New Institutionalism in Organization Theory
Forthcoming in American
Journal of Sociology
ABSTRACT
Membership in certain intergovernmental organizations (IGOs), such
as the World Trade Organization, has long been argued to stimulate
trade. Yet, evidence linking IGOs to trade is mixed. We argue that
identifying the influence of IGOs requires attention not only to the
institutions IGOs enact, but to the network through which they enact
them. We incorporate the full set of IGOs by using shared-IGO
membership to create a network of connectivity between countries. This
approach allows us to demonstrate that trade between two countries
increases by an average of sixty percent with every doubling of the strength
of IGO connection between them. We also contribute to debates
regarding the mechanisms through which structural relationships
influence economic behavior by showing that substantial trade benefits
occur not only through economic IGOs, but also through IGOs that were
formed for social and cultural purposes, and that connections through
IGOs that are organizationally strong have more impact than those
through minimalist IGOs. The broader network formed by IGO connections
is also important, as there is greater trade between countries that
have dissimilar relationships to others. We reason that such
dissimilarities in the IGO network create brokering opportunities, where
trade between two poorly connected countries flows between a third that
is better connected to both.