PRINCIPLES OF INTERNATIONAL POLITICS

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1 '' ' IIIII mil mil urn A PRINCIPLES OF INTERNATIONAL POLITICS PEOPLE'S POWER, PREFERENCES, AND PERCEPTIONS SECOND EDITION Bruce Bueno de Mesquita New York University and Hoover Institution at Stanford University f CQPRESS A Division of Congressional Quarterly Inc. Washington, D.C.

2 CONTENTS Tables, Figures, and Maps xiii Preface xvi Introduction: Foundations of International Politics 1 Governing Principles 2 Organizational Features of this Book 5 The Core Concerns of International Relations 7 The Link between Domestic Politics and International Politics! Is the State the Central Actor? 12 Solving International Relations Puzzles 13 Power, Preferences, and Perceptions: The Three Pillars of International Relations 15 Self-interest: The Decisive Motivation for Action 16 Summary 20 Suggested Reading Modern Political History Economic and International Politics 22 The Fourteen Hundreds 24 The Fifteen Hundreds 27 The Sixteen Hundreds 29 The Seventeen Hundreds 33 The Eighteen Hundreds 36 The Twentieth Century Evaluating Arguments about International Politics 51 Theories as Simplifications of Reality 51 What Is a Theory? 53 Constructing Theories 54 Judging Theories 55 The Importance of Logical Consistency 56 Truth and Falsity in Assumptions 58 The First Principle of Wing-Walking 61 The Case Study Method and Testing Theories 67

3 VII CONTENTS A Standard for Comparing Theories 71 Why Do We Need Theories? 72 Guidelines for Evaluating Arguments and Evidence: The Scientific Method 76 When a Theories Is Wrong 78 Scientific Theories Must Be Falsifiable 80 Summary Christopher Columbus and International Relations 82 Columbus's Proposal, or Ferdinand and Isabella's Ambition 83 Factors That Shape Foreign Policy Choices 84 Probability of Success or Failure 84 Policy Costs and Political Costs 85 Expected Utility of a Policy Compared with Alternative Policies 86 Discovering America: An Evaluation of Political Economy and National Security 87 The Offer to Portugal 88 The Offer to Spain 89 Lessons Suggested by Columbus's Experience 92 The Right Policy for One Leader May Be Wrong for Another 93 The Importance of Context 94 Tools and Solutions: An Illustration of the Use of Decision Theory in the Study of International Relations 97 Spain's Expected Utility 98 Portugal's Expected Utility 103 Game Theory, or Why People Sometimes Choose What They Do Not Like Best 104 Summary International Politics from a Structural Perspective 114 Evaluating Alternative Principles 114 Defining the Puzzles of Cooperation and Conflict 116 Examples of International Cooperation 116 Examples of Conflict and Competition 118 Structural Perspectives 121 Neorealism 122 Some Limitations of Neorealism 128 Liberal Theories 131 Liberal Theories and the Promotion of Cooperation 136 Marxism 147 Summary International Politics from Group and Decision-Making Perspectives 152 The Bureaucratic, or Interest Group, Perspective 152

4 VIII CONTENTS Organizational Roles in Foreign Policy 154 Principal-Agent Problems 157 Standard Operating Procedures 164 Strategic Perspective 166 Comparing the Core Perspectives 169 Hierarchy versus Anarchy 171 Core Assumptions about Policy and Security Risks 172 The Three Perspectives Illustratively Applied to Columbus 182 The Columbian Voyages of Discovery: A Neorealist Explanation 182 The Columbian Voyages of Discovery: An Interest Group Explanation 183 The Columbian Voyages of Discovery: A Strategic Explanation 184 Summary Domestic Politics and International Interactions: The Central Units of Analysis 187 The Origins of the State 188 International Relations Without the State 191 Domestic Politics as an Alternative to the State 193 Can Domestic Politics Affect Definition of the National Interest? 195 End of the Cold War: Win Sets as a Tool for Understanding Policy 196 Domestic Soviet Preferences and the End of the Cold War Winning Preferences Inside the Soviet Union 202 External Pressures to the End of the Cold War 204^ The 1992 Presidential Election 208 Policy Objectives in the 1992 Presidential Election 210 Voter Interest, Voting Blocs, and Electoral Rule 213 Alternative Interpretations of the Domestic Politics Example 218 Summary What Is Power? 222 Defining Power 223 Methods of Exercising Power 225 Persuasion 225 Rewards 227 Punishments 230 Force 235 Measuring Power 236 The Fungibility of Power 241 Projecting Power over Large Distances 246 Summary Limits to Power 249 Power and Military Victory 250

5 CONTENTS Power Can Be Cyclical 252 Coordination and Power 255 Distribution Problems, Coordination Problems, and Power 256 Pure Strategy Equilibria 259 Mixed Strategy Equilibrium 260 International Organizations: An Alternative to or Reflection of Power? 264 Power and Motivation 270 Asymmetric Motivation and Costs 278 The Exercise of Power 282 Summary 286 > 9. Preferences in International Politics 287 Preferred Values and American Foreign Policy: An Illustration 288 What Are Preferences? 291 Rationality and Preferences 292 Preferences and Constrained Choices 294 Vending Machines, Preferences, and Decisions 296 Ordering Preferences 297 Vending Machines and Information Constraints 297 Buying Soda as an Expected Utility Problem 298 Constrained Choice in International Relations: Some Examples 299 Cold War Perceptions as Constraints 300 Preferences at Marathon: An Ancient Greek Example 302 Social Choice Problems: Is There a National Interest? 306 Social Choice and the Cuban Missile Crisis 307 Preference Cycles and Structural Realism 312 Interest Groups and the Social Choice Problem 313 Common Circumstances Without the Social Choice Problem 314 Social Choice and Spatial Views of Policy 314 Predicting Policy Choices: The Median Voter Theorem 318 Summary Perceptions in International Affairs 324 Perceptions and Reality 325 People Form Perceptions All the Time 329 What Are Beliefs or Perceptions? 330 Perceptions and Information 332 Perceptions and Trade Sanctions: An Illustration 332 The Trade-Sanctioning Game 335 The Sanctioning Game and Domestic Politics 343 Perception, Repetition, and Reputation 348 Summary 350 IX

6 CONTENTS 11. Perceptions, Deterrence, and Terrorism 352 Perceptions and Deterrence 353 General Deterrence 354 Extended Deterrence and Extended Immediate Deterrence 358 North Korea's Artful Use of Misconduct 361 Perceptions and Deterrence: The Gulf War 364 Beliefs about Terrorism 370 Summary Domestic Institutions and National Performance 379 Universal Political Institutions 381 Tools to Remain in Power 384 Allocation of Resources and Political Institutions 385 Leadership Incentives and Political Institutions 388 Winning Coalition Size and Trade Policy 390 The Neorealist, Alternative View of Trade Policy 392 The Interest Group View of Trade Policy 396 Evidence: Winning Coalition Size and Economic Performance 396 Winning Coalition Size and National Survival 399 Domestic Institutions and Foreign Aid 404 Summary The International Political Economy of Trade 407 Globalization in Historical Perspective 410 An Economics Primer: Comparative Advantage, Supply, and Demand 413 Comparative Advantage 413 Supply and Demand 417 Trade as a Public or Private Good 422 Currency, Exchange Rates, and International Political Economy 424 Political Economy and Trade 428 Factors of Production 432 Mobility of Factors of Production 433 Interindustry Factor Mobility 435 The Case with No Interindustry Factor Mobility 438 The Case with Specific Factor Mobility 439 The Consequences of Free Trade: Some Evidence 441 Summary International Organizations and International Law 446 International Law, Organizations, and Regimes: Definitions and Distinctions 447 International Law 447 International Organizations 449 International Regimes 451

7 CONTENTS Can We Evaluate the Effects of International Regimes? 452 Constructivist Case 452 The Strategic Case 454 NATO and Organizational Inertia: An Illustrative Case 456 Sovereignty: A Successful International Institution 458 International Borders as Institutions 459 The Expansion of International Law: The Example of Helsinki 462 The Purpose of International Rules and Institutions 464 How Inclusive Should an International Regime Be? 471 Organizational Decision-Making Rules 474 The United Nations and Decision-Making Rules 474 The Chernobyl Disaster and Structure-Induced Equilibrium 476 Compliance and Effectiveness 482 Summary Alliances 487 What Is a Military Alliance? 487 The Purpose of Alliances 490 When Are Alliances Reliable? 493 Predicting the Reliability of Alliances 498 Measuring Shared Interests 499 Testing the Predictive Model 503 Alliances, Coordination, and Competition 505 Conflict among Allies 511 Summary The Causes of War: Structural Accounts 518 Realist Theories of War 519 How Well Does Neorealism Do in Explaining War and Instability? 521 Bipolarity and Stability 521 Bipolarity and Stability: A Second Look 528 History and Neorealist Empirical Claims 531 Other Neorealist Hypotheses and the Historical Record 535 The Survival of Essential and Inessential States 535 Uncertainty and War 536 Acquiescence and Neorealism 538 Balance of Power and Neorealism 538 The Power Transition: A Structural Alternative to Neorealism 541 Examples of International Rules and Norms 543 Dissatisfaction, the Status Quo, and War 544 Summary 549

8 XII CONTENTS 17. Strategic Theories of War 551 The International Interaction Game and War 552 War and Uncertainty: The IIG and Structural Theories 558 Weakness and War: Resurrection and Pacific Doves 559 Violent Pacific Doves: A Case History 565 Arms Races, Deterrence, and War 570 Other Hypotheses about War 577 The Scapegoat Hypothesis 577 Status Inconsistency 579 War in Cycles 581 Summary A Predictive Model of International Affairs 583 Logical Foundation of the Model 585 Perceptual Analysis 589 Estimating the Model 594 Why Does This Model Help? 596 Intuition Behind the Model's Dynamics 597 Developing the Data 598 Model Output 602 Prediction and International Relations 609 Using the Model 614 Glossary of Key Terms 616 Bibliography 625 Subject Index 647 Citations of Authors 662 Photo Credits 665

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