International Institutions and Domestic Legislatures:
GATT, RTAA, and the Stability of Tariffs in Congress
Thomas Oatley
Department of Political Science
University of North Carolina at Chapel Hill
September 1999
Revise and Resubmit at International Organization
Abstract
Few conclusions in the international political economy literature are as widely accepted as
that pertaining to the effect of the Reciprocal Trade Agreements Act on American tariff
politics. This paper re-evaluates this conclusion in the context of a broader investigation
of legislatures, international institutions, and the stability of international agreements.
Neither theory nor history encourage the belief that the RTAA could have protected
American tariffs from legislative instabilities. While the RTAA is important for
understanding how American tariff rates were reduced, this paper argues that the
American low-tariff policy was rendered a stable legislative outcome by the GATT.
An earlier version of this paper was presented at the International Studies Association
annual convention, Washington, D.C. February 1999. Thanks to Steve Biddle, Rachel
Brewster, Mark Crescenzi, Henk Goemans, Lloyd Gruber, Robert Keohane, Michael
MacKuen, Timothy McKeown, Helen Milner, Roland Stephen, Jim Stimson, Terry
Sullivan, Michael Ting, Isaac Unah, and two anonymous referees for helpful comments.
Few conclusions in the international political economy literature enjoy as
widespread agreement as the claim that the Reciprocal Trade Agreements Act (RTAA)
and its extensions transformed American tariff politics.1 Reacting to the damage they had
wrought with the Smoot-Hawley Tariff Act, Congress passed the RTAA to restrict its
ability to produce similarly damaging tariff logrolls in the future. By delegating partial
authority over the setting of tariff rates to the executive, Congress insulated American
tariff rates, and the international tariff agreements that set these rates, from congressional
logrolls, and in doing so rendered the low-tariff policy that the United States has pursued
throughout the postwar period a stable legislative outcome. The RTAA, therefore,
transformed American tariff politics by protecting tariff rates from the instabilities that had
previously characterized congressional tariff politics.
This paper re-evaluates this conclusion. I present a theoretical framework and
some empirical evidence to suggest to points. First, while the RTAA and its extensions
did embody the preferences for tariff reductions of an important group of legislators, and
therefore is centrally important to understanding how American tariffs were lowered
during the postwar period, there is little reason to believe that either low tariffs or the
RTAA’s delegation of authority that helped produce them were stable legislative
outcomes. Second, it is more likely that the stability of the American low-tariff policy in
1
Throughout the paper I use the term RTAA to refer to the entire set of postwar
trade acts through which Congress delegated authority to the executive to reduce tariffs
through negotiation. While not strictly accurate, this greatly simplifies the writing and the
reading of this paper.
1
the postwar period has been the result of a structure-induced equilibrium in the United
States Congress generated by an international institution, the General Agreement on
Tariffs and Trade (GATT).
The claim that the GATT rather than the RTAA stabilized American tariff rates is
developed in the context of a broader exploration of the interaction between domestic
legislatures and international cooperation. While recent work has begun to incorporate
domestic legislatures into theories of international cooperation, little attention has been
directed at two questions.2 First, how do legislatures affect the ex post stability of those
international agreements that are negotiated and ratified? That is, do instabilities in
domestic legislatures affect governments= abilities to comply with the agreements they
ratify, and to the extent that they do, to what extent can reciprocity strategies protect
international agreements from these instabilities? Second, (how) do international
institutions influence legislative politics? While we know that international institutions
facilitate governments= efforts to solve the international enforcement problem, do
international institutions also promote cooperation by constraining behavior in domestic
legislatures?
I offer some initial answers to these questions and then evaluate these answers in
the context of American legislative tariff politics. I develop these initial answers by using
an informal spatial model of tariff bargaining between two legislatures to evaluate how
2
See the literature on two-level games, e.g., Putnam 1988; Evans, Jacobson, and
Putnam 1993; Milner 1997.
2
legislatures might affect the stability of international agreements. The spatial model
suggests three conclusions. First, international agreements may be vulnerable to shifting
legislative majorities and, therefore, an initial ratifying coalition need not be sufficient to
ensure stable compliance over time. Second, even when reciprocity strategies solve the
international enforcement problem, they may not be sufficient to protect an international
agreement against shifting legislative majorities. Finally, because international agreements
are vulnerable to shifts in legislative majorities, the stability of international agreements
may depend upon structure that protects them against domestic legislative opposition.
The need for structure to stabilize agreements points to the need for institutions. I
develop the hypothesis that international institutions may provide the structure that is
necessary to stabilize agreements in domestic legislatures. By shifting agenda control, by
limiting the types of proposals that can be made in legislatures, and by restricting the
dimensionality of the legislative policy space, international institutions may restrict the
legislative feasible set and thereby induce equilibria in domestic legislatures. Thus,
international institutions may stabilize international agreements by altering the structure of
legislative politics.
I evaluate the argument in the context of American tariff politics. I examine
congressional delegation of the authority to negotiate reciprocal tariff agreements during
the 1890s to illustrate two points. First, this examination illustrates the logic of the model,
demonstrating that reciprocal tariff agreements and the legislation that delegates the
authority under which they are negotiated are both vulnerable to shifting legislative
3
majorities. Second, because delegated authority was not a stable legislative outcome in
the 1890s, this examination forces us to ask how very similar legislation (in form if not
necessarily in substance) embodied in the RTAA could have stabilized American tariffs
during the postwar period. In short, legislative tariff politics in the 1890s suggests that we
lack strong theoretical and historical grounds upon which to claim that the RTAA, by
itself, could have protected tariffs or tariff agreements against congressional instabilities
during the postwar period.
I then suggest that the GATT rendered the American low-tariff policy a stable
legislative outcome. By shifting agenda control, by shaping the type of trade policy
legislation that was proposed, and by restricting the legislative tariff space, the GATT
enabled politicians with a preference for trade liberalization to keep tariff legislation off the
floor of the legislature for long periods of time and to restrict the type of tariff legislation
that did come to the legislature=s floor. By restricting the legislative feasible set, the
GATT rendered the low-tariff policy a stable legislative outcome even though there
existed protectionist majorities that would have raised tariffs in the absence of the GATT.
In sum, this paper suggests that because legislatures complicate governments=
abilities to sustain cooperation over time, international institutions may promote stable
agreements by imposing structure on domestic legislatures. In the conclusion I point to
some limitations of the argument advanced here and suggest where additional work is
required.
4
II. Legislative Politics and the Stability of International Agreements
Before we can examine whether, and how, international institutions structure
legislative politics we need to understand why such structure might be necessary. In other
words, before we can evaluate how international institutions might affect outcomes in
domestic legislatures, we need to know how legislatures might affect the stability of
international agreements. I use an informal spatial model of tariff bargaining between two
legislatures to develop some initial insights into this relationship. The model suggests that
legislatures may have a powerful negative impact on the stability of international
agreements. International agreements may be quite vulnerable to shifts in legislative
majorities, and tit-for-tat strategies that solve the international enforcement problem may
not be sufficient to protect agreements from these shifting legislative majorities. The
model suggests, therefore, that in the absence of structure, international agreements may
be quite vulnerable to shifting legislative majorities.
The Policy Space and the Bargaining Outcome
Figure 1 presents a policy space defined by the home and foreign tariff dimensions
(th and tf respectively).3 I assume that the tariff level in each country is a continuous
single-dimensional issue over which politicians have well-defined and symmetric
preferences. I further assume that although politicians can vote only on the home tariff,
3
This figure is borrowed from Gilligan 1997, 41-2.
5
they have preferences over the home and the foreign tariffs. Each politician, therefore, has
an ideal point in the policy space defined by the home and foreign tariff dimensions. To
simplify the figure I present three home country legislators (labeled 1h, 2h, 3h) but only the
median legislator in the foreign country (2f).
(Figure 1 about here)
Given the assumptions of a single dimension and single peaked preferences, the
median voter theorem tells us that the outcome will lie at the median legislator=s ideal
point. In the absence of tariff bargaining between the home and foreign governments,
therefore, majority rule voting generates a home tariff at 2h=s ideal point on dimension th
and a foreign tariff at 2f=s ideal point on dimension tf. These tariff levels are Condorcet
winners in their respective domestic arena, i.e., outcomes that Abeat or tie any other
alternative in majority rule contests.@4 This produces a home-foreign tariff combination at
point A.
While A is the best that the home and foreign legislators can do without
bargaining, allowing them to engage in tariff negotiations produces a set of outcomes that
a majority of legislators in both countries prefer to A. The set of tariff agreements that
yield utility improvements over A for a majority of legislators in both countries are
contained in the lens formed by the overlap of the home and foreign countries= median
legislators= indifference maps drawn through A. Thus, tariff bargaining allows a majority
4
Hinich and Munger 1997, 62.
6
of politicians in the home and foreign country to reach a higher level of utility at lower
tariff levels than is possible in the absence of tariff bargaining.
(Figure 2 about here)
The bargaining outcome is determined by the interaction between the locations of
the home and foreign median legislators ideal points and the Nash bargaining solution. If
we assume that the two governments have equal bargaining power, the Nash bargaining
solution suggests that the home and foreign median legislators should split the potential
gains to be realized from negotiated tariff reductions. 5 This implies that the bargaining
outcome will fall at the point within the lens at which the two median legislators=
indifference curves are tangent. In figure 2, this outcome is the point labeled B.
The bargaining problem contains the central characteristics of a prisoners=
dilemma. First, a negotiated tariff reduction is preferred to the status quo by both median
legislators, and therefore joint gains relative to the status quo exist. Second, once an
international agreement is reached, both median legislators can realize greater utility
through unilateral defection. Movements along dimension th to the right of the lens allow
2h to increase its utility and render 2f worse off than the status quo ante, while upward
movements along tf above the lens allow 2f to increase its utility and render 2h worse off
than the status quo ante. Thus, unilateral defections from the status quo allow one median
legislator to maximize its utility and leave the other with the Asucker@ payoff.
5
Nash 1950. This is a standard treatment in the two-level games literature. See
e.g., Milner 1997, 71-2.
7
Enforcement Mechanisms and the Stability of the Negotiated Agreement
We can now evaluate whether an enforcement mechanism that solves the
international enforcement problem inherent in the prisoners= dilemma is sufficient to render
the negotiated tariff combination B a stable outcome. I assume that the two governments
use tit-for-tat strategies to enforce the agreement. As I define tit-for-tat here, each
government responds to a defection from the agreement by raising their tariff enough to
eliminate the gain that the other government would realize from a unilateral defection. For
example, given an initial agreement at B in figure 2, any increase in the home tariff
(movement to the right along th) by 2h will be met by an equal increase in the foreign tariff
(upward movement along tf) by 2f, thus eliminating all the gains 2h has realized from the
initial defection. I also assume that the median legislators= discount parameters are
sufficiently large, i.e., that they care enough about the future stream of payoffs from
mutual cooperation relative to the one-period gain from unilateral defection, to make titfor-tat effective.6
6
While tit-for-tat is not the only strategy governments could use to enforce the
agreement, this assumption represents a useful starting point. I return to this point in the
conclusion.
8
Tit-for-tat and Stability in a One Dimension Legislature
In a one-dimension legislature, tit-for-tat as defined above is sufficient to render
the negotiated tariff combination B a stable agreement. Tit-for-tat renders B a stable
agreement in two distinct ways. First, tit-for-tat solves the international enforcement
problem. Given the assumption that governments play tit-for-tat as defined above, the
only possible equilibrium tariff combinations that the two median legislators can achieve
are those that fall along a line drawn between the initial agreement and the status quo ante
(see figure 3). Tariff combinations are restricted to those that fall along this line because
any attempt to achieve a tariff combination somewhere in the policy space not on this line,
i.e., any attempt to engineer a unilateral defection, will be punished by the other
government (by assumption). Punishment that eliminates all gains from unilateral
defection will yield a tariff combination that falls on the line (by definition). Thus, given
the assumption that governments use tit-for-tat to deny gains from unilateral defection, the
only tariff combinations that can be sustained are those that fall on the line labeled the Aset
of feasible combinations@ in figure 3. Of all tariff combinations in this set, B offers both
median legislators the highest utility. B, therefore, is a stable international agreement.
(Figure 3 about here)
Second, tit-for-tat renders B a Condorcet winning tariff agreement in the domestic
legislature. In the absence of tit-for-tat, there are a large number of tariff combinations
that will defeat B under majority rule in the home legislature. In fact, all tariff
combinations inside 2h=s indifference map tangent to B will defeat B under majority rule.
9
Thus, without tit-for-tat B is not a stable legislative outcome. Tit-for-tat, however,
excludes from the legislative feasible set all of the tariff combinations that defeat B. The
only tariff combinations that legislators can select are those that lie within the set of
feasible tariff combinations. Tit-for-tat, in other words, produces a legislative policy
dimension, the set of feasible combinations, from which legislators select their preferred
tariff combination. If we map home legislators’ideal points onto this dimension (the
dotted arrows in figure 3), then it is clear that B is preferred by the median legislator to all
other tariff combinations on this dimension. B, therefore, is a Condorcet winning tariff
agreement in the home legislature, i.e., an tariff combination that defeats all other feasible
tariff combinations under majority rule.
In a one-dimension legislature, therefore, tit-for-tat renders the negotiated tariff
combination stable in two ways. First, tit-for-tat strategies solve the international
enforcement problem. Second, tit-for-tat strategies render the negotiated tariff agreement
a Condorcet winner in the home legislature.
Tit-for-tat and Stability in a Legislature with Two Dimensions
The tit-for-tat strategies defined above are not sufficient to render the negotiated
tariff combination a stable agreement in a legislature with two (or more) dimensions. The
home legislature is transformed from one to two dimensions when legislators make an
explicit linkage between votes on the tariff dimension and votes on other dimensions. In
other words, linkage occurs when legislators engage in logrolls. Linkage between the two
10
dimensions can be intrinsic or it can be strategic.
(Figure 4 about here)
Figure 4 defines the home legislature in two dimensions. The vertical axis is the
set of feasible combinations derived in figure 3. Along this dimension are arrayed the
possible home and foreign tariff combinations that can arise given the assumption that the
two governments enforce the agreement using the tit-for-tat strategies defined above.
Movement up this dimension implies, therefore, an increase in the home and the foreign
tariffs. Home legislators= utility along this dimension is mapped directly from figure 3, and
the negotiated tariff agreement B is located at 2h=s ideal point on this dimension. The
horizontal dimension, labeled x, is any policy issue that home country legislators have
linked to the set of feasible combinations. The status quo on dimension x lies at the ideal
point of the median legislator on this dimension, legislator 3h. The status quo in this twodimensional policy space lies at the point SQ.
Figure four illustrates two important points. First, in this two-dimension
legislature there are three sets of outcomes (combinations of home-foreign tariff
combinations and positions on x) that are preferred by a majority of legislators to SQ.
These three outcome sets are those that lie in the three lenses formed by the overlap of
each legislator=s indifference map drawn through the SQ (see figure 4). Thus, in contrast
to the one dimension legislature where the negotiated agreement is a Condorcet winner, in
the two-dimension legislature there exist multiple alternatives that defeat the negotiated
tariff agreement under majority rule. Second, these multiple alternatives exist even though
11
the two governments continue to use tit-for-tat strategies. The vertical axis in figure 4
explicitly incorporates the increase in the foreign tariff that results from any increase in the
home tariff, thus the utility legislators realize by voting for an alternative to SQ explicitly
incorporates the costs of foreign retaliation. A vote against the negotiated tariff
agreement, therefore, does not represent an attempt to realize the Atemptation,@ or
unilateral defection, payoff. Tit-for-tat prevents unilateral defection, but it does not
protect the negotiated tariff agreement against shifting legislative majorities.
A stylized example can help clarify why tit-for-tat as defined above fails to support
the initial tariff agreement in this two-dimension legislature. Suppose that legislator 1h is a
legislative agent for export-oriented sectors and legislator 3h is a legislative agent for
import-competing sectors. The negotiated tariff combination reduces the home tariff on
import-competing goods in exchange for a reduction in the foreign tariff, thereby
providing clear gains for export-oriented sectors and obvious losses for import-competing
producers. Because the benefits of the agreement are not evenly distributed across the
home country legislators, foreign retaliation in response to abrogation of this agreement
will not be costly for all home country legislators. Foreign retaliation that restricts market
access is not costly for import-competing sectors, and hence retaliation will not prevent
legislator 3h from trying to reverse the initial tariff reduction. While legislator 2h will
suffer costs from foreign retaliation, the utility improvements it will realize by moving
closer to its ideal point on dimension x more than offset the utility losses it suffers as a
result of foreign retaliation. Alternatively stated, tit-for-tat fails to support the agreement
12
because there exist alternative distributions of domestic income that legislators 2h (or 1h)
and 3h prefer to the distribution of income yielded by the negotiated agreement, even given
the costs of foreign retaliation.
The negotiated tariff agreement will be a stable outcome in the two-dimension
legislature only if a single legislator occupies the median position on both policy
dimensions. This conclusion generalizes to n dimensions: an outcome in an n-dimension
space will be stable only if it is a Condorcet winner, and it will be a Condorcet winner only
if there exists a median in all directions. The median in all directions condition is so
restrictive, however, that Ait is typically said that a majority rule equilibrium almost never
exists.@7
Summary
The spatial model suggests two conclusions about legislatures and the stability of
international agreements. First, international agreements may be vulnerable to shifts in
legislative majorities. Thus, an initial ratifying coalition is no guarantee that an
international agreement will be stable over a longer period of time. Second, even when
effective at preventing unilateral defections in the standard prisoners= dilemma sense of this
term, reciprocity strategies may not be sufficient to protect an international agreement
against shifting legislative majorities. Unless the international agreement is a Condorcet
7
Krehbiel 1988, 267.
13
winner in the legislatures that are parties to the agreement, a majority of legislators may be
able to realize greater utility by trading higher home tariffs for gains on other domestic
policy dimensions, even given the anticipated costs of retaliation.
Legislatures, therefore, might powerfully affect the stability of international
agreements. Instabilities associated with majority rule procedures in legislative politics
may frustrate governments’efforts to engage in sustained cooperation. As I demonstrate
below in the context of late 19th century American legislative tariff politics, this is not just
a theoretical possibility.
III. International Institutions and Structure Induced Equilibria in Legislative
Politics
The recognition that international agreements might need to be protected against
shifting legislative majorities opens the door to examining whether, and how, international
institutions shape behavior in domestic legislatures. The puzzle around which this
examination is structured should be fairly obvious: if shifts in legislative majorities pose
such tremendous obstacles to stable cooperation, why are so many international
agreements so durable? The answer, I suggest, is that an international institution imposes
structure on legislatures, and this structure, by limiting the possibility for majority rule
cycles, stabilizes the international agreement.
Majority rule cycles result from the absence of restrictions on the proposals that
can be made in the legislature. The absence of restrictions, in turn, results from the
14
absence of institutions in most spatial models. In a legislature without institutions, nothing
prevents losers from proposing alternative policy combinations, and an alternative that
defeats the status quo almost always exists. Stable outcomes can be induced, however, if
structure restricts Athe ability of individuals or groups to make proposals.@8 Institutions,
which in the congress literature are usually legislative procedures and the committee
system, impose precisely these kind of restrictions: they constrain who can make
proposals and they constraint the types of proposals that can be made.9 By restricting the
set of proposals that can be made, institutions remove from the feasible set most of the
alternatives that defeat a given status quo and thereby generate stable outcomes. The
literature on structure-induced equilibrium suggests, therefore, that the durability of
international agreements may result from the institutional framework within which
legislative politics takes place.
Rather than focus on institutions writ large, however, I advance the proposition
that international institutions may induce stability in domestic legislatures. International
institutions may impose structure on domestic legislatures, and this structure may protect
international agreements against shifting majorities. How can international institutions
impose structure on domestic legislatures? Two mechanisms can be suggested. First, an
international institution may shift agenda control away from legislators and toward the
8
Shepsle and Weingast 1981, 511.
9
Shepsle 1979; Shepsle and Weingast 1981.
15
executive or other actors in the government bureaucracy. As I suggest below, the GATT
has shifted agenda control in American tariff politics away from Congress to the President.
To take another example, in Italy during the 1980s, membership in the European
monetary system shifted control of the monetary policy agenda away from the government
and toward the Italian central bank.10 By shifting agenda control, international institutions
may allow legislators who have a preference for the agreement to deny a legislative
majority that would prefer an alternative outcome the opportunity to vote on alternatives.
Second, an international institution may limit the type of proposals that the agenda
setter can make in the domestic legislature. International institutions may prohibit some
types and encourage certain other types of proposal. In the European Union, for example,
EU institutions allow governments to submit broad legislation about major initiatives to
domestic legislatures, but legislatures rarely have the opportunity to scrutinize and vote on
specific regulations and directives. Thus, domestic legislators are able to vote on the
broad contours of EU policy, but not on the specific details. By limiting the type of
proposals that can be made, international institutions further allow the agenda setter to
limit the possibility for legislative logrolls that can upset previous agreements.
International institution might also restrict the dimensionality of the legislative policy
space. For example, international institutions may promote a decision making process at
the international level that revolves around the negotiation and implementation of specific
10
Author.
16
international agreements. By separating policies subject to international agreement from
other issues, legislatures may be more likely to consider issues on a single dimension,
where cycling is less likely, than in a multi-dimensional context, where cycling is more
likely.
In sum, international institutions might shift agenda control, alter the types of
policies that can be proposed, and reduce the dimensionality of the legislative policy space.
The resulting structure may reduce the legislative feasible set, that is, it may eliminate
from the set of proposals that can be made in the legislature all of the alternatives that will
defeat a given international agreement. If no policies that can defeat an international
agreement can be proposed, then the international agreement will be stable even when a
majority of legislators would vote against the agreement given an opportunity to do so.
The suggestion that international institutions may impose structure on, and induce
stability in, domestic legislatures is not a theory. I am suggesting only that it may prove
fruitful to extend the logic of a well-developed literature on domestic institutions and
stable legislative to international institutions. An astute reader may wonder why we
should bother. Legislatures have structure that is imposed by domestic institutions, so
shouldn’t we examine how domestic institutions protect international agreements against
legislative instabilities? While nothing presented here precludes a focus on domestic
institutions, two considerations do warrant my focus on international institutions. First,
the central problem, unstable legislative majorities, is common (in theory) to all parties to
an international agreement. It is not unreasonable to suggest, therefore, that stable
17
agreements may be the product of a common set of constraints, i.e. an international
institution.
Second, a focus on extant domestic institutions encounters a problem of logical
consistency. On the one hand, if an existing domestic institution induces a stable
legislative outcome, then, by definition, legislators will be unable to change policy. How,
then, can policymakers negotiate and enter into an international agreement? On the other
hand, if an existing domestic institution allows legislators to change policy and enter into
an international agreement, then it is not clear why this structure would prevent a change
back to the status quo ante after they have entered the agreement. In other words, an
explanation based on domestic institutions must explain why an institution flexible enough
to allow an ex ante policy shift is sufficiently inflexible to prevent an ex post reversion to
the status quo ante.
While neither consideration precludes the possibility that domestic institutions
stabilize international agreements, they do suggest that domestic institutions may matter
most when they are changed in conjunction with the negotiation of an international
agreement. I return to this point in the conclusion.
IV. Congressional Delegation, the GATT, and Structure Induced Equilibrium in
U.S. Tariff Politics
The model of tariff bargaining suggested that even when enforcement is effective,
international agreements might be vulnerable to shifts in legislative majorities. As a result,
18
stable international agreements may require structure that restricts the number of
alternatives that can be proposed and voted on in the legislature. International institutions
might provide this necessary structure. I turn now to evaluate the plausibility of this
framework in the context of American tariff politics.
Postwar tariff politics in the U.S. Congress are quite distinct from the patterns
observed in the late 19th and early 20th centuries. Table one summarizes the two central
characteristics of this difference. First, tariffs have been considerably lower, on average,
since World War II than in the pre-War period. These low tariffs are the result of the
series of tariff negotiations conducted under RTAA authority within the framework of the
GATT. Second, as is evident in the smaller standard deviations for the postwar period
relative to the earlier periods, American tariff rates have exhibited considerably less
volatility since World War II than they did in the pre-War period. In other words, not
only have American tariffs been lower in the postwar period than in the pre-war period,
but they have also been much more stable. This second change, the increased stability of
American tariffs in the postwar period, is the important one for the purpose at hand, for it
tells us that these negotiated tariff agreements, along with the tariff rates these agreements
have produced, have been stable legislative outcomes during the postwar period, and that
this stability was not characteristic of American tariff rates in earlier periods.
(Table 1 about here)
Why did American tariffs become much more stable after the Second World War?
Whereas existing literature emphasizes the role of the RTAA in insulating tariffs from
19
congressional instabilities, I argue that the stability of the postwar low-tariff policy has
been a product of a structure induced equilibrium generated by the GATT. I develop this
argument in two steps. First, I present evidence on legislative tariff politics in the late 19th
century to suggest that international tariff agreements and the legislation that delegates the
authority to negotiate these tariff agreements are both vulnerable to shifts in legislative
majorities. This examination suggests, therefore, that while the RTAA did embody a
legislative majority=s preference for trade liberalization that helps explain why tariffs were
reduced in this period, it is unlikely that the RTAA could not have protected these lower
tariffs against shifting majorities in Congress.
I then develop and briefly evaluate the hypothesis that the GATT rendered the
low-tariff policy a stable legislative outcome. I explain how, by shifting control over the
tariff agenda to the executive, by shaping the types of trade legislation that could be made
in Congress, and by reducing the dimensionality of the legislative tariff space, the GATT
constrained legislators= ability to vote for higher tariffs. I then develop two expectations
about what trade policy behavior in the postwar Congress should look like if this argument
is correct, and briefly demonstrate that the pattern of behavior that we observe in
congressional trade politics is consistent with these expectations.
Legislative politics, congressional delegation, and the stability of tariff agreements in the
20
late 19th century
Congressional delegation of the authority to negotiate reciprocal treaties was not a
dramatic innovation in the 1934 RTAA. Congress delegated the authority to negotiate
bilateral tariff treaties to the executive twice during the 1890s, once in the McKinley Tariff
Act of 1890 and once in the Dingley Tariff Act of 1897. And while existing literature
argues that the resulting reciprocal tariff treaties were relatively insignificant, reciprocity
was actually quite important, both as a political movement and as a substantive policy,
during the 1890s. As a political movement, reciprocity reflected the interests of a large
faction within the Republican Party and a large cross-section of American industry, and
this group was large enough to incorporate a reciprocity provision into the Republican
platform in the 1896 presidential elections.11 As a substantive achievement, reciprocity
sections were incorporated into trade legislation in 1890 and in 1897, more than 36
agreements were negotiated under the authority provided by this legislation, and at the
high point, 36 percent of American imports were covered by reciprocity agreements.12
The congressional delegation of tariff making authority embodied in the RTAA, therefore,
was not a dramatic innovation.
11
On the development of Republican reciprocity in the 1890s see Wolman 1992
and Lake 1988. On U.S. industry support for reciprocity during this decade see U.S.
House of Representatives 1896.
12
I discuss these agreements in somewhat greater detail below. Coverage of the
agreements in Pletcher 1998, 37. By way of comparison, 16 bilateral agreements were
negotiated under the RTAA during the 1930s, covering about 42 percent of American
imports and 34 percent of American exports (based on 1934 data). See Tasca 1938, 267.
21
(Table 2 about here)
While reciprocity agreements were an important element of American trade policy
during the 1890s, reciprocal tariff agreements, as well as the legislation that made them
possible, were vulnerable to shifts in legislative majorities. An examination of Senate
votes on the three main tariff acts of the 1890s illustrates quite clearly how shifting
legislative majorities complicated this early experiment with reciprocity. Senate votes on
the three main tariff acts in this decade, the McKinley Tariff of 1890, the Wilson-Gorman
Tariff of 1894, and the Dingley Tariff of 1897 indicate the existence of two trade policy
blocks in the Senate.13 One group of states was solidly for free trade, or a revenue tariff
only, while a second group of states was solidly protectionist (see table 2). Neither the
free trade nor the protectionist block held a majority in the Senate. The free trade block
provided about 25 votes on average for trade liberalization, while the protectionist block
provided about 31 votes on average for protection. Because neither block comprised a
majority of the Senate, trade legislation was passed only with the help of the swing states.
(Table 3 about here)
The pivotal role played by the swing states can be appreciated by an examination
of table 3, which reports the votes of the three groups of states for each of the three trade
acts. In the McKinley Tariff of 1890, the swing states were decisively protectionist, and
13
A state is defined as a member of a solid block if no more than one of the six
possible votes was inconsistent. Thus, a member of the free trade block can vote for
protection no more than once and vice versa.
22
their support of the protectionist McKinley Tariff Act allowed the passage of this
legislation. In 1894 the swing states shifted decisively behind trade liberalization, thereby
allowing the tariff-reducing Wilson-Gorman Act to gain Senate approval. Finally, in 1897
the swing states split between the protectionist and free trade blocks, allowing the
protectionist Dingley Tariff Act to pass.14 Swing states were not a coherent block and
votes from these states were largely issue specific. For example, in the Wilson-Gorman
Act of 1894, the two Louisiana votes for trade liberalization were gained by removing raw
sugar from the duty free list and re-imposing substantial protection.15 Two Wisconsin
votes in favor of liberalization appear to have been gained by agreeing to keep iron ore off
the free list, a significant exception to the free trade block=s stated commitment to free raw
materials. What we see throughout the decade, therefore, is a multi-dimensional tariff
policy space in which a relatively small group of states were able to shape American trade
legislation by shifting allegiances between the free trade and protectionist blocks.
(Table 4 about here)
Shifting legislative majorities made it impossible to pursue a consistent reciprocity
policy (see table 4). The McKinley Tariff Act introduced reciprocity in 1890. Section 3
of this act placed sugar and molasses, coffee, and skins and hides on the free list and gave
14
The passage of the Dingley Tariff was also helped by the uncharacteristic
defection of four solid free trade state votes. Indiana, Maryland, North Carolina, and
West Virginia each provided one vote for the protectionist legislation embodied in the
1897 Tariff Act.
15
Taussig 1894, 600.
23
the president authority to Anegotiate for concessions from countries producing these
articles, and if dissatisfied with the concessions offered, was authorized to proclaim a rate
of duty specified in the tariff act.@16 Thirteen agreements were negotiated under section 3
authority. All thirteen agreements were terminated by the Wilson-Gorman Tariff Act,
which removed sugar and molasses from the free list and re-imposed a duty. Thus, the
need to attract swing state votes in favor of trade liberalization led the free trade block to
link trade liberalization with the re-imposition of duties on sugar, thereby eliminating the
concessions upon which reciprocity agreements had been based under the McKinley Act.
The protectionist block returned to reciprocity in 1897 with the Dingley Act. The
Dingley Act provided for two distinct kinds of reciprocity. First, the Dingley Act
reintroduced the section three powers first incorporated in the McKinley Act, though this
time it allowed for reduced duties on argols, spirits, wines, paintings and statuary in
exchange for equivalent concessions. Nine agreements were negotiated under this
authority. The Payne-Aldrich Tariff Act terminated these treaties in 1909. Second,
Section 4 of the Dingley Act empowered the executive to reduce tariffs in the general
schedule by as much as 20 percent in exchange for equivalent concessions, but as treaties
each agreement would require Senate ratification. John Kasson, appointed in October
1897 by President McKinley as his special minister plenipotentiary to negotiate reciprocity
treaties, concluded eleven treaties under this authority. Only one of these treaties was
16
U.S. Tariff Commission 1933, 12.
24
submitted to the Senate (the treaty with France), and it was never allowed to reach the
senate floor.17 Thus, though a majority could be found to pass legislation that encouraged
the negotiation of reciprocity agreements, no subsequent majority could be constructed to
ratify the resulting treaties.
This very brief examination of the legislative politics of reciprocity during the
1890s suggests two conclusions. First, the tariff agreements negotiated under delegated
authority were vulnerable to shifts in legislative majorities. One congressional majority
would pass legislation authorizing the executive to negotiate reciprocal trade agreements
and a subsequent majority would either alter the legislation in a manner that abrogated the
resulting agreements, or no majority could be constructed to ratify the resulting treaties.
None of these changes were driven by a desire to realize a unilateral defection at the
expense of a trading partner, nor by a change in legislators= preferences. Instability was a
product of shifting legislative majorities within Congress. Thus, while reciprocity was an
important policy objective to one faction of legislators within the Republican Party,
reciprocity was not a stable legislative outcome.
Second, the legislative record on reciprocity during the 1890s suggests that
existing literature probably over-estimates the degree to which the RTAA could have
stabilized American tariffs in the postwar period. As we saw during the 1890s,
congressional delegation is vulnerable to shifts in legislative majorities. One congressional
17
Hoxie 1903.
25
majority would delegate authority to the executive in one year, a subsequent congressional
majority would eliminate the authority in subsequent legislation. There is nothing to
suggest that the RTAA should have been significantly less vulnerable to shifting legislative
majorities than this earlier reciprocity legislation. The RTAA was passed as an
amendment to the 1930 Smoot-Hawley Tariff Act, and the authority it conferred was valid
for three years. This legislation was therefore vulnerable in two ways. First, because the
RTAA was approved for a limited period, RTAA authority was vulnerable to nonrenewal. Second, as an amendment to the 1930 act, the RTAA was vulnerable whenever
Congress established a new tariff schedule (and the RTAA in no way limited Congress=s
ability to establish a new tariff schedule). Thus, legislation that altered the tariff rates
established by the Smoot-Hawley Act could also eliminate the authority granted under the
RTAA amendment. In other words, legislation that delegates authority to the executive,
like the RTAA, is no less vulnerable to shifting legislative majorities than is legislation that
sets specific tariff rates. There is little reason to believe, therefore, that the RTAA could
have protected American tariffs against legislative logrolls.
The GATT, legislative politics, and the stability of the low-tariff policy
While the RTAA and its extensions did embody the low-tariff preferences of a
particular legislative majority, the recognition that congressional delegation has no greater
probability of being a stable legislative outcome than does a particular set of tariff rates
suggests that congressional delegation probably does not explain the stability of the
26
postwar low-tariff policy. It is more likely that the low-tariff policy was a stable legislative
outcome because the GATT imposed a new structure on legislative tariff politics that
made it extremely difficult for protectionist majorities to alter tariffs.
The GATT imposed a new structure on legislative tariff politics through the
interaction of two mechanisms. First, the GATT shifted control over the trade policy
agenda from Congress to the executive. I do not mean to suggest that agenda control
shifted completely to the executive, for clearly the Chairs of the House Ways and Means
and the Senate Finance Committees remained influential. However, the GATT did add an
important foreign policy aspect to tariff policy and, as a consequence, allowed the
executive to gain partial control of the trade policy agenda.18 The shift in agenda control
is evident in the American trade policy process. Whereas prior to the Second World War
trade legislation originated in the House Ways and Means Committee on a regular cycle,
after the Second World War major trade legislation has tended to originate in the
executive branch in association with GATT rounds. As a result, whereas the crafting of
tariff legislation was a congressional prerogative prior to the war, in the postwar system
major trade policy legislation has been initiated by the White House: the 1962 Trade
Expansion Act was written by Kennedy Administration officials; the 1974 Trade Act was
written by Nixon Administration officials.19
18
Rhodes 1993; O=Halloran 1994; Verdier 1994.
19
See Pastor 1980.
27
Second, the GATT shaped the type of trade legislation legislators confronted.
GATT shaped the proposals legislators faced in three distinct ways. First, the GATT has
kept comprehensive tariff legislation off the floor of the Congress throughout the postwar
period. There is already some recognition that GATT negotiations had this effect. “The
very existence of ongoing negotiations proved a perfect rationale for deferring
protectionist claims. It gave negotiators (and their congressional allies) a strong
situational argument: to impose or tighten an import barrier now. . .would undercut talks
aimed at broader American trade advantages.@ 20 The GATT structure also profoundly
altered American tariff legislation. By shifting agenda control and institutionalizing
reciprocal tariff negotiations in a multilateral setting, the GATT allowed the executive
branch, acting in conjunction with congressional agenda setters, to shape major trade bills
in the form of broad legislation that delegated tariff-cutting authority rather than in the
form of specific tariff legislation. In other words, the GATT structure allowed agenda
setters to fundamentally transform the kinds of major tariff bills that Congress considered.
The ability to formulate major trade legislation in the form of delegating authority in turn
allowed the congressional leadership that wanted low tariffs to keep legislation
establishing a specific structure of tariff rates off the floor of the legislature.
The importance of this single change cannot be under-estimated. As we saw in the
previous section, one central weakness of reciprocity during the 1890s lay in the fact that
20
Destler 1996, 17.
28
legislators continued to vote regularly on comprehensive tariff legislation even when they
had delegated authority to the executive. Under the bilateral agreements strategy initiated
by Cordell Hull in the 1930s, the same type of process would likely have prevailed;
Congress would have continued to reconsider periodically the tariff schedule that was
applied to those countries with which the U.S. had not negotiated a bilateral agreement.
Under the GATT, however, legislators have not had a single opportunity to vote on a
comprehensive list of tariff rates. If the simplest way to prevent protectionist legislative
coalitions from reversing trade liberalization is to limit the opportunities legislators have to
vote on a tariff schedule, then this single consequence of the GATT has been quite
powerful.
In addition, the GATT has greatly reduced the dimensionality of the legislative
tariff policy space when Congress does vote on tariffs, as they began to do after the Trade
Act of 1974 implemented the fast track procedure. The tariff policy space is of the
dimension j x k where j is the number of trading partners and k is the number of tariff
items. Tariff policy is therefore intrinsically multi-dimensional, a fact which helps us
understand why there had been so much instability in American tariff rates prior to World
War II. The GATT reduces the dimensionality of the tariff space on the floor of the
legislature by restricting both j and k. The number of trading partners (j) is effectively
reduced to one through the combination of GATT=s multilateral nature and most favored
nation basis. Prior to World War II, delegation and reciprocity was based on negotiating j
bilateral treaties. In contrast, the multilateral and unconditional MFN basis of the GATT
29
produces a single agreement covering all GATT members. Thus, under GATT, j equals
one.
The GATT also effectively reduced the number of tariff items (k). Prior to World
War II, the bilateral nature of reciprocity treaties left the remaining American tariff rates to
be determined by Congress. Because Congress voted on tariff rates for a large number of
items, logrolls could easily develop. We saw one instance of this in the previous section,
where the free trade block=s need for votes from Louisiana caused it to remove sugar from
the free list, thereby removing the basis for the reciprocity agreements that had been
negotiated under the prior legislation. Under GATT, the number of individual tariff rates
on which Congress votes is restricted. GATT rounds produce bundles of tariff reductions
incorporated in a single agreement, and legislators vote on this package of tariff
reductions. Thus, under GATT, k equals one. Multilateralism, MFN, and package deals,
therefore, combine to reduce the tariff policy space on the legislative floor from a multidimensional space in which cycling is quite likely to a single dimension (1x1) along which
the possibility of majority rule cycles is greatly reduced.
The GATT process also restricted the alternatives that legislators faced along this
single tariff dimension. Prior to the Second World War, Congress was relatively
unrestricted in its ability to raise and lower individual rates. Under the GATT process,
when Congress does vote on tariff rates the executive=s control of the agenda and the
nature of the GATT process produces a single pair-wise comparison between the
proposed GATT agreement and the status quo ante. As a result, even if a protectionist
30
majority rejects the tariff reductions embodied in a proposed GATT agreement, the
alternative of a tariff increase is not in the feasible set. In other words, the GATT
structure protects existing tariff rates even if a protectionist majority is able to defeat a
particular GATT agreement.
Finally, the GATT insulated tariffs from tactical linkages. If votes on a GATT
agreement are linked tactically to another issue, so that a legislator who would otherwise
vote for the agreement votes against it in exchange for support on another non-trade issue
by another legislator, and even if enough votes can be altered through such linkages that
the agreement fails to attain a majority, the defeat of the GATT agreement does not alter
tariff rates. A rejection of the agreement simply leaves tariffs at the status quo ante.
In sum, the GATT imposed a new structure on legislative tariff politics. By giving
partial control over the tariff policy agenda to the executive and by creating a need to
frame major tariff legislation as broad acts delegating authority to the executive, the
GATT broke the old pattern in which tariff rates were routinely set by Congress and
established in its place a structure in which tariffs were determined by multilateral
international negotiation. This new structure allowed legislators who wanted low tariffs to
keep legislation setting specific tariff rates off the floor of the Congress throughout the
postwar period, thereby minimizing the possibility for protectionist logrolls. Moreover, by
restricting the type of tariff legislation that could be proposed when tariffs did come to the
floor of the legislature, the GATT structure made it very difficult, if not impossible, for
protectionist majorities to raise tariff rates. In other words, the GATT imposed
31
restrictions on the legislative feasible set, and these restrictions insulated American tariffs
from the instabilities that had characterized legislative tariff politics during the late 19th and
early 20th centuries.
Evaluating the GATT-induced Stability Hypothesis
Efforts to evaluate empirically the hypothesis that the GATT induced a low-tariff
equilibrium in the postwar Congress confront one central problem. The counter-factual
nature of the argument, that in the absence of the GATT postwar congressional tariff
politics would have exhibited the same instabilities that had characterized pre-war
congressional tariff politics, makes it impossible to bring evidence to bear directly on the
hypothesis. We can evaluate the hypothesis indirectly, however, by asking what the
broader legislative trade policy process should look like if the argument developed here is
correct. If the argument is correct, we should observe two types of behavior in Congress.
First, if the argument that there has been no stable legislative majority in favor of trade
liberalization is correct, we should expect legislative majorities in favor of higher
protection than that which was provided by existing tariff rates to emerge periodically.
Second, if the argument that the GATT induced stable tariffs is correct, then we should
expect those legislators desiring higher levels of protection to turn to non-tariff measures
to provide this protection.
Space constraints preclude anything other than a very concise evaluation of these
two expectations, and thus what I present here is intended to be tentative and suggestive
32
rather than conclusive. The first step is to identify an increase in non-tariff forms of
protection in the United States in the postwar period, for without such an increase the rest
of the analysis is moot. Comprehensive data on American non-tariff barriers suggests
rather conclusively that non-tariff protection did increase between 1966 and 1986.
Between 1966 and 1986, the frequency of NTBs across all commodity categories (SITC
categories 0-8) rose by thirty percent. The percentage of total imports covered by these
NTBs rose from thirty six percent in1966 to forty five percent in 1986. In manufactured
goods, where GATT binding of tariff rates has been most important, the percentage of
imports affected by NTBs rose from thirty nine percent in 1966 to seventy one percent in
1986.21 It is clear, therefore, that in at least one period during the postwar era the level of
non-tariff protection has risen.
NTBs are executive branch instruments, however, and any claim that their
increased use is due to the existence of a protectionist majority in Congress must
demonstrate a link between the increased use of these instruments and congressional
activity. It is possible to demonstrate such a link through two distinct types of
congressional activity. First, Congress establishes the framework within which unilateral
non-tariff barriers (anti-dumping, countervailing duties, and escape clause petitions) are
investigated, decided, and implemented. A tightening of this framework makes it more
difficult to establish material injury, and therefore leads to a reduced incidence of these
21
All data are from Laird and Yeats 1988.
33
forms of protection, while a loosening of this framework makes it easier to establish injury
leading to an increased incidence of these forms of protection. Congress acted twice
during the 1970s to loosen the guidelines governing administered protection, once in
conjunction with the 1974 Trade Act and once in conjunction with the ratification of the
Tokyo Round agreements in 1979.22 These changes reduced the material injury threshold
from the 1962 requirement that imports be the major cause of injury to the much less
stringent requirement that imports be a Asubstantial cause of injury or threat thereof.@23 In
addition, the independence of the (then) Tariff Commission was increased, the time frame
within which petitions for relief had to be decided was greatly reduced, and authority for
investigating anti-dumping and countervailing duty petitions was taken away from
Treasury and placed in the Commerce Department where it was believed petitions would
find a more receptive audience.24 These legislated changes in the framework for
administered protection made it easier to get a positive finding, and therefore, made it
more likely that firms facing import competition would petition for relief. As a result,
petitions for relief, and the amount of relief provided, both rose sharply in the wake of
these legislated reforms.
22
Destler 1995, Chapter 6.
23
Destler 1995, 143.
24
While the shift from Treasury to Commerce was Anot an explicit provision of the
Trade Agreements Act of 1979, [it] was a not-so-subtle condition of its approval, as the
Senate Finance Committee declined to bring that act to the floor until the president had
submitted a comprehensive trade reorganization plan.@ Destler 1995, 150.
34
Second, Congress has often threatened to impose unilateral legislated quotas in
order to compel the president to negotiate voluntary export restraints (VERs). While an
exhaustive and systematic cataloguing of these threats is well beyond the scope of this
paper, a few examples help make the point. In the 91st Congress, for example, Aalmost
three hundred members of the House, among them twenty members of the [Ways and
Means] Committee. . . , introduced quota legislation of some sort.@25 As Pastor notes, the
principal objective behind these efforts Awas to send a message to the State Department
[and] to the White House.26 A similar logic can be observed in the early 1980s. In 1981,
Lloyd Bentsen and John Danforth introduced legislation that would impose unilateral
quotas on auto imports for three years in order to compel the Reagan administration to
negotiate a VER with Japan on autos, which Reagan did in the early 1980s.27 The AFair
Trade in Steel Act@ of 1984, which threatened to impose unilateral quotas on steel
imports, was undertaken to compel the Reagan administration to negotiate a
comprehensive VER in this sector, which Reagan did later in that year.28 The
semiconductor industry used congressional channels in the early 1980s to induce the
Reagan administration to negotiate the Semiconductor Chip Agreement with Japan.29
25
Pastor 1980, 124-5.
26
Pastor 1980, 127-8.
27
Nelson 1996.
28
Moore 1996, 102-5.
29
Irwin 1996.
35
While only a few examples, these instances suggest that legislators can and do use the
threat of unilateral legislated quotas to compel the president to negotiate bilateral trade
restrictions that the legislators= desired.
In at least one part of the postwar period, therefore, we observe congressional
behavior consistent with the two expectations stated above: congressional majorities
raised the level of protection above that which was provided by existing tariff rates, and
they used non-tariff forms of protection to do so. While this brief discussion is far from
conclusive, it does suggest a pattern of legislative trade politics that is consistent with two
central arguments presented in this paper. First, the existence of a majority of legislators
with a preference for higher protection implies that it is unlikely that the stability of the
low tariff policy was caused by stable majority support for trade liberalization. Second, if
a majority of legislators were willing to vote for protection, then it is reasonable to believe
that a majority of legislators would have voted for higher tariffs had they been given an
opportunity to do so. In the absence of the GATT, the RTAA would not have prevented
them from having this opportunity. Without the GATT, it is likely that congressional tariff
politics would have continued in the familiar vein of regular and routine legislative action
on tariff rates. In this Anormal@ trade politics process, the RTAA would not have
prevented legislators from raising tariffs, just as had occurred in the late 19th century
experiment with delegation and reciprocity. The GATT, however, changed the legislative
trade policy process, allowing legislators who preferred liberalization to keep tariffs off of
the legislature=s floor and thereby deny their protectionist-minded colleagues the
36
opportunity to raise tariffs.
V. Conclusion
The RTAA and its extensions did embody the trade liberalizing preferences of a
legislative majority inside the Congress, and the delegation of authority to the executive to
engage in reciprocal tariff reductions did facilitate postwar tariff liberalization. Neither
theory nor history, however, encourage the belief that the RTAA by itself could have
protected American tariffs, or American tariff agreements negotiated under RTAA
authority, from shifting legislative majorities. While the RTAA is clearly important for
understanding how American tariffs were reduced in the postwar period, this paper has
argued that it was the GATT rather than the RTAA that rendered these low tariffs a stable
legislative outcome. By shifting agenda control and restricting the legislative feasible set,
the GATT rendered the low-tariff policy a structure induced equilibrium in the U.S.
Congress.
This re-evaluation of the role of the RTAA was conducted in the context of a
broader investigation of how legislatures affect the stability of international agreements.
The investigation has suggested two more general conclusions. First, legislatures may
have a powerful negative impact on the stability of international agreements. International
agreements may be vulnerable to shifts in legislative majorities, and reciprocity strategies
may not be sufficient to protect international agreements against these shifts. Thus, the
RTAA, American tariff politics, and the GATT highlight a more general point: legislatures
37
may pose considerable obstacles to governments= abilities to sustain agreements over the
long term, and international institutions might impose the structure necessary to stabilize
the agreement in the face of potential instabilities. Second, the paper suggested that
because agreements may be vulnerable to shifts in legislative majorities, the stability of an
international agreement may depend upon an institution to make the agreement a stable
legislative outcome.
The tentative nature of these conclusions should be emphasized. Gaining greater
confidence in these conclusions will entail additional work along four broad lines of
enquiry. First, conclusions are only as strong as the model that produces them, and the
model presented here was informal. While the model is constructed from well-established
components, I have not provided explicit proofs to support the behavioral implications I
derived from the model. Thus, an important next step is to strengthen the theoretical
foundation supporting the argument. Additional exploration of the relationship between
enforcement mechanisms and the stability of legislative outcomes is also required. Are the
conclusions generated by the spatial model presented here sensitive to the type of
reciprocity strategies that governments use? I examined a variant of tit-for-tat, and thus,
the model presented here tells us nothing about whether other strategies exist that are
incentive compatible and able to protect international agreements against legislative
instabilities.
Second, this paper examined only one case and therefore sheds little light on the
degree to which the problem identified, and the role international institutions might play in
38
resolving this problem, is pervasive. Additional empirical work must explore the wider
applicability and the limitations of the claim that international institutions can impose
structure on domestic legislatures.
Third, while I focus on international institutions, there is nothing to preclude
domestic institutions having the same effect. In thinking about how domestic institutions
support international agreements, however, it may be important to distinguish between
domestic institutions that exist prior to an international agreement and domestic
institutions that are altered in connection with an international agreement. Extant
domestic institutions may make cooperation less likely rather than contribute to the
stability of agreements. Simmons= examination of how central bank independence affects
monetary cooperation nicely illustrates this point.30 By granting central banks a high
degree of independence, governments create a domestic structure that renders price
stability a stable outcome. This stability limits the possibility for cooperation, however,
for Aeven when governments wish to cooperate with one another to maintain stable
exchange rates, independent central banks can frustrate this goal.@31 Domestic institutions
may promote stability, however, if they are altered in connection with an international
agreement. Consider, for example, domestic institutional change undertaken in connection
with the European Union=s adoption of monetary union. In negotiating monetary union,
30
Simmons 1996.
31
Simmons 1996, 438.
39
European governments made their national central banks independent of parliamentary
politics in order to protect the stability-oriented monetary policy they desired against
possible shifts in legislative majorities. It may be fruitful, therefore, to explore whether
Simmons= observation can be generalized, as well as to examine how often the negotiation
of an international agreement is accompanied by domestic institutional change expressly
designed to impose structure on domestic legislatures.
Finally, future work might usefully explore the implications of the so-called ARiker
objection.@32 Riker pointed out that institutions are congealed preferences that generate
particular outcomes. As such, Aone can expect that losers on a series of decisions under a
particular set of rules will attempt (often successfully) to change institutions and hence the
kind of decisions produced under them.@33 If preferences over outcomes induce
preferences over institutions, then institutions should be no more stable than the legislative
outcomes they are supposed to protect. This is a powerful critique of the logic of
structure induced equilibrium, but it is a critique that suggests a potentially fruitful line of
enquiry: are international institutions better able than domestic institutions to impose
stable structure on domestic legislatures because of the greater difficulty of changing an
international institution? Whereas domestic institutions can often be altered through
majority rule in one legislature, changing international institutions usually requires the
32
Riker 1980.
33
Riker 1980, 445.
40
unanimous agreement of all member governments, and therefore requires majority support
in all legislatures party to the agreement. Because unanimity is a more stringent decision
rule than majority, international institutions may be less vulnerable than domestic
institutions, and therefore better able to impose structure on domestic legislatures than
domestic institutions.
While these qualifications may create the impression that this paper raises more
questions than it answers, the approach presented here does provide some initial answers,
however tentative, to an important set of questions. Existing work has examined quite
extensively how domestic legislatures shape the possibility for and the terms of
international cooperation. This paper has taken a few steps down the next logical path in
this research program by considering how legislatures might affect the stability of
international agreements, and how international institutions might shape legislative
behavior in ways that promote stable cooperation.
41
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Table 1: American Tariff Rates, 1820-1990
Average Tariff on
Dutiable Imports
(percent)
Standard Deviation
1820-1890
30.5
10.2
1890-1934
18.8
6.6
1934-1990*
7.4
3.9
*Ending date for the last period is approximate. O=Halloran (1994, 3), the source of these figures, notes only
that the figures for the last period cover Athe contemporary era.@ Source: O=Halloran 1994.
Table 2: Senate Trade Blocks, 1890-1897
Solid Free Trade States
(Average of 25 votes)
Mississippi
North Carolina (split in 1897)
South Carolina
Tennessee
Texas
Virginia
West Virginia (split in 1897)
Alabama
Arkansas
Florida (Split in 1890)
Georgia
Indiana (split in 1897)
Maryland (split in 1897)
Missouri
Solid Protectionist States
(Average of 31 votes)
New Hampshire
New York (split in 1894)
Ohio
Oregon
Pennsylvania (split in 1890)
Rhode Island
South Dakota (split in 1894)
Vermont
Washington (split in 1897)
Wyoming
Colorado
Connecticut
Iowa
Illinois (split in 1894)
Massachusetts
Maine
Michigan
Minnesota
Montana
Nevada
Swing States
(14 votes)
Delaware
Kentucky
Louisiana
North Dakota
Source: Congressional Record.
Nebraska
New Jersey
Wisconsin
Table 3: Votes on Tariff Legislation,
1890-1897
1897
Tariff Act
(Dingley)
1894
Tariff Act
(GormanWilson)
1890
Tariff Act
(McKinley)
Protectionist
States
32
31
31
Free Trade
States
26
29
22
8
2
4
3
9
1
4
6
3
Swing States
--Protection
--Free Trade
--Abstentions
Outcome
Protection and
Reciprocity
40-28
Source: Congressional Record.
Liberalization,
No Reciprocity
38-34
Protection and
Reciprocity
39-28
Table 4: United States Reciprocity Agreements, 1890 – 1909
Agreements Concluded under Section 3 of Tariff Act of 1890
France
Germany
Great Britain, for Jamaica, and for British Guiana,
Barbados, Trinidad, Leeward Islands, Windward
Islands
Spain for Cuba and Puerto Rico, Dominican
Republic, El Salvador, Nicaragua, Honduras,
Guatemala, Brazil
Terminated by the Wilson Tariff Act of 1894
Agreements Concluded under Tariff Act of 1897
Reciprocal Executive Agreements negotiated under Section 3
Bulgaria
France
Germany
Great Britain
Italy
Netherlands
Portugal
Spain
Switzerland
Terminated by Payne-Aldrich Tariff Act of 1909
Reciprocity Treaties Negotiated Under Section 4 (Kasson Treaties)
Argentina
Denmark for St. Croix
Dominican Republic
Ecuador
France
Great Britain for Bermuda, Jamaica, Barbados,
British Guiana, Trinidad
Nicaragua
United States Tariff Commission 1933.
Never submitted to Senate for Ratification
Figure 1: The Tariff Bargaining Problem
tf
2f
A
th
3h
1
h
2
h
Figure 2: The Bargaining Outcome
tf
2f
A
B
th
3h
1h
2h
Figure 3: Stability in a One-Dimension Legislature
tf
2f
A
Set of Feasible Combinations
B
th
3h
1
h
2
h
Figure 4: Instability in a Two-Dimensional Legislature
Set of Feasible Combinations
3h
2h
SQ
1h
x