Search

A key goal of mercantilist manipulation of trade was to increase national power. Two and a half centuries of more recent economic theorizing provides reasons for thinking that this claim was (1) wrong, (2) right, or (3) conditional upon the specific context of international trade. Given the range of theoretical expectations, the question is ultimately an empirical one, and the outcome of such tests have important implications for international relations. This study develops key implications from the long economic and international relations literature on the relationship between (balance of) trade and national power, and subjects those implications to the test using data from the 1870s through the present for a panel of many countries. Our analysis suggests that trade surpluses sometimes pay. In periods in which substantial trade deficits are tolerated, countries with surpluses gain power, and one might say that mercantilism pays. In periods in which substantial deficits are not tolerated, trade balance is uncorrelated with changes in power, and one might say that mercantilism does not pay. [ABSTRACT FROM AUTHOR]

Can senders remove economic sanctions without the fear of strengthening targets' capabilities? Despite the inefficiencies created by sanctions and incentives to resume economic interactions, senders are often uncertain if targets will make policy concessions in exchange for sanctions relief. I argue that this uncertainty, coupled with the difficulty of perfectly observing the compliance behavior, creates incentives for targets to misrepresent their willingness to make policy concessions. Using a game theoretic model of sanctions removal under uncertainty about the intentions of the target, I demonstrate the conditions under which monitoring can or cannot facilitate the ending of economic coercion and the resumption of normal economic interactions. I find that monitoring facilitates sanctions removal by inducing target cooperation in some cases, eliminates the incentives to alter the status quo characterized by sanctions in others and can have unanticipated and counterproductive consequences by creating an opportunity for targets to cheat under certain circumstances. [ABSTRACT FROM AUTHOR]