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Diplomacy and domestic politics: the logic of two-level games

Published online by Cambridge University Press:  22 May 2009

Robert D. Putnam
Professor of Government at Harvard University, Cambridge, Massachusetts.
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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.

Copyright © The IO Foundation 1988

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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. 6294Google 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. 881911CrossRefGoogle 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.

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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. 145CrossRefGoogle 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. 5187Google 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.

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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.

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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.

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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. 11117Google 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. 85104CrossRefGoogle 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.

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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 (0910 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. 1928Google 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. 473503CrossRefGoogle 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. 199217CrossRefGoogle Scholar, and Vaubel, Roland, “A Public Choice Approach to International Organization,” Public Choice 51 (1986), pp. 3957CrossRefGoogle 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. 227257)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. 2744CrossRefGoogle 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. 1637Google 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. 7576Google 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. 7478Google 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.

66. The strategic significance of targeting at Level II is illustrated in Conybeare, John, “Trade Wars: A Comparative Study of Anglo-Hanse, Franco-Italian, and Hawley-Smoot Conflicts,” World Politics 38 (10 1985), p. 157CrossRefGoogle Scholar: Retaliation in the Anglo-Hanse trade wars did not have the intended deterrent effect, because it was not (and perhaps could not have been) targeted at the crucial members of the opposing Level II coalition. Compare Snyder, and Diesing, , Conflict Among Nations, p. 552Google Scholar: “If one faces a coercive opponent, but the opponent's majority coalition includes a few wavering members inclined to compromise, a compromise proposal that suits their views may cause their defection and the formation of a different majority coalition. Or if the opponent's strategy is accommodative, based on a tenuous soft-line coalition, one knows that care is required in implementing one's own coercive stretegy to avoid the opposite kind of shift in the other state.”

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. 122Google 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 357405Google 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. 6263Google 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.

79. For overviews of this literature, see Moe, Terry M., “The New Economics of Organization,” American Journal of Political Science 28 (11 1984), pp. 739–77CrossRefGoogle Scholar; Pratt, John W. and Zeckhauser, Richard J., eds., Principals and Agents: The Structure of Business (Boston, Mass.: Harvard Business School Press, 1985)Google Scholar; and Barry M. Mitnick, “The Theory of Agency and Organizational Analysis,” prepared for delivery at the 1986 annual meeting of the American Political Science Association. This literature is only indirectly relevant to our concerns here, for it has not yet adequately addressed the problems posed by multiple principals (or constituents, in our terms). For one highly formal approach to the problem of multiple principals, see Bernheim, R. Douglas and Whinston, Michael D., “Common Agency,” Econometrica 54 (07 1986), pp. 923–42CrossRefGoogle Scholar.

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.”)

82. Bailey, , Wilson and the Great Betrayal, quotation at p. 15Google Scholar.

83. Strong, Robert A. and Zeringue, Marshal, “The Neutron Bomb and the Atlantic Alliance,” presented at the 1986 annual meeting of the American Political Science Association, p. 9Google Scholar.

84. Zartman, I. William, “Reality, Image, and Detail: The Paris Negotiations, 1969–1973,” in Zartman, , 50% Solution, pp. 372–98Google Scholar.

85. Brzezinski, Zbigniew, Power and Principle (New York: Farrar, Straus and Giroux, 1983), p. 136Google Scholar, as quoted in Habeeb, and Zartman, , Panama Canal Negotiations, pp. 3940Google Scholar.

86. Harrison, in Campbell, , Trieste 1954, p. 67Google Scholar.

87. Huntington, Samuel P., “Transnational Organizations in World Politics,” World Politics 25 (04 1973), pp. 333–68CrossRefGoogle Scholar; Keohane and Nye, Power and Interdependence; Neustadt, Alliance Politics.

88. Crane, Barbara, “Policy Coordination by Major Western Powers in Bargaining with the Third World: Debt Relief and the Common Fund,” International Organization 38 (Summer 1984), pp. 399428CrossRefGoogle Scholar.