Democracy and International Trade

In this exploration of how foreign trade policy is made in democratic regimes, Daniel Verdier casts doubt on theories that neglect the influence of the voters. Instead, he shows that special interests, party ideologies and state officials and diplomats act as agents of the voters in trading decisions. Constructing a general theory in which existing theories (rent-seeking, median voting, state autonomy) function as partial explanations, he shows that trade institutions are not fixed entities but products of political competition. Verdier then offers a thorough analysis of how foreign trade policy was made in France, Britain and the United States during the period from 1860 through 1990. Challenging the conventional view that special interests have dominated American trade policy, he argues that sectoral economic weight has not been a good predictor of political power in the United States since 1888. Conversely, against the prevailing belief that French industry is controlled by an autonomous state, he reveals the existence of a privileged, collusive relationship between French industry and state officials from the 1892 Meline Tariff through the Socialist victory of 1981.