Regime type and international commercial agreements

Bryan Rosendorff, Kong Joo Shin

    Research output: Contribution to journalArticle

    Abstract

    Preferential trade agreements and bilateral investment treaties limit member-states' policy discretion; consequently policy uncertainty is mitigated. Reductions in policy uncertainty stemming from accession to an international agreement improve the resource allocation decisions of voters and reduce deadweight losses from the need to self-insure against policy uncertainty. If electoral accountability makes expropriation of assets or discriminatory treatment of firms more costly to leaders (whereas electoral accountability has little effect on rent creation via tariff revenues) then among developing countries, democratic states sign preferential trade agreements relatively more frequently than autocratic states; however, autocratic states are more likely to sign bilateral investment treaties than are democratic states. We offer a simple model, and present some empirical regularities consistent with the theory.

    Original languageEnglish (US)
    Pages (from-to)107-119
    Number of pages13
    JournalInternational Journal of Economic Theory
    Volume11
    Issue number1
    DOIs
    StatePublished - Mar 1 2015

    Fingerprint

    Policy uncertainty
    Preferential trade agreements
    Bilateral investment treaties
    Accountability
    Revenue
    Tariffs
    Expropriation
    Deadweight loss
    Regularity
    Assets
    International agreements
    State policy
    Discretion
    Voters
    Resource allocation
    Rent
    Accessions
    Developing countries

    Keywords

    • Autocracy
    • Bilateral investment treaties
    • Democracy
    • Preferential trading agreements
    • Regime

    ASJC Scopus subject areas

    • Economics and Econometrics

    Cite this

    Regime type and international commercial agreements. / Rosendorff, Bryan; Shin, Kong Joo.

    In: International Journal of Economic Theory, Vol. 11, No. 1, 01.03.2015, p. 107-119.

    Research output: Contribution to journalArticle

    Rosendorff, Bryan ; Shin, Kong Joo. / Regime type and international commercial agreements. In: International Journal of Economic Theory. 2015 ; Vol. 11, No. 1. pp. 107-119.
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