Outline for 9/17: More Optimism about International Affairs 1.More on Free Trade: International Trade as a Harmony Game. 2. Cooperation is possible in an Iterated Prisoner’s Dilemma. 3. The Democratic Peace

DatesTopical CoverageAssigned Reading 8/27Introduction 8/29Basic Concepts and Historical TrendsG&P, chap. 1 9/3, 9/5A Pessimistic Take on International AffairsG&P, chap. 2 9/10, 9/17An Optimistic Take on International AffairsG&P, chap. 3 9/19, 9/24Other PerspectivesG&P, chap. 4 9/26International ConflictG&P, chap. 5 10/1, 10/3Military ForceG&P, chap. 6 10/81 st Exam (covering G&P 1-5 only) 10/10, 10/15International LawG&P, chap. 7 10/17, 10/22, 10/24International Trade/InvestmentG&P, chap. 8 10/29, 10/31International MoneyG&P, chap. 9 11/5, 11/7International IntegrationG&P, chap /122 nd Exam (covering G&P 6-9 only) 11/14, 11/19Environment and PopulationG&P, chap /21, 12/3North-South GapG&P, chap /5, 12/10International DevelopmentG&P, chap /12The Future of International AffairsG&P, chap /17 (T 4:30-5:45pm)3 rd Exam (covering G&P only)

More on Free Trade Even if others don’t cooperate, a country does better by opening its domestic market. Why? An open domestic market lowers prices, which is good for all consumers. The benefits of free trade get even larger if other countries reciprocate Certain domestic producers benefit from more sales and greater profits. Governments also benefit from increased tax revenue. All citizens benefit from greater public goods without increased taxes.

For mercantilists, the international trade game was a Prisoner’s Dilemma. ( 3, 3 )( 1, 4 ) ( 4, 1 )( 2, 2 ) China C-open D-close C-open USA D-close But for a free trade advocate, the trade game might not be a Prisoner’s Dilemma How would you rank CC, CD, DC, and DD from the perspective of free trade theory?

The International Trade Game as Harmony Free trade ranking: CC > CD > DC > DD ( 4, 4 )( 3, 2 ) ( 2, 3 )( 1, 1 ) China C-open D-close C-open USA D-close What is the solution to this math problem? If we think that China is currently closing its market with an undervalued exchange rate, while the USA keeps theirs open, then what does this game predict will happen?

Even the Prisoner’s Dilemma (PD) can be cooperative when the game is iterated ( 3, 3 )( 1, 4 ) ( 4, 1 )( 2, 2 ) If the game is only played once, then it’s rational to play D, leading to DD outcomes. But if the game is played repeatedly, then CC becomes a more likely outcome. Why might this be the case? 2 C D C 1 D

Iterated Prisoner’s Dilemma Tournaments Valid if you believe that many interactions in IA have a PD-like structure. Multiple players in a iterated round-robin tournament, playing for points (or dollars). Most points/dollars win. ( $1, $1 )( $5, $0 ) ( $0, $5 )( $3, $3 ) ( 2, 2 )( 4, 1 ) ( 1, 4 )( 3, 3 ) same game as $5 > $3 > $1 > $0 4 > 3 > 2 > 1 If you played in an iterated round-robin PD tournament, what kind of strategy would you choose in order to score the most points?

Tit for Tat First play C, then play back whatever the other player does to you Often wins iterated round-robin PD tournaments Why? 1. nice, starts with C 2. unexploitable, will play D if other player plays D 3. forgiving, possible to get back to C even after D is played Other less successful strategies “All Cs” – nice but exploitable “Mean Tit for Tat” – unexploitable, but not nice “Grim Trigger” – nice and unexploitable, but unforgiving “All Ds” - unexploitable, but not nice and unforgiving

Democratic Peace Called a “liberal” theory, what does this mean? Characteristics of a democracy – Right to vote Competitive elections Checks and balances Protection of civil and human rights Free press Civilian control of the military Democratic Peace theory seeks to explain 3 stylized facts 1.Democracies don’t fight other democracies 2.Democracies do fight autocracies (non-democracies) 3.Autocracies do fight other autocracies Can you think of any exceptions? Why do you think there might be a “democratic peace”?

Primary explanations for the Democratic Peace 1.Institutional explanation: democratic system with checks and balances and the need to maintain support from citizens makes it hard for the chief executive to declare war. 2.Normative explanation: democracies have norms of peaceful conflict resolution leading them to negotiate before they try to fight. 3.Common interest explanation: democracies have no need to fight with other democracies because they all have similar interests. Which of these explanations do you find to be the most persuasive and why? Can you think of any other explanations for the democratic peace?

Policy Implications related to the Democratic Peace If all the countries in the world were democratic, then there would be no war US government has democratic promotion as an important policy goal, especially in the post-Cold War era more foreign aid to democratizers one of the reasons given by Clinton Admin for letting China into the WTO also one of the reasons given by the Bush Jr. Admin for invading Iraq