The link between domestic political institutions and commitments to international trade agreements

Since the early 1980s many states have liberalized their trade. To do this, many countries have joined Preferential Trading Arrangements that reduce trade barriers. Almost every country in the world is a member of a preferential trade arrangement. However, the puzzle scholars face is why so many countries have rushed to enter a free trade agreement by lowering trade barriers at this historical juncture. Although a recent expansion of preferential trade agreements has stimulated many debates, we lack an understanding as to what motivates states to make a commitment to international trade agreements since the 1980s. Moreover, economists have not paid enough attention to the changing political motivations of leaders to sign Preferential Trade Agreements (PTAs). In this dissertation, I ask how and whether domestic institutions of a country make a difference in committing to international trade agreements. The purpose of this dissertation is to provide a more convincing theoretical framework and empirical support incorporating an interaction of leaders' preferences and institutional constraints in order to explain why more countries pursue interstate commercial cooperation by entering PTAs.; In this dissertation, I argue that the rush to PTAs since the 1980s is linked to the change of domestic constraints. A decision-maker's preferences can be constrained through political institutions in the dynamic process of trade policy. In this dissertation, I aim to demonstrate how politicians may implement their particular trade policy preferences in different regimes and how this is linked to a decision to sign tariff reduction agreements. I also aim to demonstrate how the constraints of political institutions may be linked to a decision to sign tariff reduction agreements. I claim that the propensity of signing a trade agreement increases as the survival of political leaders becomes more dependent on having a large size of winning coalition. Decision-makers have greater political motivations to enter international trade agreements as the level of democracy increases. In order to test the theories, I use a large N quantitative study. This dissertation tests key propositions drawing on a comprehensive database of international trade agreements from 1950 to 1992 with 150 countries. I find that leaders have greater political incentives to conclude international trade agreements as the size of their winning coalition grows. The results also suggest that the level of democracy is associated with a leader's political motivation to conclude international trade agreements. I also find that electoral rule and the number of veto players have an impact on interstate commercial cooperation. By highlighting this dynamic, this dissertation makes important contributions to theories of international relations and international political economy more generally. Domestic institutional constraints deserve more attention in international political economy. Domestic constraints and international constraints are intertwined. On the basis of the arguments and evidence provided in this dissertation, it is clear that domestic institutional analysis facilitates our understanding of trade policy in international politics.