Peter A. Gourevitch

The second image reversed: the international sources of domestic politics

The international system is not only an expression of domestic structures, but a cause of them. Two schools of analysis exploring the impact of the international system upon domestic politics (regime types, institutions, coalitions, policies) may be distinguished: those which stress the international economy, and those which stress political-military rivalry, or war. Among the former are such arguments as: late industrialization (associated with Gershenkron); dependencia or core-periphery arguments (Wallerstein); liberal development model (much American writing in the 50s and 60s); transnational relation-modernization (Nye, Keohane, Morse); neo-mercantilists (Gilpin); state-centered Marxists (Schurmann). Arguments stressing the role of war include those which focus on the organizational requirements of providing security (Hintze, Anderson), the special nature of foreign relations (classical political theory), territorial compensation (diplomatic history), and strains of foreign involvement (analysis of revolutions). These arguments provide the basis for criticism of much of the literature which uses domestic structure as an explanation of foreign policy, in particular those which (such as the strong-state weak-state distinction) tend, by excessive focus on forms, to obscure the connection between structures and interests, and the role of politics. These arguments also permit criticism of the notion of a recent fundamental discontinuity in the nature of international relations.

The Reemergence of “Peripheral Nationalisms”: Some Comparative Speculations on the Spatial Distribution of Political Leadership and Economic Growth

Recent challenges to the unity of the nation-state in advanced industrial societies have surprised most of us. Scotland, Quebec, Flanders, Occitania, bCatalonia and other regions have made life more interesting politically and more confusing intellectually. While the emergence of ethnic consciousness, or concern with ethnic identity, appears nearly universal across Europe and North America (or indeed around the globe)nationalist movements—demands for autonomy or outright separation—are not equally strong: the nationalism of the Scots, the Basques, Catalans, Croats, Flemish, and Quebecois is far more powerful than that of the Alsatians, Bretons, South Italians, and the Occitents.

The Politics of Corporate Governance Regulation

Why do corporate governance systems differ quite substantially around the world? The American model supervises managers through a board representing a diffuse mass of external shareholders whose rights are defended by a variety of institutional rules (such as those governing insider trading, antitrust, and an open market for corporate control) and by watchdog “reputational intermediaries” (such as accountants, securities analysts, and bond-rating agencies). The claims of employers, suppliers, and buyers are subordinated to shareholder rights. The German model, in contrast, supervises managers by concentrating ownership in blockholders, permitting insider relationships, allowing substantial horizontal coordination among producers, and accepting a variety of “stakeholder” claims on the firm besides those of the shareholders. Japan, as well as Sweden, Austria, and other continental European countries, resembles the German model to varying degrees, while the United Kingdom, Canada, Australia, Ireland, and New Zealand bear closer resemblance to the

Globalization of Production: Insights from the Hard Disk Drive Industry

Abstract Rapid change in the geographical location of production raises important questions regarding the welfare, development potential, and competitive position of different countries and regions. This paper explores in detail the geography of economic activity in a specific industry, the hard disk drive (HDD) component of the computer industry. Firms in the HDD industry are breaking the production system into ever smaller distinct steps, and spreading the physical location of these steps around the world. Firms from the United States dominate the industry. Our findings suggest that globalization has enabled US firms to sustain their dominant position in the industry, preserve employment in the United States (and possibly expand it), and increase employment worldwide, most notably in Southeast Asia.

Squaring the Circle: The Domestic Sources of International Cooperation

Most theorists of international affairs would argue that international cooperation is a good thing. Private-regarding behavior creates efficiency, but some public goods are needed for optimal results, be they in producing peace or prosperity. It is in the logic of markets and of decentralized systems such as international relations to undersupply those public goods. Arms races, beggar-thy-neighbor economic policies, environmental degradation-these are but some examples of actions that take place in the absence of mechanisms to enforce cooperative agreements. Regimes that can punish defectors are able to do better: a good security regime avoids arms races; a good trade regime avoids tariffs; a good monetary regime avoids aggressive devaluations and instability; a good regulatory regime prevents particularistic mercantilism. All these arrangements require international cooperation. How do we get international cooperation? In two ways: first, through a convergence of policy objectives-agreement on the substance of what is sought in trade, security, or other issues; second, by credible commitment to institutions that manage policy disputes. Put in the negative, nations conflict when they cannot agree on policy or when they are unable to sustain commitment to agreements that they may make. For nations to cooperate on a trade or monetary regime, they must agree to the regime (convergence of policy preference) and they must agree that they will not cheat and will adhere to the regime and to a process of resolving disputes that may occur (credibility of commitment).

Breaking with orthodoxy: the politics of economic policy responses to the Depression of the 1930s

Under the same systemic shock, the collapse of the international economy in 1929, different countries formulated different policy responses. Britain, Germany, the United States, France, and Sweden all began by attempting the orthodoxy of deflation. Soon after, they abandoned deflation, devalued their currencies, erected tariff barriers, and set up corporatistic production and marketing arrangements. A few countries went further, and began experimenting with demand-stimulus fiscal policy. The most successful was Nazi Germany; the Swedish and U.S. efforts were much more limited and less effective, the French attempt crumbled in less than a year, and Britain never tried demand stimulus. Why this divergence in policy? The politics of policy response, the societal basis of different policy coalitions and the way in which they were expressed through different political formulations, suggests an answer. In all countries, labor, agriculture, and certain elements of business became available for revolts against policy orthodoxy. What differed across countries was the specific balance of forces among these interest groups, and the political factors that shaped their combinations. The effect of political leadership, institutions, and other variables on outcomes depended critically on the way specific social forces in each society used and worked through them.

The politics of stock market development

ABSTRACT This article locates the political determinants of stock market development in the distributional cleavages among voters and interest groups. Our argument questions the prevailing explanation about the role of partisanship in the literature, where it is usually assumed that left governments frighten investors. To the extent that financial development is translated into higher levels of investment that increases labor demand, workers and the parties representing them will adopt policies and regulations that favor the capitalization of financial markets. We explore the empirical content of our hypothesis against several competing explanations: the legal origins school, which argues common law proxies stronger investor protections than civil law; the electoral law school, which argues proportional representation provides weaker protections than do majoritarian ones; the institutional economics view, which argues that checks on policy-making discretion such as veto gates protect the property rights o...

Monitoring repayment in online peer-to-peer lending

Recent years have seen an explosion in the use of Peer-to-Peer (P2P) lending, in which websites such as Kiva and Microplace offer individuals the ability to make loans to microfinance borrowers across the developing world. Such sites offer a fascinating new example of a two-tiered monitoring device in which micro-finance institutions (MFIs) maintain dynamic relationships with borrowers and P2P lenders maintain dynamic relationships with MFIs. This chapter examines the credibility issues that arise in this new network of NGOs, linking individuals across countries in the absence of any public regulator. The P2P microfinance lending system is a successful example of an NGO creating a robust set of private standards to which other NGOs voluntarily subject themselves, but complex questions remain as to the causal claims that can be made by these institutions on humanitarian grounds, and how the public should evaluate their credibility. 1 The author is grateful to Bryan Diaz and Summer Starr for their excellent research assistance on this project.

France in the troubled world economy

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Industrial Relations and Politics: Some Reflections

None of the social science disciplines has played a smaller role in the study of industrial relations than political science. While the essays in this volume show the importance of sociology, social psychology and other fields, there is a noticeable absence of studies concerned with the interaction between politics and industrial relations. The ‘behavioural revolution’ in political science (especially opinion surveys analysed through sophisticated statistical techniques) has given us a great deal of knowledge about worker attitudes toward many subjects. We still know very little, though, about such matters as the impact of labour market conditions upon political behaviour, the way in which workers’ individual priorities are processed by labour organizations and the operation of labour organizations in the political system. It is striking how little attention political scientists have devoted to the role of labour unions in the domestic policy process despite the widespread belief that unions are (too?) powerful.