Integrating Explicit Political Costs into a World Trade Organization Negotiation Simulation

ABSTRACT

This paper enriches the existing set of global trade negotiation simulations by incorporating explicit, country-specific domestic political consequences incurred from trade concessions. Several semesters of testing with undergraduate students in the U.S. and master’s students in Argentina demonstrate that the simulation statistically significantly enhances students’ understanding of the role that domestic political pressures play in preventing negotiators from reaching the first-best trade regime. Students learn-by-doing that conflicting country philosophies regarding free trade vary substantially not only between developed and developing countries, but also depending on the geography and key industries of each country. The simulation also provides students with current, realistic economic values for the country and the world from freeing trade. Seventeen country tables provide instructors with tremendous flexibility in structuring the negotiation framework. A complete instructor’s manual with a detailed description of how to use the simulation, all student handouts and an Excel file that automatically calculates point totals is available via e-mail from the corresponding author.

KEYWORDS:

• Simulation
• negotiation
• World Trade Organization
• international trade

Disclosure statement

No potential conflict of interest was reported by the author(s).

Acknowledgments

The authors wish to thank two referees and two editors for their thoughtful insights that have improved this article. They also thank Russell Triplett and Francisco Gallo for their collaboration in running and recording class’ simulations.

Additional information

Notes on contributors

Andres Gallo

Andres Gallo is a professor of Economics at the University of North Florida. He teaches econometrics, international economics, and economic development. His research includes international business and economics, property rights, institutional economics, economic development topics in Latin America. His work also includes teaching in international business, global programs, doubled degrees, and sports economics.

Jeffrey W. Steagall

Jeff W. Steagall is professor of economics at Weber State University. He teaches international economics. He has published on a variety of topics including international business and economics, economic development, pedagogy for international business and economics, creating and sustaining study abroad and double degree programs, voter bias in college football polls.