The bulk of my research focuses on the effects of power and self-interest in international cooperative situations, specifically in trade and development relations. Neoliberals such as Robert Keohane and Robert Axelrod claim that egoists only cooperate when they can derive more benefit than pursuing a goal alone. My research agenda is derived from this theory of cooperation. My publications and working papers on state behavior in the WTO as well as the effects of foreign direct investment on development illustrate how power relationships define would-be cooperative interactions and lead to greater benefits for the more powerful state.
WTO Dispute Settlement Issues
Trade, Development, and the Shadow of Dependence: The Case of Latin America (book manuscript, funded by a NSF-ADVANCE Sponsorship Grant)
With this NSF-ADVANCE Sponsorship Program award, I propose to investigate how formal and informal colonial ties with the United States (US) and the European Union (EU) affect trade behavior and economic development opportunities in the Caribbean and Latin America. This project extends my work on the banana trade wars (Fattore and Allison 2013) and the struggle over foreign direct investment from rum producers in Puerto Rico and the US Virgin Islands (Fattore 2013, Latin American Policy), which is currently turning into an international trade dispute between those Caribbean states that are also rum producers.
I would explore questions regarding the participation of Latin American and Caribbean countries in the World Trade Organization’s (WTO) Dispute Settlement Mechanism (DSM). The DSM is dominated by cases filed by or targeting advanced industrialized states, such as the United States, the European Union, Japan, China, and Canada. While these economies clearly dominate global trade, that should not completely exclude smaller states from participating in the DSM as an attempt to resolve their trade disputes, and, in turn, promote fairer trade and development practices. Previous research regarding the domination of developed states in the DSM has focused mainly on a state’s legal capacity being the main determinant of a state’s ability to engage the DSM. Legal capacity is defined as a state’s ability “to monitor and enforce rights and obligations” within the context of the WTO (Busch et al 2009: 560). It encompasses the ability to staff a permanent delegation at WTO headquarters in Geneva, especially one that has been trained to deal with the highly judicialized dispute system. States with lower levels of legal capacity lack the ability to observe other states’ trade behavior or to build a case in order to bring a complaint against another state. Therefore, the assumption is that many underdeveloped states do not use the DSM because they lack the capacity to do so.
In this project, I will challenge the conventional wisdom about legal capacity limiting developing world participation in the DSM by developing a set of hypotheses about trade dispute behavior within Latin American countries. In the 1960s, Latin American economists developed dependency theory to describe how growth was stunted in the region because of neocolonial ties to the Global North. However, there is currently a gap in the literature where dependency theory has not been applied to current trade and development issues. The assumption is that, because there has been economic success in countries like Brazil and Argentina, the region has stepped out of the shadow of the US and the EU. Instead, I hypothesize those smaller states that have high levels of trade and investment with one or both of these economic giants will continue to depend on them for protection in the WTO and, specifically, in the DSM.
“Trade, Development, and the Shadow of Dependence: Latin America and the United States in the World Trade Organization.”
While previous literature generalizes about the dispute trends of developing countries and their limitations to access and utilize the dispute settlement mechanism of the WTO, this project focuses on Latin American participation in the DSM. Latin America is a unique region in that all the countries have been a part of a WTO dispute in some manner, either as a complainant, defendant, or as a third party (Torres 2012). I hypothesize that continued dependence on the US for trade and investment opportunities will restrict how Latin American states behave in the DSM, especially in targeting the US. Utilizing an empirical test, I find that states with preferential trading arrangements with the US are less likely to file a complaint against their large trading partner because the states directly control their trade policies and smaller states fear retaliation. BITs have the opposite effect, in that Latin American states feel freer to target the US since states cannot control FDI flows.
“Domestic Legal Traditions and the Dispute Settlement Body: Are Certain States More Litigious Than Others?” 2014. Journal of International Trade Law and Policy 13 (2): 123-135. PDF
The influence of domestic legal traditions on dispute behavior has been widely examined in the conflict literature. This study builds on that to focus on dispute behavior within the World Trade Organization. States with a civil legal tradition hold treaties and agreements in high esteem. Therefore, they will be more likely to file trade complaints and pursue adjudication when compared to states with common or mixed legal traditions. I test my hypotheses using data from the WTO and find that, while civil law states are more likely to file complaints, they are less likely to pursue adjudication over a negotiated settlement.
“Puerto Rican Development in Light of US Colonialism: The Case of the Rum Excise Tax.” 2014. Latin American Policy 5 (1): 26-38. PDF
The relocation of Diageo’s rum production facility from Puerto Rico to the US Virgin Islands in 2010 had larger ramifications than the shifting of jobs from one island to another. Attached to this is the distribution of monies associated with the excise tax placed on each bottle of rum produced in these territories. For close to five decades, Puerto Rico received a large majority of these funds and invested it in economic growth. In order to secure a larger share of the cover-over money, the USVI promised large corporate kickbacks funded by the tax. In this paper, I examine which strategy has an impact on economic growth: the cover-over as a supplemental fund or as a MNC enticement. I conclude that the use of the cover-over as a supplement to island growth is ineffective, and that constrained growth is due more to their political status as territories of the US.
“The Influence of Legal Capacity on WTO Dispute Duration.” 2013. The International Trade Journal 27 (5): 1-16. PDF
WTO dispute settlement has evolved away from the concise process originally imagined to one where panels languish for years. This is to the detriment of lesser-developed states that do not have the resources that allow for access. In this paper, I perform a multivariate analysis to explore the relationship between a state’s legal capacity and the length of trade disputes. Controlling for selection bias, I find that the legal capacity of both the involved parties contributes to longer disputes. The relaxed time expectations in this process favors the inclusion of developed states and excludes those without the resources necessary to carry out what has become the normal dispute process.
“Exploring Aviation Rivalries within the Legal Context of the WTO.” 2013. The Estey Centre Journal of International Law and Trade Policy 14 (1): 39-55. PDF
When states file complaints in the WTO’s Dispute Settlement Body regarding another’s trade behavior, they may be motivated to strategically promote their own national interests rather than working towards a collectively beneficial resolution. Using two cases regarding aviation, I explore the evolution of trade rivalries in the WTO environment. I derive a hypothesis from the endogenous protection literature, that states that produce the same goods in a small and competitive market will be more likely to file a significant number of WTO disputes in order to block access to their own and foreign markets. Using the principle rivalry approach, I find that both disputes involve a mutual recognition of rivalry over the aviation sector, as well as the use of heightened diplomatic language. I expect that as more states begin to utilize the DSB, other dyads involved in the trade of highly specialized goods will be more likely to engage in this type of strategic behavior.
“Extended Endogenous Protection and Exogenous Protection in the EU-US Banana Disputes.” (with Michael E. Allison) 2013. The Latin Americanist 57 (2): 111-129. PDF
“Interest Group Influence on WTO Dispute Behavior: A Test of State Commitment.” 2012. Journal of World Trade 46 (6): 1261-1280. PDF
This study examines the influence of interest groups on a state’s willingness to pursue their most favorable decision during a WTO dispute. States are committed to their WTO agreements, but they also have to act as a watchdog for their domestic industries in states that may not hold WTO agreements in high esteem. Interest group influence on the state has been examined through case studies, but never at the systemic level. I hypothesize that states being pressured by many interest groups are more likely to pursue a dispute into the higher levels of dispute resolution. I test this using data from the WTO as well as interests groups from around the world. I find that complainant states are more likely to be pressured by their interest groups to pursue a favorable outcome rather than settle or accept an earlier decision.
“Support for Women Officeholders in a Non-Arab Islamic Democracy: The Case of Indonesia.” (with Thomas J. Scotto and Arnita Sitasari) 2010. Australian Journal of Political Science 45 (2): 261-275. PDF
Recent work argues that the relationship between Islamic faith, the lack of support for gender equality and democratization is spurious. This paper analyzes the correlates of individual support for increasing the number of women serving in Indonesian legislatures. Indonesia is a relevant case because it is an emerging democracy, outside of the oil-rich Middle East, where over 85% of the citizenry registers a Muslim faith. We ﬁnd that the
willingness of Indonesians to support or oppose gender equity in politics is only minimally rooted in their faith or culture. This result buttresses the conclusions of cross-national studies that question the appropriateness of treating predominantly Muslim nations in the same way when studying questions of gender equity and democratization.
“New Cohesion Policy Aims and Instruments and Their Impact on the Regions.” 2009. In The Treaty of Lisbon and the Regions. Vitoria-Gasteiz: Parlamento Vasco.