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22 June 2010

The emergence of international order: the case of MFN treaties in the 1860s

Below is an animation of the spread of MFN treaties in the 1860s. But let me provide a little background before you play it...

One of the major themes that runs through the study of international relations is that of hierarchy and hegemony; that the rules of the international system are determined by a hegemon or small coterie of dominant states, and that the study of the international system is really a story of a contest for hegemony (cf Kindleberger, Organski, Gilpin, among many others).

The relative free trade regime that emerged in the 1860s is often taken as a case study of the role of hierarchy in the international system, where, the story goes, the hegemon, Great Britain, imposed on the international order a set of rules that served its own interests in free trade. This is a perspective I critiqued in a paper in World Politics about a decade ago. In particular, I argued, the international order was emergent, with a foundation of a set of bilateral most favored nations, and the result of the interplay of domestic interests with the rapidly evolving international economy. Specifically, associated with the rise of industrialism were lower transportation costs and scale in production. The cost to producers of industrial and differentiated goods (but not homogeneous goods) of being discriminated against in another state's markets thus must have increased through the 19th century. This trend set the stage for an "epidemic" of most favored nation treaties, starting with a treaty between France and Britain in 1860. This treaty, I argue, created a concern by other industrializing countries that their goods would be shut out of France, decreasing the price they could receive for differentiated goods, and undermining the competitiveness of their industrial producers. These countries signed treaties with France, which then created additional concerns about being shut out of French (and other) markets, spurring yet more treaties. Britain, because it generally had low trade barriers already, was in a relatively peripheral position in this treaty network.

So: here is the animination (designed by Sune Lehmann). Key things to focus on include the temporal order of treaty signings, the role of geography in determining who signed treaties with whom, and the position of Great Britain in the emerging network.

Note: an edge indicates the presence of an MFN treaty between two countries, and node size is proportional to degree.

Here's the paper: Lazer_Free-Trade-Epidemic-1999_World-Politics.pdf

Here are the data: io3.xls

And some relevant references:

David Lazer, "The Free Trade Epidemic of the 1860s and Other Outbreaks of Economic Discrimination," World Politics, July 1999, 447-483.

Douglas Irwin, "Multilateral and Bilateral Trade Policies," in Jaime de Melo and Arvind Panagariya, eds., New Dimensions in Regional Integration (Cambridge: Cambridge University Press, 1993).

Peter Marsh, Bargaining on Europe: Britain and the First Approach to a European Economic Community, 1860-1892 (New Haven: Yale University Press, 1999).

Posted by David Lazer at June 22, 2010 8:16 AM

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