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The Impact of Active Leverage II: Reforming the State and the Economy, 1997–2004

Milada Anna Vachudova

in Europe Undivided: Democracy, Leverage, and Integration After Communism

In all candidate states, the EU’s active leverage forced governments to embark on politically difficult reforms of the state and of the economy, committing politicians to a predictable agenda of ... More

In all candidate states, the EU’s active leverage forced governments to embark on politically difficult reforms of the state and of the economy, committing politicians to a predictable agenda of economic liberalization. This happened not only because of straightforward conditionality but also because the pre-accession process served as a credible commitment to economic reform and as an impetus for the growth of pro-EU groups in society. The Czech Republic stands out as a hybrid case that experienced a greater concentration (and abuse) of political and economic power than Poland or Hungary, forcing it to change more dramatically in response to the EU’s active leverage. In the post-illiberal states, keeping ruling elites within the parameters set by the EU’s pre-accession process while locking all mainstream political parties into a pro-EU orientation signifies a great success. This chapter analyses the convergence of domestic politics in Slovakia, Bulgaria, and Romania after more liberal elites took power, and also explains the significant and persistent variation in the performance of the three states in implementing comprehensive reforms.Less

Myopic Opportunism and Joint Production: A Relational Approach to Corporate Governance

Siegwart Lindenberg

in Corporate Governance and Firm Organization: Microfoundations and Structural Forms

This chapter uses the cognitive psychology notion of ‘framing’ to highlight how profitable cooperation can benefit from a partial suspension of a gain frame. It argues that even when interests are ... More

This chapter uses the cognitive psychology notion of ‘framing’ to highlight how profitable cooperation can benefit from a partial suspension of a gain frame. It argues that even when interests are broadly aligned, there is too much room for opportunism in the absence of an alignment of commitment to the relationship, and the suspension of the possibility of its instrumental use. The chapter then focuses on how a perception of transactions as ‘joint production’ can be built through a variety of ‘relational signals’ (credible commitments to the suspension of a calculative propensity to exploit any opportunity of gain even if it would damage the relationship).Less

Introduction

Iain McLean

in Rational Choice and British Politics: An Analysis of Rhetoric and Manipulation from Peel to Blair

Introduces basic concepts of social choice. Describes the median voter theorem for one issue dimension, and its chaotic failure in more than one. It explains what rhetoric and heresthetics are, also ... More

Introduces basic concepts of social choice. Describes the median voter theorem for one issue dimension, and its chaotic failure in more than one. It explains what rhetoric and heresthetics are, also how veto games and credible commitments have operated in British politics since 1846. It introduces W.H. Riker's account of the triumph of Abraham Lincoln in 1860.Less

Varieties and Logics of Medieval Hostageship

Adam J. Kosto

in Hostages in the Middle Ages

This chapter presents the variety of forms of medieval hostageship from across the whole period: unilateral and bilateral (exchange); open-ended and finite; true, where the hostage was turned over at ... More

This chapter presents the variety of forms of medieval hostageship from across the whole period: unilateral and bilateral (exchange); open-ended and finite; true, where the hostage was turned over at the formation of the agreement, and conditional, where the hostage was turned over upon violation. It shows that with respect to the subject of the agreements for which hostages were granted and their structure, as well as the identity and treatment of the hostages themselves, there was no ‘typical’ medieval hostage. Execution of hostages is shown to be quite rare, and the fate of the hostage does not always seem to correspond to the status of the agreement. This prompts an analysis of the logics of hostageship with reference to modern literature on contract theory and credible commitments.Less

Umbrella Clauses as Public Law Concepts in Comparative Perspective

Stephan W. Schill

in International Investment Law and Comparative Public Law

This chapter deals with the function, scope, and effect of umbrella clauses in international investment treaties. It proposes to understand the clauses as breaking with customary international law ... More

This chapter deals with the function, scope, and effect of umbrella clauses in international investment treaties. It proposes to understand the clauses as breaking with customary international law and argues that their function consists in stabilizing investor-State relations by opening recourse to dispute settlement by arbitral tribunals for breaches of specific and individual promises made by the State. Umbrella clauses prevent host States from acting opportunistically in reneging on their initial promises whether through acts of a governmental or purely commercial nature. While reinforcing the principle of pacta sunt servanda as a fundamental basis for investor-State cooperation, they do not exclude, however, variations of contracts due to contingencies arising during the life of a contract, nor do they override the State's police power to regulate investor-State contracts in the public interest.Less

Internationalization of the Fuel Cycle and the Nuclear Energy Renaissance: Confronting the Credible Commitment Problem

Adam N. Stulberg

in The Nuclear Renaissance and International Security

This chapter tackles the puzzle of international fuel supply cooperation. It explains why the historical record of multilateral nuclear approaches (MNAs) is mixed even though internationalizing the ... More

This chapter tackles the puzzle of international fuel supply cooperation. It explains why the historical record of multilateral nuclear approaches (MNAs) is mixed even though internationalizing the nuclear fuel cycle could make markets function more efficiently and reduce the risk of proliferation by eliminating the need for indigenous enrichment or reprocessing facilities. Framing this issue as an international credible commitment problem, the analysis demonstrates that the efficacy of MNAs hinges on the degree of power asymmetry and vulnerability among the bargaining parties. These factors shape the character of risk and trust at issue with reliance on international fuel supply. The evidence from contrasting cases studies of the UAE, South Korea, South Africa, and Kazakhstan shows that countries are most likely to support MNAs when suppliers do not wield sufficient market power to blackmail other states and when customers do not expect to be overly reliant on nuclear energy.Less

Commitment or Equivocation

Alasdair Roberts

in Strategies for Governing: Reinventing Public Administration for a Dangerous Century

This chapter distinguishes between commitment and equivocation in the design of governance strategies. For the last thirty years, “credible commitment” has been a stock phrase in scholarly writing ... More

This chapter distinguishes between commitment and equivocation in the design of governance strategies. For the last thirty years, “credible commitment” has been a stock phrase in scholarly writing about government. Governments are said to have a credibility problem, because citizens and businesses do not trust them to keep promises about how they will behave in the future. The task for leaders is to find techniques for demonstrating that they will keep their word, by designing institutions that make it hard to break promises. These institutional arrangements are called commitment devices. It can then be concluded that leaders are mainly concerned with finding clever ways to solve commitment problems. Commitment, it seems, is the key to prosperity, order, and legitimacy. Leaders want people and businesses to make choices that stimulate growth and deepen their own attachment to the existing order. However, the situation confronting leaders is actually more difficult than this. Sometimes equivocation rather than commitment is the sound choice. Leaders know that there will inevitably be emergencies where everyday rules have to be put aside, and they do not want to make it impossible to do this. For example, property might need to be seized in the name of national defense.Less

Constitutional Purposes

Mark A. Graber

in A New Introduction to American Constitutionalism

Constitutions attempt to secure important social benefits by establishing fundamental laws, mandating the rule of law, entrenching political procedures, limiting government powers, and, in liberal ... More

Constitutions attempt to secure important social benefits by establishing fundamental laws, mandating the rule of law, entrenching political procedures, limiting government powers, and, in liberal orders, guaranteeing basic human rights. Entrenched constitutional provisions organize government, vest governing officials with necessary powers, structure politics, enable government to make credible commitments to investors and foreign powers, facilitate coordination between subnational governing units, prevent self-dealing by governing officials, promote deliberation on the public interest, offer some insurance against uncertain futures, articulate national aspirations, and foster compromises among persons who disagree on national aspirations. The Constitution of the United States proposes to help Americans secure national union, social peace, commercial prosperity, and various liberal rights.Less

Power, Social Conflict, Institutional Formation, and Credible Commitment

William D. Ferguson

in The Political Economy of Collective Action, Inequality, and Development

This chapter develops a social conflict theory of institutions. The third hypothesis posits that unequal distributions of power shape the creation, evolution, and demise of economic and political ... More

This chapter develops a social conflict theory of institutions. The third hypothesis posits that unequal distributions of power shape the creation, evolution, and demise of economic and political institutions. A background discussion defines power—a slightly slippery concept—and addresses key sources and manifestations of power. Unequal distributions of power then generate a series of CAPs associated with asymmetric influence on institutional construction and evolution. A flowchart model illustrates. To complicate matters, the fourth hypothesis posits that powerful parties cannot, left to themselves, credibly promise to refrain from using their power for their own future gain—often at the expense of others. Specifically, without institutional and motivational constraint, powerful parties may seize the gains from others’ investments in potentially fruitful economic and political activities. Functional development thus requires resolving multiple, largely second-order, CAPs related to credibly restraining powerful actors—when such actors, simultaneously, exert disproportionate influence over institution building.Less

Consequentialist Grounds for the Principles of Administrative Justice

Alexander Brown

in A Theory of Legitimate Expectations for Public Administration

Section I explores the possibility that the principles of administrative justice are partly grounded by the Difference Principle. Section II considers whether the administrative goods of ... More

Section I explores the possibility that the principles of administrative justice are partly grounded by the Difference Principle. Section II considers whether the administrative goods of trust-building and making credible commitments might also normatively support or ground principles concerning the protection of legitimate expectations. Section III looks to the more basic aim of minimizing the pain of frustration as normative support or grounding for my principles of administrative justice. Finally, Section IV considers whether the principles have any negative unintended consequences that could potentially derail the proposed consequentialist grounding of them.Less

Conclusion

Paul Poast and Johannes Urpelainen

in Organizing Democracy: How International Organizations Assist New Democracies

This chapter summarizes the book’s findings and reflects on their implications for how scholars and policy makers understand IOs, democratic transitions, and the relationship between the two. The ... More

This chapter summarizes the book’s findings and reflects on their implications for how scholars and policy makers understand IOs, democratic transitions, and the relationship between the two. The chapter describes how this study speaks to research on leaders credibly committing to domestic reforms, the origins of democratization, and the development of democratic institutions. The chapter then considers implications of this study for current policy, using the recent crisis in Ukraine to explore how established democracies can encourage democratizing states to form new IOs and provide material support to those newly created IOs.Less

The Trilemma of Constitutional Authority

Turkuler Isiksel

in Europe's Functional Constitution: A Theory of Constitutionalism Beyond the State

What rides on whether a regime is considered constitutional? This chapter lays out alternative justifications of constitutional authority as a background against which to situate the EU’s legal ... More

What rides on whether a regime is considered constitutional? This chapter lays out alternative justifications of constitutional authority as a background against which to situate the EU’s legal system. Although the attention of contemporary political theorists has been absorbed by the challenge of reconciling the liberal and democratic impulses of constitutionalism, this debate captures only two horns of the trilemma of constitutional legitimacy. In addition to enabling individual and collective autonomy, constitutional mechanisms have long been marshaled to enable the effective exercise of public power. The distinguishing feature of the EU’s system of functional constitutionalism is the fact that its authority is premised primarily on this pragmatic pattern of justification rather than on enabling democratic self-rule or protecting individual liberty. Surrendering power over the adoption, monitoring, and enforcement of certain policies to EU institutions is intended to help member states secure a range of collective goods in the long run.Less

Political Legitimacy, Credible Commitment, and Euro Governance

Albert Weale

in Beyond the Crisis: The Governance of Europe's Economic, Political and Legal Transformation

Deepening economic governance and the crisis of the eurozone underscore the issue of political legitimacy in the EU. Analytically, legitimacy may be understood by reference to modern social contract ... More

Deepening economic governance and the crisis of the eurozone underscore the issue of political legitimacy in the EU. Analytically, legitimacy may be understood by reference to modern social contract theory, which states the conditions under which actors can credibly commit to one another for their mutual advantage. The same theory also shows that when a promised commitment is broken, various instruments of monitoring and compliance will be introduced, a pattern that has been observed in reforms to eurozone governance. Yet, in understanding such a contract, attention needs to be paid to context. The depoliticisation of money involves an affirmation of some types of political responsibility and the denationalisation of money is not credible unless it can secure continuing domestic political support. Given the constraint on political developments, the greater inclusion of national parliaments in the European policy process is essential.Less

Handling Spoilers and the Prospect of Violence

Marie-Joëlle Zahar

in The Slippery Slope to Genocide: Reducing Identity Conflicts and Preventing Mass Murder

This chapter focuses on the violence committed by ethnic nonstate armed groups (NSAGs). It develops an argument about the conditions under which mediators can successfully devise winning strategies ... More

This chapter focuses on the violence committed by ethnic nonstate armed groups (NSAGs). It develops an argument about the conditions under which mediators can successfully devise winning strategies to bring identity conflicts involving NSAGs to an end. In contrast to the literature that describes ethnic NSAGs as spoilers, the author contends that identity, though important, is not the only determinant of NSAG decision making. Instead, she argues that contextual factors provide a set of constraints on the ability of ethnic NSAGs to resort to violence. She then develops a typology of ethnic NSAGs and identifies the specific strategies most likely to bring different subcategories of NSAGs to the negotiating table and to ensure their commitment to peace. The contribution uses the Bosnian civil war as an example to probe the expectations of the model.Less

Partial Independence Advantages and Evolution

David A. Rezvani

in Surpassing the Sovereign State: The Wealth, Self-Rule, and Security Advantages of Partially Independent Territories

Chapter 2 lays out the principal reasons for the advantages and evolution of partially independent territories (PITs). PITs often benefit from high degrees of nationalistic compromise, core state ... More

Chapter 2 lays out the principal reasons for the advantages and evolution of partially independent territories (PITs). PITs often benefit from high degrees of nationalistic compromise, core state public goods, and credible commitments that their fully independent counterparts do not enjoy. They not only emerge because of these advantages, but also because they are initially seen by core states as an institutional response for preventing catastrophes such as state fragmentation, war, and/or economic disaster. In time the sense of self-interest and fear that tends to launch partially independent unions often gives way to mutual trust that is bolstered by core state norms of shared identity and PIT perceptions of fairness. PIT secession will, however, become an increasing possibility if this mutual trust—especially the trust that is underpinned by PIT perceptions of fairness—becomes weakened.Less

Multistakeholder Governance and the Private Sector

Brain Levy

in Working with the Grain: Integrating Governance and Growth in Development Strategies

Chapter 10 explores the potential of multistakeholder initiatives to address three familiar challenges of private-sector development in settings where the background politics and institutions needed ... More

Chapter 10 explores the potential of multistakeholder initiatives to address three familiar challenges of private-sector development in settings where the background politics and institutions needed for standard policy prescriptions to work are absent. First is the challenge of providing a business environment which offers the credible commitment necessary to attract private investment—multistakeholder approaches work via innovative (but sometimes personalized) linkages between powerful economic and political actors to provide personalized property rights. Second is the challenge of providing proactive support to firms and farmers—Zambia’s cotton and South Africa’s garments sectors illustrate the potential and limits of collective efforts to strengthen industrial clusters and provide the requisite local public goods. Third is the challenge of aligning private and social benefits and costs when neither regulation nor fiscal policy are effective—here the focus is on issue-specific global initiatives organized around collectively agreed rulemaking, monitoring, and enforcement (for example the Extractive Industries Transparency Initiative, the Marine Stewardship Council, and the Chad-Cameroon pipeline project. These institutional alternatives can facilitate gains, but risk locking in rigidities.Less

Indonesia

Hendrik Spruyt

in Exit Strategies and State Building

Similar to other colonial withdrawals, the Dutch exit from Indonesia was influenced by the balance of power, metropolitan ideology, and the nature of the nationalist regime. The Dutch-Indonesian case ... More

Similar to other colonial withdrawals, the Dutch exit from Indonesia was influenced by the balance of power, metropolitan ideology, and the nature of the nationalist regime. The Dutch-Indonesian case was further complicated by the instability of the home government. Fragile coalitions in The Hague impeded compromise, leading the government to try to defeat the nationalists by force. Third parties also played a important role in determining the eventual outcome: the United States and Britain exercised their leverage to induce the combatants to compromise. The Indonesian nationalists assured themselves of third-party support by repudiating communist influences. The Indonesian Republic’s willingness to embrace a nascent parliamentary democracy led Dutch interest groups to realize that a negotiated settlement with a noncommunist regime was acceptable. These factors led to the Round Table Agreement of 1949 and Dutch withdrawal.Less

Conclusion

in Looking for Balance: China, the United States, and Power Balancing in East Asia

This chapter sums up the key findings of this study on the balance of power in East Asia. It suggests that China is unlikely to initiate a bid for regional hegemony and discusses the implications of ... More

This chapter sums up the key findings of this study on the balance of power in East Asia. It suggests that China is unlikely to initiate a bid for regional hegemony and discusses the implications of the decision of the United States to pursue extra-regional hegemony rather than adopting the posture of an offshore balancer. The chapter also argues that East Asia has overcome the problems related to making credible commitment, and that it has fostered the macro trends and foundations for regional cooperation.Less

Authoritarian Regionalism

Anastassia V. Obydenkova and Alexander Libman

in Authoritarian Regionalism in the World of International Organizations: Global Perspective and the Eurasian Enigma

The goal of this chapter is to present the main elements of our theoretical argument. Departing from existing studies, the chapter introduces a new theory called “authoritarian regionalism” and ... More

The goal of this chapter is to present the main elements of our theoretical argument. Departing from existing studies, the chapter introduces a new theory called “authoritarian regionalism” and derives hypotheses from this. The chapter provides a definition of the NDROs (authoritarian regionalism) and then identifies several areas where these organizations should be different from their democratic counterparts: heterogeneity of membership, power distribution, and governance. This chapter also discusses the most important argument of the book: authoritarian regionalisms’ ability to contribute to the consolidation of autocracies. The chapter presents the main mechanisms which can be used for this purpose, discusses whether NDROs possess their own actorness, and analyzes the limits for autocracy promotion by authoritarian regional organizations.Less

The US and Brokering Republican Moderation

Matthew Whiting

in Sinn Féin and the IRA: From Revolution to Moderation

This chapter argues that in order for moderation through institutional inclusion to take full hold, it was necessary for the US to act as a powerful external broker throughout the negotiations of the ... More

This chapter argues that in order for moderation through institutional inclusion to take full hold, it was necessary for the US to act as a powerful external broker throughout the negotiations of the Belfast Agreement and during the consolidation of republican moderation. This brokering was short and targeted, not of relevance in the early stages of republican moderation and only mattered during the formal peace process phase and its implementation. The US provided a series of credible guarantees to republicans that their interests would be protected and given fair representation when entering a bargain with the more powerful British state. It also provided a series of incentives (funding, investment, access to powerful allies) and disincentives (the threat of removing the incentives, political marginalisation) that encouraged republicans to increase their engagement. This was important not only in persuading republicans to sign the Belfast Agreement in 1998 but also in persuading the IRA to eventually decommission its weapons some seven years later.Less