Audience Features and the Strategic Timing of Trade Disputes

Abstract

AbstractIf international institutions are such potent alarm mechanisms that mobilize procompliance domestic audiences, as many existing theories argue, why do countries wait so long before sounding the alarm? World Trade Organization (WTO) members often wait months or even years before objecting to their trading partners’ WTO-illegal barriers. To turn a phrase, trade cooperation delayed is trade cooperation denied, so why wait? To explain this variation, I develop a theory of institutional alarm mechanisms in which (1) the preferences and strength of the audience hearing the alarm vary and (2) the decision to sound the alarm is strategic. Sounding the alarm is most valuable when strong audiences in the defendant country support compliance. I test this prediction using competing risks models analyzing the timing of WTO disputes against US tariff barriers. Consistent with the theory, disputes are more likely during election years when macroeconomic indicators suggest broader support for free trade.