When Russia launched mass privatization, it was widely believed that it would create a powerful constituency for the rule of law. That didn?t happen. We present a dynamic equilibrium model of the political demand for the rule of law and show that beneficiaries of mass privatization may fail to demand the rule of law even if it is the Pareto efficient "rule of the game." The reason is that uncertainty about the legal regime can lead to asset stripping, and stripping can give agents an interest in prolonging the absence of the rule of law.
This paper analyzes the determinants of partial ownership of the foreign affiliates of U.S. multinational firms and, in particular, why partial ownership has declined markedly over the last 20 years. The evidence indicates that whole ownership is most common when firms coordinate integrated production activities across different locations, transfer technology, and benefit from worldwide tax planning. Since operations and ownership levels are jointly determined, it is necessary to use the liberalization of ownership restrictions by host countries and the imposition of joint venture tax penalties in the U.S. Tax Reform Act of 1986 as instruments for ownership levels in order to identify these effects. Firms responded to these regulatory and tax changes by expanding the volume of their intrafirm trade as well as the extent of whole ownership; four percent greater subsequent sole ownership of affiliates is associated with three percent higher intrafirm trade volumes. The implied complementarity of whole ownership and intrafirm trade suggests that reduced costs of coordinating global operations, together with regulatory and tax changes, gave rise to the sharply declining propensity of American firms to organize their foreign operations as joint ventures over the last two decades. The forces of globalization appear to have increased the desire of multinationals to structure many transactions inside firms rather than through exchanges involving other parties.
Late in 2001 the new Deputy Managing Director of the International Monetary Fund (IMF), Anne Krueger, boldly suggested that under certain conditions international debt repayments by a sovereign borrower (= government) should be temporarily suspended while negotiations take place on restructuring its debt. Thus the IMF officially endorsed one of the more radical suggestions for improvements in the international financial architecture that have been made since the Mexican financial crisis of 1995 and the several Asian crises of 1997. This article provides analytical and historical background to evaluate this and other proposals for reform.
As the cataclysmic events of September 11 have receded farther into the past, U.S. policymakers and the public should have been able to think more clearly about the causes of those events. But that has not happened. Just after the attacks, the initial wave of nationalistic feeling was understandable (similar sentiments held the day after the Japanese attack on Pearl Harbor in 1941). And the Bush administration's military action against al Qaeda and the Taliban in Afghanistan was equally understandable and justified, if not completely successful. After civilians were slaughtered so heinously on U.S. soil, the American people — recognizing the right to self–defense — would have been willing to incur a significant number of military casualties in Afghanistan to round up and kill or capture al Qaeda fighters. Yet on two separate occasions, despite its bellicose rhetoric, the Bush administration — fearing casualties, much as the Clinton administration had — allowed al Qaeda fighters to get away by timidly relying on Northern Alliance and Pakistani allies to pursue them rather than putting enough U.S. boots on the ground. What was needed then and what will be needed in the future is a robust, narrowly focused military response against terrorist groups that focus their attacks on U.S. targets. Unfortunately, a wider, less effective U.S. policy of military and covert action is being pursued by the Bush administration and supported by the American people. In fact, that indiscriminate U.S. military interventionism is a major cause of terrorism against the United States in the first place. For example, unnecessary U.S. military interventions in Georgia, the Philippines and Iraq will most likely cause more additional terrorist attacks on U.S. targets than they will prevent.
The central purpose of American power is to provide security for the United States in a dangerous world. Before September 11, other states, especially other great powers, were perceived to be the main threat to the United States. To maximize its security, American policymakers worked assiduously to ensure that the United States held a favorable position in the global balance of power. This template for thinking about American security policy has been altered somewhat by September 11. The United States still has to be deeply concerned with great power politics, particularly with the rise of China. But now it also has to confront Al–Qaeda, which has the United States in its gunsight and is determined to acquire weapons of mass destruction. President Bush has not yet devised a clear strategy for combating terrorism. Nevertheless, he has been under intense pressure to view September 11 as a transformative moment that calls for the United States to become much more actively involved around the world. Indeed, some conservatives argue that it is time to create an American empire, where the United States dominates the entire globe and shapes it according to its own interests. Presumably, this ambitious strategy would keep great power rivals at bay as well as eliminate the terrorist threat.
When Mohammed Atta boarded the airline on September 11, 2001 that soon thereafter slammed into the World Trade Center towers, he left behind a manual of instruction. Apparently prepared by his colleagues in the al Qaeda network, it instructed him and his fellow activists how to behave and what to do in preparation for their fateful act. What is interesting about this document is not only the text, but the subtext. Lying beneath the pious rhetoric of the manual and its eerie ties to the World Trade Center tragedy are hints about the perplexing issue of the role of religion in the contemporary world, and answers to the persistent question, how could religion be related to such vicious acts of political violence? The common sense way of putting this question about the September 11 attack and all of the other recent acts of religious terrorism is "what's religion got to do with it?" The common sense answers to this question are varied, and they are contradictory. On the one hand some political leaders–along with many scholars of comparative religion–have assured us that religion has had nothing to do with these vicious acts, and that religion's innocent images have been used in perverse ways by evil and essentially irreligious political actors. On the other hand there are the radio talk show hosts and even a few social scientists who affirm that religion, especially Islam, has had everything to do with it–and not just ordinary religion, but a perverse strain of fundamentalism that has infected normal religion and caused it to go bad. A reading of the Atta manuscript shows both answers to be incorrect. In an analysis of this manual undertaken by a scholar of comparative religion, Bruce Lincoln, he leaves us with no doubt that Mohammed Atta and his eighteen accomplices on that dark morning of September 11 were filled with a religious zeal and undertook their hideous assignment in a ritualistic act of self–sacrifice following traditional tenets. Moreover, although the ideology of their mentors was influenced by a certain strain of Islamic political thought characterized by the writings of Mawdudi, al Banna and Faraj, to which only a minority of Muslims subscribe, the religious practices and rituals were themselves not deviant. The actions prescribed for the nineteen on the morning of September 11 were well within the norm not only for Islamic belief and practice, but also for many other religious traditions. Skewed though their political views may have been, one could say on the basis of this text that Atta and his colleagues died as good Muslims. Had they been Christians or Hindus they would have died as good adherents of those faiths as well.
The general topic of this conference points to the link between the concepts of religion and terrorism. The September 11th attacks – and the previous and subsequent terrorist attacks in Bali and other parts of Asia – highlight the importance of gathering as much information as possible on Islam–related terrorism. Islamic fundamentalism has added new dimensions to the phenomenon of terrorism. Here I would like to mention two. First, the widespread potential or actual support for this terrorism: Muslims make up a large proportion of the world's population and this, along with the current level of technological advance, combine to make Islamic terrorism a truly global problem. Second, Islamic fundamentalism has brought a new lethality to terrorist actions through the suicide attack.
El título general de esta conferencia liga los conceptos de religión y terrorismo. Los ataques del 11 de septiembre – y los anteriores y otros posteriores en a isla de Bali y otras partes de Asia – muestran la necesidad de contar con el mayor conocimiento posible sobre el terrorismo vinculado a la religión islámica. El fundamentalismo islámico, en efecto, ha añadido dimensiones nuevas al fenómeno terrorista. Quiero señalar dos. En primer lugar la extensión de las bases de apoyo, potenciales o reales: los países islámicos son una proporción muy grande de la población mundial y ello unido a las posibilidades tecnológicas actuales convierte a este terrorismo en un problema ciertamente global. En segundo lugar, el fundamentalismo isl´mico ha añadido un enorme incremento de la letalidad de las acciones terroristas al incluir el suicidio como forma de llevar a cabo el ataque.
Wars fought to redress grievous wrongs or put a stop to evil have been termed "just wars." The concept has its origins in classical and theological philosophy and was explicit in the Christian ethics of Saint Augustine. Just war theory describes narrow circumstances and tight constraints on the ends and means that are required to apply this term. Although Western law has slowly come to accept war as an inevitable instrument of national policy and turned its attention to setting standards for the conduct of war, important echoes of just war theory remain. A distinction was made at Nuremberg, and later embedded in articles 2 and 51 of the United Nations charter, between unacceptable aggressive war and acceptable wars of self defence. Contemporary arguments about particular wars still rely on the seven main principles of just war theory. Application of these principles to the conflict in Afghanistan does not settle the debate but it might help to structure the discussion.
Globalization is the process by which the experience of everyday life, marked by the diffusion of commodities and ideas, is becoming standardized around the world. Extreme views of this process stress the destruction of local cultures and the homogenization of life styles, caused by the spread of American and Japanese popular culture. This article reviews arguments for and against the cultural imperialism hypothesis, and concludes that globalization is in the eyes of the beholder. An anthropological approach to these issues hinges upon the distinction between form and content (or outward appearance versus internal meaning). Does the appearance of a McDonald's restaurant necessarily imply that local consumers are being Americanized? Many commentators, notably journalists and politicians, confuse form with content and do not look closely at the ways ordinary people incorporate global influences into their everyday lives. This article examines several cultural systems that are said to foster globalization: fast food, film, television, style, pop music, and the internet.
Five years ago, with James Woolsey, former director of the Central Intelligence Agency, I headed a government study that found a lack of preparedness to face catastrophic terrorism. Our warnings and those of similar groups went largely unheeded. On Sept. 11, complacency was wiped away, but the fragmented bureaucratic structure and procedures of our government remain a barrier to action, despite President Bush's decision to name Gov. Tom Ridge of Pennsylvania to head a new Office of Homeland Defense.By using the rhetoric of war to frame our response to the terror attacks, President Bush has marshaled the public's patriotism and persuaded Congress to provide financing. But the danger in the rhetoric is that the new office may be structured like a military organization.There are many types of terrorism and many kinds of terrorist weapons. Even if we succeed in eliminating Osama bin Laden, we have to remember that Timothy McVeigh was home-grown. And as we succeed in battening down the cockpits to prevent civilian aircraft being used again as giant cruise missiles, terrorists will be exploring other vulnerabilities in our open society and investigating even more devastating weapons.Fortunately, nuclear and biological weapons are not as easy to make as popular fiction suggests, but there have been reports that Mr. bin Laden and others have tried to purchase stolen nuclear weapons from the former Soviet inventory. We also know that a few years ago the Japanese Aum Shinrikyo cult killed people with both chemical and biological agents.Suppressing terrorism is very different from a military campaign. It requires continuous, patient, undramatic civilian work and close cooperation with other countries. And it requires coordination within our government.The C.I.A. and F.B.I. must improve their ability to work together on detection and must reconcile their different authorities and programs in intelligence and law enforcement. The F.B.I., the Immigration and Naturalization Service, the Customs Service, the Defense Department and other agencies must improve their cooperation. Because of poor coordination, two suspects were able to enter this country even after their names had been placed on a watch list, and the jet fighters that scrambled after the Federal Aviation Administration notification of the hijackings arrived too late.The Federal Emergency Management Agency has to work with local governments on domestic responses. New federally funded research and development programs are needed to address each phase of a crisis, as well as to accelerate new technologies and devise special training and testing exercises.It would be a mistake if the Office of Homeland Defense merely added another layer of bureaucracy. Instead, Governor Ridge should head a committee of deputy secretaries from the agencies with control over budgets and programs involved with terrorism defense. He should create a small staff that works closely with the Office of Management and Budget to monitor plans to be carried out by existing agencies.His office should be supported by new research corporations created to deal with terrorism, as the RAND corporation was created in the cold war to deal with the nuclear threat. These groups should not be bound by the rigidities and inadequate salaries of the federal bureaucracy. Their independence should allow them to plan an antiterror system that can find gaps and overlaps in government agencies' antiterror efforts and examine weaknesses in private systems like computer networks.Planners should conduct regular exercises with teams simulating terrorists and defenders, trying to outsmart each other. Had we done this for our airport security system, we might have realized that it was designed to detect guns and bombs but not to stop suicide pilots armed with knives and box cutters.As recently as last spring, a commission on national security headed by former Senators Gary Hart and Warren Rudman also warned of our lack of preparedness. Sadly, the commissioners were right. Now we must organize ourselves effectively to combat terrorism.
On the 10th anniversary of 9/11, Joseph S. Nye, Jr. recorded a video for the New York Times commenting on this Op-ed piece that he wrote for the newspaper.
EL PARTEAGUAS MUNDIAL DE FINES DE LOS OCHENTA y comienzos de los noventa no dejó de afectar a Cuba. El derrumbe de los regímenes comunistas europeos y, en particular, de la Unión Soviética puso fin también a una larga etapa de la historia de Cuba comenzada en 1960. En su sistema político, económico y social, Cuba había sido distinta del resto de América durante las últimas tres décadas de la Guerra Fría en Europa. Con la desaparición de su principal aliado internacional, el gobierno de Cuba, acorralado, se vio obligado a iniciar un viraje en la conducción de su política nacional e internacional. Ese viraje, sin embargo, fue un golpe de timón de un buque anclado, cuyo piloto reorienta el barco sin alterar su equilibrio a pesar de un fuerte oleaje.
American Political Science Review, 95, 649-662There are many well–developed theories that explain why governments redistribute income, but very few can explain why this often is done in a socially inefficient form. In the theory we develop, compared to efficient methods, inefficient redistribution makes it more attractive to stay in or enter a group that receives subsidies. When political institutions cannot credibly commit to future policy, and when the political influence of a group depends on its size, inefficient redistribution is a tool to sustain political power. Our model may account for the choice of inefficient redistributive policies in agriculture, trade, and the labor market. It also implies that when factors of production are less specific to a sector, inefficient redistribution may be more prevalent.
Among countries colonized by European powers during the past 500 years, those that were relatively rich in 1500 are now relatively poor. We document this reversal using data on urbanizations patterns and population density, which we argue, proxy for economic prosperity. This reversal weighs against a view that links economic development to geographic factors. Instead, we argue that the reversal reflects changes in the institutions resulting from European colonialism. The European interventions appears to have created an "institutional reversal" among these societies, meaning that Europeans were more likely to introduce institutions encouraging investment in regions that were previously poor. This institutional reversal accounts for the reversal in relative incomes. We provide further support for this view by documenting that the reversal in relative incomes took place during the late eighteenth and early nineteenth centuries, and resulted from societies with good institutions taking advantage of the opportunity to industrialize. This paper documents a reversal in relative incomes among the former European colonies. For example, the Mughals in India and the Aztecs and Incas in the Americas were among the richest civilizations in 1500, while the civilizations in North America, New Zealand, and Australia were less developed. Today the United States, Canada, New Zealand, and Australia re an order of magnitude richer than the countries not occupying the territories of the Mughal, Aztec, and Inca Empires.
We develop a theory of political transitions inspired by the experiences of Western Europe and Latin America. Nondemocratic societies are controlled by a rich elite. The initially disenfranchised poor can contest power by threatening revolution, especially when the opportunity cost is low, for example during recessions. The threat of revolution may force the elite to democratize. Democracy may not consolidate because it is redistributive, and so gives the elite an incentive to mount a coup. Highly unequal societies are less likely to consolidate democracy, and may end up oscillating between regimes and suffer substantial fiscal volatility.
The literature on the role of religious institutions in ethnic conflict does not answer the question of whether these institutions support violence or the status quo. From a resource mobilization perspective, religious institutions generally have the organizational resources to facilitate opposition to the status quo. However, it is also clear that most religions at different times have supported both violence and the status quo. An analysis of 105 ethno–religious minorities using data from the Minorities at Risk project shows that religious institutions tend to inhibit peaceful opposition unless there is a sufficient level of perceived threat to the religious institutions or the religion itself, in which case religious institutions tend to facilitate political opposi–tion among ethno–religious minorities. However, the decision to violently oppose a regime is based mostly on secular factors including the desire for some form of autonomy or independence and political discrimination against the ethno–religious minority.Studies in Conflict and Terrorism, Vol. 22, Iss. 2 (1999): 119-139.
As the international community reflects on the forms and magnitude of the assistance that can be rendered to Pakistan, it is worth pondering how a country that has been one of the world's largest recipients of foreign financial aid—nearly $58 billion from 1960-98, the third-highest of any country—still finds itself in such a beleaguered and impoverished state. In particular, the international community has to grapple with the reality that the very institution whose help is critical in efforts to break the power of terrorists groups in South Asia, the Pakistani military, is also deeply responsible for creating and nurturing these groups. The role of the Pakistani army is central not only to the well being of Pakistan's citizens, and to the region. It is also critical to stopping the global spread of terrorism.Pakistan's current economic, political and social fragility is primarily the result of the country's history as a beneficiary of geostrategic rents—from the U.S. during the 1950s and `60s, and again in the '80s; from the Middle East, especially in the '70s and '80s; and from China in the '90s. These substantial rents have shaped the country's political economy and its institutions. And they have underpinned the continued preeminence of the Pakistani military even as militaries in most other developing countries have gone back to the barracks.The consequences have been devastating. Internally, Pakistan's institutions have atrophied, which has in turn provided the justification for the military to maintain its monopoly on power. Gen. Pervez Musharraf has promised to return the country to full democracy with provincial and federal elections in October 2002. And yet there is ample evidence to suggest that the proposed power devolution, carried out via constitutional reforms, will actually marginalize secular political parties and the civilian bureaucracy, thereby allowing the army an even wider role in the country's political future.Moreover, the military's hegemonic role has had a negative effect on the nation's economy. The military has claimed a disproportionate fraction of the country's modest resources while expenditures on health, education and business development programs have suffered. Even today, military expenditures are twice that of the latter, in a country that has one of the weakest indicators of human development.Another consequence stems from the chronic quest for legitimacy that authoritarian regimes need to retain power. Pakistan's military has used two instruments to shore up its domestic support. First, beginning with President Muhammad Zia ul-Haq in the early '80s, the military cultivated the Islamic religious establishment using religious parties to outflank their mainstream counterparts. This Faustian bargain resulted in the rapid growth of Islamic schools, the madraasas, with financial support from Saudi Arabia, which was eager to enlarge the influence of Wahabist Islam and the Islamicization of the Pakistani military and society. The weakening of secular political parties further justified the military establishment's grip on political power.The second instrument of the military government's legitimacy comes from the perennial tension with India. The need to "protect the integrity of Pakistan" against the alleged wily machinations of India has always been a handy tool to whip up nationalist sentiment and justify the military's hold on power. The May 1999 Kargil invasion, engineered by Gen. Musharraf even as the country's own civilian government was engaged in a dialogue with its Indian counterpart, ensured that dialogue was still-born and the military's hegemony unchallenged.But even if the Pakistani security establishment's bleeding of India in Kashmir can be justified by India's actions, it is Afghanistan, much more than India, that has suffered egregiously from the Pakistani military's actions. Driven by its obsession with India, the Pakistani military sought to create a client state in Afghanistan in its quest for "strategic depth," and thereby build a staging area from which to infiltrate Kashmir.From funding, logistics and indirect military support, the Pakistani military intervened in Afghanistan's affairs to a degree that even the superpowers rarely managed during the Cold War. Although the ultimate rationale of the Pakistani security establishment's involvement in Afghanistan has been India, the net result was to further hasten the destruction of the country begun by the Soviets.A third instrument of control has been the military's contention that it is a protector of Muslims throughout South Asia. This claim is made by an institution that was responsible for one of the world's worst slaughters of Muslims in the last century—at least half a million people in what was then East Pakistan, now Bangladesh, in 1971.Western, and in particular American policy makers and media, have long been apologists for the Pakistani army. Nevertheless, though the strategic calculations of the Cold War have given way to the tactical imperatives of the current Afghan campaign, this alone cannot justify blind support for the military, nor glossing over the long-term consequences of that support for Pakistan and the region, and the West itself.There can be no doubt that given Pakistan's importance on the global stage and its current weaknesses, the country both needs and deserves considerable and sustained international financial assistance. But in doing so, there should be a clear target for the aid: a country and its people. The international community must ensure that, unlike the foreign assistance offered to Pakistan in the 1980s, new resources don't simply help to further strengthen the very institution that has been at the root of the country's—and increasingly the region's—problems.Proposals to cut Pakistan's debt servicing and reschedule the debt are basically steps in the right direction. However, unless the resulting savings are channeled toward sharply increasing social expenditures on human capital development and poverty-oriented programs, they will serve little more than to further entrench the military regime. It is not surprising that during his recent visit to Washington, Gen. Musharraf was more interested in securing the release of a package of F-16 fighter jets from the Bush administration than in obtaining aid for his country's devastated education system.External assistance should therefore be contingent on curbing military expenditures (which continue to be one of the highest in the world) as well as funding for the madraasas that serve as jihadi prep schools (although it should be emphasized that many madraasas are simply parochial schools and not training grounds for zealots). However, these initiatives will also require the cooperation of "moderate" Arab countries, especially Saudi Arabia and the United Arab Emirates, whose citizens are an important source of funds not only in Pakistan, but also in other parts of South and Southeast Asia.The manner in which the international community helps Pakistan will have broader implications as it grapples to assist other weak, undemocratic states. Unfortunately, for much of the past half-century, foreign aid has too often served as the palatable cover for what were essentially bribes to friendly regimes to secure their cooperation than as resources whose intent was the long term political and economic development of a country and its people. In the process, hundreds of billions of dollars have been spent with little to show for it; regimes that have caused untold misery to their people in a variety of contexts have been entrenched; donor institutions have been seriously discredited. This is a lesson American policy makers should heed in helping Pakistan to secure a promising future for its 140 million people.
Before the Nazis killed him for his work in the Resistance, the great French historian Marc Bloch wrote a famous short book, Strange Defeat, in which he puzzled over Germany's six-week conquest of his nation in the spring of 1940. In Strange Victory, the distinguished diplomatic historian Ernest R. May argues that Germany's success is even more of a puzzle than Bloch could have imagined, for we now know that its armed forces were measurably inferior to those of France and its allies, even in tanks, and its top military leaders all considered an attack on France to be a long-odds gamble.Strange Victory, a riveting study not only of those crucial six weeks but of the years and days leading up to the German invasion, makes it clear how Hitler, though a lazy, ill-informed psychopath, outguessed his own experts as to how French and British leaders would respond to German actions. May's dramatic narrative, laced with vivid character sketches, draws on little-used German, French, and British archives to show how German intelligence officers found the keys to plan a successful surprise attack on the Western front, and, on the Allied side, how French and British officers failed to see or understand the plain signs of Germany's intentions, even though they had well-placed spies in Berlin. His interpretative history suggests new ways to think about the decisions taken on both sides, and new ways to see how this history relates to issues of our own time.Strange Victory makes it clear that French and British leaders (Winston Churchill not excepted) clung to their expectations of a nearly bloodless victory over Germany, even through the first devastating days of the German offensive. This part of the story is especially important, for it has some of the qualities of a parable: Nazi Germany was taking advantage of governmental habits of mind and custom in 1940s France that have parallels today—among them, confidence in technology, a high aversion to incurring casualties, and decision-making processes that did not favor rapid response. In the future, Professor May suggests, nations may suffer strange defeats of their own if they do not learn from their predecessors' mistakes.
In Bernhard Ebbinghaus and Philip Manow eds., Comparing Welfare Capitalism: Social Policy and Political Economy in Europe, Japan and the USA (London/New York: Routledge, 2001)To the extent that the literature on the varieties of capitalism has taken notice of welfare state arrangements, it has done so by focusing upon the impact of such arrangements on employment relations (Esping–Andersen 1990; Estevez–Abe et al. 1999; Manow 1997a,b; Mares 1997; Huber and Stephens 1997; Wood 1997). In the literature, however, employment relations constitute just one of the features that define a specific model of capitalism (Aoki and Dore 1994; Berger and Dore 1996; Crouch and Streeck 1997; Hall 1986; Hal and Soskice, forthcoming; Boyer 1989; Hollingsworth and Boyer 1997; Kitschelt et al. 1999). The nature of financial markets and the relations between firms and suppliers of capital are every bit as important. The ability of corporations to form long–term commitments, such as lifetime employment, depends on the availability of patient, far–sighted capital. The longer the time horizon of capital suppliers, the greater the autonomy of corporate managers. The time horizon of capital is, in short, one of the most significant determinants of variation between different types of capitalism.