Global climate change is a pressing political issue, yet some governments have done more to address it than others. Building on the “compensation hypothesis” from the international trade literature, I argue that legislators are more willing to support carbon restrictions when workers in their districts are protected by generous unemployment insurance. I test this hypothesis with an analysis of Congressional climate change votes. I find that higher carbon-intensive employment makes legislators less likely to vote for carbon restrictions, but this effect is weaker where unemployment benefits are high. I also find that generous unemployment benefits make legislators more likely to vote for carbon restrictions but only where carbon-intensive employment is high. My results imply that generous unemployment insurance can help governments to pass stronger climate change legislation. More broadly, they indicate that struggles over the welfare state have important consequences for other policy domains.
Abstract Both trade and climate change policies affect the international competitiveness of carbon-intensive industries. This suggests that policy changes in one area may affect politics in the other. Does openness to international trade affect climate change politics? Do climate change policies affect the politics of trade? Does formally linking trade and climate policies via trade sanctions affect the prospects for cooperation in each domain? There are good theoretical reasons to believe that the answer to these questions is yes. Theoretically, each set of policies should affect the other, but these interactions could either encourage or discourage trade and climate cooperation. How trade and climate politics interact is thus an empirical question. Empirically, the overall picture is of a nascent but promising field of research. Extant studies provide indirect tests and suggestive evidence, but little in the way of firm conclusions. Only one point emerges clearly: progress in this area will require more and better data on national climate policies.
Climate-related foreign aid is on the rise, with signatories to the Paris Climate agreement pledging $ 100 billion annually to promote mitigation and adaptation in recipient countries. While this seems like a welcome development, we have little evidence that climate aid actually encourages recipients to adopt climate legislation. In this article, we examine the relationship between climate aid and recipient climate policy. Using multiple measures of each, we find no evidence that the former is systematically related to the latter. Although this suggests that climate aid is ineffective, this conclusion must be qualified due to the poor quality of both climate aid and climate policy data. More definitive conclusions will require more accurate coding of climate aid as well as better climate policy measures that distinguish truly consequential policies from less consequential ones.
International trade and the environment are uneasy partners. Both environmentalists and free traders worry that the pursuit of one goal may obstruct the other. Nowhere is this tension more evident than in the area of climate change. Does trade liberalization increase carbon emissions? Do efforts to reduce carbon emissions lead to protectionist pressures? This paper addresses these questions by examining the relationship between CO2 emissions and tariffs in 109 to 153 countries from 1988 to 2013. Using instrumental-variable regressions to address reciprocal causation, I find that emissions reductions led to higher tariffs on manufactured goods. This suggests that carbon-intensive industries responded to carbon restrictions by lobbying against trade liberalization. In contrast, emissions did not affect tariffs on less carbon-intensive primary products, and neither type of tariff affected CO2 emissions. My results imply that efforts to combat climate change may obstruct trade liberalization, but the latter should not hinder climate change mitigation.
Why are some autocracies more open to trade than others? And why are autocratic trade policies so volatile? Despite wide variation in how autocracies approach international trade, existing research offers few answers to these questions. We argue that the trade policies of autocratic regimes depend in part on the mode of entry of their leaders. Autocrats can enter power either legally-according to established rules of succession-or extralegally, through a palace revolt or coup. These different modes of entry lead to different posttransition politics and trade policies. Because new extralegal leaders are outsiders with limited resources, they are vulnerable to coups by other ruling elites. They reduce this vulnerability by building public support via lower tariffs. However, as they consolidate their rule, they reverse these initial tariff cuts. Extralegal entries thus lead to foreign economic policies that are more "cooperative" in the short run but more volatile in the long run.
Does foreign aid affect domestic political unrest? Selectorate' models of political survival predict that foreign aid should lead autocratic governments, but not democratic ones, to restrict civil liberties. This requires investment in repressive capacity, which should in turn deter unrest. We thus argue that foreign aid should reduce unrest in autocracies but not in democracies. We find strong support for this hypothesis in a sample of 84 countries from 1970 through 2007, as well as evidence for our causal mechanism. Our results add to the mounting evidence that foreign aid has more desirable effects when targeted at democratic regimes.
Can foreign aid be a useful tool to promote trade liberalization? In new research which studies 66 autocracies over two decades, Daniel Yuichi Kono and Gabriella R. Montinola find that foreign aid does encourage trade liberalization – but only in countries where leaders are politically insecure. They write that the less chance that an autocratic leader has of staying in power, the greater the effect of aid on tariff reductions.
Although there are theoretical reasons to expect foreign aid to promote trade liberalization, empirical research has found no relationship. Without disputing this general nonresult, we argue that foreign aid can incentivize liberalization under certain conditions. In the absence of aid, the incentive to liberalize trade depends on government time horizons: Far-sighted governments have incentives to do so, whereas short-sighted governments do not. It follows that foreign aid should not encourage far-sighted governments to liberalize, as they do so in any case. Foreign aid can, however, induce short-sighted governments to liberalize by ameliorating short-term adjustment costs. We thus hypothesize that aid is more likely to promote trade liberalization when given to governments with short time horizons. We support this hypothesis with an analysis of aid, time horizons, and two measures of trade policy. Our results contribute to the growing debate about the conditions under which foreign aid encourages growth-enhancing policies.
Credit rating agencies such as Moody's and Standard & Poor's have considerable influence in the global economy. Nonetheless, we know little about the factors that affect these ratings, particularly factors under government control. We argue that participation in preferential trade arrangements (PTAs) can significantly improve national credit ratings by “locking in” liberal trade policies at home and abroad. This both ensures a stable stream of export revenues and represents a commitment to market-friendly policies of which the rating agencies approve. We test and find support for this hypothesis with an analysis of intra-PTA trade and credit ratings in 100 countries from 1971 to 2008. As expected, intra-PTA trade consistently improves national credit ratings. However, this effect is only partially mediated by trade volatility and other economic variables, suggesting that the rating agencies' support for PTAs is partly ideological in nature. Interestingly, overall trade openness does not affect credit ratings once we control for participation in PTAs. It is thus the formal commitment to open trade, rather than the volume of trade per se, that improves credit ratings. Our results point to the growing importance of private actors in international governance, as well as to the interrelated nature of trade and financial regimes.
Do international treaties constrain national governments? The answer appears to be “yes” when it comes to the use of traditional barriers to trade, such as tariffs. Yet, while many governments have cut tariffs to comply with international agreements, they have often raised non-tariff barriers in their place. One increasingly prominent non-tariff barrier is discrimination in public procurement. Governments frequently discriminate against foreign suppliers in favor of domestic ones when buying goods and services. In an attempt to reduce procurement discrimination, international organizations, such as the World Trade Organization, have devoted ever more attention to members’ procurement practices. Additionally, a growing number of preferential trade agreements seek to regulate public procurement. It remains unclear, however, whether international rules are effective in changing governments’ purchasing behavior. Using original data, we find that neither multilateral nor preferential procurement agreements substantially reduce governments’ propensity to “buy national.” These results illustrate the difficulty of regulating non-transparent policy areas via international treaties.
Many studies show that democracy promotes freer trade. However, because they typically focus on "at-the-border" barriers such as tariffs, we know little about democracy's effects on "behind-the-border" barriers such as discrimination in government procurement. We address this question by asking how democracy affects governments' incentives to discriminate against foreigners when buying goods and services. We argue that "buy national" policies have unclear costs and are harder to attack than policies that visibly interfere with consumers' ability to buy foreign goods. This makes such provisions more attractive than tariffs to democratic leaders seeking reelection. We thus hypothesize that democracy leads to lower tariffs but to greater discrimination in public procurement. We support this hypothesis with an analysis of procurement and imports in 138 countries from 1990 to 2008. Our results imply that a full understanding of the democracy-trade policy relationship requires attention to increasingly prominent behind-the-border barriers to trade.
Research shows that foreign aid promotes economic development in democracies but not in autocracies. Although explanations for this phenomenon vary, a common theme is that autocracies are more likely to misuse aid. We provide evidence of such misuse, showing that autocracies are more likely than democracies to divert development aid to the military. Theoretically, we build on "selectorate" models in which autocrats respond to aid by contracting civil liberties. Because this strategy requires military capacity, autocracies but not democracies should spend aid on the military. We support this hypothesis empirically, providing further evidence that autocracies misuse foreign aid.
Research shows that foreign aid promotes economic development in democracies but not in autocracies. Although explanations for this phenomenon vary, a common theme is that autocracies are more likely to misuse aid. We provide evidence of such misuse, showing that autocracies are more likely than democracies to divert development aid to the military. Theoretically, we build on “selectorate” models in which autocrats respond to aid by contracting civil liberties. Because this strategy requires military capacity, autocracies but not democracies should spend aid on the military. We support this hypothesis empirically, providing further evidence that autocracies misuse foreign aid.
Although nondiscrimination is a central tenet of the global trade regime, discrimination was in fact common under the General Agreement on Tariffs and Trade, particularly against developing countries. The latter have recently sought to end such discrimination through World Trade Organization rules: for example, the Agreement on Textiles and Clothing (ATC) prohibited quota discrimination in this sector. I examine the ATC's impact on US discrimination, asking whether the ATC ended the US policy of favoring allies with generous textile and clothing quotas. I find that, while the United States favored allies before the ATC, this favoritism vanished in the post-ATC period. The ATC thus accomplished its goal of ending explicit textile and clothing discrimination. This result underscores the potential for multilateral rules to control trade discrimination and implies that popular theories of trade policy may be contingent on such rules.
Over the past several decades international trade agreements have grown both more common and more ambitious. Today, many agreements regulate non-transparent “behind-the-border” barriers to trade. One particularly opaque form of trade protection is discrimination in public procurement. Increasingly, preferential trade agreements prohibit governments from discriminating against foreign bidders when buying goods and services. We know little, however, about the effectiveness of these rules. Using an original dataset of preferential procurement agreements, we examine their effects on procurement discrimination in 112 countries from 1990 to 2007. We find that preferential procurement agreements have no effect on governments’ purchasing behavior: signatories are no more inclined than non-signatories to spend public funds on imports. This suggests an important qualification to existing theories of compliance. While reputational concerns may sometimes ensure that governments abide by international agreements, reputational concerns have limited effectiveness in deterring noncompliance in opaque policy areas where treaty violations are difficult to detect. Our results thus shed light on the conditions under which governments do not keep their international commitments.
Research shows that trade openness and high social spending go hand in hand, at least in wealthy democracies. It is not clear, however, exactly why this is so. Many scholars and policymakers argue that generous social spending facilitates trade liberalization, but there is no direct empirical support for this claim. This paper is the first to show directly that social spending promotes freer trade. Specifically, I show that U.S. state-level unemployment insurance makes Congress members significantly more likely to vote for freer trade. Since state unemployment insurance is exogenous to individual congressional votes, my analysis shows clearly that the former affects the latter. My results imply that social spending insures not only citizens but also open trade policies against hard economic times. They also highlight the importance of subnational policy choices to national policy outcomes.
As traditional “at the border” trade barriers have fallen, governments have become increasingly concerned about “behind the border” barriers such as discriminatory public procurement. Although a growing number of governments have tried to control procurement discr imination by including rules about public procurement in preferential trad e agreements, we currently know nothing about the effects of such rules. This paper is the first to examine the impact of preferential procurement agre ements (PPAs) on procurement discrimination. We assemble an original dataset of PPAs and examine their effects in a sample of 112 countries from 1990-2007. In an exhaustive analysis that employs different model sp ecifications and estimation techniques, different subsamples, and different gro ups of preferential agreements, we find no evidence that PPAs reduce discrimination against foreign producers. We speculate that the irrelevan ce of PPAs stems from the opaque nature of public procurement and the consequent difficulty of identifying treaty violations. Our results thus sh ed light on the conditions under which governments are not likely to keep their international commitments.