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

the international telecommunications regime the political roots of regimes for high technology the international telecommunications regime provided a multilateral framework that reinforced domestic monopolies and bilateral cartel arrangements in the global market the regime s epistemic community believed that telecommunications services and equipment were best supplied by national monopolies and that international communications by telephone telegram and telex should be jointly provided by monopolists strong domestic political incentives reinforced this cognitive framework when technological innovation triggered a successful political attack on the domestic regulation of telecommunications in a few key countries the stage was set for a global challenge to the intellectual and political foundations of the regime two paths to reform have emerged their significance can be assessed by looking at changes in the distribution of benefits from the regime changes in the manner in which governments delegate power to the regime and shifts in the epistemic community associated with the regime

retaliation bargaining and the pursuit of free and fair trade that domestic political economic factors are important determinants of a nation s trade barriers has been empirically well established however the question of how effective strategically retaliatory trade barriers are in deterring foreign protectionism has received far less systematic empirical attention in this article we use bilateral nontariff barrier ntb data between the united states and five developed partner countries japan france germany italy and the united kingdom to systematically examine the effectiveness of strategic retaliation we employ a simultaneous tobit model where the home and foreign ntb levels are determined endogenously in a bilateral game the model provides estimates of deterrence coefficients that is the reduction in foreign trade barriers as a result of u s retaliation which we use to characterize the nature of bilateral ntb games our hope is that the empirical results presented here which have realistic though controversial implications will inform u s trade policy

squaring the circle the domestic sources of international cooperation most theorists of international affairs would argue that international cooperation is a good thing private regarding behavior creates efficiency but some public goods are needed for optimal results be they in producing peace or prosperity it is in the logic of markets and of decentralized systems such as international relations to undersupply those public goods arms races beggar thy neighbor economic policies environmental degradation these are but some examples of actions that take place in the absence of mechanisms to enforce cooperative agreements regimes that can punish defectors are able to do better a good security regime avoids arms races a good trade regime avoids tariffs a good monetary regime avoids aggressive devaluations and instability a good regulatory regime prevents particularistic mercantilism all these arrangements require international cooperation how do we get international cooperation in two ways first through a convergence of policy objectives agreement on the substance of what is sought in trade security or other issues second by credible commitment to institutions that manage policy disputes put in the negative nations conflict when they cannot agree on policy or when they are unable to sustain commitment to agreements that they may make for nations to cooperate on a trade or monetary regime they must agree to the regime convergence of policy preference and they must agree that they will not cheat and will adhere to the regime and to a process of resolving disputes that may occur credibility of commitment

the multinational corporation and global governance modelling global public policy networks globalization has increased the economic power of the multinational corporation mnc engendering calls for greater corporate social responsibility csr from these companies however the current mechanisms of global governance are inadequate to codify and enforce recognized csr standards one method by which companies can impact positively on global governance is through the mechanism of global public policy networks gppn these networks build on the individual strength of mncs domestic governments and non governmental organizations to create expected standards of behaviour in such areas as labour rights environmental standards and working conditions this article models gppn in the issue area of csr the potential benefits of gppn include better overall coordination among industry and government in establishing what social expectations the modern mnc will be expected to fill

dying to win olympic gold medals and longevity abstract this paper compares mortality between gold and silver medalists in olympic track and field to study how achievement influences health contrary to conventional wisdom winners die over one year earlier than losers i find strong evidence of differences in earnings and occupational choices as a mechanism losers pursued higher paying occupations than winners according to individual census records i find no evidence consistent with selection or risk taking how people respond to success or failure in pivotal life events may produce long lasting consequences for health

the effect of income on mortality evidence from the social security notch abstract legislation in the 1970s created a notch in social security payments with those born after january 1 1917 receiving sharply lower benefits using restricted use versions of the national mortality detail file combined with census data we use this quasi experiment to examine the income mortality link in an elderly population estimates from difference in difference and regression discontinuity models show the higher income group has a statistically significantly higher mortality rate contradicting the previous literature we also found that younger cohorts responded to lower incomes by increasing postretirement work effort suggesting that moderate employment has beneficial health effects for the elderly

corporate unity in american trade policy a network analysis of corporate dyad political action this essay examines factors that produce political unity among large u s corporations advocating free trade expanding on old debates these data and analyses validate the importance of organizational and class cohesion approaches to corporate political action methodologically the political unity of pairs dyads of firms in trade policy activism is analyzed with quadratic assignment procedure regression shared membership in prominent policy networks and board interlocks positively predict corporate political unity across three areas of trade policy influence from the executive branch to the legislature non network organizational indicators also significantly predicted corporate trade policy activism the findings support business unity accounts of corporate political action and suggest that higher levels of firm embeddedness within intercorporate networks facilitate collective corporate political action

the social basis of interdependent preferences abstract most economists are sympathetic to the idea that concerns for relative position are an important aspect of many economic problems there has traditionally been a reluctance to include such concerns primarily because models that included them often allow such a broad range of behavior that there are few if any restrictions on equilibrium behavior and hence such models would have little or no predictive power in this paper we discuss how reduced form models may naturally give rise to utility functions that depend in part on relative standing there are several advantages of modelling concern for relative standing in reduced form utility functions even when there is no similar concern in the deep preferences it provides structure and constraints on the way that relative standing affects utility and further it can yield testable implications about the way that changes in the underlying environment affect the concern for relative standing we discuss the advantages and disadvantages of modelling social concerns in this way and provide examples that illustrate how concerns for relative standing can affect savings investment and labor choice decisions

foreign direct investment and the demand for protection in the united states over the past decade foreign direct investment fdi in the united states has grown dramatically changing the composition of many u s industries and bringing foreignowned firms into the domestic political process presumably fdi also has affected the politics of protection by both altering the domestic coalitions around protectionist demands and shifting the potential benefits that protectionism is likely to bring to understand this process we create and test a model that examines the level of inward investment and the extent to which this investment either complements or substitutes for existing import levels import complementing investment we suggest will cause a split in protectionist demands with local producers favoring protectionism and foreign investors pushing for free trade import substituting investment by contrast will create convergent interests between local and foreign producers in both cases inward fdi reshuffles traditional alliances and demands for protection challenging many prevailing views about protectionism in the united states

prizes and productivity how winning the fields medal affects scientific output knowledge generation is key to economic growth and scientific prizes are designed to encourage it but how does winning a prestigious prize affect future output we compare the productivity of fields medal recipients winners of the top mathematics prize to that of similarly brilliant contenders the two groups have similar publication rates until the award year after which the winners productivity declines the medalists begin to play the field studying unfamiliar topics at the expense of writing papers it appears that tournaments can have large postprize effects on the effort allocation of knowledge producers

relativity rank and the utility of income relative utility has become an important concept in several disjoint areas of economics i present a cardinal model of income utility based on the supposition that agents care about their rank in the income distribution and that utility is subject to adaptation over time utility levels correspond to the leyden individual welfare function while utility differences yield a version of the prospect theory value function thereby providing a new and shared derivation of each i offer an explanation of some long standing paradoxes in the wellbeing literature and an insight into the links between relative comparisons and loss aversion

understanding the demand side issues of international corruption in global business business organizations and their representatives frequently encounter corruption and may be the perpetrators victims or simply participants in such acts while international corruption has existed in multiple forms for several years many individuals companies nations and international organizations are currently attempting to reduce or eliminate corrupt acts because of their harmful effects on local economies and the quality of life of citizens several of these corruption curtailment efforts have been directed toward the supply side of corruption i e those who make corrupt payments in developing an understanding of corruption however and formulating strategies for its reduction consideration must also be given to the demand side of corruption i e those who demand and accept corrupt payments accordingly this study examined the demand side of corruption and several related factors in the categories of government economy and poverty education geography and culture analysis of these factors employed the corruption perceptions index cpi formulated annually by transparency international ti and other sources several factors in each of the five categories were found to correlate significantly with perceived corruption and strategies for addressing these issues were developed and discussed

global linkages and domestic politics trade reform and institution building in india in comparative perspective this article examines how the world trade organization wto affects institutional development and policy responses in india india is a country traditionally resistant to external pressures but in

transgovernmental networks and domestic policy convergence evidence from insider trading regulation cross border cooperation among domestic regulators and public offi cials has become a defining feature of global governance while a number of studies have tracked the emergence and institutionalization of such transgovernmental net works less is known about their effect on domestic policy this study explores this link for the important case of insider trading regulation in original data for 116 coun tries between 1977 and 2006 it offers quantitative evidence that transgovernmental cooperation is related to domestic policy convergence but that the relationship is more complex than often assumed direct ties to powerful regulators increases a jurisdiction s likelihood of adopting internationally promoted policies such as insider trading rules separately membership in the international organization of securities commissions iosco a forum designed to diffuse best practices among regulators increases a jurisdiction s likelihood of subsequently enforcing newly adopted policies the find ings in this study suggest that different network components are associated with dis tinct aspects of domestic policy convergence the results are directly relevant for current public policy debates about the reregulation of global financial markets as trans governmental networks among domestic regulators have assumed a critical role

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 impact of demand and price expectations on the behavior of prices the effects of demand and price expectations on price behavior are analyzed using data from the manufacturing sector and a model formulated to pinpoint the demand oriented factors affecting prices and to incorporate price expectations as a direct influence on price behavior the expected normal demand is seen to have a strong and systemic influence on price behavior the expected normal level of new orders is found to be an adequate measure with sector data in general although some industries require more specification the effects of inventories and unfilled orders on prices are sporadic and across sectors and industries demand oriented forces are concluded to perform as well statistically as cost push determinants expectations concerning the current normal industry price level have a significant and consistent impact on price behavior this supports the idea that firms setting prices take into account their estimates of competitor s prices future price expectations appear to have little effect on current price information 15 references

firms and tariff regime change explaining the demand for protection although it is commonly argued that there is a connection between tariff levels and business conditions this hypothesis has not been subjected to systematic empirical analysis or given any theoretical basis the author presents two complementary theories of the movement of tariff levels in response to changing business conditions both explain tariff changes in terms of the changing political demands of business firms and both rely on the business cycle to drive these changing demands one theory is a conventional argument about changing opportunities for entry and exit the other treats firms as satisficers the theories yield similar predictions preliminary empirical analysis while consistent with both does not differentiate between them

u s corporate interests and the political economy of trade policy this paper examines the behavior of american corporations with respect to international trade policy initiatives during the 1970s using survey generated data on revealed corporate trade policy interests and firmand industry level data on company characteristics direct or proxy variables were developed and applied in linear regression equations using an ordered probit specification and in an alternative approach using factor analysis to construct a composite dependent variable hypothesized relationships were verified between corporate positions on trade liberalization and the intensity of competition from imports the benefits from improved access to foreign markets and internal risk pooling capabilities of firms firms exposed to the international competitive environment inevitably have a stake in national trade policy this paper explores the revealed behavior of u s corporations on matters of trade policy in the 1970s it develops a set of hypotheses linking corporate trade policy positions to a series of company and industry attributes these hypotheses are tested using survey generated information regarding corporate behavior on trade policy matters beginning with the protectionist burke hartke initiatives of the early 1970s through the post tokyo round period at the end of the decade studies of the political economy of protection typically begin with the proposition that import barriers create rents that can be appropriated by the protected industry the size of the rents to be obtained and their probable division among the various participants in the industry partly determine the intensity of protection seeking behavior lobbying undertaken by participants in the industry brock and magee 1978 the intensity is also influenced by the degree of success expected in the political arena and by imperfections in the lobbying process for instance the incentive to be a free rider on the lobbying efforts of others walter and jones 1981 the actual outcome of protection seeking activity is conditioned by a variety of political considerations as well for instance politicians may be constrained by the possibility of repercussions from groups adversely affected by protection including consumers and export oriented industries foreign competitors are also affected so that issues concerning foreign relations enter into the decision process in addition politicians may be influenced more generally by ideology party platforms or attitudes toward equity a number of researchers including ball 1967 fieleke 1976 clark 1980 and ray 1981a 1981b have verified that a significant positive correlation exists between nominal tariff rates or effective rates of protection across manufacturing industries and low skilled labor intensity taken to be an indicator of the intensity of import competition and thus related to the size of the rents that could be obtained by protection cheh 1974 and bale 1977 analyzed the determinants of the percentage reductions in rates of duty resulting from the kennedy round tariff cuts concluding that the cuts were determined in such a way as to minimize labor adjustment costs see also allen lewis and tower 1980 marvel and ray 1983 also explored the determinants of kennedy round tariff cuts finding the size of tariff cuts tended to be smaller if an industry was more concentrated or sold a larger fraction of its output to household consumers and larger if the industry was more intensive in research and development r d or more highly unionized the result for r d presumably represents the desire at the industry level for improved access to export markets achievable through larger reciprocal reductions in protection on the part of foreign countries along somewhat different lines baldwin 1976 analyzed several key congressional votes on the received for publication november 21 1983 revision accepted for publication december 14 1984 new york university the authors are grateful to robert lipsey robert j levenson j peter jarrett and james green for providing data that contributed to this study to jang ro lee ashok chatterjee and monica kaufmann for research assistance and to bill greene for providing advice on the estimation technique and computer program used to perform the statistical analysis thomas a pugel is also grateful for the support of an esmee fairbaim research fellowship at the university of reading 1 in both studies ray also explores nontariff barriers ntbs across u s manufacturing industries aside from finding a positive relationship between tariff rates and ntbs the results are not easily interpreted however there is some inferential evidence in walter 1971 which finds a significant positive relationship between ntb incidence and presumably relatively low skill intensive developing country exports

the increasingly mixed proportional hazard model an application to socioeconomic status health shocks and mortality we introduce a duration model that allows for unobserved cumulative individual specific shocks which are likely to be important in explaining variations in duration outcomes such as length of life and time spent unemployed the model is also a useful tool in situations where researchers observe a great deal of information about individuals when first interviewed in surveys but little thereafter we call this model the increasingly mixed proportional hazard imph model we compare and contrast this model with the mixed proportional hazard mph model which continues to be the workhorse of applied single spell duration analysis in economics and the other social sciences we apply the imph model to study the relationships among socioeconomic status health shocks and mortality using 19 waves of data drawn from the german socio economic panel soep the imph model is found to fit the data statistically better than the mph model and unobserved health shocks and socioeconomic status are shown to play

the effect of newspaper entry and exit on electoral politics we use new data on entries and exits of us daily newspapers from 1869 to 2004 to estimate effects on political participation party vote shares and electoral competitiveness our identification strategy exploits the precise timing of these events and allows for the possibility of confounding trends we find that newspapers have a robust positive effect on political participation with one additional newspaper increasing both presidential and congressional turnout by approximately 0 3 percentage points newspaper competition is not a key driver of turnout our effect is driven mainly by the first newspaper in a market and the effect of a second or third paper is significantly smaller the effect on presidential turnout diminishes after the introduction of radio and television while the estimated effect on congressional turnout remains similar up to recent years we find no evidence that partisan newspapers affect party vote shares with confidence intervals that rule out even moderate sized effects we find no clear evidence that newspapers systematically help or hurt incumbents

politics pressure and economic policy explaining japan s use of economic stimulus policies while supplementary budgeting has long been part of the japanese fiscal cycle substantive and procedural aspects of the process have changed first since the late 1970s supplementary budgets have been used to fund government economic stimulus efforts keizai taisaku and second since the late 1980s these budgets have been assembled several months after the announcement of the actual stimulus packages such stimulus policies do not fit the prevailing model of the japanese electoral business cycle which emphasizes the targeting of benefits by the liberal democratic party ldp at its constituents at election time this article addresses this anomoly by developing a theory of how governing parties use the economic policy process to serve their electoral interests particularly through broadly gauged policies designed to improve macroeconomic conditions the authors amend the prevailing model to allow an adequate test of their electoral theory to be conducted the results suggest that japanese economic stimulus policies were the result of governing parties attempts to expand their support at election time and to satisfy u s pressure to use fiscal policy to stimulate domestic demand

ideology interests and the american executive toward a theory of foreign competition and manufacturing trade policy faced with a formidable competitiveness problem the american government chief executive appeared to offer a series of ad hoc responses in the 1980s contrarily this article suggests that executive responses to foreign economic challenges follow a predictable pattern pointing to the interactive effects of ideology and interest this article argues that both the degree and type of executive response be it in the form of market opening strategies of temporary or permanent forms of protectionism or of adopting a laissez faire approach can be predicted based on two factors whether a sector is characterized as high tech and whether it is considered to be competitive a major implication of this argument is that the u s chief executive has used trade policy as a surrogate for industrial policy but in so doing the strategic considerations associated with industrial policies have been bypassed the major effect is that the executive fails to intervene only in the realm of an infant industry policy the area most likely to generate a dynamic economy the product of this combiantion of protectionist policies is a stagnant economy that we term compromise protectionism

tournaments without prizes evidence from personnel records we use a quasi experimental research design to study the effect of giving workers feedback on their relative performance the setting is a firm in which workers are paid piece rates and where for exogenous reasons management begins to reveal to workers their relative position in the distribution of pay and productivity we find that merely providing this information leads to a large and long lasting increase in productivity that is costless to the firm our findings are consistent with the interpretation that workers incipient concerns about their relative standing are activated by information about how they are performing relative to others this paper was accepted by olav sorenson organizations

firms governments and wto adjudication japan s selection of wto disputes what explains the selection of cases for wto adjudication this article explores the business conditions under which industries lobby their home government to use the wto adjudication process and the political factors that influence government decisions it explains the industry pattern of selection for international trade disputes as a function of the velocity of the business environment while wto adjudication is seen as costly and slow a positive ruling brings broad benefits in terms of deterrence against future discrimination firms in static industries will invest in wto dispute settlement to achieve these benefits but firms in industries shaped by dynamic competition have high opportunity costs that make them less willing to pursue adjudication this argument accounts for why there are fewer wto cases about electronics industry issues than there are likely incidences of protectionist measures since japan is a leading exporter and provides a government report with unique data on potential wto disputes it was chosen to test the argument in greater depth interviews with japanese business officials and statistical analysis of an original data set provide support for the argument the authors conclude that the passive attitude toward wto adjudication by japan s largest export industry electronics and the sensitivity of japan s diplomatic relations with china have constrained the cases that japan files these findings suggest that the effectiveness of the wto for dispute settlement is conditional upon the time horizon of the industry and the political relations among members

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

economic interests and regional trading arrangements the case of nafta this article examines lobbying in the united states on the north american free trade agreement nafta i argue that economies of scale and production sharing across borders create incentives for firms to seek regional trade liberalization statistical analysis demonstrates that sectors with these characteristics were more likely to lobby for free trade in north america these sectors were also exposed to free trade more rapidly under the tariff phasing schedule in the nafta treaty however corporate restructuring to rescale production for the regional market and to increase offshore assembly presented adjustment costs for u s workers which created divisions between labor unions and their employers i conclude that regional arrangements are an attractive mechanism to liberalize trade for firms in need of larger than national markets to take advantage of economies of scale or to develop production sharing networks

neither miti nor america the political economy of capital liberalization in japan compared with japan no other industrialized country has so adamantly denied foreign investors direct access to its domestic markets japan continued to deny such market access until domestic constituencies finally championed foreign demands and successfully pressured a reluctant state for concessions the initiative for these concessions came neither from japan s principal government negotiators in the ministry of international trade and industry miti nor from public policymakers in america rather it came from american and other multinational corporations mncs seeking to exploit imperfect markets for the technology and related assets which they alone controlled and which a few japanese oligopolists demanded these local oligopolists served as manipulative intermediaries between mncs and the nationstate and in that position determined both the timing and the substance of their country s long march toward capital liberalization between the legislation of capital controls in 1950 and the de jure elimination of those controls in 1980 what began as an extension of limited concessions to individual mncs eventually aided by small regulatory loopholes gradually encompassed all foreigners supplying broad product groups during the intervening thirty years the mncs examined in this article including coca cola ibm texas instruments and the big three u s automakers finally gained limited access to the japanese market for them the formal liberalizations of the late 1960s and early 1970s proved significant but not always decisive as japanese oligopolists moved both to replace public regulations with private restrictions and to mesh their ongoing political influence domestically with their emerging economic power internationally thus de facto liberalization proceeded slowly and unevenly at least through 1980 and foreign direct investment in japan continued to languish what capital liberalization did occur had little to do with the pressures exerted on miti and the japanese state by the u s government and the international organizations that america then controlled rather american diplomacy proved successful in forcing concessions from japan only when it was backed up both by the economic power of american mncs and by the active support of japanese business

the long arm of the law extraterritoriality and the national implementation of foreign bribery legislation can the application of domestic law by bureaucracies in powerful states alter policy dynamics globally courts and regulatory agencies with jurisdiction over large markets routinely impose national rules to conduct transpiring outside of their physical borders such extraterritoriality has expanded to issues ranging from antitrust to the environment proponents claim that extraterritorial acts can have far reaching international consequences spilling over into the domestic political economy of regulation in target states skeptics however question the effects of these sanctions against internationally mobile actors in this study we offer the first quantitative analysis of extraterritorial intervention for global policy convergence in particular we construct an original time series panel data set to test the association between extraterritorial actions by u s prosecutors and the national enforcement of foreign bribery regulations in target countries our empirical analysis finds strong statistical evidence linking extraterritoriality to national policy implementation with jurisdictions that experienced a u s intervention being twenty times more likely to enforce their national rules the findings suggest the important influence that domestic law in powerful states may have for global cooperation in general and sheds light on the key pillars of international anticorruption efforts in particular

habits peers and happiness an evolutionary perspective the principal motivating factor in our lives is the pursuit of happiness in most cultures when seeking this end individuals place a high priority on income and spend much of their waking time procuring this intermediate goal the connection between income and happiness is by no means trivial however two critical factors come into play first beyond subsistence level the positive effect of a permanent change in income tends to be short lived we rapidly become accustomed to a more expensive lifestyle a common name for this feature is habit formation second the satisfaction derived from a given level of income is sharply dependent on how it compares to the income of peers see for example andrew b abel 1990 becker 1996 and william a brock and steven n durlauf 2001 for a demonstration of the influence of habits and peer comparisons over behavior and see shane frederick and george loewenstein 1999 for a review of the underlying psychology habits and peer comparisons mean that an individual is not concerned mainly with her absolute level of income but rather with the difference between her income and a benchmark that changes over time in recent years economists have become increasingly interested in this fact this interest has been both applied i e the study of habits and peer influences over behavior and the analysis of happiness surveys and theoretical i e a search for biological foundations but unlike other more developed areas of economics these two approaches remain fairly separate from each other in particular the existing theoretical work is motivated only by the most basic empirical observations and the existing applied work for the most part has not been influenced by theoretical results in this essay we seek to reduce the distance between these two literature strands in particuhabits peers and happiness an evolutionary perspective

a nonlinear expenditure system using a linear logit specification recent literature on the estimation of models of consumer expenditure patterns indicates that engel curves are nonlinear and demographic variables are important determinants of demand a linear logit household expenditures model is presented which automatically displays adding up properties derived from the budget constraint while permitting great flexibility in the engel curves in addition homogeneity and symmetry can be imposed and tested and by a simple transformation the coefficients can be estimated by linear regression another advantage of the model is that demographic variables such as household size and composition can be introduced without sacrificing the adding up properties

making rules for global finance transatlantic regulatory cooperation at the turn of the millennium this article explains a shift in the way transatlantic authorities managed conflicts over the cross border regulation of securities markets from cooperation skewed heavily toward the preferences of u s officials and accepted grudgingly by european counterparts to a euro american regulatory condominium characterized by close interactions among decision makers and mutual accommodation in the final decades of the twentieth century the asymmetric influence wielded by u s securities market authorities had few parallels in other regulatory areas why then did u s officials become more accommodating and european authorities more influential and why did the turning point occur in 2002 and 2003 an unlikely moment for intensified transatlantic sovereignty sharing my study shows that institutional change inside the eu recast the north atlantic balance of regulatory leverage and thereby was the primary factor behind the reshaping of transatlantic cooperation internal eu regulatory centralization changed the expectations of u s and european firms and authorities and generated new incentives in washington d c for accommodation and closer transatlantic coordination my explanation differs from models that accepting u s financial pre eminence as a given attribute variance in cross border regulatory cooperation to factors such as incentives derived from the particularities of issue areas or preferences rooted in domestic politics while resonating with a well established theme from the realist branch of ipe my findings have broad theoretical significance and open new avenues for dialogue between realists and constructivists about the social political and institutional foundations of power in global economic affairs the transatlantic political process set off by financial transformation in europe reveals contemporary sources of systemic change and raises questions about what the eu s ascendance as a global financial regulator will mean in the aftermath of the late 2000s crisis

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

mortality and immortality the nobel prize as an experiment into the effect of status upon longevity it has been known for centuries that the rich and famous have longer lives than the poor and ordinary causality however remains trenchantly debated the ideal experiment would be one in which extra status could somehow be dropped upon a sub sample of individuals while those in a control group of comparable individuals received none this paper attempts to formulate a test in that spirit it collects 19th century birth data on science nobel prize winners correcting for potential biases we estimate that winning the prize compared to merely being nominated is associated with between 1 and 2 years of extra longevity

the dynamics of the two level bargaining game the 1988 brazilian debt negotiations n this study we examine the case of the brazilian debt rescheduling lagreement of 1988 as a two level game in which each of the two main negotiators the brazilian state and the international bank advisory committee must satisfy its own constituents while trying to negotiate an international agreement the literature on the politics of debt and adjustment tends to look either at the domestic politics of stabilization and adjustment or at collective action at the level of the international regime we argue however that the interaction between the domestic and international levels must be understood in order to explain the outcomes of international debt negotiations drawing on the concept of the two level game in international politics suggested by robert putnam

the price of international business morality twenty years under the foreign corrupt practices act last year marked the 20th anniversary of the foreign corrupt practices act fcpa of 1977 the fcpa is the first and only statute prohibiting bribery and other corrupt business practices by u s citizens and companies conducting business overseas this paper provides an overview of the fcpa during the two decades of its existence more specifically the objectives of this paper are four fold first the paper provides background information about the fcpa of 1977 and subsequent amendments in 1988 second the paper discusses the enforcement of the fcpa since its passage by examining the number of cases prosecuted under the fcpa and the respective penalties imposed third the paper discusses the economic impact of the fcpa by addressing whether the fcpa places u s firms at a competitive disadvantage fourth the paper provides public policy recommendations to expand the reach and scope of the fcpa it covers efforts to criminalize bribery through multilateral organizations such as the organization for economic cooperation and development oecd the world trade organization wto and the organization of american states oas it also covers bilateral arrangements and efforts by non governmental organizations such as transparency international

healthy bodies and thick wallets the dual relation between health and economic status there is abundant evidence of a quantitatively large association between many measures of economic status including income and wealth and a variety of health outcomes such as mortality or morbidity however considerable and often heated debate remains especially across disciplines about the direction of causation and about why the association arises although medical scientists are often convinced that the dominant if not exclusive pathway is that variation in socioeconomic status produces health disparities they are increasingly debating among themselves about why low economic status might lead to poor health at least for modern industrial countries 1 the old standby arguments the less well to do have access to less or lower quality medical care or a stronger pattern of deleterious personal behaviors have been rejected as insufficient instead a series of intriguing competing theories have arisen that emphasize long term impacts of early childhood or even inter uterine environmental factors the cumulative effects of prolonged exposures to individual stressful events or reactions to macro societal factors such as rising levels of income inequality a common link is that each theory attempts to document the physiological processes through which low economic status leads to poorer health while these scientific questions are extremely important this research has taken place with little input from economists economists are now making contributions about the alternative pathway the impact poor health may have on economic resources poor health may restrict a family s capacity to earn income or to accumulate assets by limiting work or by raising medical expenses at a minimum this work should provide a caution against exaggerating the magnitude of causation from economic status to health outcomes but the potential contribution runs deeper as people age the evolving variation in individual health outcomes may offer additional statistical information to estimate parameters of household savings and consumption behavior that so far have proven to be somewhat elusive thus incorporating health uncertainty and risk into economic models should eventually enrich our understanding of basic tenets of household behavior the first section of this paper documents the size of the association between health and one prominent economic status measure household wealth section two deals with how health influences economic status by sketching out reasons why health may alter household savings and eventually wealth and then providing estimates of the empirical magnitude of these effects section three shifts attention to the alternative pathway the links between economic status and health and summarizes 2major controversies and evidence surrounding these issues

determinants of bribery in international business the cultural and economic factors corruption perceptions index cpi scores for 47 countries reported by transparency international were used to ascertain determinants of bribe taking in international business two sets of independent variables economic and cultural were used in a multiple regression analysis results indicate that bribe taking was more likely to be prevalent in countries with low per capita income and lower disparities in income distribution cultural factors such as high power distance and high masculinity in a country were also likely to be associated with high level of bribe taking both economic and cultural factors were important explanatory factors of bribery implications of the findings for combating bribery are discussed

free trade fair trade strategic trade and protectionism in the u s congress 1987 88 what conditions led the one hundredth congress of the united states to enact fair trade and strategic trade policies into law during 1987 88 political partisanship is an important force with democrats supporting and republicans opposing all types of trade intervention otherwise the coalitions of support for and opposition to the various trade policies differ particularly in the senate in that body international business is associated with support for fair trade policies and with opposition to classical protectionism while domestic u s business is associated with support for classical protectionism liberalism is strongly associated with support for fair and strategic trade policies but is not associated with classical protectionism in the house of representatives the long standing protectionist coalition remains an influence few forces in support of free trade remain in u s politics changing international market conditions rapidly affect the making of u s trade policy

inventory adjustment and dynamic winery behavior this paper develops a dynamic model of processor behavior which is applied to the california wine industry price production and input demand functions are derived from an optimal control model which takes into account inventory growth from aging and the linkage between product inventories and input purchases an important feature of the model is that expected future market conditions and beginning inventories influence current behavior through changes in the inventory shadow price the empirical results generally conform to the theoretical specification and emphasize the role of demand expectations on winery behavior

rank as an inherent incentive evidence from a field experiment abstract money is the prime incentive considered in economic models however recent evidence indicates that people are also greatly concerned about their social rankings is this solely because rank brings tangible benefits or because in addition people have an inherent preference for high rank this paper deployed a field experiment that provides evidence for an inherent preference in the experiment vietnamese students enrolled in an english course performed significantly better on the official standardized international final test when they were told their rankings on practice tests than when they were not this result held even when this ranking information could not be reliably communicated thus severely attenuating the potential to bring tangible or status benefits

negotiation arithmetic adding and subtracting issues and parties students of international negotiations often examine strategic interactions among a given set of parties dealing with a specified group of issues the issues and parties themselves are often choice variables whose ultimate configuration can have decisive effects on a bargain s outcome using a variety of international cases i investigate the properties of several classes of moves that are intended to alter the issues and parties of an original negotiation a unified approach to the analysis of such situations suggests numerous distinct means by which the addition or subtraction of issues can yield one sided gains to the use of power can yield joint gains that create or enhance a zone of possible agreement and can reduce or destroy a zone of possible agreement the effects of adding or subtracting parties are similarly analyzed however unintended complexity unforeseen interrelationships organizational considerations transactions costs and informational requirements may alter the analysis of such moves

between free trade and protectionism strategic trade policy and a theory of corporate trade demands conventional theories of the political economy of trade argue that industries in import competing businesses favor protectionism while multinational firms and export dependent corporations advocate unconditional free trade however many multinational industries have recently advocated strategic trade policies that is they are willing to support free trade at home only if foreign markets are opened or foreign governments reduce subsidies to their firms if demands for strategic trade policy were adopted by the united states they could represent a threat to the general agreement on tariffs and trade gatt and the multilateral trading system this article seeks to explain the emergence of these new corporate trade demands and thereby broaden theories of the political economy of trade the article begins with the widely supported position that multinational and export oriented firms prefer unconditional free trade building on concepts from theories of industrial organization and international trade the article then hypothesizes that rising economies of scale and steep learning curves will necessitate that these firms have access to global markets via exports if growing dependence on world markets is combined with foreign government subsidies or protection the trade preferences of firms will shift from unconditional free trade to demands that openness at home be contingent on openness overseas the manner in which firm demands then get translated into industry demands will vary with the industry s structure if the industry consists of firms with symmetric strategies it will seek strategic trade policy but if the industry is highly segmented it will turn toward protectionism the article concludes with a preliminary test of these hypotheses in four brief studies of the politics of trade in the semiconductor commercial aircraft telecommunications equipment and machine tool industries

veblen effects in a theory of conspicuous consumption the authors examine conditions under which veblen effects arise from the desire to achieve social status by signaling wealth through conspicuous consumption while veblen effects cannot ordinarily arise when preferences satisfy a single crossing property they may emerge when this property fails in that case budget brands are priced at marginal cost while luxury brands though not intrinsically superior are sold at higher prices to consumers seeking to advertise wealth luxury brands earn strictly positive profits under conditions that would with standard formulations of preferences yield marginal cost pricing the authors explore factors that induce veblen effects and they investigate policy implications copyright 1996 by american economic association

the dynamics of negotiated protectionism r ecent protectionism by the united states has principally taken the form of negotiated barriers to trade such as voluntary export restraints these barriers tend to evolve over time and to display three patterns which we label institutionalized temporary and sporadic protectionism cartel theory and studies of the politics of protection suggest that the dynamics of negotiated protectionism will depend on three variables the barriers to entry into an industry the size of the domestic industry and the exit barriers for domestic firms low barriers to entry will lead to institutionalized protectionism when the domestic industry is large and exit difficult temporary protectionism results when the domestic industry is small and exit easy and sporadic protectionism is likely when barriers to entry are high brief studies of u s protectionism in textiles and apparel steel footwear televisions and automobiles illustrate the value of this framework t rade protectionism has often been thought of as a unilateral act by a sovereign state yet much protectionism during the 1970s and 1980s has been negotiated rather than unilaterally imposed voluntary export restraints vers and similar arrangements have become the preferred means by which the united states has sought to cartelize industrial sectors threatened by imports such negotiated protectionism has been particularly evident in five industries in the united states during part or all of the last quarter century in textiles and apparel steel footwear television sets and autos the united states has negotiated trade restrictions with numerous foreign exporters while the u s government has occasionally provided unilateral measures of protection for small industries all u s administrations since world war ii have been reluctant to countenance general schemes of protection for major industries yet beginning with the eisenhower administration s negotiations in textiles in 1956 virtually every u s president has actively sought vers for economically and politically sensitive industrial sectors

international r d rivalry and industrial strategy this paper presents a theory of government intervention which provides an explanation for industrial strategy policies such as r d or export subsidies in imperfectly competitive international markets domestic net welfare is improved by the capture of a greater share of the output of rent earning industries although the subsidy ridden noncooperative international equilibrium is jointly suboptimal behaviour of governments and firms is modelled as a three stage subgame perfect nash equilibrium the assumption that the government is the first player in this game allows it to influence equilibrium outcomes by altering the set of credible actions open to firms

political transfer and trading up transatlantic trade in genetically modified food and u s politics although there is a popular perception that trade liberalization undermines domestic regulation under certain circumstances international trade can provide a catalyst for making domestic regulations more stringent this article makes a case extending the applicability of the so called trading up thesis by finding evidence of change within the united states in response to the transatlantic trade dispute over genetically modified food in particular it argues that political transfer the transfer of political concern from one jurisdiction to political mobilization in another can prompt policy change even in the absence of the adoption of foreign standards by domestic firms

the origins of financial openness a study of current and capital account liberalization theory we assess the determinants of the national regulation of international finance or the comparative degree of national financial openness or closure hypotheses partisanship interacts with a nation s factor endowments to account in part for different international financial policies by governments of the same partisan hue methods we offer a quantitative measure of international financial openness or current and capital account regulation for 21 member countries of the organization for economic cooperation and development for 1950 88 we use regression analysis employing panel corrected standard errors to discover the determinants of financial openness results our main finding is that political partisanship substantially explains openness but does so in complex ways differences in both political institutional arrangements and types of political economy also account for part of the differences in international financial regulation

last place aversion evidence and redistributive implications we present evidence from laboratory experiments showing that individuals are last place averse participants choose gambles with the potential to move them out of last place that they reject when randomly placed in other parts of the distribution in modified dictator games participants randomly placed in second to last place are the most likely to give money to the person one rank above them instead of the person one rank below last place aversion suggests that low income individuals might oppose redistribution because it could differentially help the group just beneath them using survey data we show that individuals making just above the minimum wage are the most likely to oppose its increase similarly in the general social survey those above poverty but below median income support redistribution significantly less than their background characteristics would predict jel codes h23 d31 c91