Political economy and trade

International political economy is an important and highly relevant subfield within the study of international politics. It emphasizes that domestic politics and economics have vital roles in shaping a state’s foreign policy, and several IR theorists choose to discuss states' international behavior in terms of political economy and trade. Two theorists in particular, Ronald Rogowski and John A.C. Conybeare, will be discussed below.

When taking an economic perspective, international trade behavior is traced to domestic political coalitions and vice versa in order to predict why states are free trade oriented (cooperative and in pursuit of absolute gains) or protectionist (free-riding and in pursuit of relative gains). Exogenously introduced rules or changes to the terms of trade between states affect actor preferences in predictable patterns that Rogowski and Conybeare depict graphically or through scenario building and game theoretic models.

Rogowski describes how domestic coalitions form and influence the trade policy of a state based on the scarcity or abundance of land, labor, and capital. He hypothesizes that class-based or urban/rural cleavages result from unequal distributions of these factors, and governments must act as entrepreneurs to strike a balance between the opposing forces on each side of the cleavage. Different state behaviors (namely, government policies regarding free trade or protectionism) result as governments attempt to maintain their domestic support and legitimacy.

Conflicts of domestic economic interests must be overcome in order to foster free trade, which is purported by economists to be the best path to national economic growth. However, achieving a policy of free trade obviously represents a problem of cooperation and collective action among domestic self-interested parties, an environment and dilemma extremely similar to the problems of anarchy and self help hypothesized by IR theory!

In his book, Trade Wars, John A.C. Conybeare produces a variety of graphical representations for the dilemmas of international trade. He sees trade not as a collective good, but as a "club good" that can be exclusive in nature. In turn, Conybeare depicts the interactions between states during trade as game-theoretic models where iterated games can demonstrate the probability of progress towards free trade. Because Conybeare believes that trade relationships are inherently unstable, he uses the Prisoner’s Dilemma, Stag Hunt, and Chicken in his models.

Conybeare concludes that states are income maximizers and that large states are able to use "optimal tariffs" to victimize small states. His models for economic behavior, as well as the arguments of Rogowski, take their form from IR theory and its insights into state behavior, but they also serve to create a fuller explanation of state behavior that is more useful for theorists and practitioners alike.

Hegemonic stability theory

This post will discuss two prominent IR theorists' models for the concept of hegemonic stability.

Duncan Snidal and Robert Gilpin see system hegemons as the only actors capable of providing system stability and collective security in the midst of the anarchic, self-help environment of the international system. System stability and collective security are "public goods" in that they are shared jointly and nonexclusively, and free-riding can occur when states enjoy them without contributing any of their own resources in providing them.

Both Snidal and Gilpin agree that hegemons bear a disproportionate cost in the provision of system stability and collective security. Because a hegemon has an obvious interest in maintaining the status quo, it will be willing to expend resources to do so even if other states in the system free-ride on these public goods. However, this arrangement will eventually lead to the decline and inevitable fall of the hegemon.

Snidal argues that the loss of a hegemon does not necessarily mean the end of stability and security in the international system. Initially, a hegemon is able to bear the cost of providing public goods because it receives a net benefit. As a hegemon declines, its net benefit diminishes and its capability to contribute to public goods is also reduced. The point at which there is no longer a net benefit for the hegemon should be where system stability collapses.

However, Snidal suggests that free-riding states will prefer to cease their free-riding behavior and begin contributing to the provision of the public goods, bearing some of their costs. Faced with a choice, these states will accept a reduced net benefit rather than lose it completely.

Gilpin's model for the role of the hegemon in the international system is developed in his book, War and Change in World Politics. Gilpin sees in history an apparent pattern of episodic hegemonic war, and he models a transformation process from the equilibrium of hegemonic stability to disequilibrium and then back again.

In between the system-transforming conflicts of hegemonic war, peace and stability are provided by the hegemon. Gilpin rejects the arguments of regime theorists such as Robert Keohane who suggest that regimes can manage stability and security in the international system 'after hegemony.' Once a hegemon has lost its position of advantage over all other states, war results.

During Gilpin's equilibrium of hegemonic stability, other states make relative gains until power and state capabilities have been redistributed to the extent that either negotiation or war must occur. When a state sees that the benefits of changing the system outweigh the costs of initiating such a change, war breaks out and continues so long as its marginal benefit continues to outweigh its marginal cost. After the systemic resolution of hegemonic war, a new equilibrium is created.

These models do an excellent job of explaining how and why periods of hegemonic stability arise and yet are so short-lived. A hegemon might be able to 'rig the rules' of the system so that it receives a disproportionate benefit from the public goods that it provides, extending its advantage and entrenching its position; However, no state has ever been able to maintain a position of system dominance forever. At the same time, Snidal's suggestion that cooperation becomes more likely amidst a declining hegemon makes Gilpin's model seem the more realistic of the two. Snidal has an apparent bias towards stability, while Gilpin's preference for stability is only mildly normative and does not reduce the dynamic nature and explanatory power of his model.

Systems theory

In an attempt to create a broad and comprehensive theoretical approach that transcends any of the complications involved in the level of analysis problem of international relations studies, systems theory describes an international dynamic that captures both subsystem and system-level influences. Systems theory presents a self-contained analytic model of inputs, outputs, and a feedback loop that outlines "constituents" of stability and instability, and it discusses how international systems (successfully or unsuccessfully) manage the problem of change.

Systems theorists are concerned with studying and explaining equilibrium and disequilibrium in international systems. What factors contribute to stability or instability? What system-level controls maintain the status quo? What is the impact of the subsystem on the system and vise versa? How great is the capacity of an international system to cope with disturbances and threats to its status quo?

Richard Rosecrance develops a five-component model for international systems and change in his book Action and Reaction in World Politics. He uses three domestic (subsystemic) variables that lead to a status quo or revisionist stance on the part of states, and defines two system-level capacities for dealing with the disturbances that revisionist-minded states create. The dependent variable in Rosecrance's model is the "pattern of international outcomes," namely the polarity of the system and the nature of competition between states in the system.

Rosecrance's three subsystemic variables are the direction, resources, and control held by state leaders or state elites. Depending on the attitude of these leaders, their fungible resources, and their ability to use them while retaining domestic support or legitimacy, a state will support the current international system or attempt to change it. For its part, an international system itself has regulators such as alliance blocs, regimes, or international institutions as well as an environment characterized as scarcity or abundance that can absorb or deflect state attempts to disrupt the system's equilibrium.

Systems theory has the distinct advantage of being a broad and holistic theory. However, unlike structural neorealism, it is not an extreme abstraction but rather incorporates domestic details and thus completely transcends level of analysis complications.

In spite of this advantage, systems theory has one very important weakness: it remains useful only for retrospective analyses, for there is no way to predict when a particular international system (like the current one) will reach its tipping point and be transformed by change. In addition, Rosecrance's work has itself been criticized for the eccentric history that he uses in the empirical cases depicted in Action and Reaction in World Politics.

Systems theory makes important advances in showing the interaction between domestic environments and the international system, even if its models remain for the most part unidirectional and unable to make predictions about state behavior and system change. By "opening up the state,” Rosecrance creates a diversity and heterogeneity that now must be dealt with in theory construction but adds great insight for articulating and explaining the dynamics of international political systems.

No more Picasa, so here's a photo!

Kudos to Blogger for getting rid of Picasa as the middle-man software for posting photos! It was SO much easier to post this photo compared to what I had to go through to get the one uploaded for my user profile.

Anyway, the DC trip was one full day of driving followed by two full days of walking followed by another full day of driving. The only respite was when riding the Metro, sitting down for a meal, or collapsing in the hotel room. Still managed to enjoy it though.

One week off

Not that anyone is reading this blog or posting comments (except for that one that you did, Diane. . or was it Roger?) and therefore will notice, but I am taking one week off from my weekly posts to make an excursion to Washington DC.

So for those of you eagerly awaiting the posting on systems theory (all none of you), I'm afraid that you will have to wait one more week.

Level of analysis

The next topic that I would like to discuss is systems theory, but first I think that I should briefly cover the "level-of-analysis problem" that systems theory attempts to transcend.

Level-of-analysis is a choice that an IR scholar must make when attempting to explain state behavior. One of the early and most definitive studies on level-of-analysis options, Kenneth Waltz's Man, the State, and War, posited three possible "images" that could be used to explain - in the case of Waltz's particular study - the sources of war (the universal nature of man, the particular make-up of a state, or the basic properties of the international system). However, only Waltz's second and third images comprise the basic options that current IR scholars select from when formulating their studies: the sub-systemic or the systemic.

To choose the sub-systemic level-of-analysis (the trees) is to suggest that a particular state's form of government, institutions, leaders, etc. play the predominant role in determining its behavior. For example, this approach suggests that a democracy and a dictatorship will behave differently under similar international conditions, therefore an extensive compilation of domestic factors must be included in one's analyses.

To choose the systemic level-of-analysis (the forest) is to suggest that system-level characteristics, such as anarchy and polarity, determine state behavior regardless of that state's domestic make-up. This argument takes its most extreme form in Waltz's homogeneity of states proposition.

Scholars' level-of-analysis choices have important and substantial consequences for their assumptions, definitions, methodology, and epistemology. Although this decision might be made on grounds of conceptual or methodological convenience, it should also take into account each approach's utility, for each option has inherent advantages and disadvantages based on their chosen emphases. In addition, attempts to combine data from differing levels-of-analysis studies are likely to result in the violation of scholars' assumptions or methodology.

While system theory attempts to transcend this dilemma by capturing both international and domestic influences into a system-level dynamic and world-view, Wolfram Hanrieder's "compatibility and consensus" model also does an excellent job of rationalizing the apparent dilemma between these two levels-of-analysis. Hanrieder describes a state's foreign policy/behavior as the union of what is feasible based on the make-up of international system and what is acceptable to the domestic polity. As such, compatibility and consensus are two types of constraints, one international and one domestic, that policy-makers must accommodate in crafting their policy. This perspective posits an "interpenetrated state" that is unlike the unitary actor (a.k.a. "billiard ball) approach to states that tradition IR theory utilizes.

While Hanrieder and system theory (which will be described in the next posting) make some progress towards resolving the level-of-analysis problem, this choice remains an important methodological one that IR scholars must remain sensitive to.