The purpose of this paper is to sketch the general contours and rationale of the U.S. domestic preparedness program, and to identify the most significant problems of domestic preparedness.4 The first section discusses the program?s origins and evolution. While the basic motivation of the domestic preparedness program has been the perception of a rising threat, the specifics of the program have been determined not by any guiding strategic concept but by discrete, uncoordinated legislative appropriations and administrative initiatives. The second section elaborates on the basic rationale behind the domestic preparedness program, explaining how these highly specific domestic policy innovations relate to the national security objective of reducing the threat of WMD terrorism to America. The third section describes the major policy and management challenges facing the program.
China in 1978 embarked on a major economic transformation, seeking to alter the stance of the previous 30 years and engage economically with the rest of the world in several dimensions—trade, foreign direct investment by private firms, external borrowing by government from both private and public sources, education. Each of these represented a major change in policy. The transformation in the intervening 22 years has been dramatic and palpable, as can be seen in the sky–lines of the major cities.Published in Journal of East Asian Studies 1, no. 1 (February 2001).
This paper introduces various sources of consumer heterogeneity in one-sector representative-consumer growth models and develops tools to study the evolution of the distribution of consumptions, assets and incomes. These tools are applied to the Ramsey-Cass-Koopmans model of optimal savings and the Arrow-Romer model of productive spillovers. The RC property per se places very few restrictions on the nature of observed distributions, and a wide range of distributive dynamics and income mobility patterns can arise as the equilibrium outcome. An example illustates how to use these tools to generate quantitative predictions and compare them to the data.
We define a country's technology as a triple of eficiencies: one for unskilled labor, one for skilled labor, and one for capital. We find a negative cross–country correlation between the eficiency of unskilled labor and the eficiencies of skilled labor and capital. We interpret this finding as evidence of the existence of a World Technology Frontier. On this frontier, increases in the eficiency of unskilled labor are obtained at the cost of declines in the eficiency of skilled labor and capital. We estimate a model in which firms in each country optimally choose from a menu of technologies, i.e. they choose their technology subject to a Technology Frontier. The optimal choice of technology depends on the country's endowment of skilled and unskilled labor, so that the model is one of appropriate technology. The estimation allows for country–specific technology frontiers, due to barriers to technology adoption. We find that poor countries tend disproportionately to be inside the World Technology Frontier.
The purpose of this paper is to develop a greater understanding for US perceptions of Common European Security and Defence policy (CESDP) by looking at major factors, interests, threats, and opportunities that seem to influence thevarying degrees of US support. The first chapter of this paper gives a short historical overview of European security and defence issues and examines the current process of developing CESDP. The second chapter focuses on US strategic interests in Europe and the compatibility of American and European interests. The third chapter presents both opportunities and threats that European security and defence reforms could pose to the transatlantic security partnership. The final chapter looks at possible outcomes of CESDP and discusses ways to ensure a lasting transatlantic partnership on security and defence.
In an effort to address this shortcoming, we develop in this article a model of political competition that seeks to capture important characteristics of political competition in underdeveloped polities. These characteristics include: 1. That the state is weak (Evans, Skocpol, and Rueschmeyer (1985); Evans (1995); Myrdal, Kohli, and Shu (1994)). That is, the state lacks a monopoly over the use of violence (Weber (1958)); the use of coercion is controlled by political ?lites. 2. That democratic institutions are weak. Political competition is not governed by the rules of elections. 3. That politicians compete for private rents, extracted from public revenues (Marcouiller and Young (1995)). 4. That politics is "personalistic". Because of charisma (Apter (1963)); a tradition of "big man" politics (Jackson and Rosberg (1982)); or the forces of cultural identity (Geertz (1963)), personal characteristics can be as important as issue stands in determining the appeal of politicians. To analyze political competition in political settings that share these characteristics, we develop a simple model of political competition in which two politicians compete to recruit tax–paying citizens into their respective political camps.
What is the optimal number of currencies in the world? Common currencies aspect trading costs and, thereby, the amounts of trade, output, and consumption. From the perspective of monetary policy, the adoption of another country?s currency trades offers the benefits of commitment to price stability against the loss of an independent stabilization policy. The nature of the trade depends on coñmovements of disturbances, on distance, trading costs, and on institutional arrangements such as the willingness of anchor countries to accommodate to the interests of clients.
This document is organized around "political" and "economic" institutions. We begin with the former, with a discussion of the role of the judicial system and of the separation of power followed by the electoral law and structure of parliament; and a discussion of crime prevention and criminal justice system. We then move to economic institutions; we focus on those that have to do with the bureaucracy and provision of social services; monetary and fiscal institutions, namely the Central Bank, the budget process and, especially important, the local/central government relationships.
We seek in our analysis to understand the forces that favor and oppose currency unions, that is, we extend the classic analysis of optimum currency areas from Mundell (1961). One consideration, not touched on in Mundell?s economic analysis, is that individual currencies are sometimes valued simply out of national pride. One would have expected these nationalistic concerns to be more intense for language than for money, yet most countries willingly use the language of another country, typically the one of a former colonial ruler. Given this acceptance of transplanted language, it is surprising how often people reject currency unions–which sometimes involve the use of another country's currency– simply on the grounds that important countries are supposed to have their own money.
We investigate how the number and size of local political jurisdictions in an area is determined. Our model focuses on the tradeoff between the benefits of economies of scale and the costs of a heterogeneous population. We consider heterogeneity in income, race, ethnicity, and religion, and we test the model using American school districts, school attendance areas, municipalities, and special districts. Using both cross–sectional and panel analysis, we find evidence of a significant tradeoff between economies of scale and racial heterogeneity. We find weaker tradeoffs between economies of scale and income or ethnic heterogeneity. That is, it appears that people are willing to sacrifice the most, in terms of economies of scale, in order to avoid racial heterogeneity in their jurisdiction.
Ch. 2 in John Stephens, Herbert Kitschelt, Peter Lange, and Gary Marks (eds.), Change and Continuity in Contemporary Capitalism. New York: Cambridge University Press, 1999, 36–69The internationalization and integration of capital markets has been the most significant change in the political economy of the industrialized countries over the past three decades. From the Great Depression to the Bretton Woods period, capital markets developed largely within national boundaries. Yet the past three decades have witnessed historically unprecedented growth in cross–border capital movements that have surpassed those of the late nineteenth century, often thought of as a golden age of international finance. Moreover, since World War II, the integration of capital markets has been far more rapid and complete among the industrialized countries than has the integration of markets for goods and services. No other area of the economy has been so thoroughly internationalized as swiftly as have capital markets since the 1970s.
The interactions between identity groups engaged in a protracted conflict lack the conditions postulated by Gordon Allport in The Nature of Prejudice (1954) as necessary if contact is to reduce intergroup prejudice. The article examines the Israeli–Palestinian conflict from this perspective. After summarizing the history of the conflict, it proposes that a long–term resolution of the conflict requires development of a transcendent identity for the two peoples that does not threaten the particularistic identity of each. The nature of the conflict, however, impedes the development of transcendent identity by creating a state of negative interdependence between the two identities such that asserting one group’s identity requires negating the identity of the other. The resulting threat to each group’s identity is further exacerbated by the fact that each side perceives the other as a source of some of its own negative identity elements, especially a view of the self as victim and as victimizer. The article concludes with a discussion of ways of overcoming the negative interdependence of the two identities by drawing on some or the positive elements in the relationship, most notably the positive interdependence between the two groups that exists in reality. Problem–solving workshops represent one setting for equal–status interactions that provide the parties the opportunity to "negotiate" their identities and to find ways of accommodating the identity of the other in their own identity.
During the past two decades or so, capital controls have been lifted, national capital markets have been liberalized and international capital markets have exploded among the advanced industrial economies and beyond. As major players with significant stakes in the smooth operation of international capital markets, the United States and Europe have common interests in the emergence of a regulatory framework that enhances market stability, minimizes systematic risks, and allows for the efficient operation of markets. Yet despite the growth in cross border capital movements, regulatory cooperation is at times plagued by differences in national approaches and preferences, difficulties coordinating rules where multiple regional or international organizations are involved, and regulators' reluctance to cooperate fully with foreign jurisdictions... A single chapter cannot do justice to the range of rules and agreements that have been made among the banking and securities regulators of Europe and America over the past decade. Rather than strive for exhaustiveness, this chapter selects three issue areas that illustrate particular dynamics of rule development: capital adequacy standards for internationally active banks; anti–money laundering efforts; and international accounting standards for foreign listings on local stock exchanges. There are two key dimensions that these cases illustrate: the problem of defection (which demands stronger rules of surveillance and sanction than mere coordination problems), and the issue of the scope of agreement (systematic problems demand multilateral solutions).
The purpose of this essay is to describe the recent internationalization of capital, and to explore the implications for the industrialized countries of the Organization for Economic Cooperation and Development (OECD). The first section describes capital controls under the Bretton Woods regime and their subsequent liberalization. Bretton Woods endorsed capital controls, but these were relaxed in the 1970s and virtually eliminated in the 1980s and 1990s in most OECD countries. The second section describes the increase in transnational capital movements, and the third reviews the evidence of capital market integration since the 1960s. The fourth section explores the consequences of more integrated capital markets on national politics and policy making, and the final section offers conclusions.
This chapter examines the role of international legal approaches to the settlement of territorial disputes. What are the conditions that make resort to negotiations inadequate for the settlement of a territorial dispute? Why do governments make legal commitments that bind their future behavior with respect to how a territorial agreement is to be resolved? That is, what conditions make a formal legal commitment to arbitrate a dispute an attractive alternative? And, finally, why do states sometimes actually go through with such commitments to submit to third–party review of their territorial claims? Motivating this study is the question of the role that international quasi–judicial processes can play in the resolution of territorial disputes among states. Previous research suggests that international law may play an important role in reducing the incidence of territorial disputes. Paul Huth (1996), for example, has found that clear legal agreements reduce the probability that a dispute will arise in the first place. By his estimate, some 142 border agreements were concluded between 1816 and 1990, and 126 of these were still in force and honored by both states in 1995 (Huth 1996, 92; see also Kocs 1995). If supranational authoritative rulings contribute to such agreements, then there are good reasons to expect them to make a positive contribution to settling the dispute peacefully.
In A Road Map to War: Territorial Dimensions of International Conflict edited by Paul F. Diehl. Vanderbilt University Press, January 1999.Download PDF
The focus of this paper is on interactive problem solving, an unofficial, academically–based, third–party approach to the resolution of international and intercommunal conflicts. The methods of interactive problem solving are applicable to a wide variety of conflicts and have indeed been applied in a number of protracted conflicts between identity groups around the world, including Cyprus, Sri Lanka, Bosnia, and Northern Ireland. My own focus, however, for some thirty years, has been on the Arab Israeli conflict and especially on the Israeli–Palestinian component of that conflict.
In this chapter, I examine the process of reconciliation within the framework of interactive problem solving, an approach to conflict resolution anchored in social–psychological principles. Interactive problem solving is a form of unofficial diplomacy, derived from the work of John Burton and epitomized by the microprocess of problem–solving workshops. These workshops are unofficial, private, confidential meetings between politically influential member of conflicting parties, designed to develop new insights into their conflict and new ideas for resolving it, which can then be infused into the political process within each community. My work in this genre has focused primarily on the Israeli–Palestinian conflict, but the approach can be – and has been – applied to other protracted conflicts between identity groups.
International Economic Review, 40, 209-230This paper provides a theory of strikes as part of a constrained efficient enforcement mechanism for an implicit contractual agreement. A firm possessing contemporaneously private information about demand engages in an enduring relationship with its work force. If the information becomes perfectly observable subsequently, then, modulo discounting, the first–best is implementable, but strikes are always off the equilibrium path. If the observations of the workforce are imperfect strikes occur in equilibrium. The dynamic contracting problem is modeled as a repeated game with imperfect monitoring. The equilibrium exhibits production inefficiency and incomplete insurance to mitigate the efficiencies caused by strikes.
I argue that the impact of development on the distribution of political power in society may create an incentive for a state to become 'predatory' and fail to promote economic development. I develop a model of endogenous policy choice where public investment, while socially productive, simultaneously increases the ability of agents outside the ruling group to contest political power. The model shows that ineffcient underinvestment (predatory behavior) tends to arise in societies where, (1) there are large benefits to holding political power, and which are, (2) well endowed which natural resources, (3) badly endowed with factors which are complementary to public investment, such as human capital, and (4) intrinsically unstable. I document the importance of the mechanism I propose in accounting for the behavior of actual predatory regimes.