BLOCS OR ROUNDS - AN ANALYSIS OF 2 APPROACHES TO TRADE LIBERALIZATION

This article examines the properties and relative strengths of two app roaches to reducing barriers to trade among nations: multilateral nego tiating rounds versus regional economic blocs. Instead of focusing on the net welfare gains-the macro-level effects-that result either from each member of the system reducing trade barriers to all its partners (rounds) or from reductions among a subset of states (blocs), the anal ysis focuses on the institutional features (group size and the voting and enforcement mechanisms) that may affect individual nations' micro- level motivations to participate in and abide by certain trade arrange ments. Existing models in formal theory are used to analyze these appr oaches in terms of voting games and collective action models.