Current Issue

International Organization
Volume 66 Number 3, Summer 2012

Exogenous Shocks, Foreign Aid, and Civil War
Burcu Savun and Daniel C. Tirone

The recent civil war literature suggests that negative economic shocks in low-income countries increase the risk of civil war. Foreign aid can be an effective conflict-prevention tool in times of severe economic conditions. Aid cushions government spending from the downward pressures of economic shocks, providing recipient governments with resources they can use to make rebellion a less attractive option for aggrieved domestic groups. Using Official Development Assistance (ODA) data covering 1990 through 2004, we find that foreign aid appears to be a useful tool for preventing civil wars in the wake of negative economic shocks, and as such aid should be assessed by donors with these conflict-suppressing aspects in mind.

Before Hegemony: Adam Smith, American Independence, and the Origins of the First Era of Globalization
James Ashley Morrison

While extensive scholarship has shown that it is possible to maintain global economic openness after hegemony, economic liberalization is still thought to be unlikely prior to hegemonic ascent. This assumption is based on the conventional narrative that Great Britain “began lowering her trade barriers in the 1820s,” as it began its hegemonic ascent. This article shows that Britain began pursuing an open trading structure in the 1780s—in precisely the multipolar world that hegemonic stability theorists claimed would be least likely to initiate the shift. This change in commercial strategy depended crucially on the intellectual conversion of a key policymaker—the Earl of Shelburne—from mercantilist foreign economic policy to Adam Smith’s revolutionary laissez-faire liberalism. Using the case of “the world’s most important trading state” in the nineteenth century, this article highlights the importance of intellectuals—as well as their ideas—in shaping states’ foreign policy strategies. It also provides further evidence of key individuals’ significance and their decisions at “critical junctures.”

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Embeddedness and Regional Integration: Waiting for Polanyi in a Hayekian Setting
Martin Höpner and Armin Schäfer

This article analyzes the social potential of regional integration processes by using the example of European integration. Recent case law from the European Court of Justice has led some observers to argue that judicial decisions increasingly provide European politics with a “Polanyian” drive. We test this claim by distinguishing three dimensions to European economic and social integration: market-restricting integration, market-enforcing integration, and the creation of a European area of nondiscrimination. We also identify two forms of integration that have different speeds, scopes, and potentials: political integration and judicial integration. The evidence shows that the EU has come closer to Hayek’s vision of “interstate federalism” than is usually warranted because market-enforcing integration and European nondiscrimination policies have asymmetrically profited from “integration through law.” The opportunities for international courts to push ahead market-enforcing integration increase as the participants of regional integration processes become more diverse. In such “Hayekian” constellations, individual rights are increasingly relocated to the central level, at the cost of subordinating the decentralized capacity for solidarity and interpersonal redistribution.

The Illusion of Democratic Credibility
Alexander B. Downes and Todd S. Sechser

Though scholars widely claim that issue linkage—the simultaneous negotiation of multiple issues for joint settlement, can help states conclude international agreements—there exist some notable skeptics. Resolving this debate requires empirical evidence. However, beyond a few case studies, there exists no direct and systematic evidence that issue linkages actually increase the probability of agreement. I address this lack of direct and systematic evidence by combing original data on failed alliance negotiations with data from the Alliance Treaty Obligations and Provisions (ATOP) database. Using matching techniques, I find that, for alliance negotiations between 1860 to 1945, offers of trade linkage did substantially increase the probability of agreement. Besides confirming issue linkage’s ability to help clinch an agreement, this article’s research design and evidence have far-reaching implications for the study of negotiations and alliances. The research design illustrates the value of considering the “dogs that didn’t bark” as it identifies both successful and failed negotiations. The article’s evidence explains the high rate of alliance compliance identified by previous scholars and highlights a need to rethink the alliance formation process.

The Effects of the International Security Environment on National Military Expenditures: A Multicountry Study (Research Note)
William Nordhaus, John R. Oneal, and Bruce Russett

Recent research on the sources of individual attitudes toward trade policy comes to very different conclusions about the role of economic self-interest. The skeptical view suggests that long-standing symbolic predispositions and sociotropic perceptions shape trade policy opinions more than one’s own material well-being. We believe this conclusion is premature for two reasons. First, the practice of using one attitude to predict another raises questions about direction of causation that cannot be answered with the data at hand. This problem is most obvious when questions about the expected impact of trade are used to predict opinions about trade policy. Second, the understanding of self-interest employed in most studies of trade policy attitudes is unrealistically narrow. In reality, the close relationship between individual economic interests and the interests of the groups in which individuals are embedded creates indirect pathways through which one’s position in the economy can shape individual trade policy preferences. We use the data employed by Mansfield and Mutz to support our argument that a more complete account of trade attitude formation is needed and that in such an account economic interests may yet play an important role.

Finding the "Democratic Advantage" in Sovereign Bond Ratings: The Importance of Strong Courts, Property Rights Protection, and the Rule of Law (Research Note)
Glen Biglaiser and Joseph L. Staats

Much scholarship in the political economy literature has investigated the influence of the democratic advantage on sovereign bond ratings by credit rating agencies (CRAs). Missing from earlier work, however, is inquiry into the effects on bond ratings of factors that lower political risk, such as adherence to the rule of law, the presence of a strong and independent judicial system, and protection of property rights. Using panel data for up to thirty-six developing countries from 1996 to 2006, we find that rule of law, strong and independent courts, and protection of property rights have significant positive effects on bond ratings. Policymakers wanting to obtain higher bond ratings and increased revenue from bond sales would do well to heed the message contained in these findings.