Review INTERNATIONAL ORGANIZATIONS (Course number MSFS 565, Spring 2010) Instructor: James Raymond Vreeland, Professor 2.0JamesRaymondVreeland

Plan Make explicit what has been implicit

One of the course take-aways: Institutions matter… The international arena partly depends on domestic & international institutions. What is an institution? –A set of rules (structures/constraints/mechanisms) that govern the behavior of a given set of actors in a given context. –(An equilibrium)

What international institutions do Cooperation – especially coordinating actors on Pareto superior equilibria in prisoner-dilemma-esque situations Commitment –Hands tying of present government (two level game) – change the payoffs for other veto players –Hands tying of future governments – LOCK-IN! –Hands tying of present governments – signaling resolve to foreign and/or domestic audiences Laundering / Dirty work (A 3 rd -party source of information)

Culture vs Institutions

The Olympics : an international institution dedicated to peace Fahey argues there are 6 conditions for peace : 1.athletic competition 2.intellectual discourse 3.artistic celebrations 4.trade agreements 5.diplomatic recognition 6.international alliances International Olympic Committee (IOC) founded in 1894 The Olympic flag (1914) includes 5 interlaced rings, representing the union of the 5 continents & the meeting of athletes from throughout the world at the Olympic Games Olympic Charter Article 1 Section 1: The goal of the Olympic Movement is to contribute to building a peaceful and better world by educating youth through sport practised in accordance with Olympism and its values

Do some Olympic games privilege certain countries because of a cultural preference for different sports? The Olympic Games program consists of 33 sports, 52 disciplines and nearly 400 events Does culture determine who wins which games? Does culture determine who wins the most gold medals?

Culture My languages : Spanish, French, (Haitian Creole) Places I’ve gone for work (chronological order):

This class: apply GENERAL theories to specific cases The cases names do not matter – the theories are meant to apply generically Bravely risk false generalization – (and sometimes are just plain wrong ) in the pursuit of general statements Statements apply regardless of spatio- temporal location Non-culturalist (weakly culturalist) approach

Goal: Replace proper nouns & dates with the names of variables! Political + Exchange-rate regime Multi-party dictatorships Age of democracy IO membership Military expenditures # of checks and balances Focal point Trade policy Domestic political constraints Political importance (UNSC) Alliance (voting at the UNGA) Economic ties Regional Organization Membership Distribution of global economic power population, GDP/capita, host-country, Soviet/planned country, "history" International Institution (the IMF) CAT membership (Vreeland) ECHR membership (Moravcsik) Democracy (Reiter) Alliance formation (Gilligan & Hunt) Slow, steady success of EU International reserve currency (McNamara) Forum shopping (Busch) International negotiation posture (Weiss) Foreign Aid (Kuziemko & Werker) Foreign Aid (ADB – Kilby) Conditionality (Lipscy) Democracy (Pevehouse) Global governance Olympic medals!

Intercultural Center If you only have a hammer, everything looks like a nail We often rely on cultural lenses –Attribute differences in levels of economic development, political regime, crime rates, gender inequality to… –“culture” This class offers a non-cultural lens –Explain differences across countries & regions to –individual incentives and constraints –shaped by institutions (domestic & international)

Culturalist explanations? Does culture explain? “They are different because of culture” = “They are different because they are different” WHY ARE THEY DIFFERENT?

What does it mean “to explain”?

Nomothetic (law-like) vs. Idiographic (descriptive) approaches Law-like statement: –Whenever & wherever X occurs, X is in a certain relation to Y. Descriptive statement: –Specifies spatio-temporal locations and makes all subsequent propositions relative to these parameters.

EXAMPLES OF THESE KINDS OF STATEMENTS:

Law-like statements: A particle to which no force is applied will move with constant velocity in a straight line. E=mc 2

Descriptive statements: In Africa during the early 1960s, ethnically based parties entered situations of violent conflict. In Chile, 1973, the military staged a coup subverting this Latin American democracy. In the US, 2000, the 2 major presidential candidates, Bush & Gore, offered remarkably similar policy platforms to the electorate.

We can easily apply law-like statements to particular cases… A particle to which no force was applied in Africa during the early 1960s moved in a straight line with constant velocity. In Chile, E equaled mc 2 in True - but redundant - statements.

But some would judge the following “improper” because people don’t behave in a universal fashion the way “particles” do. Poor democracies in which all parties are ethnically-based are unstable. Polarization of the legislature in poor democracies causes regime breakdown. Candidates in a 2-party system will adopt the preferences of the median voter.

We have taken a law-like approach to what international institutions do: Cooperation – especially coordinating actors on Pareto superior equilibria in prisoner-dilemma-esque situations Commitment –Hands tying of present government (two level game) – change the payoffs for other veto players –Hands tying of future governments – LOCK-IN! –Hands tying of present governments – signaling resolve to foreign and/or domestic audiences Laundering / Dirty work (A 3 rd -party source of information)

Alternative (also valuable) approach: History of international organizations Descriptive Less risky Can lead to the view that every outcome is UNIQUE (Aside: not necessarily – see the work of economic historian Barry Eichengreen)

Does culture matter? Sports? What predicts Olympic medal count? –GDP, Communist dictatorship, host country – olympic-medal-count/ olympic-medal-count/ –

But specific sports? United States, China and Gold Medals in soccer??? Not part of our cultures so we’re not good at it?

USA has, arguably, the most successful soccer program in the world 2008: gold 2004: gold 2000: silver 1996: gold World Cup: Germany & US 2 each Really???... WOMEN’S SOCCER! Why? Culture?… or Title IX? 1972: A federal law granting girls and women in high schools and colleges the right to equal opportunity in sports

Title IX in action!

The USA does not value soccer The USA does value women’s/girl’s athletics Institutional explanation for American dominance of women’s soccer Scholarships*** (  health, fun, self-esteem)

Presumably, using public funds to promote sports is intended to produce a healthier, happier, and more psychologically balanced population. How can you achieve these goals if you only invest in the athletics of half of your population? (you can’t) The USA has an institutional solution (Title IX) which is upheld by other institutions (independent judiciary)

Puzzles Which countries do the best in athletics? Which countries do the best in women’s athletics? Which countries have the best health care? Is the answer to these questions “culture”?

Culture is malleable Study the incentives and constraints of actors

Research project What predicts WOMEN’s Olympic medal count?... Check back here in a few years:

Consider another (seemingly unrelated) example…

Germany, the United States & bankruptcy Why is bankruptcy tolerated in the USA but not in Germany? Different cultures? What is the #1 reason for bankruptcy in the USA? MEDICAL BILLS Here the USA is failing to properly invest in the health of its population, and the price is great uncertainty in credit markets!

One more example

UK v. US Similar –Cultural –Foreign policy –Legal traditions Opposite ends of the spectrum on –gasoline tax policy –Addressing climate change

Car culture: gasoline taxes and prices per liter in 31 countries (2004):

Who needs the most gasoline? Urban v Rural

Does “need” translate into policy preference?

Malapportionment tends to weigh RURAL preferences more than URBAN (i.e., Proportional representation tends to weigh URBAN preferences more than RURAL) Does this have an effect on NATIONAL policy?

Kyoto Protocol to the UN Framework Convention on Climate Change Stabilize atmospheric “greenhouse” gas 1997 (enter into force: 2005) 2009: 187 states ratified Commitment to reduce greenhouse gases: –carbon dioxide –Methane –nitrous oxide –sulphur hexafluoride

Ratifiers, signers, and non

Test: Does malapportionment affect: –Gasoline prices –Kyoto ratification

Which came first? Car culture? Malapportionment? Once created, however, car-culture may reinforce malapportionment Car-culture may have other effects: –Crash: –It's the sense of touch.... Any real city, you walk, you know? You brush past people. People bump into you. In L.A., nobody touches you. We're always behind this metal and glass. I think we miss that touch so much that we crash into each other just so we can feel something. Hypothesis: car-culture exacerbates racial/ethnic tension Operationalized: automobiles/capita  inter-ethnic/racial violent crime

Take-home analytical tools from the course Time-inconsistent preference problem / Shadow of the future / Commitment problem Prisoner’s dilemma / Collective action problem / Free rider problem Coordination games Repeated games Principal-agent problem Nash equilibrium Factors & sectors Broad & shallow v. narrow & deep organizations Veto players Two-level games Second image reversed Audience costs Laundering Case studies Defining variables Coefficient / standard error Linear regression Logit Probit Tobit Survival/hazard models Difference-in-difference models Thinking dynamically Non-random selection / endogeneity Instrumental variable Regression Discontinuity Design Extreme bounds analysis 2 triangles…

The Democratic Peace Democracy International OrganizationsInternational Trade Peace War

Free Capital Flow Fixed Exchange RateSovereign Monetary Policy Inconsistent/Unholy Trinity Or “Trilemma”: a country can only have 2 out of 3 of these

One more triangle…

Is this a “Bretton Woods” Moment?

Treaty of Versailles (1919–20): League of Nations Keynes begins discussions on an “international loan” 1918 Stock Market Crash! World War II ( ) United Nations (1945) Bretton Woods: IMF/World Bank (1944) GATT: 1947 Smoot-Hawley (1930)  Beggar-thy-neighbor years from crash to institutional solutions… 1929

Latin American Debt Crisis (1982) 1980 Tequila Crisis (1995) 2008 Financial Crisis “Bretton Woods” moment… 2023?... Or beyond? East Asian Financial Crisis ( ) 2023? Lay out architecture now, so we’re ready when it comes…

Think Big about Global Governance!

Is regionalism our future? Customs Unions: A real sacrifice of sovereignty Common tariff policy with rest of the world

Currency Union: Sacrifice of monetary policy

Baby steps Asia –Asian Development Bank –ASEAN + 3 –Chiang Mai Initiative North America –NAFTA

Flag fun shParsons/flags/ shParsons/flags/

Main take-home from the class: What is it to explain? –to state the conditions under which it always or usually takes place (perhaps probabilistically) The BRIDGE –The BRIDGE between historical observations and general theory is the substitution of variables for proper names and dates

“The assignment is designed to bridge what we learn from academia to the policy world. ” Academics take the bridge out to the general Policy makers go in the other direction

Thank you WE ARE GLOBAL GEORGETOWN!