Dangerous liaisons
| Author | Olga Chyzh |
| Published date | 01 May 2016 |
| Date | 01 May 2016 |
| DOI | http://doi.org/10.1177/0022343316629605 |
| Subject Matter | Research Articles |
Dangerous liaisons: An endogenous model
of international trade and human rights
Olga Chyzh
Departments of Political Science and Statistics, Iowa State University
Abstract
This article applies recent advances in network analysis to highlight a central tension faced by policymakers –
balancing the benefits of engaging with the international system and the associated domestic policy costs. Interna-
tional trade rewards certain domestic practices, such as respect for human rights. Enforcing such practices, however,
is politically costly and sometimes prohibitive to state leaders who rely on political repression to stay in power. In
such cases, domestic elites often resort to an alternative strategy of securing the benefits of international trade –
setting up indirect trade channels through intermediary states. These competing incentives are modeled within a
single framework using a formal network game in which states form trade-links (direct or indirect) with other states,
while simultaneously choosing their optimal level of domestic human rights protections. The model suggests that
there may be an inverse relationship between a state’s embeddedness within a network of indirect trade and respect
for human rights: indirect trade channels serve as loopholes that allow domestically troubled states to enjoy the
benefits of trade without pressure for domestic improvement. The predictions are supported by the results of the
empirical analyses of the international trade and repression data (1987–2000), conducted using a coevolutionary
actor-oriented longitudinal-network model – a statistical estimator that closely mimics the theoretical model.
Keywords
human rights, indirect trade, network analysis, network game, repression
Introduction
Recent research has emphasized the advantages of net-
work analysis for theoretically modeling interdependence
(Gallop, 2016; Larson, 2016; Ward and Dorussen,
2016). This article applies advances in network game
theory to explore the relationship between international
trade and domestic respect for human rights. Through its
tight link to internationa l finance, international trade
creates a powerful incentive for leaders to protect domes-
tic human rights.
1
Repression and arbitrary law
enforcement undermine the business marketplace by
creating uncertainty. Even if businesses are not the direct
target of repressive actions, arbitrary arrests, disappear-
ances, and instances of torture undermine the confidence
of international financial institutions, raising insurance
premiums and interest rates on obtaining credit and,
thus, stifling trade. At the same time, many governments
rely on repression in order to maintain power. While a
government may want the economic benefits that come
from trade, improving domestic conditions that facilitate
trade may reduce their ability to extract rents or control
dissent. Finding a balance between the benefits accrued
1
Trading firms have influence over their country’s international
economic policies, due to their small number, large size, significant
lobbying budgets, high productivity, and access to political elites. For
example, 4%of the 5:5 million US firms in 2000 engaged in exports,
with the top 10%accounting for 96%of US exports (Bernard et al.,
2007: 2). General Motors (GM) chairman Charles Wilson, at his
1953 Senate Armed Servi ces Committee confirm ation hearing to
become US defense secretary, exemplified this viewpoint, stating
that keeping his current position at GM poses no conflict of
interest, because ‘what is good for the country is good for General
Motors, and vice versa’ (Fogel, Morck & Yeung, 2008: 84).
Corresponding author:
ochyzh@iastate.edu
Journal of Peace Research
2016, Vol. 53(3) 409–423
ªThe Author(s) 2016
Reprints and permission:
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DOI: 10.1177/0022343316629605
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