Despite its relative economic decline, the United States remains the dominant power in the world economy. The foreign economic actions taken by American officials, whether they involve trade, technology transfer, or the value of the dollar, continue to have profound consequences for other states in the international system, as well as for American domestic politics and economics. Thus, it is not surprising that the study of American foreign economic policy attracts considerable scholarly attention, and presently constitutes a major portion of the subfield of international political economy.

Domestic politics and international relations are often inextricably entangled, but existing theories (particularly “state-centric” theories) do not adequately account for these linkages. When national leaders must win ratification (formal or informal) from their constituents for an international agreement, their negotiating behavior reflects the simultaneous imperatives of both a domestic political game and an international game. Using illustrations from Western economic summitry, the Panama Canal and Versailles Treaty negotiations, IMF stabilization programs, the European Community, and many other diplomatic contexts, this article offers a theory of ratification. It addresses the role of domestic preferences and coalitions, domestic political institutions and practices, the strategies and tactics of negotiators, uncertainty, the domestic reverberation of international pressures, and the interests of the chief negotiator. This theory of “two-level games” may also be applicable to many other political phenomena, such as dependency, legislative committees, and multiparty coalitions.

This article attempts to build a bridge between the study of international organizations and the sociology of organizations. Comparisons between functionalism in the two fields are found to be especially important in understanding different treatments of international organizations. We suggest that a number of concepts from the sociology of organizations can be effectively used to illuminate issues in international organizations. We focus on organizational performance and its determinants in environment, technology, goals, and structure. The authors' current work in international population planning and social forestry shows how the sociological concepts can offer useful perspectives and hypotheses for the study of international organizations.

One of the most important recent contributions to the field of comparative political economy is Mancur Olson's The Rise and Decline of Nations. In that work, Olson deduces, from his logic of collective action, a series of implications regarding the impact of social organizations—in particular, “distributional coalitions”—on economic growth that can explain variations in national growth rates across a wide range of time and space. This article considers the assumptions upon which that logic is founded, the plausibility of the several implications drawn from that logic, and the application of the theory to account for differences among five nations in rates of economic growth in the post-World War II era. The analysis suggests that the characteristics of group activity emphasized by Olson represent, at best, only a small— perhaps negligible—part of the explanation of cross-national differences in growth. Instead, it suggests that an important source of the variation among nations in growth rates is the international political and economic system. In particular, the discussion of the German, Japanese, and British cases suggests that stagnation (or growth) is, to a considerable extent, the product of a nation's position in the world economy, the policy responses through which governments seek to perpetuate or improve that position, and the constraints upon (or opportunities for) growth-oriented domestic economic policy posed by that position.

The question “what causes alignment?” remains a basic issue in international relations theory. Moreover, competing hypotheses about alliance formation underlie many recurring policy debates. Balance-of-power theory predicts states will ally to oppose the strongest state; the “bandwagoning hypothesis” predicts that alignment with the stronger side is more likely. These two hypotheses are usually framed solely in terms of the distribution of capabilities (that is, the balance of power), which neglects several other important factors and leads to faulty predictions about alliance choices. A careful examination of the alliance policies of Iran, Turkey, India, and Pakistan reveals that “balance-of-threat theory” provides a better explanation of alliance choices than these other conceptions. This theory predicts that states balance against the most threatening state, rather than the most powerful. Threats are a function of power, geographic proximity, offensive capability, and perceived intentions. Thus, balance-of-threat theory is an important refinement of structural balance- of-power theory.

Basic analytic premises are an issue in contemporary debates about the U.S. foreign economic policy process. In dispute are the power structures alleged to govern the formation of American trade and international monetary policy. Thus, the literature supports both of these assumptions: the distribution of power is skewed towards private actors in the issue-area generally; the distribution of power varies according to issue-area. Within the camp of issue-specific power structures, as I shall discuss in more detail, support can be found for almost any assumption about the distribution of power prevailing, in the language of current debate, between “state and society.”

International economic factors increasingly influence American trade and exchange policy, and interdependence also circumscribes the autonomous choice of domestic policies. But the growing concern of Organization for Economic Cooperation and Development (OECD) policymakers over the potential for macroeconomic policy coordination to enhance national as well as world welfare implies that international economic relations present opportunities rather than constraints under some circumstances. This suggests that understanding domestic economic policy choice within its international context involves not only how policy choices are made within the bounds of international constraints, but also when countries might cooperate to modify the constraints themselves. This research looks to four important historical cases for information on these questions: the first three are the series of cumulating crises in the international monetary system during the 1960s and early 1970s, the fourth is the energy supply shock of 1973 and the recession that followed. The article describes the process of policy selection in each of these cases, contrasting domestic versus international premises for policy choice. The economics literature has emphasized the magnitude of domestic welfare gains available from coordinated national economic policies. Although the cases considered here do not contradict the importance of payoffs, they underline the corresponding role of political, economic, and strategic uncertainty in conditioning elites' policy choices.

Bargaining theory is used to evaluate the proposition that asymmetrical economic interdependence among states is a source of political power. It is shown that asymmetrical economic interdependence does not imply that less dependent actors will be able to exercise political influence over more dependent ones. The use of economic interdependence for political influence requires, instead, that the exchange of economic resources for political concessions make both parties to a relationship better off than they would be if they bargained over the distribution of the gains from the economic relationship alone. Whether this is true is independent of the degree of asymmetry in the economic relationship, or its direction. An explanation is given for the fact that other scholars have reached different conclusions, and the implications of these results for our understanding of a variety of types of relations among governments are derived.

This study examines the determinants of intra-alliance cooperation by focusing on a single case study: the North Atlantic Treaty Organization (NATO) attempts to deal with Persian Gulf security since 1979. It chronicles the evolution of NATO policy towards Southwest Asia, identifying examples of cooperative and noncooperative behavior. The essay then develops four hypotheses about intra-alliance behavior and uses them to examine the case study. The External Threat hypothesis suggests that alliance cohesion rises and falls with external threats to collective security. The Alliance Security Dilemma hypothesis proposes that cohesion is a function of the coercive potential of the alliance leader and its ability to exact cooperative behavior from its weaker partners. The Collective Action hypothesis suggests that alliance behavior is fundamentally a public goods problem. The Domestic Politics hypothesis asserts that alliance behavior is determined primarily by political and economic factors at the domestic level.

The essay points to the overriding importance of American coercion in producing political cooperation within NATO on the out-of-area problem. It shows, however, that the economic components of alliance behavior are relatively insensitive to bargaining pressure and threat perceptions, and that European defense expenditures are determined largely by domestic factors. The article therefore illuminates the need to distinguish carefully between the political and economic components of alliance management. It suggests, however, that the different dynamics driving cooperation and discord are not a function of the issue-area per se, but of the scope and locus of its decision-making arena. While some issue-areas are largely the domain of foreign policy elites and lend themselves to oligarchic forms of decision making, others have a far more immediate impact on domestic politics and are therefore more influenced by pluralist factors.

Trade policy is commonly seen as a product of domestic interest group politics. Despite the obvious economic distortions introduced by trade barriers, protectionism recurs, we are often told, because producers organize more readily than consumers and dominate the political process. In this “demand side” explanation of protection, the state is seen as the empty receptacle of societal bargaining with no independent voice or role.

In trade among the members of the Council for Mutual Economic Assistance (CMEA), prices of raw materials are lower and those of manufactured goods higher than comparable world prices. Because the Soviet Union is a net exporter of raw materials to, and net importer of manufactures from, the other CMEA countries, it benefits less from CMEA trade than it would from trading with the rest of the world, and the other CMEA members benefit more. This redistribution of the gains from trade is generally seen as a form of subsidization. One explanation of these subsidies is that they represent Soviet payments for political and military benefits provided by East European regimes; another is that the subsidies compensate Eastern Europe for the economic burden imposed by central planning and extensive economic ties to the Soviet Union. I argue that neither of these explanations is consistent with the type of economic and political relations that one would expect of the Soviet and East European regimes. In their place I offer an alternative explanation based on the Heckscher-Ohlin model of comparative advantage. The distribution of CMEA subsidies is shown to reflect the distribution of gains from trade that would arise among any group of economies forming a preferential trading scheme. I also argue that the willingness of members to belong to CMEA, even at the expense of paying subsidies, is that CMEA can be viewed as a club that provides benefits to members while imposing costs that may to some extent be unequal and unpredictable.

The newest liberal institutionalism asserts that, although it accepts a major realist proposition that international anarchy impedes cooperation among states, it can nevertheless affirm the central tenets of the liberal institutionalist tradition that states can achieve cooperation and that international institutions can help them work together. However, this essay's principal argument is that neoliberal institutionalism misconstrues the realist analysis of international anarchy and therefore it misunderstands realism's analysis of the inhibiting effects of anarchy on the willingness of states to cooperate. This essay highlights the profound divergences between realism and the newest liberal institutionalism. It also argues that the former is likely to be proven analytically superior to the latter.

Socialists at the turn of the century explained modern imperialism as an attempt to escape the crisis of monopoly capitalism. “Super-profits” that could be secured in the periphery, according to Lenin, were necessary to offset declining rates of return in the advanced economies. Today, radical theorists stress the role of the multinational corporations in accounting for neocolonialism. If great national power does produce material benefits for foreign investors, this should be apparent in two cases: the experience of British capitalists in the “high age of imperialism,“ 1870–1913, and the operations of U.S. multinational corporations abroad after World War II. But rates of return on foreign investments have not been significantly different in the developed and less developed regions of the world—a finding that is relevant not only for theories of imperialism but also for understanding development and modernization, the operation of the multinational corporation, and international capital markets.

Many scholars argue that labor is excluded from Japan's political system. However, since the 1970s, labor has become considerably influential in the policymaking process in Japan. The oil crisis of 1973 and the Shuntou wage bargaining of 1975 have made labor, especially private-sector unions, modest in their wage demands, but at the same time these events have made labor participate actively in the policymaking process in order to maintain employment and seek some benefits from the government. This article demonstrates that Japan's increasing export-dependence and tradeoffs between wage increases on the one hand, and inflation and unemployment on the other in the 1970s, have driven labor to this new, more active role in policymaking, while the necessity for the governing Liberal Democratic party to seek a new constituency has enabled labor to achieve some success in this new role. This implies that Japan's political system has changed its nature since the 1970s; its political process has become more pluralistic with labor's participation within the existing political system.

A key topic of inquiry in the ongoing debate over Japan's remarkable postwar growth is the role of the government. Some argue that the state has played a leading role in stimulating and guiding the development of specific industries; others argue that market factors, such as high rates of investment and savings and low labor costs, have been the key impetus. This article focuses on the link between the state and the market, in particular the impact of state policies on market competition. It is primarily concerned with how targeting policies can be structured in ways that spur industrial development; that is, how policies can help firms enter an industry and encourage them to invest heavily to make better products, without sapping their initiative and making them dependent on the government. A case study of Japan's national strategy to develop an economically viable computer industry provides an opportunity to explore the relationship among targeting policies, market competition, and industrial development.

The period from 1914 to 1940 is one of the most crucial and enigmatic in modern world history, and in the history of modern U.S. foreign policy. World War I catapulted the United States into international economic and political leadership, yet in the aftermath of the war, despite grandiose Wilsonian plans, the United States quickly lapsed into relative disregard for events abroad: it did not join the League of Nations, disavowed responsibility for European reconstruction, would not participate openly in many international economic conferences, and restored high levels of tariff protection for the domestic market. Only in the late 1930s and 1940s, after twenty years of bitter battles over foreign policy, did the United States move to center stage of world politics and economics: it built the United Nations and a string of regional alliances, underwrote the rebuilding of Western Europe, almost single-handedly constructed a global monetary and financial system, and led the world in commercial liberalization.

In 1930, Congress approved the highly restrictive Smoot–Hawley tariff, the textbook case of pressure group politics run amok. Four years later, Congress passed the Reciprocal Trade Agreements Act (RTAA), surrendering much of its tariff-making authority to a policy process in which internationalists had increasing influence. While the United States had used reciprocity to expand exports before, the stick of discriminatory treatment took precedence over the carrot of liberalizing concessions. With the transfer of tariff-making authority to the executive, the United States could make credible commitments and thus exploit its market power to liberalize international trade. Despite later modifications, the RTAA set the fundamental institutional framework for trade politics.

The World Bank and the International Monetary Fund have been bedeviled since their common creation over how to define their areas of specialized competence and how to interact in areas of overlapping jurisdiction. The multiple shocks that have destabilized the global economy over the last two decades have stimulated the Bank and Fund to alter fundamentally their programs and approaches, often without fully taking into account their relation to the work of the other Bretton Woods agency.

The Fund's traditional focus on short-term stabilization, correcting external account imbalances, and fighting inflation, contrasted with the World Bank's provision of long-term funds for investment in capital-intensive projects. But more recently, with the establishment of the IMF's Extended Fund Facility and the Bank's structural adjustment lending, both institutions share the objective of adjustment with growth, and each claims some responsibility for an extremely wide range of policy instruments. The new Structural Adjustment Facility, in particular, has the potential to link more tightly decision-making on Fund stand-by arrangements and Bank structural adjustment lending, increasing the probability of new forms of cross-conditionality—termed here consultative cross-conditionality, interdependent cross-conditionality, and indirect financial linkage.

The Bank and Fund need to find ways to better delineate and manage their new relationship. Problems that should be addressed to do so include proper modes of collaboration between Bank and Fund staff, issue specialization, the avoidance of piling on excessively detailed performance requirements, and decisions on ineligibility. Enhanced cooperation between the Bank and Fund can not only produce more coherent adjustment programs, but can also help to mobilize other sources of official and private capital.

Why have advanced industrial countries responded with different types of protectionist policy to postwar international competition and the resulting societal pressure for state action? In contrast to the across-the-board tariff wars of the 1930s, postwar protectionism is a patchwork of tariffs, unilateral and nonunilateral quotas, administrative restrictions, state subsidies, and production cartels. Arguments based on international economic structure, international regimes, statist approaches, and domestic structure all appear to have difficulty in accounting for divergent trade policy choices. This article introduces a more nuanced identification and integration of the international and domestic sources of the new protectionism. An examination of textile trade policy in the United States and Japan reveals that when state policymakers face conflicting international constraints and domestic pressure over the use of overt types of protectionist policy, the greater the domestic pressure, the more overt the policy response.

The voting behavior of the Third World states in the United Nations shows that the Third World unity increased in the 1980s. Systemic theory reveals that changes in the power of the Third World could partly account for the increased unity. For a more complete explanation, I examine three models of the Group of 77—the communityof- interest model, the leadership model, and the reciprocal coordination model—and find that the data support the reciprocal coordination model most consistently.