How have governments managed the political challenges of trade liberalization? In her book, Megumi Naoi offers a compelling answer based on party strategies to dole out pork-barrel payments and policy benefits in order to win over support for liberalization. This is not a simple solution—leaders must overcome collective-action challenges when losers from liberalization are diffuse, and they also must act within budget constraints. Hence, the centralization of the party structure plays a critical role in allowing politicians to target the optimal level of pork and policy across districts. Under these conditions of centralized party rule, leaders are able to allocate side payments to districts that experience economic losses when they are subjected to high levels of liberalization, while limiting the level of liberalization for critical swing districts that would otherwise defect from the support coalition for majority rule.

Building Legislative Coalitions for Free Trade in Asia develops a theory of globalization as legislation in which the majority requirement in a legislature dictates the buying off of opponents to liberalization. The key theoretical concepts turn on how the distribution of losers and centralization of party organization balance the use of pork, policy, or institutional reform as the tool for building a majority coalition. Privileging the legislature as the central actor behind liberalization goes against the conventional wisdom that legislatures are inherently protectionist due to their susceptibility to the influence of special interests opposed to liberalization. Whereas previous studies emphasize delegation away from the legislature to the executive as the necessary condition for achieving trade liberalization, Naoi contends that legislative support remains necessary. Global markets and trading partners are opportunities to be utilized by the leader who is able to distribute income gains effectively according to a political logic for compensating losers.

Using her theory of domestic preferences grounded in both economic interests and political institutions, Naoi is able to explain how a diverse set of countries across the developing and developed nations have come to embrace globalization. Her main theoretical contribution is to demonstrate how leaders exercise agency to actively build support for liberalization. Politicians are not helpless in the face of global pressures; they possess tools to mitigate market forces and compensate for harm. Where other scholars place greater emphasis on global firms, electoral institutions, or ideology as a source of preferences, Naoi focuses on majoritarian politics. The book pushes forward the literature on comparative political economy with a nuanced theory of political leadership.

For the empirical testing of the theory, Naoi undertakes a comprehensive analysis of trade policy in Japan and Thailand. In each case, she marshals detailed information about the schedule of liberalization across products, with attention to the political competitiveness of electoral districts and economic conditions faced by producers. The evidence ranges from analysis of party organization and statements by politicians and interest groups in the legislature to statistical analysis of the patterns of liberalization. Over time, she traces shifts in use of pork and policy to transitions in her key variables for the centralization of party and diffusion of costs. For example, the move to establish policy tribes within the ruling Liberal Democratic Party in the 1970s is credited with reducing the intraparty bargaining costs and facilitating a shift from pork to policy. Thailand was able to increase its welfare spending only after Prime Minister Thaksin Shinawatra achieved one-party dominance. Remarkably, in both countries the structure of party organization matters more than electoral reforms or economic crises for shaping the strategies used by politicians to manage globalization.

By distinguishing among pork, policy, and institutional reforms, Naoi presents useful categories for empirical research analyzing compensation to losers from globalization. Rather than focusing on a single budget measure or policy outcome, she digs deep into the political context to highlight how a ministerial post, industrial development-zone designation, or subsidy may all represent substitutable forms of side payments to help politicians who would otherwise oppose liberalization measures. But when losers are diffuse, social-spending programs or protection against imports represent broader policy responses. Most surprising is the insight into institutional reforms as a form of benefit: Changing the rules of the game in politics can help those legislators threatened by the discontents of liberalization from losing office. The empirical chapters of the book show how Japanese and Thai politicians chose to allocate benefits to legislators by means of this full panoply of tools that lie within the control of the prime minister and party leaders.

Although this is a study of trade policy, international pressures are treated as background conditions. Yet one cannot ascribe trade liberalization as a unilateral policy when access to markets abroad is conditional on reciprocity and investment flows respond to information about the policy environment. Political leaders may be looking over their shoulders at backbencher support, but they must also look outward to balance the dictates of international markets. The role of the United States bilateral pressure on ongoing trade rounds in the multilateral regime continued to shape the targeting and timing of liberalization in Japan long after its accession to GATT. Inasmuch as Thailand underwent reforms following the Asian financial crisis, it is difficult to differentiate those that were instigated by the International Monetary Fund versus domestic political strategies. Do the domestic requirements of coalition building deflect demands from international actors? Is the flexibility of international trade rules the complement to allow for targeting protection and subsidies? There are promising avenues for further research into the fit between political needs to maintain support for globalization and theories about the design and effectiveness of international rules for free trade.

Any scholars with an interest in legislative politics or the domestic politics of trade policy, or who seek a deeper understanding of politics in Japan and Thailand, should read this book. This is comparative politics at its best, as Naoi offers both careful attention to the political context of decision making and broad engagement with the fundamental logic of political survival in a global economy. In the midst of a growing backlash against liberal trade, the prescripts for how to build support for liberalization will be put to the test in many countries.