NBER WORKING PAPER SERIES THREATS AND PROMISES Jonathan Eaton Maxim Engers Working Paper No. 4849 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 September 1994 We thank B. Peter Rosendorff, Marie C. Thursby, and participants at the NBER-Universities Conference on International Trade Rules and Institutions, Cambridge. MA, December 1993, and at the Summer Meetings of the North American Econometric Society, Quebec. Canada, June 1994, for comments. We gratefully acknowledge the support of the National Science Foundation under grant number SES-9111647. This paper is part of NBER's research program in International Trade and Investment. Any opinions expressed are those of the authors and not those of the National Bureau of Economic Research. 1994 by Jonathan Eaton and Maxim Engers. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including notice, is given to the source.