Endogenous Politics and the Design of Trade Institutions*

Much of the literature on the design of trade policy institutions takes the political pressure that governments face as exogenous. This paper integrates exogenous and endogenous political pressure into a single model, showing that the presence of endogenous political pressure overturns important results and provides insight into observed features of trade agreements as well as rules of organizations like the WTO. Endogenous politics destroys a traditionally-defined escape clause’s ability to provide flexibility in the face of political shocks when lobbies use the flexibility to seek rents. This can explain why WTO Safeguard use is conditioned on measurable economic indica-