Do Democracies Sign Deeper Preferential Trade Agreements?
43 Pages Posted: 1 Aug 2011 Last revised: 30 Aug 2011
Date Written: 2011
Abstract
What explains the variation in preferential trade agreements (PTAs)? These agreements have increased exponentially over the past twenty years, yet they differ significantly. In this paper, I focus on the variation in PTA depth, arguing that states design the legal depth of PTAs based on their own interests. I test whether democratic states design legally deeper PTAs than non-democracies, who face no pressure from voters. Depth could be either a function of legal norms or a need for a strong economy, something deeper trade could help. Analyzing 193 bilateral PTAs, I find no monadic regime-type effect on PTA depth, though more democratic dyads sign deeper PTAs. A closer look at the PTAs suggests a different variable: age of democracies. I find that new democracies do tend to sign shallower PTAs, even when accounting for the monadic or dyadic democracy variable. Thus, it may be that states sign PTAs for political, rather than economic, reasons. This is a way for these newer democracies to signal legitimacy of being democracies.
Keywords: Preferential Trade Agreements, Regime-Type, New Democracies, Dispute Settlement Procedures
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