CHAPTER 4: A Society-Centered Approach to Trade Politics

Multiple Choice Questions

1. A society-centered approach to trade politics argues that a) a government’s trade policy objectives are not shaped by politicians’ responses to interest group demands. b) a government’s trade policy objectives are shaped by politicians’ responses to interest group demands. c) a government’s trade policy objectives are shaped by rational choices among strong economic models. d) trade largely has no distributional consequences. e) distributional consequences from trade only creates winners.

Answer: b

2. The model that argues that trade politics are driven by competition between competition between labor and capital is called a) the sector model. b) the liberal model. c) the conservative model. d) the factor model. e) the distributional model.

Answer: d

3. The model that argues that trade politics are driven by competition between two industries is called a) the sector model. b) the distributional model. c) the factor model. d) the pluralist model. e) the competition model. Answer: a

4. A policy of free trade will cause a) economic specialization that gradually increases the size and political significance of the protectionist industries and interests. b) economic specialization that gradually reduces the size and political significance of the protectionist industries and interests. c) economic specialization that gradually increases the size and but not the political significance of the protectionist industries and interests. d) no consequences for the relative balance of political power between the protectionist and liberalizing blocs. e) no consequences for the relative political power of liberalizing blocs. Answer: b

5.The tendency for trade to cause factor prices to converge is known as the a) factor mobility theorem. b) import competing theorem. c) Stolper-Samuelson theorem. d) Hecksher-Ohlin theorem. e) factor price differentiation theorem.

Answer: c

6. The factor model predicts that a) labor will prefer protectionist trade policies in developing countries. b) owners of capital will prefer liberal trade policies in developing countries. c) labor will prefer will prefer liberal trade policies in developed countries. d) owners of capital will prefer liberal trade policies in developed countries. e) owners of capital will prefer protectionist trade policies in developed countries.

Answer: d

7. A large body of evidence indicates that support for trade liberalization a) is lowest among that segment of the American work force with the least amount of formal education. b) is highest among that segment of the American work force with the least amount of formal education. c) is lowest among that segment of the American work force with the least amount of labor mobility. d) is lowest among that segment of the American work force with the most amount of labor mobility. e) is equal among the segments of the American work force regardless of the amount of formal education.

Answer: a

8. The sector model predicts that a) trade politics are driven by competition between high skill workers. b) trade politics are driven by competition between industries. c) trade politics are driven by competition between low skill workers. d) trade politics are driven by competition between capital and labor. e) trade politics are driven by competition between union and non-union workers.

Answer: b

9. The sector model assumes that a) factors are not easily moved from one industry to another. b) factors are easily moved from one industry to another. c) factors are not specific to the sector in which they are currently employed. d) geography of industry location does not mean workers have to physically relocate. e) logistical obstacles to physical relocation are not insurmountable.

Answer: a

10. The factor model assumes that a) factors are not highly mobile from one industry to another. b) people’s economic interests are not determined by their factor ownership. c) people’s economic interests are determined by their factor ownership. d) logistical obstacles to physical relocation are insurmountable. e) factors are specific to the sector in which they are currently employed.

Answer: c

11. The factor and sector models both argue that a) globalization is good. b) globalization is not good. c) trade policy preferences are not determined by the income consequences of trade. d) trade policy preferences are determined by the income consequences of trade. e) trade politics is driven by the conflicts between business and labor.

Answer: d

12. Oatley’s view suggests that people base their trade policy preferences on a) what is good for the country as a whole. b) what is good for their religious beliefs. c) what is bad for the country as a whole. d) primary actors that engage in trade politics which typically are large organizations. e) primary actors that engage in trade politics which typically are individuals.

Answer: d

13. The logic of collective action helps us understand several important characteristics of trade politics in advanced industrial countries including that a) consumers, rather than producers, dominate trade politics. b) export-oriented sectors demanding liberalization dominate trade politics. c) import-competing sectors demanding liberalization dominate trade politics. d) reciprocal trade agreements make it harder for export-oriented industries. e) governments rarely liberalize unilaterally.

Answer: e a) Producers, rather than consumers, dominate trade politics. b) Import-competing sectors demanding protectionism dominate trade politics. c) Individual consumers have a strong incentive to organize and campaign to influence trade policy. d) Individual consumers face a strong incentive to be a free rider. e) Individual consumers have few incentives to organize and campaign to influence trade policy.

14. Which of the following is NOT an important characteristic of trade politics illustrated by the logic of collective action?

Answer: c

15. Most scholars argue that the Reciprocal Trade Agreements Act (RTAA) of 1934 a) delegated the President the authority to increase tariffs in exchange for equivalent concessions from foreign governments. b) authorized the Congress to reduce tariffs in exchange for equivalent concessions from foreign governments. c) transformed the large heterogeneous group favoring liberalization into smaller groups of export-oriented industries that could more easily organize. d) transformed the smaller homogeneous group favoring protectionism into larger groups of export-oriented industries that could more easily organize. e) transformed the smaller homogeneous group favoring liberalization into larger groups of export-oriented industries that could more easily organize.

Answer: c

16. Supply side models of trade politics find considerable agreement a) that political institutions do not play an important role in transforming interest group demands into actual policies. b) about how political institutions play an important role in transforming interest group demands into actual policies. c) that political institutions do not play an important role in transforming interest group demands into actual policies by establishing rules that influence strategies. d) that political institutions do not play an important role in transforming interest group demands into actual policies by enforcing rules that influence strategies. e) that political institutions play an important role in transforming interest group demands into actual policies by establishing rules that influence strategies.

Answer: e

17. Electoral systems that combine single member districts and first-past-the-post elections are best called a) proportional representation systems. b) majoritarian systems. c) modified proportional representation systems. d) systems that advantage smaller third parties. e) systems that advantage party coalitions.

Answer: b

18. Electoral systems that distribute legislative representation in accordance with the share of the popular vote are best called a) majoritarian systems. b) run-off systems. c) proportional representation systems. d) single party systems. e) multi-party systems.

Answer: c a) Majoritarian systems may encourage organization around common factor-based interests. b) Proportional representation (PR) systems may encourage organization around common sector-based interests. c) Majoritarian systems may encourage organization around broad industry interests. d) Proportional representation (PR) systems may encourage organization around common factor-based interests. e) Proportional representation (PR) systems may encourage organization around interests in their own districts.

19. Electoral systems affect trade policies in which ways?

Answer: d

20. We would expect governments with PR systems to maintain a) lower tariffs because large groups benefit more from protectionism. b) lower tariffs because small groups benefit more from protectionism. c) lower tariffs than majoritarian electoral systems. d) higher tariffs than majoritarian electoral systems. e) higher tariffs because large groups benefit more from protectionism.

Answer: c: : -

21. A political actor whose agreement is necessary in order to enact policy is a) called a veto player. b) called a maverick player. c) called a poker player. d) not usually present in unified government. e) not usually present in divided government.

Answer: a

22. Applied to trade policy, a) political systems with few veto players will find it more difficult to alter tariffs in response to societal pressure for change. b) political systems with many veto players will find it easier to alter tariffs in response to societal pressure for change. c) liberalization rises more sharply in recessions in countries with more veto players. d) protectionism rises more sharply in recessions in countries with fewer veto players. e) political systems with many veto players will find it more difficult to alter tariffs in response to societal pressure for change.

Answer: e a) It more adequately explains who will win the political battle. b) It gives us more guidance about how to measure the balance of power between interests. c) It more correctly assumes that politicians play no autonomous role in trade politics. d) It more adequately addresses the motivations of noneconomic actors in trade politics. e) It gives us more guidance about how trade shapes the fortunes of different groups in society.

23. The society-centered approach helps us understand trade politics because it has several strengths.

Answer: e a) It correctly assumes that politicians play no autonomous role in trade politics. b) It adequately addresses the motivations of noneconomic actors in trade politics. c) It adequately addresses how to measure the balance of power between interests. d) It gives us more guidance about how trade shapes the fortunes of different groups in society. e) It gives us more guidance about who will win the political battle. Answer: b

24. Which of the following is a weakness of the society-centered approach to understanding trade politics?

25. In Britain’s Brexit decision, a) the more or less constant pro-Brussels refrain in British politics has been amplified since 2006 by a number of factors associated with globalization. b) polling data offers evidence that British voters’ preferences over Brexit didn’t reflect their economic interests as the standard trade models would predict c) polling data offers evidence that those who gained from Britain’s economic interdependence with the EU would vote Remain. d) individuals with greater mobility and fewer sector-specific skills (the young) are less ready to accept the risks of trade openness than individuals with more mobility. e) people who believed that Britain was better off 30 years ago than it was today were more likely to vote Remain.

Answer: c

True-False Questions

1. A society-centered approach argues that a government’s trade policy objectives are shaped by politicians’ responses to interest group demands.

Answer: True

2. Both the factor and the sector model of trade policy preferences agree that raising and lowering tariffs redistributes income.

Answer: True

3. The factor model predicts that labor will prefer protectionist trade policies in developing countries.

Answer: False

4. The sector model predicts that trade politics are driven by competition between capital and labor.

Answer: False

5. In Britain’s Brexit decision, voters with a university degree were significantly more likely to support Remain, while voters without a university degree were more likely to vote Leave.

Answer: True: : -

6. The tendency for trade to cause factor prices to diverge is known as the StolperSamuelson theorem.

Answer: False

7. By the logic of collective action, consumers, rather than producers, dominate trade politics.

Answer: False

8. The increasing importance of factor or class in trade politics arises from the fact that capital is more mobile internationally than labor

Answer: True

9. Electoral systems that combine single member districts and first-past-the-post elections are best called proportional representation systems.

Answer: False

10. The society-centered approach does not address the motivations of noneconomic actors in trade politics.

Answer: True

Essay/Discussion Questions

1. Explain the differences between the factor and sector models of trade policy preferences regarding income distributions.

2. Explain the differences between the factor and sector models of trade policy preferences regarding factor mobility.

3. Explain how and why transforming preferences into political demands requires that the actors who share a common preference organize in order to exert influence on the policy-making process.

4. Explain how producer groups rather than consumer groups can more easily organize to lobby government in the pursuit of their desired trade policy.

5. Is Brexit a backlash against globalization? Compare the differing answers.

6. How do the differences between majoritarian and proportional representation electoral systems affect trade politics?

7. Explain how veto players influence trade policy decisions.

8. What are the weaknesses of the society-centered approach to trade politics?

9. Explain how trade politics is driven by conflicts between import-competing and exportoriented industries.