Standards have become one of the most important nontariff barriers to trade, especially national product standards that specify design or performance characteristics of manufactured goods. Divergent national standards often inhibit trade, whereas regional and international standards increasingly serve as instruments of trade liberalization. Consequently, the setting of international standards—seemingly technical and apolitical—is rapidly becoming an issue of economic and political salience. But who sets international standards? Who wins, who loses? This article offers a fresh analytical approach to the study of international standards, which the authors call the institutional complementarities approach. It builds on insights from realism and the “Battle of the Sexes” coordination game but emphasizes complementarities of historically conditioned standardization systems at the national level with the institutional structure of standardization at the international level. It posits that, after controlling for other factors that influence involvement in international standardization, differences in institutional complementarities play a critical though largely accidental role in placing firms from different countries or regions in a first- or second-mover position when standardization becomes global. The authors illustrate the insightfulness of this approach through statistical analyses of the first scientific set of data on standards use and standardization, collected by the authors through an international online survey.

Fixed exchange rates implemented to increase credibility and attract foreign investment, or as an alternative approach to stabilization in high inflation economies, have been shown to be successful in expanding economic activity and correcting inflation in the short term but often lead to undesirable outcomes in the medium to long term. Although there is a wealth of literature documenting the boom-bust cycles associated with the adoption of a nominal anchor, no adequate explanation has been proffered as to governments repeatedly choosing policies that are self-defeating. The authors address this question with a political economy explanation based on the notion of a self-interested government for which short-term stabilization is attractive in the face of incentives posed by the electoral cycle. If the election coincides with the boom phase of an exchange rate—based stabilization, incumbent governments increase the likelihood of gaining reelection, and the bust phase will develop, if at all, only after the contest. The authors thus suggest a modified version of the traditional political business cycle. From the standpoint of a self-interested office-seeking government, exchange rate—based stabilizations can make good political sense. Empirical results based on an analysis of eighteen Latin American countries from 1970 to 1999 support the insights of the argument: movements towards a more fixed exchange rate are greater than three times more likely in a preelection period than in other stages of the electoral cycle.

This article contributes to the growing literature on the role that domestic political institutions play in mediating globalization pressures by arguing that the capital tax constraints arising from international economic integration are the most severe for countries with majoritarian political institutions. In doing so, the author solves a tax puzzle that challenges conventional thinking about how institutions condition the relationship between economic globalization and domestic politics. He presents a formal, game-theoretic model to sharpen the basic logic of his argument and then tests some of the model's predictions empirically using both quantitative and qualitative evidence.