International Politics Week 6: Domestic politics and foreign policy

1. International Politics Week 6:Domestic politics and foreign policy Instructor: James Raymond Vreeland, Professor 2.0

3. Introduction • A Theory of Presidential Power and US Foreign Policy • Interest Groups and American Foreign Policy Instruments • Budget Politics and Roll Call Voting on US Foreign Policy • The Design and Control of US Foreign Policy Agencies • Presidential Power and Substitution in American Public Opinion • A Case Study of Policy Instrument Politics and Substitution • Conclusions

4. First: A couple slides from last class Skill-building time!!!

6. More meaningful…

7. Interests, Ideology, Information

8. Where do “interests” come from?Recall the H-O and R-V models on p43

9. Factor incomes & class conflict • Simplest version: • labor v. capital • (workers v. owners of capital) • Countries have a comparative advantage in producing goods requiring their ABUNDANT FACTOR • There are • capital-abundant countries & • labor abundant countries Vs.

10. In the factor model, trade causes… • Income of the ABUNDANT factor to RISE • Income of the SCARCE factor to FALL

11. Take-away: Abundant factors win from globalization (intuition: supply & demand) In a closed economy (autarky), Papa Smurf is in high demand. And he has a lot of cheap labor. WINNERS FROM TRADE! LOSERS FROM TRADE! But imagine there’s another country out there with lots of “Papas” and only one regular smurf. If these two countries countries trade, the supply of Papa-goods (for the 1st country) goes way up (and the price way down) Meantime (still for the 1st country), the demand for regular smurf-goods (worldwide) goes way up – and so does their price.

12. Labor abundant country • Absent trade • “Capital” is relatively scarce in a country like China, so the “rent” can be enormous • Labor is cheap, so wages are low • By opening up to trade • Capital “rents” will fall until they equal the (rising) rate of return in trading partner countries • Wages will rise until they equal the (falling) wage in trading partner countries

13. Capital abundant country • Absent trade • Capital is abundant, so returns are low • Labor is relatively scarce in a country like Switzerland, so wages can be enormous • By opening up to trade • Return to capital will rise until it equals the (dropping) rate in trading partner countries • Wages will drop until they equal the (rising) wage in trading partner countries

14. Stolper-Samuelson Theorem • Factor-price equalization • The tendency for trade to cause factor prices to converge • The scarce factor is a LOSER!

15. Are the doors big enough in the factor model?

16. Factor mobility • =The ease with which labor and capital can move from one industry to another • We have implicitly assumed that capital and labor are highly MOBILE • All capital is the same • (computers, car factories, etc…) • All labor is the same • (shoe-makers, furniture-makers, steel-workers, etc…) • But what if factors are highly SPECIFIC?

17. Sector model

18. Sector Incomes & Industry Conflict • It’s really about computers, shoes, … your INDUSTRY or “sector” • Suppose “Factor Mobility” is low • Incomes of labor AND capital in the same SECTOR (industry) rise and fall together • Now, we do not completely abandon the factor model: • We still use the factor model to tell us which INDUSTRIES (or SECTORS) benefit from trade, however,… • LABOR & CAPITAL EMPLOYED IN INDUSTRIES THAT RELY INTENSIVELY ON SOCIETY’S ABUNDANT FACTOR **BOTH** GAIN FROM TRADE

19. Advanced industrial countries • Capital abundant, so… • Capital AND labor employed in capital-intensive industries both gainfrom trade • The export-oriented SECTOR • Capital AND labor employed in labor-intensive industries both losefrom trade • The import-competing SECTOR

20. Developing countries • Labor abundant, so… • Capital AND labor employed in _______-intensive industries both gainfrom trade • The export-oriented SECTOR • Capital AND labor employed in _______- intensive industries both losefrom trade • The import-competing SECTOR

21. Ongoing research by Princeton PhD students • Bryan Schonfeld: “Trading Places, Trading Platforms: Skill-Sorting And Party Positioning On Protectionism” • Meir Alkon: Following the 2008 GFC, “[t]he Chinese regime used declining exports as part of a geographical reallocation of government investment, away from regions more negatively impacted by the crisis.”

22. Where does “ideology” come from?

23. Information? • President enjoys informational asymmetry • Unless interest groups mobilize to inform Congress • Collective action problem • solved when benefits/costs are concentrated • i.e., when distributive (“interests”) consequences high

24. Predictions of Presidential Strength

25. FP Tools & Presidential Power Sanctions Immigration Geopolitical Aid Trade Military Deployment Economic Aid Domestic Military Spending

27. Empirical Chapters • Interest Group Testimony and Lobbying in Congress • Budget politics between President and Congress and Roll Call voting • Presidential versus Congressional control over foreign policy bureaucracies • Public opinion • Case study on SSA

28. Congressional Testimony Results

30. Presidential Power & Issue Areas President’s position coded 1 if the president was of the legislator’s same party and the president supported a policy in favor of international engagement (p142)

31. Ideological Divisions & Issue Areas District ideology measured using the percentage of the previous two-party presidential vote that went to the Republican candidate (p143)

32. Bureaucracies & Presidential Control Index of control of bureaucratic agencies, four dimensions: 1. Headed by an administrator or commission? 2. Partisan balance regulation? 3. Can the president remove the head any time or fixed terms? 4. Is agency located in cabinet or executive office?

35. CT: Kenya, Ethiopia, Eritrea CT: Djibouti CT: Yemen AGOA cleared AGOA announced ACOTA launched AFRICOM operational PPD-25 Camp Lemonnier AIDS: threat AFRICOM announced US strikes Sudan ACRI launched Global Fund PMI announced PEPFAR Aid cuts Debt relief USAID offices Seeds of Hope AGOA II AGOA III AGOA IV Policies MCA announced MCA launched 1992 1996 1998 2000 2002 2004 2006 2008 1994 UNISOM II Midterm Elections US Embassy Bombings 9/11 Rwandan Genocide UNAMSIL Niger-Iraq Uranium Story Events Aid Defense Trade Eritrea-Ethiopia War Report: Africa’s Strategic Importance

36. Choice of foreign policy tool depends on the degree of (1) distributive consequences and (2) ideological divisions. • When these consequences are high, interest groups mobilize to inform Congress, so the President does not have an informational advantage. • This logic steers the President away from tools of Economic Aid, Trade, and Domestic Military Spending (and Immigration) • It steers the President towards Military Deployment, Geopolitical Aid, Sanctions • Evidence: • Interest groups lobby Congress more in high-distributive policy areas • The President influences Congressional votes more when distributive politics and ideological divisions are low • Presidential control of US Foreign Policy Agencies is highest where distributive politics are low • Public Opinion reflects the President’s advantage when distributive politics and ideological divisions are low • The case of Africa shows how two very different presidencies followed similar patterns in turning to military engagement over trade and aid

37. Thank you