Geographic Concentration and Agricultural Trade Liberalization

• In Event: Remote Sensing—Methods and Applications

Abstract

Using remote-sensed data on geographic concentration of agricultural commodities around the globe, matched with product-level data on trade agreements, this paper demonstrates that parliamentary systems pursue deeper-cutting trade agreements in good times, and shallower ones in hard times and are likely to liberalize geographically concentrated commodities. Presidential systems pursue deeper liberalization regardless of business cycles and are likely to liberalize geographically diffused commodities. Our theory predicts these patterns by considering parliamentary advantages in striking what we call “substitution bargain” between executive and legislative branches leading up to ratification, where executives exchange promises of compensation for legislative support on the floor. In parliamentary systems, the same actor negotiates a trade agreement and domestic compensation facilitating the substitution bargain with geographically concentrated commodities. In presidential systems, an executive branch negotiates a trade agreement and a legislative branch negotiates budget, which breaks down the bargain and leads to liberalization of geographically diffused commodities.

Authors

• In Song Kim, Massachusetts Institute of Technology

• Megumi Naoi, University of California, San Diego

• Tomoya Sasaki, MIT