1. The following account is drawn from Putnam, Robert D. and Henning, C. Randall, “The Bonn Summit of 1978: How Does International Economic Policy Coordination Actually Work?” Brookings Discussion Papers in International Economics, no. 531 (Washington, D.C.: Brookings Institution, 10 1986)Google Scholar, and Putnam, Robert D. and Bayne, Nicholas, Hanging Together: Cooperation and Conflict in the Seven-Power Summits, rev. ed. (Cambridge, Mass.: Harvard University Press, 1987), pp. 62–94Google Scholar.

2. Among interdependent economies, most economists believe, policies can often be more effective if they are internationally coordinated. For relevant citations, see Putnam, and Bayne, , Hanging Together, p. 24Google Scholar.

3. For a comprehensive account of the Japanese story, see Destler, I. M. and Mitsuyu, Hisao, “Locomotives on Different Tracks: Macroeconomic Diplomacy, 1977–1979,” in Destler, I. M. and Sato, Hideo, eds., Coping with U.S.-Japanese Economic Conflicts (Lexington, Mass.: Heath, 1982)Google Scholar.

4. For an excellent account of U.S. energy policy during this period, see Ikenberry, G. John, “Market Solutions for State Problems: The International and Domestic Politics of American Oil Decontrol,” International Organization 42 (Winter 1988)CrossRefGoogle Scholar.

5. It is not clear whether Jimmy Carter fully understood the domestic implications of his Bonn pledge at the time. See Putnam and Henning, “The Bonn Summit,” and Ikenberry, “Market Solutions for State Problems.”

6. Waltz, Kenneth N., Man, the State, and War: A Theoretical Analysis (New York: Columbia University Press, 1959)Google Scholar.

7. Gourevitch, Peter, “The Second Image Reversed: The International Sources of Domestic Politics,” International Organization 32 (Autumn 1978), pp. 881–911CrossRefGoogle Scholar.

8. I am indebted to Stephan Haggard for enlightening discussions about domestic influences on international relations.

9. Rosenau, James, “Toward the Study of National-International Linkages,” in his Linkage Politics: Essays on the Convergence of National and International Systems (New York: Free Press, 1969)Google Scholar, as well as his “Theorizing Across Systems: Linkage Politics Revisited,” in Wilkenfeld, Jonathan, ed., Conflict Behavior and Linkage Politics (New York: David McKay, 1973), especially p. 49Google Scholar.

10. Deutsch, Karl W. et al. , Political Community in the North Atlantic Area: International Organization in the Light of Historical Experience (Princeton: Princeton University Press, 1957)Google Scholar and Haas, Ernst B., The Uniting of Europe: Political, Social, and Economic Forces, 1950–1957 (Stanford, Calif.: Stanford University Press, 1958)Google Scholar.

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13. Katzenstein, Peter J., ed., Between Power and Plenty: Foreign Economic Policies of Advanced Industrial States (Madison: University of Wisconsin Press, 1978), p. 4Google Scholar. See also Katzenstein, , “International Relations and Domestic Structures: Foreign Economic Policies of Advanced Industrial States,” International Organization 30 (Winter 1976), pp. 1–45CrossRefGoogle Scholar; Krasner, Stephen D., “United States Commercial and Monetary Policy: Unravelling the Paradox of External Strength and Internal Weakness,” in Katzenstein, , Between Power and Plenty, pp. 51–87Google Scholar; and Krasner, , Defending the National Interest: Raw Materials Investments and U.S. Foreign Policy (Princeton: Princeton University Press, 1978)Google Scholar.

14. For example, see Krasner, , “United States Commercial and Money Policy,” p. 55Google Scholar: “The central analytic characteristic that determines the abiliiy of a state to overcome domestic resistance is its strength in relation to its own society.”

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16. Gourevitch, , “The Second Image Reversed,” p. 903Google Scholar.

17. In their more descriptive work, “state-centric” scholars are often sensitive to the impact of social and political conflicts, such as those between industry and finance, labor and business, and export-oriented versus import-competing sectors. See Katzenstein, , Between Power and Plenty, pp. 333–36, for exampleGoogle Scholar.

18. Lake, David A., “The State as Conduit: The International Sources of National Political Action,” presented at the 1984 annual meeting of the American Political Science Association, p. 13Google Scholar.

19. Alt, James E., “Crude Politics: Oil and the Political Economy of Unemployment in Britain and Norway, 1970–1985,” British Journal of Political Science 17 (04 1987), pp. 149–99CrossRefGoogle Scholar; Evans, Peter B., Dependent Development: The Alliance of Multinational, State, and Local Capital in Brazil (Princeton: Princeton University Press, 1979)Google Scholar; Gourevitch, Peter, Politics in Hard Times: Comparative Responses to International Economic Crises (Ithaca, N.Y.: Cornell University Press, 1986)Google Scholar; Katzenstein, Peter J., Small States in World Markets: Industrial Policy in Europe (Ithaca, N.Y.: Cornell University Press, 1985)Google Scholar.

20. Walton, Richard E. and McKersie, Robert B., A Behavioral Theory of Labor Negotiations: An Analysis of a Social Interaction System (New York: McGraw-Hill, 1965)Google Scholar.

21. Strauss, Robert S., “Foreword,” in Twiggs, Joan E., The Tokyo Round of Multilateral Trade Negotiations: A Case Study in Building Domestic Support for Diplomacy (Washington, D.C.: Georgetown University Institute for the Study of Diplomacy, 1987), p. viiGoogle Scholar. Former Secretary of Labor John Dunlop is said to have remarked that “bilateral negotiations usually require three agreements—one across the table and one on each side of the table,” as cited in Raiffa, Howard, The Art and Science of Negotiation (Cambridge, Mass.: Harvard University Press, 1982), p. 166Google Scholar.

22. Druckman, Daniel, “Boundary Role Conflict: Negotiation as Dual Responsiveness,” in Zartman, I. William, ed., The Negotiation Process: Theories and Applications (Beverly Hills: Sage, 1978), pp. 100–101, 109Google Scholar. For a review of the social-psychological literature on bargainers as representatives, see Pruitt, Dean G., Negotiation Behavior (New York: Academic Press, 1981), pp. 41–43Google Scholar.

23. Robert Axelrod, “The Gamma Paradigm for Studying the Domestic Influence on Foreign Policy,” prepared for delivery at the 1987 Annual Meeting of the International Studies Association.

24. Snyder, Glenn H. and Diesing, Paul, Conflict Among Nations: Bargaining, Decision Making, and System Structure in International Crises (Princeton: Princeton University Press, 1977), pp. 510–25Google Scholar.

25. Black, Max, Models and Metaphors (Ithaca, N.Y.: Cornell University Press, 1962), p. 242Google Scholar, as cited in Snidal, Duncan, “The Game Theory of International Politics,” World Politics 38 (10 1985), p. 36nCrossRefGoogle Scholar.

26. To avoid unnecessary complexity, my argument throughout is phrased in terms of a single chief negotiator, although in many cases some of his responsibilities may be delegated to aides. Later in this article I relax the assumption that the negotiator has no independent preferences.

27. Stoltenberg, Gerhardt, Wall Street Journal Europe, 2 10 1986Google Scholar, as cited in Henning, C. Randall, Macroeconomic Diplomacy in the 1980s: Domestic Politics and International Conflict Among the United States, Japan, and Europe, Atlantic Paper No. 65 (New York: Croom Helm, for the Atlantic Institute for International Affairs, 1987), p. 1Google Scholar.

28. Takashi, Ito, “Conflicts and Coalition in Japan, 1930: Political Groups and the London Naval Disarmament Conference,” in Groennings, Sven et al. , eds, The Study of Coalition Behavior (New York: Holt, Rinehart, & Winston, 1970)Google Scholar; Tatsuo, Kobayashi, “The London Naval Treaty, 1930,” in Morley, James W., ed., Japan Erupts: The London Naval Conference and the Manchurian Incident, 1928–1932 (New York: Columbia University Press, 1984), pp. 11–117Google Scholar. I am indebted to William Jarosz for this example.

29. This stipulation is, in fact, characteristic of most real-world ratification procedures, such as House and Senate action on conference committee reports, although it is somewhat violated by the occasional practice of appending “reservations” to the ratification of treaties.

30. New York Times,26 September 1986.

31. For the conception of win-set, see Shepsle, Kenneth A. and Weingast, Barry R., “The Institutional Foundations of Committee Power,” American Political Science Review 81 (03 1987), pp. 85–104CrossRefGoogle Scholar. I am indebted to Professor Shepsle for much help on this topic.

32. To avoid tedium, I do not repeat the “other things being equal” proviso in each of the propositions that follow. Under some circumstances an expanded win-set might actually make practicable some outcome that could trigger a dilemma of collective action. See Crawford, Vincent P., “A Theory of Disagreement in Bargaining,” Econometrica 50 (05 1982), pp. 607–37CrossRefGoogle Scholar.

33. The Sunday Times Insight Team, The Falklands War (London: Sphere, 1982)Google Scholar; Hastings, Max and Jenkins, Simon, The Battle for the Falklands (New York: Norton, 1984)Google Scholar; Dabat, Alejandro and Lorenzano, Luis, Argentina: The Malvinas and the End of Military Rule (London: Verso, 1984)Google Scholar. I am indebted to Louise Richardson for these citations.

34. Canzoneri, Matthew E. and Gray, Jo Anna, “Two Essays on Monetary Policy in an Interdependent World,” International Finance Discussion Paper 219 (Board of Governors of the Federal Reserve System, 02 1983)Google Scholar.

35. Axelrod, Robert, The Evolution of Cooperation (New York: Basic Books, 1984)Google Scholar; Keohane, Robert O., After Hegemony: Cooperation and Discord in the World Political Economy (Princeton: Princeton University Press, 1984), esp. p. 116Google Scholar; and the special issue of World Politics, “Cooperation Under Anarchy,” Oye, Kenneth A., ed., vol. 38 (10 1985)CrossRefGoogle Scholar.

36. Destler, I. M., Fukui, Haruhiro, and Sato, Hideo, The Textile Wrangle: Conflict in Japanese American Relations, 1969–1971 (Ithaca, N.Y.: Cornell University Press, 1979), pp. 121–57Google Scholar.

37. Winham, Gilbert R., “Robert Strauss, the MTN, and the Control of Faction,” Journal of World Trade Law 14 (09–10 1980), pp. 377–97Google Scholar, and his International Trade and the Tokyo Round (Princeton: Princeton University Press, 1986)Google Scholar.

38. This discussion implicitly assumes uncertainty about the contours of the win-sets on the part of the Level I negotiators, for if the win-sets were known with certainty, the negotiators would never propose for ratification an agreement that would be rejected.

39. Harrison, Geoffrey W., in Campbell, John C., ed., Successful Negotiation: Trieste 1954 (Princeton: Princeton University Press, 1976), p. 62Google Scholar.

40. Schelling, Thomas C., The Strategy of Conflict (Cambridge, Mass.: Harvard University Press, 1960), pp. 19–28Google Scholar.

41. I am grateful to Lara Putnam for this example. For supporting evidence, see Kaufman, Robert R., “Democratic and Authoritarian Responses to the Debt Issue: Argentina, Brazil, Mexico,” International Organization 39 (Summer 1985), pp. 473–503CrossRefGoogle Scholar.

42. Habeeb, W. Mark and Zartman, I. William, The Panama Canal Negotiations (Washington, D.C.: Johns Hopkins Foreign Policy Institute, 1986), pp. 40, 42Google Scholar.

43. Several investigators in other fields have recently proposed models of linked games akin to this “two-level” game. Kenneth A. Shepsle and his colleagues have used the notion of “interconnected games” to analyze, for example, the strategy of a legislator simultaneously embedded in two games, one in the legislative arena and the other in the electoral arena. In this model, a given action is simultaneously a move in two different games, and one player maximizes the sum of his payoffs from the two games. See Denzau, Arthur, Riker, William, and Shepsle, Kenneth, “Farquharson and Fenno: Sophisticated Voting and Home Style,” American Political Science Review 79 (12 1985), pp. 1117–34CrossRefGoogle Scholar; and Shepsle, Kenneth, “Cooperation and Institutional Arrangements,” unpublished manuscript, 02 1986Google Scholar. This approach is similar to models recently developed by economists working in the “rational expectations” genre. In these models, a government contends simultaneously against other governments and against domestic trade unions over monetary policy. See, for example, Rogoff, Kenneth, “Can International Monetary Policy Cooperation be Counterproductive,” Journal of International Economics 18 (05 1985), pp. 199–217CrossRefGoogle Scholar, and Vaubel, Roland, “A Public Choice Approach to International Organization,” Public Choice 51 (1986), pp. 39–57CrossRefGoogle Scholar. Tsebelis, George (”Nested Games: The Cohesion of French Coalitions,” British Journal of Political Science 18 [04 1988], pp. 145–70)CrossRefGoogle Scholar has developed a theory of “nested games,” in which two alliances play a competitive game to determine total payoffs, while the individual players within each alliance contend over their shares. Sharpf, Fritz (”A Game-Theoretical Interpretation of Inflation and Unemployment in Western Europe,” Journal of Public Policy 7 [1988], pp. 227–257)CrossRefGoogle Scholar interprets macroeconomic policy as the joint outcome of two simultaneous games; in one, the government plays against the unions, while in the other, it responds to the anticipated reactions of the electorate. Alt, James E. and Eichengreen, Barry (”Parallel and Overlapping Games: Theory and an Application to the European Gas Trade,” unpublished manuscript, 11 1987) offer a broader typology of linked games, distinguishing between “parallel” games, in which “the same opponents play against one another at the same time in more than one arena,” and “overlapping” games, which arise “when a particular player is engaged at the same time in games against distinct opponents, and when the strategy pursued in one game limits the strategies available in the other.” Detailed comparison of these various linked-game models is a task for the futureGoogle Scholar.

44. Romer, Thomas and Rosenthal, Howard, “Political Resource Allocation, Controlled Agendas, and the Status Quo,” Public Choice 33 (no. 4, 1978), pp. 27–44CrossRefGoogle Scholar.

45. In more formal treatments, the no-agreement outcome is called the “reversion point.” A given constituent's evaluation of no-agreement corresponds to what Raiffa terms a seller's “walk-away price,” that is, the price below which he would prefer “no-deal.” (Raiffa, Art and Science of Negotiation.) No-agreement is equivalent to what Snyder and Diesing term “breakdown,” or the expected cost of war. (Snyder and Diesing, Conflict Among Nations.)

46. Bailey, Thomas A., Woodrow Wilson and the Great Betrayal (New York: Macmillan, 1945), pp. 16–37Google Scholar.

47. Raiffa notes that “the more diffuse the positions are within each side, the easier it might be to achieve external agreement.” (Raiffa, , Art and Science of Negotiation, p. 12Google Scholar.) For the conventional view, by contrast, that domestic unity is generally a precondition for international agreement, see Artis, Michael and Ostry, Sylvia, International Economic Policy Coordination, Chatham House Papers: 30 (London: Routledge & Kegan Paul, 1986), pp. 75–76Google Scholar.

48. “Meaningful consultation with other nations becomes very difficult when the internal process of decision-making already has some of the characteristics of compacts between quasi-sovereign entities. There is an increasing reluctance to hazard a hard-won domestic consensus in an international forum.” Kissinger, Henry A., “Domestic Structure and Foreign Policy,” in Rosenau, James N., ed., International Politics and Foreign Policy (New York: Free Press, 1969), p. 266Google Scholar.

49. See Wilson, James Q., Political Organization (New York: Basic Books, 1975) on how the politics of an issue are affected by whether the costs and the benefits are concentrated or diffuseGoogle Scholar.

50. Another factor fostering abstention is the greater complexity and opacity of monetary issues; as Winham, Gilbert R. (“Complexity in International Negotiation,” in Druckman, Daniel, ed., Negotiations: A Social-Psychological Perspective [Beverly Hills: Sage, 1977], p. 363) observes, “complexity can strengthen the hand of a negotiator vis-à-vis the organization he represents.”Google Scholar

51. Habeeb and Zartman, Panama Canal Negotiations.

52. Bailey, Wilson and the Great Betrayal.

53. I am grateful to Ernst B. Haas and Robert O. Keohane for helpful advice on this point.

54. Hollick, Ann L., U.S. Foreign Policy and the Law of the Sea (Princeton: Princeton University Press, 1981), especially pp. 208–37CrossRefGoogle Scholar, and Sebenius, James K., Negotiating the Law of the Sea (Cambridge, Mass.: Harvard University Press, 1984), especially pp. 74–78Google Scholar.

55. Raiffa, , Art and Science of Negotiation, p. 175Google Scholar.

56. I am indebted to Lisa Martin and Kenneth Shepsle for suggesting this approach, although they are not responsible for my application of it. Note that this construction assumes that each issue, taken individually, is a “homogeneous” type, not a “heterogeneous” type. Constructing iso-vote curves for heterogeneous-type issues is more complicated.

57. I am grateful to Henry Brady for clarifying this point for me.

58. Gilbert R. Winham, “The Relevance of Clausewitz to a Theory of International Negotiation,” prepared for delivery at the 1987 annual meeting of the American Political Science Association.

59. Carter, Jimmy, Keeping Faith: Memoirs of a President (New York: Bantam Books, 1982), p. 225Google Scholar.

60. Winham (see note 37); Twiggs, The Tokyo Round.

61. Walton, and McKersie, , Behavioral Theory of Labor Organizations, p. 321Google Scholar.

62. Artis and Ostry, International Economic Policy Coordination. Of course, whether this is desirable in terms of democratic values is quite another matter.

63. Schelling, , Strategy of Conflict, p. 28Google Scholar.

64. Walton, and McKersie, , Behavioral Theory of Labor Organizations, p. 345Google Scholar.

65. Carter, , Keeping Faith, p. 172Google Scholar. See also Raiffa, , Art and Science of Negotiation, p. 183Google Scholar.

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67. Walton, and McKersie, , Behavioral Theory of Labor Negotiations, p. 319Google Scholar.

68. Velebit, Vladimir, in Campbell, , Trieste 1954, p. 97Google Scholar. As noted earlier, our discussion here assumes that the Level I negotiator wishes to reach a ratifiable agreement; in cases (alluded to later) when the negotiator's own preferences are more hard-line than his constituents, his domestic popularity might allow him to resist Level I agreements.

69. Transaction benefits may be enhanced if a substantive agreement is reached, although sometimes leaders can benefit domestically by loudly rejecting a proffered international deal.

70. Snyder, and Diesing, , Conflict Among Nations, pp. 516, 522–23Google Scholar. Analogous misperceptions in Anglo-American diplomacy are the focus of Neustadt, Richard E., Alliance Politics (New York: Columbia University Press, 1970)Google Scholar.

71. Synder, and Diesing, , Conflict Among Nations, p. 517Google Scholar.

72. I am grateful to Robert O. Keohane for pointing out the impact of uncertainty on the expected value of proposals.

73. Zartman, I. William, The 50% Solution (Garden City, N.J.: Anchor Books, 1976), p. 14Google Scholar. The present analysis assumes that constituents are myopic about the other side's Level II, an assumption that is not unrealistic empirically. However, a fully informed constituent would consider the preferences of key players on the other side, for if the current proposal lies well within the other side's win-set, then it would be rational for the constituent to vote against it, hoping for a second-round proposal that was more favorable to him and still ratifiable abroad; this might be a reasonable interpretation of Senator Lodge's position in 1919 (Bailey, Wilson and the Great Betrayal). Consideration of such strategic voting at Level II is beyond the scope of this article.

74. Hillman, John R., “The Mutual Influence of Italian Domestic Politics and the International Monetary Fund,” The Fletcher Forum 4 (Winter 1980), pp. 1–22Google Scholar. Spaventa, Luigi, “Two Letters of Intent: External Crises and Stabilization Policy, Italy, 1973–77,” in Williamson, John, ed., IMF Conditionality (Washington, D.C.: Institute for International Economics, 1983), pp. 441–73Google Scholar, argues that the unions and the Communists actually favored the austerity measures, but found the IMF demands helpful in dealing with their own internal Level II constituents.

75. Hiss, Dieter, “Weltwirtschaftsgipfel: Betrachtungen eines Insiders [World Economic Summit: Observations of an Insider],” in Frohn, Joachim and Staeglin, Reiner, eds., Empirische Wirtschaftsforschung (Berlin: Duncker and Humblot, 1980), pp. 286–87Google Scholar.

76. On cognitive and communications explanations of international cooperation, see, for example, Haas, Ernst B., “Why Collaborate? Issue-Linkage and International Regimes,” World Politics 32 (04 1980), pp 357–405Google Scholar; Cooper, Richard N., “International Cooperation in Public Health as a Prologue to Macroeconomic Cooperation,” Brookings Discussion Papers in International Economics 44 (Washington, D.C.: Brookings Institution, 1986)Google Scholar; and Zartman, 50% Solution, especially Part 4.

77. Henning, , Macroeconomic Diplomacy in the 1980s, pp. 62–63Google Scholar.

78. This is the approach used to analyze the Anglo-Chinese negotiations over Hong Kong in de Mesquita, Bruce Bueno, Newman, David, and Rabushka, Alvin, Forecasting Political Events: The Future of Hong Kong (New Haven: Yale University Press, 1985)Google Scholar.

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80. Hillman, “Mutual Influence,” and Spaventa, “Two Letters of Intent.”

81. This power of the chief negotiator is analogous to what Shepsle and Weingast term the “penultimate” or “ex post veto” power of the members of a Senate-House conference committee. (Shepsle and Weingast, “Institutional Foundations of Committee Power.”)

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