In Venice I read how the Japanese are concerned about the U.S.-South Korea free trade agreement, and might seek their own trade deal with the United States.  The Japanese are afraid of being "left out in the cold."  I’ve also read speculation that a South Korean trade agreement might make Congress look more favorably upon free trade agreements with Latin America.  So why might one free trade agreement lead to others?  I can think of a few hypotheses:

1. Free trade agreements lead to considerable amounts of trade diversion, not just more trade.  The "left out" countries fear that trade diversion and thus wish to cut their own bilateral deals.

2. Free trade agreements show that other governments have found a commitment to greater trade worthwhile.  This may signal that either that benefits of trade are especially high, or that anti-trade interest groups are especially weak.

3. There is a big copycat effect in politics and public opinion, as evidenced by the historical clustering of revolutions and reforms.

4. A bilateral free trade agreement means that the U.S. will regard South Korea as a closer political ally than before, and Japan (and others) wish to keep in step.  In particular Japan wishes to keep "first dibs" on U.S. military protection and be the "go-to" country in international fora and joint endeavors.

What have I left out?

Note that under #1, bilateral trade agreements might lead to inefficient trade diversion, but the resulting spread of trade agreements will reverse many of those costs.

Here is John Nye on the historical tendency of free trade agreements to prove contagious.  Here is Mark Thoma on trade diversion.

The bottom line: I haven’t read the details of the U.S.-South Korea agreement, but I suspect that in this setting even a highly imperfect trade agreement is a net plus.

In Italy, on my way back home, these are the papers one’s thoughts turn to:

In immature democracies, businessmen run for public office to gain direct control over policy; in mature democracies they typically rely on other means of influence.  We develop a simple model to show that businessmen run for office only when two conditions hold.  First, as in many immature democracies, institutions that make reneging on campaign promises costly must be poorly developed.  In such environments, office holders have monopoly power that can be used to extract rents, and businessmen run to capture those rents.  Second, the returns to businessmen from policy influence must not be too large, as otherwise high rents from holding office draw professional politicians into the race, crowding out businessmen candidates.  Analysis of data on Russian gubernatorial elections supports these predictions.  Businessman candidates are less likely 1) in regions with high media freedom and government transparency, institutions that raise the cost of reneging on campaign promises, and 2) in regions where returns to policy influence measured by regional resource abundance are large, but only where media are unfree and government nontransparent.

Here is the paper.  From the same seminar series, here is a Jim Fearon paper on how democracy minimizes the cost of rebellion.

Dictatorships are generally most brutal when the fear of being overthrown is strongest.  The most benevolent dictatorships, in relative terms, tend to have strong roots in the country’s social and economic power centers.  This would help explain, for instance, why the minority Sunni Saddam Hussein was so tyrannical against his potential opponents.  Without extreme oppression, he would have lost power and his life.

The optimistic scenario for Iraq was (way back when) that a Shiite autocracy, with broad-based public support, would be considerably less brutal.  Once in power, the ruling clique would find it much easier to stay in power without extreme brutality.  At least that is how the theory went.

In this view, the critical U.S. mistake was not disbanding the (largely Sunni) army, which was in any case inconsistent with the best available power structure.  The critical mistake was creating a government that had no real unity and no real chance of having power on the ground.

The pessimistic scenario is that there are no broad-based constituencies left, or perhaps there never were any in the first place.  Under the former case American policy has been far more harmful, in net terms, than under the latter case.  It is possible that our handling of the transition disbanded whatever broad-based groups were in place to eventually rule.  Or perhaps Saddam had already destroyed them.

Partition has a certain logic in this model.  But there is no one to effectively oversee the process of division and allocation, either for the population or the oil.  I would expect a good million or half million lives to be lost from the resulting slaughter and the forced migrations of population.

To repeat, I am not claiming this model is true.  But if it is false, it is worth thinking about what further assumptions should be added or which current assumptions should be dropped.

Addendum: Modeling the current Iraq is difficult for a few reasons.  It is rare for an occupying power to set up a democracy, so historical data are scarce.  In any case this is not the world of MacArthur and postwar Japan.  Nor is it the democracy of Anthony Downs or Arendt Lijphart.  For many unusual governmental forms, I start with the implicit models of Gordon Tullock’s Autocracy and the problems of stability and cycling autocratic coalitions.  But Iraq seems too far from stability for cycling to be the major problem.  The instability seems radically overdetermined, and that makes comparative statics difficult.

The closest parallel I can think of is Yugoslavia in the early 1990s, when relative stability gave way to bloodshed.  Fear encouraged a mental overinvestment in strategies of ethnic solidarity and many groups started launching pre-emptive attacks, leading to widening circles of violence and then greater fear.

There are many smart writers on Iraq, with varying degrees of knowledge and information.  I wish more of them would seek to provide a simple model of what is going on.

If you do leave comments, please focus on public choice issues rather than attacking or defending the war itself.

Find it here, the conclusion is that Hispanics are following traditional immigration patterns and do not represent an outlier, as suggested by Samuel Huntington.