Technology, Markets and Governance: A Logic of Trade Agreements
Year: 2011
Type: preprint
Abstract: In this paper, I seek to devise a general argument that can account for the characteristics of trade agreements and their effectiveness, as well as states’ likelihood of signing them. I do so by focusing on the role of technological innovations -- which lower the costs of transportation and communication -- in simultaneously facilitating exchanges in larger markets and engendering market failures in those newly expanded markets. More specifically, I argue that states are likely to sign trade agreements when the costs of the market failures outweigh the cost savings effected by technological innovations. In short, trade agreements ensure that states sustain the market access initially created by technological changes. I carry out a preliminary analysis against 19th century British trade agreements using indices of ocean freight rates as a measure of technological changes.
Source: SSRN Electronic Journal
Author: Moonhawk Kim
Institution: University of Colorado Boulder
Language: English
Topic: Global trade and economics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2266101938