Rosendorff and Milner (2001)- The Optimal Design of International Trade Institutions- Uncertainty an

Rosendorff and Milner (2001)- The Optimal Design of International Trade Institutions- Uncertainty an

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The Optimal Design of International Trade Institutions: Uncertainty and Escape By: B. Peter Rosendorff and Helen V. Milner (2001) Rosendorff, B. Peter, and Helen V. Milner. 2001. “The Optimal Design of International Trade Institutions: Uncertainty and Escape.” International Organization. 55(4): 829-857. Section 1: Introduction Escape Clause: “allows states to escape the obligations agreed to in the negotiations” 1. Pros: “increase the flexibility of the agreement by adding some discretion for national policy makers” 2. Cons: a. Erode credibility b. Erode Liberalizing effect of international trade agreements Research Questions 1. When is such increased flexibility (as escape clauses provide) rationally optimal for states making Intl trade agreements? 2. “If escape clauses allow states more flexibility in meeting their obligations, what impact does this have on their compliance with the agreement? What are the consequences of increased flexibility for institutional performance: is cooperation enhanced, and is it more durable?” 829-830 Define: Escape Clause: “…any provision of an international agreement that allows a country to suspend the concessions it previously negotiated without violating or abrogating the terms of the agreement.” 830 Arms agreements tend to not contain escape clauses Examples of Escape Clauses: 1. Anti-Dumping safeguards 2. Countervailing 3. Infant Industry Exemptions 4. Balance-of-Payment Exemptions 5. National Security Payments “…all designed by governments to reduce domestic pressured to withdraw from the entire agreement when protectionist pressures grow at home.” 830
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Three Central Claims of Paper: 1. “…escape clauses are an efficient equilibrium under conditions of domestic uncertainty.” “…the greater the uncertainty that political leaders face about their ability to maintain domestic compliance with international agreements in the future, the more likely agreements are to contain escape clauses.” 2. “…for escape clauses to be useful and efficient, they must impose some kind of cost on their use.” 3. “…including escape clauses makes initial agreements easier to reach.” Section 2: Escape Clauses and Political Uncertainty
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Rosendorff and Milner (2001)- The Optimal Design of International Trade Institutions- Uncertainty an

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