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Unit 10 : Political Economy of Non-tariff Barriers : and Their Applications

factors are more salient determinants of voting behavior than are personal economic circumstances. Notes
Other survey research further suggests that public support for protection increases during downturns
in the economy and when domestic industries are under severe pressure from foreign competition.
As a result, public officials seeking to enhance their electoral fortunes have incentives to impose
protection during periods of high unemployment and currency appreciation because such measures
are likely to be popular and may blunt the short-term effects of macroeconomic pressures. These
analyses therefore lead us to expect a direct relationship to exist between both the level of
unemployment and the real exchange rate, on the one hand, and the incidence of NTBs, on the other
hand.
10.2 Statist Approaches to Trade Policy

While societal approaches have been especially influential in the field of political economy, they also
have been criticized on a number of grounds. Especially important is the charge leveled by statists
and others that societal approaches systematically underestimate the effects of two factors that regulate
the provision of protection : state interests with respect to trade policy and domestic institutions.
Analyses that emphasize state interests generally focus on the roles of politicians and policymakers
in the formation of trade policy, holding constant societal pressures. Further, as Ikenberry, Lake, and
Mastanduno note, these analyses presume that the preferences of public officials “are partially, if not
wholly, distinct from the parochial concerns of either societal groups or particular government
institutions, and are tied to conceptions of the ‘national interest’ or the maximization of some social
welfare function.”
Many statists conclude that the ability of policymakers to advance the national interest depends in
large measure on the extent to which domestic political institutions render them susceptible to demands
by pressure groups and other nonstate actors. Policymakers who are poorly insulated from, and lack
autonomy with respect to, pressure groups will face difficulty advancing the national interest unless
(as discussed further below) it converges with the preferences of societal groups. Thus, one hypothesis
we will test is that institutional factors that foster the insulation and autonomy of public officials
bolster the ability of states to pursue trade policy consistent with the national interest.
Relative size
Clearly, the national interest with respect to trade is likely to vary across states; and it is not possible
to assess adequately the influence of institutional factors on trade policy from a statist perspective
unless each state’s interest can be specified. On this score, many analysts have argued that a state’s
economic size governs its national interest with respect to trade policy.
There is ample reason to expect that larger states will display a more pronounced interest in protection
than their smaller counterparts. First, international trade theory suggests that this should be the case.
By virtue of their size, large states are likely to be vested with disproportionate market power. They
can exploit their monopoly power through the use of tariffs, as well as quotas and other NTBs that
duplicate a tariffs effect. If the imposition of an optimal quota elicits retaliation, the welfare of both
parties will suffer. This, however, only limits the incentives for a large state to impose NTBs against
a state of similar size, since only states with some monopoly power have an incentive to retaliate in
response to the imposition of protection. Large states retain an incentive to target small states, since
the latter have no incentive to retaliate. In contrast, small states are unlikely to possess the market
power necessary to benefit from optimal protection and face the prospect of retaliation by trade
partners (thereby reducing foreign commerce on which they tend to be highly dependent) if they
impose NTBs. Hence, on average, we expect larger states to display a greater preference for NTBs
than their smaller counterparts.
Second, state size is likely to be directly related to patterns of protection due to the time period
analyzed in this article. As discussed further below, the empirical analysis conducted in this study is
based on the mid-1980s. In the opinion of many scholars, this was a period characterized by a
moderately skewed distribution of power among a few relatively large nonhegemonic states. A number
of studies have concluded that systems of this sort—as well as ones in which hegemony is declining—

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