Supplying Trade Reform: Political Institutions and Liberalization in Middle‐Income Presidential Democracies

Abstract

Correcting the relative lack of attention to the supply side of trade policy, this article addresses how political institutions channel societal demands for protection. I hypothesize that strong presidents with significant legislative powers and strong party leaders—empowered through electoral rules that rein in the personal vote—can help overcome protectionist biases. These arguments compare with two institutional alternatives: first, that protectionism should decrease as electoral district size grows because elections become more proportional; and second, that the collective‐action problems in fragmented party systems thwart trade reform. I evaluate these hypotheses empirically using pooled time‐series–cross‐sectional data involving 18 developing countries from 1971 to 1997. I find that delegation to presidents and party leaders is significantly related to trade liberalization, and some evidence suggests that the effective number of parties and the size of electoral districts may also influence levels of protectionism.