Why have trends in government welfare spending in developing countries diverged from those in developed countries? I address this question by investigating the effects of capital and trade flows on government welfare spending in fifty-three developing countries. Using an original measure of labor power in developing countries, I test the links between international markets, labor's political strength, and the welfare state. I argue that labor's collective-action problems, caused by large populations of low-skilled and surplus workers, offset labor's potential political gains from globalization. I show that when the proportion of low-skilled workers in a nation is high, globalization will lead to a decline in welfare spending. Most significantly, the results suggest that in nations where labor-market institutions are not yet well developed, government social-welfare spending is constrained by international market, forces.

In the thirty years before Economic and Monetary Union was achieved, European currency policies varied widely among countries and over time. In this article, I argue that the sectoral impact of regional exchange-rate arrangements, in particular their expected real effects on European trade and investment, exerted a powerful influence on the course of European monetary integration. The principal benefit of fixing European exchange rates was facilitation of cross-border trade and investment within the European Union (EU); the principal cost of fixed rates was the loss of national governments' ability to use currency policy to improve their producers' competitive position. Empirical results indeed indicate that a stronger and more stable currency was associated with greater importance of manufactured exports to the EU's hard-currency core, while depreciations were associated with an increase in the net import competition faced by the country's producers. This suggests a powerful impact of real factors related to trade and investment, and of private interests concerned about these factors, in determining national currency policies.

Relatively weak ethnic groups mobilize and rebel against their governments just as frequently (or infrequently) as strong ones. However, such seemingly irrational behavior is not inconsistent with a rationalist approach to ethnic separatism. A bargaining model that treats all the relevant actors as strategic players suggests that power disparities between an ethnic minority and the state—including those based on a group's access to third-party intervention—should affect how the state treats the group but not the likelihood that the group rebels against the state. Greater mistreatment by the state should not be correlated with greater external intervention on a group's behalf. New empirical support for the model is drawn from the Minorities at Risk data set, and the discussion has implications for the field of international relations beyond ethnic conflict to extended deterrence more generally.

I seek to explain the causes for the apparent commercialization of state sovereignty, and in particular the reasons for its association with tax havens. I argue that the conditions that gave rise to the commercial use of sovereignty as perfected by tax havens have little to do with surges in taxation and regulation in the postwar era. Instead, these conditions can be traced to jurists' and policymakers' attempts to resolve an inherent contradiction between insulated state law and the rapidly integrating world market.

Central bank independence (CBI) and fixed exchange rates are alternative monetary commitments that differ in transparency. While CBI is opaque and difficult to monitor, a commitment to a fixed exchange rate is easily observed. Political systems also vary in terms of transparency. I argue that the transparency of monetary commitments and the transparency of political systems are substitutes. Where political decision making is opaque (autocracies), governments must look to a commitment that is more transparent and constrained (fixed exchange rates) than the government itself. The transparency of the monetary commitment substitutes for the transparency of the political system to engender low inflation. Where the political process is transparent (democracies), a formal commitment to CBI can produce lower inflation because private agents and the political opposition are free to detect and punish government interference with the central bank. Statistical results indicate that (1) autocracies are more likely to adopt exchange-rate pegs than democracies, and (2) CBI is effective in limiting inflation in nations with high levels of political transparency.

The bargaining product of the Amsterdam Intergovernmental Conference—the Amsterdam Treaty—dwindled down the draft proposal to a consensus set of all fifteen member states of the European Union (EU). Using the two-level concept of international bargains, we provide a thorough analysis of how this consensus set was reached by issue subtraction with respect to domestic ratification constraints. Drawing on data sets covering the positions of all negotiating actors and ratifying national political parties, we first highlight the differences in the Amsterdam ratification procedures in the fifteen member states of the EU. This analysis allows us to compare the varying ratification difficulties in each country. Second, our empirical analysis of the treaty negotiations shows that member states excluded half of the Amsterdam bargaining issues to secure a smooth ratification. Because member states with higher domestic ratification constraints performed better in eliminating uncomfortable issues at the Amsterdam Intergovernmental Conference, issue subtraction can be explained by the extent to which the negotiators were constrained by domestic interests.

In this article, we reconsider the rarity of the Long Peace in the light of a probability model that targets the collective experience of major powers. Our examination shows that consecutive periods of peace equal to the forty-two years of the so-called Long Peace are not uncommon over the past eighteen decades—these periods occurred slightly more than 30 percent of the time. The period between 1816 and 1913 actually contains less war involvement by major powers than the period of the putative Long Peace. Our analysis demonstrates that long periods of major power peace are not unusual; periods of major power war are more exceptional than normal. Thus we conclude that the Long Peace is not rare and that its role in evaluating theories of war is misleading.

Why has the literature on Asian development not addressed the issue of money politics in South Korea? How can we reconcile the view of an efficient developmental state in South Korea before 1997 with reports of massive corruption and inefficiency in that same country in 1998 and 1999? Politics is central to the answer. In this study I make two arguments. First, money politics was extensive in South Korea both during and after the high-growth era. Second, political—not economic—considerations dominated policymaking. This study explains both past and present and compares the patterns of money politics in the early post-independence era with those that arose after the democratic transition in 1987. While during the Park era a balance of power between businessmen and politicians kept corruption from spinning out of control, the transition to democracy altered the basic business-state relationship, allowing business to exert greater influence over policy decisions. The political hypothesis advanced in this study suggests a new direction for our research about the developmental state.

In this article, I refine and expand the agenda for research on monetary institutions. First, I evaluate the analyses and research designs presented in this special issue of International Organization. Out of this evaluation, several ideas about how to produce a “third generation” of research on this topic emerge. Specific ideas include how to: create a better synthesis with certain branches of economics, such as information economics; broaden the welfare criteria on which institutional choices are made; deepen the analyses of coalitional and other political processes on which the choice of institutions are based; and strengthen the tests that are offered in support of these choices.

In the second part of this article, I explore questions of how popular sovereignty over economic policy and institutional choice are achieved. I show that the institutional regimes proposed in the special issue are, in a sense, democratic as long as the public's “perceived consensus” about economic policies and macroeconomic outcomes is real. However, if, as new work suggests, there is genuine dissensus about policy and macroeconomic objectives, it is no longer clear that the regimes proposed in the special issue are democratic. In the conclusion, I briefly discuss a possible crisis of imagination in institutional design.

We attempt to assess the effect of monetary policy in a panel model for 16 member countries of the Organization for Economic Cooperation and Development (OECD). To answer the question of whether central banks actively create political business cycles, we focus on the short-term interest rate as a proxy for the use of monetary instruments. Our results indicate that central banks do not create political business cycles. This conclusion holds whether or not central banks are independent and whether or not they are constrained by the exchange-rate system in force.