The study of international relations since 1945 has focused on the question, how can states make their commitments to go to war more credible? Scholars have proposed that states often make their commitments more credible by tying their hands, by making it impossible or highly costly not to follow through on a commitment. However, tying hands necessarily makes it impossible or more difficult to stay out of war. If war is fought under undesirable political or military conditions, it becomes the “wrong war” and risks extraordinary or even catastrophic costs for the leader, society, and state. The grave risks and costs of the wrong war cause states, leaders, and societies to prefer to avoid tying hands, to give themselves the flexibility to avoid the wrong war. They prefer not to engage in brinkmanship, sign binding alliance treaties, give mad leaders or computers the ability to start wars, or deploy tripwire forces to drag the nation into war. When they rarely tie their hands to make a commitment more credible, they tie their hands as minimally as possible, to provide as much ability as they can afford to avoid getting dragged into the wrong war.

After 1945, the United States found it necessary to create and maintain global security commitments. A central foreign policy problem became, how can the US credibly threaten to go to war to defend its global interests? In the 1950s, the economist Thomas Schelling used the emerging field of game theory to provide a conceptual solution: states can make commitments more credible by tying their hands, making it impossible or excessively costly to renege on a commitment. Schelling and others used this tying hands insight to craft an understanding of the Cold War and international relations more generally, describing several means by which states tie their hands, including engaging in brinkmanship, signing binding alliance treaties, giving mad leaders or computers the ability to start wars, and deploying small force contingents to foreign soil to serve as tripwires. This book argues that this description is flawed, that states do not tie their hands, that they instead prefer to keep their hands untied, giving them the ability to avoid the wrong war. The book provides support for this argument by examining an array of empirical evidence, with special focus on the most salient crises and conflicts of the Cold War.

This chapter presents the bargaining model of war. The basic approach of the bargaining model is to frame the onset, prosecution, and termination of war as a bargaining process: war represents a failure of two sides to reach a peaceful bargain settling a dispute over an issue such as a territorial border, and during war states continue to bargain, searching for a peace settlement both sides prefer over continuing to fight. Using very little math, the chapter introduces a number of key concepts, such as ideal points, reservation points, reversion outcomes, and bargaining space. It also lays out three possible bargaining model explanations as to why wars break out: when the sides disagree about the likely outcome of a war; when at least one side doubts the credibility of the other side to abide by commitments to peace; and when the issue under dispute is perceived to be indivisible. The chapter also develops information and commitment credibility perspectives on bargaining during wartime, and how wars eventually end. It applies these ideas to a summary of a quantitative study of the effects of peacekeeping on civil war outcomes, and to a case study of World War II in the Pacific.

Institutional weaknesses can be attributed to limited human and/or financial capacity, limited accountability, limited commitment and limited fiscal capacity. Ignoring institutional limitations increases the odds of inefficient regulation, undesirable social side effects and excessive fiscal burdens. To address some of the limitations, most countries have created specialized separate regulatory agencies (SRA). The SRA model has been less popular for water and transport regulation, which continues to be largely managed by units within ministries or agencies directly controlled by the ministries, than for telecoms and electricity. Countries with overlapping and interconnected network facilities are increasingly considering moving part of the regulatory responsibilities to supranational agencies. In contrast to the theoretical predictions, the empirical evidence on the effectiveness of SRAs in terms of efficiency, equity, financial/fiscal viability and accountability is mixed. There is no single perfect institutional solution that applies to all sectors and all countries. The existence of an agency is neither a necessary nor a sufficient condition for performance improvements of a public utility. Hybrid models that combine traditional visions with more modern approaches, which include a role for civil society and for expert panels, can be better to match the local country context.