, I used the translation “Tax Union” for the less familiar Steuerverein in North Germany. Where differences are minor, I see no reason not to use the native spelling (Hannover not Hanover, México not Mexico, Perú not Peru, Württemberg not Wurttemberg or Wuerttemberg).

Introduction

By far the largest component of social policy in Britain measured in terms of government expenditure is the social security system. Despite many changes, this system was for over half a century recognisably the same as that proposed by Beveridge (1942). Over the past decade, however, that system has been radically restructured. Goals have been changed: the guiding mantra has become ‘work for those who can, security for those who cannot’ (DSS, 1998). The period since 1997 is also one in which tackling poverty has been given prominence. In 1999, the Prime Minister set out the goal of abolishing child poverty in a generation (Blair, 1999) and the reduction of pensioner poverty has also been a goal. ‘Redistribution’ has not, however, been a prominent New Labour term. No use of the word will be found in the Labour Party's General Election manifestos of 1997, 2001 or 2005. Yet a whole lot of redistribution has been going on, often in innovative ways.

The purpose of this chapter is to review and assess the changes that have occurred. The emphasis here is on both the structure of redistribution and its extent. The purpose is not to examine overall changes in inequality and poverty but rather to examine how the impact of government through benefits and taxes on the distribution of net money incomes has changed since 1997. The question of how these changes have affected behaviour will be touched on but is not the central focus.

What effect have the changes had on the extent of redistribution? That is the question that this chapter aims to answer.

Major changes in the structure and administration of redistribution, 1997-2006

The British social security system has shown a remarkable resilience, even though the department responsible for it has changed its name four times since 1948, most recently in 2001 to the Department for Work and Pensions. Although it had up to 1997 evolved in important ways, large parts still continued essentially unchanged. Since 1997 there have been the most fundamental administrative changes. These are summarised in Figure 10.1.

Most strikingly, large components of social security have been shifted into the tax system either taking the form of ‘tax credits’ or being administered by HM Revenue and Customs. The Conservative Chancellor of the Exchequer Nigel Lawson (1992) set out his view that the functions of taxing and spending should be kept entirely separate.

In writing about the history of social policy, ‘Poor Law’ principles have often been unfavourably compared to ‘welfare state’ principles, as strategies and social philosophies for distributing services and resources to persons in need. Poor Law provision has often been associated with policies of concentrating welfare provision on the ‘very poor’, with the exercise of discretion, means testing and character discrimination in determining who should receive public assistance within any given community, and with the denial of civic privileges and social respect. Welfare state provision, by contrast, has been seen as universal in coverage, deliberately detached from assessments of moral character, and potentially available to all members of a community – regardless of wealth, class, economic or social position – as a matter of civic status and citizen right. Although most sharply emphasised in the historiography of social policy in Britain, a similar narrative of historical evolution from archaic Poor Laws to progressive welfare states pervades many accounts of social welfare provision in other parts of Europe, the British Commonwealth, Japan and the US (Trattner, 1974; Mommsen, 1981; Baldwin, 1990; Gould, 1993).

Whether the principles underlying these two models have been accurately identified, however, and whether the historical progression from the one to the other has typically been one-way, seems increasingly open to question. The publication of a volume of essays in honour of Howard Glennerster, whose work has very often addressed both the positive and negative relationships between earlier forms of welfare provision and the imperatives of current policy, seems an apposite moment for reviewing this dichotomy. In this essay, it will be argued that familiar portrayals of the key characteristics of the two systems are in certain respects caricatures; that in real historical settings the two have often coexisted (and continue to coexist) in tandem; and that each of them may be seen as complementary to certain wider economic strategies. In particular, I shall suggest that some at least of the principles often seen as fundamental to ‘progressive’ social policy had their primal origins in the archaic roots of the Poor Laws, although often attributed to the rise of ‘modern’ welfare states.

The celebration of Howard Glennerster's 70th birthday in October 2006 coincided with the anniversary of a seminal moment in the history of welfare provision in Britain, and indeed of ‘welfare state’ thinking more generally, that had occurred almost exactly a hundred years before.