Preferential trading agreements (PTAs) are proliferating rapidly. Scores of these institutions have formed over the past half century and almost every country currently participates in at least one. By 2006, according to the World Trade Organization (WTO), nearly 300 PTAs were in force, covering approximately half of the overseas trade conducted worldwide.' Why states have chosen to enter such arrangements and what bearing the spread of PTAs will have on international affairs are issues that have generated considerable controversy. Some observers fear that these arrangements have adverse economic consequences and have eroded the multilateral system that has guided international economic relations in the post-World War II era. Others argue that such institutions are stepping stones to greater multilateral openness and stability. This debate has stimulated a large body of literature on the economic and political implications of PTAs. Surprisingly little research, however, has analyzed the factors giving rise to these arrangements. The purpose of this article is to help fill that gap.