Paul Poast and Johannes Urpelainen have written an excellent review that summarizes the key insights of Democracy and Trade Policy. Their review shows the importance of studying the link between democratic institutions and the politics of trade policy. We agree on several issues, such as the need to understand how democratic institutions can influence protectionist trade policy in developing countries. Poast and Urpelainen, however, raise two insightful critiques.
First, they correctly point out that the impact of international factors—for example, the World Trade Organization’s effect or the role of the United States—in influencing trade reforms in developing states has been overlooked in the book. Indeed, they systematically show in their book Organizing Democracy how international organizations help incumbents in newly democratized states to enact economic reforms. There is little doubt that international system variables play a critical role in influencing trade policy in developing-country democracies. It is impossible to contest this claim. A more ambitious book on trade liberalization in democracies should ideally present a broad theory that explores how international factors combine with domestic institutions and labor markets to affect trade politics in developing economies. But building such a theoretical story may come at the price of sacrificing theoretical parsimony and paying less attention to the microfoundations underlying the design of trade policy in developing-country democracies.
Democracy and Trade Policy adopts a less ambitious approach by focusing on how and when the material preferences of voters and firms in the tradable sectors find “voice” in the political arena to influence the trade policy choice of incumbents in new and consolidated democracies. Doing so permits one to identify the policy preferences of key societal actors in trade politics and understand exactly which democratic institutions determine how these preferences are aggregated in ways that influence trade reforms. It also leads to the development of clear theoretical mechanisms and hypotheses with strong microfoundations that would be extremely challenging to achieve if one attempted to combine numerous international-system variables, as well as domestic political and economic variables, in one unified theoretical framework.
The second critique that Poast and Urpelainen raise is the restricted definition of “consolidated democracy”; specifically, in the book, newly democratized states are assumed to evolve into consolidated democracies once they have been democratic for at least five years. This is a valid criticism, as some newly democratized states reverted to autocratic rule five years after their initial transition to democracy. Yet we learn from the more prominent cases of successful developing-country democracies (e.g., Brazil, Indonesia, South Africa)—which are important states in the world of international trade—that these countries unambiguously grew into consolidated democracies within three to four years after transitioning to democracy. Further, if successful democracies are those in which political actors understand and respect the rules of the democratic game in a self-enforcing equilibrium, then it may not be far-fetched to presume a five-year threshold for democratic consolidation, as this threshold will only be reached when political leaders truly respect the rule of democratic politics.
