This short and well-written book provides a fresh look at the making of trade policy, one that breaks away from easy determinisms (systemic, economic, institutional or ideological) but views politicians as 'entrepreneurs' constructing coalitions and institutions.
There are few issues as politically explosive as the liberalization of trade, as recent controversies in the United States, Canada, and Mexico have shown. While loosening trade restrictions may make sense for a nationÆs economy as a whole, it typically alienates powerful vested interests. Those interests can exact severe political costs for the government that enacts change. So why accept the risk?Michael Lusztig contructs a model to determine why and under what conditions governments will take the free trade gamble. Lusztig uses his model to explain shifts to free trade in four cases: BritainÆs repeal of the Corn Laws; the United StatesÆ enactment of the Reciprocal Trade Agreements Act (1934); CanadaÆs decision to initiate continental free trade with the United States in 1985; and MexicoÆs decision to pursue the North American Free Trade Agreement (NAFTA) in 1990.
Lusztig examines various models of the decision-making process and argues that support for liberalizing trade is a second-order objective, adopted by political actors as a by-product of the first-order objective of effecting a favorable political realignment of domestic interests. . . . Lusztig's model of political entrepreneurship is valuable . . . [and] of interest to readers seeking a conceptual framework for policymaking in the area of international trade.
A fresh and inventive argument. Its distinctiveness will allow [the book] to be seen and heard within a very crowded literature on the topic.
This is a fine book, well written and important. The case studies, from repeal of the Corn Laws to Mexico's interests in NAFTA, are compelling.