POLI441: International Political Economy: International Trade
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1 POLI441: International Political Economy: International Trade Winter Semester 2016, Tuesdays and Thursdays 8:35 9:55 am ENGMD 279 Prof. Krzysztof J. Pelc Office: Leacock Office hours: Thursdays, 10am-noon. Teaching Assistant: 1. Course Description & Objectives This is an advanced undergraduate lecture course looking at the political forces and interests affecting international trade. The course uses the issue-area of trade to examine broad theoretical concepts in political science: cooperation between states, collective action, the design of international rules, and the paradoxes of domestic politics. It assumes limited familiarity with basic economic concepts, and a willingness to engage with some quantitative methods. A second objective of the course is to provide students with sufficient understanding of the political economy of trade theory to critically assess the portrayal of events related to international trade and the global economy in popular discourse and in the media. Among other topics, we cover the economic foundations of trade, as well as the intellectual history of these ideas; the emergence of international trade agreements; individual and state interests with regards to trade liberalization; the roles of emerging economic powers such as India and China; debates and controversies surrounding the GATT/WTO, and current trade issues such as environmental standards and the proliferation of preferential trade agreements. 2. Course Requirements Students are responsible for all assigned readings. I will assume knowledge of the ideas discussed in the readings in lecture, and all readings are part of exam material, though the emphasis will be on the concepts covered in class. Some of the readings, taken from academic journals, rely on advanced quantitative methods. You are not being asked to grasp these in detail: make sure, however, that you can identify the questions the authors are asking, the arguments they are propounding, and views they may be arguing against. Conference participation is mandatory, and an important part of the course grade (10%). This is the forum in which to test out ideas about the course material, even those ideas that are not yet fully worked out. 1
2 Students will write two short response papers. The first of these is an examination of a current event in the form of an op-ed, using some theoretical concept examined in class. It will be due in class on Feb. 16 th, 2016, and announced in class a week and a half prior, on Feb. 2nd. The second short paper will be a response to a question posted in class on March 24th, 2015, and due March 31st, Both short papers are a strict maximum of 3 pages, double-spaced, in 12 point Times New Roman font, with regular margins, and each will count for 15% of your grade. 3. Grade Distribution: Conference Participation: 10% Midterm exam (in class): 25% 2 short papers: 15% (each) Final exam: 35% 4. The Fine Print McGill University values academic integrity. Therefore, all students must understand the meaning and consequences of cheating, plagiarism and other academic offences under the Code of Student Conduct and Disciplinary Procedures. (see for more info) In accord with McGill University s Charter of Students Rights, students in this course have the right to submit in English or in French any written work that is to be graded. Instructors who adopt the use of text-matching software to verify the originality of students written course work must register for use of the software with Educational Technologies and must inform their students before the drop/add deadline, in writing, of the use of textmatching software in a course. Late work will be penalized one letter grade (e.g. from a B to a B-, or from a B- to a C+) per day. No distinction is made between being a minute late and being 23 hours late, so be strategic. If you drop off late work outside of class, you MUST have it time-stamped and signed by a secretary in the political science department. 5. Required Texts There is no textbook. All readings are either available through JSTOR, or will be posted on the course website. As the semester unfolds, we may add readings covering current events related to course material. Readings marked with an asterisk are optional. 2
3 6. Course Schedule Week 1. Introduction. (Jan 12 th and 14 th ) Irwin, Douglas, Against the Tide: An Intellectual History of Free Trade. Princeton Press. Introduction, Chapter 2 Krugman, Paul, What Do Undergrads Need to Know About Trade?, The American Economic Review, 83:2, 1993, Oatley, Thomas. International Political Economy. Longman, 2 nd edition: p * Grampp, William D What Did Smith Mean by the Invisible Hand? The Journal of Political Economy, 108(3): Week 2. Why Do Countries Trade? (Jan 19 th and Jan 21st) Irwin, Douglas, Against the Tide: An Intellectual History of Free Trade. Princeton Press. Introduction, Chapters 3 and 5. Bhagwati, Jagdish Protectionism, MIT Press Week 3. Variation in Trade Policy Through Time (Jan 26th and 28th) Bhagwati, Charles Kindleberger, The World in Depression, , Chapter 14, "An Explanation of the 1929 Depression," (Berkeley: University of California Press, 1973), pp Dani Rodrik, How Far Will International Economic Integration Go? Journal of Economic Perspectives 14 (1) 2000: Week 4. The Emergence of Institutions (Feb. 2 nd and 4 th ) Keohane, Robert O After Hegemony: Cooperation and Discord in the World Political Economy (Princeton: Princeton University Press), pp ; Ikenberry, John G., Institutions, Strategic Restraint, and the Persistence of American Postwar Order, International Security, 23: Week 5. The Demand for Protection (Feb 9 th and 11 th ) 3
4 Busch, Marc L. and Eric Reinhardt Geography, International Trade, and Political Mobilization in U.S. Industry. American Journal of Political Science 44 (4): Scheve, Kenneth and Matthew Slaughter What Determines Individual Trade-Policy Preferences. Journal of International Economics 54: Jens Hainmueller and Michael J. Hiscox, Learning to Love Globalization: Education and Individual Attitudes Toward International Trade, International Organization 60 (Spring 2006), Week 6. The Supply of Protection (Feb 16 th and 18 th ) Mansfield, Edward D., Helen V. Milner, and B. Peter Rosendorff. Why Democracies Cooperate More: Electoral Control and International Trade Agreements. International Organization 56(3): Kono, Daniel Y Optimal Obfuscation: Democracy and Trade Policy Transparency. American Political Science Review 100 (3): Pelc, Krzysztof "Googling the WTO: What Search Engine Data Tell Us About the Political Economy of Institutions." International Organization, 67(3): * Ehrlich, Sean D Access to Protection: Domestic Institutions and Trade Policy in Democracies. International Organization 61 (3): *** Week 7. Midterm: Feb 23rd *** Midterm covers all the material covered up to and including Feb. 18 th. No class on Feb. 25th. READING WEEK Feb 29th to March 4th. Week 9. The Effects of the WTO (March 8th and 10th) Krueger, Anne Introduction, in Anne O. Krueger, The WTO as an International Organization, University of Chicago Press, 1998, Özden, Çaglar and Eric Reinhardt The Perversity of Preferences: GSP and Developing Country Trade Policies, Journal of Development Economics 78 (1): Rose, Andrew Do We Really Know That the WTO Increases Trade? American Economic Review 94(1):
5 Goldstein, Judith, Douglas Rivers, and Michael Tomz Institutions in International Relations: Understanding the Effects of the GATT and the WTO on World Trade. International Organization 61(1): Rose, Andrew Do We Really Know That the WTO Increases Trade? Reply American Economic Review 97(5): Week 10. Dispute Settlement: the Cornerstone of the GATT/WTO (March 15 th and 17 th ) WTO Dispute Settlement Understanding Summary: Understanding on Rules and Procedures Governing the Settlement of Disputes. Oatley, Busch, Marc, and Eric Reinhardt Bargaining in the Shadow of the Law: Early Settlement in GATT/WTO Disputes. Fordham International Law Journal, 24: Bown, Chad "Participation in WTO Dispute Settlement: Complainants, Interested Parties, and Free Riders". The World Bank Economic Review, 19(2): Pelc, Krzysztof The Politics of Precedent in International Law: A Social Network Application. American Political Science Review 108(3): Week 11. Escape Clauses, Flexibility and Law (March 22nd and 24 th ) Bello, Judith Hippler The WTO Dispute Settlement Understanding: Less Is More. American Journal of International Law 90 (3): Jackson, John International Law Status of WTO Dispute Settlement Reports : Obligation to Comply or Option to Buy Out?, The American Journal of International Law, 98(1): Pelc, Krzysztof Seeking Escape: The Use of Escape Clauses in International Trade Agreements International Studies Quarterly. 53(2): * Barbara Koremenos Contracting Around International Uncertainty, American Political Science Review 99(4): Week 13. Trade Standards: Races to the Top, Races to the Bottom? (March 29 th and March 31st) 5
6 Greenhill, Brian, Layna Mosley and Aseem Prakash Trade-based Diffusion of Labor Rights: A Panel Study, American Political Science Review 103(4): Raluca Dragusanu, Daniele Giovannucci, and Nathan Nunn The Economics of Fair Trade Journal of Economic Perspectives 28(3): Victor V. Claar, Colleen E Correspondence. Journal of Economic Perspectives 29(1): * Hafner-Burton, Emilie Trading Human Rights: How Preferential Trade Agreements Influence Government Repression. International Organization 59 (Summer): Week 14. Supply Chains and Regional Proliferation (April 5 th and 7 th ) Bhagwati, Jagdish Regionalism versus Multilateralism. The World Economy, Vol. 15, pp Manger, Mark Investing in Protection. Cambridge. Introductory chapter. "Twelve countries reach an agreement on trans-pacific trade". Oct 5, Economist. * Busch, M Overlapping Institutions, Forum Shopping, and Dispute Settlement in International Trade. International Organization 61 (4): Week 15. Wrap up REVIEW (April 12th) and Final Exam (April 14 th ) *** 6
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