A key question in debates over globalization is its effect on the welfare states in particular on welfare “retrenchments”: programmatic retractions of the scope and coverage of social programs. We conceptualize such retrenchments as discrete policy events; and we offer a comprehensive model of their occurrence that integrates domestic economic, political, and institutional factors as well as those related to the global economy. Our analysis of all such retrenchments in Organization for Economic Cooperation and Development (OECD) nations between 1978 and 1994 indicates that the effects of globalization are complex, with trade openness and financial liberalization clearly operating against such retrenchments but outward foreign direct investment perhaps pressuring for them. In addition, we uncover support for a dynamic of “self-limiting immoderation”: economic and demographic pressures for costly welfare expenditures provoke actions to roll back eligibility and benefit rates that link increasing numbers of unemployed and retired persons to increased social spending. In short, the same demographic pressures that gave often been noted to substantially drive welfare spending may trigger welfare cutbacks.Our thanks to A. A. Alderson, Bob Jackman, Lane Kenworthy, Joakim Palme, Duane Swank, John Stephen, and two anonymous reviewers for their helpful comments and discussions, as well as to Kendralin Freedman for her work preparing the final manuscript. All remaining errors are our own. Previous versions of this article were presented at the Annual Meetings of the American Political Science Association and the American Sociological Association. The views expressed herein are those of the authors and do not reflect the opinions of the National Science Foundation or the U.S. government. All data and commands necessary to replicate the analyses presented here are available at our Web site 〈http://polisci.emory.edu/zorn/HZ/index.html〉.

International cooperation can fail even though governments have no distributional conflicts or incentives to free-ride, face no informational or credibility problems, and even agree on the policies that need to be implemented. Germany's refusal to cooperate with the Eurogroup members on the Greek bailout in 2010 until the crisis threatened to derail the entire Eurozone is puzzling in that regard especially because Germany is the main beneficiary of the euro. It was alleged at the time that this was a dilatory tactic designed to postpone a domestically unpopular decision until after crucial regional elections. But why would voters allow themselves to be misled like that? And why did Merkel agree to the bailout before the elections took place? To analyze how citizen preferences affect international cooperation, we develop a game-theoretic model of the four-way interaction between two governments that must coordinate a response to a crisis affecting both countries but who also must face the polls domestically with an electorate that might be uncertain whether a response is necessary. We find that, paradoxically, governments that stand to receive the greatest benefits from international cooperation face the greatest obstacles to implementing the required policies even when voters would want them to. We show how the model can rationalize Merkel's electoral strategy and why her party suffered at the polls when the strategy went off the rails.

The concept of “international politics” which is central to a large sector of political science, indeed its label, is increasingly being called into question. Those processes which can no longer be clearly assigned either to states or—as suggested by the model of “inter-national politics”—to the area between states are gaining in importance in international affairs. Some examples of these processes are the direct horizontal transactions between societal actors of different nation-states, transactions which bypass the institutions of government but strongly affect their margin of maneuver; the various forms of mutual penetration of formally separate entities; and the growing activities of a number of nonstate actors. Many theories which are connected with the model of international politics, above all that of sovereignty but also subordinate constructs such as the doctrine of separation of powers, should likewise be called into question.

“The Rational Design of International Institutions” (special issue of IO, Autumn 2001) makes a significant contribution to the theoretical literature on international institutions. It is important, however, to recognize the limits of both the Rational Design project in its current form and the conclusions that can be drawn from the special issue about the project's usefulness and validity. This article evaluates the project on its own terms, as a rationalist attempt to explain variation in international institutions. I identify three significant sets of limitations: those of the scope of the project, those of the analytical framework, and those of the efforts that are made to evaluate the framework through empirical analysis. Although the first set of limitations is largely a matter of choice, the last two raise questions about how much of an advance the special issue in fact represents. Nevertheless, these shortcomings are not absolute—they can be remedied through further theoretical and empirical research.

Why does a common challenge, such as the oil crisis, elicit different national responses in the international political economy? The domestic structure of the nation-state is a critical intervening variable without which the interrelation between international interdependence and political strategies cannot be understood. The essay justifies this volume's concentration on a few advanced industrial states of the North; from a broader historical perspective it looks briefly at the interaction of international and domestic forces in the shaping of the international political economy; it examines two theories of foreign policy (international approaches and bureaucratic politics) in order to highlight the gap which this volume intends to fill; and it details the theoretical orientation informing the essays which follow.

I use the nuclear proliferation regime to show that dyadic diplomacy is not necessarily incompatible with the building of a multilateral regime; bilateralism is not the opposite of multilateralism, but an efficient component thereof. Although this point will not be new to most students of institutions, no general rationale has so far been offered on the complementarity of bilateral and multilateral diplomacy. Starting from a characterization of proliferation as the result of a large number of prisoner's dilemmas played out between states engaged in local dyadic rivalries, I demonstrate that it is possible for the superpowers to design an optimal mix of threats and bribes in which states with low compliance costs join the regime on the terms of the multilateral treaty alone; states with intermediate compliance costs need additional customized incentives, delivered through bilateral agreements; and states with high compliance costs are not only left out of the regime but also punished for nonparticipation. I draw a few comparative statics that I systematically test on Nuclear Proliferation Treaty (NPT) membership data. I discuss the applicability of the model to the currency, trade, and aid regimes.

Quantitative studies of conflict analyze either civil or interstate war. While there may be observable differences between civil and interstate wars, theories of conflict focus on phenomena—such as information asymmetries, commitment problems, and issue divisibility—that should explain both conflicts within and between states. In analyses of conflict onset, duration, and outcome combining civil and interstate wars, we find most variables have similar effects on both “types” of war. We thus question whether there is any justification for separate study of war types.

A large literature concludes that democracy has ambiguous effects on public policy and that political checks and balances exacerbate crisis. The analysis in this article finds that although democracies are no less likely to experience banking crises, in the event of financial crisis, competitively elected governments intervene more rapidly in insolvent banks and make transfers to them that are between 10 and 20 percent of gross domestic product less than those made by nondemocratic governments. Their countries suffer far smaller growth collapses. However, political checks and balances have no effect on government responses to financial crisis. A simple model offers new explanations for these regime effects. First, for those public policies for which voter information and political credibility are particularly likely to be problematic (financial regulation), electoral accountability matters only when the consequences of failure become large and visible (financial crisis). Second, checks and balances reduce political incentives to seek rents, offsetting the delays they induce in crisis response. The analysis in this article underlines the importance of considering regime effects on political incentives to cater to special interests at the expense of broad social interests, and of avoiding aggregated and subjective measures of democracy that can obscure the identification of regime effects.This article benefited from the generous comments of George Clarke, Robert Cull, and Patrick Honohan, and from those of participants at the 6th International Conference on Finance and Development, Moscow 2005; and in seminars at the University of California, Los Angeles, Universität Basel, and the Inter-American Development Bank.

Analysts have commonly argued that there has been a decline in international coordination of the kinds of policies that governments can use to manage the international payments imbalances that emerge when different governments pursue different macroeconomic policies. The decline typically has been attributed to a posited decline in American hegemony. In contrast, this article argues that international coordination of macroeconomic adjustment policies (trade and capital controls, exchange rate policies, balance-of-payments financing, and monetary and fiscal policies) was at least as extensive for much of the 1980s as it had been in the 1960s. There was, however, a shift away from coordination of balance-of-payments financing and other policies that have limited direct consequences for domestic economic and political conditions and a concurrent shift toward coordination of monetary and fiscal policies that are critically important for domestic politics and economics. This change is best explained as a consequence of changes in the structure of the international economy. Most important, international capital market integration encouraged governments to coordinate monetary and fiscal policies because balance-of-payments financing and exchange rate coordination alone are insufficient to manage the enormous payments imbalances that emerge when capital is able to flow internationally in search of higher interest rates and appreciating currencies.

How does international law affect state behavior? Existing models addressing this issue rest on individual preferences and voter behavior, yet these assumptions are rarely questioned. Do citizens truly react to their governments being taken to court over purported violations? I propose a novel approach to test the premise behind models of international treaty-making, using web-search data. Such data are widely used in epidemiology; in this article I claim that they are also well suited to applications in political economy. Web searches provide a unique proxy for a fundamental political activity that we otherwise have little sense of: information seeking. Information seeking by constituents can be usefully examined as an instance of political mobilization. Applying web-search data to international trade disputes, I provide evidence for the belief that US citizens are concerned about their country being branded a violator of international law, even when they have no direct material stake in the case at hand. This article constitutes a first attempt at utilizing web-search data to test the building blocks of political economy theory.

Central bank independence is associated with restrictive monetary choices that can be deflationary within fixed exchange-rate regimes. Because central banks act to counteract domestic inflation, they put a premium on domestic price stability at the expense of international monetary stability. Evidence from fifteen countries between 1925 and 1938 shows that the more independent central banks took more deflationary policies than were necessary for external adjustment. Central banks in general were more restrictive under left-wing governments than they were under more conservative regimes and often were more restrictive than required for external equilibration. This suggests that policies of independent central banks designed to enhance domestic price stability may force deflationary pressures onto other states in the system and potentially destabilize a fixed exchange-rate regime.

Some prominent scholars and public activists contend that a fundamental change in the nature of world politics can be brought about through efforts to change prevailing culture, norms, and ideas. In this view, behavior in anarchy is what the prevailing culture makes of it, since social reality is, in Alexander Wendt's words, “ideas almost all the way down.” Anthropologists studying the causes of war in pre-industrial anarchies have tested this hypothesis extensively. Their research shows that war behavior cannot be reduced to either material factors or culture alone. Rather, material, institutional, and cultural elements must all be taken into account simultaneously in assessing an anarchical society's propensity for war and in designing strategies to promote change. Models of nested causality or of interaction effects between variables can sometimes capture these causal interrelationships, but they cannot capture nonlinear system effects that often play a prominent role. Patterns found in anthropological research can serve as a heuristic for understanding the democratic peace and processes of contemporary international cultural change.

The United States resisted restrictionist immigration legislation in the late twentieth century, providing an anomaly for those who would expect restrictionism in times of economic recession. According to some expectations, labor unions would be part of a coalition that in such times would restrict migration to reduce job competition. This reasoning draws on a state-centric approach and assumes that effective barriers to entrance exist. If one alternatively assumes that states cannot fully regulate the socioeconomic forces driving migration flows, then one may expect labor unions to abandon their supposed preference for restrictionism and instead organize immigrant workers. In that case, unions would prefer migration law that accommodates the transnational migrants' interests. The data provide some support for this argument. The perspective of complex interdependence, which emphasizes transnational relations and the blurring of foreign and domestic politics, can enhance understanding of immigration policymaking.

In response to President Trump instigating conflict over trade with China, the Chinese government countered by issuing tariffs on thousands of products worth over USD 110 billion in US exports. We explore whether China's tariffs reflected a strategy to apply counterpressure by hurting political support for the president's party. We also assess the strategy's impact on the 2018 midterm elections and examine the mechanism underlying the resulting electoral shift. We find strong evidence that Chinese tariffs systematically targeted US goods that had production concentrated in Republican-supporting counties, particularly when located in closely contested Congressional districts. This apparent strategy was successful: targeted areas were more likely to turn against Republican candidates. Using data on campaign communications, local search patterns online, and an original national survey, we find evidence that voters residing in areas affected by the tariffs were more likely to learn about the trade war, recognize its adverse impact, and assign the Republicans responsibility for the escalating dispute. These findings demonstrate how domestic political institutions can be a source of vulnerability in interstate disputes.

Since 1989, twenty-five countries have adopted a monetary policy rule known as inflation targeting (IT), in which the central bank commits to using monetary policy solely for the purpose of meeting a publicly announced numerical inflation target within a particular time frame. In contrast, many other countries continue to conduct monetary policy without a transparent nominal anchor. The emergence of IT has been almost completely ignored by political scientists, who instead have focused exclusively on central bank independence and fixed exchange rates as strategies for maintaining price stability. We construct a simple model that demonstrates that countries are more likely to adopt IT when there is a conformity of preferences for low-inflation monetary policy between the government and the central bank. More specifically, the combination of a right-leaning government and a central bank without bank regulatory authority is likely to be associated with the adoption of IT. Results from a spatial autoregressive probit model estimated on a time-series cross-sectional data set of seventy-eight countries between 1987 and 2003 provide strong statistical support for our argument. The model controls for international diffusion from neighboring countries by accounting for spatial dependence in the dependent variable, but our results indicate that domestic interests and institutions—rather than the influence of neighboring countries—drive the adoption of IT.We thank David Bearce, Bill Bernhard, Cristina Bodea, Lawrence Broz, Bill Clark, Nate Jensen, Phil Keefer, David Leblang, Eric Reinhardt, Shanker Satyanath, Jerome Vandenbussche, Robert Walker, Tom Willett, and the editors and anonymous reviewers for helpful comments and suggestions. We also thank Sergio Bejar and Jon Bischof for research assistance. Earlier versions of this article were presented at the first annual International Political Economy Society meeting, the 11th annual conference of the International Society for New Institutional Economics, and the 2007 annual meeting of the Midwest Political Science Association; we thank the conference participants for their feedback and suggestions. Mukherjee thanks the Niehaus Center for Globalization and Governance at Princeton University for research support.

When and under what conditions is an existing international institution most likely to be replaced by a new one? Conventional international relations theories offer only partial insights into this question and seldom address it directly. But replacement occurs in a variety of important international contexts. For example, the United Nations replaced the League of Nations, the WTO replaced the GATT, and most recently, the Ottawa Convention banning landmines replaced Protocol II of the Convention on Certain Conventional Weapons (CCW). I argue that the concept of legitimacy, commonly defined as “the belief that an institution ought to be obeyed,” and careful attention to the development of the existing institution are necessary to understand replacement. After developing a theoretical framework to conceptualize the relationship between legitimacy and replacement, this article traces the origins and development of the largely overlooked institutional predecessor to the Ottawa Convention: the CCW. It then shows how ideational change, driven by transnational efforts to delegitimate the CCW, paved the way for a shift in discourse from control to disarmament that made the creation of a new institution possible. The article concludes by seeking to generalize from the CCW experience through a preliminary discussion of other ways and cases in which legitimacy might affect institutional replacement and persistence.

Since the Second World War complex and changing sets of norms and rules have governed trade relations among most countries. They have largely originated from a unique and accidental international organization, the General Agreement on Tariffs and Trade (GATT). We have labeled these norms, rules, and decision-making mechanisms the GATT regime or global trade barriers regime. The importance that GATT members have attached to certain norms has shaped the regime's procedural mechanisms, rules, and implementation of rules. Classifying those norms as sovereignty or interdependence norms, we posit that the strength or autonomy of the regime can be established by analyzing the prominence of the interdependence norms in the issue area. We close by exploring some of the functions of the regime in international trade and political relations.

The dominant approaches to the study of capital account liberalization have highlighted institutional barriers to reform and have also demonstrated an important role for interdependence, or the diffusion of a policy innovation from one country to another, as a causal force. Our approach contrasts with the institutional approach and seeks to clarify the political mechanisms of international policy diffusion. Specifically, we develop and test hypotheses that posit that structural economic legacies of the pre–reform era both condition the way in which international diffusion operates, and create the societal and economic interests that help produce varying capital account policy outcomes in the domestic political sphere. Analysis of capital account liberalization strategies in post–debt-crisis Latin America (1983–2007) reveals that capital account opening and the channels through which this innovation diffuses are conditioned by the legacy of a country's pre–debt crisis economic development model. Specifically, the degree to which advanced import-substituting industrialization was pursued prior to the reform era affects capital account policy by shaping both the relevant international peer groups through which policy models diffuse, and the sorts of domestic interests that are likely to influence the liberalization process. International diffusion also varies in its impact depending on domestic political and economic conditions.