The U.S. is no longer providing leadership in trade policy. In recent years, we have seen a sharp turn toward a rapid proliferation of bilateral preferential trade agreements, accords that are likely to undermine the World Trade Organization (WTO). By pursuing a strategy of ‘competitive liberalization’ both on a sectoral basis under the Bill Clinton administration, and then a policy of seeking bilateral arrangements under the George W. Bush administration, this article argues that American administrations have undermined the coalition for free trade in the United States. Consequently, protectionist industries including textiles, steel, and agriculture have made further liberalization more difficult and thus the prospects for promoting continued trade liberalization have grown dimmer.

For many, transnational capital is one of the most important driving forces of economic globalization; yet, we know little about what determines cross-border portfolio investments. In addition to recent economic literature's focus on information asymmetries as one key determinant of cross-border investment, this study brings in a political aspect to the field of international trade in assets. The –race to the bottom’ thesis connects domestic economic policies to investment decisions and argues that capital is more likely to move towards economies characterized by economic liberalism; political institutions are also relevant for portfolio investments, because democratic institutions often provide more credible protection against predatory practices. In this study, I model bilateral portfolio investments as a function of economic policies, political institutions, and levels of transparency of sending and receiving countries as well as important international connections. Empirical findings indicate the importance of transparency to attract portfolio investments. Moreover, transnational portfolio investments are only sensitive to some fiscal policy indictors and only within the OECD countries. Therefore, for non-OECD countries, there is still ‘room to move’ in maneuvering different aspects of fiscal policies. Finally, I find that investors care about the nature of political institutions as democratic institutions tend to be associated with higher levels of portfolio investment inflows. This is good news for developing countries that have undergone or are in the process of democratization. In addition to democratizing for peace, increased foreign capital further incentivizes a progression towards democratization.

Most of the existing studies of the welfare state have dealt with OECD countries. Moreover, these studies have focused on government partisanship (left versus right), or institutional features under democracy, as primary causal variables. By providing four primary causal mechanisms (the power of popularly based parties, labor strength, democracy, and political instability) that are different from those of OECD countries, I answer the question of whether and why the efficiency or compensation hypothesis holds for developing countries. I show that either the efficiency or compensation thesis can hold for developing countries depending on the type of globalization with which popularly based governments interact.

This paper broadens the scope and depth of business alliance research by way of interdisciplinary enrichment. The paper draws on the political science literature on nation-state alliances to generate insights into the establishment, operations and performance of inter-firm alliances. Shared theory bases of game theory and transaction cost economics, as well as theories, variables and research findings indigenous to political science are posited as a platform from which propositions regarding inter-firm alliances are derived.

Is it possible to generate more efficient outcomes with respect to public procurement in general and defense acquisition in particular? Or are cost overruns inevitable when it comes to major engineering projects, like the development of modern weaponry? In this article, we draw on a unique data set of nearly 50 French armaments contracts in order to examine how one government has reformed its defense acquisition process over the past twenty years. Beginning in the early 1990s, France embarked on a series of policy reforms that enabled the state to contain skyrocketing weapons costs. We emphasize three, inter-related aspects of the defense acquisition environment in France that favored cost containment: first, hard budget constraints; second, the great technical capacity that the French government brought to bear on the weapons acquisition process, coupled with its iterative relationship with a small number of suppliers; and third, the use of contracting techniques that empowered project managers.

In this study we advance the current research on corporate political strategy by examining how firms decide on their level of engagement in political action. This study proposes a contingency approach that identifies conditions in which firms prefer individual action to collective action in their pursuit of political strategy and introduces a framework that addresses this preference. Our results show that even in concentrated industries, a firm's preference of individual action over collective action varies when government contracts or research and development intensity are important considerations.

Although the global economy has flourished in the current global economic governance regime, the foundations of this order are starting to crumble. Both in trade and in finance, the existing institutions are under severe stress. In trade, more and more countries undermine the WTO by implementing preferential trade agreements. In finance, the IMF has been weak for most of this decade, although it experienced a revival in the current crisis. First and foremost, this weakness of the institutions of global economic governance is the result of policies implemented by the transatlantic powers. Both the European Union and the United States are actively pursuing policies that weaken the existing institutions. In trade, there is a large gap between the official rhetoric, which highlights the importance of the multilateral regime, and the trade policy practice, which is weakening the WTO. In finance, the transatlantic powers have until very recently blocked any progress in the IMF with regard to lending policies. In addition, the EU continues to defend its unjustified overrepresentation in the IMF's governance structures. The article suggests that one of the key explanations for this development is the weak support for globalization in most OECD-countries. Confronted with no enthusiasm for globalization in their domestic constituencies, policy makers in Europe and the United States are increasingly opting for policies that will, over time, erode the existing regimes of global economic governance.

Why do many States in transitional economies lack the regulative capacities to evenly distribute property rights among emerging private firms resulting in having public good devoured by particularistic interests? I argue that uneven distribution of property rights is deeply embedded within broader power relations permeating political regimes. This study attempts to develop the concept of politically-embedded cronyism where State incumbents generate and protract uneven distribution of property rights in favor of a few private actors as tactics of regime survival that go beyond the mere interest of self-enrichment as the capture thesis would argue. Politically-embedded cronyism is likely to emerge the more State incumbents retain their relative autonomy from their cronies through higher concentration of power in the executive, less role of societal groups in general and business in particular in the reproduction of the power of top incumbents and higher public asset retention in the post-liberalization period in addition to possessing channels of political incorporation to fledging business.

Until the 1990's, Switzerland could be classified as either a corporatist, cooperative or coordinated market economy where non-market mechanisms of coordination among economic and political actors were very important. In this respect, Business Interest Associations (BIAs) played a key role. The aim of this paper is to look at the historical evolution of the five main peak Swiss BIAs through network analysis for five assorted dates during the 20th century (1910, 1937, 1957, 1980 and 2000) while relying on a database that includes more than 12,000 people. First, we examine the logic of membership in these associations, which allows us to analyze their position and function within the network of the Swiss economic elite. Until the 1980's, BIAs took part in the emergence and consolidation of a closely meshed national network, which declined during the two last decades of the 20th century. Second, we investigate the logic of influence of these associations by looking at the links they maintained with the political and administrative worlds through their links to the political parties and Parliament, and to the administration via the extra-parliamentary commissions (corporatist bodies). In both cases, the recent dynamic of globalization called into question the traditional role of BIAs.

Seeking to build on related successes in other information technology sectors, the government of India has signaled its intent to transform the country's performance in microelectronics. Facing a young and expanding population, India needs to create manufacturing jobs in promising industries, and it needs to build out from its limited high-technology base. Semiconductors are foundational in this regard. Today, there is much discussion within India about the link between semiconductors and innovation in bio-electronics, alternative energy production and storage, and various micro- and nano-devices. The government's contemporary attempt to promote the building of infrastructure for manufacturing and applied research in semiconductors highlights reasons for hope. So too does the remarkable talent now available in the Indian diaspora. But significant impediments, especially in postsecondary and graduate-level education, must still be overcome if the necessary human capital is to be developed, equipped, and deployed effectively.

Reform of the multilateral trade regime is not simply a second order problem within a wider economic crisis. The completion of the Doha Round may be a second order question but the global trade regime faces a series of broader systemic challenges beyond the completion of the current negotiations. This paper identifies five challenges: (i) a marked reduction in popular support for open markets in major OECD countries; (ii) the stalling of a transition from one global economic equilibrium to another; (iii) a lack of clarity and agreement on the agenda and objectives for the WTO as we move deeper into the 21st century; (iv) the demand for fairness and justice in the governance of the WTO'the ‘legitimacy’ question and (v) the rise of regional preferentialism as a challenge to multilateralism. Failure to address these challenges will represent not only a fundamental question for the future of the WTO as the guarantor of the norms and rules of the global trade regime specifically, but also the ability to establish greater coherence in global economic governance overall when its need is arguably greater than at any time since the depression years of the 20th century inter-war period.

American political campaigns have become a multi-billion dollar industry. Rather than assume that only political factors affect the campaigns that voters see, scholars must assess the importance of the business incentives associated with political consulting. Economic competition does not match political competition; firms compete for clients within the two major parties, against their political allies. I argue that the supply of firms in each party, the revenue models in the industry, the diversification of client types, and the cooperative structure in each party all may affect political campaigns. The way the industry operates and the different patterns of behavior within each party create incentives and practices that may alter campaigns in response to economic factors having little to do with optimal political strategy. Using two original surveys and a network analysis, I analyze how the industry is changing and how consultants in each party cooperate and compete.

This essay explores the relationship between commerce and culture in the context of the recent debate over the social effect of Wal-Mart. In spite of much public debate, little is known about how Wal-Mart affects values. Using data collected from multiple sources, we show there is little evidence that Wal-Mart makes communities more conservative or more progressive.

This paper discusses the pros and cons of a Transatlantic Free Trade Area (TAFTA) in comparison with an informal trade-facilitating marketplace between Europe and the US. It finds considerably more cons, especially since TAFTA would be expected to produce larger, more detrimental discriminatory effects on dynamic non-member economies, mainly in Asia but also in food-exporting regions as well. Efficiency-enhancing effects are argued to be achievable under a marketplace concept which does not separate insiders from outsiders. It is also shown that in foreign direct investment (FDI) and FDI-related service trade, TAFTA seems redundant as in recent years bilateral capital and trade flows have proven to be buoyant without preferential treatment.

With increasing fragmentation of worldwide production chains and the corresponding contracting relations between companies, the “firm as an inspector” has become a frequent phenomenon. Buyer firms deploy supervising activities over their suppliers' products and production processes in order to ensure their compliance with regulatory standards, thereby taking on tasks commonly performed by public authorities. Why would a firm engage in such activities? In this article we will analyze the conditions under which firms play the role of an inspector vis-à-vis their sub-contractor firms to guarantee compliance with quality and environmental regulations. We develop a theoretical argument based on transaction cost economics and institutionalism to offer hypothetical answers to this question and provide an empirical assessment of our hypotheses.

How and to what effect do firms coordinate their actions to deal with the negative external effects of productive activity? Under which conditions do associations engage in self-regulation and how do they tackle the specific regulatory challenges at stake? When developing hypotheses, we first vary attributes of the information environment in which private actors interact; and, secondly, actors' preferences as a function of the problem type at hand. With respect to the environmental conditions, our findings show that a regulatory threat matters when developing associative action, whilst the evidence is less clear as regards NGO campaigns. In terms of the problem type, we find that redistributive issues and prisoner's dilemma situations are much more conflict prone than coordination/win-win type of problems. Industry actors recur to various governance devices such as flexible contract design and compensation mechanisms to solve redistributive problems. Prisoner's dilemma (PD) problems may only partially be addressed by governance devices to the extent that free-riding is controlled and sanctioned within an association. We conclude that private actors engaging in self-regulation will not successfully manage all types of conflicts. They lack powerful sanctioning tools to deal with PD situations, but prove to be able to flexibly handle redistributive problems.

Over the last 60 years, the multilateral management of trade through the GATT and subsequently through the WTO has been led by the United States and Europe. Since the turn of the new millennium, however, developing countries have increasingly used their leverage to insist that talks on agriculture receive priority attention, deny the inclusion of investment and competition policy on the negotiating agenda, and block agreement on negotiating modalities for agriculture and non-agricultural market access (NAMA). Cooperation between the United States and the European Union is still essential, but no longer sufficient, for successful multilateral negotiations. Specifically, the “BRICKs” (Brazil, Russia, India, China, and Korea) are likely to be pivotal in directing the course and contributing to the success or failure of the WTO.

How do multilateral institutions influence the strategic choices and actions of international managers? This paper addresses the question by exploring the impact of the World Trade Organization's (WTO) decision-making process on multinational enterprises (MNEs). We discuss the three phases of the WTO decision-making lifecycle - the formulation of trade rules, the implementation of those rules, and the enforcement of the rules – and propose a strategic adjustment framework for understanding how companies alter their strategies and structures in response to the WTO's rules and operations. We argue that the increased relevance of multilateral rules and enforcement mechanisms – embodied in the WTO - is an important influence on MNE strategies and structures because of the increasing embeddedness of the WTO in national levels of regulation. We illustrate this through examples taken from the pharmaceutical, textiles and sugar industries sectors that have witnessed substantial multilateral regulation.

Drawing upon a comprehensive database of contemporary protectionism, this paper offers an initial assessment of the extent to which our understanding of protectionism may have to evolve. While some long-standing features of protectionism appear to have endured (such as the distribution of discriminatory measures across economic sectors), specific corporate needs arising from the global financial crisis and particular national attributes are more likely to have influenced the choice of beggar-thy-neighbor policy instruments than binding trade rules and other international accords.