Racism By Design: The Role of Race and Ethnicity in the Design of International Trade Agreements

Abstract

What are the determinants of institutional flexibility? While traditional scholarship has argued that institutional flexibility is good for cooperation, I suggest that flexibility may actually have adverse effects on the gains from trade in allowing states to legally restrict market access and therefore, have negative implications on development. In this project, I argue that states’ racialized identity will influence the types of agreements they design with one another. I hypothesize that states will design less flexible agreements with states’ part of their racialized in- groups than racialized out-groups due to particularized trust. I test my hypotheses in a cross- national study of over 600 preferential trade agreements and two different measures of a state’s racial identity from 1947 – 2013. I find partial support for my hypotheses. My project contributes to the institutional design and globalization literature to understand the role of race in international commerce.