## In WTO We Trust? : International Institutions and Domestic Interactions

2015
Dissertation
##### Abstract
International institutions do matter, both theoretically and empirically, to cooperation in world politics. In line with recent progress of liberalism and institutionalism on the plausible roles of international institutions in shaping domestic interactions, at least two questions need to be answered. Are international institutions like GATT/WTO reliable in promoting domestic cooperation and reducing internal conflicts? What kinds of roles can these “secondary rules” in international politics play in the domestic arena?
In order to answer these questions, this dissertation aims to depict a more elaborate image between the dynamics at international level and the outcomes at domestic level. It tries to bridge the theoretical divide between international institutions as macro structures with the interactive behaviors of domestic actors as micro indicators. It also attempts to integrate key elements of international relations theories from rationalist and constructive approaches in explaining this long and sophisticated causal link.
With the aim of examining the effects of international institutions on domestic actors’ behavior choices among their interactions, it builds an integral theoretical framework and employs Contest Success Function (CSF) to design mathematical models from both structural and processual perspectives. Game-theoretical calculation and data simulation are applied to explore the propositions of the mathematical models. After that, two empirical tests are conducted to measure the effects of international trade institutions (GATT/WTO) on domestic political conflicts by applying statistical methods including logit regression, regression discontinuity design (RDD), and propensity score matching (PSM), etc.
After the introduction of research questions and the literature review on the causal link of diverse actors and various issues across different levels, it goes beyond “two-level games” and constructs a “two-plus-level model” in Chapter 2 by disaggregating international institutions, operationalizing the black-box of state actor, and applying CSF as the essence of the theoretical framework and models. It describes key parameters and causal mechanisms of international institutions posing impacts on domestic groups that may select different behaviors during their own interaction towards cooperation or conflicts. In addition to structural explanation, this dissertation regards the influence of international institutions as a 4-stage process both by itself and by the relational interaction between international institutions and given state actors. The process perspective further differentiates the roles of key elements of international institutions, i.e. rules and/versus norms, between exogenous phases and endogenous phases.
Subsequently, the effects of international institutions on domestic actors’ behaviors and interaction are modeled from both structural and process perspectives on the basis of CSF. Chapter 3 provides three sets of methods to solve the equilibriums and explore the impacts of parameters on both actors’ expected payoffs from conflict and cooperation behaviors, including Nash equilibrium, social norm/custom models, and data simulation. On the one hand, the interplay of international and domestic institutions is confirmed to be crucial in determining the interaction behaviors of domestic actors by Nash equilibrium solutions in a symmetric circumstance with complete information. After the norms of international institutions are internalized, they would update the institutional effectiveness, affect the success probability, increase the moral costs on wrongdoings, and might cause a “snowballing effect” in some situations. Data simulation provides about 27 million observations, which confirms previous findings on institutional interaction and demonstrates the significance of relevant parameters in different configurations. However, the connection between conflict dimension of domestic institutions and provoking aspects of international institutions is further clarified rather than the peace dimension.
In respect to empirical tests in Chapter 4 and Chapter 5, it firstly discusses the relations between international trade institutions and domestic armed conflicts from 1946 to 2009. RDD results show GATT/WTO membership can pacify the risk and frequency of conflict incidence; but the pacifying effects are more significant within a 2-year lead-time and 5-year lagged time according to current data. And by using logit regression, GATT/WTO involvement has a mixed and conditional effect on the incidence of conflict. It implies both membership by itself and recent negotiation rounds with higher liberalization degree have a provoking effect while higher institutionalization degree and long adaptation time have a pacifying effect. PSM is subsequently applied to clarify the causal relation by assigning treatment and non-treatment samples and to extend domestic armed conflicts to more general categories. PSM results indicate GATT/WTO treatment can significantly provoke the frequency of domestic political conflicts while slightly but positively affect the incidence of political violence and societal Major Episodes of Political Violence.
In the end, this dissertation generally summarizes key findings, prescribes some theoretical and policy implications, and then provides some unanswered questions that need further investigation in the future.
320 Politics
##### Cite This
ISO 690MAO, Weizhun, 2015. In WTO We Trust? : International Institutions and Domestic Interactions [Dissertation]. Konstanz: University of Konstanz
BibTex
@phdthesis{Mao2015Trust-31947,
year={2015},
title={In WTO We Trust? : International Institutions and Domestic Interactions},
author={Mao, Weizhun},
school={Universität Konstanz}
}

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