Nearly everything a state does has distributional consequences, including grand strategy. Societal groups with different stakes in the international economy and defense spending often have conflicting strategic priorities, and these groups pursue their parochial interests by supporting the nomination and election of like-minded politicians. Thus, grand strategy is a product of political economy. An overview of American foreign policy over the last several decades illustrates this logic. In the 1980s, the Democratic and Republican coalitions had conflicting interests over the international economy, so the two parties diverged on grand strategy. The recovery of the Rust Belt in the 1990s and 2000s, however, brought increasing convergence. Political discourse over foreign policy was fiercely partisan, but, with the notable exception of George W. Bush’s decision to go to war in Iraq in 2003, the two parties shared essentially the same view of America’s role in the world. The disastrous outcome in Iraq led the Bush administration back to the middle ground in its second term, and Obama followed the same course. In contrast, the election of Donald Trump augurs change. Trump’s electoral coalition consists of a different balance of interests in the international economy than that of past Republican presidents, so he is likely to pursue different strategic priorities.
This is an advance summary of a forthcoming article in the Oxford Research Encyclopedia of Politics. Please check back later for the full article.
Tourism is important in debates on change and development because it is arguably the world’s largest industry, a major driver of economic growth, and a high priority in developing countries’ plans for economic development.
Discourses of responsible tourism claim to address the concerns surrounding mass, packaged tourism: principally, the lack of environmental and cultural authenticity and sustainability. Responsible tourism promises to fulfill tourists’ desires to experience authenticity while having positive economic and social impacts. Proponents of this kind of tourism claim that, by creating a demand for these “goods,” communities can protect and revive pristine environments and authentic cultures.
Authenticity plays an important role in the sustainable development discourse implicit in responsible tourism. However, there are tensions between authenticity, sustainability, and neo-liberal development whose historical trajectories can be traced from the 1970s to the present; from a rejection of market-led economic growth to delivering sustainability through market mechanisms. Critics have noted that the neo-liberalization of every aspect of development has been integral to the political agenda of global governance by institutions such as the World Bank. In short, by integrating sustainable development into neo-liberal mechanisms, alternatives to dominant market-led development are denied.
Tourism plays a major part in these debates because conceptualizations of authenticity have followed a similar path: from imaginations of pre-contact, harmonious idylls; to creation of “value-added” products; to conservation of natural environments; and preservation and revival of traditional cultures for tourist consumption. The turn away from modernization development paradigms and towards cultural revival is politically fraught. Whereas traditional cultures, admired by the West for their environmental sustainability and social cohesion, existed largely outside of global markets, under global neo-liberal regimes, cultural revival is delivered through market forces. Moreover, delivering cultural revival through tourism often de-politicizes highly contentious issues. This is particularly pertinent in Latin America, where the continent has been experiencing a “left turn” in formal politics, including indigenous cosmovisions in new constitutions.
Finally, debates on authenticity, sustainable development and tourism, and especially responsible tourism, are key to understandings of current political approaches to development.
Most people in human history have lived under some kind of nondemocratic rule. Political scientists, on the other hand, have focused most efforts on democracies. The borders demarcating ideal types of democracies from nondemocracies are fuzzy, but beyond finding those borders is another, arguably greater, inferential challenge: understanding politics under authoritarianism. For instance, many prior studies ignored transitions between different authoritarian regimes and saw democratization as the prime threat to dictators. However, recent scholarship has shown this to be an error, as more dictators are replaced by other dictators than by democracy.
A burgeoning field of authoritarianism scholarship has made considerable headway in the endeavor to comprehend dictatorial politics over the past two decades. Rather than attempting to summarize this literature in its entirety, three areas of research are worth reviewing, related to change inside of the realm of authoritarian politics. The two more mature sets of research have made critical contributions, the first in isolating different kinds of authoritarian turnover and the second in separating the plethora of authoritarian regimes into more coherent categories using various typologies. How do we understand authoritarian turnover? Authoritarian regimes undergo distinct, dramatic, and observable changes at three separate levels—in leaders, regimes, and authoritarianism itself. Drawing distinctions between these changes improves our understanding of the ultimate fates of dictators and authoritarian regimes. How do we understand the diversity of authoritarian regimes? Scholarship has focused on providing competing accounts of authoritarian types, along with analyses of institutional setup of regimes as well as their organization of military forces. Authoritarian typologies, generally coding regimes by the identities of their leaders and elite allies, show common tendencies, and survival patterns tend to vary across types. The third research area, still developing, goes further into assessing changes inside authoritarian regimes by estimating the degree of personalized power across regimes, the causes and consequences of major policy changes—or reforms—and rhetorical or ideological shifts.
Randall L. Schweller
The balance of power—a notoriously slippery, murky, and protean term, endlessly debated and variously defined—is the core theory of international politics within the realist perspective. A “balance of power” system is one in which the power held and exercised by states within the system is checked and balanced by the power of others. Thus, as a nation’s power grows to the point that it menaces other powerful states, a counter-balancing coalition emerges to restrain the rising power, such that any bid for world hegemony will be self-defeating. The minimum requirements for a balance of power system include the existence of at least two or more actors of roughly equal strength, states seeking to survive and preserve their autonomy, alliance flexibility, and the ability to resort to war if need be.
At its essence, balance of power is a type of international order. Theorists disagree, however, about the normal operation of the balance of power. Structural realists describe an “automatic version” of the theory, whereby system balance is a spontaneously generated, self-regulating, and entirely unintended outcome of states pursuing their narrow self-interests. Earlier versions of balance of power were more consistent with a “semi-automatic” version of the theory, which requires a “balancer” state throwing its weight on one side of the scale or the other, depending on which is lighter, to regulate the system. The British School’s discussion of balance of power depicts a “manually operated” system, wherein the process of equilibrium is a function of human contrivance, with emphasis on the skill of diplomats and statesmen, a sense of community of nations, of shared responsibility, and a desire and need to preserve the balance of power system.
As one would expect of a theory that made its appearance in the mid-16th century, balance of power is not without its critics. Liberals claim that globalization, democratic peace, and international institutions have fundamentally transformed international relations, moving it out of the realm of power politics. Constructivists claim that balance of power theory’s focus on material forces misses the central role played by ideational factors such as norms and identities in the construction of threats and alliances. Realists, themselves, wonder why no global balance of power has materialized since the end of the Cold War.
The banking union is considered to be one of the main steps in economic integration in the European Union. Given the rather recent establishment of this policy, academic research on the banking union does not have a long lineage, yet it is an area of bourgeoning academic enquiry. There are three main “waves” of research on the banking union in political science, which have mostly proceeded in a chronological order. The first wave of scholarly work focused on the “road” to banking union, from the breaking out of the sovereign debt crisis in the euro area in 2010 to the agreement on the blueprint for the banking union in 2012, explaining why it was set up. The second wave of literature explained how the banking union was set up and took an “asymmetric” shape, whereby banking supervision was transferred to the European Central Bank (ECB); however, banking resolution partly remained at the national level, whereas other components of the banking union, namely, a common deposit guarantee scheme and a common fiscal backstop, were not set up. The third wave of research discussed the functioning of the banking union, its effects and defects. The banking union has slowly brought about significant changes in the banking systems of the member states of the euro area and in government–business relations in the banking sector, even though these effects have varied considerably across countries.
The idea that states should provide a means-tested guaranteed minimum income for citizens who are unable to meet their basic needs is widely shared and has been a central component in the evolution of social citizenship rights in existing welfare states. However, an increasing number of activists and scholars defend the more radical option of establishing a universal basic income, that is, an unconditional income paid to all members of society on an individual basis without any means test or work requirement. Indeed, some political philosophers have argued that basic income is one of the most important reforms in the development of a just and democratic society, comparable to other milestones in the history of citizenship rights, such as universal suffrage or even the abolishment of slavery. Basic income or similar ideas, such as a basic capital or a negative income tax, have been advanced in many versions since the 18th century in different parts of the world and under a great variety of names. However, while these were previously often isolated and disconnected initiatives, basic income has more recently become the object of an increasingly cumulative research effort to shed light on the many aspects of this idea. It has also inspired policy developments and given rise to experiments and pilot projects in several countries.
Hanna Niczyporuk, Marko Klašnja, and Joshua A. Tucker
Corruption—the misuse of public office for private or political gain—has a detrimental effect on a variety of economic and political outcomes. Unfortunately, reducing corruption is a difficult task. Persistent differences exist across and even within countries, which unfortunately appear to be quite sticky, which scholars have referred to as the “corruption trap.” This trap can be understood as an equilibrium arising from the inability—and unwillingness—of key stakeholders to coordinate on actions that would reduce corruption. A rich literature has focused on coordination challenges among bureaucrats or between bureaucrats and private actors. We argue, however, for the importance of considering political factors in perpetuating these corruption traps. From this perspective, corruption traps can arise from coordination challenges and breakdowns among and between three key sets of political actors: incumbent politicians, the pool of possible political entrants, and voters. There are challenges faced by each set of actors, their interactions, and ways in which these challenges could potentially be overcome. Three particular processes may help or hinder the ability to break out of corruption traps: (1) collective action and coordination among voters, (2) strategic obstruction by incumbents, and (3) mechanisms of political selection and the availability of non-corrupt challengers.
Capitalist peace theory (CPT) has gained considerable attention in international relations theory and the conflict literature. Its proponents maintain that a capitalist organization of an economy pacifies states internally and externally. They portray CPT either as a complement or as a substitute to other liberal explanations such as the democratic peace thesis. They, however, disagree about the facet of capitalism that is supposed to reduce the risk of political violence. Key contributions have identified three main drivers of the capitalist peace phenomenon: the fiscal constraints that a laissez-faire regimen puts on potentially aggressive governments, the mollifying norms that a capitalist organization creates; and the increased ability of capitalist governments to signal their intentions effectively in a confrontation with an adversary. Defining capitalism narrowly through the freedom entrepreneurs enjoy domestically, this article evaluates the key causal mechanisms and empirical evidence that have been advanced in support of these competing claims. The article argues that CPT needs to be based on a narrow definition of capitalism and that it should scrutinize motives and constraints of the main actors more deeply. Future contributions to the CPT literature should also pay close attention to classic theories of capitalism, which all considered individual risk taking and the dramatic changes between booms and busts to be key constitutive features of this form of economic governance. Finally, empirical tests of the proposed causal mechanism should rely on data sets in which capitalists appear as actors and not as “structures.” If the literature takes these objections seriously, CPT could establish itself as central theory of peace and war in two respects. First, it could serve as an antidote to the theory of imperialism and other “critical” approaches that see in capitalism a source of conflict rather than of peace. Second, it could become an important complement to commercial liberalism that stresses the external openness rather than the internal freedoms as an economic cause of peace and that particularly sees trade and foreign direct investment as pacifying forces.
The first CBs were private institutions that were given a monopoly over the issuance of currency by government in return for help in financing the budget and adherence to the rules of the gold standard. Under this standard the price of gold in terms of currency was fixed and the CB could issue or retire domestic currency only in line with gold inflows or outflows. Due to the scarcity of gold this system assured price stability as long as it functioned. Wars and depressions led to the replacement of the gold standard by the more flexible gold exchange standard. Along with restrictions on international capital flows this standard became a major pillar of the post–WWII Bretton Woods system. Under this system the U.S. dollar (USD) was pegged to gold, and other countries’ exchange rates were pegged to the USD. In many developing economies CBs functioned as governmental development banks.
Following the world inflation of the 1970s and the collapse of the Bretton Woods system in 1971, eradication of inflation gradually became the explicit number one priority of CBs. The hyperinflationary experiences of the first half of the 20th century, which were mainly caused by over-utilization of the printing press to finance budgetary expenditures, convinced policymakers in developed economies, following Germany’s lead, that the conduct of monetary policy should be delegated to instrument independent CBs, that governments should be prohibited from borrowing from them, and that the main goal of the CB should be price stability. During the late 1980s and the 1990s numerous CBs obtained instrument independence and started to operate on inflation targeting systems. Under this system the CB is expected to use interest rate policy to deliver a low inflation rate in the long run and to stabilize fluctuations in economic activity in the short and medium terms. In parallel the fixed exchange rates of the Bretton Woods system were replaced by flexible rates or dirty floats. The conjunction of more flexible rates and IT effectively moved the control over exchange rates from governments to CBs.
The global financial crisis reminded policymakers that, of all public institutions, the CB has a comparative advantage in swiftly preventing the crisis from becoming a generalized panic that would seriously cripple the financial system. The crisis precipitated the financial stability motive into the forefront of CBs’ policy concerns and revived the explicit recognition of the lender of last resort function of the CB in the face of shocks to the financial system. Although the financial stability objective appeared in CBs’ charters, along with the price stability objective, also prior to the crisis, the crisis highlighted the critical importance of the supervisory and regulatory functions of CBs and other regulators. An important lesson from the crisis was that micro-prudential supervision and regulation should be supplemented with macro-prudential regulation and that the CB is the choice institution to perform this function. The crisis led CBs of major developed economies to reduce their policy rates to zero (and even to negative values in some cases) and to engage in large-scale asset purchases that bloat their balance sheets to this day. It also induced CBs of small open economies to supplement their interest rate policies with occasional foreign exchange interventions.
The 2008 Global Financial Crisis (GFC) and subsequent European Debt Crisis had wide-sweeping consequences for global economic and political stability. Yet while these twin crises have prompted soul searching within the economics profession, international political economy (IPE) has been relatively ineffective in accounting for variation in crisis exposure across the developed world. The GFC and European Debt Crisis present the opportunity to link IPE and comparative political economy (CPE) together in the study of international economic and financial turmoil. While the GFC was prompted by the inter-connectedness of global financial markets, its instigators were largely domestic in nature and were reflective of negative externalities that stemmed from unsustainable national policies, especially those related to financial regulation and household debt accumulation. Many in IPE take an “outward looking in” approach to the examination of international economic developments and domestic politics; analysis rests on how the former impacts the latter. The GFC and European Debt Crisis, however, demonstrate the importance of a (CPE-based) “inward looking out” approach, analyzing how unique policy and political features (and failures) of individual nation states can unleash economic and financial instability at the global level amidst deepened economic and financial integration. IPE not only needs to grant greater attention to variation in domestic politics and policies in a time of closely integrated financial markets, but also should acknowledge the impact of a wider array of actors beyond banks and financial institutions (specifically more domestically rooted actors like households) on cross-national variation in the consumption of foreign credit.
Robert J. Franzese
The basic economics of international trade imply that globalization will have driven in the developed democracies of the Western world an increasing divergence between the material advancement of human, physical, and financial capitalists—a minority of the population—and the material stagnation or even decline of labor—a majority. This article reviews that theory and the strong comparative-historical empirical record substantiating those effects, and explains how the rise of xenophobic, nationalistic, anti-elite populism has its complementary roots in these economic developments.
Ever since Aristotle, the comparative study of political regimes and their performance has relied on classifications and typologies. The study of democracy today has been influenced heavily by Arend Lijphart’s typology of consensus versus majoritarian democracy. Scholars have applied it to more than 100 countries and sought to demonstrate its impact on no less than 70 dependent variables. This paper summarizes our knowledge about the origins, functioning, and consequences of two basic types of democracy: those that concentrate power and those that share and divide power. In doing so, it will review the experience of established democracies and question the applicability of received wisdom to new democracies.
Cuba in the second decade of the new millennium remains as interesting as ever, commanding a place on the world stage much greater than its small size would indicate. Fidel Castro passed away in November 2016 after 10 years of retirement from public life, during which time his brother Raúl assumed the leadership of the country and led Cuba through some very important political and economic changes that are still being played out. In 2011, a long delayed Communist Party congress mandated the scaling back of government employment and the re-creation of a services sector of the economy dominated by private economic activity. These market mechanisms have threatened the island’s vaunted egalitarianism but have moved the economy forward after years of stagnation. In 2013 Raúl declared the political reform of a two-term limit on the presidency and in 2018 Miguel Diaz-Canal, a man in his fifties, assumed the presidency, signaling a shift of political control to a generation born after the revolution triumphed in 1959. The final results of these political and economic reforms, especially in the face of continued hostility from the United States, are not clear, but if they succeed it will not be the first time that Cuba will be an inspiration to those in the world seeking a successful model of social justice.
Timothy Hellwig and Dani M. Marinova
Connections between the economy and vote are commonly invoked to evaluate political accountability in representative democracies. A principal motivation for studying economic voting lies in its value as a gauge of whether democracy works or not. In recent years, however, researchers have cast doubt on the assertion that economic conditions influence voters’ evaluations of political incumbents.
Criticisms hail from several directions. Some, adopting a cross-national perspective, cite the instability problem as evidence against economic voting’s existence. That is, variance in the economy-vote relationship across different national contexts is sufficiently large so as to undermine claims that the economy registers a systematic effect. Other critics charge that the electorate lacks sufficient knowledge to incorporate economic conditions in their decisions at the polls. Still others remind us not to mistake correlation for causation. They charge that the voters’ perceptions of how well the economy is performing are viewed through a pre-existing partisan lens. All told, these and other reservations cast doubt on the use of economic voting as a means to evaluate accountability and, in turn, democratic performance.
These charges against the fidelity of economic voting require further examination. Rather than join a growing chorus of observers concluding that the economic vote is a chimera, this piece posits that recent critiques should push us to reconceive rather than discredit economic voting. Recent work in psychology and behavioral economics provides a basis for constructive and meaningful reinterpretations of the economy’s influence on voter decisions. These new directions include an emphasis on framing effects—be it on the part of strategic elites or from the media, an emphasis on what voters know about the economy, and a wider consideration of just which “economy” matters to which set of voters. While many in number, each of these new directions advance understanding by embodying deeper conceptions of voters and elected officials.
A substantial body of scholarship has considered the impact of regime types on public spending and basic service provision, much of which has implications for education. While some of the theoretical and empirical conclusions from this work are globally applicable, there are also important ways in which the relationship between democracy and education may be influenced by the African context. The most useful theoretical arguments for why democracy may influence public spending, and spending on education in particular, focus on the political incentives generated by multiparty electoral competition. Related but distinct arguments focus on how this may impact in turn on education outcomes, and on why these dynamics may vary because of factors that are particularly pertinent in many African countries. These include variations in the degree of electoral competitiveness and political competition as well as in levels of economic development and ethnic fractionalization. A large body of empirical evidence investigates these various arguments, evaluating the impact of democracy on both education spending and education outcomes. Although evidence for the positive impact of democracy on education is compelling, evidence for this relationship in Africa remains limited and is hampered by limitations to data. In particular, although evidence suggests democracy may have a positive impact on access to education in Africa, there is less evidence for its impact on the quality of education. Future work should continue to address these issues while seeking to investigate sources of heterogeneity in the impact of democracy on education in Africa.
Christina J. Schneider
How does domestic politics affect international cooperation? Even though classic work on international relations already acknowledges the central role of domestic politics in international relations, the first generation of scholarly work on international cooperation focused almost exclusively on the international sources of cooperation. Theories that explicitly link domestic politics and international cooperation did not take a more prominent place in the scholarly work on international cooperation until the late 1980s.
Recent research analyzes how interests and institutions at the domestic level affect the cooperation of governments at the international level. The analysis is structured along a political economy model, which emphasizes the decision making calculus of office-motivated political leaders who find themselves under pressure by different societal groups interested in promoting or hindering international cooperation. These pressures are conveyed, constrained, and calibrated by domestic institutions, which provide an important context for policy making, and in particular for the choice to cooperate at the international level. This standard political economy model of domestic politics is embedded within models of international cooperation, which entail decisions by governments about (a) whether to cooperate (and to comply with international agreements), (b) how to distribute the gains and costs from cooperation, (c) and how to design cooperation as to maximize the likelihood that the public good will be provided.
Domestic politics is significant to explain all aspects of international cooperation. The likelihood that governments engage in international cooperation does not only depend on international factors, but is also and sometimes predominantly driven by the demands of societal groups and variations in institutional structures across countries. Domestic factors can explain how governments behave in distributive negotiations, whether they can achieve advantageous deals, and if negotiations succeed to produce an international collective action. They also contribute to our understanding about whether and how governments comply with international agreements, and consequently, how the design of international institutions affects government compliance. More recently, scholars have become interested in the democratic responsiveness of governments when they cooperate at the international level. Whereas research is still sparse, emerging evidence points to responsive conduct of governments particularly when international cooperation is politicized at the national level.
Economic and Monetary Union (EMU) is one of the most important policy areas of the European Union (EU). Academic research on EMU in political science is well-established and ever-evolving, like EMU itself. There are three main “waves” of research on EMU, which have mostly proceeded in a chronological order. The first wave of scholarly work has focused on the “road” to EMU, from the setting up of the European Monetary System in 1979 to the third and final stage of EMU in 1999. This literature has explained why and how EMU was set up and took the “asymmetric” shape it did, that is to say, a full “monetary union,” whereby monetary policy was conducted by a single monetary authority, the European Central Bank (ECB), but “economic union” was not fully fledged. The second wave of research has discussed the functioning of EMU in the 2000s, its effects and defects. EMU brought about significant changes in the member states of the euro area, even though these effects varied across macroeconomic policies and across countries. The third wave of research on EMU has concerned the establishment of Banking Union from 2012 onward. This literature has explained why and how Banking Union was set up and took the “asymmetric” shape it did, whereby banking supervision was transferred to the ECB, but banking resolution partly remained at the national level, while other components of Banking Union, namely a common deposit guarantee scheme and a common fiscal backstop, were not set up. Subsequently, the research has begun to explore the functioning of Banking Union and its effects on the participating member states.
Hyo Joon Chang and Scott L. Kastner
Recent studies on commercial liberalism have paid more attention to microfoundations linking economic interdependence to peace. Using a bargaining model of war, these studies have specified and tested different causal mechanisms through which economic ties function as a constraint, a source of information, or a transformative agent. Recent scholarly efforts in theoretical development and some empirical testing of different causal processes suggest the need to consider scope conditions to see when an opportunity cost or a signaling mechanism is likely to be salient. Future research can be best benefited by focusing on how economic interdependence affects commitment problems and empirically assessing the relative explanatory power of different causal arguments.
Mary Stegmaier, Michael S. Lewis-Beck, and Lincoln Brown
In democracies, we elect our political leaders by choosing among a rival set of candidates or parties. What makes us pick one over all the others? Do we carefully weigh the platforms of all the candidates and then select the one closest to our personal desires? Or, do we select the candidate our friends and neighbors recommend? Perhaps, even, to save time, do we just vote for the same party we did last time? All of these are choice strategies, and there are many more. Here we focus on a well-known explanation of how voters decide, commonly called the Michigan Model, so named for the university where it was developed, in a path-breaking scholarly volume—The American Voter. The authors systematically gathered data, via scientific survey research, on individual voters in American presidential elections, measuring different traits, perceptions, and attitudes that they hypothesized might influence vote choice.
They arranged these different factors, or variables, into long-term forces and short-term forces that acted on the voter, and could be arrayed as if they were spread along a funnel of causality: from more remote, fixed variables, such as social class or party identification, to more proximate, fluid variables, such as issue preferences and candidate attributes. All these variables generally mattered, but those that concern us here deal with issues, in particular economic issues. How do voter evaluations of the economy help the voter decide what party to favor? Is it the national economy or the pocketbook that counts? How important are economic issues compared to other issues? What conditions make economic considerations more (or less) impactful? Does economic voting operate differently in different countries? These and other questions are addressed herein, with special attention to three leading democracies where economic voting has been heavily studied—the United States, Britain, and Germany. As demonstrated, economic considerations are pervasive and powerful elements in the democratic voter’s calculus.
Stephanie J. Rickard
Policies as diverse as tariffs, exchange rates, and unemployment insurance vary across democratic countries. In an attempt to explain this cross-national variation, scholars have turned to the institutions that govern countries’ elections. The institutions that regulate elections, also known as an electoral system, vary significantly across democracies. Can these varied electoral institutions explain the diversity of policies observed? This question remains unanswered. Despite a growing body of research, little consensus exists as to precisely how electoral institutions affect policy. Why is it so difficult to untangle the effects of electoral institutions on economic policy? One reason for the confusion may be the imprecise manner in which electoral institutions are often measured. Better measures of electoral systems may improve our understanding of their policy effects. Improved theories that clarify the causal mechanism(s) linking electoral systems to policy outcomes will also help to clarify the relationship between electoral systems and policies. To better understand the policy effects of electoral institutions, both theoretical and empirical work must take seriously contextual factors, such as geography, which likely mediate the effects of electoral institutions. Finally, different types of empirical evidence are needed to shed new light on the policy effects of electoral institutions. It is difficult to identify the effects of electoral systems in cross-national studies because of the many other factors that vary across countries. Examining within-country variations, such as changes in district magnitude, may provide useful new insights regarding the effects of electoral institutions on policy.