1. Tools for Analyzing International Affairs Chapter 3

2. 2 Overview We develop three tools enable us to analyze the role of perceptions in international relations decision making Spatial models based on ideas such as the median voter theorem allow us to plot leaders’ policy preferences along a line. This logical continuum allows us to visualize: (1) which option a leader prefers the most and which she prefers least; (2) how close or far apart different leaders’ preference are in relation to one another Win sets allow us to identify possible winning coalitions and policy agreements by highlighting where different leaders’ preferences overlap Expected utilities show how leaders evaluate costs and benefits of alternative courses of action and weight them by their probability. It is possible to predict a decision maker’s course of action by comparing expected utilities

3. 3 Ongoing Example: North Korea’s Nuclear Policy Following the 1950-1953 Korean war, the Democratic People’s Republic of Korea (DPRK, or North Korea) and the Republic of Korea (ROK, or South Korea) have remained at loggerheads During the Cold War North Korea depended on the support of the Soviet Union Doubts about the reliability of Soviet support led North Korea to develop a homegrown nuclear program Development was accelerated after the collapse of the Soviet Union. In 1993 North Korea withdrew from the Treaty on the Non-Proliferation of Nuclear weapons (NPT) The Clinton administration negotiated a non-proliferation deal with North Korea –the 1994 Agreed Framework- promising, in exchange, economic assistance

4. 4 Ongoing Example: North Korea’s Nuclear Policy Congress struck down the deal and North Korea resumed nuclear enrichment efforts, successfully testing a nuclear weapon in 2006 Many see North Korea’s nuclear activities as a threat to peace, as the DPRK maintains a belligerent attitude against the South and sells nuclear technology to other states and terrorist organizations Six-party talks involving North and South Korea, the US, China, Japan, and Russia have been ongoing for several years North Korea prefers bilateral talks with the US, whereas the US prefers a multilateral setting In December 2011, the North Korean dictator Kim Jong-Il passed away and was replaced by his son, Kim Jong-Un

5. 5 Spatial Models Spatial models assume that it is possible locate decision makers’ policy preferences either on a line or in a space with more than one dimension One-dimensional spatial models consider decision making in the context of one of preference on one policy issues at a time They can be used to identify solution to policy questions such as national security and the North Korea problem

6. 6 The Median Voter Theorem (MVT) The median voter theorem is a spatial model that can prove useful in this context It states that the median voter’s position is the winning outcome if 1.Issues are one-dimensional 2.Preferences are single-peaked 3.It takes a majority to win 4.Everyone votes based on their preferences

7. 7 MVT’s Unidimensionality Assumption An issue is unidimensional if the possible ways to resolve it can be displayed on a straight line Each actor’s preferred outcome on that line is called its ideal point We are interested in the relative distance between policy outcomes Imagine we can display the policy outcomes in the North Korean nuclear problem on a line arbitrarily scaled between 0 and 1

8. 8 MVT’s Unidimensionality Assumption Positions closer to 0 reflect opposition to North Korea, while positions closer to 1 reflect more support for the North Korean

9. 9 MVT’s Unidimensionality Assumption We can locate each of the parties’ preferred policies on this unidimensional policy

10. 10 MVT’s Single-Peakedness Assumption Assuming single-peaked preferences means that the farther a policy position is from a stakeholder’s ideal point, the less that stakeholder desires that outcome figure 3.3 slide suivante(remplacer éventuellement Ahmadinejab par King Jong-Un)

12. 12 MVT’s Single-Peakedness Assumption The Y axis represents intensity of preferences The assumption allows us to rule preference orderings in an actor may equally like two or more policy outcomes Because in reality some actors may have multiple-peaked preferences, this assumption must undergo close empirical scrutiny

13. 13 MVT’s Majority Rule Assumption The position that draws a majority of votes from the stakeholders involved wins In the international policy problem, we seldom encounter formal voting and majority rule Majority can be redefined as the majority of power that each of the stakeholders controls Majority rule means that the position accruing the most power from the stakeholders wins

14. 14 MVT’s Majority Rule Assumption On the North Korea nuclear policy issue, the array of the stakeholder’s power based on their ideal points would look like this:

15. 15 Median Voter Theorem Implications Given the previous assumptions, the position preferred by the median voter wins because, in a head-to-head comparison with all other policy positions, it attracts more support than any alternative By the definition of the median, no more than one-half of the voters minus one can be to the left, or to the right, than median voter’s position On the North Korean nuclear proliferation issue, we can see how the stakeholders’ power cumulates, moving from outcome 0 to position 1, and identify the median position in that distribution

16. 16 Median Voter Theorem Implications The median falls around 0.45, approximating the Russian leadership’s preferred position, which involves a nonaggression pact, economic assistance and civilian nuclear energy capacity for the DPRK, in exchange for a UN-monitored dismantlement of its nuclear capabilities

17. 17 Win Sets When the median voter theorem’s assumptions are relaxed, the theorem may not longer apply Policy issues can be two-dimensional Actors will have linked policy preferences on two dimensions They will have to make trade-offs between the costs of conceding on one dimension and the benefits of achieving a more preferred outcome on another dimension Concerning North Korea’s nuclear proliferation, each actor is likely to differ in its preferred mix of economic aid concessions to North Korea and nuclear policy

18. 18 Win S ets We can locate the status quo and each actor’s preferred mix of aid and nuclear policies in a two dimensional space

19. 19 Win Sets This scenario is still amenable to spatial analysis A circular indifference curve can be drawn around each actor’s two-dimensional ideal point Think of this as a ring around a mountain whose summit –the single peak- is a stakeholder’s ideal point Of particular interest is the circular indifference curve that is tangent to the status quo position –Its radius goes from an actor’s two-dimensional ideal point to the status quo The policy combinations inside the circle are referred to as an actor’s preferred-to se t

20. 20 Win Sets For example, Russia’s preferred-to set on North Korea issue looks as follows

21. 21 Win Sets Policy areas resulting from overlapping preferred-to sets which contain a majority of the power (or votes) among the stakeholders and the veto players are known as win sets They include policy outcomes that are potential agreements Overlapping areas that either exclude a veto player or lack a majority support cannot beat the status quo

22. 22 Win Sets The following overlapping areas result in the North Korea’s nuclear proliferation issue

23. 23 Win Sets There are two win sets 1.A petal-shaped area with China in the middle and Russia near its lower edge, which includes all major actor except Japan and covers all possible limited deals 2.A small petal-shaped area with the DPRK on its lower edge which includes all stakeholders and covers all sets of policies that represent a comprehensive deal The solid arrows represent the bounds of the foreign aid- nuclear policy trade-offs of the more cooperative, limited deal win set The dotted arrows represent the bounds of the more stringent comprehensive deal win set –The inclusion of Japan reduces the amount of foreign aid North Korea would receive Win-set analysis shows that with multidimensional issues it is sometimes possible to link issues and break an impasse

24. 24 Expected Utility Faced with a foreign policy decision, decision makers assess the probability of each possible outcome They estimate the expected costs and benefits associated with different courses of action They then multiply the costs and benefits of each alternative course of action by the probability of its corresponding outcome They then sum these quantities across all the possible consequences Finally they compare the expected utility associated with each course of action and choose the one yields the greatest expected net gain

25. Computing Expected Utilities Decision makers do not write down these calculations but as if this is what they do The range of numerical values associated to utilities is not important; it is their relative magnitudes that matter Utilities cannot be compared across decision makers Utility scores tell us how much more a decision maker likes one outcome compared to another 25

26. Computing Expected Utilities It is convenient to attribute a utility of 1 to a stakeholder’s most preferred outcome, and a utility of 0 to its least preferred outcome Assuming linear preferences, an actor’s utility for alternative X compared to her favorite outcome X* is Utility = 1 - (|X* - X|) Be definition probabilities fall between 0 and 1 The sum of all probabilities across of possible outcomes must equal 1 26

27. Computing Expected Utilities Suppose North Korea’s Kim Jong-Un assigns a utility of X to a compromise with the US, and that 0 < U DPRK (X) < 1 on the linear policy space introduced earlier Conversely, the US president’s utility for X will be equal to U US (X) = 1 – X Kim Jong-Un’s alternative involves attacking South Korea, and the war has costs k Kim Jong-Un’s utility for winning the war is 1 – k, whereas losing the war has utility 0 - k 27

28. Combining Probability, Costs and Benefits Imagine Kim Jong-Un attaches probability p to winning the war and 1 – p to losing the war North Korea’s expected utility for a successful war will be EU(DPRK|Attack ROK) = p(1 - k) + (1 – p)(0 – k) Facing the decision to reciprocate a North Korean attack with costs k, the US’s expected utility will be EU(US|Strike) = p(0 – k) + (1 – p)(1 – k) 28

29. Combining Probability, Costs and Benefits For North Korea, the expected utility calculation (from initiating an attack) reduces to p – k For the US, the expected utility reduces to 1 – p – k Each actor compares that expected utility to the value of a compromise (recall, X for North Korea; 1 - X for the US) North Korea prefers compromise if X ≥ p – k The US prefers compromise if 1 – X ≥ 1 – p – k or, rearranging, p + k ≥ X 29

30. Combining Probability, Costs and Benefits Thus, war between the US and North Korean can be avoided if p + k ≥ X ≥ p – k The range of compromise outcomes below p – k (closer to the US favorite position at 0) is unacceptable to North Korean The range of compromise outcomes above p + k (closer to North Korea’s favorite position at 1) is unacceptable to the US 30

31. Combining Probability, Costs and Benefits 31