1 / 19

Political Economy of Democratic Transition and Optimal Cooperative Design The Case Study of Gravity model-FTA

gaille
Download Presentation

Political Economy of Democratic Transition and Optimal Cooperative Design The Case Study of Gravity model-FTA

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

    1. Political Economy of Democratic Transition and Optimal Cooperative Design The Case Study of Gravity model-FTA

    2. Democratization and Interstate Cooperation

    4. Average AFTA/CEPT Rates mmmmmm

    6. ASEAN free trade agreement (AFTA)

    7. Degree of Export Dependence in ASEAN free trade area (1993-1996)

    9. Empirical Perspectives of Democratic Transition and interstate Cooperation Remmer (1998) asserts, The process of democratization that began in the late 1970s was followed by a dramatic resurgence of cooperative endeavors, including the revitalization of the Central American Common Market, as well as the creation of new vehicles for interstate cooperation, notably NAFTA. (p.26) Source: Remmer, K.L. (1998). The politics of neo-liberal economic reform in South America, 1980-1994, Studies in Comparative International Development, 33(2), 3-29. Mansfield, Milner, and Rosendorff (2002) assert, The regime type of states can strongly affect their propensity to cooperate on economic issues and more democratic countries have displayed a greater likelihood of concluding trade agreement than other countries, even when holding constant various political and economic influences .(p.505) Democratic countries are about twice as likely to form a PTA as autocratic countries, and that pairs of democracies are roughly four times as likely to do so as autocratic pairs. These results provide strong evidence that democracies are more commercially cooperative than other countries. (p. 481) Source: Mansfield D. E, Milner V. H, Rosendorff B. P. (Summer, 2002). Why democracies cooperate more: electoral control and international trade agreements. International Organization, 56(3), 477-513. The regime type serves as an international economic cooperation

    10. Literature Review Edward D. Mansfield; Helen V. Milner; B. Peter Rosendorff (2000) test the hypothesis on bilateral trade flows with gravity model from 1960-1985/ 1990, N=30480 observations. (in-outside, Second Image Theory) The Result of Study 1) The results of an empirical analysis based on the period 1960-1985/1990 are consistent with the these predictions. 2) Holding constant various economic and political factors, democratic dyads tend to trade more freely than dyad composed of a democracy and an autocracy. Demo+Auto 15-20% less commerce than a dyad composed of two Demo. from1960-1985. Demo+Auto 40% less commerce than a dyad composed of two Demo by 1990. Source: Edward D. Mansfield; Helen V. Milner; B. Peter Rosendorff (2000). Free to Trade: Democracies, Autocracies, and International Trade. The American Political Science Review, 94(2), 305-321. Xinyuan Dai (2002) highlights some problematic aspects of MMR’s analysis. The Result of Study 1) He recalculates the aggregate trade barriers and concludes that no clear comparison can be drawn without considering the preference of decision makers that go into the institutions. Source: Dai X. (2002)Political Regime and International Trade: Democratic difference Revisited. the American Political Science Review, 96(1), 159-165).

    11. The MMR Model Three main Assumptions for MMR Model The shocks on the world prices and the establishment of protection level represents an imperfect information. Domestic shocks have no impacts on world prices since the model assumes countries are small opening economies. The voters might become aware of the domestic prices affected by both the shocks to world prices and poor economic performance. (the interstate conflicts or violations of trade agreements on commercial issues) The four factors that determines the MMR model Functions of the economy The polity Conditions of political regime type The executive’s optimal level of trade protection in order to explain the trade preference of voters and government. The Function of Government’s Maximized Level of Import Tariff Settings

    13. The Results of MMR Model

    14. Methodology The data for our test are drawn from a wide range of World Bank, UN COMTRADE, International Monetary Fund (IMF), Polity IV, International Financial Statistics (IFS), and Industry Trade Data. The data of bilateral trade in SITC REV.3 (manufactured goods-labor intensive sectors) from ASEAN-5’s major trade partners, such as, Malaysia, Philippines, Indonesia Singapore, and Thailand, from 1993-2005. The panel data analysis (cross section and time-series method) because the advantages of this method are that panels can capture all relevant relationships among independent and dependent variables over time, and monitor unobservable bilateral-trade-pairs’ individual effects. Disputes ij is not included in this inquiry because there is no relationship of disputes in terms of military conflicts The objective of Analysis Hypothesis: the increased probability of interstate cooperation under either RTAij or WTOij is caused by the rising democratic levels. The Concept of Neoliberal Intuitionalists (International Institutions).

    18. Concluding Remarks

More Related