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54
limit their usefulness because theory focuses too narrowly on market forces at the
expense of necessary political choices. He identifies the role of political actors and
argues that economic integration can best be understood as an effort to internalize
externalities in which demand for regional schemes emerge from economic actors.
He concludes that RTA formation is a function of the demand of economic actors for
institutional arrangements being matched by the supply from political actors. As
discussed previously, domestic producers demand trade liberalization of government
in order to access new markets to achieve economies of scale and to import inputs
more cheaply. As such, even import competing sectors may contribute to the
demand for trade liberalization. The ability of political actors to meet the demand of
economic actors reflects a political outcome that is superior to an economic outcome.
The implied suboptimal economic outcome supports claims that regional schemes
reflect domestic politics.
Economists do, in fact, incorporate political choices into political economy
models of trade agreements to explain why governments choose suboptimal welfare
outcomes (Grossman and Helpman 1995, Bagwell and Staiger 1999). In these
models, theorists use campaign donations from lobbyists seeking protection for
import competing industries to demonstrate how the political equilibrium resulting
from government extraction of rents accruing to protected sectors is more desirable
than the alternative free market equilibrium. Political economy models do no address
the choice of the RTA trade policy in contrast to multilateralism. In contrast, the
analytical framework presented in this analysis accommodates lobbyist demand for
Object Description
| Title | Riding the wave: an interdisciplinary approach to understanding the popularity of RTA notifications to the GATT/WTO |
| Author | McClough, David Andrew |
| Author email | mcclough@usc.edu; dmcclou@bgsu.edu |
| Degree | Doctor of Philosophy |
| Document type | Dissertation |
| Degree program | Political Economy & Public Policy |
| School | College of Letters, Arts and Sciences |
| Date defended/completed | 2008-08-07 |
| Date submitted | 2008 |
| Restricted until | Unrestricted |
| Date published | 2008-10-18 |
| Advisor (committee chair) | Katada, Saori N. |
| Advisor (committee member) |
Nugent, Jeffrey B. Cartier, Carolyn |
| Abstract | The proliferation of Regional Trade Agreements (RTAs) notified to the GATT/WTO since the early 1980s deviates from the long-term trend and reflects participation of nearly every member of the United Nations. This dissertation seeks to explain the current wave of RTA notifications by supplementing the economic model of supply and demand with diffusion theory. Application of the supply and demand model is useful in distinguishing between changes in demand and changes insupply of RTAs. This distinction is seldom emphasized in the current literature examining RTAs. Recent applications of diffusion theory in the discipline of international relations offer a unique opportunity to include a dynamic force in the static analysis of the supply and demand model. Empirical analysis assesses the fit of the RTA diffusion pattern by comparing the RTA diffusion pattern to a cumulative standard normal distribution. The analysis indicates that the diffusion pattern of RTAs resembles the diffusion of an innovation through a social system.; The implication of this finding is that the adoption of an RTA as trade policy is not made independently of the decision by other states. Indeed, the analysis suggests interdependency between states. Further empirical analysis explores economic and political variables that may explain the decision to adopt the RTA as trade policy. The empirical analysis is unique in that survival analysis is utilized to assess the variation in duration to adopt an initial RTA since the early 1980s. A central discovery is that regional designation explains the variation in duration to adopt an initial RTA. Multiple regression analysis confirms the results generated using survival analysis and support the assertion that the proliferation of RTAs likely reflects changes in both the demand for RTAs and the supply of RTAs. This dissertation concludes by considering implications for the WTO resulting from the increase in RTA notifications. |
| Keyword | trade agreements |
| Coverage date | after 1980 |
| Language | English |
| Part of collection | University of Southern California dissertations and theses |
| Publisher (of the original version) | University of Southern California |
| Place of publication (of the original version) | Los Angeles, California |
| Publisher (of the digital version) | University of Southern California. Libraries |
| Provenance | Electronically uploaded by the author |
| Type | texts |
| Legacy record ID | usctheses-m1675 |
| Contributing entity | University of Southern California |
| Rights | McClough, David Andrew |
| Repository name | Libraries, University of Southern California |
| Repository address | Los Angeles, California |
| Repository email | cisadmin@lib.usc.edu |
| Filename | etd-McClough-2338 |
| Archival file | uscthesesreloadpub_Volume32/etd-McClough-2338.pdf |
Description
| Title | Page 63 |
| Contributing entity | University of Southern California |
| Repository email | cisadmin@lib.usc.edu |
| Full text | 54 limit their usefulness because theory focuses too narrowly on market forces at the expense of necessary political choices. He identifies the role of political actors and argues that economic integration can best be understood as an effort to internalize externalities in which demand for regional schemes emerge from economic actors. He concludes that RTA formation is a function of the demand of economic actors for institutional arrangements being matched by the supply from political actors. As discussed previously, domestic producers demand trade liberalization of government in order to access new markets to achieve economies of scale and to import inputs more cheaply. As such, even import competing sectors may contribute to the demand for trade liberalization. The ability of political actors to meet the demand of economic actors reflects a political outcome that is superior to an economic outcome. The implied suboptimal economic outcome supports claims that regional schemes reflect domestic politics. Economists do, in fact, incorporate political choices into political economy models of trade agreements to explain why governments choose suboptimal welfare outcomes (Grossman and Helpman 1995, Bagwell and Staiger 1999). In these models, theorists use campaign donations from lobbyists seeking protection for import competing industries to demonstrate how the political equilibrium resulting from government extraction of rents accruing to protected sectors is more desirable than the alternative free market equilibrium. Political economy models do no address the choice of the RTA trade policy in contrast to multilateralism. In contrast, the analytical framework presented in this analysis accommodates lobbyist demand for |
