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Quality of Governance and the Formation of Preferential Trade Agreements

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  • Masahiro Endoh

Abstract

This paper investigates economic and political factors which explain the presence or absence of preferential trade agreements (PTAs). A model of three countries with imperfect competition markets is employed for theoretical analysis of political economy. The validity of theoretical results is tested by econometric analysis with a logit model. It is shown that countries with similar incomes are more likely to form PTAs, and that governments with low quality of governance have little incentive to form PTAs.

Suggested Citation

  • Masahiro Endoh, 2006. "Quality of Governance and the Formation of Preferential Trade Agreements," Review of International Economics, Wiley Blackwell, vol. 14(5), pages 758-772, November.
    • Handle: RePEc:bla:reviec:v:14:y:2006:i:5:p:758-772
    DOI: 10.1111/j.1467-9396.2006.00614.x
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    References listed on IDEAS

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    1. Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 2002. "Governance matters II - updated indicators for 2000-01," Policy Research Working Paper Series 2772, The World Bank.
    2. World Bank, 2002. "World Development Indicators 2002," World Bank Publications - Books, The World Bank Group, number 13921.
    3. Hiroshi Mukunoki & Kentaro Tachi, 2006. "Multilateralism and Hub‐and‐Spoke Bilateralism," Review of International Economics, Wiley Blackwell, vol. 14(4), pages 658-674, September.
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    Cited by:

    1. S. Standaert & G. Rayp, 2012. "Regional Integration Agreements and Rent-Seeking in Africa," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 12/773, Ghent University, Faculty of Economics and Business Administration.
    2. Gu, ZhenHua, 2014. "Political and Economic Determinants of Free Trade Agreements in the Presence of Foreign Lobbying," MPRA Paper 57279, University Library of Munich, Germany.
    3. Laura Márquez-Ramos & Inmaculada Martínez-Zarzoso & Celestino Suárez-Burguet, 2011. "Determinants of Deep Integration: Examining Socio-political Factors," Open Economies Review, Springer, vol. 22(3), pages 479-500, July.
    4. Gu, ZhenHua, 2014. "国际贸易新格局下的自由贸易协定研究 ——基于新政治经济学的视角 [Research on Free Trade Agreement in The New Situation of International Trade]," MPRA Paper 56567, University Library of Munich, Germany.

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