Quality of governance and the formation of preferential trade agreements

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Abstract

This paper investigates economic and political factors which explain the presence or absence of preferential trade agreements (PTAs). A model of three countries with imperfect competition markets is employed for theoretical analysis of political economy. The validity of theoretical results is tested by econometric analysis with a logit model. It is shown that countries with similar incomes are more likely to form PTAs, and that governments with low quality of governance have little incentive to form PTAs.

Original languageEnglish
Pages (from-to)758-772
Number of pages15
JournalReview of International Economics
Volume14
Issue number5
DOIs
Publication statusPublished - 2006 Nov 1

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ASJC Scopus subject areas

  • Geography, Planning and Development
  • Development

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