Democratic differences: Electoral institutions and compliance with GATT/WTO agreements
| Author | Stephanie J. Rickard |
| Published date | 01 December 2010 |
| Date | 01 December 2010 |
| DOI | http://doi.org/10.1177/1354066109346890 |
| Subject Matter | Articles |
European Journal of
International Relations
16(4) 711–729
© The Author(s) 2010
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DOI: 10.1177/1354066109346890
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Article
Corresponding author:
Stephanie J. Rickard, London School of Economics, H320, Connaught House, Houghton Street, WC2A 2AE, UK.
Email: S.Rickard@lse.ac.uk
Democratic differences:
Electoral institutions
and compliance with
GATT/WTO agreements
Stephanie J. Rickard
London School of Economics, UK
Abstract
A growing body of literature argues that democracies are more likely to comply with
international agreements than authoritarian states. However, substantial variation exists
in the compliance behaviour of democracies. How can this variation be explained? The
same mechanism that links regime type to compliance, namely electoral competition, also
explains variation in compliance among democracies. This is because the nature of electoral
competition varies across democratic systems. An analysis of democratic GATT/WTO
member countries from 1980 to 2003 reveals that governments elected via majoritarian
electoral rules and/or single-member districts are more likely to violate GATT/WTO
agreements than those elected via proportional electoral rules and/or multi-member districts.
Keywords
compliance, democracy, electoral rules, GATT/WTO, international agreements
Introduction
A growing body of literature argues that democracies are more likely to comply with
international agreements than authoritarian states (e.g. Gaubatz, 1996; Mansfield et al.,
2002; Smith, 1996). Such arguments often point to the deterrent effect of democratic
elections. Voters are believed to punish leaders who violate international agreements by
voting against them in the next election. This makes it costly for democratically elected
leaders to breach international agreements; doing so reduces their chance of staying in
office (McGillivray and Smith, 2000). Electorally minded leaders in democratic states
therefore comply with international agreements to maximize their chances of re-election,
according to conventional wisdom. The implication is that democratic states violate
international agreements less frequently than authoritarian states.
712 European Journal of International Relations 16(4)
However, significant variation in compliance behaviour exists amongst democracies.
While some consistently comply with international agreements, others habitually violate
them. In fact, the most frequent violators of agreements negotiated within the framework
of the World Trade Organization (WTO) are high-functioning democracies with strong,
credible opposition parties and regular competitive elections. This poses a puzzle for
existing theories of democratic compliance, particularly those that place primary impor-
tance on the deterrent effects of competitive elections. If elections deter non-compliance,
as conventional wisdom suggests, why do some democratically elected leaders violate
international agreements more often than others?
A possible explanation is the significant variation in electoral competition that exists
among democratic states. This variation results from the different rules used to elect
leaders. In majoritarian systems, politicians need 50 percent plus one of the votes in their
electoral district to win (re-)election; parties need to win a majority of the districts to win
control of the legislature. This engenders candidate-centred electoral competition where
narrow interests have substantial political influence (e.g. Carey and Shugart, 1995;
Persson and Tabellini, 2003). In contrast, proportional electoral rules (PR) engender
party-centred competition. In these systems, parties work to maximize their share of the
national vote because this determines the number of legislative seats the party will con-
trol. Variation in how politicians are elected may help to explain why some democracies
violate international agreements more often than others.
Virtually all international agreements have distributive consequences that make some
voters better off and others worse off (Tomz, 2002). For example, the World Trade
Organization’s Agreement on Subsidies and Countervailing Measures restricts the use of
subsidies by member country governments. Subsidies targeted to individual industries or
firms are explicitly banned by Articles 1 through 9.1 These restrictions are intended to
increase economic efficiency and reduce costs to consumers. Consumers, who constitute
a large segment of countries’ populations, benefit from compliance with these rules.
In contrast, narrow segments of the population, like domestic producers, lose out from
compliance. Producers including individual firms and industries would like to be able to
earn rents from lucrative government subsidies. They would prefer that their national
government violate WTO rules restricting subsidies. Non-compliance with this inter-
national ag reement benefits narrow producer groups; it serves their own self-interest.
This is an important point — one that has been largely overlooked in existing studies of
international compliance. If voters’ preferences over compliance with an international
agreement vary, the effect of democratic elections on compliance is ambiguous. The impact
of democracy will depend critically on the electoral incentives facing politicians and voter
support for compliance. If, for example, compliance with an international agreement ben-
efits broad-based groups, like consumers, then politicians in proportional rule countries
have relatively greater electoral incentives to comply with the agreement. This is because
the best electoral strategy for politicians and parties in proportional rule systems is to appeal
to broad segments of the population in order to maximize the party’s vote share (e.g. Carey
and Shugart, 1995; Persson and Tabellini, 2003). In PR systems, vote share determines the
number of seats a party will control in the country’s legislature. By maximizing its vote
share, a party maximizes its power in the legislature and its chances of being in government.
This implies that among democracies, those with proportional electoral rules are more
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