Research Library

Scholarly "realism" has been the dominant approach in the study of U.S. – Mexican relations; it has portrayed the Mexican government as a unified and calculating rational actor. Nonetheless, much of the reality of U.S. – Mexican relations has never been explained well by that approach. In this work, I assess the utility of other explanations for understanding U.S. – Mexican relations in the 1980's and 1990's. In particular, I consider the contributions of approaches based on international regimes and institutions, "games" played at multiple levels, and signaling a behavior.

In the 1998 and 1991 national elections, Mexican voters asked themselves above all whether they continued to support the long–ruling official party. Voter behavior was not well explained by attachments to social cleavages, attitudes on policy issues, or general assessments about the present circumstances and the prospects for the nation's economy or personal finances. In both elections, moreover, the parties of the Left failed to mobilize voters that had chosen to abstain in past elections. Once voters were ready to oppose the ruling party, however, differences by issue, prospective economic assessments, and social cleavages shaped their choice between opposition parties.

In the first quarter of 1995 Mexico found itself in the grip of an intense financial panic. Foreign investors fled Mexico despite very high interest rates on Mexican securities, an undervalued currency, and financial indicators that pointed to long–term solvency.

The fundamental conditions of the Mexican economy cannot account for the entire crisis. Moreover, the crisis was not the result of irresponsible fiscal behavior. The crisis was due to unexpected shocks that occurred in 1994, and the inadequate policy response to those shocks. In the aftermath of the March assassination the exchange rate experienced a nominal devaluation of around 10 percent and interest rates increased by 7 percentage points. However, the capital outflow continued. The policy response to this was to maintain the exchange rate rule, and to prevent further increases in interest rates. The Government prevented interest rates from going up by expanding domestic credit and by converting short–term peso–denominated government liabilities (Cetes) falling due into dollar–denominated bonds (Tesobonos). A fall in international reserves and an increase in short–term dollar–denominated debt resulted. The government simply ended up illiquid, and therefore financially vulnerable. Illiquidity exposed Mexico to a self-fulfilling panic.

In this work I test the proposition that normative standards of behavior can influence state actions in security related conflicts. Specifically, I examine the construction of norms in the settlements of security related disputes and the effects these settlements have on subsequent militarized interactions. I argue that dispute settlements alter subsequent crisis bargaining in two important ways. First, they act as normative referents which alter the interpretation of subsequent crisis bargaining behavior both by demonstrating that a solution to the dispute exists which both sides consider illegitimate. Second, in combination with the response to their violation, dispute settlements inflict reputational costs on states which violate them. I test these arguments against a realist theory of coercion through an analysis of 122 reinitiated international crises between 1929 and 1979. I find strong support for the hypothesis that states can and do construct normative standards which guide their behavior in international crises. Realist coercion theory, on the other hand, receives only mixed support.

The world is going through an ethnic and nationalistic resurgence. In political science, however, rational choice theories and methods have acquired great popularity over the last decade and a half. These theories have, on the whole, dealt with the politics of interests — who gets what, how and why — in the relatively institutionalized setting of a legislature or a bureaucracy. Can the politics of ethnic and national identities — who am I? where am I coming from? — be analyzed in a rational choice framework? This paper argues that standard rational choice models, based on instrumental rationality, are unable to explain a) why people feel ethnic or nationalistic, and b) why a free–rider problem does not cripple ethnic or national mobilization. To provide a better explanation, a Weberian distinction between value–rationality and instrumental rationality is reclaimed. Both of these rationalities are expressions of goal–directed behavior, but their conceptions of costs widely diverge. Instrumental rationality entails a strict cost–benefit calculus with respect to goals; value–rational behavior is produced by goals and beliefs that are indifferent to the costs of realizing them. The origins of ethnic mobilization are value–rational, but the mobilization cannot be sustained without strategic considerations. Drawing upon wideranging examples, a three–fold taxonomy of ethnic behavior is proposed; pure value–rational; pure instrumental-rational; and a combination of value– and instrumental rationality. Most ethnic conflicts belong to the third category.

Growth in developing countries, particularly that brought about through trade liberalization, will affect developed countries in many ways, mostly to their benefit. Trade liberalization will directly increase incomes in developed countries. It will also cause some dislocation, but that will be small relative to the numerous other distrubances to modern economies, and can be handled at relatively low cost when the required adjustments are phased in over time.

National governments pursue international monetary policies for domestic political reasons having to do with the policy preferences of important social groups and coalitions. The policies of major states, however, influence the international monetary system. The existence of such externalities – which may be positive as well as negative – suggests that a stable international monetary order need not require implicit or explicit agreement among member states about the characteristics and requirements of membership. Nor is it necessary that such an order be "hegemonic." While stability does seem to require the existence of the equilibrating functions identified by Kindleberger, member states can have different objectives and divergent policy preferences if the international externalities of their national policy choices are strongly positive. Historical evidence from the classical gold standard (and more briefly, fromthe Bretton Woods system and the European Monetary System) is evaluated.

The European Community features a number of important supranational institutions, including the European Commission, the European Court of Justice and the European Parliament. The nature and extent of supranational autonomy, however, is hotly disputed within the existing literature on European integration, which depicts the Commission alternately as the obedient servant of the member states, or as a runaway Eurocracy independent of any meaningful member state oversight. In this paper, I apply the insights of rational choice institutionalist theory to the problem of supranational autonomy, examining the types of functions that member state "principals" are likely to delegate to supranational "agents"; the extent to which supranational agents are able to carry out these functions independent of member state control; and the ability of supranational institutions to set the substantive and procedural agenda of the member states in subsequent policymaking. The paper then concludes by generating a number of spe cific hypotheses about delegation, agency and agenda setting, and discussing how researchers might go about testing such hypotheses.

This article develops and tests a model in which nontariff barriers are expected to be most pervasive when deteriorating macroeconomic conditions give rise to demands for protection by pressure groups, a country is sufficiently large to give policymakers incentives to impose protection, and domestic institutions enhance the ability of public officials to act on these incentives. Statistical results, based on a sample of advanced industrial countries during the 1980s, provide support for this model. These findings indicate that the incidence of nontariff barriers tends to be greatest when the preferences of pressure groups and policymakers converge, and that more attention should be devoted to the interaction between societal and statist factors in cross–national studies of trade policy.

The repeated Prisoner's Dilemma is representative of a broad range of situations in international relations, both in security and in international political economy. Of particular interest to international relations theorists is the evolution of cooperati on among states under such conditions. In contrast to past research, which has either not incorporated the possibility of implementation or perception errors or has incorporated only a symmetric form of those errors, I examine the effects of asymmetric "noise" on the emergence and maintenance of cooperation in a repeated Prisoner's Dilemma. I find that positive and negative asymmetric noise have very different effects on the strategies' performances in the systems modeled here and that the effects of neutral noise reflect the signature effects of each asymmetric noise type. Of the strategies examined, Contrite Tit–for–Tat (CTFT) proves to be a robust heuristic across all noise environments, with generally superior performance in the heterogeneous systems and in the evolutionary models. CTFT as an institution is also robust across all noise environments and, under the conditions of this study, actors will almost always fare better in a CTFT institution than by employing any other strategy in a heterogeneou s system. Thus, there are incentives for the formation of institutions — and, in fact, one sees the boundedly-rational actors of the evolutionary models moving from heterogeneous modes of bilateral interaction to cooperative norms of behavior..

Available in print format only.

This paper examines the hypothesis that the superior return to so–called value stocks is the result of expectational errors made by investors. We study stock price reactions around earnings announcements for value and glamour stocks over a 5 year period after portfolio formation. The announcemen returns suggest that a significant portion of the return difference between value and glamour stocks is attributable to earnings surprises that are systematically more positive for value stocks. The evidence is inconsistent with a risk–based explanation for the return differential.

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.

Proposal for avoiding conflict between China and Taiwan.

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.

Since the widely publicized signing of the accord between Israel and the Palestinian Liberation Organization (PLO) in September of 1993, there has been general recognition of the role that unofficial efforts have played directly or indirectly – in making this agreement possible.

The Oslo, Norway talks themselves, from which this accord emerged, cannot be characterized as an instance of "unofficial" of "track two" diplomacy. Rather, the Oslo talks were a form of back–channel negotiations, which contained a mixture of official and unofficial – track one and track two – elements. The Oslo negotiations demonstrated dramatically, however, that private, nonofficial individuals and settings can play a significant role in advancing a negotiating process that had reached an impasse at the official level. The heightened awareness of the potential contributions of unofficial inputs served to remind observers of the contacts and interactions between Israelis and Palestinians that had been organized over the years by a variety of unofficial third parties and that helped lay the groundwork for the recent developments.

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...