The Peculiar Political Economy of NAFTA: Complexity, Uncertainty and Footloose Policy Preferences*

Abstract

On a large number of dimensions, the domestic political economy of the North American Free Trade Agreement (NAFTA) in the US was peculiar. In some ways the most surprising aspect of the politics of NAFTA relates to the apparent footlooseness of aggregate opinion. That is, since standard theories of political economy assume that policy preferences are determined by material conditions, those theories only predict changes when material (economic or political) conditions change. In this paper we provide evidence that aggregate public opinion in NAFTA shifted dramatically in the absence of any change in the underlying political and economic fundamentals. We will then sketch the elements of a theory of footloose policy preferences that helps understand this sort of phenomenon and conclude with a discussion of the implications of the analysis for policy analysis and advice.