Two-level negotiations in a fragmented system: Saudi Arabia's WTO accession

Based on a case study of Saudi Arabia's WTO accession, the article offers a critique of conventional factor- and sector-based models of trade policy, proposing instead a two-level institutional account that is likely to be relevant for non-democratic states in general. Historically grown patterns of institutional fragmentation in both public and private sector in Saudi Arabia have made interest formation and the building of policy coalitions difficult. Various WTO-related economic reforms have therefore been held up as long as they were negotiated within the disjointed Saudi system. However, as soon as the Saudi leadership decided to directly follow the reform demands of its international negotiation partners, changes were rammed through rapidly - as institutional fragmentation of interests prevented an encompassing veto coalition against a comprehensive policy package which was in its substance imposed from outside. Fragmentation of state, business and relations between them can hence mean policy stalemate, but can also make for rapid policy adjustment under conditions of external pressure. In its conclusion, the article relates these findings to the institutionalist literature on trade in general.