The paper examines a significant phenomenon overlooked by the trade literature: internationally regulated goods. Contrary to the general trend of trade liberalization, specific goods, such as drugs, small arms, and antiquities, have come under increasing international control in recent decades through a set of global regulatory agreements. I argue that these goods are unique in that they involve transnational negative externalities. Whereas certain countries benefit from the trade in these goods, the trade inflicts negative effects on other countries. Examples of such negative externalities include fatalities and refugee flows resulting from rampant gun violence, high crime rates associated with widespread drug abuse, and archaeological destruction caused by antiquities looting. The paper develops a theory that first explains why national regulation is insufficient and why international regulation is necessary for curbing these negative externalities. The theory then analyzes why certain governments are strongly in favor of international regulation while others wish to maintain the trade uncontrolled. My analysis locates the sources of governments’ conflicting preferences in the domestic political arena and considers how exporters, consumers, and civil society shape governments’ views. The final part of the theory examines how the distribution of state power affects the establishment of the regulatory agreements. The paper makes several additional theoretical contributions by bridging rationalist and non-rationalist accounts of international law and by focusing on international cooperation in the absence of shared interest.
Available at: http://works.bepress.com/asif_efrat/1/