Domestic Interest Groups Research Articles

Political Economy of Altering Trade Restrictions in Response to Commodity Price Spikes

AbstractA model is developed to explain trade policy interventions in response to commodity price spikes. The model predicts that government preferences for averting losses for domestic interest groups lead to changes in trade distortions. In particular, trade interventions in response to downward price spikes are predicted, which is consistent with the proposal for a Special Safeguard Mechanism (SSM) in the World Trade Organization (WTO). Higher tariffs are likely in a noncooperative setting, and higher export subsidies will emerge in response. An efficient cooperative trade policy can be achieved in a repeated game setting and with possible involvement of the WTO.

Tit-for-tat in trade policies: nothing but a fest for vested interests?

AbstractTit-for-tat (TFT) in trade policies is a common practice. It is even enshrined in Article 22.4 of the WTO's dispute settlement process within multilateral trade integration. As such, it is a well-recognized means for promoting cooperation and for enforcing compliance with a common set of rules or institutions. However, there is equally widespread concern that a strategy of TFT degenerates into a prisoner's dilemma, in particular because of special interests ill-using it as a springboard for advancing protectionist measures and beggar-thy-neighbor policies. This paper provides a novel evolutionary perspective on TFT in trade policy regimes in that it tracks the role of special interests by parameterizing their leverage on strategies. Doing so, it provides new insights on the political economy of TFT in international institutions. Accordingly, the set of parameters for which a prisoner's dilemma emerges shrinks rather than widens, even with powerful domestic interest groups sharing a stake in protection.

Comparing the domestic and the EU lobbying context: perceived agenda-setting influence in the multi-level system of the European Union

ABSTRACTThe contribution analyses whether the factors affecting perceived interest group influence on political agendas differ depending on whether groups lobby in their own domestic context or seek influence at the European Union (EU) level. Findings from a multinomial logistic regression analysis based on survey responses from 1,723 domestic interest groups in the United Kingdom, Denmark and the Netherlands do not indicate that differences in the national setting are important for perceived group influence at the two levels. However, they underline how the decision-making level acts as a contextual factor, which conditions the explanatory potential of other crucial variables: Embeddedness into domestic decision-making is primarily an asset for securing perceived influence on the national rather than the EU agenda, whereas group resources matter more at the EU than the national level. In this way our multi-level design underlines how the state-of-play for securing perceived influence varies across lobbying contexts.

External influence, policy transfer and national ownership: A case on primary education of Bangladesh

This paper aims to explain ‘how the development partners have worked to transfer policies in primary education of Bangladesh’, followed by an assessment of national policy ownership in context of external policy influence in the sector. The external development partners’ mode and nature of the policy influence has taken the form of ‘emulation’ in primary education sector. Emulation entails making, by the development partners, the funds and policy ideas available for reforms in educational development projects and programmes. They have tried down various modalities and by the way they have consolidated their position in directing primary educational development by introducing sector-wide approach. Together with this, they have imported many reforms from the outside in the education system. Empowering schools to prepare school improvement plans within the second primary education development program is an example of external policy transfer. This raises questions about government's leadership in educational development policies. Lack of national policy ownership weakens ministerial accountability to the government or the parliament. National capacity constraints, uncertainty of national education policy, and resistance of the domestic interest groups to local reforms are some of key bottlenecks towards promoting national stewardship in policy domain.

THE POLITICAL ECONOMY OF REGIONALISM IN WORLD TRADE : IS IT COMPATIBLE WITH MULTILATERALISM?

Regional trading arrangements (RTAs) became popular in the last decade while the trade negotiations of the Uruguay Round continued under the multilateral track of GATT. This Article reopens a discussion that has divided both economists and policy makers as to whether the trend towards "regionalismn in world trade helps to move the process of multilateral trade liberalization forward or leads to more pro tectionist preferential/discriminatory practices, thereby undermining the multilateral approach of GATT. The authors, in this study, assess the fallacious view that equates regional freeing of trade with "free traden itself and advocate a ''public choicen approach arguing that whatever the motivations are for the regionalism, they may, on the other hand, give rise to abuse by domestic interest groups for pro tectionist purposes and therefore endanger the liberalization of the world trading sys tem.

The Political Economy of Italy in the EMU: What Went Wrong?

Although Italy was amongst the most enthusiastic founding members of the European Economic Community in 1957, the Italian capacity to respect the imperatives of European integration could not, and, still, cannot, be given for granted, as the recent sovereign debt crisis demonstrates. Apart from the many structural inconsistencies that persist not only in the economic, but also in the political and social organization of the country, also the public debate is sometimes characterised by a tendency to blame the process of Europeanisation for the less palatable decisions taken by the national institutions. This article addresses the sub-national, national and supranational dimensions of the process of Italian Europeanisation focusing in particular on the role of domestic socio-economic actors in influencing monetary policy decision making processes. The article is based on field research conducted by the author both in Italy and Brussels. The main object of this research effort was to analyse to what extent the outcomes of the process of European monetary integration have been influenced by domestic politics and by domestic economic interest groups in Italy with the final aim of assessing the impact of Italian entry into the EMU and especially its future within it. Thus, at the core of this research lies the following question: What is the role of domestic politics and domestic interest groups in monetary policy-making? The theoretical starting point of this interpretation of the process of European monetary integration is represented by an integrated domestic-foreign policy focusing on the role of economic interest groups in defining national exchange rate and monetary policy decisions. It is not here the place to discuss the different theories explaining the process of European integration and, more specifically, of the issue of European monetary integration. Here it will simply be underlined that, to explain foreign economic policy choices, policy outcomes need to be linked to domestic politics.

International and domestic dynamics of intellectual property protection

I examine the variation in the extent of intellectual property (IP) protection across countries. Combining insights from the ‘old’ and ‘new’ institutional perspectives, I argue that global pressures stemming from commitments to the World Trade Organization influence IP protection, but countries differ in their sensitivity to external pressures due to differences in domestic characteristics. The presence of a domestic interest group positively moderates the relationship between WTO commitment and stronger IP protection while domestic public health concerns negatively moderates this relationship. Data on IP protection for 65 countries during the period 1995–2006 provide support for the hypotheses.

Russia in WTO: interests, policy autonomy, and deliberations

The author examines the role of Russia’s WTO accession in shaping institutional adaptation across several important dimensions, arguing that WTO accession has generated more scope for pro-trade as opposed to protectionist domestic interest groups, constrained the scope of trade policy, and made more and better information available to deliberations by business and the public related to trade. Adjustments to Russian legislation and trade policies through the lengthy accession process have, it is argued, helped elicit more transparent forms of business–government coordination. The article also explores the role of Russia’s WTO commitments in shaping the functioning of the Eurasian Customs Union formed in 2010. The crisis in Russia’s relations with the EU and the US, initially sparked by contending projects of regional economic integration, will be a major challenge for the WTO’s agenda-setting and conflict management functions, a test having implications for the broad question of relevance of the WTO in an atmosphere of renewed geopolitical tensions among major powers.

Designing foreign policy

The literature on economic sanctions has long studied sender countries’ policymaking as a simple choice between imposing sanctions to extract concessions from the targeted country and doing nothing. We depart from this simplifying assumption and analyze sanctions as a multifaceted foreign policy instrument. We argue that senders design sanction policies in response to policy preferences of two domestic constituencies. Voters expect a response to an international dispute in the form of some policy, such as economic sanctions; hence, the sender’s policymakers seek to demonstrate their competence in foreign affairs by imposing sanctions. Once the policymakers announce the use of sanctions, special interest groups that stand to experience economic losses when this foreign policy is implemented pressure the policymakers to choose sanction measures limiting such losses. As a result, the policymakers design sanction policies to include measures that will be less detrimental to special interest groups. We test our theoretical argument using the Threat and Imposition of Sanctions data and show that, while pressures from public opinion increase the likelihood of sanctions, special interest groups that benefit from the relationship with the target country are associated with a lower probability of the use of sanction measures that would impose substantial costs on domestic interest groups.

Tarnishing Tinseltown: Hollywood’s Responses to Nazi Germany

Tarnishing Tinseltown: Hollywood’s Responses to Nazi Germany Lawrence Baron Thomas Doherty, Hollywood and Hitler 1933–1939. New York: Columbia University Press, 2013. Pp. 448. Cloth $35.00. ISBN 978-0231163927. Ben Urwand, The Collaboration: Hollywood’s Pact with Hitler. Cambridge, MA: Belknap Press, 2013. Pp. 336. Hardcover $26.95. ISBN 978-0674724747. Not since the publication of Daniel Goldhagen’s Hitler’s Willing Executioners has a scholarly monograph generated so much controversy within and outside of academia as Ben Urwand’s The Collaboration. He indignantly indicts Hollywood for colluding with Nazi Germany’s censorship demands to purge Jewish characters and anti-Nazi themes from American movies during the 1930s. Urwand’s sweeping condemnation of Hollywood’s complicity contrasts sharply with Thomas Doherty’s more balanced assessment of how the American film industry responded to Hitler’s incremental escalation of anti-Semitic, expansionist, and repressive policies before the outbreak of World War II. The initial trigger for the debate over the conflicting interpretations proffered by the two authors was the publicity campaign for The Collaboration. Harvard University Press hired Goldberg McDuffie Communications to promote Urwand’s book, scheduled for release in October 2013, seven months after Doherty’s hit the shelves in April. In what appears to have been an attempt to counteract the positive reviews Hollywood and Hitler had begun to receive, the marketing firm provided advance copies of The Collaboration to prospective reviewers in June. The cover letter accompanying the review copies denigrated the depth of Doherty’s research and touted that of Urwand’s: “Whereas Doherty relied on flawed, superficial accounts in domestic trade papers, Urwand discovered a vast array of primary resource materials.”1 While Urwand does not specifically mention Hollywood and Hitler (which he presumably had not read when he was writing The Collaboration) in the text of his book, he curtly dismisses it in a footnote as “a lively account, but one [End Page 59] that is limited to reports that appeared in American trade papers.” (256) To be sure, Urwand delved into the German archives to unearth reports about the hectoring of the film industry by Georg Gyssling, Nazi Germany’s consul in Los Angeles, but Doherty also draws on a “rich repository of archival sources” beyond the trade press, including the files of the Production Code Administration (PCA), the Motion Picture Producers and Distributors of America (MPPDA), and memos from federal officials. (375) Both books reveal how the major studios avoided direct criticism of Hitler and his anti-Semitic policies, abandoned or altered scripts that might antagonize Nazi Germany, and eliminated Jewish characters from their movies in the 1930s. They similarly attribute these concessions to the film industry’s commercial stakes in the German market. A main point of contention between the two scholars is whether this self-censorship constituted “collaboration,” exacted primarily by Germany’s threat to deny distribution licenses to the films of studios that did not abide by the content parameters it established, as Urwand claims, or a continuation of Hollywood’s standard practice of editing films and scripts to gain the approval of the PCA and local and state censorship boards in the United States and to placate domestic interest groups and foreign governments, as Doherty posits. The first reviewers of Urwand’s book seized upon the incendiary charge he leveled at the movie moguls by giving their pieces sensationalist titles such as, “Hollywood’s Creepy Love Affair with Adolf Hitler,” “Scholar Asserts That Hollywood Avidly Aided Nazis,” “When Hollywood Held Hands With Hitler,” and “Hollywood’s Deal with The Devil (Hitler).”2 Yet these titles only slightly exaggerated Urwand’s censure of Hollywood’s kowtowing to Nazi demands. In the prologue to his book, he unambiguously declares, “Over the course of the investigation, one word kept reappearing in both the German and American records: ‘collaboration’ (Zusammenarbeit). And gradually it became clear that this word accurately described the particular arrangement between the Hollywood studios and the German government in the 1930s.”(8) Amplifying his thesis, he argues, “The studio heads, who were mostly immigrant Jews, went to dramatic lengths to hold on to their investment in Germany. Although few remarked on it at the time, these men followed...

Domestic European Union Coordination and Interest Group Mobilization in Three Member States: Looking Beyond the Formal Mechanisms

One conclusion in the literature on domestic European Union (EU) coordination is that the formal institutional properties of countries—devolved versus centralized or unitary—affect the nature of coordination practices. Basically, the view has emerged that domestic coordination is a largely bureaucratic process in which political control mechanisms remain relatively weak. Instead of only looking at public authorities and their formal networks, this article relies on a data set that allows us to analyse informal political-administrative networks and look at how societal interests mobilize and target policymakers in order to shape the position governments defend at the EU level. One of our conclusions is that despite devolution in Belgium, its intergovernmental coordination shows a considerable level of network centralization, even when compared to unitary countries such as France and the Netherlands, meaning that there are large differences between the three states with respect to the connectedness of the actors involved.

The Micro-Formation Mechanism of Trade Conflicts between Large Developing Countries: India’s Anti-dumping Action against China

Employing Grossman and Helpman’s “protection for sale” model, this article uses data on anti-dumping actions from 1999 to 2009 to perform a quantitative analysis of factors influencing India’s determinations of anti-dumping duties against China, and reveals the micro-formation mechanism of economic conflicts between China and India. We find that the political power of India’s anti-dumping plaintiffs markedly increases the tariff level of its final determinations and that the relationship between the import penetration ratio and duty rates depends upon whether the plaintiffs are politically organized. Further, there is a significant positive correlation between India’s anti-dumping duty rates and its unfavorable trade balance with China. This indicates that in determining anti-dumping duties, Indian authorities are clearly influenced by the political clout of their domestic interest groups. They are also motivated by the desire to keep down China and gain the upper hand in the face-off between the “dragon and the elephant.”

Cooperation for forest protection in Southeast Asia: the role of Japan and its domestic interest groups

Abstract This article examines Japan’s role in advancing regional forest governance in Southeast Asia and reasons why the country, despite claiming environmental leadership, has not created a strong long-term institutional framework to promote sustainable forest management (SFM). The first half of the article is dedicated to analyzing Asia Forest Partnership and bilateral agreements with Indonesia and Malaysia in the light of implementation of SFM. The second half examines Japan’s domestic interest groups and their attitudes towards SFM and cooperation for forest protection with the Southeast Asian countries. The article argues that the gap between Japan’s commitments and actual activities has not been closed in the most recent cooperation for forest protection in the region. One of the major reasons for that is the strength and resistance against the regulations of the Japanese companies that benefit from the free trade of tropical timber.

Picking Treaties, Picking Winners

International treaty negotiations and domestic politics are interrelated. We show that negotiators can strategically select treaties to mobilize domestic interest groups and support particular candidates for office. Interest groups will support (oppose) political parties that will ratify treaties benefiting (harming) them. By designing treaties that mobilize these “swing” groups, negotiators can affect different parties’ chances of assuming power. Our model produces specific predictions for treaty design, contingent on the preferences of negotiators, parties, and interest groups. With conservative and moderate interest groups, the results may be counterintuitive—for instance, foreign governments pushing liberal treaties on liberal incumbents they dislike, intentionally mobilizing interest groups against the treaty and in favor of conservative challengers. Highly competitive systems, particularly those where moderate interest groups’ support is in play, give treaty negotiators leeway to shape political outcomes. Powerful interest groups may exert strong influence or no influence, depending on the cost of appeasing them and whether domestic and foreign negotiators are willing to gamble the incumbent’s political future for the achievement of their policy ideals.

The Domestic Sources of Donor Credibility

Donors often condition foreign aid to recipients on policy adjustments. How do domestic interest groups influence a donor’s ability to credibly commit to implementing threats and promises? In our model, domestic interest groups in the donor country can mobilize to support the donor’s implementation of punishments and rewards. The expectation of such mobilization influences the credibility of threats and promises at the prior contracting stage. The analysis produces three central findings. First, the donor chooses to rely on a single instrument when the domestic interest group exhibits a strong preference for that instrument, even if the cost of using that instrument is relatively high. Second, for credibility reasons the donor often promises generous rewards or threatens ruthless sanctions that seem out of proportion. Finally, the donor cannot simultaneously make credible threats and promises unless domestic interest groups mobilize to support both instruments. We examine the case of US foreign aid to Israel and Palestine to illustrate these theoretical propositions.

Business insiders and environmental outsiders? Advocacy strategies in international climate change negotiations

While non-governmental organisations (NGOs) do not formally have a voice in intergovernmental negotiations, such as the climate change negotiations, they resort to a range of activities to make their voice heard, including direct contacts with government negotiators, side events, media contacts or demonstrations. These diverse activities are typically classified as belonging to either an inside strategy or an outside strategy, depending on whether they aim at influencing politics directly or whether they seek to exert influence from the outside, via the media and the general public. What explains variation in the use of these two advocacy strategies? The strategies of interest groups in domestic politics have been studied extensively; the activities of groups in multilateral negotiations have so far mainly been looked at in qualitative case studies. This article therefore applies insights and methods from the study of domestic interest groups to groups active in the global climate change negotiations. Three reasons for specialisation in an inside or an outside strategy are put forward. First, the goals of non-governmental participation – namely, to provide accountability and to improve the negotiation process – are potentially conflicting. Second, groups differ in the degree of access to policymakers; if they lack access, they are unable to engage in inside advocacy. Third, groups do not only seek to influence policy, for which inside advocacy is presumably more suitable; they are also interested in their survival as organisations, for which outside advocacy seems more appropriate. These explanations lead to expectations that different types of groups employ different advocacy strategies. In particular, environmental organisations are thought to engage in more outside advocacy, compared with business groups that should rely to a greater extent on inside advocacy. Yet, if we find advocacy differences across group types, we cannot be sure whether these are due to differences in access, or because different groups accord differing priorities to influencing policy and organisational survival. By further analysing the effect of group characteristics, specifically expertise and membership type, this article seeks to disentangle the motivations for opting for a given advocacy strategy. Empirically, the article uses novel data from a survey conducted among organisations active in international climate politics. Over 200 fully completed questionnaires were returned and provided information on the frequency with which organisations engage in a range of inside and outside advocacy activities. A statistical analysis of the data provides evidence for differences across group types. Business groups use more inside advocacy; environmental organisations tend towards an outside strategy. Over and above group type, however, the data also indicate that experience increases the use of inside advocacy: across all group types, the longer a group has been involved in climate change negotiations, the more it uses inside advocacy. In contrast, membership type has, according to the analysis, no effect on advocacy behaviour.The article contributes to the literature on interest group strategies by looking at strategies at the international level. By comparing the advocacy behaviour of different groups active in the climate change negotiations, it also helps understand the role and influence of these different groups in the negotiations. If we assume that advocacy activities differ in their effectiveness, it is important to take into account variation in the use of advocacy strategies. As the value of non-state participation in intergovernmental negotiations stems from the diversity of views and ideas that different stakeholders can bring to the process, we need to ask whether all views and ideas have the same chance of being heard. The findings here are hence relevant for debates on the legitimacy of the negotiations, as well as, more generally, on the role of civil society in environmental governance.

The domestic politics of financial internationalization in the developing world

ABSTRACT This paper examines the domestic politics of financial internationalization. Financial internationalization has two components, the liberalization of cross-border capital flows and the liberalization of foreign ownership restrictions, yet most research to date has concentrated exclusively on the former. Building on existing theoretical work, this paper argues that in the developing world, domestic finance favors the joint abolition of restrictions on the inflow of foreign capital alongside continued restrictions on the ability of foreigners to own and operate domestic financial institutions. I test the argument on a unique dataset of foreign entry restrictions in developing economies and by examining interest group pressures for financial internationalization in Indonesia and Mexico. The findings complement and extend recent work on financial internationalization in the developing world and suggest further areas for research in the role of domestic interest group preferences for global economic integration.

Transnational activism of social movement organizations: The effect of European Union funding on local groups in the Czech Republic

Focusing on social movement organizations (SMOs) in the Czech Republic, this article explores the level of transnational activism of these actors. Although knowledge exists on domestic interest groups’ choice of European Union (EU) venues for lobbying, the influence of EU funding on protest and public campaigning by actors such as SMOs remains under-studied. We show what the level of transnationalization of SMOs is, what types of transnational strategies SMOs employ, and what explains these choices. Specifically, the article examines the effect the EU has had on Czech SMOs. We are interested in whether EU funding contributed to their de-radicalization and co-optation by the political elite, or rather empowered them to engage in transnational protest. The results of our analysis support the empowerment hypothesis.

Tertiarization, Industrial Adjustment, and the Domestic Politics of Foreign Aid1

Kleibl, Johannes. (2012) Tertiarization, Industrial Adjustment, and the Domestic Politics of Foreign Aid. International Studies Quarterly, doi: 10.1111/j.1468-2478.2012.00754.x © 2012 International Studies Association This paper explains the varying degrees to which commercial interests or recipients’ development needs shape donor governments’ foreign aid allocation decisions. I argue that domestic interest group politics is a major driver of the heterogeneity in donors’ aid allocation policies. As proxy measures of donor governments’ dependence on the political support of industrial producer lobbies and their susceptibility to the demands of development interest groups, I exploit variation in the level of tertiarization and in the intensity of industrial restructuring processes across donor countries and over time. While higher levels of tertiarization increase donor governments’ relative responsiveness to the aid allocation demands of development interest groups, intense periods of industrial adjustment provide incentives for governments to allocate aid in line with the preferences of their industrial producer constituencies. Statistical analyses of a dyadic panel data set of 21 OECD donor and 124 developing recipient countries for the period from 1980 to 2001 support the theoretical predictions.

Strategy in the climate change negotiations: do democracies negotiate differently?

Governments in international negotiations such as the United Nations Framework Convention on Climate Change (UNFCCC) negotiations use different negotiation strategies to increase their impact, which can be hard or soft, that is, more or less adding conflict to a negotiation. However, little is known about the structural (e.g. economic size) and domestic (e.g. pressure from stakeholders) factors that determine their choice of strategies. Using an original data set created from interviews with 58 delegations who attended the UNFCCC negotiations in Copenhagen, it is shown that the variables of economic power, democratic status, and pressure from domestic stakeholders had an effect on whether these delegations used hard negotiation strategies. It was found that economically powerful states were likely to use such strategies; in contrast democracies tend to use fewer hard strategies if their economic status is accounted for. However, democracies can be pressured to use hard strategies when they are lobbied by their domestic interest groups (e.g. GHG emitter interests, environmental groups).