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Alliances and the High Politics of International Trade*

  • Scott Wolford and Moonhawk Kim
Abstract

What is the role of trade policy in military alliances? We analyze and test a game-theoretic model of economic and security cooperation in which allies hold different interests across the security and commercial aspects of the relationship. In equilibrium, allies with little market power who are valuable politically to larger states engage in sociallysuboptimal protectionism, as their allies’ threats of retaliation are incredible. Stable cooperation emerges in the form of unretaliated protection rather than mutually low trade barriers. We test the model’s implications against a dyadic data set of antidumping petitions from 1980 to 2013 and find that larger allies are more likely to tolerate protectionism by smaller allies by denying domestic petitions to retaliate against dumping measures by the latter.

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Scott Wolford, Associate Professor, Department of Government, University of Texas at Austin 158 W 21st St, Austin, TX 78712 (swolford@austin.utexas.edu). Moonhawk Kim, Assistant Professor, Department of Political Science, UCB 333, University of Colorado Boulder, Boulder, CO 80309-0333 (moonhawk.kim@colorado.edu). The authors thank Scott Adler, Aysegul Aydin, Andy Baker, Terry Chapman, Mike Findley, Doug Gibler, Amy Liu, Toby Rider, Emily Ritter, Anand Sokhey, and, especially, Eric Reinhardt, for helpful comments and suggestions, as well as the editors and anonymous reviewers at PSRM.

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Political Science Research and Methods
  • ISSN: 2049-8470
  • EISSN: 2049-8489
  • URL: /core/journals/political-science-research-and-methods
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