Explaining nineteenth-century bilateralism: economic and political determinants of the Cobden-Chevalier network1

Abstract

This study investigates the empirical determinants of the treaty network of the 1860s and 1870s. It makes use of three central theories about the determinants of PTA formation, considering economic fundamentals from neoclassical and 'new' trade theory, political-economy variables, and international interaction due to trade diversion fears (dependence of later PTAs on former). These possible determinants are operationalized using a newly constructed dataset for bilateral cooperation and non-cooperation among 13 European Countries and the US. The results of logistic regression analysis show that the treaty network can be explained by a combination of 'pure' welfare-oriented economic theory with political economy and international interaction models. This is a preprint of an article accepted for publication in The EconomicHistory Review (c) AbstractThis study investigates the empirical determinants of the treaty network of the 1860s and 1870s. It makes use of three central theories about the determinants of PTA formation, considering economic fundamentals from neoclassical and 'new' trade theory, political-economy variables, and international interaction due to trade diversion fears (dependence of later PTAs on former). These possible determinants are operationalized using a newly constructed dataset for bilateral cooperation and non-cooperation among 13 European Countries and the US. The results of logistic regression analysis show that the treaty network can be explained by a combination of 'pure' welfare-oriented economic theory with political economy and international interaction models.

Tax revenues and the fiscal cost of trade liberalization, 1792–2006

“…One important political determinant of the timing of trade liberalization in the 19th and early 20th century -democratization -has also been found to be relevant in the post 1970s period. 33 There is substantial evidence that democracies were more likely to enter trade agreements in the 19th century ( Lampe, 2011 ), though more so in labor-rich economies ( O'Rourke and Taylor, 2006 ); similarly democratic transitions often led to free-trade agreements in developing countries since 1970 ( Milner and Kubota, 2005 ). Democratization is also a key determinant of growth of governments revenues; Aidt et al (2006) for example find evidence that democratization in Europe led to higher government spending in the 1830-1938 period.…”

Something Rational in the State of Denmark? The Case of an Outsider in the Cobden-Chevalier Network 1860-1875

“…and 1875 presented by Lampe (2009b). Based on Pahre's theory of endogeneous trade policy cooperation and related theories on the neo-classical "economic fundamentals" (distance, factor endowment, market size) of preferential treaty-making (Baier and Bergstrand 2004) and systemic international interaction due to trade diversion fears (dependence of later PTAs on earlier, Baldwin 1995), he estimated a logistic regression model with the aim of explaining the determinants of mid-nineteenth century bilateralism.…”

“…Section 4 provides a more formal assessment of the optimal choice of parties for bilateral treaties, using the results of Lampe (2009b). Section 5 concludes.…”

“…This suggests that non-cooperation was certainly not irrational, and in fact seems to have been the optimal policy decision. Source: Calculated from the data underlying Lampe (2009b), using the coefficients of Table 5.…”

International competition in the first wave of globalization: new evidence on the margins of trade

“…For an assessment of MFN agreements and trade creation, see Lampe, ‘Explaining’. MFN treaties were typical into the early 1890s, after which Spain adopted a two‐tier tariff structure, countries negotiating special treaties to avoid paying the maximum tariff.…”