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UNSC exercise. Brazil, Germany, India, Japan Argentina, Italy, Korea, Pakistan African Union (53 countries) United States China. The “G4” countries the have the most to gain from adding permanent seats to the UNSC. Groups of countries to know for the mid-term:.

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unsc exercise
UNSC exercise
  • Brazil, Germany, India, Japan
  • Argentina, Italy, Korea, Pakistan
  • African Union (53 countries)
  • United States
  • China

The “G4” countries the have the most to gain from adding permanent seats to the UNSC

groups of countries to know for the mid term
Groups of countries to know for the mid-term:
  • “G5” – top shareholders of the IMF/World Bank

United States, Japan, Germany, France, United Kingdom

  • G20

G7 + BRIC + EU + MAKTISAS

  • “G4” – Countries seeking permanent membership on the UNSC

Brazil, Germany, India, Japan

  • P5

United States, France, United Kingdom, Russia, China

  • Swiss bloc
today is really about an analytical tool
Today is really about an analytical tool:
  • The Commitment Problem
  • One version:
    • The Schelling Conjecture:

Tying your hands increases your bargaining leverage

  • Another version:
    • Time-inconsistent preference problems
  • For both versions we need a
    • CREDIBLE constraint or
    • “CREDIBLE COMMITMENT” MECHANISM
slide5
Plan
  • The Schelling Conjecture
  • Weiss’s argument:
    • Japan\'s UNSC seat & domestic politics
  • The Schelling Conjecture reversed?
  • Credible commitments & democratization
  • Ὀδύσσεια
    • The Odyssey
  • Kidnapping
  • Government expropriation
  • Central Banks (The Federal Reserve)
  • Your exam as a credible commitment device
  • Marriage
puzzle
Puzzle

Anti-Japanese protests in China

Sometimes allowed

Sometimes prevented

Why?

typical schelling conjecture
Typical Schelling Conjecture
  • 2 actors negotiating at the international level
    • (e.g., over tariffs)
  • One actor is severely constrained by a domestic legislature
    • (e.g., protectionist legislature)
  • The other actor is a dictator with no constraints
  • Who has the better bargaining position?
a little animation
A little animation

A*

P?

D*

NSQ

L*

SQ

Line represents some generic policy space

A*=“Authoritarian” government’s ideal point

D*=“Democratic” government’s ideal point

SQ=Status quo

P?=A proposal from the authoritarian government, which seems plausible for the democratic government – in the absence of the legislative constraint…

L*=Ideal point of the democracy’s legislature

NSQ=The new status quo – the best deal the authoritarian government can get, given the credible legislative constraint

most have argued
Most have argued…
  • The Schelling Conjecture favors DEMOCRACIES
  • They have the CREDIBLE CONSTRAINT
  • E.g., the LEGISLATURE
  • More generically:
  • AUDIENCE COSTS
weiss turns this around
Weiss turns this around!
  • US announces support for Japan
  • So, audience costs are in place for backing down!
  • China – at first – does not object
  • Then “releases” the protests
  • Now China has a credible constraint
  • And the US backs down!
  • A dictatorship uses audience costs against a democracy
credible commitment
Credible commitment?
  • Always ask this question!
  • Here:
    • China can control when protest STARTS
    • But cannot put the genie back in the bottle
  • If China can stop protests as easily as it can prevent them, then the constraint is not credible
international constraints
International constraints?
  • Look back at CLASS 5 notes, slide 22
  • Internationalconstraints to gain domesticleverage
slide14

How does bringing in the IMF help push through economic reform?

Figure 1: The logic of bringing in the IMF

Payoff to veto player

-1 (change policy)

Accept

Veto player

Without the IMF

Reject

0 (maintain the status quo)

Executive

With the IMF

-1 (change policy) + loan

Accept

Veto player

Reject

-r (reject the IMF)

a pure domestic setting
A pure domestic setting?
  • Boix’s story of democracy
  • Do the poor have a credible commitment not to expropriate/tax the rich?
  • Do the rich have a credible exit threat?
  • All hinges on
    • repression costs
    • income distribution
    • asset specificity
  • Explains political regimes in the Middle East – it’s OIL, not Islam or Arabic culture
slide16
‘‘That minority still controls the police, the army, and the economy. If we lose them, we cannot address the other issues.’’
now onto the 2 nd version

Now onto the 2nd version:

Time-inconsistent

preference problems

the generic problem of time inconsistent preferences
The generic problem of time-inconsistent preferences:

Individual’s preferences over time:

  • Time 1: U(A)>U(B)
  • Time 2: U(B)>U(A)
  • Anticipating the change in preferences, can the individual COMMIT @ Time 1 to choosing State A @ Time 2?
  • Is there a CREDIBLE COMMITMENT?
examples
Examples:
  • Classic: Ulysses & the Sirens
  • Time 1=Before listening to the Sirens.
  • Time 2=While listening to the Sirens.
  • State A=Sailing home…
  • State B=Belly of the beast…

http://traumwerk.stanford.edu/philolog/2009/10/homers_odyssey_in_art_sirens_f.html

American Weekly, Temptaions of Ulysses: Sirens (1948) Pogany – 033

http://www.americanartarchives.com/pogany,w.htm

slide20

Time 1

Time 2

  • Hostages would like to commit to not pressing charges.

Promise

Free

Testify

H

K

H

(T,-10 years)

Not

Kill

Not

(–,1)

(–, 1)

(0,1)

under democracy
Under democracy:
  • Time 1: Voters elect a government that offers incentives to firms to invest.
  • Time 2: Voters elect a government to tax the firm (expropriate the benefits from investment).
  • Solution: Credible property rights?
slide22

Time 1

Time 2

Offer

Invest

Expropriate

G

F

G

(T,0)

Not

Not

Not

(0,0)

(-S,S)

(1,1)

Suppose that T>1>S>0

another common example
Another common example:
  • Principal: Government.
  • Agent: Central bank.
  • If the central bank is not independent of the government, it may be subject to pressures to lower interest rates before elections…leading to inflation and long-run economic problems.
education
Education:
  • Principal=student.
  • Delegates to agent=professor.
  • Time 1: Beginning of the semester.
  • Time 2: Any Thursday night.
  • State A: State of knowledge.
  • State B: State of… (Tombs).
  • Solution: Your agent (me) will give you a bad grade if you do poorly on the exam
    • Credible commitment?
  • REPUTATION!!!
marriage
Marriage:
  • Not needed if there is “true love” or “happily ever after.”
  • Needed because we anticipate the possibility of “Time 2.”
  • Time 2: U(B)>U(A)
  • State A=Together
  • State B=Sirens, Tombs, etc…
  • “Richer,” “health,” & “better” added for symmetry.
  • “Poorer,” “sicker,” “worse” are the kickers.
what did you learn today
What did you learn today?
  • The COMMITMENT problem pervades many political, economic, and other relationships.
  • The analytical tool of CREDIBLE COMMITMENTS can be applied well outside of the study of international relations.
take aways
Take-aways
  • Constraints strengthen negotiation posture
    • (The Schelling Conjecture)
  • Usually interpreted as favoring democracies
  • Weiss turns this around (also see J. Weeks, Cornell)
  • Constraints only work if they’re CREDIBLE
  • Recalls “The Commitment Problem”
  • Credible commitments can solve “time-inconsistent” preference problems
suggested further readings
Suggested further readings
  • Elster, Jon. 1990. Ulysses and the Sirens: Studies in Rationality and Irrationality. New York: Cambridge University Press.
  • Elster, Jon. 2000. Ulysses Unbound. New York: Cambridge University Press.
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