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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 study of compliance with international agreements has gained momentum over the past few years. Since the conclusion of World War II, this research agenda had been marginalized by the predominance of realist approaches to the study of international relations. However, alternative perspectives have developed that suggest that international law and institutions are important influences on the conduct of international politics. This review examines four perspectives and assesses their contribution to understanding the conditions under which states comply with international agreements. Despite severe conceptual and methodological problems, this research has contributed significantly to our understanding of the relationship between international politics and international law and institutions.

The article is organized into three major sections. The first section provides an analytical review of the development of studies of international institutions. From the beginning, the pages of IO have been filled with insightful studies of institutions, in some cases asking questions consistent with the research agenda we propose in this essay. But the lack of a disciplinary foundation in the early years meant that many good insights were simply lost, not integrated into other scholars' research...
The second section explicitly addresses a theme that arises from the review of scholarship on institutions; whether international politics needs to be treated as sui generis, with its own theories and approaches that are distinct from other fields of political science, or whether it fruitfully can draw on theories of domestic politics...
The third section turns to the problem of research agendas. Where does scholarship on international institutions go next? Our primary argument in this section is that attention needs to focus on how, not just whether, international institutions matter for world politics...

This study argues that an important part of the explanation for international economic outcomes during the interwar years arose from the internal politics and institutions prevalent within many countries after the Great War. In the face of balance of payments deficits, governments could choose to adjust internally by reducing prices and demand, or adjust externally with "beggar–thy–neighbor" policies that pushed the problem of adjustment onto a country's trade partners. Is there a political explanation for the choice of adjustment strategy? To answer this question I draw on theoretical work that has developed the logic of strategic behavior – the temptation to dump currencies that are likely to be devalued, the logic of competitive devaluation, the individual rationality of tariff retaliation – but go beyond these by testing for the political conditions associated with the decision to defect from the gold standard and liberal trade...

The recent experience of the European Monetary System has once again brought the problem of international monetary instability to scholars’ and policymakers’ attention.

In 1992, German interest rate hikes meant to address growing inflationary pressures within Germany sparked speculation against the pound and lira that eventually led England and Italy to devalue their currencies and to leave the European Monetary System’s Exchange Rate Mechanism (ERM). A year later, the fluctuation bands linking the participating currencies of Europe were widened from 2.5 percent to 15 percent, rendering the system almost as loose as floating exchange rates.

Recent research on the inter–war years points to the importance of international economic policies for the macroeconomics of the 1920s and 1930s. The chapters, in the second section of this volume are no exception. Tarmo Haavisto and Lars Jonung show how the deflation associate with Sweden's return to its pre–war gold parity in 1922 was associated with a severe contraction of output, but how Finland escaped those costs by accepting as permanent the depreciation of its currency. Isabelle Cassiers shows for Belgium and France how the decision to remain on the gold standard explains the depth and duration of the Great Depression in both countries, and how Belgium's abandonment of convertibility in March 1935, a year and a half in advance of France, accounts for the precocious recovery (by French standards) of its exports and production. Jean–Charles Asselain and Alain Plessis compare France not with its northern European neighbor, Belgium, but with its hot–blooded Mediterranean rival, Italy. While the very different structures of the French and Italian economies render the comparison problematic, once again international monetary policies emerge as key for understanding the course of the Depression...

Theories of the development, maintenance, and adaptation of international institutions have been at the center of scholarship in international political economy in the past decade. Functionalist logic, often based on game–theoretic representations of strategic state behavior, has been especially influential in explaining the demand for international institutions. These theories point to the role of international institutions in infusing international relations with a greater degree of certainty, to the general longer–term benefit of cooperating nations. This article draws on a distinct but parallel development in the economic literature on international finance: dynamic contracting and rational expectations approaches to capital market suboptimality. Like functional theories of international cooperation, this approach focuses on the dynamics that lead to inefficient outcomes and provides a theoretical rationale for the development of international institutions to overcome these inefficiencies. When applied in the context of the policy preferences of the key actors (the governments of the major powers, their central bankers, and the dominant international bankers of the day), this approach makes it possible to explain not only the impetus for international financial cooperation, but also why this effort converged on an international financial institution such as the Bank for International Settlements.

Over the last ten years, international regimes emerged as a major focus of empirical research and theoretical debate within international relations. The interest in regimes sprang from a dissatisfaction with dominant conceptions of international order, authority, and organization. The sharp contrast between the competitive, zero–sum "anarch" of interstate relations and the "authority" of domestic politics seemed overdrawn in explaining cooperative behavior among the advanced industrial states. The policy dilemmas created by the growth of interdependence since World War II generated new forms of coordination and organization that fit uneasily in a realist framework...
We begin by briefly surveying the contending definitions of international regimes, which range from patterned behavior, to convergent norms and expectations, to explicit injunctions. We then suggest a number of dimensions along which regimes vary over time or across cases; these dimensions have been or might be used to operationalize "regime change." They include strength, organizational form, scope, and allocational mode. The third section examines four theoretical approaches to regimes – structural, game–theoretic, functional, and cognitive – and attempts to clarify what each theory can and cannot tell us about regimes.
In the conclusion, we ask how and whether regimes "matter..."