Integrating Explicit Political Costs into a World Trade Organization Negotiation Simulation

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.