| James Anderson - William B. Neenan
S.J. Millennium Professor of Economics, Boston College |
| |
Title: “Economic Integration
and Civilizing Commerce” |
| |
|
Abstract:
David Hume and Adam Smith proposed that the spread of commerce was
civilizing. Their hypothesis is formally examined in this paper. The
basic mechanism is one where the opportunity to trade induces traders
in any one country to form institutions of contract enforcement for
foreigners, but their optimal institution still allows scope for
opportunism.
Regional integration can, in this model, induce endogenous changes in
trade costs, either positive or negative. Endogenous trade cost changes
are negative in a country if increases in trade lead to less scope for
opportunism (commerce is civilizing). This occurs when the elasticity
of supply of traders is sufficiently high. Two countries within a
region will typically compete in their desirability as import
destinations. Competition in institutions induces still better
enforcement if enforcement strategies are strategic complements.
Complementarity is obtained if the supply of trade is sufficiently
elastic. The model provides a useful structure of endogenous
enforcement and gives promise of explaining patterns of institutional
development. |
| |
|
|
| Richard Baldwin - Professor of
International Economics, Graduate
Institute of International Studies, Geneva, Switzerland |
| |
Title: “Sequencing
and Depth of Regional
Economic Integration: Lessons for the Americas from Europe” |
| |
|
Abstract:
The paper first reviews Europe’s experience with regional integration,
stressing the political economy forces that have sped, slowed and
guided the process. It argues that the geographic spread of economic
integration in Europe is driven by a “Domino Theory” process by which
each successive integration increases the pressure on non-participants
to join the integration effort. On the depth of integration, the paper
argues that the path of European integration – from completion of the
customs union, to the Single Market programme, to the Maastricht Treaty
and monetary union – was dictated by a political economy dynamo set in
motion by the unique institutional features established by the 1957
Treaty of Rome. Consequently, the lessons for other regions must be
considered with great care. The paper concludes by considering the
lessons that the European experience provides for the Americas. |
| |
|
|
| Eric Bond - Joe L. Roby Professor
of Economics, Vanderbilt
University |
| |
Title: “The
Sequencing of Trade Liberalization in
the Presence of Adjustment Costs” |
| |
|
Abstract:
Regional
trade agreements differ substantially in the extent of coverage of the
agreement. In addition to the issue of whether the agreement is to be a
free trade area or a customs union, there is also the question of
whether to allow factor mobility or to adopt a common currency. Some
agreements, such as the European Union, have evolved over time to
include a much deeper degree of cooperation between the member
countries. The objective of this paper is to examine the conditions
under which an agreement between countries should start small with
cooperation on a limited set of issues, followed by subsequent
expansion, as opposed to immediate cooperation on all issues. It will
also allow examination of the order in which the issues should be added
to the agreement.
This question is an extension of existing work on gradualism
in trade agreements. I plan to depart from previous work by emphasizing
an environment where countries have private information about their
willingness to cooperate under the agreement (eg. the extent of
political pressure that comes from the import competing sector).
Deepening of integration over time can then result from learning about
the characteristics of the trading partner. |
| |
|
|
Robert Devlin - Deputy Manager,
Integration and Regional Programs Department, Inter-American Development Bank
Antoni Estevadeordal - Principal Trade Economist,
Integration, Trade, and Hemispheric Issues Division, Inter-American Development Bank
Kati Suominen - Trade Specialist, Integration,
Trade, and
Hemispheric Issues Division, Inter-American
Development Bank |
| |
Title:
"Sequencing
Regional Trade Integration and Cooperation Agreements" |
| |
|
Abstract:
Regional integration has long been seen as evolving in sequential
steps. The most common conceptualization, stressed particularly in the
economics literature and influenced by the EU's integration experience,
is moving from shallow to deep economic integration, from free trade
agreements to customs unions, and further to common markets and
monetary unions. However, economic analysis has generally yet to move
beyond the realm of trade (or economic) integration to explore other
forms of regional cooperation. For its part, political science has
explored a wider range of regional cooperation, in areas such as
security, environment, political dialogue, etc. While the more recent
studies have moved from asking whether states can cooperate to how they
cooperate at a regional level, the literature on international (or
regional) cooperation remains primarily theoretical; relying on
relatively limited empirical evidence. In this paper we attempt, first,
to connect these two streams of literature mending some theoretical and
conceptual gaps in our understanding of regional integration and
regional cooperation; and, second, to provide some empirical evidence
regarding the sequencing of regional trade integration agreements and
other forms of regional cooperation. Our empirical exercise uses a
newly constructed worldwide dataset on bilateral and regional trade and
cooperation agreements spanning more than a century. The paper will
emphasize some policy implications for intra regional and inter
regional cooperation in the Americas. |
| |
|
|
Antoni Estevadeordal - Principal
Trade Economist, Integration, Trade, and Hemispheric Issues Division, Inter-American Development Bank
Caroline Freund - Senior Economist of the
International Trade Team, Development Research Group, The World Bank
Emanuel Ornelas - Assistant Professor of Economics,
University
of Georgia |
| |
Title: "Does Regionalism
Help or Hinder
Multilateralism? An Empirical Evaluation" |
| |
|
Abstract:
The majority of countries are involved in both regional and
multilateral trade liberalization initiatives. The main concern about
the proliferation of regional agreements is that it will draw countries
away from global integration into less optimal regional groups, and
that some countries will be excluded altogether. Indeed, results from a
large theoretical literature imply that these two processes will
interact, and in particular, that regionalism can either help or hinder
the multilateral process. We empirically examine the effects of
regionalism on multilateralism, using industry-level data on tariffs
and bilateral preferences for eleven Latin American countries from
1989-2001. This unique data set allows us to examine whether products
where preferences loom large are more or less likely to be liberalized.
Our results imply that, in general, regionalism helps the multilateral
process. The greater the preferences a country gives to its partners,
the more the country tends to reduce its multilateral (MFN) tariffs.
While there is no evidence that regionalism hinders multilateralism, we
do find evidence that customs unions have a significantly smaller
effect on multilateral tariffs than free trade areas. This is
consistent with theoretical results showing that because countries in a
customs union choose external tariffs jointly, as opposed to at the
individual country level, their optimal tariffs are relatively higher.
Overall, our results imply that concerns about a negative effect of
regionalism on the multilateral system are overblown. |
| |
|
|
| Simon J. Evenett - Professor, University
of St. Gallen; Nonresident Senior Fellow, The Brookings
Institution |
| |
Title: “Competitive
Liberalization: A
Tournament-Theory-Based Interpretation” |
| |
|
Abstract:
Three prominent features of the current U.S. trade policy of
"competitive liberalization" are stimulating a competition among
trading partners for access to U.S. markets; the inclusion of
provisions in trade agreements not directly related to market access;
and a greater role for foreign and security policy in U.S. trade
policymaking than in the past. This paper adapts the theory of
rank-order tournaments to provide a rationalization for these three
features and to explore their implications for the design and
sequencing of preferential trade agreements. The role of trade
diversion and its relationship to these features assumes a key role in
this analysis.
|
| |
|
|
Edward Mansfield - Hum Rosen
Professor of Political Science, University
of Pennsylvania
Helen Milner - B. C. Forbes Professor of Politics
and International Affairs, Princeton University
Jon Pevehouse - Assistant Professor of Political
Science, University
of Wisconsin |
| |
Title: “Democracy, Veto
Players, and the Depth of Regional Integration” |
| |
|
Abstract:
In
this paper, we examine the domestic political factors that might
account for the choice of trade agreement that states adopt. States can
pursue at least five types of trade agreements, in order of their depth
of policy integration: non reciprocal trade agreements, free trade
areas, customs unions, common markets and economic unions. What factors
account for their choice of type? We argue that domestic politics
should matter to this choice. The extent of policy that countries are
willing to coordinate with other countries depends on each one’s
domestic political constraints. In countries where more veto players
exist, deeper cooperation is less likely. Using data from all pairs of
countries since 1945, we show that, controlling for many other
international and economic factors, domestic politics do matter to the
choice of the type of trade agreement. |
| |
|
|
| Andrew Moravcsik - Professor of
Politics and Director, European Union Program, Princeton University |
| |
Title: “Sequencing
and Path Dependence in European Integration" |
| |
|
Abstract:
This paper sruveys and evaluates some recent trends in the
historiographical and political science literatures on sequencing and
path dependence in the process of European integration. It draws
four main conclusions: (1) A theoretical synthesis of endogenous
policy theory, non-coercive interstate bargaining theory, and
international regime theory provides a plausible account of European
integration. (2) There is substantial historical evidence in
favor of this synthetic explantion, as opposed to explanations
stressing geopolitical or ideological factors, international mediation
and political entrepreneurship. (3) These theories suggest a
modest role for sequencing, particular as regards the impact of the
order in which successive countries enter the EU. (3) Efforts
have long been made to advance theories, generally referred to as
"historical institutionalist" or "neo-functionalist" that treat
sequencing as a more important variable -- notably those that argue
that integration is fundamentally "path dependent -- but little
historical evidence supports such claims. (4) Currently the
process of European integration appears to have reached an
institutional plateau. There is now in place a "European
Constitutional Compromise," about which theories in which sequencing
plays a critical role five us little purchase.
|
| |
|
|
|
| |
|
| |
|
|
|