The Political Economy of Preferential Trade Agreements: An Empirical Investigation

Distributive politics and economic growth

Giovanni Facchini, Peri Silva () and Gerald Willmann

The Economic Journal, 2021, vol. 131, issue 640, 3207-3240

Abstract: We develop a political economy model to study the decision of representative democracies to join a preferential trading agreement, distinguishing between free trade areas and customs unions. Our theoretical analysis shows that bilateral trade imbalances and income inequality are important factors determining the formation of preferential trading agreements, whereas the patterns of geographic specialisation explain whether a customs union or a free trade area will emerge. Our empirical analysis—using a comprehensive panel dataset spanning 187 countries over the period 1960–2015—provides strong support for these predictions.

Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://hdl.handle.net/10.1093/ej/ueab044 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: The Political Economy of Preferential Trade Agreements: An Empirical Investigation (2021)
Working Paper: The political economy of preferential trade agreements: An empirical investigation (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:econjl:v:131:y:2021:i:640:p:3207-3240.

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

The Economic Journal is currently edited by Francesco Lippi

More articles in The Economic Journal from Royal Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press () and ().