Core Literature

Question 1

Martin (1999)

Answer 1

States are self-interested: interests clash, poor information undermines reciprocity, IOs assist states in cooperation dilemma, IOs allow states to reach pareto frontier, IOs satisfy states demand for monitoring and reliable information about other states behaviour-> IOs make actions of other states more predictable

Question 2

Krasner (1991)

Answer 2

Pareto optimum analysis ignore power differences, cooperational problems with distributional consequences lead to differences on the pareto frontier,
Distributional conflicts can be resolved by exercising power:
1.Power to determine who plays the game
2.Power to dictate rules of the game
3.Power to change payoff matrix (issue linkages)

Question 3

Shadlen (2009)

Answer 3

There are “makers, takers and breakers” of int. institutions
Rationalist (resources) vs institutionalist (rules) perspective on Post-Uruguay WTO negotiations.
1. Uruguay: Single undertaking made DCs agree to rules on IP and Investment to gain market access
2. Uruguay:
- TRIPS: DCs exploited differences between Europe, US and Japan to exclude some restrictions, but had to agree to most
- TRIMS: Same, but US wanted strong and broad investment agreement, DCs resisted successfully to limit to trade-related through deadlocking negotiations
3. Doha: Investment negotiations on basis of positive list
- “like-minded group” (led by India and Malaysia) succeeds in establishing ‘explicit consensus’ rules in investment.
-consensus rules aloud developing countries to secure a clarifying statement that clarified dcs right to issue compulsory licenses
4. Cancun: DCs interpreted explicit consensus to start negotiations, Developed countries as explicit consensus about modalities-> DCs effectively blocked negotiation on the basis of explicit consensus
-> Therefore, rules empowered resource-poor countries to block more deepness (Investment) and clarified rules they were originally strongly opoosed to-> DCs have blocking power
-> this was not possible during Uruguay round because of single undertaking in combination with withdrawal of EC and US from GATT 1947 immidiately upon joining GATT 1994 (Gruber: Go it alone power)

Question 4

Babb (2013)

Answer 4

The Consensus was a transnational policy paradigm, shaped by both scholarly and political forces (Hall, 1993). At the core of the Consensus was the international financial institutions’ practice of conditionality – making loans to governments in exchange for policy reforms. The Consensus was subsequently weakened by its own unintended consequences, by political forces both within Washington and worldwide and by intellectual changes in the field of economics. However, the Consensus has yet to encounter any serious rivals.

Question 5

Oenis & Senses (2005)

Answer 5

the PWC, in so far as it influences the actual practice of key Bretton Woods institutions, provides an improvement over the Washington Consensus. Yet, at the same time, they draw attention to the failure of the PWC, as reflected in current policy practice, to provide a sufficiently broad framework for dealing with key and pressing development issues such as income distribution, poverty and self-sustained growth

Question 6

Callaghy (2001)

Answer 6

In conjunction with elements of an epistemic community, the NGO translocal networks have shaped the amplitude and sway of the international debt regime in important ways.
The three “genetic” strands of the triple helix – the institutions of the international debt regime, the NGO debt networks, and the epistemic community – has powerfully affected the way a number of African and other states function; it has intervened in the day-to-day operation of these states in very detailed ways. In their interaction with the international debt regime, the epistemic and NGO strands of the triple helix have helped to create new forms of governance at both the national and international levels.
The international debt regime strand of the triple helix can be characterized as an international arena. With its widely amplified norms and discourses, it constitutes an international public sphere made up primarily of states and international financial institutions.
Not all creditor countries resisted more debt relief, and some of those that did, did not do it all the time; sometimes they changed their minds. Over time the two major Bretton Woods institutions had quite varied views and played quite different roles in regard to debt issues. Not all NGOs supported HIPC I and HIPC II; many have refused to support them because of the very tight link to the often harsh and intrusive conditionalities of structural adjustment. Another lesson is that the NGOs with the best understanding of the international debt regime and the economics epistemic community were able to bring about the most change.

Question 7

Chin (2012)

Answer 7

1. China has revolved into a net donor in the last fifteen years, surge has been catalysed by rise as an economic power and promoted by party leadership. (Brasil, and SA also net donors now), but china probably third largest donor in the world
2. China rose economically but continued to self-identify with south by redirecting part of wealth and technical expertise to Global South; at the same time China is receiving aid from traditional donors
3. Aid recipients press China for more sustainability of aid relationship and transparency of processes and results (concerns over data)

Question 8

Pettifor (2003)

Answer 8

International financial system leads to crises, those who caused them (small number of OECD countries who set up the system) should bear responsibility for the costs of debt crises.

Question 9

Boorman (2003)

Answer 9

A formal mechanism is needed (SDRM).

Question 10

Porzecanski (2003)

Answer 10

If anything, international efforts should make enforcement of debt contracts against ‘irresponsible governments’ easier

Question 11

Palley (2003)

Answer 11

Two assessment criteria for every proposal:

1. Procedural fairness
2. Price and supply of credit for debtors

Question 12

Helleiner (2005)

Answer 12

Three political problems for SDRM:

1. collective action problems on both the side of sovereign debtors and that of private foreign creditors:
   - it is in common interest to back regime that prevents exit in the lead up to a crises, but in the absence of collective commitment it is in each creditors interest to exit before others do
   - collective interest to restructure, but individual interest to demand full payment and free ride on other creditors restructuring
   - collective interest for debtors to create SDRM, but individual country faces reputational problems if it indicates support
2. basic distributional conflicts embodied in any debt restructuring effort: Even if debtors and creditors agree about SDRM being beneficial, the specific rules can tilt the balance towards one or the other-> hard to find agreeable solution
3. the uncertain behaviour of the private creditors’ home states:
   - incentives of private credors’ home states are driven by a wide number of economic, political and strategic factors making it difficult to resolve the collective action problems through state actions

Question 13

Gallagher (2013)

Answer 13

Sovereign debt often covered under IIAs, Creditors can use BITs to reclaim the full value off their bonds through ISDS, US has included SDR exemptions in some of its BITs (but they do not permit SDR to violate NT-> inadequate, because domestic interests need to be treated differently in a crises

Question 14

Gagné (2000)

Answer 14

Strengthened WTO dispute settlement procedures enhance the authority of international institution over world trade and to tackle potential conflicts among states. Even though state cooperation between powerful states remains essential to ensure viability of international rules, the WTO’s and Uruguay rounds extensive provisions are both eloquent testimonies to states commitment and to the legitimacy of those provisions. These factors, coupled with the ever-increasing impact of globalisation make it constantly harder both in economic and political terms not to observe international trade obligations.

Question 15

Shaffer (2015)

Answer 15

Four dimensions of regulatory change catalysed by the WTO with which legal compliance is synergistically linked:
(i) changes in the boundary between the market and the state (involving concomitantly market liberalization and growth of the administrative state); (ii) changes in the relative authority of institutions within the state (promoting bureaucratized and judicialized governance); (iii) changes in professional expertise engaging with state regulation (such as the role of lawyers); and (iv) changes in normative frames and accountability mechanisms for national regulation (which are trade liberal and transnational in scope)
It shows how nation states are reshaped in the process of their engagement with WTO law, demonstrating how professions, normative frames, and domestic institutions are central to these processes.
Poor developing countries are the least engaged in WTO processes because they trade less and are unlikely to have robust administrative states in the first place, giving rise to what Phillips (2006) calls “regulation without a regulatory state,” with government departments beset by low regulatory capacity, capture, and corruption.

Question 16

Allee & Scalera (2012)

Answer 16

The more rigorous a state’s accession to an international organization, and thus the greater policy change required to join, the greater the benefits it will receive from membership in the organization. States facing greater scrutiny from the WTO and thus engaging in greater trade liberalization as part of the WTO accession process should experience greater trade on joining compared to those who face little scrutiny and engage in little if any liberalization. Quantitative analysis demonstrates that those who engage in the greatest amount of accession-driven liberalization experience the greatest trade increases from WTO membership, particularly in the years right after joining. In contrast, those who do little or nothing to join do not see any trade gains from being a WTO member.

Question 17

Kim (2008)

Answer 17

Countries with the administrative capacity to follow elaborate procedures reap the benefits of increased legalization. For countries without such capacity primarily developing countries the potential benefits are offset by their difficulty in following the procedures. Compared to the GATT era, developed countries with greater capacity are much more likely to utilize dispute settlement in the WTO than developing countries. Gains from the institutional changes in dispute settlement procedures have accrued to benefit mostly developed member countries in the WTO.

Question 18

Steinberg (2002)

Answer 18

GATT/WTO consensus decision-making process is organized hypocrisy in the procedural context:

1. When GATT/WTO bargaining is law-based, states take procedural rules seriously, attempting to build a consensus that is Pareto-improving, yielding market-opening contracts that are roughly sym- metrical. When GATT/WTO bargaining is power-based, states bring to bear instruments of power that are extrinsic to rules (instruments based primarily on market size), invisibly weighting the decision-making process and generating outcomes that are asymmetrical and may not be Pareto-improving.
2. Trade rounds have been launched through law-based bargaining (pareto-improved contracts), concluded through power-based bargaining (asymmetrical contracts), agenda setting dominated by powerful states
3. Sovereign equality decision making, because it allows states to formulate legislative packages that favor the interests of powerful states, yet can be accepted by all participating states and generally considered legitimate by them

Question 19

Mayer (2009)

Answer 19

1. to be meaningful and pro-development, the context for policy space must extend beyond trade policy and include the many non-trade (particularly macroeconomic and exchange-rate) policies that will achieve developmental goals more effectively;
2. policy space depends not only on international rules; rather, in a globalised world it also depends on the impact of international market conditions and policy decisions taken in other countries on the effectiveness of national policy instruments;
3. international integration affects policy space through several factors that pull in opposite directions; whether it increases or reduces policy space differs by country and type of integration;
4. policy-makers who choose to pursue more proactive policies and broad development objectives which privilege real economic variables (for example, real output and income growth) require instruments that allow
   (a) correcting for market and government failures,
   (b) managing boom-bust cycles, and
   (c) dealing effectively with external shocks; and
5. while the UR agreements have introduced restrictions, most of the policy space required to pursue proactive development policies is available and could be further enlarged by tightening disciplines in international monetary and financial relationships.

Question 20

Gallagher (2008)

Answer 20

Developing countries took a respite from the negotiations because the potential gains of the market access deal on the table were relatively small and the cumulative costs in terms of losses of policy space in the UR and the DDR combined were relatively large.
Before the current round of negotiations began the WTO system provided policy space in the following areas by allowing nations to:
• use average tariffs to sequence certain industries into world markets;
• restrict the liberalization of certain service industries and ‘limit’ the liberalization of other industries to steer liberalization toward
development;
• issue compulsory licenses under the TRIPs; and
• require foreign firms to transfer technology, form joint ventures and perform R&D in the host country.
The DDR proposals through September of 2007 could have put much of these openings in jeopardy, with little benefits in return.

Question 21

Scott & Wilkinson (2011)

Answer 21

The introduction of new data on declined levels of protectionism and the running of projections on the basis of draft texts clearly shows that the overall size of the Doha pie is smaller than initially envisaged and considerably less for LDCs. This situation is made worse when the pattern of the negotiations unfolding is taken into account. Implementation issues, a key requirement for the developing countries in the run-up to the launch of the DDA, have been squeezed out of the negotiations. The move towards a focus on agriculture as the core development content of the round has been problematic because of a lack of ambition and commitment on the part of the US and EU, the capacity for subsidy box shifting to undermine any agreement that might be reached, and the inadequacy of the attention paid to issues like cotton. In addition, the focus on liberalisation does little to address the crucial agricultural issues for LDCs, such as how to ensure greater food security and self-sufficiency. Likewise, the pressure many developing countries have come under in the NAMA negotiations highlights the conflict between the liberalisation agenda and the need of developing countries to maintain flexibility in trade policies. Moreover, little comfort can be found elsewhere in the DDA as the questionable value of commitments on duty-free and quota-free access illustrates.

Question 22

Chang (2004)

Answer 22

During their early stages of development, now-developed countries systematically discriminated against foreign investors. They have used a range of instruments to build up national industry, including: limits on ownership; performance requirements on exports, technology transfer or local procurement; insistence on joint ventures with local firms; and barriers to ‘brownfield investments’ through mergers and acquisitions. We argue that, only when domestic industry has reached a certain level of sophistication, complexity, and competitiveness do the benefits of non-discrimination and liberalisation of foreign investment appear to outweigh the costs.

Question 23

Smythe (2003)

Answer 23

The dynamics of global economic governance at the WTO are changing. The changing membership and the role of NGOs are raising challenges to the way in which, and in whose interests, the WTO operates:

1. The compromise that created the Working Group on Trade and Investment (WGTI) reflected the lack of consensus on negotiating investment rules at the WTO in 1996 and the ongoing efforts led by the United States to forge an investment agreement first at the OECD
2. opponents of investment rules were able, for a period, to stymie any progress toward a decision on negotiations in the working group. Ultimately, however, proponents could overcome enough opposition to at least insert a deadline for a future decision on investment and other Singapore issue negotiations into the Doha Declaration
3. WTO capacity-building program for DCs was a final key to overcome DCs reluctance for engaging in new negotiations
4. NGOs played a role in alternative capacity building and the articulating of ideas and knowledge about investment issues, which was intended to counter the claims of proponents about the link between multilateral investment rules and development and to strengthen developing-country opposition to negotiations
5. the growing challenge for proponents to make a convincing case for negotiations by linking development and multilateral investment rules in the WGTI and the increasing atmosphere of acrimony and frustration that reinforced develop ing-country opposition

Question 24

Crystal (2009)

Answer 24

While developing countries have undergone a remarkable transformation in their attitudes toward foreign direct investment (FDI) during the past decade, they still resist the establishment of a multilateral regime governing FDI. This is puzzling, first, because these states are liberalising their policies anyway, and second, because a multilateral regime offers several advantages over the patchwork of unilateral and bilat- eral arrangements that currently exist (for instance, by contributing to increasing FDI flows). What explains this paradoxical attitude? This paper critically examines a number of potential explanations. Concerns about losing sovereignty, lack of knowledge about the costs of FDI restrictions, or lingering suspicions of multinational corporations may play some role, but cannot account for unilateral and bilateral liberalisation. Another approach highlights the role of domestic groups in supporting or opposing a multilateral agreement. Yet the pattern of variation among the attitudes of developing countries casts doubt on this explanation as well. Finally, the paper puts forth an argu- ment that focuses on how bargaining power affects the trade-off between economic gains and the loss of sovereignty. The host state’s perceived attractiveness to multinational investors conditions whether or not the government resolves this trade-off in favour of supporting a multilateral regime.

Question 25

Elkins et al (2006)

Answer 25

BIT proliferation driven by competition for capital and credible commitments

Question 26

Sell (2010)

Answer 26

Historical institutionalism can help to explain how a global regime for intellectual property protection emerged as a product of internal institutional change in the US. The process began with a post-Watergate trade policy reform and subsequently, the explicit incorporation of intellectual property into trade policy and trade institutions. Layering intellectual property protection onto trade institutions through lobbying and legislation gave the USTR more authority and resources, and also created new tasks for the USTR. Institutional layering also helped an initially disparate group of actors with various understandings of, and interests in, intellectual property to build a coalition united behind a mul- tilevel (bilateral and multilateral) trade policy framework to further insti- tutional change.

Question 27

Maskus (2014)

Answer 27

The period since the mid-1990s has seen sweeping and globalised reforms in the laws and standards protecting intellectual property rights. Empirical evidence suggests that these reforms are not having much impact on innovation in the developing world but are improving the processes and efficiency of technology diffusion. However, stronger patents and copyrights also raise con- cerns about how they will affect the ability of poor countries to access technologies for dealing with public and social objectives

Question 28

Shadlen (2004)

Answer 28

Developing countries have limited control over the distributional and substantive dimensions of international institutions, but they retain an important stake in a rule- based international order that can reduce uncertainty and stabilize expectations. Because international institutions can provide small states with a potential mecha- nism to bind more powerful states to mutually recognized rules, developing coun- tries may seek to strengthen the procedural dimensions of multilateral institutions. Clear and strong multilateral rules cannot substitute for weakness, but they can help ameliorate some of the vulnerability that is a product of developing countries’ position in the international system.
Lacking the power to revise the substance of the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), developing countries, allied with a network of international public health activists, subsequently designed strategies to operate within the constraining international political reality they faced. They sought to clarify the rules of international patent law, to affirm the rights established during the TRIPS negotiations, and to minimize vulnerability to opportunism by powerful states. In doing so the developing countries reinforced global governance in IPRs.

Question 29

Kapstein & Busby (2010)

Answer 29

Why were AIDS activists successful in putting universal access to treatment on the international agenda when so many other global campaigns have either failed or struggled to have much impact?
Analyse:
(1) permissive material conditions;
(2) convergence on a policy prescription;
(3) attributes of the activists; and
(4) the broad political support for their cause.
Argument:
The market for antiretroviral (ARV) drugs was politically constructed; activists had to bring the demand and supply sides of the market together through a variety of tactics and strategies. The idea that motivated the activists was that ARVs should ideally be ‘merit goods’, goods that are available to everyone regardless of income. But, when ARVs first came on the market, poor people in the developing world lacked the resources to buy them. Activists successfully lobbied donor nations to use foreign aid to buy ARVs, and they pressured pharmaceutical companies to lower their prices, while encouraging generic firms to enter the market. However, even where a policy enjoys favorable material conditions – i.e. low costs, large benefits, demonstrated feasibility – this may not be enough. A clear prescription, credible messengers and resonant arguments may be necessary for an issue to receive adequate political support

Question 30

Haggard (1995)

Answer 30

Chapter 1:
Advanced developing countries are becoming important players in the trading system and as a result have come under strong pressure to conform with international norms of deep integration. Poorer countries have concentrated on achieving shallow integration through removing trade and investment barriers.

Chapter 2:
1980s difficult decade for DVs:
- economic problems, heavily indebted countries faced decline in availability of international commercial lending and strong pressures to adjust as a result
- Expanding definition of conditionality for multi and bilateral assistance
- Bilateral pressure on trade policy from the US
- Changes in expectation of participation in the GATT

Question 31

DiCaprio (2010)

Answer 31

While the obligations imposed by the FTA are extensive, and pervasive across the policy spectrum, and considerably lighten the available basket of policy choices, it is still possible to move resources into target sectors and to re-equilibrate following a trade shock. In fact, as the existence of reiterative chapters and anecdotal evidence on the functioning of FTAs illustrated, in some cases the FTA has introduced new policy options that were not available to countries in the absence of this governance institution.

Many of the options that are available to developing countries on paper are not used in practice