Betz, Timm, David Fortunato, and Diana Z. O'Brien (forthcoming). "Do Women Make More Protectionist Trade Policy?" American Political Science Review, accepted for publication.
Men and women differ in their preferences over many economic policies, including over trade policies. We assess whether this well-documented relationship between gender and protectionism in the mass public carries over into a relationship between women's political representation and (i) party platforms, and (ii) governments' trade policy choices. We demonstrate that with an increase in women's representation, political party trade policy positions become more protectionist. For government trade policy choices, we identify more nuanced results. The gender gap in preferences translates into policy when women gain political office, but only where not opposed by powerful business interests.
Betz, Timm, and Amy Pond (forthcoming). "Politically Connected Owners." Comparative Political Studies, available online.
Drawing on the ownership structure of firms, we identify a link between political turnover and turnover in the ownership of firms: political turnover prompts newly politically connected individuals to take, and newly disconnected individuals to cede, ownership of firms. This pattern is more pronounced in countries with weaker property rights, among firms with publicly recorded owners, and among firms with more immobile assets. Firms that experience changes to ownership during periods of political turnover also pay less taxes and earn higher profits. Because politically vulnerable firms seek out connected owners, these results explain why vulnerable firms might not receive significantly worse government treatment.
Betz, Timm, David Fortunato, and Diana Z. O'Brien (2021). "Women's Descriptive Representation and Gendered Import Tax Discrimination." American Political Science Review, 115(1): 307-315. pdf.
We identify a form of gender-based policy discrimination: the setting of import tariffs for gendered goods. Import tariffs can differ across otherwise identical gender-specific products, and often impose direct penalties on women as consumers. Comparing nearly 200,000 paired tariff rates on men's and women's apparel products, we find that women suffer a tax penalty that varies systematically across countries. In democracies, women's presence in the legislature is associated with decreased import tax penalties on women's goods. We highlight a previously unacknowledged government policy that penalizes women, provide evidence that descriptive representation can have a direct impact on such discriminatory policies, and demonstrate how inequities in political representation are reflected in tariff rates.
Betz, Timm, Amy Pond, and Weiwen Yin (2021). "Investment Agreements and the Fragmentation of Firms across Countries." Review of International Organizations, 16(4): 755-791. pdf.
We examine the global ownership structure of firms in the context of the investment regime. Drawing on subsidiary location choices of the world's largest firms, as well as data on firm ownership structures and aggregate investment flows, we present systematic evidence that firms systematically expand their access to investment agreements by locating subsidiaries in `transit' countries. This firm-specific access to investment agreements through transit countries also has implications for investment flows: Transit countries receive more inflows and outflows of investment. Moreover, the impact of agreements declines over time and treaty partners, as seemingly newly protected firms have previously gained coverage through subsidiaries. The paper highlights the importance of the global ownership structure of firms in an environment of heterogeneous international rules and discusses new distributional consequences of the investment regime.
Specifying relationships between units is one of the biggest hurdles for applied researchers in undertaking spatial analysis. We derive bounds for the bias in models with omitted spatially-lagged predictors or outcomes. The bias expressions can be obtained without prior knowledge of the network, and some concerns can be eliminated ex ante. We also derive bounds for spatial econometric models with non-systematic error in the specification of the weights matrix. We demonstrate that the omission of spatial predictors or outcomes is the limit condition of including them with a misspecified spatial weights matrix under these conditions.
Betz, Timm, Scott J. Cook and Florian M. Hollenbach (2020). "Spatial Interdependence and Instrumental Variable Models." Political Science Research and Methods, 8(4): 646-661. pdf.
Instrumental variable models frequently ignore spatial interdependence in the outcome. We show that ignoring spatial interdependence in the outcome results in asymptotically biased estimates. We also identify conditions under which this bias is particularly severe and argue that many commonly used instruments, such as rainfall, natural disasters, economic shocks, and regionally- or globally-weighted averages, amplify this bias.
Betz, Timm (2020). "The Electoral Costs of Policy Commitments." Political Science Research and Methods, 8(1): 30-44. pdf.
Parties in government can use domestic or international institutions to lock in their own policy preferences by tying the hands of successors. I contrast such hands-tying incentives with office-seeking motives. The paper emphasizes the trade-off between implementing policy preferences, on the one hand, and exploiting partisan differences for electoral success, on the other hand: Locking in a policy takes an issue off the table, but it also undermines a party's ability to leverage differences to the opposition in elections.
Betz, Timm and Amy Pond (2019). "Foreign Financing and the International Sources of Property Rights." World Politics, 71(3): 503-541. pdf.
Investment agreements protect the assets of foreign firms, but not of domestic firms. We demonstrate how this segmentation of the property rights environment creates a rationale for international financial relationships between firms. Our theory suggests a political logic to the fragmentation of firm ownership stakes across jurisdictions, offers a new perspective on the political consequences of capital mobility, and identifies distributional consequences of international law.
Betz, Timm (2019). "Tariff Evasion and Trade Policies." International Studies Quarterly, 63(2): 380-393. pdf.
Existing theories of trade policy miss an important aspect of tariffs: while they are easy to implement and can be targeted narrowly, tariffs also need to be enforced at border crossings. Faced with high tariffs, firms can misclassify their products into categories with lower tariffs. Pointing to the potential for such tariff evasion, I discuss the difficulties for governments in using tariffs for political gain and derive implications for trade politics.
Betz, Timm and Amy Pond (2019). "The Absence of Consumer Interests in Trade Policy." Journal of Politics, 81(2): 585-600. pdf.
A common explanation of trade openness is that voters as consumers benefit from free trade. Because governments in democracies should be more responsive to voters, this argument has been used to link liberal political systems to liberal trade policies. Assembling detailed data on consumption shares across products and matching these data with tariff rates, we find no evidence that consumer interests account for lower tariffs; the association is weakest in democracies. We discuss potential alternative explanations of an association between democracy and free trade, based on firm lobbying for free trade, and show how they revise our understanding of the sources of trade openness.
Betz, Timm, Scott J. Cook and Florian M. Hollenbach (2018). "On the Use and Abuse of Spatial Instruments." Political Analysis, 26(4): 474-479. pdf.
Many popular instrumental variables are constructed based on neighboring values, such as regional or global averages. We demonstrate that these instrumental variables can be recast as as spatial lags, and clarify the assumptions necessary for these instruments to be valid.
Betz, Timm (2018). "Domestic Institutions, Trade Disputes, and the Monitoring and Enforcement of International Law." International Interactions, 44(4): 631-660. pdf.
I identify two complementary mechanisms through which domestic institutions explain the initiation of trade disputes at the GATT/WTO. Where domestic institutions increase the government's incentives to provide targeted beneﬁts, governments are more likely to enforce trade rules on behalf of domestic firms. In turn, anticipating that enforcement is more likely to be forthcoming, domestic firms invest in the monitoring of international law, which improves the chances of detecting rule violations.
Betz, Timm (2017). "Trading Interests: Domestic Institutions, International Negotiations, and the Politics of Trade." Journal of Politics, 79(4): 1237-1252. pdf.
To explain trade policies, a large literature draws on domestic institutions. Institutions that are more responsive to narrow-interest groups are expected to succumb to protectionist demands, resulting in higher average tariffs. Integrating theories of domestic and international institutions with a firm-based model of trade politics, I demonstrate how the link between domestic institutions and protectionism breaks down. The rise of product-specific tariff rates emerges as a response to competing firm interests.
Betz, Timm and Andrew M. Kerner (2016). "Real Exchange Rate Overvaluation and WTO Dispute Initiation in Developing Countries." International Organization, 70(4): 797-821. pdf.
We argue that developing country governments bring more trade dispute to the WTO when overvalued real exchange rates put exporters at a competitive disadvantage. This dynamic is most prevalent in countries where large foreign currency debt burdens discourage nominal currency devaluations that would otherwise serve exporters' interests. Our findings provide an explanation for differences in dispute participation rates among developing countries, suggest a new link between exchange rate regimes and trade policy, and point to the importance of a country's debt denomination.
Betz, Timm and Andrew M. Kerner (2016). "The Influence of Interest: Real US Interest Rates and Bilateral Investment Treaties." Review of International Organizations, 11(4): 419-448. pdf.
Why are bilateral investment treaties more popular in some places and times than others? We argue that global monetary conditions -- specifically, US interest rates and net external financial liabilities -- shape the enthusiasm of governments for joining bilateral investment treaties. U.S. monetary policies emerge as an important source of government engagement with international institutions.
Betz, Timm (2013). "Robust Estimation with Nonrandom Measurement Error and Weak Instruments." Political Analysis, 23(1): 86-96. pdf.
Applications of instrumental variable models frequently ignore the possibility of non-random measurement error, and standard estimators may additionally suffer from problems when instruments are weak. This article introduces a rank-based estimator that addresses both problems.