Ideology, interests, and the American executive: toward a theory of foreign competition and manufacturing trade policy

Abstract

Faced with a formidable competitiveness problem, the American government chief executive appeared to offer a series of ad hoc responses in the 1980s. Contrarily, this article suggests that executive responses to foreign economic challenges follow a predictable pattern. Pointing to the interactive effects of ideology and interest, this article argues that both the degree and type of executive response, be it in the form of market-opening strategies, of temporary or permanent forms of protectionism, or of adopting a laissez-faire approach, can be predicted based on two factors: whether a sector is characterized as “high tech” and whether it is considered to be competitive. A major implication of this argument is that the U.S. chief executive has used trade policy as a surrogate for industrial policy; but in so doing, the strategic considerations associated with industrial policies have been bypassed. The major effect is that the executive fails to intervene only in the realm of an “infant industry” policy—the area most likely to generate a dynamic economy. The product of this combiantion of protectionist policies is a stagnant economy that we term “compromise protectionism.”