Building Legislative Coalitions for Free Trade in Asia: Globalization as Legislation by Megumi Naoi (review)

Ideally, a strong piece of social science analysis will effectively challenge a commonly held assumption. Maybe two. This impressive, empirically rich book tackles six or seven different assumptions that are widely shared in the literature on the politics of international trade and domestic policymaking. These include the following claims:

• • protectionism is “natural”; as a result, states generally do not open their economies to competing imports without pressure from, or shared expectations with, other states; and they only do so when bureaucrats are insulated from political pressures;

• • levels of trade protection vary according to political institutions or regime type; for example, parliamentary (rather than presidential) and candidate-centered (rather than party-centered) electoral systems tend to have higher tariff rates;

• • organized and concentrated interests always are better equipped to secure protection from imports because they have greater ability to overcome collective action problems;

• • pork-barrel politicking is mostly a rural phenomenon;

• • legislators generally adopt positions on economic policy that reflect their constituents’ immediate interests;

• • governments are compelled to compensate domestic actors who suffer big losses from globalization or liberalization.

Using a battery of statistical tests and case studies from Japan and Thailand, Megumi Naoi, associate professor of political science at the University of California, San Diego, pokes holes in all of these assumptions, making a bold argument that politicians have played the leading role in proactively opening their economies to global trade.

This claim flies in the face of a longstanding scholarly consensus that liberalization only proceeds when states are embedded in a global trade regime of hard bargaining and reciprocity,¹ or when legislators delegate trade policy to the executive branch (the president or appointed bureaucrats) who are not routinely subjected to the whims of special interest groups or voters.² On trade issues, Naoi counters, politicians don’t merely react to external pressures and don’t simply serve their constituents reflexively. Legislators “often push liberalization bills that provide collective benefits to the party, the government, or general citizens in the long run, while hurting their own districts’ interests at least in the short run” (pp. 8–9).

The most valuable contribution Naoi makes here is to show exactly how politicians achieve liberalization, even when they are operating in “protectionist friendly” or candidate-centered regimes with multimember districts, and even when “trade friendly” policies hurt some industries and voters in the short run and thus jeopardize the electoral fortunes of some legislators. She argues that party leaders have strategically used pork, policy, or institutional reform to secure winning coalitions for more open economies. That is, they have distributed side payments to legislators, especially fence sitters, who otherwise might have opposed liberalization.

This last point deserves emphasis. Much of the literature on the politics of trade suggests that governments are forced to pay compensation to the biggest and best-organized domestic losers from globalization. Thus, Nita Rudra argues that, in developing countries, politically well-connected and heavily unionized industries hit especially hard by competing imports are the ones most likely to receive government assistance following trade liberalization.³ Naoi demurs. She argues instead that calculations about such payouts are based more on the political needs of legislators than on the economic needs of constituents (industries, workers, voters). Party leaders will direct “goodies” to reluctant legislators whom they believe can be lured into a pro-liberalization coalition, meaning “legislators representing small net losers of globalization.”

These “goodies” or side payments take different forms depending on the circumstances, according to Naoi’s “Globalization as Legislation” model (“GL” for short, of course). In most cases, the easiest way for leaders to secure support for liberalization is to deliver pork, such as a new airport or some other public works project, to districts represented by swing legislators from the same party. But what do those leaders do when the allocation of pork becomes prohibitively expensive (such as when the costs...