International relations scholars increasingly debate when and how international institutions influence domestic policy. This examination of ethnic politics in four Baltic and East European countries during the 1990s shows how European institutions shaped domestic policy, and why these institutions sometimes failed. Comparing traditional rational choice mechanisms such as membership conditionality with more socialization-based efforts, I argue that conditionality motivated most behavior changes, but that socialization-based efforts often guided them. Furthermore, using new case studies, statistics, and counterfactual analysis, I find that domestic opposition posed far greater obstacles to socialization-based methods than it did to conditionality: when used alone, socialization-based methods rarely changed behavior; when they did, the domestic opposition was usually low and the effect was only moderate. In contrast, incentive-based methods such as membership conditionality were crucial in changing policy: As domestic opposition grew, membership conditionality was not only increasingly necessary to change behavior, but it was also surprisingly effective.Many panel and seminar participants have offered useful comments on this work, but my thanks goes in particular to Michael Zürn, Alexandra Gheciu, Frank Schimmelfennig, Jeff Checkel, Robert Keohane, Steven Wilkinson, Robert Putnam, Milada Vachudova, and the editors and anonymous reviewers of International Organization. I also thank Princeton University Press for allowing me to use material from my book Ethnic Politics in Europe: The Power of Norms and Incentives. The usual caveats apply. This research was funded by a grant from the Danish Research Academy (former Forskerakademiet), and by travel support from the Weatherhead Center for International Affairs at Harvard.

It is commonly thought that there is a trade-off between the breadth and depth of multilateral institutions—that is, multilaterals that are more inclusive in their memberships will necessarily be shallower in their level of cooperation. Using a multilateral bargaining model with self-seeking rational actors, I show that such a trade-off does not exist for a broad class of multilateral cooperation problems. The conclusion that there is a broader-deeper trade-off follows from the assumption that the members of the multilateral must set their policies at an identical level. The multilateral agreement modeled in this article allows states to set their policies at different levels. Once this change is made, there is no broader-deeper trade-off, a finding that has obvious empirical and policy implications. It explains why some regimes are created with fairly large memberships at the outset, and it calls into question the policy prescription of limiting membership of multilateral institutions to a small group of committed cooperators for the class of cooperation problems modeled in this article.I am indebted to the editor, an anonymous reviewer, Bruce Bueno de Mesquita, William Clark, Eric Dickson, Catherine Hafer, Charles Holt, Marek Kaminski, Dimitri Landa, Antonio Merlo, Robert Powell, Adam Przeworski, Ann Sartori, Shanker Satyanath, Randall Stone, and the participants at seminars at Rutgers and University of California-Berkeley in May and October 2000, respectively, for comments on earlier drafts of this work. I thank Jon Preimesberger for editorial assistance. All errors remain my responsibility.

Do institutions help explain macroeconomic performance? This article addresses two issues. First, especially given the practical implications of the literature, measurement of institutions should avoid tautologies, and therefore this study uses econometrics to estimate the effect of objectively measurable institutions such as labor market organization, financial development, fiscal federalism, and political regime-type. Second, the growing literature on these promising factors, in turn, is unfortunately incommensurable because previous studies fail to control for other institutional and, in some cases, standard economic variables. Given data on up to ninety-four countries from 1961 through 2000, extreme-bound analysis (EBA), an econometric technique that addresses the sensitivity of previous findings to alternative assumptions about model specification, suggests that some institutions associated with the organization of labor and capital are robust correlates of investment. Few data support the view that variables related to the organization of the state, including fiscal federalism and political regime-type, affect macroeconomic performance.Without implication, the author thanks Richard Nelson, Doug Chalmers, Robert Shapiro, Alessandra Casella, Brendan O'Flaherty, Geoffrey Garrett, Alexander Hicks, Brett Hammond, Mark Kesselman, the editor (Lisa Martin), and two anonymous referees for helpful comments. Also, Ross Levine, Peter Rousseau, Geoffrey Garrett, and Torben Iversen were very helpful in locating data. The views expressed in this article do not necessarily reflect those of the Board of Governors of the Federal Reserve System or any member of its staff.

In the past fifteen years, financial regulators from the developed world have attempted to create international regulatory standards in a variety of financial issue areas. Their negotiations are notable for the stark variation in the preferences of regulators toward international regulatory harmonization. Certain regulators actively resist any attempts at regulatory harmonization, while others are vocal in their advocacy for an international agreement. When will regulators seek to harmonize their rules with their foreign counterparts? I propose a principal-agent framework for analyzing regulator behavior that views international harmonization as a means of satisfying domestic political pressures. The framework predicts that regulators are more likely to seek international regulatory harmonization when confidence in the stability of financial institutions is declining, and when competitive pressures are increasing from foreign firms facing less stringent regulations. I explore the consistency of the framework with two important cases in the history of international financial regulation: the negotiations among bank regulators leading up to the 1988 Basel Accord on bank capital adequacy, and the negotiations among securities regulators over capital adequacy for securities firms between 1988 and 1992.I thank Gabe Aguilera, David Bach, Ethan Bueno de Mesquita, Dan Carpenter, Bill Clark, Mark Copelovitch, Jeff Frieden, Dan Gingerich, Dan Ho, Devesh Kapur, Joseph N. R. Sanberg, Ross Schaap, Allan Stam, Matt Stephenson, two anonymous reviewers, and the editors of IO for helpful comments, discussions, and feedback. I am also indebted to the thirty current and former regulators and financial industry executives who participated in interviews to advance this project. Finally, I thank the Weatherhead Center for International Affairs and the Center for European Studies for research funding.

We test how domestic political institutions moderate the effect of leadership turnover on relations between states. Deriving hypotheses from recent theoretical work, Bueno de Mesquita et al. and McGillivray and Smith, we examine how leader change affects trading relations between states using dyadic trade data. Consistent with hypotheses, we find that large winning coalition systems, such as democracies, are relatively immune from the vagaries of leadership change. In such systems, trade remains relatively constant whether leader change occurs or not. In contrast, when winning coalition size is small, as in autocratic states, leadership change profoundly alters relations, causing a decline in trade. Finally, we examine instances of poor relations, measured by a significant decline in trade compared to historical levels. As predicted, instances of poor relations are less common between pairs of democracies than other dyadic pairings. Further, leadership turnover in autocratic systems restores trading relations between states. The effect of leadership change in democracies is much less pronounced.An earlier version of this article was prepared for the 2002 Peace Science Society meeting in Tucson, Arizona. We gratefully acknowledge the financial support of the National Science Foundation, SES-0226926. We thank John Oneal and Bruce Russett for generously making their data available to us. We thank audiences at New York University, the University of Rochester, Yale University, and several anonymous reviewers for their helpful comments.

How can one explain cross-national differences in innovative activity across the industrialized democracies? In this article, I examine the “varieties of capitalism” (VOC) response to this question. VOC theory predicts that societies with liberal-market economies will direct their inventive activity toward radical technological change, while societies with coordinated-market economies will direct their inventive activity toward incremental technological change. I find that these predictions are not supported by the empirical data, and that the evidence offered by VOC proponents depends heavily on the inclusion of a major outlier, the United States, in the class of liberal-market economies. My empirical investigation includes simple patent counts, patents weighted by forward citations, and scholarly publications (both simple counts and citations-weighted). I analyze data covering all of the VOC countries over the course of several decades, little of which reveals the innovative patterns predicted by VOC scholars.For their excellent insights, critiques, and encouragement I gratefully thank Thomas Cusack, Tracy Gabridge, Michael Brewster Hawes, Derek Hill, Daniel K. Johnson, Chappel Lawson, Mark Lewis, Benedicta Marzinotto, Andrew Miller, Michael Piore, Jonathan Rodden, Herman Schwartz, James Snyder, David Soskice, Edward Steinfeld, Scott Stern, Dan Winship, the editors at International Organization, and two anonymous reviewers.