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The Political Economy of Trading States: Factor Specificity, Collective Action Problems, and Domestic Political Institutions

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The Political Economy of Trading States: Factor Specificity, Collective Action Problems, and Domestic Political Institutions . James E. Alt and Michael Gilligan Presented by Sarah Boyce and Rick Boccadoro.

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slide1

The Political Economy of Trading States: Factor Specificity, Collective Action Problems, and Domestic Political Institutions

James E. Alt and Michael Gilligan

Presented by Sarah Boyce and Rick Boccadoro

they feel that too many scholars fail to emphasize the domestic political dimension of trade policy

Alt and Gilligan seek to outline the requirements to understand the ‘domestic consequences of a society’s ‘choosing to trade’” (Frieden and Lake, 328).

They feel that too many scholars fail to emphasize the domestic political dimension of trade policy.

slide3

Alt and Gilligan also address smaller empirical puzzles within the article in order to gather evidence for their argument.

Pareto and Schattschneider – address how policies which benefit a small minority of the population are enacted.

Stolper-Samuelson Theorum

Hecksher-Olin Theorum

Ricardo-Viner Theorum

are factors besides abundance and mobility important to the formation of trade policy
Are factors besides abundance and mobility important to the formation of trade policy?
  • Dependants:

- Collective Action

  • Explanatory

- Political Institutions

- Abundance and Mobility

- Trade barriers

- Logrolling

- Interest groups

- Other factors (such as ease of communication, geographical concentration and preexisting collective organizations.)

slide5

Alt and Gilligan expect to find that the domestic consequences of trade may vary depending on the theorem used. They do not use a research design that includes a static example. Rather, they detail each theorem and point out how collective action fits into each one. Their dependant variable (i.e. collective action) is measured in terms of theoretical group size and the impact of the individual within the group.

slide7

Are factors besides abundance and mobility important to the formation of trade policy?Yes, their findings indicate that other factors, such as collective action, play an important role in the formational of trade policy.

criticisms
Criticisms
  • Alt and Gilligan broke each theorem down into simple terms but failed to provide any historical data to serve as evidence to support their argument.
  • The article assumes that collective action can be applied. There are many countries in which collective action is not a possibility due to totalitarian rule.
contributions
Contributions

Alt and Gilligan’s article raises some important issues. For instance, although many recent studies focus primarily on economic factors when analyzing the formation of trade policy, it is clear that domestic political factors are just as important, and that policies are formed through the interplay of both.

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