Mark Souva

The Economic Peace Between Democracies: Economic Sanctions and Domestic Institutions*

This article argues that the influence of democratic institutions in international relations extends beyond the military realm and into the economic. The authors extend Bueno de Mesquita et al.’s institutional theoryof political regimes to explain the use and variety of economic sanctions in world politics. It is argued that democracies impose sanctions more oftenthan other regime types because they encompass a greater variety of interest groups. Yet, institutional incentives for successful foreign policies lead democracies to prefer sanctioning non-democracies instead of democracies.The pacifying influence of jointly democratic regimes, then, extends into the economic realm. Further, these same institutional incentives account forvariation across regime types in the choice of sanctions used and the goalspursued. Owing to incentives to minimize harm to their public and achieve successful foreign policies, democratic regimes are more likely than non-democracies to impose financial sanctions and pursue minor foreign policy goals. The authors use the Hufbauer, Schott & Elliott sanctions dataset to empirically evaluate each hypothesis. The empirical analysis supports the argument that domestic political institutions affect the incentives of leaders and, therefore, the foreign policies of states.

The Liberal Peace Revisited: The Role of Democracy, Dependence, and Development in Militarized Interstate Dispute Initiation, 1950–1999

We test a model of the liberal peace by examining the initiation of militarized interstate disputes at the monadic level of analysis from 1950–1999. Liberal peace theory contends that both economic dependence and democratic political systems reduce conflict propensities. Extant empirical analyses of the monadic liberal peace, however, are under-specified. First, the concept of economic dependence not only includes trade, but also foreign investment. Second, existing models do not control for the influence of economic development. Previous research on the monadic liberal peace has also failed to distinguish between the initiation of conflict and participation in conflict. We find evidence for a liberal peace: trade dependence, foreign investment, and democracy reduce a state’s propensity to initiate militarized disputes.

Institutional Similarity and Interstate Conflict

This paper makes two arguments. First, the political and economic institutions of a state affect that states foreign policy preferences. Second, dyads with similar political and economic institutions are less likely to experience conflict than other types of dyads. After developing the logic of these arguments, I create measures of political and economic institutional similarity and test the hypotheses against the empirical record. The empirical analysis supports the argument that dyadic institutional similarity reduces the likelihood of conflict. The most noteworthy finding is that economic institutional similarity, even when the political institutions in a dyad are dissimilar, reduces the likelihood of militarized conflict.

Promoting Trade: The Importance of Market Protecting Institutions

What set of domestic institutions most affect bilateral trade flows? Extant research emphasizes security institutions or democratic political institutions. We agree that domestic institutions matter, but not the ones previously identified. Rather, the key set of institutions influencing trade flows are those that protect property rights. These market-protecting institutions, such as the establishment of banking and insurance laws and common standards of measurement, promote trade by lowering the transaction costs of commercial exchange. An empirical analysis of bilateral trade flows employing a number of estimation methods and operationalizations of the key concept support our market-protecting institutions argument.

Institutions and International Cooperation

This paper addresses a new issue in sanctions research: the determinants of the time it takes for nations to return to presanctions levels of trade after a sanctions episode ends. The authors argue that democratic institutions reduce transaction costs and promote trust between economic agents. Their primary hypothesis is that jointly democratic dyads return to their presanctions level of trade faster than nonjointly democratic dyads. To evaluate this argument, the authors have constructed an event history data set of 59 sanctions cases beginning between 1954 and 1992. The empirical analysis finds strong support for the theoretical hypothesis that democratic political institutions facilitate a return to trade. These results hold even in the presence of competing explanations, and are robust to alternative model specifications.

A Comparative Theory Test of Democratic Peace Arguments, 1946—2000:

Multiple theories posit the existence of a dyadic democratic peace. The authors extend the logic of three theories of the democratic peace — informational, normative, and preferences — and find that they make different predictions with respect to the onset and escalation of disputes across the range of similar regime dyads. First, regarding dispute onset, the preferences argument, but not the normative and informational arguments, expects autocratic dyads of similar type to have less conflict onset than mixed dyads. Second, the normative argument expects democratic, but not non-democratic, dyads to be less likely to escalate their disputes, while the informational argument expects democracy to have little impact, after conflict onset has been taken into account. The preferences argument expects all dyads of similar regime type to be less likely to escalate their disputes. Critical tests of these expectations are conducted by estimating a censored choice model of conflict onset and escalation, using multiple measures of interstate conflict. The authors find little support for a broader regime-similarity peace, and their findings on democratic dispute escalation favor the informational argument over the normative argument.

The Accountability Effects of Political Institutions and Capitalism on Interstate Conflict

Selectorate theory posits that leader accountability increases with the size of the winning coalition. Recent research contends that capitalism also increases leader accountability because leaders are more dependent on the public for revenue in more capitalist economies. The authors argue that extant tests of accountability arguments of interstate conflict initiation and targeting are flawed. Accountability theories of foreign policy expect leaders to selectively initiate disputes based on their probability of winning. Accountability arguments, then, expect a conditional relationship between the accountability mechanism and the balance of power. For example, if capitalism produces peace through accountability, then more capitalist states should be less likely to initiate militarized disputes as their power advantage decreases. The authors find that this is not the case. At the same time, the authors find robust support for selectorate theory’s contention that larger winning coalitions are more selective about using military force. Political institutions induce accountability; capitalism does not.

Elite Opinion Differences and Partisanship in Congressional Foreign Policy, 1975-1996

Why are some foreign policy votes partisan and others bipartisan? The authors argue that an electoral connection drives partisanship in congressional foreign policy voting. Members of Congress depend on core supporters for mobilization and money, and primary voters are likely to follow the opinion cues of partisan elites; as a result, when Republican and Democratic opinion elites hold more distinct views on an issue, one may expect to observe more partisan behavior in Congress on both low and high-politics foreign policy issues. An empirical analysis of elite public opinion and congressional voting on foreign policy issues for six Congresses between 1975 and 1996 supports the elite opinion cleavage argument.

Foreign Policy Determinants: Comparing Realist and Domestic-Political Models of Foreign Policy

Systemic realist arguments of foreign policy decision-making suggest that partisan disagreement stops at the waters edge. A domestic-politics model of foreign policy decision-making posits that politics does not stop at the waters edge. Extant research on foreign policy voting in the U.S. Congress is consistent with the systemic realist argument. According to this research, partisan voting is less likely to occur on national security, or high-politics issues, than on low-politics issues. I argue that this research suffers from two flaws. First, it does not measure high-politics in accordance with systemic realist thinking. Second, the goal in addressing the waters-edge question is not to learn if a specific variable, such as high-politics, is significant, but to compare competing models. To this end, it is necessary to engage in a “three-cornered fight” and conduct a nonnested model discrimination test. After creating a new measure of high-politics, I compare a systemic realist model against a domestic-politics model of foreign policy voting in the House of Representatives from 1953—2000. The model discrimination test indicates that the domestic-politics model outperforms the systemic realist model. Institutional dynamics and public opinion are more important for understanding foreign policy voting than are more traditional realist variables.

Audience Costs, Information, and Credible Commitment Problems

Leaders who can accumulate audience costs can send costly signals that may help alleviate information problems associated with crisis escalation. We argue that research examining the effect of audience costs fails to appreciate the theoretical context in which audience costs matter. Audience costs may help alleviate information problems associated with international conflict. However, credible commitment problems are more central than information problems for some international conflicts. Theory does not expect audience costs to matter in this context; as a result, extant tests, and many criticisms, of the effect of audience costs on crisis escalation are flawed. We offer a more appropriate test of the effect of audience costs on crisis escalation. Consistent with extant theoretical arguments, we find that audience costs only reduce the likelihood of conflict when credible commitment problems are not the dominant concern motivating a dispute or crisis.