Open International Markets without Exclusion: Encompassing Domestic Institutions, Excludable Goods, and International Public Goods

William Phelan

The Institute for International Integration Studies Discussion Paper Series from IIIS

Abstract: This paper uses the concept of the ‘encompassing group’ to set out a collective action theory based explanation for the maintenance of open international markets to add to existing explanations for stable international market regimes, hegemonic stability and tit-for-tat specific reciprocity. While groups representing small constituencies have incentives to seek inefficient redistributions of income while imposing costs on wider society, cohesive groups representing large cross-issue constituencies – encompassing groups – have incentives to accept costs in return for the provision of public goods. States whose domestic political institutions are encompassing – inclusive of large numbers of diverse interests and centralized to provide coordination across issue-areas – have similar incentives to accept costs on constituents in order to support the provision of public goods for their constituents as a whole – such as welfare gains from trade or avoiding damage to reliable international markets – even without the application of external sanctions.

New Economics Papers: this item is included in nep-int and nep-pbe
Date: 2008-03-26
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