Hostname: page-component-cd9895bd7-gbm5v Total loading time: 0 Render date: 2024-12-22T16:15:00.108Z Has data issue: false hasContentIssue false
  • English
  • Français

Exit Options and the Effectiveness of Regional Economic Organizations*

Published online by Cambridge University Press:  08 November 2013

Julia Gray  and
Jonathan B. Slapin
Julia Gray
Affiliation:
University of Pennsylvania
Jonathan B. Slapin
Affiliation:
University of Houston
Get access Rights & Permissions [Opens in a new window]

Abstract

Regional economic organizations (REOs) proliferate in the developed and developing world. However, there is wide variation in both their institutional structure and the degree to which they achieve their goals. This article presents a theoretical framework and empirical evidence to explain the variance in the institutional design and effectiveness of these agreements. It argues that the conditions that produce effective and broad agreements are not a function of design, but rather of exogenous factors. If countries within the REO have fewer options for world trade beyond the REO, they will develop strong institutions and make substantial use of them. This study presents a new cross-regional dataset, compiled from expert surveys, to test these arguments. It shows that expert evaluations of how well a REO functions - including its ability to meet its own goals and the ambition of those goals—hinge less on that agreement's legalization and more on the trade opportunities that REO members faced when the institution was formed.

Type
Original Articles
Information
Political Science Research and Methods , Volume 1 , Issue 2 , December 2013 , pp. 281 - 303
Copyright
Copyright © The European Political Science Association 2013 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

*

Julia Gray is Assistant Professor, University of Pennsylvania 208 S. 37th Street, Room 217, Philadelphia, PA 19104-6215, United States ([email protected]). Jonathan B. Slapin is Associate Professor, University of Houston, 447 Philip Guthrie Hoffman Hall, Houston, TX 77204-3011 ([email protected]).

References

Alesina, Alberto, Spolaore, EnricoWacziarg, Romain. 2000. ‘Economic Integration and Political Disintegration’. American Economic Review 90(5):1276–1296.Google Scholar
Alesina, AlbertoWacziarg, Romain. 1998. ‘Openness, Country Size and the Government’. The Journal of Public Economics 69(3):305–322.Google Scholar
Alter, Karen J. 1998. ‘Who Are the “Masters of the Treaty”?: European Governments and the European Court of Justice’. International Organization 52(1):121–147.Google Scholar
Baccini, Leonardo. forthcoming. Cheap Talk: Transaction Costs, Quality of Institutions, and Trade Agreements. European Journal of International Relations.Google Scholar
Baccini, LeonardoDür, Andreas. 2012. ‘The New Regionalism and Policy Interdependence’. British Journal of Political Science 42(1):57–79.Google Scholar
Bagwell, KyleStaiger, Robert W.. 2005. ‘Enforcement, Private Political Pressure, and the General Agreement on Tariffs and Trade/World Trade Organization Escape Clause’. The Journal of Legal Studies 34(2):471–513.Google Scholar
Bednar, Jenna. 2007. ‘Valuing Exit Options’. Publius: The Journal of Federalism 37(2):190–208.Google Scholar
Benoit, KennethLaver, Michael. 2006. Party Policy in Modern Democracies. London: Routledge.Google Scholar
Bhagwati, Jagdish. 1991. The World Trading System at Risk. Princeton, NJ: Princeton University Press.Google Scholar
Bhagwati, Jagdish, Greenaway, DavidPanagariya, Arvind. 1998. ‘Trading Preferentially: Theory and Policy’. The Economic Journal 108(449):1128–1148.Google Scholar
Binmore, Ken. 1985. ‘Bargaining and Coalitions’. In Game-Theoretic Models of Bargaining, edited by Alvin E. Roth, 295–322. Cambridge University Press.Google Scholar
Bown, Chad P.Hoekman, Bernard M.. 2005. ‘WTO Dispute Settlement and the Missing Developing Country Cases: Engaging the Private Sector’. Journal of International Economic Law 4(8):861–890.Google Scholar
Busch, Marc. 2007. ‘Overlapping Institutions, Forum Shopping, and Dispute Settlement in International Trade’. International Organization 61(4):735–761.CrossRefGoogle Scholar
Busch, Marc, Reinhardt, EricShaffer, Gregory. 2009. ‘Does Legal Capacity Matter? A Survey of WTO Members’. World Trade Review 8(4):559–577.Google Scholar
Chapman, Terrence L. 2007. ‘International Security Institutions, Domestic Politics, and Institutional Legitimacy’. Journal of Conflict Resolution 51(1):134–166.Google Scholar
Crawford, Jo-Ann, Fiorentino., Roberto V. 2005. The Changing Landscape of Regional Trade Agreements. WTO working paper.Google Scholar
Dai, Xinyuan. 2005. ‘Why Comply? The Domestic Constituency Mechanism’. International Organization 59:363–398.Google Scholar
Eichengreen, BarryFrankel, Jeffrey A.. 1995. ‘Economic Regionalism: Evidence from Two 20th Century Episodes’. The North American Journal of Economics and Finance 6(2):89–106.Google Scholar
Fang, Songying. 2008. ‘The Informational Role of International Institutions and Domestic Politics’. American Journal of Political Science 52(2):304–321.Google Scholar
Fang, SongyingRamsey, Kristopher W.. 2010. ‘Outside Options and Burden-sharing in Nonbinding Alliances’. Political Research Quarterly 63(2):188–202.Google Scholar
Fernandez, Raquel. 2000. Returns to Regionalism: An Evaluation of Nontraditional Gains from Regional Trade Agreements. World Bank working paper.Google Scholar
Foroutan, Faezeh. 1998. Does Membership in a Regional Preferential Trade Arrangement Make a Country More or Less Protectionist? World Bank working paper.Google Scholar
Fratianni, MichelePattison, John. 2001. ‘International Organizations in a World of Regional Trade Agreements: Lessons from Club Theory’. World Economy 24(3):457–488.Google Scholar
Gleditsch, Kristian S. 2002. ‘Expanded Trade and GDP Data’. Journal of Conflict Resolution 46(5):712–724.Google Scholar
Gray, JuliaSlapin, Jonathan B.. 2012. ‘How Well Do Regional Trade Agreements Work? Ask the Experts’. Review of International Organizations 7(3):309–333.Google Scholar
Grieco, Joseph M. 1997. ‘Systemic Sources of Variation in Regional Instituionalization in Western Europe, East Asia, and the Americas’. In The Political Economy of Regionalism, edited by Helen Milner and Edward D. Mansfield, 164–187. New York: Columbia University Press.Google Scholar
Grossman, Gene M.Helpman, Elhanan. 1994. ‘Protection for Sale’. American Economic Review 84(4):833–850.Google Scholar
Grossman, Gene M.Helpman, Elhanan. 1995. ‘The Politics of Free Trade Agreements’. American Economic Review 85(4):667–690.Google Scholar
Gruber, Lloyd. 2000. Ruling the World: Power Politics and the Rise of Supranational Institutions. Princeton, NJ: Princeton University Press.Google Scholar
Haftel, Yoram. 2012. Regional Economic Institutions and Conflict Mitigation: Design, Implementation, and the Promise of Peace. Ann Arbor: University of Michigan Press.Google Scholar
Haftel, Yoram Z. 2007. ‘Designing for Peace: Regional Integration Arrangements, Institutional Variation and Militarized Interstate Disputes’. International Organization 61(1):217–237.Google Scholar
Haggard, Stephan. 1997. ‘Regionalism in Asia and the Americas’. In The Political Economy of Regionalism, edited by Edward D. Mansfield and Helen V. Milner, 20–49. New York: Columbia University Press.Google Scholar
Hicks, RaymondKim, Soo Yeon. 2012. ‘Reciprocal Trade Agreements in Asia: Credible Commitment to Trade Liberalization or Paper Tigers?’ Journal of East Asian Studies 12(1):1–29.Google Scholar
Holmes, Tammy. 2005. What Drives Regional Trade Agreements That Work? Graduate Institute of International Studies HEI Working Paper No: 07/2005.Google Scholar
Hooghe, L., Marks, GaryWilson, C.. 2002. ‘Does Left/Right Structure Party Positions on European Integration?’ Comparative Political Studies 35:965–989.Google Scholar
Jo, HyeranNamgung, Hyun. 2012. ‘Dispute Settlement Mechanisms in Preferential Trade Agreements: Democracy, Boilerplates, and the Multilateral Trade Regime’. Journal of Conflict Resolution 56(6):1041–1068.Google Scholar
Kahler, Miles. 2000. ‘Legalization as Strategy: The Asia-Pacific Case’. International Organization 54(3):549–571.Google Scholar
Keohane, Robert O., Moravcsik, AndrewSlaughter, Anne-Marie. 2000. ‘Legalized Dispute Resolution: Interstate and Transnational’. International Organization 54(3):457–488.CrossRefGoogle Scholar
Kim, Moonhawk. 2008. Adjusting to Institutionalized Trade Integration: Preferential Trade Arrangements, the GATT/WTO and Pressures for Competitiveness and Compensation. University of Colorado – Boulder working paper.Google Scholar
Kono, Daniel. 2007. ‘Making Anarchy Work: International Legal Institutions and Trade Cooperation’. Journal of Politics 69(3):746–759.Google Scholar
Koremenos, Barbara. 2005. ‘Contracting around International Uncertainty’. American Political Science Review 99(4):549–565.Google Scholar
Koremenos, Barbara, Lipson, CharlesSnidal, Duncan. 2001. ‘The Rational Design of International Institutions’. International Organization 55(4):761–799.Google Scholar
Krishna, Pravin. 1998. ‘Regionalism and Multilateralism: A Political Economy Approach’. Quarterly Journal of Economics February: 227–251.Google Scholar
Krueger, Anne O. 1999. ‘Are Preferential Trading Arrangements Trade-Liberalizing or Protectionist?’ Journal of Economic Perspectives 4(13):105–124.Google Scholar
Kucik, JeffreyReinhardt., Eric 2008. ‘Does Flexibility Promote Cooperation? An Application to the Global Trade Regime’. International Organization 62(3):477–505.Google Scholar
Lacarte-Muró, JulioGappah, Petina. 2000. ‘Developing Countries and the WTO Legal and Dispute Settlement System: A View from the Bench’. Journal of International Economic Law 3(3):395–401.Google Scholar
Laver, Michael. 1998. ‘Party Policy in Britain 1997: Results from an Expert Survey’. Political Studies 46(2):336–347.Google Scholar
Li, Quan. 2000. ‘Institutional Rules of Regional Trade Blocs and Their Impact on Trade’. In The Political Consequences of Regional Trade Blocks, edited by Robert Switky and Bart Kerremans, 85–118. London: Ashgate.Google Scholar
Mansfield, Edward D. 1998. ‘The Proliferation of Preferential Trading Arrangements’. Journal of Conflict Resolution 42(5):523–543.Google Scholar
Mansfield, Edward D.Reinhardt, Eric. 2008. ‘International Institutions and the Volatility of International Trade’. International Organization 62(4):621–652.Google Scholar
Mansfield, Edward D., Reinhardt, Eric. 2009. International Institutions and Terms of Trade Volatility. Working paper.Google Scholar
Mansfield, Edward D.Milner, Helen. 1997. The Political Economy of Regionalism. New York: Columbia University Press.Google Scholar
Marks, Gary, Hooghe, Lisbet, Steenbergen, Mark R.Bakker, Ryan. 2007. ‘Cross-validating Data on Party Positioning on European Integration’. Electoral Studies 26(1):23–38.Google Scholar
Martin, LisaSimmons, Beth. 1998. ‘Theories and Empirical Studies of International Institutions’. International Organization 52(3):729–757.Google Scholar
Mattli, Walter. 1999. The Logic of Regional Integration. Cambridge, MA: Cambridge University Press.Google Scholar
McCall Smith, James. 2000. ‘The Politics of Dispute Settlement Design: Explaining Legalism in Regional Trade Pacts’. International Organization 54(1):137–180.Google Scholar
Milner, HelenBüthe, Tim. 2008. ‘The Politics of Foreign Direct Investment into Developing Countries: Increasing FDI through International Trade Agreements’. American Journal of Political Science 52(4):741–762.Google Scholar
Milner, Helen V. 1997. Interests, Institutions and Information: Domestic Politics and International Relations. Princeton, NJ: Princeton University Press.Google Scholar
Moravcsik, Andrew. 1998. The Choice For Europe. Ithaca, NY: Cornell University Press.Google Scholar
Muthoo, Abhinay. 1995. ‘On the Strategic Role of Outside Options in Bilateral Bargaining’. Operations Research 43(2):292–297.Google Scholar
Nitsch, Volker., Sturm., Daniel 2004. The Trade Liberalization Effects of Regional Trade Agreements. Global Trade Analysis Project working paper.Google Scholar
Odell, JohnEichengreen, Barry. 1998. ‘The United States, the ITO, and the WTO: Exit Options, Agent Slack, and Presidential Leadership’. In The WTO as an International Organization, edited by Anne Krueger, 189–209. Chicago, IL: University of Chicago Press.Google Scholar
Oye, Kenneth A. 1992. Economic Discrimination and Political Exchange: World Political Economy in the 1930s and 1980s. Princeton, NJ: Princeton University Press.Google Scholar
Panagariya, Arvind. 1999. ‘The Regionalism Debate: An Overview’. The World Economy 22(4):455–476.Google Scholar
Panagariya, Arvind., de Melol., Jaime 1992. Regional Integration, Old and New. World Bank Policy Research Working Paper Series 985.Google Scholar
Rickard, Stephanie. 2010. ‘Democratic Differences: Electoral Institutions and Compliance with GATT/WTO Agreements’. European Journal of International Relations 16(4):711–729.Google Scholar
Rosendorff, B. Peter. 2005. ‘Stability and Rigidity: Politics and Design of the WTO's Dispute Settlement Procedure’. American Political Science Review 99(3):389–400.Google Scholar
Rosendorff, B. PeterMilner, Helen V.. 2001. ‘The Optimal Design of International Institutions: Uncertainty and Escape’. International Organization 55(4):829–857.Google Scholar
Rosenthal, HowardVoeten, Erik. 2007. ‘Measuring Legal Systems’. Journal of Comparative Economics 35(4):711–728.Google Scholar
Serra, Jaime. ed. 1997. Reflections on Regionalism: Report of the Study Group on International Trade. Washington, DC: Carnegie Endowment for International Peace.Google Scholar
Slantchev, Branislav, London, TamarStone, Randall. 2008. ‘Choosing How To Cooperate: A Repeated Public-Goods Model of International Relations’. International Studies Quarterly 52(2):335–362.Google Scholar
Slapin, Jonathan B. 2009. ‘Exit, Voice, and Cooperation: Bargaining Power in International Organization and Federal Systems’. Journal of Theoretical Politics 21(2):187–211.Google Scholar
Steenbergen, Marco R.Marks, Gary. 2007. ‘Evaluating Expert Surveys’. European Journal of Political Research 46(3):347–366.Google Scholar
Stinnett, Douglas. 2007. Depth, Compliance, and the Design of Regional Trade Institutions. Paper presented at the Annual Meeting of the Midwest Political Science Association, Palmer House Hotel, Chicago, IL, 12 April.Google Scholar
Stone Sweet, AlecBrunell, Thomas. 1998. ‘Constructing a Supranational Constitution: Dispute Resolution and Governance in the European Community’. American Journal of Political Science 92(1):63–81.Google Scholar
Urata, Shujiro. 2002. ‘Globalization and the Growth of Free Trade Agreements’. Asia-Pacific Review 9(1):20–32.Google Scholar
Viner, Jacob. 1950. The Customs Union Issue. New York: Carnegie Endowment for International Peace.Google Scholar
Voeten, Erik. 2001. ‘Outside Options and the Logic of Security Council Action’. American Political Science Review 95(4):845–858.Google Scholar
Whitefield, Stephen, Vachudova, Milada Anna, Steenbergen, Marco R., Rohrschneider, Robert, Marks, Gary, Loveless, Matthew P.Hooghe, Liesbet. 2007. ‘Do Expert Surveys Produce Consistent Estimates of Party Stances on European Integration? Comparing Expert Surveys in the Difficult Case of Central and Eastern Europe’. Electoral Studies 26:50–61.Google Scholar
Yarbrough, Beth V.Yarbrough, Robert M.. 1992. Cooperation and Governance in International Trade: The Strategic Organizational Approach. Princeton, NJ: Princeton University Press.Google Scholar