Suspiciously timed trade disputes

Paola Conconi; David R. DeRemer; Georg Kirchsteiger; Lorenzo Trimarchi; Maurizio Zanardi

doi:10.1016/j.jinteco.2016.12.001

Suspiciously timed trade disputes

Paola Conconi, David R. DeRemer, Georg Kirchsteiger, Lorenzo Trimarchi, Maurizio Zanardi

Research output: Contribution to journal › Article › peer-review

Abstract

This paper shows that electoral incentives crucially affect the initiation of trade disputes. Focusing on WTO disputes filed by the United States during the 1995–2014 period, we find that U.S. presidents are more likely to initiate a dispute in the year preceding their re-election. Moreover, U.S. trade disputes are more likely to involve industries that are important in swing states. To explain these regularities, we develop a theoretical model in which re-election motives can lead an incumbent politician to file trade disputes to appeal to voters motivated by reciprocity.

Original language	English
Pages (from-to)	57-76
Number of pages	20
Journal	Journal of International Economics
Volume	105
DOIs	https://doi.org/10.1016/j.jinteco.2016.12.001
Publication status	Published - 1 Mar 2017
Externally published	Yes

Funding

We are grateful to Chad Bown, Meredith Crowley, Bal\u00E1zs Murak\u00F6zy, David Rietzke, and G\u00E9rard Roland for helpful discussions, and the Editor Giovanni Maggi and two anonymous referees for valuable comments. We thank participants at the 2014 European Trade Study Group, the 7th FIW Research Conference on International Economics, the Fall 2014 DISSETTLE Workshop, the 2015 MWIEG Spring meeting, the 2015 UECE Lisbon Meetings in Game Theory and Applications, the Budapest Workshop on Game Theory and Social Choice, the 2016 Royal Economic Society Conference, and seminars at ECARES, the Hungarian Academy of Sciences, Paris School of Economics, Newcastle Business School, Birmingham Business School, Universit\u00E0 Bocconi, and University of Bielefeld. This paper is produced as part of the project \u201CDispute Settlement in Trade: Training in Law and Economics\u201D (DISSETTLE), a Marie Curie Initial Training Networks (ITN) funded under the EU's Seventh Framework Programme, Grant Agreement No. FP7-PEOPLE-2010-ITN_264633. Funding from the F.R.S. - FNRS and the Hungarian Academy of Science's Lend\u00FClet Program (project entitled `Firms, Strategy and Performance') program is gratefully acknowledged.

Funders	Funder number
Universität Bielefeld
Newcastle Business School
Università Bocconi
European Commission
European Trade Study Group
Royal Economic Society
Paris School of Economics
Seventh Framework Programme
Birmingham Business School, University of Birmingham
Fonds De La Recherche Scientifique - FNRS
Magyar Tudományos Akadémia
Seventh Framework Programme	264633
Economic and Social Research Council	ES/M010341/1
Fundação para a Ciência e a Tecnologia	Incentivo/SAU/LA0001/2013

Keywords

Elections
Reciprocity
Trade disputes

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10.1016/j.jinteco.2016.12.001

Cite this

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title = "Suspiciously timed trade disputes",

abstract = "This paper shows that electoral incentives crucially affect the initiation of trade disputes. Focusing on WTO disputes filed by the United States during the 1995–2014 period, we find that U.S. presidents are more likely to initiate a dispute in the year preceding their re-election. Moreover, U.S. trade disputes are more likely to involve industries that are important in swing states. To explain these regularities, we develop a theoretical model in which re-election motives can lead an incumbent politician to file trade disputes to appeal to voters motivated by reciprocity.",

keywords = "Elections, Reciprocity, Trade disputes",

author = "Paola Conconi and DeRemer, \{David R.\} and Georg Kirchsteiger and Lorenzo Trimarchi and Maurizio Zanardi",

note = "Funding Information: We are grateful to Chad Bown, Meredith Crowley, Bal{\'a}zs Murak{\"o}zy, David Rietzke, and G{\'e}rard Roland for helpful discussions, and the Editor Giovanni Maggi and two anonymous referees for valuable comments. We thank participants at the 2014 European Trade Study Group, the 7th FIW Research Conference on International Economics, the Fall 2014 DISSETTLE Workshop, the 2015 MWIEG Spring meeting, the 2015 UECE Lisbon Meetings in Game Theory and Applications, the Budapest Workshop on Game Theory and Social Choice, the 2016 Royal Economic Society Conference, and seminars at ECARES, the Hungarian Academy of Sciences, Paris School of Economics, Newcastle Business School, Birmingham Business School, Universit{\`a} Bocconi, and University of Bielefeld. This paper is produced as part of the project “Dispute Settlement in Trade: Training in Law and Economics” (DISSETTLE), a Marie Curie Initial Training Networks (ITN) funded under the EU's Seventh Framework Programme, Grant Agreement No. FP7-PEOPLE-2010-ITN\_264633. Funding from the F.R.S. - FNRS and the Hungarian Academy of Science's Lend{\"u}let Program (project entitled `Firms, Strategy and Performance') program is gratefully acknowledged. Publisher Copyright: {\textcopyright} 2016 Elsevier B.V.",

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N1 - Funding Information: We are grateful to Chad Bown, Meredith Crowley, Balázs Muraközy, David Rietzke, and Gérard Roland for helpful discussions, and the Editor Giovanni Maggi and two anonymous referees for valuable comments. We thank participants at the 2014 European Trade Study Group, the 7th FIW Research Conference on International Economics, the Fall 2014 DISSETTLE Workshop, the 2015 MWIEG Spring meeting, the 2015 UECE Lisbon Meetings in Game Theory and Applications, the Budapest Workshop on Game Theory and Social Choice, the 2016 Royal Economic Society Conference, and seminars at ECARES, the Hungarian Academy of Sciences, Paris School of Economics, Newcastle Business School, Birmingham Business School, Università Bocconi, and University of Bielefeld. This paper is produced as part of the project “Dispute Settlement in Trade: Training in Law and Economics” (DISSETTLE), a Marie Curie Initial Training Networks (ITN) funded under the EU's Seventh Framework Programme, Grant Agreement No. FP7-PEOPLE-2010-ITN_264633. Funding from the F.R.S. - FNRS and the Hungarian Academy of Science's Lendület Program (project entitled `Firms, Strategy and Performance') program is gratefully acknowledged. Publisher Copyright: © 2016 Elsevier B.V.

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N2 - This paper shows that electoral incentives crucially affect the initiation of trade disputes. Focusing on WTO disputes filed by the United States during the 1995–2014 period, we find that U.S. presidents are more likely to initiate a dispute in the year preceding their re-election. Moreover, U.S. trade disputes are more likely to involve industries that are important in swing states. To explain these regularities, we develop a theoretical model in which re-election motives can lead an incumbent politician to file trade disputes to appeal to voters motivated by reciprocity.

AB - This paper shows that electoral incentives crucially affect the initiation of trade disputes. Focusing on WTO disputes filed by the United States during the 1995–2014 period, we find that U.S. presidents are more likely to initiate a dispute in the year preceding their re-election. Moreover, U.S. trade disputes are more likely to involve industries that are important in swing states. To explain these regularities, we develop a theoretical model in which re-election motives can lead an incumbent politician to file trade disputes to appeal to voters motivated by reciprocity.

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ER -

Suspiciously timed trade disputes

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