Review 7: Trade Protection in the United States, by Charles K. Rowley, Willem Thorbecke & Richard E. Wagner (1995)

Thomas D. Willett,
Center for Politics and Economics,
Claremont Graduate School and Claremont McKenna College,
Clemson University,
Public Choice, 93: 511-514 (1997)

"This is both a very valuable and a very frustrating book. Much of the frustration comes because the structure of the manuscript is likely to keep the authors' work from having the impact it should. The basic problem is that the authors do not appear to have made a clear decision on the purpose of the book and its intended audience. The book has three different messages. One is the virtues of free trade and a proposal for an amendment to the U.S. Constitution to achieve this goal. A second is to illustrate the usefulness of public choice analysis in explaining the history of U.S. trade policy in this century. The third is to address some major controversies in public choice analysis. By attempting to combine all three objectives in one book, I am afraid that the most appropriate audience for each of the three messages is likely to be put off by the formidableness of a 348-page volume. This would be a shame as facets of the book made especially valuable contributions in each area. The authors indicate that the book "began as a small eight chapter primer designed to place a public choice gloss on trade policy" but that "as work on the book advanced, it became apparent to the authors that a more substantial involvement with trade theory and policy would be desirable and that this in turn would create a lengthier book" (p.xi). The type of intended audience is not mentioned.

A second type of frustration stems from the spottiness of the coverage given to the existing literature. One of the strengths of the volume is the very useful surveys it presents of a great deal of relevant literature. This makes its numerous omissions all the more noticeable. It is as if the authors had just dipped into the international trade area, but not attempted to master it in any systematic way. That would be legitimate for a popular introduction to the usefulness of looking at trade policy issues through a public choice lens, but not for a book of over 300 pages. The omission of a high proportion of the substantial body of literature by political scientists (for examples and references see Frieden and Lake, 1995; Ikenberry, Lake, and Mastanduna, 1988; Lake, 1993; Odell and Willett, 1990; and Willett, 1995), while distressing, can perhaps be understood as reflecting a traditional disciplinary bias. One would like to think, however, that public choice types were less susceptible to such bias. What is particularly hard to understand is the number of omitted references to relevant contributions published in Public Choice and by card-carrying members of the Virginia School such as Robert Tollison, Leland Yeager and myself. At last my true complaint is revealed! Despite the sloppiness of this aspect of the authors' scholarship, the book contains much to commend it.

It begins with four chapters on basic principles which are pitched at the level of an undergraduate international economics text, and include a basic pitch for the relevance of public choice analysis. These are quite well written and include a wealth of wonderful stories to illustrate various points. Part II presents three chapters on the major institutions of U.S. policymaking, the Congress, the President and the bureaucracy. These are quite valuable surveys of the recent political science and public choice literature on these subjects. Part III turns to the market in trade protection, providing long historical chapters on the role of Congress and the executive branch in U.S. trade policy and shorter ones on fair trade laws and regional trade policies. The last part contains a chapter on the political economy of GATT, which seems out of place in this volume since it is largely descriptive with little public choice analysis, and a concluding chapter which presents a case for a constitutional amendment to require free trade.

As a normative piece to convince the general public of the case for free trade and the deficiencies of current U.S. trade policy the book is far too long. Indeed, even for use as a text there is far too much historical detail to keep the interest of the typical student, yet in terms of the historical analysis of the political economy of U.S. trade policy, the book offers primarily summaries of other sources, especially the fine book by Max Drestler on American trade politics.

The typical format is a well-written summary of a major historical episode followed by a section showing how this illustrates various aspects of public choice analysis. This is an excellent strategy for a text, but the reader is given so many examples that it is hard to keep one's concentration. With a good deal of careful pruning the volume could easily be turned into a wonderful supplementary paperback for courses in international economics.

The book also contains important contributions to public choice research but, again, these are unfortunately not presented in a way which makes it easy for the reader to appreciate them. In my view one of the most important issues for public choice research is to more systematically formulate and test propositions for the contrasting Chicago and Virginia schools of political economy. These schools tend to differ on such crucial issues as the importance of institutions, the degree of competitiveness of political systems, and the levels of information possessed by all but the most active participants in the political process. While my background gives me priors which are more sympathetic to the Virginia school, I strongly believe that each school has much to learn from the other. The authors, all from the Public Choice Center at George Mason University, champion the Virginia approach as would be expected. In their first chapter on political economy the authors note and dismiss in two sentences Gary Becker's influential argument that political competition will induce governments to adopt efficient policies.

In Chapter 5, however, such issues are given more systematic attention. Here the authors note that "the theory of endogenous protection advanced by Chicago-oriented political economists offers little or no scope for independent action on the part of Congressional lawmakers and views with more than a modicum of skepticism the notion that institutions matter at all on the determination of policy" (p. 120). In this and the following two chapters they present many cogent arguments why it is reasonable to believe that institutional structures matter and that rational ignorance and other factors limit the degree to which competition forces the political process to produce efficient outcomes. They also make a cogent case that recent public choice analysis has tended to focus too much on Congress relative to the President and that the extent to which congressional committees control government bureaus and regulatory agencies is an open question. In these discussions the authors present a balanced view that the answer to such questions is not likely to lie entirely with one of the contending views or the other.

In their chapter on the history of trade policy they give proper attention to the importance of the economic variables used in empirical applications of endogenous protection theory. They miss, however, the opportunity of using their historical case studies to systematically address the public choice issues under dispute. They are content instead to point to this and that development which is connected with public choice analysis or endogenous protection theory. This is quite legitimate from the standpoint of the authors' original intention of presenting a primer on trade policy with a public choice gloss. But for a more major work this was a missed opportunity. Fortunately all three authors remain highly productive public choice scholars and one hopes that they will turn at least some of their future research time to the testing of the comparative explanatory power of the different major political economy views."