Generalized Sanctions Threats: Evidence from the Generalized System of Preferences
Abstract: Individual states are threatened with sanctions only after they have chosen to violate international norms. Therefore, empirical analyses of threats to impose sanctions on specific states are subject to a strategic selection effect. Before any aberrant conduct occurs, the threat of sanctions is understood to be a possible consequence. Are generalized sanctions threats enough to prevent certain policies, even though they do not target specific states? I study this question in the context of the US Generalized System of Preferences using a differences-in-differences estimation strategy. Membership in the GSP is available to developing states conditional on respect labor and intellectual property rights. The policy is general because it includes all developing states. I leverage exogenous variation in the state-specific product scope to isolate the causal effect of changes in the value of program membership on rights protections in eligible states. I find evidence that states really do increase intellectual property rights enforcement when the benefits of GSP membership are higher, but the effects are not present for labor rights.