Joanne Gowa

Power Politics and International Trade

Recent literature attributes the relative scarcity of open international markets to the prisoners dilemma structure of state preferences with respect to trade. We argue that the prisoners dilemma representation does not reflect the most critical aspect of free trade agreements in an anarchic international system, namely, their security externalities. We consider these external effects explicitly. Doing so leads us to two conclusions: (1) free trade is more likely within, rather than across, political-military alliances; and (2) alliances are more likely to evolve into free-trade coalitions if they are embedded in bipolar systems than in multipolar systems. Using data drawn from an 80-year period beginning in 1905, we test these hypotheses. The results of the analysis make it clear that alliances do have a direct, statistically significant, and large impact on bilateral trade flows and that this relationship is stronger in bipolar, rather than in multipolar, systems.

Polities and Peace

In this paper, we review the central claim of a growing literature: that is, that democratic states rarely, if ever, wage war against and are very unlikely to engage in militarized disputes with other democratic states. We first examine the analytic foundations of this claim. We conclude that they are tenuous. Next, we examine the evidence. We find that no statistically significant relationship exists between regime type and the probability of war before World War I. We also find that the probability of disputes short of war is significantly higher for democratic-democratic pairs than for other pairs of states in the pre- 1914 period. In both cases, our analysis shows that the hypothesized relationship prevails only after World War H. Because of the Cold War that ensued after 1945, our results suggest that the relationship we observe between democracy and conflict is the product of common interests rather than of common polities. An analysis of the relationship between regime type and the probability of alliance formation lends support to this interpretation.

Politics at the Water's Edge: Parties, Voters, and the Use of Force Abroad

This article examines the effects of party politics and presidential election cycles on U.S. recourse to force abroad. I analyze a game-theoretic model to generate predictions about these effects. In the unique time-consistent equilibrium outcome of the one-shot game, policy varies across political parties. In a subgame–perfect equilibrium outcome of the repeated game, the use of force is invariant to the partisan composition of government. In neither case does policy respond to the electoral cycle.An empirical analysis supports the predictions of the repeated game. Between 1870 and 1992, U.S. recourse to force abroad responds neither to partisan politics nor to the domestic political calendar. It responds only to changes in U.S. power status and to the advent of general wars.

Rational Hegemons, Excludable Goods, and Small Groups: An Epitaph for Hegemonic Stability Theory?

In defining international free trade as a public good, “hegemonic stability theory” posited early in the 1970s that its reliable supply depended upon a distribution of international power analogous to that within a privileged group. More recently, however, critics have challenged three assumptions fundamental to hegemonic theory: its premises of free trade, public goods, and privileged groups. They have concluded that hegemony is not necessary for, and indeed may be antithetical to, a stable world economy based on market exchange. The author argues that the critics overstate their case. The assumptions they attack allow hegemonic theory to represent analytically several critically important barriers to free trade among states. Among these are the existence of strategic interdependence among the actors and the prevalence of informational asymmetries. The most significant flaw in hegemonic theory is its neglect of the essence of the domain to which it applies: the politics of inter-state trade in an anarchic world.

An Exclusive Country Club: The Effects of the GATT on Trade, 1950-94

Using data on bilateral trade flows from both before and after World War II, this article examines the impact of the General Agreement on Tariffs and Trade on trade between its members and on the system of interwar trade blocs. It shows that the distribution of the benefits produced by the GATT was much more highly skewed than conventional wisdom assumes. The article also shows that the gold, Commonwealth, Reichsmark, and exchange-control blocs exerted positive and significant effects on trade after 1945. The authors attribute these effects to the bargaining protocol that governed successive rounds of GATT negotiations, the signature element of the postwar trade regime.

Alliances, Imperfect Markets, and Major-Power Trade

The “new†trade theory and standard trade theory make different predictions about the composition and distribution of trade flows. Empirical evidence suggests that an increasing share of international trade consists of differentiated products, a consequence of increasing returns to scale. Nonetheless, the existing political science literature typically assumes that the conditions of standard theory hold. As such, the literature ignores the dynamic-inconsistency problem that imperfect markets can create. In doing so, it also ignores the fact that imperfect markets can shift the political prerequisites of open international markets. In this article we examine these shifts. We argue that alliances can support an optimal level of trade when scale economies rather than differences in relative factor endowments motivate it. Our empirical results support this argument, indicating that alliances exert a stronger influence on trade in goods produced under conditions of increasing rather than constant returns to scale.Earlier versions of this article were presented at the 2002 Annual Meeting of the American Political Science Association, Boston; the 2002 Annual Convention of the International Studies Association, New Orleans; and seminars at the University of Chicago (PIPES), the University of Colorado, Cornell University, Dartmouth College, New York University, the University of Pennsylvania, and Yale University. For helpful comments and suggestions, we are grateful to participants in these seminars and to Regina Baker, Bruce Bueno de Mesquita, William Clark, Benjamin Cohen, Christina Davis, Eric Fisher, Avery Goldstein, Stephen Kobrin, Lisa Martin, Patrick McDonald, Helen Milner, Robert Powell, Dan Reiter, Anne Sartori, Branislav Slantchev, and Beth Yarbrough. We are also grateful to Regina Baker and Patrick McDonald for research assistance.

Democratic states and international disputes

A growing literature in international relations concludes that democratic states pursue distinctive foreign policies. Specifically, democracies do not engage each other in war and only rarely engage each other in serious disputes short of war. Scholars have offered three basic explanations to support these findings. Each of the three invokes a different explanatory variable: norms, checks and balances, and trade. None of the three, however, provides a convincing explanation of the peace that is said to prevail between democratic polities: the distinction between norms and interests is unclear; substitutes for checks and balances exists in nondemocracies; and trade can deter conflict only under restrictive conditions.

Public goods and political institutions: trade and monetary policy processes in the United States

Basic analytic premises are an issue in contemporary debates about the U.S. foreign economic policy process. In dispute are the power structures alleged to govern the formation of American trade and international monetary policy. Thus, the literature supports both of these assumptions: the distribution of power is skewed towards private actors in the issue-area generally; the distribution of power varies according to issue-area. Within the camp of issue-specific power structures, as I shall discuss in more detail, support can be found for almost any assumption about the distribution of power prevailing, in the language of current debate, between “state and society.â€

The Democratic Peace after the Cold War

Political scientists and policy‐makers agree that democratic states were less likely to engage each other in militarized disputes than were other states during the Cold War. Most among them attribute this to their domestic political structures. Some, however, believe that the common and conflicting interests that the East–West conflict induced explain the relatively low democratic‐dispute rate. Evidence from the post‐Cold War world can help to arbitrate between these very different claims, as the collapse of the Soviet Union destroyed the bipolar system, precipitated a sharp rise in the number of democracies, and shifted dispute‐rate patterns. The analyses in this paper show that dyadic dispute rates converge after the Cold War, casting doubt on the existence of a democratic peace.

US national power and the post-war trading regime

This essay examines the effect of power asymmetries and imperfect markets on US trade policy, two issues often neglected in the conventional literature. We suggest that when the distribution of power is skewed and markets do not conform to the world of standard trade theory, open international markets will not exist unless the disproportionately most powerful state can make a credible commitment to free trade. We suggest that these two conditions characterized the post-World War II trade environment and partially explain why the United States encouraged the formation of the postwar international trade regime. To demonstrate this argument, we examine the voting rules, dispute settlement procedures, and regional trading arrangements that characterized the three postwar trade organizations: the stillborn International Trade Organization, the General Agreement on Tariffs and Trade, and the World Trade Organization. We argue that the rules of these institutions empowered their member states to punish any US attempts to ‘cheat’. In so doing, it made free trade their welfare-maximizing strategy choice.