Research Library

Alesina, Alberto. 2000. “War, Peace and the Size of Countries”. Abstract

This paper studies the relationship between international conflict and the size distribution of countries in a model in which both peaceful bargaining and non–peaceful confrontations are possible. We show how the size distribution of countries depends on the likelihood, benefits and costs of conflict and war. We also study the role of international law and show how better defined international "property rights" may lead to country breakup and more numerous local conflicts.

Alesina, Alberto. 2000. “Who Trusts Others?”. Abstract

Both individual experiences and community characteristics influence how much people trust each other. Using individual–level data drawn from US localities we find that the strongest factors associated with low trust are: i) a recent history of traumatic experiences; ii) belonging to a group that historically felt discriminated against, such as minorities (blacks in particular)and, to a lesser extent, women; iii) being economically unsuccessful in terms of income and education; iv) living in a racially mixed community and/or in one with a high degree of income disparity. Religious beliefs and ethnic origins do not significantly affect trust. The role of racial cleavages leading to low trust is confirmed when we explicitly account for individual preferences on inter–racial relationships: within the same community, individuals who express stronger feelings against racial integration trust relatively less the more racially heterogeneous the community is.


Centre for Economic Policy Research Discussion Paper Series No. 2646, December 2000

Simmons, Beth A. 1999. “The Internationalization of Capital”. Abstract

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, 36–69

The 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.

International Economic Review, 40, 209-230

This 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.

Johnston, Alastair Iain. 1999. “Sun Zi Studies in the United States”. Abstract

This paper discusses the recent rise in popularity of Chinese philosopher Sun Zi's writings in the U.S.

Domínguez, Jorge I. 1999. “U.S.-Latin American Relations During the Cold War and its Aftermath.” Institute of Latin American Studies. Institute of Latin American Studies. Publisher's Version Abstract

Did the Cold War matter for US–Latin American relations? In many respects, the answer is no. The United States had faced military, political and economic competition for influence in the Americas from extracontinental powers before the Cold War, just as it did during the Cold War. The United States had pursued ideological objectives in its policy towards Latin America before, during, and after the Cold War. And the pattern of US defence of its economic interests in Latin America was not appreciably different during the Cold War than at previous times. From these singular perspectives, it is difficult to assert that the Cold War was a signficantly distinctive period of US–Latin American relations; it looked like 'more of the same'.

Nonetheless, the Cold War emerges as significantly distinctive in U.S. relations with Latin America because ideological considerations acquired a primacy over U.S. policy in the region that they had lacked at earlier moments. From the late 1940s until about 1960, ideology was just one of the important factors in the design of U.S. policy toward Latin America. The victory and consolidation of the Cuban revolutionary government changed that. In its subsequent conduct of the key aspects of its policy toward Latin America, the U.S. government often behaved as if it were under the spell of ideological demons.

This study argues that the states of Southeastern Europe must devote special emphasis to the promotion of an arms control regime in the region which will aim at achieving three particular goals, i) conflict prevention, ii) crisis stability and iii) arms race stability. To this end a hypothetical, yet necessary, political framework for organizing arms control efforts in the peninsula will be described. The study is divided into three parts. Firstly, an account of the trends and characteristics of the post–Cold War Southeast European security environment is given. In addition, the current status of the arms control enterpise with respect to both intra–state (i.e., the arrangements entailed in the Dayton Peace Accord) and inter–state conflict (i.e., the agreeements concluded and implemented by Southeast European states on bilateral and multilateral level) is presented. Particular reference is made to the Greek–Turkish arms race and its consequences for the region?s stability.

A Greek view of Greek-Turkish relations.

The past decade has witnessed a growing controversy over the status of formal approaches in political science, and especially the growing prominence of formal rational choice theory. Rational choice models have been an accepted part of the academic study of politics since the 1950s, but their popularity has grown significantly in recent years. Elite academic departments are now expected to include game theorists and other formal modelers in order to be regarded as "up to date," graduate students increasingly view the use of formal rational choice models as a prerequisite for professional advancement, and research employing rational choice methods is becoming more widespread throughout the discipline. Is the increased prominence of formal rational choice theory necessary, inevitable, and desirable?

Toft, Monica Duffy. 1999. “Russia Votes' Symposium Roundtable, 11/29/99”.

A conventional wisdom holds that the European and American economies represent different ways of organising the generation and distribution of wealth to produce similar outcomes in terms of economic performance. Around a common long–run growth rate of 2.5% per annum, the United States has opted for slow productivity growth, more employment and an army of working poor while Europe has opted for higher productivity growth, more unemployment and a much tighter distribution of incomes. Recently this wisdom has come under attack as growing evidence of superior US performance in growth and improved performance on productivity along with very low unemployment has constrasted with anemic European growth and a very poor employment performance. Under this new scenario, rigidities in European product and particularly labour markets are undermining recovery and leading to jobless growth of modest proportions.

The paper develops a simple stochastic new open economy macroeconomic model based on sticky nominal wages. Explicit solution of the wage–setting problem under uncertainty allows one to analyze the effects of the monetary regime on welfare, expected output, and the expected terms of trade. Despite the potential interplay between imperfections due to sticky wages and monopoly, the optimal monetary policy rule has a closed–form solution. To motivate our model, we show that observed correlations between terms of trade and exchange rates are more consistent with our traditional assumptions about nominal rigidities than with a popular alternative based on local–currency pricing.

Reflections on relations between India and the United States.

One of China's chief problems at this point is that, in its desire to bring about economic development while retaining political control, Party leaders are not sure how tolerant they can be, while the Chinese people, on the other hand, do not know what individual activities are accepted at a any given time. Since 1978 and throughout China=s opening to the West, Chinese leaders have encouraged the people to achieve economic prosperity and have even promoted private ownership, whereas social activities have been suppressed. The latest confrontation in China occurred in late 1998, when President Jiang Zemin denounced attempts to found an opposition party and made clear that AEconomic reforms were not a prelude to Western style multiparty democracy.@5 Also the Tiananmen Square incident in 1989 destroyed much of the internal and international trust that had been created during the previous ten years. This kind of rough handling is contrary to the people=s standpoint; many of them, especially those educated abroad, can compare both the political atmosphere and the Party's promises about "socialistic freedom" with their experiences in other countries.

Paarlberg, Robert L. 1999. “Markets, Politics, and World Food Security”. Abstract

Transitory food insecurity in poor countries is not directly or significantly linked to changing conditions in world grain markets. Per capita grain consumption in the developing countries did not generally worsen when grain export prices increased in 1973–74, or when they increased again briefly in 1995–96, and consumption generally grew more rapidly during the decade of the 1970s (when prices were high) than during the decade of the 1980s (when prices were low). This is partly because reliance on grain imports by genuinely poor developing countries is low, and lower today than several decades ago even when food aid is taken into account. This low dependence cannot be explained as a response to the instability of world grain markets or as a justifiable response to unreliable supplier concerns; it reflects instead a more general aversion by poor countries to all freely operating food markets, domestic as well as foreign. Transitory food insecurity thus seldom results from the malfunction of food markets. Its most conspicuous cause is violent internal conflict, plus non–accountable governments and natural disasters such as drought.

Working Paper 99–06, Weatherhead Center for International Affairs, Harvard University, April 1999. 

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It is nearly a decade since most African countries embarked on what Samuel Huntington has popularized as the "third wave of democracy". The proliferation of political institutions, the liberalization of the economic and political landscapes, the regularity of elections hitherto unheard of in certain African countries, and a decline in military coups in the 1990s, have all signaled that a momentum towards democratic consolidation on the continent is on the increase. Yet, these formalisms of procedural democracy have also concealed a much more profound pattern of declining press freedom on the continent, as African governments, under the guise of constitutional rule, have resorted to the enactment of suppressive laws against an increasingly critical media. In most of the new democracies, as this paper attempts to show, new parliamentary bills that are hostile to the media, are increasingly being promulgated, and this includes countries that have traditionally been considered democratic. This paper posits the question that, given this evolving trend, and considering that the media is the mirror of society?s freedom, can we authoritatively conclude that democracy is gaining momentum in Africa?

Failure to cooperate for mutual benefit does not necessarily signal ignorance or irrationality or even malevolence, as philosophers since Hobbes have underscored. Social scientists have lately analyzed this fundamental predicament in a variety of guises: the tragedy of the commons; the logic of collective action; public goods; the prisoners' dilemma. In all these situations everyone would be better off if everyone could cooperate. In the absence of coordination and credible mutual commitment, however, everyone defects, ruefully but rationally, confirming one another's melancholy expectations.

In "Rigor or Rigor Mortis: Rational Choice and Security Studies," Stephen Walt warns of the dangers to the field of security studies that are in store "[i]f formal theory were to dominate security studies as it has other fields of political science." He backs up these warnings by evaluating published formal work in the field according to seemingly reasonable criteria, finding that the gain in rigor inherent in formal work is not sufficient to offset its empirical, creative, and policy–relevance weaknesses. While Walt ends with a plea for diversity, the overall structure of the argument puts rational choice on trial, finds it lacking but threatening to become dominant, and does little to serve the purpose of encouraging pluralism.

The movement toward institutionalization has not escaped the notice of international relations theory. Some of the major theoretical debates in international relations over the last two decades have involved new attempts to understand why states turn to institutions, and what effects these institutions have on patterns of state behavior. The first section of this paper reviews rationalist theories of international institutions, an approach that has its roots in liberal theory but has developed a genuinely new perspective on the role of institutions in world politics. Next, the paper turns to considering some of the major research puzzles in the study of international institutions. While we observe institutionalization, many aspects of this process remain highly puzzling and demand better integration into our explanatory frameworks.

We develop a new typology for examination of the effects of international institutions on member states’ behavior. Some institutions lead to convergence of members’ practices, while others result, often for unintended reasons, in divergence. We hypothesize that the observed effect of institutions depends on the level of externalities to state behavior; the design of the institution; and variation in the organization and access of private interests that share the goals of the institution. We illustrate these propositions with examples drawn from international institutions for development assistance; protection of the ozone layer; and completion of the European Union’s internal market. We find that significant externalities and appropriately–designed institutions lead to convergence of state behavior, while divergence can result from the absence of these conditions and the presence of heterogeneity in domestic politics.

Martin, Lisa L. "Institutional Effects on State Behavior: Typology and Hypotheses." Working Paper 99–05, Weatherhead Center for International Affairs, Harvard University, 1999.