International Politics Notes

Full credit here goes to Layna Mosley and her POLI 150 class at UNC Chapel Hill, from which these
notes are taken, at times verbatim.

Part One

Introduction

Foreign policy is influenced by domestic public opinion, as governments- democratic or authoritarian-

listen to the desires of their constituencies (see: Brexit). Democratic politics -> international politics.

From WWII to the 1990’s, intrastate war grew more common while interstate war remained relatively
stable. The frequency of intrastate wars has since dropped, but they are still more common than
interstate conflicts. Since 1990, the world has become more democratic. It’s been official U.S. foreign
policy since then to promote liberal democracy.

International politics is a positive study, not a normative one; its scholars try to be scientists, not
pundits. They frequently use the phrase “under what conditions?”, as iron laws are rare in political
science and claims are probabilistic. The field focuses on incentives and preferences. Leaders are
rational actors, and therefore influenced by domestic politics and institutions. They behave strategically
abroad as well, and are influenced accordingly.

A state is a territory (geographical) and its corresponding government (political). Focus on the interests,
institutions, and interactions of states: what do actors want? What are the rules and incentives? What
are their strategies, and how do they interact with one another? What will the outcomes be?

The two ends on the spectrum of interaction in international politics are bargaining- allocating
something that both sides want in a zero-sum manner- and cooperation- coordinating to achieve
common interests. Bargaining is splitting up the pie, cooperation is trying to make it bigger. Many
actions fall somewhere in between these two poles (see: climate change treaties).

A theory is a tentative conclusion about the causes of some phenomenon, a logically consistent set of
statements answering a set of “why” questions. Social science theories are probabilistic, not
deterministic, and are often multivariate. Theories generate multiple testable hypotheses. We often
have to make simplifying assumptions with them. We are skeptics about our own hypotheses, and we
use different methods to test them (small-n qualitative, large-n quantitative; most research is now
quantitative). There are often many cases, and variation is needed. Theories are sensitive to
generalizability and scope.

Grand Theories

According to Snyder, grand theories of international relations have long historical roots (founders),
implications for foreign policy (doers,) and have some adherents among political scientists (thinkers). All
grand theories focus on the structural, systematic level. Most believe that the international system is
anarchic- lacking a higher power. How is power divested among states (unipolar, bipolar, multipolar)?

All grand theories of IR are focused on the level of the international system, not affairs within nations-
states are like billiard balls; we don’t care what’s inside, we just want to see how they bump up against
one another. There are three major theories: realism, liberalism, and constructivism.
 Realism
o Offshoots: classical, structural, offensive (Mearsheimer)
o Actors are power-seeking.
o Nation-states are the key actors in IR.
 International institutions are ineffective at forcing states to do things they
wouldn’t otherwise want to do. John Bolton in 1994: “There is no U.N.”
o Uncertainty about others states institutions.
 Security dilemma: states went to feel secure, but doing so makes them seem
more threatening, thus leading to an arms race.
o Military power (or hard power, the coercive ability to force states to do things they
wouldn’t otherwise want) is the most important; it’s fungible, meaning that power is
transferable from one realm to another (military power -> trade power, etc.)
o States are hesitant to cooperate because they focus on ensuring relative gains, not
absolute gains.
o International politics is a zero-sum game and conflict is more likely than cooperation,
given concerns about cheating and relative gains.
 Liberalism
o Offshoots: neoliberal institutionalism (Keohane), idealism
o Human nature is fundamentally good.
o Survival is important, but often many states move beyond just survival to focus on other
things, like economic growth. Military power has limited (non-fungible) utility, but soft
power (non-coercive power - making people want what you want) is important as well.
o States are cooperative, even under anarchy, because they focus on absolute gains.
 They think not only about today, but also about how current actions impact
their futures – the “shadow of the future.”
 Long-term focus and reciprocity can create incentives to solve collective action
problems.
o Non-state actors can play a role in international politics.
 Constructivism
o Offshoots: Idealism (Snyder; Wendt, Barnett, and Finnemore)
o Focused on the role of ideas.
o Much more recent theory.
o Interests are the result of social interaction.
o State behavior is shaped by norms, beliefs, and identities.
 International interaction “socializes” states.
o Norms may change over time, thus changing interests and practices.
 See: development of stigma around the institution of slavery.
o Ideas and discourse are important in IR (philosophical idealism).
o Wendt argues that “anarchy is what states make of it”: prevailing beliefs within the
international system determine the results of an anarchic international system.
 In a worst case scenario, this can lead to self-fulfilling prophecies of anarchy
failing because states assume that it will fail and act accordingly.
 o The same international structure means different things to different states at different
times.

Scholars have fallen out of love with grand theories after their failure to foresee the end of the Cold War
(1989-1990), and have since adopted mid-range theories incorporating aspects of each. Some were also
frustrated with the lack of all three theory’s focus on domestic politics in IR.

Brief History Refresher

The first era of economic globalization was 1880-1914, featuring openness, international trade, and
open-ish flows of labor and capital. It started when England liberalized its trade and ended with WWI.
Many wanted it back after WWI, but it ultimately failed.

Following WWII, a bipolar power structure emerged between the USA and the USSR. Additionally, major
international institutions emerged, including the UN and the IMF.

Bargaining and Cooperation

The Pareto frontier is the set of best outcomes that every party can achieve without taking away from
someone else. Situations of bargaining involve moving along the frontier, while situations of cooperation
involve moving the frontier outwards.

But in situations of cooperation, when both parties win, who wins more? When this question arises, it
becomes clear that both bargaining and cooperation are involved in the scenario. Indeed, almost all
situations involve aspects of both.

There are two types of barriers to cooperation:

1. Coordination: a standard-setter is needed in situations where all actors gain and there are no
incentives for non-compliance. For example, all air traffic controllers and pilots speak the same
language, but someone needs to select what language it is. This issue is expressed in game
theory through the Stag Hunt problem.
2. Collaboration: sometimes there are gains from working together, but also conflicting incentives
not to comply with an agreement. This issue is expressed in game theory through the Prisoner’s
Dilemma problem.

Game Theory

Game theory helps us understand how actors have both conflicting and common interests, and that the
structure of the situation creates incentives for certain behaviors. It’s important to understand what a
game’s equilibrium(s) is(are): outcomes where neither party has an incentive to unilaterally deviate.

Institutions can address the prisoner’s dilemma problem through reduced uncertainty, monitoring of
compliance & non-compliance, and dispute settlement mechanisms. They also create a “shadow of the
future” by allowing for iterated interaction: interactions that occur repeatedly, thus building trust for
the actors involved and impacting their decisions in games.
There are three important games to understand:

Prisoner’s Dilemma Chicken Stag Hunt

A2 A2 A2
C D C D C D
A1 C 3,3 1,4 A1 C 3,3 2,4 A1 C 4,4 1,3
D 4,1 2,2 D 4,2 1,1 D 3,1 2,2

In the Prisoner’s Dilemma, the equilibrium is D-D, meaning both defects, even though it would be better
if neither did. Any example of this is the security dilemma. In Chicken, the equilibria are C-D and D-C,
meaning that the person with the least resolve will defect; the best option is to do the opposite of what
the other player will do. A good example of this is a nuclear arms race. In the Stag Hunt, the equilibria
are C-C and D-D: everyone cooperates, but there are reasons to defect; once person has defected, the
other person will seek to do so as well. An example of this is the air traffic controllers mentioned earlier.

International Institutions

International institutions vary widely in age: of the oldest remaining international institutions is the ILO.
They also vary in scope (environment/economy/security, narrow/broad), membership (club/universal,
regional/global), decision-making procedures (voting/weighted voting/veto power), and monitoring and
enforcement (dispute settlement/reliance on third parties/etc.)

Compliance is necessary for effective international institutions. Most states comply with most
commitments most of the time, but many instances of non-compliance can be very worrying. Longer
“shadows of the future” help cooperation. The number and density of member states can impact an
institution’s effectiveness. Ease of monitoring and degree of legalization (how legally formalized
institutions are) matter too.

Barnett & Finnemore write about the power and pathologies of international institutions:

 The Power: institutions may have some autonomy from their members resulting from their role
as legitimate bureaucrats, and from their principle-agent relationship with members (control of
an access to technical information, capacity to label and classify behavior).
 The Pathologies: tendency to channel their power into areas independent from states’ desires.
Can, like other bureaucracies, be inefficient and unresponsive.

Putnam argues for the existence of a two-level game, arguing against the position that domestic politics
don’t matter in international relations. He uses the Bonn Summit as an example of an instance where
states did not act as “unitary actors.” There are two components to the two-level game:

1. Level I: Bargaining among governments, leading to a preliminary agreement

2. Level II: National governments discuss the agreement with their constituents in hopes of
ratification
States’ anticipations of Level II dynamics affect level I behavior. A win set at Level II is the set of all
possible Level I agreements that could win sufficient support domestically. Win set size is affected by the
domestic preferences (and power) of interest groups, domestic political institutions for ratification, and
the strategies of Level I negotiators. Small and large win sets each have pros and cons. Larger win sets
make deals more likely, but smaller win sets let you drive agreements in the direction of your real
preferences. There can be incentives to misrepresent your win set, but there are also fears that others
may defect or call your lie.

International Law

International law is a body of rules that binds states and other agents in global politics together. Some
international governmental organizations (IGOs) engage in law-making, and some treaties found or
revise IGOs. However, not all IGOs make laws, and not all treaties make IGOs. How is international law
made? Customary international law is simply a set of norms, while codified international law consists
of international treaties ratified by states. Codified international law is often considered binding if it is
widely accepted, even if it isn’t ratified by everyone.

FLS’ three dimensions along which international law varies:

 Obligation: soft vs. hard law

 Precision: general commitments vs. specific commitments
 Delegation to third parties: (ex. international courts)

Enforcement provisions are most likely when states have incentives to defect, face larger difficulties
committing credibly to the agreement, and are more uncertain about the behaviors of their treaty
partners. Economic treaties are the most likely to include punishment provisions, with human rights
treaties in second and environmental and security treaties falling far behind. However, in each category,
less than half contain enforcement provisions.

International norms are standards of behavior defined in terms of rights and obligations. They
constitute “appropriate” behavior. They serve as informal international institutions, although they can
also be codified into law. The main types of norms are:

 Constitutive: who is a legitimate actor?

 Procedural: how are decisions made?
 Regulative: how should actors behave?

The life cycle of norms goes:

1. Convince (…of the need for a norm)

2. Cascade (in which a norm gains massive attention)
3. Internalize (become standard expectations)

Transnational advocacy networks (TANs) often play a role in creating and promoting norms (see: Keck
and Sikkink). They often follow a boomerang model: when they are blocked from pressuring a state,
they use other states and IGOs to do so.

Human Rights
The International Criminal Court (ICC) is the first permanent court established to try individuals for
specific violations of international human rights law. It is focused on genocide, war crimes, and crimes
against humanity- the most egregious human rights violations. It is empowered to prosecute anywhere
in the world, as long as crimes occurred in a signatory country, the accused is from a signatory country,
or the UN Security Council votes on it. It’s a court of last resort, to be used when national courts fail. It
was created by the 1998 Rome Treaty and came into effect in 2002, with no retroactive jurisdiction. 124
states are parties to it- the United States has signed it but not ratified it. To date, 27 suspects have been
indicted by the ICC.

There is a general tension between state sovereignty and universal human rights. There’s been a general
trend in human rights law from soft to hard (binding) law: Universal Declaration of Human Rights
(1948) -> ICCPR (1966/1976). There’s greater agreement over some rights than there is over others.

If human rights treaties do sometimes make a difference, when is it? When do other states seek to
enforce human rights?

States violate human rights in order to retain power, deal with foreign threats, etc. Ways to punish
human rights violators:

 Naming and shaming (diplomatic)

 Issue linkage: tying cooperation on certain issues (economic benefits, trade, lending, sanctions,
etc.) with a country’s human rights record.
 Intervention (unilateral or multilateral)

However, there are concerns about the costs of each of these strategies. When do benefits outweigh
costs? It depends on the spillover of costs, domestic demands for action, strategic interests, and norm
consistency.

War

What are the causes of large scale wars?

 WWI: spiral model, security dilemma, self-fulfilling prophecy; too pessimistic of others’
intentions?
 WWII: Failure of deterrence, unchecked aggression, allies didn’t credibly threaten Germany,
failed to adhere to the three C’s of deterrence: commitment, capability, and credibility. Too
optimistic of other’s intentions?
 Cold War: Why did it remain cold: bipolarity? Nukes?

On the other hand, why is there so much peace? Murder, car accidents, and accidental falls are the
causes of more deaths in the U.S. than war and terrorism in recent times. Intrastate is more common
than interstate war, but it also declined following the end of the Cold War (though it has been rising
again in recent years).

Fearon posits a puzzle: war is often very costly, but yet it continues to occur. It’s possible that leaders
are irrational and fail to anticipate costs (Germany in WWI?), but this doesn’t explain most wars. Maybe
leaders know costs bust still desire war (preventative war in a system of anarchy). In order for there to
be a war, both sides must have positive expected utility: they expect to gain. At least one side is wrong,
because war is a situation of bargaining- more specifically, it is a failure of bargaining. States often
disagree over things like territory and regime type. More than half of the wars over the last 300 years
were about territorial claims. These are bargaining issues.

A bargaining range is the set of outcomes that both parties prefer to war. War can provide benefits, but
also entails costs. There is a mutually acceptable set of outcomes in many conflicts.

States will not challenge a status quo if the war (benefits-costs) does not improve the status quo.

What makes bargaining break down and lead to war, then?

 Information problems: leaders may have incomplete information about capabilities and resolve.
As a result, they may yield too little (Kuwait, 1990) or demand too much (Iraq, 1990).
o Resolve (credibility problems): states have incentives to misrepresent themselves.
They’ll want to make threats credible by making them costly, via:
 Brinkmanship: a willingness to court risks in order to show resolve and separate
the serious people from the bluffers (Cuban Missile Crisis)
 Tying Hands: taking control out of their hands to make backing down from
threats difficult. This uses audience costs: retaliation from domestic or
international actors from failing to act as promised.
 Commitment: States have a hard time committing to respect a given settlement. There’s future
temptation to use force to revise terms, especially if a current settlement is expected to cause
future weakness. In this scenario, states will fear that adversaries will exploit their weakness.
This can lead to preventative war: falling to the temptation to fight today rather than in the
future, when you’re weaker in relative terms.
o Jarvis focuses on the role of technology in war, arguing that he world that’s most
dangerous is that one in which offensive and defensive weapons can’t be distinguished
and offensive weapons are dominant. Offensive technology gives actors a first strike
advantage, creating an incentive for preemptive war.
Offensive weapon Defensive weapon
dominance dominance
Can’t distinguish between Doubly dangerous Security dilemma, with
off. and def. weapons some interest overlap
Can distinguish between No security dilemma, but Doubly safe
off. and def. weapons aggression possible
 Indivisibility: Disputes over gods that can’t be divided (without diminishing their value) are
more likely to lead to war (ex. Jerusalem?). However, claims of indivisibility are often just a
bargaining tactic, not an actual cause of war. Some claim is in fact possible to divide some goods
that are “indivisible” through compensation, joint/shared control, etc.

Knowing this, what makes war less likely? Increasing costs, greater transparency, outside enforcement,
dividing “indivisible” goods.

Domestic politics

Democratic peace theory claims that democracies almost never go to war with one another. It’s a
dyadic theory. While the empirical evidence for the claim has been established, the causal mechanism is
up for debate. Three commonly cited mechanisms are cooperatism, shared values, and trade.
War, like trade, has distributional consequences. Costs and benefits are not shared equally within a
country. This affects the bargaining range and, therefore, the likelihood that war will occur. Domestic
politics is about both interests (demand policies) and institutions (supply policies). Some important
players:

 Bureaucracy: different organizations that make up a state’s structure.

o Military: source of expert knowledge and advice. Not necessarily hawkish.
o Other agencies: CIA (intelligence), State Department (diplomacy)
 Interest groups: offer campaign contributions, support of voters. They lobby with the
expectation of future support for their interests. They also educate their members on their
views of politics and policy. It’s hard to empirically assess how much influence a given interest
group has on a foreign policy decision.
o Economic actors: companies, trade groups, industries
o Ethnic lobbies/diasporas: (ex. Cuban-Americans)
 Voters: the general public plays a major role too.
o Do leaders create diversionary wars to generate a rally effect (Falklands War)? If so, it’s
rare. In the United States, support for conflict dissipates as casualties rise, even though
support is high at the start. Conflict is more likely to be initiated by leaders who are
politically strong, implying that diversionary wars are outliers. The benefits of
diversionary war often aren’t large enough to close the bargaining range. Plus, starting a
war is risky, with large political costs if you lose.

Domestic interests can alter leaders’ assessments of the costs and benefits of war. They may increase
the number of issues over which leaders come into conflict with other states. They could also increase
either the costs or benefits of war, thus changing the bargaining range. Domestic institutions also affect
foreign policy behavior: status of military and other bureaucracy, influence/access of interest groups
(campaign finance, democracy vs. autocracy), preferences of national leaders, and audience costs.

Section readings:

 Frieden and Lake: “International Relations as a Social Science: Rigor and Relevance”
 Chirstensen: “The China Challenge: Shaping the Choices of a Rising Power”
 Brooks and Wolforth: “The Once and Future Superpower”
 Keohane: “From After Hegemony”
 Measheimer: “The False Promise of International Institutions”
 Keck and Sikkink: “Transnational Advocacy Networks in International Politics”
 Simmons: “Mobilizing for Human Rights”
 Huntington: “The Clash of Civilizations?”
 Mahbubani and Summers: “The Fusion of Civilizations”
 Diamond: “Democracy in Decline: How Washington Can Reverse the Tide”
 Krasner: “Sharing Sovereignty: New Institutions for Collapse and Failing States”
 Part Two

Civil Wars

Civil (intrastate) wars last longer (6 years on average, compared to 3 for interstate); are more frequent
(130 with at least 1,000 deaths since WWII); and are responsible more deaths (since WWII) than
interstate war. Violence directed at civilians and a difficulty in distinguishing civilian from combatant
contribute to this death toll. It can be difficult for sides to credibly commit to peace deals. 60% of the
time, civil wars recur. 39 of the UN’s 69 Peacekeeping Missions have had a civil war dimension.

Intrastate conflicts are driven by grievance (government discriminates against members of a group) and
greed (a group wants to control more of a country’s resources). These two factors lead to conflicts over:

 Territory: separatism, irredentism, claims for local autonomy, self-determination

 Policy: threats of civil war can be used to motivate policy change
 Regime: civil war as a means of gaining control over the government

Assuming a conflict of interests is present, when does organized, armed opposition emerge?

 Group-level explanations: when ethnic ties can help overcome collective action problems, social
networks are present, resources are available to pay fighters
 Country-level explanations: hybrid political regimes, poverty, unemployment (especially among
youth), economic decline, natural resource dependency (preponderance of resources can
lengthen a conflict’s length), large populations, large and rugged territories, environmental
scarcity.
o Is ethnic diversity a cause, a la Huntington? Sometimes, but sometimes it makes conflict
less likely. A 60%-40% split can lead to conflict, as there is a large minority group which
rarely receives its demands, but a five-way 20% split requires cross-cutting alliances,
making violent conflict less likely.
 International-level explanations: External support (prolongs conflicts), proxy wars, a contagion
effect when other civil wars are being fought nearby

Civil war can be seen as a bargaining failure as well, meaning causes include:

 Incomplete information: rebel groups have an incentive to misrepresent their power, as

governments will only negotiate with powerful groups. It is hard to know exactly who is
powerful unless war occurs. Longer wars and more decisive victories provide more info. Rebels
themselves may at times be uncertain of their own access to financing, and also about the
government’s resolve- governments also want to appear tough, especially if they face multiple
challengers.
 Commitment problems: shifts in power are frequent in civil conflict settings- this makes making
commitments difficult. There is concern on each side that the other will renege on agreements.
Settlements almost always reduce the power of rebels through demobilization. It’s worse when
political and legal institutions are weak, and when then there are minority-majority divisions (ex.
Shiite-Sunni). Power-sharing can be more effective with outside enforcement (ex. UN), which is
 itself more likely for poor countries with competing factions and weak central governments.
Intrastate wars are more likely to have settlements end sooner than interstate wars.
 Indivisibility

Civil wars are more likely to end with outright military victory or rebel collapse, then negotiated
settlement. How might intervention facilitate settlement? Commitment, prevention?

Power tells the story of how the US failed to prevent the Rwandan genocide because it had no
incentives to do so and was not too concerned about it, and also because they confused the genocide
for a civil war.

Insurgency and Terrorism

Insurgency is asymmetric warfare that doesn’t aim to take and hold territory. Insurgents use “weapons
of the weak” like violence against civilians to impose costs on governments. Counter-insurgency focuses
on winning over “hearts and minds.”

Terrorism is the use of violence against citizens by non-state actors to attain political goals. This includes
bombings (including suicide bombings), shootings, assassinations, and hijackings. Terrorists are
strategically motivated, and intend to influence an audience beyond just their victims. It’s sometimes
transnational, but is most commonly domestic. It can often be ideologically extremist (left-wing,
anarchist, religious, etc.) It can also sometimes be state-sponsored. Most terrorist attacks kill 0 or 1
people, but suicide bombing can be deadlier and a small percentage of attacks are highly lethal.

Fortna defines terrorism as deliberately indiscriminate violence against civilians. It has advantages and
disadvantages. Terrorism signals weakness, alienates some political supporters, and it allows the
government to justify draconian responses. Fortna shows that empirically, there is no systematic
evidence that rebel groups that use terrorist tactics win more often, or win more concessions. It’s
possible that they are used simply to stay relevant, attract supporters, and prolong conflicts.
Additionally, governments will sometimes make concessions to terrorist campaigns, but will be less
accommodative on the most important matters. Democracies are more sensitive to terrorist tactics.

The most comprehensive databases includes over 150,00 terrorist incidents from 1970 to 2015.
Bombings were most popular, then assassinations and kidnappings (armed assault). 2015 saw a decline
from 2014. The State Department says that 19 private citizens were killed in terrorist attacks abroad last
year. That year, Iraq, Afghanistan, and Pakistan had the most terror attacks. The largest perpetrators
were the Taliban, Isis, Boko Haram, Indian Maoists, and the PKK.

Terrorist attacks, like wars, are bargaining failures. They can result from:

 Information problems: governments have incomplete information about terrorist capabilities

and resolve (and, thus, one of goal of counter-terrorism is information gathering). Terrorists
have difficulties making threats credible as a result. Terror attacks are costly signals: they reveal
a group’s resolve and send a signal to both the government and the people on their side.
 Commitment problems: present on both sides. As a result, third parties play an important role in
enforcing settlements.
 Indivisibility
What are the goals of terrorism? Regime change, territory change, policy change, and stats quo
maintenance.

Why use terrorism? There are four strategies:

1. Coercion: to induce policy change by imposing or threatening costs on the target state. This is
when attacks serve the role of costly signals. Targets are often sensitive to the costs of violence,
whether because of domestic politics, public perception of threat levels, or past behavior
toward other terrorist actions.
2. Provocation: to convince an audience that target government cannot be trusted, needs to be
replaced, or has malign interests. This is used when there is uncertainty among terrorists’ home
population about a target’s interests (ex. U.S. involvement in the Middle East).
3. Spoiling: to prevent peace agreements between moderates in a group’s own country and the
government; additionally, it convinces the government that moderates are either unable or
unwilling to control extremists. This plays on uncertainty about moderates’ intentions and
capabilities (ex. Palestinian terrorism, especially during the Oslo Peace Process).
4. Outbidding: as a form of internal competition between groups, both of which want to represent
domestic constituents. Here, attacks demonstrate which group is more extreme to those who
perceive extremist groups to be their best representatives. This strategy can be applied to
suicide terrorism especially (ex. Fatah and Hamas in Palestine).

Biddle and Shapiro argue that we should contain ISIS instead of destroying them, as completely
destroying them means that we would have to get involved in the messy and dangerous process of
rebuilding afterwards.

Alliances

Alliances are commitments by states to cooperate on security policy. They form when states have
compatible military interests. There are several different types:

 Bi- and multilateral (ex. NATO)

 Asymmetrical: a powerful state committing to defend a weaker state (ex. US-SK)
 Offensive (ex. Axis powers in WWII)
 Defensive (ex. also US-SK)

Alliances are costly: there must be a commitment of resources to defend another state, and they must
be upheld to be credible, even if defeat is likely. They limit a country’s freedom, as consultation with
allies is necessary before acting or making decisions. Additionally, an emboldened ally may entrap its
protector (ex. an Israeli attack on Iran could drag the US into a war in the Middle East).

Countries form alliance because weak states can gain protection from powerful rivals, and strong states
can signal resolve by promising to defend a weaker state. Additionally, combining resources can also
economize, allowing for greater defense. They can also temper conflicts (ex. Greece and Turkey in
NATO) or formalize a sphere of influence (ex. Warsaw Pact).

Small states may seek to avoid domination by alliance leaders, and alliances with strong states can
threaten state freedom. However, in between different groups, balancing tends to result in roughly
equal blocs. But that’s if you accept the balance of power theory; the balance of threat theory instead
has powerful states not always generating opposing powerful alliances.

But balancing does not explain all alliance formation: there are other explanations at times.
Bandwagoning is when states form alliances with the side perceived to be winning (ex. Italy in WWII),
and Affinity is when states form alliances because of shared culture, ideology, or religion.

The existence of an alliance can change the outcome of a bargaining range. Alliances can deter potential
attackers, but they can also embolden members (moral hazard). However effects are conditional on the
capability of alliance commitments. Credibility can be increased through prior coordination, and there
are also negative reputational effects for reneging on alliances. States face a tradeoff between a highly
credible commitment (which raises the odds of a reckless ally) and efforts to control partners (resulting
in flexible and ambiguous alliances).

NATO’s origins were as are a collective defense (an attack on one is an attack on all) pact during the
Cold War. It was concerned with external attacks. After the collapse of the USSR in 1989, questions were
asked about how much cooperation would persist. Forces were cut from 300,000 to 100,000, but
membership expanded. Starting in the 1990’s, it began to act “out of area.”

 1993-1995: Airstrikes and enforcement of sanctions in support of the UN in Bosnia.

 1999: Airstrikes against Yugoslavia/Serbia over Kosovo (because Milosevic was convinced they
would not intervene, their credibility was at stake).
 2000-2014: ISAF in Afghanistan.
 2011: Enforced a UN arms embargo and no-fly zone over Libya to protect civilians. 14 member
states contributed (about as many did not), and it involved five non-NATO members as well. Air
and sea forces were about 75% non-US. The rebels were victorious, but Kupierman argues that
the US ought not to have intervened.

Russia has long expressed concerns about NATO’s eastward expansion. These complaints became
particularly pronounced beginning in 2014. In speeches, Putin treats NATO and the Ukrainian
government as nearly one in the same, although Ukraine is not a member.

Breedlove (a U.S. NATO Commander in Europe, 2013-2016) argues NATO has grown complacent and
should treat Russia as more of a threat due to their foreign involvements (Georgia 2008, Ukraine 2014,
Syria 2016), along with focusing on issues like terrorism and refugee displacement. The US has
undergone increased deployment in Europe in 2015-2016, but he would say it’s not enough.

Finnemore argues that intervention must be multilateral to be legitimate today.

Contrary to NATO’s collective defense, collective security is formed around a common interest that all
members are presumed to share, and is focused on internal threats. Collective security organizations
(like the UN) have near universal membership. As such, they face challenges regarding collective action
problems and decision-making with mixed membership interests. As a solution, they can delegate
authority to a sub-group of powerful states (ex. UNSC).
The UN’s structure:

 Secretary General
o Five year, renewable term. Nominated by the General Assembly, approved by the
Security Council (and, thus, is never offensive to any of the UNSC members). Currently
Ban Ki-Moon, Antonio Guterres is next.
 General Assembly
o One country, one vote for all members. Resolutions require a 2/3rds vote, and are non-
binding. They control finances, including peacekeeping.
 UN Security Council (UNSC)
o 5 permanent members with veto power and 10 rotating members with 2-year terms,
elected by the GA with no veto power. Security Council resolutions are binding on all
members.

UN intervention in a country can come through the UNSC two different paths:

 Chapter VI: Pacific Settlement of Disputes. Usually focused on observation, mediation, and
monitoring. Troops are usually not given permission to use force (“blue helmets”). It relies on
the consent of state(s) in which intervention occurs. This was the format for “first generation”
peacekeeping missions (ex. Cyprus).
 Chapter VII: Action with Respect to the Peace, Breaches of Peace and Acts of Aggression. It
doesn’t require consent: the UNSC can impose measures with obligatory legal force. The
mandate of the mission can specify conditions under which troops can fire (self-defense,
preventative action to protect civilians and aid workers). It often includes non-military
objectives, such as institution building and overseeing elections. This is the format, for the
“second, third, and fourth generation” peacekeeping (ex. Somalia, DR Congo).

The UN has had 71 peacekeeping operations since 1948, with 3,508 deaths. They have 16 current
missions, with about 100,000 military and 16,000 civilian personnel from 123 countries. This is a nine-
fold increase since 1999. However, peacekeeping personnel levels often fall short of UNSC mandates.

They also have 11 current political and peacebuilding missions (post-conflict stabilization, electoral
assistance), with 3,300 personnel. These have seen many past successes in preserving peace and
overseeing democratic elections (ex. Namibia, El Salvador, Cambodia, Mozambique).

WMDs and Nuclear Weapons

Weapon of mass destruction (WMD) includes biological, chemical, and nuclear weapons. Nuclear
Weapons are distinguished by their enormous lethality. Missile technology is needed for (some forms
of) their delivery. Chemical and biological weapons are rarely used in war. Some international treaties
have attempted to govern these weapons, but they have few provisions for inspection or enforcement.

International efforts to govern the spread of nuclear weapons are more advanced. They seek to stop
proliferation, or the spread of WMDs into the hands of additional actors. The Nuclear Non-Proliferation
Treaty (1968) required that declared nuclear states work to reduce their arsenals, barred non-nuclear
states from acquiring nuclear weapons, and made sure nuclear states provide access to peaceful nuclear
technologies. Monitoring is done by the International Atomic Energy Agency and enforcement is done
by the UNSC. In 1995, the treaty was extended indefinitely, with 188 states signing.

During the Cold War, nuclear deterrence was central to both US and Soviet strategy (recall the three C’s
of deterrence: capability, communication, and credibility). Mutually Assured Destruction posed a
credibility problem. Did nuclear weapons keep the Cold War cold? Waltz says that nuclear weapons
could induce caution through a crystal ball effect, in which leaders refuse to use them because they can
see how massive the costs would be. But his use of the Cold War to prove this may be problematic:
there are concerns of a lack of a “nuclear taboo” among non-nuclear states, and concerns about
accidental or unauthorized use.

In April 2010, Obama updated the US nuclear strategy, committing not to use nuclear weapons against
non-nuclear states that comply with the NPT, even if those states attack the US with biological,
chemical, or cyberweapons. The 2015 National Security Strategy states that goals include preventing
Iran from obtaining a nuclear weapon.

How do states with nuclear weapons manage access to their weapons? Civilian-military relations and
acquisition by non-state actors are both matters of concern. The always/never dilemma is that nuclear
weapons must always deploy when ordered and never deploy when not ordered.

With nukes, there are three animals to deal with:

 Porcupine: Nukes are used to increase the power of otherwise weak states. This way, status quo
countries won’t be able to touch these countries. This makes regional conflicts hard to address.
FLS asks if it’s possible to offer security to these countries via other means, like offering the US’
nuclear umbrella.
 Pit Bull: Nuclear states may act more aggressively. They’re often involved in regional conflicts,
with competing claims for territories. With small nuclear arsenals, states may be tempted to use
them early, before they’re destroyed by an enemy first strike.
 Turkey: Nuclear states may have a hard time solving command and control problems, both
through civilian-military relations and relations with non-state actors. It took the US a long time
and lots of effort to solve safety problems; new nuclear states may not have such resources.
There were close calls in the Cold War (goes back to Always/Never).

Some propose a “safe-sex” solution: instead of teaching state to never build any nuclear weapons, we
should instead try to teach them to do it and use them safely.

Is the NPT effective? On the one hand, some states have worked to acquire nuclear weapons (Israel,
India, Pakistan), some states have signed it and then violated it (Iran), and others have signed and then
renounced it (North Korea). Not to mention, some have alleged hypocrisy on the part of the original
nuclear powers. On the other hand, other states did give up programs before signing the NPT, and other
states who cheated were caught and reformed. Regime type comes into play here: no democratic non-
nuclear state has started a covert weapons program after ratifying the NPT. This implies that the NPT
has different effects in different contexts.
 International Political Economy

Theories of international political economy (IPE) are focused at a general level, as described by Gilpin.
What do different approaches suggest about the relationship between wealth and political power?

 Liberalism: neoclassical economics (Smith & Ricardo), with limited role for the state
 Mercantilism: overlap with realism; a focus on state survival. Economic nationalism and
strategic trading. Focused on the role hegemony plays in economic cooperation.
 Marxism: an international version of Marx’s class analysis (labor vs. capital). “Dependency
Theory” of economic development. Core vs. periphery countries.

To a great extent these theories are prescriptive: they’re about policy recommendations. For descriptive
analysis, we need to look inside of countries: domestic interest groups (firms, industries, workers,
consumers) and institutions.

Globalization has varied meanings, often depending on the discipline and audience. It varies by country,
income, and region, and has multiple dimensions:

 Social: cross-border personal contacts, information flows, cultural proximity

 Political: IGO memberships, bi- and multilateral treaties, foreign embassies, and UN peace
missions
 Economic: trade, capital, and labor flows

Globalization is the result of several different forces: government policy, international institutions, and
technological change. It has consequences for government influence and control; opportunities and
competition for investment; possibility of financial crises; opportunities for growth via trade (but with
some losers) and domestic politics regarding international trade and finance.
Here’s all we need to know:

Globalization

Economic Globalization

Trade Finance
goods and banks, stocks,
services and bonds
WTO, PTAs IMF, World Bank
(WTO,

Multinational Production
FDIs, MNCs

Imports, Exports Exchange Rate

open or fixed or flexible
protectionist

Current Account Capital Account

Balance of Payments
trade deficit/surplus short-term/long-term

PTA refers to Preferential Trade Agreements (ex. NAFTA, TPP).

The current account is goods exports – imports, and the capital account is capital imports – exports.
These are always balanced out, by definition, and we refer to their balance as the balance of payments.
Persistent deficits in either account suggest the need for adjustment. The balance of payments includes
official reserves activities (central bank buying and selling currencies) and “errors and adjustments.”
Large “errors and adjustments” can sometimes suggest that a country has a large black market.

The exchange rate is one country’s currency in terms of another countries’ currency. A fixed exchange
rate is when the government sets the currency price (now less common), and a floating (flexible)
exchange rate is when currency price is set by the market (now more common).

Autarky is a totally closed system of no trade. It’s expressed through a basic, closed economy economic
model. Free trade is the complete and total lack of barriers to trade. This model sees larger consumer
surplus and smaller producer surplus, since inefficient companies are forced out of business. Here,
Qd – Qs = imports.
What’s the case for international trade, as opposed to autarky? Comparative advantage: when a country
has a lower opportunity cost for producing certain goods. Neoclassical trade theory argues that trading
along the lines of comparative advantage is efficient. What countries have comparative advantage in
depends on their endowments (the Hecksher-Olin theorem says that endowments generate
comparative advantages). Rogowski says that national endowments can also tell us about the layout of
the domestic politics that we can expect with trade in different scenarios.

Trade openness is linked to international growth. Economically, trade is good because comparative
advantage allows for specialization; economies of scale can form; there are lower consumer prices;
there are increasing returns to scale (which is particularly relevant to intra-industry trade); and a greater
flow of information and exchange of ideas takes place, including the spread of technology and
production strategies.

But though trade may frequently generate gains at the national level (though not for all countries at all
times), there are also people within each country which lose as a result of trade.

Tariffs are taxes on imports. Under tariffs, producers win back part of the consumer surplus they lose
through trade. Additionally, government revenue and deadweight loss are also brought into the
equation. Non-tariff barriers are regulations which can effectively discriminate against exports, even if
not explicitly. They are less transparent and increasingly more common. The WTO says that regulations
are fine as long as they aren’t discriminatory on the basis of nationality.

Why do countries restrict trade (and all do, to some extent,) through tariffs, quotas, subsidies, export
prohibitions, and other non-tariff barriers? To close perceived gaps in competitiveness and to protect
potential losers within their country. In other words, for distributional concerns.

Identifying the winners and losers from trade is critical to understanding the domestic politics of trade.
There are two main models of trade policy preferences:

 Factor Model (labor vs. capital; Rogowski). Here, the Stolper-Samuelson theorem says that
trade raises the income of the society’s abundant factor and reduces the income of the scarce
factor- whichever of the two is more common wins, whichever is less common loses.
 Sector Model (industry-by-industry; Ricardo-Viner Model). Here, it’s assumed that the factors
are industry-specific and that inter-sector is mobility is low. It ultimately comes down to import-
competing vs. export-competing sectors.
These aren’t alternatives, they’re different models for different countries: the factor model works better
in poorer countries, while the sector model works better in wealthier countries. The mobility of factors
to move across industry also matters for trade policy preferences.

Governments want trade liberalization, but are also concerned with reciprocity, defection and cheating,
dependence on others being used for political bargaining, and prisoner’s dilemma problems. One
solution to these problems is hegemony. Another solution, which has grown popular since WWII, is
international institutions like GATT and WTO. They provide a forum for negotiations with reciprocity as
the aim, monitor commitments, and deal with enforcement and dispute settlement.

The General Agreement on Trade and Tariffs (GATT) was founded in 1948 as a stopgap effort after
more ambitious plans for an international trade organization failed. It included 23 original members and
had several negotiating rounds using consensus decision making.

In 1995, the World Trade Organization (WTO) was created out of frustration over the GATT that had
frown in the 1980’s over its ineffective enforcement mechanisms. It has 160 members. It has much
greater scope, dealing not only with trade issues but also trade in services and intellectual property.
While the GATT had 200 disputes in 47 years, the WTO has had 500 since 1995. One complaint against
the WTO is that it’s hard for small, poor countries to get the legal and technical resources to sue
countries for their trade policies. The WTO’s principles are:

 Market liberalism: on aggregate, trade provides gains

 Non-discrimination: every country must treat all countries the same as the countries that they
give Most Favored Nation Status, but you can go further in approved free trade deals. There’s
also an exception for unilateral trade preferences to assist poorer nations (like America’s
Generalized System of Preferences).
The WTO’s last negotiating round, the Doha Development Round, started in 2001, and has still not
completed. Conflicts between developed and developing countries have effectively stalled it.

The average tariff level in developing countries has fallen from the high 30’s in the early 1980’s to just
under 10% as of around 2010. The cause for the dramatic growth in trade since the 1950’s has a number
of causes, including policy, technology, and changes in ideas. Tariffs have declined specifically but some
protections still remain (typically on manufactured imports for developing nations and agricultural
imports in developed nations). Non-tariff barriers are harder to eliminate. New issues have also arrived:
intellectual property, trade in services, government procurement, and health and safety regulations.

Preferential Trade Agreements (PTAs) vary in scope, depth, and effectiveness (ex. NAFTA, EU, CAFTA-
DR, TPP). Some “next generation” agreements include many of the issues mentioned above. They also
may make benefits dependent on human and labor rights, environmental policy, etc. This type of trade
deal has skyrocketed since the early 1990’s: they covered about 20% of trade in 1960, and they cover
over half of it today. However, they’ve become less regional over time.

There a number of different types of capital flows:

 Currency markets (short-term, speculative)

 Portfolio investments (volatile)
o Bank loans
o Equities (stocks)
o Bonds (government (sovereign debt) or corporate)
o Derivatives (CDOs, CDSs, MBSs)
 Foreign Direct Investment (longer term and comes with a controlling stake; see Pandya)
 Remittances (often countercyclical in nature, 70% go to middle-income developing nations)
 Public/official finance
o World Bank finances
o IMF loans
o Foreign aid (which has different motives than private investors)

Why does capital flow internationally? Efficiency: in theory, capital moves from capital-rich to capital-
poor countries due to the higher returns available. But in reality that’s only partially true: a lot of capital
flows are between rich countries, and some rich countries have capital deficits. But higher returns still
force a tradeoff between economic or political risk and return in poor countries. Many investors prefer
diversification for this reason.

The benefits of capital flows include funding private and public sector activities, promoting economic
growth, and allowing technology transfers (especially through FDI). The costs include governments being
subject to “market discipline” and capital being prone to stops and reversals: volatility can lead to
frequent crises (often followed by austerity), and these crises can be contagious within a country’s
economy.

Capital controls have been liberalized over time. There’s been an overall trend towards financial
liberalization starting among rich countries in the 1960’s and 70’s, then spreading to developing
countries in the 1990’s and after. IMF and US pressure in countries has contributed to this, as both take
a “neoliberal” ideological stance in favor of liberalization- this is known as the Washington Consensus.
As with trade liberalization, capital liberalization brings with it domestic winners and losers.

Many governments keep foreign exchange reserves in their central banks in order to prepare against
risk. 60% of total foreign reserves are U.S. dollars in the form of bonds. The USD reserve currency status
helps the U.S.

Frieden argues for the importance of international finance and offers some ways to regulate it:

 Lender of Last Resort: an institution to provide liquidity to financial markets when no one else
will do so in the middle of a crisis, helping to prevent a total collapse
 Regulatory Harmonization: cooperation between regulators in different countries in order to
avoid regulatory arbitrage
 Macroeconomic Policy Coordination: cooperation between national governments (possibly
through international institution or coalition) on economic policy to internalize externalizes and
create international stability.

According to Frieden, national regulators have moved towards regulatory harmonization since the 2008
financial crisis. Central banks are also cooperating more, the IMF is moving towards the role of a lender
of last resort, and major financial institutions (IMF, Bank for International Settlements, G20 Financial
Stability Board) are moving towards providing an international financial governance infrastructure.

There is debate over how willing developing nations should be open to multinational corporations
(MNCs). Pandya argues in favor of them in the form of FDI, highlighting the benefits of technology
spillover, economic stimulus, jobs, tax revenues, current account balancing, and providing the benefits
of greater market access to local businesses. Concerns include that they will compete against local
businesses and that they’ll lead a “race to the bottom,” bringing environmental and labor standards
downwards. Drezner argues against the existence of a race to the bottom, while our professor’s
research finds mixed evidence for it. Berliner, et. al. argues that representation of worker’s interests in
developing countries depends on two simultaneous factors: state capacity and labor political will (the
strength of unions and left-wing parties).

Part Three

A review of the IMF:

 Gets its resources from member governments, and large contributions get you more voting
power (though there were minor reforms to this system in 2010).
 Provides balance of payments financing, with conditions. It’s a lender of last resort that requires
structural adjustments on the part of borrowers.
 Took on the role of preventing the spread of economic and financial crisis.
 Lots of critiques: effects on growth and inflation, moral hazards, serving the interests of wealthy
developed countries, etc.
A review of foreign direct investment (FDI):

 Multinational corporations (MNCs) are firms with significant operations in multiple nations,
thus engaging in FDI. These are important to the world economy.
 Horizontal integration involves companies owning many similar companies, while vertical
integration involves companies owning companies at other points on the production chain.
 Positive effects: tech transfers, economic growth, multinational wage premium, less volatile
than portfolio investment
 Negative effects: “race to the bottom” concerns (labor, environment); and enclave economies:
MNCs don’t get integrated with domestic firms in the local economy, instead just staying in
special export zones and extracting natural resources from the country

Economic Development

What explains variations in development?

 Historical colonialism
 Resource Endowments
o Countries with small-scale agriculture did better than those with plantation agriculture
o Natural resource endowments (upon which dependency is bad)
 Geography
 Domestic politics
o Policies to promote growth (infrastructure, property rights, stable economic policies)
o Government may fail to do this because of a lack of capacity and technical resources
(need for capacity building) or a lack of political will (stemming from rural poor vs. urban
elite political splits, for example)

From the 1950’s-1980’s, protectionism was dominant. Urban manufacturers won from this, while rural
agriculture lost. This is because governments often better serve narrow, not broad-based interests. This
policy was supported by structuralist criticisms, which emphasized market failures and the need for
government to coordinate firm start-ups and investment. Marxian dependency theory (Singer-Prebisch)
also supported it by arguing that developing countries faced secular economic decline when faced with
trade.

In the 1960’s and 70’s, countries sought autarkical import-substitution industrialization (ISI) strategies:
closing markets to imports and developing local industry with government help. First-stage ISI was easy
to do, focusing on consumer goods. Secondary ISI moved to durable good and capital goods. This policy
required trade barriers, government planning, and investment policy (targeted loans, SOEs, etc.) The
effects of ISIS are redistribution from agriculture to manufacturing. It generated rapid economic growth
in the 60’s and 70’s, but it didn’t last, with failures and imbalances emerging starting in the 70’s. Current
account deficits exploded at the same time fiscal deficits did, requiring capital inflows (commercial and
official credit, foreign aid). ISI countries become deeply indebted in the 1980’s, and the debt crises
erased the gains they made.

Many countries (Mexico, Argentina, Brazil, etc.) defaulted on their debts and got loans from the IMF
requiring structural adjustment. This was part of a shift towards neoliberal export-led industrialization
in the 1980’s and 90’s. ISI was hard to eliminate, despite large budget and current account deficits: it led
to the formation of rent-seeking political coalitions. The effect of structural adjustment (a painful
process of economic reform) in Latin America was to eventually promote growth, but with greater
poverty and inequality.

The East Asian model instead focused on government support high-value-added exports. So while it was
an example of export-led industrialization, it also involved government intervention (protection for
infant industries, targeted bank lending, etc.) This system also resulted in instability. A financial crisis
started as a currency crisis in Thailand in 1997 and quickly spread to Indonesia, Malaysia, South Korea,
the Philippines, and so on. The model tried to convince banks to make risky loans, and was successful in
the 1980’s, but continued beyond the low-hanging fruit in the 1990’s. The model relied on government-
bank-industry relations, which can make governments less effective at regulating bank loans. Plus, the
model is less effective as more people do it.

More generally speaking, international integration presents challenges to developing nations. They have
little decision-making power in inter-governmental organizations, and there are high technical costs for
joining and complying with the WTO. Additionally, the need for domestic institutional and governance
reform can pose another challenge. Finally, the question should be asked: can every country succeed at
export-oriented development?

Trade II: Electric Boogaloo

What are the mechanisms by which trade should generate growth? Comparative advantage, with
competition leading to greater efficiency and economies of scale. However, it may be harder for
countries to achieve productivity gains in agriculture of commodities than manufacturing, even with
comparative advantage. Plus, there’s lots of competition in manufacturing. First-mover firms tend to do
well with countries opening up, but others lose out.

Margalit identifies the perceived social and cultural consequences of openness as a major determinant
of attitudes regarding openness to international trade. It’s not the only determinant (material concerns,
economic performance concerns, etc.), but an important one all the same. He did a survey experiment
of individual attitudes in 10 countries and found that both cultural and material concerns matter.
Importantly, cultural concerns are more likely to occur among the less educated and less skilled.

There are lots of benefits to globalization (MNCs, consumers,) but also those who lose out, generating a
backlash against globalization. The backlash is partially fueled by cultural concerns, factors (unskilled
labor in wealthy countries) losing out or not seeing the gains they’re supposed to due to weak labor
rights, and perceptions that rising inequality is caused by globalization, despite evidence pointing to
other causes. Sometimes Globalization is neither inevitable nor irreversible. Opposition to economic
openness is usually more pronounced in the wake of economic crises.

Resource Curse

Ross discusses the resource curse: countries with resource wealth tend to experience poor economic
performance and undemocratic and violent politics. The economic connection depends on where and
when you look. From 1970-1990, the negative relationship was there, while more recent studies find a
smaller relationship. Resource endowments cause growth volatility and is often associated with rising
inequality, but there is also a linkage between them and better child health (varying across regions-
strongest in the Middle East, but weakest in Africa). In sum, economic evidence is mixed. But why don’t
resource-rich countries grow faster? Theories:

 Dutch Disease: the discovery of resources leads to positive wealth shocks, drawing labor and
capital from other parts of the economy and putting upward pressure on prices (inflation,
currency appreciation)
 Wages in the resource sector deter workers and entrepreneurs from participation in other
sectors, meaning less innovation and skill acquisition; this hits hard once prices go low

Ross focuses on the political problems: there is a positive and significant relationship between resource
endowments and the occurrence of civil war. It’s an inverted u-shape relationship, so that the odds of
civil war are lowest at very low and very high levels of resource wealth. This is especially true with
onshore oil, especially when the drilling takes place in poor and ethnic minority areas. There is no
consensus on the causal mechanisms.

Higher levels of resource wealth, oil specifically, also help authoritarian regimes- oddly, this is not true
for other resources. Could it still be part of some general pattern about “unearned income” though?
There is also a link between social and political gender inequality and resource wealth. What are the
mechanisms here? Rentier state? Less pressure for accountability?

Foreign Aid

Wright and Winters write about foreign aid: money or other assistance given to help countries develop
economically or to meet basic needs This covers a variety of programs, some with political goals, others
with economic or normative goals. 70% of foreign aid is bilateral, from developed nations. Only one-
fourth of all aid is directed at long-term poverty reduction and disease control. Developed nations have
a 0.7% GDP goal for foreign aid, but it’s actually closer to 0.3%. America spends 1% of its budget on
foreign aid, but Americans think it’s far, far more.

There’s not much evidence for a link between foreign aid and growth. Wright and Winters point out that
this shouldn’t be surprising, as aid is often just given for political and strategic reasons. Post-1990, more
aid goes to places with good political contestation, but there’s no reward for political inclusion. Aid may
encourage corruption and allow leaders to put off political reform. Alternatively, aid could be linked to
reform by donors. Different types of aid have different effects.

Does foreign aid “work”?

 Optimists: Yes, but we need more. A “big push” could make a big difference. Aid would allow for
poor countries to increase investments and pursue growth.
 Pessimists: No. Increased aid often just replaces domestic government spending, and even then
we can’t trust governments to use aid effectively, or as intended. They may suggest: aid
conditionality; targeted micro-level aid projects (which are also easier to study); and fueling aid
directly to recipients, not governments.

Global Inequality

According to Milanovic, from 1988-2008, the global bottom 5% were the only income group without
real income gains, though those at the 80th percentile also had very little. Developing countries have had
an easier time getting high levels of growth than developed countries, forming a process known as
convergence.

How do we define and conceptualize global inequality? Milanovic proposes three ways:

 Between countries (mean income)

o This inequality rose during globalization
 Within countries (income between citizens, probably weighted by population size)
o This has fallen, sometimes dramatically (but not in every country, ex. USA)
 Worldwide (without regard for borders, requiring PPP conversions)
o This is hard to measure (almost no pre-1980’s data)

As opposed to the 19th century, your location explained more about your wealth than your class did in
the year 2000. Thus, reducing global inequality today would require improving outcomes in poorer
countries, global income redistribution (politically highly unlikely), and migration.

International Institutions II: Electric Boogaloo

In studying governance and equity, we have two questions. The normative question is: to what extent
and in what ways should existing international institutions change? The positive question is: under what
conditions is institutional reform likely? Alternatively, is there a possibility for the creation of new forms
of governance, like new IGOS (ex. Asian Infrastructure Investment Bank) or private sector-based
governance?

Stone focuses on US power within the IMF, formally and informally.

 Informal governance: the US is allowed influence through informal channels when an issue is
important to the US. In return, the US accepts a “lower-than-its-share-of-global-GDP” amount of
formal influence.
 Role of the dollar: the dollar’s status as a global reserve currency creates demand for US
Treasury bonds and dollar-backed assets, giving the United States a unique form of power.

Following the East Asian Financial Crisis of the 1990’s, many criticized the IMF’s one-size-fits-all
conditionality, especially the requirement to liberalize short-term capital flows. This, combined with less
demand for assistance, led to a shift in attitude in the IMF in the 2000’s. They became more flexible, but
there was no radical change. Stone thinks the IMF needs broader influence over global economic
governance.

Bretton Woods II is an informal institutional effort created in response to the late-1990’s Asian financial
crisis. It is meant as an alternative to the IMF, using self-insurance via reserve accumulation (USD,
usually). It is made possible through large current account surpluses via undervalued currencies. The
Chiang Mai initiative is an agreement framework associated with it, in which Asian countries pledge
they will bail one another out. This effort created additional demand for USD assets.

Liao argues that the AIIB represents an East Asian alternative to Bretton Woods due to their perceived
exclusion from it. The main difference is that, unlike IMF, the AIIB can take political considerations into
account, not just pure economics.
 The Environment

There are a number of functional needs for international cooperation on the environment:

 Common pool resources: non-excludable, but rival. Overexploitation occurs as a negative

externality. Ex: fishing.
 Public goods: non-excludable and non-rival, leading to the tragedy of the commons in which
each party with access to the good seeks to take advantage of it as much as they can. Ex: ozone
layer, climate, clean air.

Collective action problems in the environment can be solved with international institutions. There are
already many international environmental agreements: over 1,000 multilateral and 1,300 bilateral. 15-
20 nations account for 75% of carbon dioxide emissions, but no single one accounts for more than 27%.
Tension has formed between developed and developing nations as to what metric to use in
negotiations: total emissions (in which China leads) or emissions per capita (in which the US leads).

Are environmental issues bargaining, cooperation, or both?

The Montreal Protocol (1987) was an international treaty restricting CFC emissions to deal with the
ozone layer, and is generally seen as a significant success. Earlier this Fall, it was revised to also address
HCFC, which were often used as replacement to CFCs. The Kyoto Protocol (1997) asked member
countries to set targets (which varied slightly) to address carbon emissions. It didn’t come into effect
until a certain agreement level was hit, so that it only came into effect after some time; it only covered
targets through 2012, and the targets may not have been strong enough.

Why were we able to take major action on the ozone, but not on climate change? What was the
difference? There was more belief in the science, solutions were lower-cost, the Montreal Protocol was
less ambitious, and there was less domestic political opposition
(Montreal simply enforced a movement already occurring in US
industries), narrow industry was more effective at taking collective
action, and the developed vs. developing country debate was
better handled.

Countries become better at protecting the environment when

they’re rich. Countries often tend to follow a Kuznets Curve-like
trend on matters of pollution.