Publications by Type: Unpublished

This paper compares an international fund with a tradeable permit market as two alternative institutions for transferring resources during the implementation of an international cooperative agreement. The paper draws on the theory of contracts and transac tion cost economics to identify the common problems, definition of property rights, renegotiation, cost effectiveness and enforcement, that any institution must address. The solutions which are available to address these problems are partly dependent on t he institutional form used. The paper explores these differences both generally and in the context of the problem of ozone depletion and the institutions developed to address it. The paper concludes that in the early stages of an agreement, the need for flexibility and lack of consensus make an international fund an appropriate instrument because of the greater discretion it allows both in determining responsibilities and in encouraging compliance. However, in the long run, a tradeable permit market off ers significant advantages for cost effectiveness, may be less prone to renegotiation and therefore more robust, and may have advantages in monitoring and enforcement. Therefore the fund is ideally regarded as a transitional instrument, and designed to facilitate the development of a market.

Available in print format only.

Many claims about China's future breakup are based on hearsay and flawed assumptions. This article shows that China's political system is still authoritative; that China's governability has in fact increased; and that central economic and political control over regions has remained substantial.

Available in print format only.

Working Paper 95–01, Weatherhead Center for International Affairs, Harvard University, 1995.

Parallel to the shift from the idealism of the early days to the realism of nation–building in Russia after the aborted coup attempt in the summer of 1991, Russian foreign policy has undergone a process of necessary adaptation, moving away from a policy of almost unconditional alliance with the West to a more sober–minded and realistic pursuit and defense of her concrete national interests.

In the midst of turbulent change, and precisely because of such change, an attempt to formulate a new foreign policy concept for a newborn Russia was launched by the Ministry of Foreign Affairs of the Russian Federation. The first concept, formed and shared with members of the Parliament around February 1992, proclaimed a very idealistic and pro–Western course of foreign policy. The first priority was to integrate Russia into the community of civilized countries, first and foremost by virtue of radical economic reforms on the model of Western democratic institutions and market economies. The Parliament was not as unconditional in its support of such a course, but a pro–Western foreign policy, or what one might call "Atlanticism," prevailed while people still had high hopes for radical reforms and the effectiveness of Western assistance. The term "Economization" of foreign policy, was coined.

The euphoria began to evaporate in the summer of 1992 when reforms met with obstinate resistance from vast number of people whose interests were threatened directly by reforms such as privatization. Also around this time, relations with the CIS (the Commonwealth of Independent States) became strained, and the 25-million–strong Russian population in CIS countries voiced strong appeals against "unfair treatment" by the new states. Therefore, foreign policy–makers were forced to emphasize more clearly the high priority placed on the relationship with the Commonwealth. This coincided with a period when negotiations with the Baltic States over the withdrawal of troops were approaching an impasse. The second concept paper, discussed with the Parliament towards the end of 1992, reflected these changes.

The year 1993 brought a more glaring assertion of the national interests in Russian foreign policy. More people began to stress the Eurasian nature of Russia and argue for Russian to be accorded Great Power status. The Security Council concept paper, published in late April, 1993, testified to this shift. The December elections of 1993 simply reinforced the trend.

It may well be that the euphoria of the early days after the August 1991 coup was simply not tenable, and one may have to comfort oneself with the though that the emerging foreign policy, which is more consistent with domestic reality, is less harmful th an a very abstract policy that cannot be delivered. But if Russian wants to join the post–communist world, it must strike the right balance between "Atlanticism" and "Eurasianism."

This paper assesses the impact of the American–led Gulf War of 1991 on current politics. I argue that an ironic and unintended consequence of Desert Storm was to undermine further the Cold War order that was already on the retreat and upon which rested U.S. international authority. One immediate effect of the conflict was to fuel domestic conservative attacks on Gorbachev, and thereby accelerate the collapse of the Soviet Union. Without its Soviet adversary, American authority unravelled. The lack of order in the international system reflects that phenomenon. The paper examines the possibilities that exist for creating post-Cold War order and who will most likely lead.

International cooperation in general, and European integration in particular, requires that states translate their international commitments into domestic policy changes. Implementation of international agreements is vital. The author finds that the involvement of national parliaments in European integration does not hinder the integration process because it improves implementation records even while potentially slowing down negotiations. This process appears most clearly in the case of Denmark, where parliamentary involvement is intense and constant. Similarly, regional authorities can plague implementation efforts unless they are integrated into negotiation at an early stage. Thus, democratic accountability supports, rather than obstructs, effective integration.

Many state decisions, including those to join coalitions, are positively contingent on the actions of other states. Positive feedback leads to difficulties in predicting outcomes, and so calls for analysis of decisionmaking processes in addition to outcomes. The games of coordination, repeated Prisoners' Dilemma, and zero–sum interactions lead to expectation about the intensity of positive feedback in coalition formation; it should increase as the benefits of cooperation do. Statistical measures of contagion can be used to test hypotheses about the incidence of feedback, as illustrated in an examination of international cooperation on economic sanctions. This example supports the hypothesis that international institutions increase positive feedback among their members.

Over twenty years of systematic empirical research has been unable to substantiate a relationship between regime type and war–proneness. Using an improved statistical model, I demonstrate that from 1960 to 1980, democratic nations were less involved in military conflict than other regime types. Estimates of this relationship are robust to different operational definitions of both war and democracy and to adding control variables for other possible correlates of war. Further tests of categorical associatio n confirm these results, in addition to suggesting why previous efforts have failed to establish the relative pacifism of democracies.

How do very large groups of self–interested and free–riding individuals arrive at cooperative outcomes and establish institutional public goods that govern their behavior? The argument of this paper is that a broad and heterogeneous group of individuals who share interests in certain public goods may, paradoxically, benefit from the rent–seeking activities of a narrow segment of the society. The logic is that legalized monopoly privileges are worthless in the absence of a functioning market, and a functioning market requires mechanisms to protect individual rights to property. Since property rights must exist before a predatory group can benefit from government–imposed exemptions from market forces, there is a self–interested rationale for rent–seekers to organize and lobby for stable property rights. Paradoxically, property rights that benefit an entire community may arise as a function of the predatory actions of a few who seek to establish market forces only to get the government to limit them in their favor. The theory is applied to the origins and early evolution of central banking in England and the United States.

Hong Kong, one of the most modern cities in the world, is one of its greatest anachronisms. It is the last corner of Asia where Europeans rule, a rock–pool left, brilliant, vital and teeming, by the historic ebb tide which saw the age of European dominance over Asia ending in this century's second half. The Germans, the Spanish, the Dutch, the French, the Portuguese, and the British, whose domains in Asia were once greatest of them all, withdrew or were forcefully evicted. But Britain preserved its power undiminished over the tiny but populous patch of China named Hong Kong, and thus the reversion of Hong Kong to China in 1997 will close an epilogue to the age of Europe's Asian dominance.

Through the first half of the century Britain gave almost no thought to the 1997 expiry of the lease which legitimizes its rule over Hong Kong. Then followed a period of false hope that Hong Kong could somehow be retained, lease or no lease. After coming to accept that the return of Hong Kong to China was ineluctable, Britain succeeded in negotiating with Beijing what promised to be a cooperative and cordial transfer of power. How that agreement was achieved and how the achievement came to be undone is the subject of this paper.

Transition in Central Europe is four years old. State firms which dominated the economy are struggling with market forces. A new private sector quickly emerged and has taken hold. Unemployment, which did not exist, is high and still increasing. Will this process of transition accelerate, or slow down? Will unemployment keep increasing? Can things go wrong and how? Our paper represents a first pass at answering those questions. The basic structure of the model we develop is standard, that of the transition from a low to a high productivity sector. But we pay attention to two aspects which strike us as important. The first is the interactions between unemployment and the decisions of both state and private firms. The second are the idiosyncracies which come from the central planning legacy, from the structure of control within state firms to the lack of many market institutions, which limits private sector growth. We start with a description of transition in Poland so far. We then develop a model and use it to think about the determinants of the speed of transition and the level of unemployment. Finally, we return to the role of policy and the future in Poland, as well as the causes of cross–Central European country variations.

Thomas Hobbes posited a dilemma between insecure anarchy and predatory despotism, but both of these situations are highly unsatisfactory. In a nuclear age, insecure anarchy is too dangerous; in a cybernetic era, predatory despotisms cannot be technologically advanced and economically dynamic. In international politics, sovereignty has been the traditional response to Hobbes's Dilemma, limiting conflict without fundamentally changing state interdependence. Under conditions of high interdependence, in the Zone of Peace among advanced democracies, sovereignty has fundamentally changed, becoming less a territorially–defined barrier than a bargaining resource in negotiations that often take place within international institutions. However, in the Zone of Conflict, including much of Africa, the Middle East and parts of the former Soviet Union, Hobbes's Dilemma retains more force and sovereignty is likely to retain its traditional role. The creation and maintenance of effective international institutions will be difficult enough in the Zone of Peace and often impossible in the Zone of Conflict. However, in the long run such institutions are essential if international conflict is to be moderated and patterns of cooperation encouraged.