Since the collapse of the Bretton Woods system, countries have been able to choose from a variety of exchange-rate arrangements. We argue that politicians' incentives condition the choice of an exchange-rate arrangement. These incentives reflect the configuration of domestic political institutions, particularly electoral and legislative institutions. In systems where the cost of electoral defeat is high and electoral timing is exogenous, politicians will be less willing to forgo their discretion over monetary policy with a fixed exchange rate. In systems where the costs of electoral defeat are low and electoral timing is endogenous, politicians are more likely to adopt a fixed exchange-rate regime. Consequently, differences in domestic political systems can help account for variations in the choice of exchange-rate arrangements. We test this argument using constrained multinomial logit and binomial logit on a sample of twenty democracies over the period 1974–95. Domestic political institutions have a significant effect on exchange-rate regime choice, even after controlling for systemic, macroeconomic, and other political variables.

A key assumption of audience costs theories of crisis bargaining and international cooperation is that audience members have strong preferences for consistency between their leader's commitments and actual policy choices. However, audiences also have strong preferences over the policy choices themselves, regardless of their consistency with past commitments. I conducted a randomized survey experiment to evaluate the magnitude of consistency and policy effects in the context of international agreements over trade policy. Respondents with expressed policy preferences, whether supporting or opposing free trade, have muted reactions to learning that their leader has broken an agreement. Only respondents with no opinion on trade policy are affected by learning that their leader's policy is inconsistent with prior commitments. This suggests that constituents' underlying preferences limit the degree to which audience costs influence policymakers' calculations.

Recent research has highlighted combat's positive effects for political behavior, but it is unclear whether they extend to attitudes toward the conflict itself. We exploit the assignment of health rankings determining combat eligibility in the Israel Defense Forces to examine the effect of combat exposure on support for peaceful conflict resolution. Given the centrality of the Israeli-Palestinian conflict to global affairs, and its apparent intractability, the political consequences of combat become all the more pressing. We find that exposure to combat hardens attitudes toward the rival and reduces support for negotiation and compromise. Importantly, these attitudes translate into voting behavior: combatants are likely to vote for more hawkish parties. These findings call for caution in emphasizing the benign effects of combat and underscore the importance of reintegrating combatants during the transition from conflict to peace.

What explains the changes in International Monetary Fund (IMF) conditionality? I argue that IMF conditionality agreements are influenced by supplementary financiers. The IMF regularly relies on external financing to supplement its loans to countries facing payments imbalances. As a result, these supplementary financiers are able to exercise leverage over the IMF and the design of its conditionality programs. I consider the influence of one type of supplementary financier, private financial institutions, on IMF conditionality. “Conclusions are supported by a data set of 249 conditionality arrangements, coded according to their terms, and two case studies.”

Theories of regional integration are becoming obsolescent because three core assumptions on which these theories have been based are becoming less and less relevant to the behavior patterns actually displayed by governments active in regional organizations. These three assumptions are (1) that a definable institutional pattern must mark the outcome of the process of integration, (2) that conflicts of interests involving trade-offs between ties with regional partners and ties with nonmembers should be resolved in favor of regional partners, and (3) that decisions be made on the basis of disjointed incrementalism. The history of the European Communities since 1968 shows that most governments no longer behave in accordance with these assumptions, although they did earlier. The explanation for the new trend is to be found in awareness of the various novel kinds and dimensions of interdependence between countries, issues, and objectives, particularly with reference to policies involving those aspects of highly industrial societies which do not respond readily to the incentives of a customs union. A new decision-making rationality–labelled “fragmented issue linkage”–seems to be competing with incremental habits, suggesting that efforts are being made to cope with “turbulence” in the industrial environment so as to avoid piecemeal solutions. The effort to cope with turbulence, in turn, is unlikely to lead to any “final” set of regional institutions.

I develop a systematic argument about the politics of the 1997–98 Asian economic crisis. I focus on institutions—specifically, the connection linking the institutional framework of national politics, the policy environment, and investment. I seek to resolve the tension between the literatures on credible policy commitment and policy flexibility, arguing that if either is severely undersupplied, the risk associated with the policy environment rises rapidly for investors. Building on a veto player framework, I develop a simple model of a U-shaped relationship between the number of veto players in a political system and policy risk to investors. Institutional vetoes on executive authority lower policy risk for investors but only up to a point, after which additional veto players promote unwelcome policy rigidity. I illustrate this using four cases: Thailand, the Philippines, Malaysia, and Indonesia, the four main Southeast Asian countries involved in the financial crisis. I argue that the institutional framework of national politics had a powerful and predictable influence on policy responses and investor reactions.

The years immediately after World War II provided American policy makers with a unique opportunity to help shape the international economic order for a generation to come. United States objectives are usually described in terms of enlightened idealism or capitalist expansionism. But much of the way policy makers envisaged international economic reconstruction derived from the ambivalent way in which domestic economic conflict had been resolved before and during the New Deal. In the inconclusive struggle between business champions and the spokesmen for reform, Americans achieved consensus by celebrating a supposedly impartial efficiency and productivity and by condemning allegedly wasteful monopoly. Looking outward during and after World War II, United States representatives condemned Fascism as a form of monopoly power, then later sought to isolate Communist parties and labor unions as adversaries of their priorities of production. American blueprints for international monetary order, policy toward trade unions, and the intervention of occupation authorities in West Germany and Japan sought to transform political issues into problems of output, to adjourn class conflict for a consensus on growth. The American approach was successful because for almost two decades high rates of growth made the politics of productivity apparently pay off. Whether an alternative approach could have achieved more equality remains an important but separate inquiry.

The theoretical and empirical literature on international alliances has tended to support the realist view that the pursuit or tightening of external alignments stems predominantly from external security threats. Consequently, the role of domestic factors has generally been ignored or downplayed. This article begins with the observation that leaders confronted with external threats make trade-offs between the pursuit of external alignments and the mobilization of domestic resources. It then argues that the choice of strategy depends on a combination of systemic and domestic factors, including the perceived degree of external threat to state security, the perceived degree of domestic instability and threat to the government, and the constraints that derive from the domestic political economy. The analysis of Egypt's alignment behavior during the period from 1962 to 1973 underscores the impact of domestic and economic political constraints on the choice of domestic mobilization or alliance formation and the central role of alliances in providing resources for confronting domestic as well as foreign threats.

In recent decades, countries have experimented with a variety of monetary institutions, including alternative exchange-rate arrangements and different levels of central bank independence. Political economists have analyzed the choice of these institutions, emphasizing their role in resolving both the time-inconsistency problem and dilemmas created by an open economy. This “first-generation” work, however, suffers from a central limitation: it studies exchange-rate regimes and central bank institutions in isolation from one another without investigating how one monetary institution affects the costs and benefits of the other. By contrast, the contributors to this volume analyze the choice of exchange-rate regime and central bank independence together and, in so doing, present a “second generation” of research on the determinants of monetary institutions. The articles incorporate both economic and political factors in explaining the choice of monetary institutions, investigating how political institutions, democratic processes, political party competition, and interest group pressures affect the balance between economic and distributional policy objectives.

A central component of International Monetary Fund (IMF) programs is reducing government budget deficits. We ask how domestic political considerations shape the distribution of cuts made by governments in IMF programs. Our central finding is that IMF programs shrink the role played by domestic politics. While democracies allocate larger shares of their budgets to public services in the absence of IMF programs, the difference between democracies and nondemocracies disappears under IMF programs. This result has important implications for our understanding of government spending priorities under different resource constraints.We dedicate this article to the memory of Harold K. Jacobson. Robert Kaufman, Lisa Martin, Joan Nelson, and two anonymous reviewers for IO provided valuable comments on earlier drafts, and Chris Achen, Chris Adolph, Leah Anderson, Carew Boulding, Sarah Brooks, Chelsea Brown, Lawrence Broz, Eric Chang, Dan Corstange, Rob Franzese, Nate Jensen, Marcus Kurtz, Margaret Levi, Autumn Payton, Nita Rudra, Heidi Sherman, and James Vreeland offered helpful advice. We thank Autumn Payton for research assistance. Earlier versions were presented at the 2004 Midwest Political Science Association Meetings, the 2004 American Political Science Association Meetings, the 2005 workshop on “Distributive Politics and Social Protection in the 21st Century” at Ohio State's Mershon Center, and the 2005 International Studies Association Meetings. All errors remain our own.

Are UN peacekeepers effective in protecting civilians from violence? Existing studies examine this issue at the country level, thereby making it difficult to isolate the effect of peacekeepers and to assess the actual mechanism at work. We provide the first comprehensive evaluation of UN peacekeeping success in protecting civilians at the subnational level. We argue that peacekeepers through their sizable local presence can increase the political and military costs for warring actors to engage in civilian targeting. Since peacekeepers’ access to civilian populations rests on government consent, peacekeepers will primarily be effective in imposing these costs on rebel groups, but less so for government actors. To test these conjectures we combine new monthly data on the location of peacekeepers with data on the location and timing of civilian killings in Africa. Our findings suggest that local peacekeeping presence enhances the effectiveness of civilian protection against rebel abuse, but that UN peacekeeping struggles to protect civilians from government forces.

Recent efforts to explain why some peace agreements last while others fail have focused on the strength of the agreement itself. Maintaining peace, even if both belligerents want peace, can be difficult if there are temptations to defect or there are reasons to fear that one may be played for the sucker. Strong agreements that can increase the costs of defection, enhance monitoring, or reward cooperation help to solve this enforcement dilemma and generally increase the former belligerents' incentives to remain at peace. Although we agree that such carrots and sticks can facilitate cooperation, we argue in this article that such measures will often be inadequate if the belligerents themselves are no longer committed to keeping the peace. If the belligerents believe that a renewed war can lead to better terms, peace will be precarious. We demonstrate that getting (and keeping) the terms right may be more important than any carrots and sticks incorporated into the document to enforce those terms. In particular, we show that “unnatural” ceasefires that come about as a consequence of third-party pressure are significantly more likely to fail. We also show that ceasefires negotiated after wars with consistent battle outcomes are more likely to last than those where the “right” terms of settlement are less apparent.We would like to thank Virginia Page Fortna, Dani Reiter, Nicholas Sambanis, and the anonymous reviewers and editors of International Organization for their many suggestions and insightful comments on previous versions of this article.

Why do powerful states often channel coercive policies through international organizations (IOs)? The article explains this phenomenon by theorizing the political advantages of working through a neutral institution, defined as one with heterogeneous and representative member preferences. The argument centers on the notion of strategic information transmission. IO involvement sends information about the coercer's intentions and the consequences of the coercive policy to foreign leaders and their publics, information that determines the level of international support offered to the coercing state. The logic helps explain why the United Nations Security Council plays a unique role in approving and disapproving the use of force. A case study of the 1990–91 Gulf War shows how these information transmission mechanisms work in practice and that the rationalist information argument provides more traction than a legitimacy-based alternative explanation.For valuable comments on earlier drafts, I would like to thank Charles Glaser, Peter Gourevitch, Lloyd Gruber, Darren Hawkins, Keith Krehbiel, David Lake, Charles Lipson, Daniel Nielson, Kenneth Schultz, Duncan Snidal, Michael Tierney, Daniel Verdier, Erik Voeten, and Joel Westra, as well as participants in the PIPES workshop at the University of Chicago and the conference on Delegation to International Organizations at the University of California, San Diego. I also thank Lisa Martin and two anonymous reviewers for constructive suggestions. I am grateful to Matthew Scherbarth for research assistance and to the Mershon Center at Ohio State University for financial assistance.

This article analyzes the social potential of regional integration processes by using the example of European integration. Recent case law from the European Court of Justice has led some observers to argue that judicial decisions increasingly provide European politics with a “Polanyian” drive. We test this claim by distinguishing three dimensions to European economic and social integration: market-restricting integration, market-enforcing integration, and the creation of a European area of nondiscrimination. We also identify two forms of integration that have different speeds, scopes, and potentials: political integration and judicial integration. The evidence shows that the EU has come closer to Hayek's vision of “interstate federalism” than is usually warranted because market-enforcing integration and European nondiscrimination policies have asymmetrically profited from “integration through law.” The opportunities for international courts to push ahead market-enforcing integration increase as the participants of regional integration processes become more diverse. In such “Hayekian” constellations, individual rights are increasingly relocated to the central level, at the cost of subordinating the decentralized capacity for solidarity and interpersonal redistribution.

The global financial crisis that erupted in summer 2007 has made the reform of international prudential financial regulation one of the top priorities of global public policy. Past scholarship has usefully explained the creation and strengthening of international financial standards with reference to three policy arenas: interstate, domestic, and transnational. Despite the accomplishments of this specialist literature, the recent crisis has revealed a number of limitations in the ways scholars have understood interstate power relations, the influence of domestic politics, and the significance of transnational actors within international financial regulatory politics. Taken together, developments in each of these three arenas suggest that researchers may also need to be prepared to shift from explaining the strengthening of official international standards to analyzing their weakening in the postcrisis world. The latter task will require scholars to devote more analytical attention to a wider set of international regulatory outcomes, including “informal regulatory convergence,” “regulatory fragmentation,” and especially “cooperative regulatory decentralization.”

The period from 1914 to 1940 is one of the most crucial and enigmatic in modern world history, and in the history of modern U.S. foreign policy. World War I catapulted the United States into international economic and political leadership, yet in the aftermath of the war, despite grandiose Wilsonian plans, the United States quickly lapsed into relative disregard for events abroad: it did not join the League of Nations, disavowed responsibility for European reconstruction, would not participate openly in many international economic conferences, and restored high levels of tariff protection for the domestic market. Only in the late 1930s and 1940s, after twenty years of bitter battles over foreign policy, did the United States move to center stage of world politics and economics: it built the United Nations and a string of regional alliances, underwrote the rebuilding of Western Europe, almost single-handedly constructed a global monetary and financial system, and led the world in commercial liberalization.

Nowhere is America's hegemonic decline more evident than in changing trade patterns. The United States trade balance, a measure of the international demand for American goods, is suffering historic deficits. Lowered demand for American goods has led to the under-utilization of both labor and capital in a growing number of traditionally competitive American industries. Conversely, Americans' taste for foreign goods has never been so great. Japanese cars, European steel, Third World textiles, to name a few, are as well produced as their American counterparts and arrive on the U.S. market at a lower cost.

National welfare programs are importantly affected by models of welfare activity institutionalized at the global level. This article examines the impact of the welfare regime advocated by and within the International Labor Organization (ILO). Countries that have recently ratified ILO conventions related to welfare show increased growth in spending, net of national characteristics. Subanalyses show that the effects of ILO ratification are strong in the industrialized capitalist democracies, particularly where prior welfare spending is low and the working class has a weakly institutionalized role in policymaking. ILO ratification seems disconnected from spending in the less developed countries. Legislative case studies point to similar patterns. These findings suggest that international norms contribute to policy where they offer compelling models that powerful actors can use to legitimate policy innovation.

During the past half-century, states have established a large number of international trade institutions, both multilateral and regional in scope. The existing literature on this topic emphasizes that these agreements are chiefly designed to liberalize and increase the flow of overseas commerce. Yet such institutions have another function that has been largely ignored by researchers, namely, reducing volatility in trade policy and trade flows. Exposure to global markets increases the vulnerability of a country's output to terms of trade shocks. Governments seek to insulate their economies from such instability through membership in international trade institutions, particularly the World Trade Organization (WTO) and preferential trading arrangements (PTAs). We hypothesize that these institutions reduce the volatility of overseas commerce. We further hypothesize that, because market actors prefer price stability, trade institutions increase the volume of foreign commerce by reducing trade variability. This article conducts the first large-scale, multivariate statistical tests of these two hypotheses, using annual data on exports for all pairs of countries from 1951 through 2001. The tests provide strong support for our arguments. PTAs and the WTO regime significantly reduce export volatility. In so doing, these institutions also increase export levels.