involuntary defection in two level games ratification failures are prevalent in international relations but due to the assumption of unitary actors in international relations theory theoretical analysis has been underdeveloped in formalizing putnam s metaphor of two level games this article shows that incomplete information about the preferences of domestic actors is crucial for understanding ratification failures furthermore institutional mechanisms affect bargaining outcomes through their impact on information revelation in particular it is found that two sided constraints lead to relatively equitable bargaining outcomes and that renegotiation and pre negotiation poll taking can induce strategic voting by domestic constituents thereby exacerbating domestic constraints

stochastic convenience yield and the pricing of oil contingent claims this paper develops and empirically tests a two factor model for pricing financial and real assets contingent on the price of oil the factors are the spot price of oil and the instantaneous convenience yield the parameters of the model are estimated using weekly oil futures contract prices from january 1984 to november 1988 and the model s performance is assessed out of sample by valuing futures contracts over the period november 1988 to may 1989 finally the model is applied to determine the present values of one barrel of oil deliverable in one to ten years time

less filling tastes great the realist neoliberal debate this essay examines and reformulates the realist neoliberal debate focusing initially on the issue of the attribution of goals to states we argue that not only are goals merely the epiphenomena of other things but also that their specification constitutes but a re description of strategic environments that is although an attribution of goals may contribute to our characterization of outcomes a discussion of them is not central to the development of a theory that explains and predicts the outbreak of conflict and the patterns of cooperation instead we argue that the realist neoliberal debate should be recast so that our central research agenda is the development of substantively specific models that allow us to ascertain how the equilibrium to a game in which states structure international affairs influences the types of issue specific subgames states play how countries coordinate to equilibria of different types how we can characterize the coordination problems associated with different equilibria how states can enhance the attractiveness of an equilibrium and how states can signal commitments to the strategies that are part of that equilibrium

economic linkages relative scarcity and commodity futures returns this paper shows that economic linkages among commodities create a source of long term correlation between futures returns we extend the theory of storage to a multi commodity level and find that the convenience yield of a commodity depends on its relative scarcity with respect to other related commodities this implies a feedback effect between commodities that is necessary to replicate the upward sloping correlation term structure of futures returns observed for related commodities we present a multi commodity affine model that validates our theoretical predictions and considerably reduces the pricing errors in out of sample crack spread options the author 2012 published by oxford university press on behalf of the society for financial studies all rights reserved for permissions please e mail journals permissions oup com oxford university press

the change of tide in political cooperation a limited information model of european integration european integration follows a puzzling stop and go pattern that traditional international reations theories cannot fully explain the predominating paradigms only account for either the achievements or the setbacks of the integration process an information based explanation makes it possible to move beyond structural accounts provided by realist and functionalist scholarship such an approach yields solid micro level foundations of international bargaining and focuses on leaders use of threats in negotiations about regional cooperation situations involving governments agreeing on the necessity of further integration but disagreeing about its level create room for strategic manipulation of information asymmetries this type of uncertainty stems from the manipulator s information and control advantages concerning domestic costs the analysis of different summit meetings demonstrates the empirical relevance of such maneuvers for the dynamics of european integration

forward curves scarcity and price volatility in oil and natural gas markets the role of inventory in explaining the shape of the forward curve and spot price volatility in commodity markets is central in the theory of storage developed by kaldor kaldor n 1939 speculation and economic stability the review of economic studies 7 1 27 and working working h 1949 the theory of the price of storage american economic review 39 1254 1262 and has since been documented in a vast body of financial literature including the reference paper by fama and french fama e f and k r french 1987 commodity futures prices some evidence on forecast power premiums and the theory of storage journal of business 60 55 73 on metals the goal of this paper is twofold i validate in the case of oil and natural gas the use of the slope of the forward curve as a proxy for inventory the slope being defined in a way that filters out seasonality ii analyze directly for these two major commodities the relationship between inventory and price volatility in agreement with the theory of storage we find that i the negative correlation between price volatility and inventory is globally significant for crude oil ii this negative correlation prevails only during those periods of scarcity when the inventory is below the historical average and increases importantly during the winter periods for natural gas our results are illustrated by the analysis of a 15 year database of us oil and natural gas prices and inventory

why are some international agreements informal verbal contracts samuel goldwyn once said aren t worth the paper they re written on yet informal agreements and oral bargains suffuse international affairs they are the form that international cooperation takes in a wide range of issues from exchange rates to nuclear weapons take monetary affairs for instance except for the regional european monetary system there have been no formal comprehensive agreements on exchange rates since the downfall of the bretton woods system in 1971 a prolonged effort to resurrect the pegged rate system failed although new treaties were drawn up and duly signed private financial markets simply overwhelmed these official efforts and central bankers eventually conceded the point the one comprehensive agreement since then concluded in 1976 in jamaica merely ratified a system of floating rates that had emerged unplanned for the past fifteen years monetary arrangements have been a succession of informal agreements of indefinite duration most recently the plaza communique and the louvre accord designed to cope with volatile currency movements the bretton woods system itself depended on such agreements in its declining years it was held together by the tacit agreement of european central banks not to convert their major dollar holdings into gold the system fell apart when germany and france abandoned that commitment they did so because they believed that the united states had abandoned its own tacit commitment to restrain inflation and to avoid large current account deficits

in view of ratification governmental preferences and domestic constraints at the amsterdam intergovernmental conference 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

entrepreneurship social mobility and income redistribution in south india development economists have been preoccupied with the problem of increasing the size of the gnp pie to the relative neglect of its distribution despite the recent disenchantment with the viewpoint that all classes share in the benefits of industrial growth empirical data on the distribution of income business opportunity and economic power are in short supply many of the studies on entrepreneurship and economic development when they are not apologetics for ruthless capitalist exploitation as paul baran suggests extol the achievements of the capitalist entrepreneur without examining class origins and monopoly advantage joseph schumpeter sees entrepreneurs irrespective of class origin as heroic figures with the dream and will to found a private kingdom to conquer adversity to achieve success for its own sake and to experience the joy of creation for gustav papanek 1967 the private entrepreneur who is frugal diligent far sighted remarkably able and willing to take political risks is in large part responsible for the success of pakistan in achieving rapid industrialization

managing domestic differences in international negotiations the strategic use of internal side payments when nations negotiate often the toughest bargaining is not between nations but within them the reason is simple proposed international agreements no matter how much in the national interest inevitably have differential effects on factional concerns threatening to make winners of some and losers of others potential losers often have the power to prevent agreements not to their liking thereby limiting what is possible in international negotiations this article uses a negotiation analytic framework to analyze the consequences of such limits it argues that limits need not be a liability for a divided country under some circumstances they may provide a bargaining advantage and demonstrates circumstances under which intracountry differences are desirable and undesirable from a national perspective more specifically the article shows that the effect of domestic differences on international negotiations depends on the configuration of domestic interests on the nature of domestic political processes and on characteristics of the international bargain it then explores a particular dimension of the domestic process the ability to link issues which allow factions to make internal side payments it demonstrates that internal issue linkage can have profound effects on the external bargain and explores the strategic implications of side payments for those who would manage domestic differences in international negotiations

the politics of foreign direct investment into developing countries increasing fdi through international trade agreements the flow of foreign direct investment into developing countries varies greatly across countries and over time the political factors that affect these flows are not well understood focusing on the relationship between trade and investment we argue that international trade agreements gatt wto and preferential trade agreements ptas provide mechanisms for making commitments to foreign investors about the treatment of their assets thus reassuring investors and increasing investment these international commitments are more credible than domestic policy choices because reneging on them is more costly statistical analyses for 122 developing countries from 1970 to 2000 support this argument developing countries that belong to the wto and participate in more ptas experience greater fdi inflows than otherwise controlling for many factors including domestic policy preferences and taking into account possible endogeneity joining international trade agreements allows developing countries to attract more fdi and thus increase economic growth

disguised protectionism and linkages to the gatt wto member states of the gatt wto have linked some issue areas outside trade to the institution and did so with varying depths at the same time they have chosen not to link other issue areas what accounts for this variation the author argues that states establish a legalized linkage between the gatt wto and an issue area outside it when they are uncertain about the possibilities of disguised protectionism such uncertainty exists under two conditions when diversity in regulations in an issue area across states generates a large adverse impact on trade negative externalities but that diversity can be justified at the international level for 1 having an independent objective apart from hampering trade and 2 when there are few alternative policies to achieve that objective legitimacy states establish a highly legalized linkage in these situations to reduce the uncertainty and minimize disguised protectionism by contrast when regulatory diversity exhibits low legitimacy states establish only a weakly legalized linkage in the absence of meaningful externalities they do not establish any linkages the author evaluates this argument in two ways he provides an overview of eleven issue areas about which there have been some debates or conflicts about linkages to the gatt wto in addition he carries out in depth case studies of three issue areas labor standards environmental standards and health safety standards the findings of this article contribute to a better understanding of international institutions and cooperation as well as of the evolution of the multilateral trade institution

the effects of commodity price stabilization programs in this paper the authors analyze the effects of commodity programs in which the government attempts to support and stabilize price through open market purchases and sales specifically they as sess the effects of such programs on the u s soybean market using a rational expectations model that allows for private storage expected price responsive production and arbitrary support and release price s a salient feature of the model is that private storage and product ion behavior adjusts to changes in government policy stochastic simu lations of the market model demonstrate that price stabilization prog rams can reduce long run market price and destabilize producer revenu e copyright 1988 by american economic association

does the ilo definition capture all unemployment the labour market status of many non working persons is at the boundary between unemployment and inactivity like the unemployed they seek and are available for work unlike them their last search action was not recent enough to meet the ilo definition of unemployment in this paper we examine by non parametric tests how the transition probabilities of these out of the labour force job seekers differ from those of the unemployed as well as the other non participants first using data from the european community household panel we show that in most eu countries these job seekers constitute a distinct labour market state second we rely on information only available in the italian labour force survey to derive a measure of search intensity which we use to break down the out of the labour force job seekers on the basis of their transition probabilities the most active are indistinguishable from the unemployed

oil futures prices in a production economy with investment constraints we document a new stylized fact that the relationship between the volatility of oil futures prices and the slope of the forward curve is nonmonotone and has a v shape this pattern cannot be generated by standard models that emphasize storage we develop an equilibrium model of oil production in which investment is irreversible and capacity constrained investment constraints affect firms investment decisions and imply that the supply elasticity changes over time since demand shocks must be absorbed by changes in prices or changes in supply time varying supply elasticity results in time varying volatility of futures prices estimating this model we show it is quantitatively consistent with the v shape relationship between the volatility of futures prices and the slope of the forward curve in recent years commodity markets have experienced dramatic growth in trad

the rational design of international institutions international institutions are central features of modern international relations this is true of trade international debt and financial restructuring and even national security once the exclusive realm of pure state action it was certainly true of the two major military engagements of the 1990s the wars in kosovo and the persian gulf as international institutions have gained prominence in the political landscape they have increasingly become prominent topics for study the sharpest debate among researchers has been theoretical do international institutions really matter missing from this debate is a sustained inquiry into how these institutions actually work we shift the focus by posing researchable questions about how they operate and how they relate to the problems states face we begin with a simple observation major institutions are organized in radically different ways some are global essentially open to all states others are regional with restricted memberships some institutions give each state an equal vote whereas others have weighted voting and sometimes require supermajorities institutions may have relatively strong central authorities and significant operating responsibilities or be little more than forums for consultation some arrangements for example most bilateral treaties have no formal organizational structure these are plentiful because states have a striking tendency to codify their relationships in formal legal arrangements why do these differences exist do they really matter both for members and for international politics more generally do they affect what the institutions themselves can do we focus on these large questions of institutional design

monopoly behaviour with speculative storage abstract we analyze the effects of competitive storage when the production of the good is controlled by a monopolist the existence of competitive storers serves to reduce the monopolist s effective demand when speculators are selling and to increase it when they are buying this results in the monopolist manipulating the frequency of stockouts and hence the price smoothing effects of competitive storage we find that competitive storage affects both the level and the volatility of price under monopoly the average price level is higher with storage due to the monopolist s desire to induce stockouts by occasionally keeping the price just at the level that induces a stockout although storage does reduce the volatility of prices under monopoly production prices are more volatile than they would be under perfectly competitive production even though stockouts occur less frequently under monopoly these results are demonstrated through closed form solutions of the two period version of the model and computational solutions to the infinite horizon version of the model

design in context existing international agreements and new cooperation this research note highlights an important element missing from rational design theories of international agreements institutional context the presence or absence of existing and prior agreements between prospective partners in new cooperation if as rational design theorists argue agreement design is deliberate strategic and directed toward enhancing contracting parties ability to credibly commit to future cooperation then prior design successes should influence the terms of additional cooperation we test for this omitted variable problem in three agreement design outcomes ex ante limitations on agreement duration exit clauses and dispute settlement provisions through an augmentation and reanalysis of data from a key study in the rational design literature barbara koremenos s contracting around international uncertainty we show institutional context is positively correlated with inclusion of ex ante time limitations in negotiated agreements and negatively correlated with the inclusion of exit clauses and third party dispute settlement provisions institutional context also mediates and conditions the effects of the explanatory variable at the heart of existing rational design theories uncertainty about the future distribution of gains from cooperation our findings show that the collective appeal of particular design features varies not only with the nature of underlying strategic problems but also with degrees of shared institutional context

patently misleading partial implementation and bargaining leverage in sino american negotiations on intellectual property rights we develop a model of international negotiation in which states antici pate that the agreements they sign will only be partly implemented the results dif fer significantly from theories of domestic ratification that have previously been applied to this problem negotiators do not try to satisfy the implementer and may even choose agreements that the implementer would explicitly reject in a ratification model par tial implementation also makes it possible for two negotiators to reach agreements outside their usual win set this situation may allow one country to make extra ordinary concessions knowing that some provisions will never be fully imple mented we apply these claims to sino american negotiations over intellectual property rights where implementation has been a recurrent issue the theory enriches the theory of two level games which has focused much too narrowly on formal rati fication without amendment as the canonical case of domestic influence over inter national bargaining

maximum likelihood estimation of the standard commodity storage model evidence from sugar prices we present a maximum likelihood estimator for the standard commodity storage model with stockouts based on prices only while it imposes no additional assumptions on the model the maximum likelihood estimator has small sample properties superior to those of the pseudo maximum likelihood approach we provide a proof that is crucial for applying our estimator to the model with normal harvests and possibly unbounded prices thereby eliminating an inconsistency in the empirical storage model literature applying our maximum likelihood estimator to a series of annual sugar prices from 1921 to 2009 provides new evidence for the empirical relevance of the standard storage model our results imply a cutoff price at which discretionary stocks go to zero which is higher than the price obtained by applying the pseudo maximum likelihood estimator to the same data the implied frequency of stockouts is lower and price correlations skewness and kurtosis implied by the model closely match those seen in the annual sugar price data we find the price of sugar to be highly responsive to small changes in consumption when inventories are not available to buffer the effects of negative supply shocks on consumption prices must increase sharply to induce the consumption changes needed to clear the market our results show why production shocks are not necessarily aligned with price spikes the same production shock can give rise to very different price responses depending on whether or not there are sufficient stocks to buffer its impact

equilibrium exhaustible resource price dynamics we develop equilibrium models of exhaustible resource markets with endogenous extraction choices and prices our analysis demonstrates how adjustment costs can generate oil and gas forward price dynamics with two factors consistent with the behavior these commodities exhibit in the schwartz and smith 2000 calibration our two factor model predicts that stochastic volatility will arise in these markets as a natural consequence of production adjustments however and we provide supporting empirical evidence differences between endogenous price processes from our general equilibrium model and exogenous processes in earlier papers can generate significant differences in both financial and real option values

a simple competitive model with production and storage we study a rational expectations partial equilibrium model of a market for a single storable commodity whose output each period is a function of previous period effort on production and a realization of a shock that affects equally all producers i he final demand is non random and depends only on each period s price risk neutral producers make production and storage decisions based on forecasts of future price distributions existence of equilibrium is proved and for the case of i i d shocks several comparative statics results are established as well as the existence and stability of a unique stationary distribution and whose output at each period is a multiplicative function of previous period s planting and of the realization of a shock that affects equally all producers the final demand for this good is non random and depends only on this period s price this describes approximately markets for agricultural products which are not traded internationally and where most of the price uncertainty stems from supply shocks risk neutral producers make their decisions based on forecasts of future price distributions and of known cost functions of storage and production to maximize their discounted profits in order to close the model an assumption on how such price forecasts are made is needed we assume that agents make equilibrium forecasts i e that their forecast is common and that when producers act taking the forecasted prices as given they make decisions that yield the forecasted prices as equilibrium prices this is of course what has been sometimes called rational expectations the assumption of equilibrium expectations and the presence of risk neutral pro ducers will imply that the equilibrium variables may be obtained by considering a related market surplus maximization problem 1 this places strong restriction on the stochastic process of equilibrium prices for the case where the basic shocks are assumed to be independently and identically distributed over time one may thus show that equilibrium prices are a function of a certain state variable the total stocks kept from last period plus this period s output and this allows us to derive properties of equilibrium solutions our main results concerning this case are a storage is a non increasing function of price and expected production a non decreasing one b the elasticity of expected future prices with respect to today s prices is positive and less than one c this elasticity is non constant being zero for high enough prices d the price process follows a renewal process if prices are low

tacit bargaining and arms control astate bargains tacitly with another state when it attempts to manipulate the latter s policy choices through its behavior rather than by relying on formal or informal diplomatic exchanges the process is tacit because actions rather than rhetoric constitute the critical medium of communication it is bargaining and not coercion because the actions are aimed at influencing an outcome that can only be achieved through some measure of joint voluntary behavior obviously states rarely rely on either purely tacit or purely formal negotiation however the theory of tacit bargaining does not become totally inapplicable when there is verbal or written communication between the principals it simply becomes increasingly relevant as states rely more on actions than on conventional negotiation examples of tacit bargaining are plentiful in international relations a retaliatory tariff is announced in response to trade barriers a state at war refrains from using chemical weapons or from bombing nonmilitary targets in the hope that its opponent will behave similarly an austerity program is implemented by a financially troubled government in order to convince foreign banks that they should continue to extend credit

rational deterrence theory and comparative case studies several recent books have argued that comparative case studies of crises demonstrate the failure of rational deterrence theory they have offered certain empirical generalizations as substitutes this paper shows that such contentions are unwarranted first the empirical generalizations are impressive as historical insights but they do not meet the standards for theory set out by the most sophisticated case study analysts themselves second the tests of rational deterrence used in the case studies violate standard principles of inference and the ensuing procedures are so biased as to be useless rational deterrence then is a more successful theory than portrayed in this literature and it remains the only intellectually powerful alternative available case studies are essential to theory building more efficiently than any other methods they find suitable variables suggest middle range generalizations for theory to explain and provide the prior knowledge that statistical tests require their loose constraints on admissible propositions and suitable evidence are appropriate and even necessary for these tasks these same characteristics however inevitably undermine all attempts to construe case study generalizations as bodies of theory or tests of hypotheses

estimating a nonlinear rational expectations commodity price model with unobservable state variables this paper is concerned with the estimation of a model in which a possibly serially correlated stochastic process the harvest of an agricultural commodity generates a competitive price in a market comprising both final consumers and risk neutral speculators who can store the commodity at a cost in the anticipation of profit because storage cannot be negative the relationship between prices and harvests is inherently nonlinear and is an unpromising candidate for a linear quadratic model or for linearization more generally instead we calculate numerically a policy function in which price is a function of two unobservable state variables the harvest and current availability and we use the result to fit the price data

price dynamics in biological production processes exposed to environmental shocks this paper demonstrates a mechanism by which environmental shocks in biological production processes can lead to extreme price movements and thus be a contributing factor to short term food price volatility in biological production processes environmental shocks can lead to a stock out when the harvest transitions to a new stock year class with a different marginal value the result in the market is a temporary price spike or bubble bounded by the marginal value of the new stock we highlight this phenomenon in a cohort or year class biological production setting each year class in the model is a finite non renewable capital stock and capital theory is used to solve for the stochastic dynamic competitive equilibrium the model is parameterized to be representative of the norwegian salmon aquaculture industry results suggest that the model can replicate much of the observed patterns in price harvest and capital stock dynamics including the infrequent occurrence of extremely high prices in the market

discouraged workers and economic fluctuations this article examines recent trends and cyclical changes in the number of discouraged workers and other persons outside the labor force who report wanting regular jobs both the incidence of discouragement and its sensitivity to labor market conditions vary widely across demographic groups the number of persons discouraged for job market reasons has shown marked cyclical swings but not the number discouraged for personal reasons the findings illumine one of the social costs of a slack economy and are relevant to the continuing controversy over the classification of discouraged workers as not in the labor force the author also shows that recent pro cyclical swings in the size of the labor force are much larger than can be accounted for by the entry and withdrawal of discouraged workers he suggests that many persons who decide to enter the labor force when unemployment is low are not reported as discouraged workers or even as wanting jobs when unemployment is high

domestic institutions and international bargaining the role of agent veto in two level games putnam s 1988 conjecture that negotiators can benefit from their domestic constraints implies that they may want to impose domestic constraints on themselves by granting veto power to an agent i show that a negotiator s decision to employ an agent as veto player depends on the kinds of information available to the foreign country and the alignment of preferences between the negotiator and the agent when the foreign country has incomplete information about the negotiator s preferences and the negotiator has preferences too divergent from those of the agent the negotiator will not give veto power to the agent however this applies only to an agent with extreme preferences and a surprisingly large number of agent types will receive veto power the attractiveness of the agent veto to the negotiator is in part due to its informational effect by granting veto power to an agent the negotiator can transmit more information to the foreign country and capture informational gains that would be lost in the absence of the agent veto

two level games and bargaining outcomes why gaiatsu succeeds in japan in some cases but not others one of the strengths of robert putnam s two level bargaining game model is its ability to capture how international negotiations make it possible for negotiators to pursue synergistic strategies aimed at improving their prospects for a favorable deal by reshaping politics in both their own and their counterparts domestic arenas while reaffirming the utility of this approach this article argues that putnam describes only some of the synergistic strategies available to negotiators in addition to reverberation and synergistic linkage a negotiator can also reshape politics in his or her counterpart s domestic arena in two other ways 1 by transforming decision making in ways that expand elite participation and bring the weight of public opinion to bear on policies that were previously dictated by small groups of privileged domestic actors and 2 by influencing the way in which policy alternatives are considered in the decisionmaking process through an examination of the structural impediments initiative a set of negotiations through which the united states applied a great deal of foreign pressure gaiaisu on japan the article makes the case for the above modifications to the putnam model and argues that participation expansion strategies are most likely to be successful when involvement in decision making before foreign intervention is limited and latent support for foreign demands exists outside the privileged elite while alternative specification is most likely to work when opportunities exist to link favored policy proposals to already recognized domestic problems

from unanimity to consensus an analysis of the negotiations at the eu s constitutional convention disputes filed at the world trade organization wto are attracting a growing number of third parties most observers argue that their participation influences the institution s rulings the authors argue that third parties undermine pretrial negotiations their influence on rulings is conditioned by this selection effect they test their hypotheses along with the conventional wisdom using a data set of wto disputes initiated through 2002 consistent with the authors argument they find that third party participation lowers the prospects for early settlement controlling for this selection effect the evidence also suggests that third party support increases the chances of a legal victory at the wto

hidden unemployment a search theoretic interpretation abstract labor force surveys show that in the united states a significant fraction of the jobless who do not search for work and who are therefore not classified as unemployed by official statistics state that they want a job now a model of job search is used to interpret this phenomenon

on the behavior of commodity prices when speculative storage is bounded abstract this paper investigates the implications of bounded speculative storage storage bounded from below at zero and above at a capacity on commodity prices binding capacity mirrors the non negativity constraint on storage and leads to negative price spiking and higher volatility when the market is in deep contango i e low current prices at high stock levels with bounded storage there is no need to restrict storage to be costly to ensure a rational expectations equilibrium this allows the model to cover a wide range of storage technologies including free and productive storage we also provide an alternative expression for speculative prices that highlights the key role of the storage boundaries the competitive equilibrium price is the sum of discounted future probability weighted boundary prices the boundary prices can be viewed as dividends on commodities in storage reflecting the realization of economic profits from storage

divided government and u s trade policy theory and evidence if different parties control the u s congress and white house the united states may maintain higher import protection than otherwise this proposition follows from a distributive politics model in which congress can choose to delegate trade policymaking to the president when the congressional majority party faces a president of the other party the former has an incentive to delegate to but to constrain the president by requiring congressional approval of trade proposals by up or down vote this constraint forces the president to provide higher protection in order to assemble a congressional majority evidence confirms that 1 the institutional constraints placed on the president s trade policymaking authority are strengthened in times of divided government and loosened under unified government and 2 u s trade policy was significantly more protectionist under divided than under unified government during the period 1949 90

neorealism and neoliberalism the classic dialectic between realist and liberal theories of international politics as expressed by robert o keohane ed in neorealism and its critics and richard rosecrance the rise of the trading state can be transcended neither paradigm singularly explains international behavior realism is the dominant approach but liberal theories of transnationalism and interdependence help to illuminate how national interests are learned and changed keohane and fellow critics argue that neorealism articulated definitively in kenneth waltz s theory of international politics 1979 elegantly systematizes realism but concentrates on international system structure at the expense of system process focused tightly on the concept of bipolarity waltz s theory tends toward stasis the unit state level unproductively becomes an analytical dumping ground as a neoliberal counterpoint rosecrance s argument does not go far enough in the tradition of commercial liberalism he argues that an open trading system offers states maneuverability through economic growth rather than through military conquest he tempers his argument with realist considerations of prudence but fails to clarify realist liberal links in his theory or to explore fully the connections between power and non power incentives influencing states behavior a synthesis of neorealism and neoliberalism is warranted a systemic theory using the former to analyze at the level of structure the latter more often at the level of process

competitive storage and commodity price dynamics by buying cheap and selling dear risk neutral commodity speculators can smooth commodity prices and induce serial dependence in price even when none would exist under a simple process of supply and demand commodity prices are variable and strongly positively correlated from one year to the next the variability is often explained by supply factors and the autocorrelation by the activities of speculators we show that this explanation is not consistent with the evidence speculation can substantially increase autocorrelation for prices that are weakly autocorrelated in its absence but not to the high levels that are observed in the data

rules versus discretion in food storage policies this article compares various policies in a rational expectations food storage model with risk averse consumers and missing insurance markets calibrated to represent a developing country i consider an optimal storage policy under discretion and two optimal simple rules a constant private storage subsidy and a price band the storage subsidy achieves welfare gains similar to the discretionary policy the price band maximizing social welfare is a price peg scheme the floor and ceiling prices are the same and the capacity constraint represents 11 of the steady state production level this price band achieves three quarters of the gains from the optimal policy under discretion

globalizing electoral politics political competence and distributional bargaining in the european union this article analyzes electoral cycles in distributional bargaining in the european union the author argues that governments attempt to increase their eu membership benefits above average levels in the preelection period hoping to appear politically competent to voters the theory discusses when and how eu members can increase these gains before elections through negotiations in the council of ministers a time series cross sectional analysis of eu member states annual budget negotiations from 1977 to 2006 supports the existence of conditional electoral cycles in distributional bargaining and generally points to the importance of accounting for such cycles when analyzing patterns of international cooperation

relative gains and the pattern of international cooperation many political situations involve competitions where winning is more important than doing well in international politics this relative gains problem is widely argued to be a major impediment to cooperation under anarchy after discussing why states might seek relative gains i demonstrate that the hypothesis holds very different implications from those usually presumed relative gains do impede cooperation in the two actor case and provide an important justification for treating international anarchy as a prisoner s dilemma problem but if the initial absolute gains situation is not a prisoner s dilemma relative gains seeking is much less consequential its significance is even more attenuated with more than two competitors relative gains cannot prop up the realist critique of international cooperation theory but may affect the pattern of cooperation when a small number of states are the most central international actors

stocks to use ratios and prices as indicators of vulnerability to spikes in global cereal markets we identify critical stocks to use ratios surs for major grains and for an index of total calories from these grains the latter appears to be a promising indicator of vulnerability to large price spikes when the current price shows no cause for concern more generally our results suggest that stocks data though no doubt unreliable can be valuable complements to price data as indicators of vulnerability to shortages and price spikes

optimal food price stabilisation policy this paper proposes a framework for designing optimal food price stabilisation policies in a self sufficient developing country it uses a rational expectations storage model with risk averse consumers and incomplete markets government stabilises food prices by carrying public stock and by applying a state contingent subsidy tax to production the policy rules are designed to maximise intertemporal welfare the optimal policy under commitment crowds out all private stockholding activity by removing the profit opportunity from speculation the countercyclical subsidy tax to production helps price stabilisation by subsidising production in periods of scarcity and by taxing it in periods of glut it contributes little to welfare gains most of which come from stabilisation achieved through public storage

bargaining power at europe s intergovernmental conferences testing institutional and intergovernmental theories this article examines how european union member states make choices about political institutions at intergovernmental conferences the grand negotiations where many key institutional changes are made using data on member state preferences from the intergovernmental conference leading to the treaty of amsterdam i test competing bargaining theories institutionalism and intergovernmentalism and present strong evidence that institutionalism better captures negotiations compared to intergovernmentalism i present a formal model to discern between these competing theories of bargaining power derive a statistical model directly from this formal model and then use data from the european union s treaty of amsterdam to test these theories and corresponding power sources veto power associated with institutional models better explains intergovernmental conference outcomes compared to power from size and economic might often associated with intergovernmental analyses i would like to thank kathy bawn julia gray tim groseclose james honaker joe jupille thomas konig jeff lewis sven oliver proksch george tsebelis and the participants in ucla s graduate student formal theory and statistical methods workshops for their insightful comments on various drafts of this article i am also grateful for the comments from several anonymous reviewers and the editors at international organization an earlier version of this article was presented at the annual meeting of the midwest political science association april 2006 data and replication material are available at http faculty unlv edu jslapin