Trading For Votes: Domestic and International Institutions and Their Influence on Trade Disputes Under the GATT and WTO

Abstract

This project explores the impact of international and domestic institutions on the decisions of political leaders. A theory of two-level institutional incentives is developed that seeks to explain how institutional context at the domestic and international levels affects the incentives, and thus the behavior of political leaders when making decisions related to trade policy. This theory argues that the institutional context in which political leaders make policy decisions has a significant effect on their decision-making. Further, the institutional context must include both domestic and international institutions. Building on previous work on the impact of institutions at both the domestic and international levels, this project seeks to test the theory of institutional incentives in the context of trade disputes under the GATT and WTO.A series of empirical tests are conducted using a dataset of GATT disputes combined with a new dataset of disputes under the WTO. These tests demonstrate strong support for the theories set forth in this project that domestic and international institutions combine to affect the behavior of political leaders. Domestic institutions affect the impact of international institutions and vice versa. This project extends previous work in two-level institutional incentives by demonstrating that institutional change at both levels has significant effects on the behavior of political leaders.