State Power and the Structure of International Trade

Abstract

The structure of international trade, identified by the degree of openness for the movement of goods, can best be explained by a state-power theory of international political economy. This theory begins with the assumption that the nature of international economic movements is determined by states acting to maximize national goals. Four goals—aggregate national income, political power, social stability, and economic growth—can be systematically related to the degree of openness in the international trading system for states of different relative sizes and levels of development. This analysis leads to the conclusion that openness is most likely to exist when there is a hegemonic distribution of potential economic power. Time-series data on tariff levels, trade proportions, regional concentration, per capita income, national income, share of world trade, and share of world investment are then presented. The first three are used to describe the degree of openness in the trading system; the last four, the distribution of state power. The data suggest that the state-power theory should be amended to take into consideration domestic political constraints on state action.

Open economy politics: A critical review

“…See also Marini (1972), Furtado (1973), andSunkel (1969). 10 The theory is reviewed in greater detail in Lake (1993). induce, or persuade other states into opening their markets to foreign trade and investment (Gilpin 1975(Gilpin , 1977Krasner 1976). Although plausible, these alternative intuitions did not produce a body of well-specified theory.…”

Democratization and International Organizations

“…of the largest state in the system~for the entirety of this analysis, the United States! by global GDP in year t, using data compiled in the Penn World Table+ 64 This measure of hegemony, although somewhat crude, is closely related to that used in many previous studies+ 65 Earlier research has found that hegemony influences the formation of IOs as well as patterns of international conflict and cooperation; however, the strength of these relationships remains controversial+ 66 In addition to political factors, we analyze three key aspects of each state's economy+ Past research has linked economic wealth and size to both IO membership rates and democratic transitions, so it is important to control for these factors+ 67 Consequently, we include development, which is country i's per capita GDP in year t, and its gdp in t+ openness is country i's total foreign trade~imports plus Krasner 1976;Russett 1985;McKeown 1991;Busch 1995+ 66+ See Keohane 1984;Martin 1992;andMansfield 1994+ 67+ See Jacobson, Reisinger, andMathers 1986;Burkhart and Lewis-Beck 1994;Shanks, Jacobson, and Kaplan 1996+ exports! divided by its GDP in year t+ There is some evidence that increasing openness increases the propensity for states to join IOs+ 68 Furthermore, because the flow of overseas commerce is affected by the regime types of the trading partners, it is important to ensure that any relationship between democratization and IOs is not an outgrowth of international trade+ 69 We also include a trend~year!…”

The transatlantic divide: Why are American and British IPE so different?*

“…The stimulus was the apparent decline of American hegemony. Both Gilpin (1975b) and Krasner (1976), as well as the economist Charles Kindleberger (1973), were early exponents of the idea that global economic health was somehow dependent on the presence of a single dominant power -a view that Keohane (1980) later labeled the theory of hegemonic stability. Despite what seemed like an erosion of American power, however, the world economy did not appear rudderless.…”