Cutting the Gordian Knot of Economic Reform

When and How International Institutions Help

Leonardo Baccini and Johannes Urpelainen

The thesis is controversial in that it argues trade agreements are more about economic reform than they are about trade.
The first empirical analysis of the three stages of international cooperation: formations of the agreement, design of the agreement, and effect of the agreement in the enforcement phase.
Offers a mixed-method approach and quantitative analysis of four case studies.

Cutting the Gordian Knot of Economic Reform

When and How International Institutions Help

Leonardo Baccini and Johannes Urpelainen

Description

Why do leaders of countries opt to sign on to international institutions that constrain their freedom to enact domestic policy? In this book, Leonardo Baccini and Johannes Urpelainen address this enduring question of international relations by looking at liberal economic reforms.

During the past two decades, governments across the developing world have implemented many liberal economic reforms that reduce direct state intervention in different industries, for example with regard to intellectual property rights and privatization. While failure to implement them can have disastrous economic and political consequences, liberal economic reforms have also provoked intense political controversy domestically. Baccini and Urpelainen argue that international institutions help to cut this Gordian knot by allowing leaders to credibly commit to liberal policies while also creating domestic political support for reform. The book takes a comparative look at developing countries that have engaged in treaties with the United States and European Union to develop a full theory of when and how leaders enter into international institutions to effect economic reform.

Cutting the Gordian Knot of Economic Reform is the first work to provide a theory on the design of international institutions, the circumstances that cause leaders to form international institutions, and the effects of international institutions on economic reform.

Cutting the Gordian Knot of Economic Reform

When and How International Institutions Help

Leonardo Baccini and Johannes Urpelainen

List of Figures
List of Tables
Chapter 1. Introduction
Chapter 2. When and How International Institutions Promote Economic Reform
Chapter 3. Preferential Trading Agreements as Helpful International Institutions
Chapter 4. Design of Preferential Trading Agreements
Chapter 5. Formation of Preferential Trading Agreements
Chapter 6. Economic Reform and Preferential Trading Agreements
Chapter 7. Explaining Economic Reform in Croatia and South Africa
Chapter 8. Agreements and Reforms without Democratization: Chile and Columbia
Chapter 9. Conclusion
Notes
Bibliography
Index

Cutting the Gordian Knot of Economic Reform

When and How International Institutions Help

Leonardo Baccini and Johannes Urpelainen

Author Information

Leonardo Baccini, Assistant Professor of International Political Economy, London School of Economics and Political Science, and Johannes Urpelainen, Assistant Professor of Political Science, Columbia University

Leonardo Baccini is Assistant Professor of International Political Economy at the London School of Economics and Political Science Johannes Urpelainen is Associate Professor of Political Science at Columbia University.

Cutting the Gordian Knot of Economic Reform

When and How International Institutions Help

Leonardo Baccini and Johannes Urpelainen

Reviews and Awards

"Every once in a long while a major puzzle in the study of politics and economics is solved. Baccini and Urpelainen have done just that in this important book. Through careful political-economy theorizing, clear quantitative analysis and penetrating, theoretically-sophisticated case analysis, they explain when international institutions effectively combine with domestic political conditions to promote economic reform and when they do not. They make a powerful and thoroughly convincing case for the advantages that preferential trade agreements with the United States or the European Union can have over multilateral arrangements or bilateral agreements with states such as China. They show clearly how international institutions can serve as credible commitment devices for leaders facing stiff domestic opposition to reform. Anyone interested in development must read this wonderful book." - Bruce Bueno de Mesquita, New York University

"Baccini and Urpelainen offer a compelling account of the causes and consequences of North-South trade agreements. By showing that these agreements have enabled comprehensive economic reforms beyond trade liberalization, the book offers an important and timely contribution to the study of international economic institutions. The book will be a key reference to scholars and students of international and comparative political economy." - Helen V. Milner, Princeton University

"Baccini and Urpelainen marshal an impressive array of evidence to support a novel and surprising theory of the dynamics of economic reform. Preferential trading agreements are not merely steps towards incremental trade liberalization. Instead, PTAs are important levers of domestic reform, allowing leaders to do two things: make credible commitments that they otherwise could not and buy support from interests who would otherwise be implacably opposed." - Philip Keefer, Development Research Group, The World Bank