Electoral Systems and Trade Policies
In comparison to other types of social relations, one characteristic is peculiar to international relations: their core is political interaction. This is because in the absence of a legitimate center of power, international relations represent a continuous process of rivalry and harmonization of the interests of states. However, in the second half of the 20th century, the importance of the economic factor has immeasurably grown in the life of the international community, producing in many ways a new quality of international relations. This is manifested in some events and trends. Firstly, after World War II, relatively actors new in comparison with states, such as global economic organizations, transnational corporations, and banks that had taken an important place in international relations, including in the sphere of power relations, entered the world arena.
Secondly, the priority objectives of the policy of states in the international arena are changing in comparison with past historical periods. While maintaining the importance of the struggle for territory and sphere of influence, the desire for more profitable application of capital and access to sources of raw materials is gaining momentum. Such concepts as economic and energy security appear.
Thirdly, for the first time in the centuries-old history of the state-centered international system, state sovereignty began to be corroded, which was most clearly manifested in the relative loss of states' ability to control economic processes on their territory. Some of the state functions are transferred “upward,” to the management of international organizations, some are affected by spontaneous global or regional economic processes (Blakem & Walters, 1992).
Fourthly, since the 1970-ies, a qualitatively new force factor – oil - has appeared in the world, and in the long term, other minerals can fulfill the same function. “Oil weapons” for the first time was applied by the Middle Eastern countries of OPEC in 1973 regarding the countries of the West. In modern international relations, such a threat was declared by Iran against Western countries insisting on cutting Iran's nuclear program (Kaye & Martini, 2014).
Fifth, the functions of the informal regulatory center of the system of international relations are increasingly accumulated by the Group of Eight as the union of the most developed countries of the world, while the UN appears unable to respond to many current challenges and needs serious reform.
Sixth, European economic integration plays a role, qualitatively changing interstate relations in Western Europe after centuries of unceasing wars and the “nightmare of coalitions” (Mansfield, Milner & Rosendorff, 2000). The processes of economic integration are developing in other regions of the world, especially in the Americas and the Asia-Pacific region. The triad of the most successful regions in the economic field, presented by Western Europe, North America, and South-East Asia, has clearly emerged on the world stage.
Finally, among the system-forming factors of the world order, incomparably greater role than in past centuries is played by world economic tendencies - economic globalization and the formation of a post-industrial civilization that objectively divide the world into a prosperous Center and a backward Periphery.
However, the question arises: was not there something similar in the past, albeit on a different objective basis? After all, in the history of international relations, there were events (for example, the Great geographical discoveries, the expansion of capitalism in the period of the emergence of colonialism), which gave a powerful impetus to the development of economic relations between peoples and influenced the whole system of international relations. The answer is positive. Parallels with the present day can be carried out, beginning with the 40-ies of the 19th century. During this period, on the wave of the industrial revolution, England, the “workshop of the world,” initiated a system of free trade and a gold standard, which later was adopted by other European states. Until the end of the 19th century, England avoided major wars, did not seek to conquer new colonies, granted independence to some old ones, convincing them of the benefits of free trade. Namely, this period some researchers call the first stage of the globalization of the world economy (Blakem & Walters, 1992).
Thus, England was the initiator of a fundamentally new “non-territorial international policy” (Blakem & Walters, 1992). Before that, if a state became stronger than others, it strived to a military-territorial advantage. England saw its benefits in the other - economic specialization and trade. Until the 1840-ies, there was nothing like this in international relations. Such a policy was developed only in the theories of A. Smith, D. Ricardo, D.Hume. However, the strengthening of the role of the economic component of world politics in the 19th century was only an episode, not a trend. The end of the free-trade system emerged in the last years of the century, but finally, it collapsed with the outbreak of the First World War. After it and until the end of World War II, in the world the military-political system of coordinates dominated.
The current stage of the economization of international relations has significant differences from the Pax Britannica period. Economists would note first of all, probably, that the cooperation of production has replaced trade cooperation. Political scientists rather would focus on the other. First, the locomotive of the current changes in the world has become another power - the United States with its characteristic goals and priorities in foreign policy. Secondly, the mechanisms of interaction between international politics and the economy have significantly changed. In the past, these mechanisms were represented by bilateral interstate relations and the relations of colonies and metropolises. Now, non-traditional actors, such as international economic organizations and transnational capital, enter into complex and often contradictory relationships with states. The latter divided into economically prosperous and behind in development, forming poles of the “North” and the “South” that are extremely ambiguous regarding the degree of influence on world processes. Under the influence of these processes, the content of international political-economic relations has become much more complex and multifaceted.
Economists believe that the state foreign trade policy is aimed at regulating the country's economic relations with other states (Mansfield, Milner & Rosendorff, 2000). The modern methodology of state regulation of foreign trade activity is constituted on the basic economic postulates of the classics of political economy and the theory of international trade, but the internal political component of foreign trade policy is often overlooked. In our opinion, the country's foreign trade policy is a system of measures aimed at protecting the domestic market, or to stimulate the growth of foreign trade, its structure and direction of commodity flows, based on the country's overall development strategies and is a part of its political activities and political system.
The first works showing the continuity of international politics and economics in principle and especially in the new conditions of interdependence and the globalizing world were presented by S. Strange, R. Cohen, and J. Nye, C. Kindleberger, R. Cooper and several other authors. A big role was played by the books of R.Gilpin, in particular, his The Political Economy of International Relations, published, however, somewhat later - in 1987 (Gilpin, 2001).
Susan Strange correctly writes that the theoretical problem of synthesizing economics and politics in international studies has not yet been solved. In her opinion, the difficulties in determining the subject of this field of research, as well as the methods that should be used, are related in particular to the fact that the analysis of the political and economic problems of international relations turned out to be subordinated to the economic theory with its concepts and methodology. Moreover, experts in the field of international relations use concepts and even ways of argumentation borrowing from the economics (Strange, 1988).
At present, there is the appearance of a significant number of generalizing works devoted to the political and economic processes in the world, as well as the influence of internal political factors, such as the electoral system. In particular, C.Evans in her research found a correlation between tariffs and electoral systems across countries in historical perspective. Based on empirical research, she makes a conclusion that “countries with majoritarian systems do indeed appear to have higher average tariffs than do countries with proportional systems” (Evans, 2009, p.278). Grossman and Helpman, based on strong mathematical evidence, also identify a protectionist bias in majoritarian politics (Grossman & Helpman, 2005).
R. Rogowski also traces a connection between trade and state institutions (democratic or not) and claims that Proportional systems are primarily associated with higher consumer prices, arguable due to higher tariffs/subsidies (Rogowski, 1987).
Developed countries and TNCs strive to maximize the sales markets for their goods, seek liberalization of trade and political regimes of partners, including within the WTO, and, finally, widely use more and more means to stimulate exports. At the same time, small and medium businesses do not have such opportunities to achieve sustainable competitive advantages in the international market and are much less interested in the unrestricted liberalization of foreign trade.
Particular importance is characteristic to the problems associated with the formation, functioning, and political influence of TNCs in society, as well as the relationships between TNCs and the state, which initially took a major part in the process of their formation, and now in many spheres of its activity is competitively influenced by TNCs. Transnational corporations have long ceased to be just conductors of state policy; now they independently form their behavior strategy and participate in the implementation of priority areas of activity in the global economic and political system. In countries with a developed market economy and a well-established corporate sector, the political participation of corporations has a long history, as well as forms and methods of such participation, are well-developed. The variability and diversity of interests of TNCs predetermine their active participation in lobbying processes, which is facilitated by the majority electoral system (Marsh & Smith, 2000).
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- Nadiia Kudriashova (Author), 2018, Electoral Systems and Trade Policies, Munich, GRIN Verlag, https://www.grin.com/document/496813