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The political economy of nontariff barriers: a cross-national analysis

Published online by Cambridge University Press:  22 May 2009

Edward D. Mansfield
Affiliation:
Associate Professor of Political Science at Columbia University, New York.
Marc L. Busch
Affiliation:
Assistant Professor of Government and Social Studies at Harvard University, Cambridge, Massachusetts.
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Abstract

Nontariff barriers to trade are most pervasive when deteriorating macroeconomic conditions give rise to demands for protection by pressure groups, when countries are sufficiently large to give policymakers incentives to impose protection, and when domestic institutions enhance the ability of public officials to act on these incentives. Statistical results based on a sample of advanced industrial countries during the 1980s support the argument that the incidence of nontariff barriers tends to be greatest when the preferences of pressure groups and policymakers converge. More attention should be devoted to the interaction between societal and statist factors in cross-national studies of trade policy.

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Copyright © The IO Foundation 1995

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References

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30. For example, it is well-known that the United States' geographically based, winner-take-all electoral system limits both the ability of parties to control the votes of legislators and their insulation from constituent pressures for protection. In this respect, the United States stands in contrast to PR systems, among other types of regimes. For examinations of these and other variations that are likely to influence trade policy, see Destler, American Trade Politics; and Rogowski, “Trade and the Variety of Democratic Institutions.”

31. Among the few studies that address this topic, see Katzenstein, “Conclusion”; Gourevitch, Politics in Hard Times; and Milner, Helen V., Resisting Protectionism: Global Industries and the Politics of International Trade (Princeton, N.J.: Princeton University Press, 1988)Google Scholar.

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33. See Bhagwati, Jagdish, Protectionism (Cambridge, Mass.: MIT Press, 1988)Google Scholar; Destler and Odell, Anti-protection; and Milner, Resisting Protectionism.

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43. These data, as well as an extensive overview of the methods used to measure NTBs, are presented in Laird and Yeats, Quantitative Methods for Trade-Barrier Analysis.

44. Data on GDP are expressed in real terms and are taken fromSummers, Robert and Heston, Alan, “The Penn World Table (Mark 5): An Expanded Set of International Comparisons, 1950–1988,” Quarterly Journal of Economics 106 (05 1991), pp. 327–68CrossRefGoogle Scholar, and the computer diskette supplement to that article, dated 15 June 1993. Data on imports are taken from the International Monetary Fund (IMF), International Financial Statistics (Washington, D.C.: IMF, various years)Google Scholar.

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46. Belgium and Luxembourg are treated as a single state for the purposes of this analysis because the Belgium-Luxembourg Economic Unit stipulates that the two states maintain parity between their currencies, share in integrated foreign trade and balance of payment policies, and maintain a joint central bank. On this point, see TheEconomist Intelligence Unit, Belgium, Luxembourg Country Profile 1992–93 (London: The Economist Intelligence Unit, 1992)Google Scholar.

47. This is not surprising, since New Zealand's economy is considerably different from the other states in our sample. For a discussion of the unique features of New Zealand“s economy, see Economist Intelligence Unit, New Zealand: Country Profile 1992–93 (London: Economist Intelligence Unit, 1992), p. 8Google Scholar.

48. See Bhagwati, Protectionism, chap. 3; and Laird and Yeats, Quantitative Methods for Trade-Barrier Analysis.

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50. For a discussion of this issue, see ibid.

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55. Although some sectoral analyses of tariffs and NTBs have examined whether these variables are jointly determined, such an approach is unwarranted here. There is, for example, little reason to expect that the incidence of NTBs in 1983 and 1986 should have influenced tariff levels agreed to during the Tokyo Round of the GATT, which concluded in 1979. See Ray, “The Determinants of Tariff and Nontariff Trade Restrictions in the United States”; and Trefler, Daniel, “Trade Liberalization and the Theory of Endogenous Protection: An Econometric Study of U.S. Import Policy,” Journal of Political Economy 101 (02 1993), pp. 138–60CrossRefGoogle Scholar.

56. These data are taken from Summers and Heston, “The Penn World Table (Mark 5).”

57. Our analysis of this issue was conducted too recently to include these results in Table 1. The results are available upon request from the authors. We are grateful to Robert O. Keohane for suggesting that we conduct these tests related to the ratio of government expenditures to GDP.

58. See Baldwin, Robert E., “Changes in the Global Trading System: A Response to Shifts in National Economic Power,” in Salvatore, , Protectionism and World Welfare, pp. 80–98Google Scholar; Destler, I. M. and Henning, C. Randall, Dollar Politics: Exchange Rate Policymaking in the United States (Washington, D.C.: Institute for International Economics, 1989)Google Scholar; Destler, American Trade Politics; and Richardson, J. David, “U.S. Trade Policy in the 1980s: Turns—and Roads Not Taken,” in Feldstein, Martin, ed., American Economic Policy in the 1980s (Chicago: University of Chicago Press, 1994), pp. 627–58Google Scholar.

59. Destler, and Henning, , Dollar Politics, pp. 3640Google Scholar. See also Destler, , American Trade Politics, pp.123–24 and 188Google Scholar.

60. Destler, and Henning, , Dollar Politics, p. 119Google Scholar. See also Destler, , American Trade Politics, p. 123Google Scholar.

61. Destler, and Henning, , Dollar Politics, p. 104Google Scholar.

62. Ibid., p. 39. See also Destler, , American Trade Politics, p. 83Google Scholar; and Richardson, , “U.S. Trade Policy in the 1980s,” pp. 646–47Google Scholar.

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65. OECD Economic Surveys, Germany (Paris: OECD, 1984), p. 12Google Scholar.

66. Report of the Bundesbank for the Year 1983 (Frankfurt: Johanes Weisbecker, 1984), p. 13Google Scholar.

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70. See, for example, Johnson, Chalmers, MITI and the Japanese Miracle (Stanford, Calif.: Stanford University Press, 1982)Google Scholar; and Katzenstein, “Conclusion.”

71. See, for example, Katzenstein, “Conclusion”; Krasner, Defending the National Interest; and Krasner, “United States Commercial and Monetary Policy.”

72. See Calder, Kent E., “Japanese Foreign Economic Policy Formation: Explaining the Reactive State,” World Politics 40 (07 1988), pp. 515–41CrossRefGoogle Scholar; Cowhey, Peter F., “Domestic Institutions and the Credibility of International Commitments: Japan and the United States,” International Organization 47 (Spring 1993), pp. 299326CrossRefGoogle Scholar; Curtis, Gerald L., The Japanese Way of Politics (New York: Columbia University Press, 1988)Google Scholar; Kernell, Samuel, “The Primacy of Politics in Economic Policy,” in Kernell, Samuel, ed., Parallel Politics: Economic Policymaking in Japan and the United States (Washington, D.C.: The Brookings Institution, 1991), pp. 325–78Google Scholar; Ramseyer, J. Mark and Rosenbluth, Frances McCall, Japan's Political Marketplace (Cambridge, Mass.: Harvard University Press, 1993)Google Scholar; and Uriu, Robert M., Troubled Industries: The Political Economy of Industrial Adjustment in Japan (Ithaca, N.Y.: Cornell University Press, forthcoming)Google Scholar.

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74. Ibid., pp. 528–32.

75. Kernell, “The Primacy of Politics in Economic Policy.”

76. See, for example, Bhagwati, Protectionism; Gourevitch, Politics in Hard Times; Krasner, Defending the National Interest; Krasner, “United States Commercial and Monetary Policy”; Lake, Power, Protection, and Free Trade; Milner, Resisting Protectionism; and Nelson, “Endogenous Tariff Theory.”

77. See, for example, Gourevitch, Politics in Hard Times; Gowa, “Public Goods and Political Institutions”; Ikenberry, Lake, and Mastanduno, “Introduction”; Katzenstein, “Conclusion”; Krasner, Defending the National Interest; and Milner, Resisting Protectionism.

78. As noted throughout, our focus has been on explaining the incidence on NTBs. Other studies have focused on the level of NTBs and argued that NTBs and tariffs are complements. It is clear that our results and those based on the level of NTBs need not be incompatible. For one leading attempt to assess the relationship between tariffs and NTB levels, see Magee, , Brock, , and Young, Black Hole Tariffs and Endogenous Policy Theory, pp. 236–41Google Scholar.

79. For two perspectives on this possibility, see Diaz-Alejandro, Carlos F., Trade, Development and the World Economy (New York: Basil Blackwell, 1988; ed., Velasco, Andres)Google Scholar, chap. 14; and Findlay, Ronald, “Trade, Development, and the State,” in Ranis, Gustav and Schultz, T. Paul, eds., The State of Development Economics: Progress and Perspectives (New York: Basil Blackwell, 1988), pp. 7895Google Scholar. We are grateful to an anonymous reviewer for bringing this point to our attention.