Terrence L. Chapman

The United Nations Security Council and the Rally ’Round the Flag Effect

A principal agent model is used to test the hypothesis that when proposed uses of force attract the support of the United Nations (UN) Security Council, the rally in support of the American president increases significantly. Regression analysis is applied to rallies during all militarized interstate disputes from 1945 to 2001. Results show that UN Security Council support significantly increases the rally behind the president (by as many as 9 points in presidential approval), even after including an array of control variables. This finding is generally robust across most model specifications. This effect is unique among international institutions because other actions by the UN or regional security organizations do not significantly affect rallies. These findings provide new insight into how international institutions can matter and influence the foreign policies of states by affecting public opinion.

International Security Institutions, Domestic Politics, and Institutional Legitimacy

Scholars have devoted considerable attention to the informational role of international institutions. However, several questions about the informational aspects of institutional behavior remain underexplored: What determines how audiences respond to institutional decisions? Through what channels does information provision affect foreign policy? To answer these questions, I develop a formal model motivated by recent literature on the informational effects of security institutions. The formal model depicts information transmission between a domestic audience, an international institution, and a foreign policy maker. Statements issued by member states through the institution serve to inform the audience about the likely outcomes of its leader’s actions. The model demonstrates that leaders have incentives to consult relatively conservative institutions, because their support convinces audiences that they should also support proposed policies. Leaders face incentives to avoid the disapproval of more revisionist institutions, because their opposition will tend to induce public opposition. The empirical implications are discussed.

International Organizations, Strategy, and Crisis Bargaining

We analyze a game-theoretic model of crisis bargaining in which a challenger state can consult an international organization whose decisions can affect its costs for war. We demonstrate that, first, while multilateral opposition lowers the probability of war by coordinating international opposition and increasing the costs of fighting multilateral support can increase the probability of war by coordinating support and lowering those costs. Second, the aggregate effect of IO involvement on the probability of war is conditional on the strategic decisions of challengers to initially consult the organization, implying that any empirical analysis of the pacific effects of IOs should take this selection process seriously. Finally, we provide a more nuanced explanation for why states seek multilateral support and fail; rather than a lack of material power to influence IO decisions, it is a strategic incentive to take greater risks of opposition in order to garner the benefits multilateral support. This allows us to address broader debates about the role of international institutions by showing that IOs are neither ineffectual nor universally a force for peace.

Global Credit Markets, Political Violence, and Politically Sustainable Risk Premia

How do international financial conditions affect civil unrest? Existing studies examine the domestic economic roots of political violence but say little about the role of external financial conditions. We explore the interactions between international lending, government policy, and domestic unrest. In particular, we note that because of sovereign risk and defensive lending dynamics, credit ratings and interest rate premia are endogenous to expectations about civil violence. We test these claims using instrumental variables techniques and daily data on sovereign bond yield spreads, credit ratings, and episodes of civil violence in 59 developing countries from 1990 through 2004. After correcting for endogeneity, we find that exogenous increases in the price of foreign capital are robustly associated with increased odds of civil conflict. Primary commodity dependence, low economic growth, and poverty can also increase the odds of civil conflict by reducing access to foreign capital.

Mixed Signals: IMF Lending and Capital Markets

The effect of new International Monetary Fund (IMF) lending announcements on capital markets depends on the lender’s political motivations. There are conditions under which lending reduces the risk of a deepening crisis and the risk premium demanded by market actors. Yet the political interests that make lenders willing to lend may weaken the credibility of commitments to reform, and the act of accepting an agreement reveals unfavorable information about the state of the borrower’s economy. The net ‘catalytic’ effect on the price of private borrowing depends on whether these effects dominate the beneficial effects of the liquidity the loan provides. Decomposing the contradictory effects of crisis lending provides an explanation for the discrepant empirical findings in the literature about market reactions. This study tests the implications of the theory by examining how sovereign bond yields are affected by IMF program announcements, loan size, the scope of conditions attached to loans and measures of the geopolitical interests of the United States, a key IMF principal.

International bargaining, endogenous domestic constraints, and democratic accountability

How do domestic constraints affect international negotiations? Most existing research takes these constraints as given, owing to the presence of certain types of domestic institutions. We analyze a two-sided international bargaining model with endogenous domestic constraints. Our model includes a principal–agent tension between domestic audiences and leaders, and it shows how constraints may arise endogenously and be tailored to the strategic situation at hand by domestic audiences. We show that domestic actors can often use accountability mechanisms to garner bargaining leverage and control special interests, even when leaders hold private information about their distributive preferences. We also show that the relative strength of accountability across countries is important for understanding the emergence of endogenous constraints. We discuss the implications of these theoretical findings for the influence of domestic constraints in several prominent examples of international negotiations

Information and Institutions Redux

In “Information and Institutions Revisited,” Fey et al. point out some corrections to the equilibrium analyzed in Chapman. In this brief response, we argue that while these corrections are appropriate, they do not address the larger substantive question of when conditions exist that would facilitate information transmission between an international security organization and a domestic audience. We show an equilibrium in which the core logic of the information transmission argument in Chapman remains. We also discuss the particular modeling choices that facilitate information transmission (or prevent it) in equilibrium.