Preference Similarity and Interstate Commercial Cooperation

Abstract

In this study, I evaluate a hypothesis regarding whether a dyadic preference similarity guides foreign policy behavior. The existing literature in international relations highlights the importance of domestic institutions and international factors, yet the mutual preference similarity has not been fully explored in interstate economic cooperation research. Quantitative studies on commercial cooperation have largely ignored the impact of mutual preference similarity on international economic foreign policy. I revisit a claim that international economic cooperation can be explained mainly as the product of similar political and economic institutions. I argue that the similarity of mutual preference between dyads is likely to affect the probability of interstate economic cooperation. Omitting the variance of mutual preferences leads to an incomplete picture of commercial cooperation. I show that an index of states dyadic preference similarity based on correlation between roll-call voting in the United Nations General Assembly accounts for much of the variance in economic cooperation propensity. If state preferences coincide over divergent issues, then their commercial ties become stronger. I conclude that the preference similarity of governments foreign policy goals affects the willingness of states to form Free Trade Agreements (FTAs).