Much of the literature on foreign economic policy focuses on the preferences of societal groups to explain policy decisions. Here, however, the author emphasizes the effects of domestic political institutions that intervene between policy demands and policy decisions. The comparative politics literature on social welfare policy argues that states with more veto points and/or veto players are less able to alter preexisting policies. The author applies this argument to trade policy and tests whether veto points and players affect the ability of states to change tariffs and nontariff barriers in response to changing economic conditions. The sample is a cross-national time-series collection of 23 countries. The results offer support for the argument. Large numbers of institutional veto points are associated with smaller percentage changes in both tariffs and nontariff barriers. These relationships hold even after controlling for the effects of international institutions and for domestic pressures to change tariff and nontariff-barrier levels.
Alt, J., Frieden, J., Gilligan, M, Rodrik, D., & Rogowski, R. (1996). The political economy of international trade: Enduring puzzles and an agenda for inquiry. Comparative Political Studies, 29(6), 687-717.
2.
Bailey, M., Goldstein, J., & Weingast, B. (1997). The institutional roots of American trade policy. World Politics, 49(3), 309-338.
3.
Beck, N., & Katz, J. N. (1995). What to do (and not to do) with time-series cross-section data. American Political Science Review, 89(3), 634-647.
4.
Beck, N., & Katz, J. N. (2001). Throwing out the baby with the bath water: A comment on Green, Kim, and Yoon. International Organization, 55(2), 487-495.
5.
Bonoli, G. (2001). Political institutions, veto points, and the process of welfare state adaptation. In P. Pierson (Ed.), The new politics of the welfare state (pp. 238-264). Oxford, UK: Oxford University Press.
6.
Busch, M., & Reinhardt, E. (1999). Industrial location and protection: The political and economic geography of U.S. nontariff barriers. American Journal of Political Science, 43(4), 1028-1050.
7.
Carey, J. M., & Shugart, M. S. (1995). Incentives to cultivate a personal vote: A rank ordering of electoral formulas. Electoral Studies, 14(4), 417-439.
8.
Castles, F. G. (1999). Fragmentation and the post-war political economy. European Journal of Political Research, 36(1), 27-53.
9.
Castles, F. G., & Mair, P. (1984). Left-right political scales: Some ‘expert’judgments. European Journal of Political Research, 12(1), 73-88.
10.
Caves, R. E. (1976). Economic models of political choice: Canada’s tariff structure. Canadian Journal of Economics, 9(2), 278-300.
11.
Cowhey, P. (1993). Domestic institutions and the credibility of international commitments: Japan and the United States. International Organization, 47(2), 299-326.
12.
Cox, G. W., & McCubbins, M. D. (2001). The institutional determinants of economic policy outcomes. In S. Haggard & M. McCubbins (Eds.), Presidents, parliaments, and policy (pp. 21-63). New York: Cambridge University Press.
13.
Crepaz, M. M. L. (2002). Global, constitutional, and partisan determinants of redistribution in fifteen OECD countries. Comparative Politics, 34(2), 169-188.
14.
Deardorff, A. V., & Stern, R. M. (1985). The structure of tariff protection: Effects of foreign tariffs and existing NTBs. Review of Economics and Statistics, 67(4), 539-548.
15.
Frieden, J. (1988). Sectoral conflict and foreign economic policy, 1914-1940. International Organization, 42(1), 58-90.
16.
Frieden, J. (1991). Invested interests: The politics of national economic policies in a world of global finance. International Organization, 45(4), 425-451.
17.
Ganghof, S. (2002). Veto points and veto players: A skeptical view. Retrieved from http://www.mpi-fg-koeln.mpg.de/people/ga/Ganghof_Veto_2.pdf
18.
Garrett, G., & Lange, P. (1991). Political responses to interdependence: What’s ‘left’for the Left?International Organization, 45(4), 539-564.
19.
Garrett, G., & Lange, P. (1995). Internationalization, institutions and political change. International Organization, 49(4), 627-655.
20.
Goldstein, J. (1993). Ideas, institutions, and American trade policy. Ithaca, NY: Cornell University Press.
21.
Gourevitch, P. A. (1978). The second image reversed: The international sources of domestic politics. International Organization, 32(4), 881-911.
22.
Gourevitch, P. A. (1986). Politics in hard times: Comparative responses to international economic crises. Ithaca, NY: Cornell University Press.
23.
Haggard, S. (1988). The institutional foundations of hegemony: Explaining the Reciprocal Trade Agreements Act of 1934. International Organization, 42(1), 91-119.
24.
Haggard, S., & McCubbins, M. D. (2001). Introduction: Political institutions and the determinants of public policy. In S. Haggard & M. McCubbins (Eds.), Presidents, parliaments, and policy (pp. 1-20). New York: Cambridge University Press.
25.
Hallerberg, M., & Basinger, S. (1998). Internationalization and changes in tax policy in OECD countries: The importance of domestic veto players. Comparative Political Studies, 31(3), 321-352.
26.
Hanson, B. T. (1998). What happened to fortress Europe? External trade policy liberalization in the European Union. International Organization, 52(1), 55-85.
27.
Hayes, J. P. (1993). Making trade policy in the European Community. New York: St. Martin’s.
28.
Heller, W. B., Keefer, P., & McCubbins, M. D. (1998). Political structure and economic liberalization: Conditions and cases from the developing world. In P. Drake & M. D. McCubbins (Eds.), The origins of liberty: Political and economic liberalization in the modern world (pp. 146-178). Princeton, NJ: Princeton University Press.
29.
Hiscox, M. J. (1999). The magic bullet? The RTAA, institutional reform, and trade liberalization. International Organization, 53(4), 669-698.
30.
Huber, J., & Inglehart, R. (1995). Expert interpretations of party space and party locations in 42 societies. Party Politics, 1(1), 73-111.
31.
Huber, E., Ragin, C., & Stephens, J. D. (1993). Social democracy, Christian democracy, constitutional structure, and the welfare state. American Journal of Sociology, 99(3), 711-749.
32.
Ikenberry, G. J. (1988). Conclusion: An institutional approach to American foreign policy. International Organization, 42(1), 219-243.
33.
Immergut, E. M. (1992). The rules of the game: The logic of health policy-making. In S. Steinmo, K. Thelen, & F. Longstreth (Eds.), Structuring politics: Historical institutionalism in comparative analysis (pp. 57-89). New York: Cambridge University Press.
34.
International Monetary Fund. (2003, April). International financial statistics [CD-ROM]. Washington, DC: Author.
35.
Irwin, D. A. (1998). Changes in U.S. tariffs: The role of import prices and commercial policies. American Economic Review, 88, 1015-1026.
36.
Kapstein, E. B. (2000). Winners and losers in the global economy. International Organization, 54(2), 359-384.
37.
Karol, D. (2000). Divided government and U.S. trade policy: Much ado about nothing?International Organization, 54(4), 825-844.
38.
Kastner, S. L., & Rector, C. (2003). International regimes, domestic veto-players, and capital controls policy stability. International Studies Quarterly, 47(1), 1-22.
39.
Katzenstein, P. J. (1985). Small states in world markets: Industrial policy in Europe. Ithaca, NY: Cornell University Press.
40.
Keohane, R. (1984). After hegemony: Cooperation and discord in the world economy. Princeton, NJ: Princeton University Press.
41.
Kittel, B. (1999). Sense and sensitivity in pooled analysis of political data. European Journal of Political Research, 35(2), 225-253.
42.
Kreppel, A. (1997). The impact of parties in government on legislative output in Italy. European Journal of Political Research, 31(3), 327-350.
43.
Laird, S., & Yeats, A. (1990a). Quantitative methods for trade barrier analysis. New York: New York University Press.
44.
Laird, S., & Yeats, A. (1990b). Trends in nontariff barriers of developed countries, 1966-1986. Weltwirtschaftliches Archiv, 126(2), 299-325.
45.
Landes, D. S. (1969). The unbound Prometheus: Technological change and industrial development in western Europe from 1750 to the present. London: Cambridge University Press.
46.
Laver, M., & Hunt, W. B. (1992). Policy and party competition. New York: Routledge.
47.
Lijphart, A. (1999). Patterns of democracy: Government forms and performance in thirty-six countries. New Haven, CT: Yale University Press.
48.
Lohmann, S., & O’Halloran, S. (1994). Divided government and U.S. trade policy: Theory and evidence. International Organization, 48(4), 595-632.
49.
MacIntyre, A. (1999). Political institutions and the economic crisis in Thailand and Indonesia. In T. Pempel (Ed.), The politics of the Asian economic crisis (pp. 143-162). Ithaca, NY: Cornell University Press.
50.
MacIntyre, A. (2001). Institutions and investors: The politics of the economic crisis in Southeast Asia. International Organization, 55(1), 81-122.
51.
McKeown, T. J. (1984). Firms and tariff regime change: Explaining the demand for protection. World Politics, 32(2), 215-233.
52.
Milner, H. V., & Rosendorf, B. P. (1997). Democratic politics and international trade negotiations: Elections and divided government as constraints on trade liberalization. Journal of Conflict Resolution, 41(1), 117-146.
53.
Mitchell, B. R. (1998). International historical statistics. New York: Stockton Press.
54.
Odell, J. (1990). Understanding trade policies. World Politics, 43(1), 139-167.
55.
Organization for Economic Cooperation and Development. (1998). Indicators of tariff and non-tariff trade barriers. Paris: Author.
56.
Organization for Economic Cooperation and Development. (2002a). OECD economic outlook database. Retrieved from http://www.newsourceoecd.org
57.
Organization for Economic Cooperation and Development. (2002b). Revenue statistics of OECD member countries. Retrieved from http://www.newsourceoecd.org
58.
Organization for Economic Cooperation and Development (2003). ITCS international trade by commodities statistics. Retrieved from http://www.newsourceoecd.org
59.
Polanyi, K. (1944). The great transformation: The political and economic origins of our time. Boston: Beacon, Hill.
60.
Ray, E. J. (1981). Tariff and nontariff barriers to trade in the United States and abroad. Review of Economics and Statistics, 63(2), 161-168.
61.
Rodriguez, F., & Rodrik, D. (2000). Trade policy and economic growth: A skeptic’s guide to the cross-national evidence. Retrieved from http://ksghome.harvard.edu/.drodrik.academic.ksg/papers.html
62.
Rodrik, D. (1994). Political economy of trade policy. In G. Grossman & K. Rogoff (Eds.), Handbook of international economics (Vol. III, pp. 1457-1494). New York: Elsevier.
63.
Rodrik, D. (1997). Has globalization gone too far?Washington, DC: Institute for International Economics.
64.
Rogowski, R. (1987). Trade and the variety of domestic institutions. International Organization, 41(2), 203-223.
65.
Rogowski, R. (1989). Commerce and coalitions: How trade affects domestic political alignments. Princeton, NJ: Princeton University Press.
66.
Schmidt, M. G. (1996). When parties matter: A review of the possibilities and limits of partisan influence on public policy. European Journal of Political Research, 30(2), 155-183.
67.
Sherman, R. (2002). Delegation, ratification, and U.S. trade policy: Why divided government causes lower tariffs. Comparative Political Studies, 35(10), 1171-1197.
68.
Shugart, M. S., & Haggard, S. (2001). Institutions and public policy in presidential systems. In S. Haggard & M. D. McCubbins (Eds.), Presidents, parliaments, and policy (pp. 64-103). New York: Cambridge University Press.
69.
Siaroff, A. (1999). Corporatism in 24 industrial democracies: Meaning and measurement. European Journal of Political Research, 36(2), 175-205.
70.
Sigelman, L., & Zeng, L. (1999). Analyzing censored and sample-selected data with Tobit and Heckman models. Political Analysis, 8(2), 167-182.
71.
Simmons, B. (1994). Who adjusts? Domestic sources of foreign economic policy during the interwar years. Princeton, NJ: Princeton University Press.
72.
Spero, J. E., & Hart, J. A. (1997). The politics of international economic relations. New York: St. Martin’s.
73.
Stimson, J. A. (1985). Regression in space and time: A statistical essay. American Journal of Political Science, 29(4), 914-947.
74.
Swank, D. (2002). Global capital, political institutions, and policy change in developed welfare states. New York: Cambridge University Press.
75.
Thelen, K., & Steinmo, S. (1992). Historical insitutionalism in comparative politics. In S. Steinmo, K. Thelen, & F. Longstreth (Eds.), Structuring politics: Historical institutionalism in comparative analysis (pp. 1-32). New York: Cambridge University Press.
76.
Tsebelis, G. (1999). Veto players and law production in parliamentary democracies: An empirical analysis. American Political Science Review, 93(3), 591-608.
77.
Tsebelis, G. (2000). Veto players and institutional analysis. Governance: An International Journal of Policy and Administration, 13(4), 441-474.
78.
Van Meter, D. S. (1974). Alternative methods of measuring change: What difference does it make?Political Methodology, 1(4), 125-140.
79.
Verdier, D. (1994). Democracy and international trade: Britain, France, and the United States, 1860-1990. Princeton, NJ: Princeton University Press.
80.
Verdier, D. (1998). Domestic responses to capital market internationalization under the gold standard, 1870-1914. International Organization, 52(1), 1-34.
81.
Woldendorp, J., Keman, H., & Budge, I. (1998). Party government in 20 democracies: An update (1990-1995). European Journal of Political Research, 33(1), 125-164.
82.
World Bank. (2001). World development indicators [CD-ROM]. Washington, DC: Author.
83.
Zorn, C. J. W. (2001). Generalized estimating equation models for correlated data: A review with applications. American Journal of Political Science, 45(2), 470-490.
