Question

Domestic-level analysts choose either a society-centered or a state-centered approach to explaining trade politics. How do these two approaches differ in explaining trade politics? What is the main strength of the society-centered approach? What is its main weakness? What is the main strength of the state-centered approach? What is its main weakness? Justify your answers.

Answer 1

Society centered approach :

• In this approach government trade policy are shaped by politician's response to interest groups demand
• They are based on trade gains and losses
• The government cater to these demands so they can be reelected or remain in power

State centered approach:

• The government intervenes in the economy to raise social welfare that remains independent from domestic interest groups.

Society centered approach:

Strengths:

• Focus on government subsidies to support domestic firms
• They have national interest regarding trade
• Use of industrial policy to improve social welfare.

Weakness:

• It assumes that governments are unconstrained by interest groups
• Extreme government intervention.
• Protectionism deprives society from trade, especially in states that are comparatively disadvantaged.

State centered approach :

Strength :

• Ability of a government to act independently of interest groups
• Boost international competitiveness

Weakness :

• Lacks implicit microfoundations
• Assumes too much state autonomy
• Too many assumptions in general.