The Attraction of FDI to Conflicted States: The Counter-Intuitive Case of US Oil and Gas

States burdened with conflict have been considered to be undesirable destinations for foreign direct investment (FDI) due to, inter alia, political instability, regulatory unpredictability, and expropriation risk. However, we develop an alternative view based on corporate governance and real option theories. We analyze a dataset of FDI location decisions made in the Oil and Gas sector by 250 US firms across 44 countries between 2007 and 2013. After controlling for energy reserves, the results show counter-intuitively, that civil war and terrorism risks, and terrorist events are positively associated with US investment in Oil and Gas. US subsidiaries also show high levels of ownership commitment. It is tempting to conclude that US Oil and Gas is a wholly unique, resource-bound case, but we argue that this disconnect may have occurred for two reasons. First, a threat of conflict and violence can make MNEs exercise their growth options and expand resource extraction sooner rather than later. Second, political instability does not necessarily lead to higher levels of FDI expropriation risk. On the contrary, instability can reduce the incentives for the state to seize assets from technologically superior MNEs, i.e. it may reduce expropriation risk. Just as the rule of law and ‘good’ governance can constrain a state from expropriation, there are theoretical reasons why ‘bad’ governance resulting from instability and incapacity may do so, too

How soon is now? The effects of the IMF on economic reforms in Latin America

IMF, Stand-by agreements, Economic reform implementation, U.S., Domestic pressures, Latin America,

Reward, punishment or inducement? US economic and military aid, 1946-1996

If the US has wielded power as global hegemon, then there should be evidence of a linkage between American resources and the ability to influence behavior. However, there is widespread disagreement on how this power is manifested (see Krause, 1991). Methodological and epistemological issues have hampered empirical studies of US hegemonic behavior. For example, does the US reward past behavior or does it offer inducements for future behavior? We document and discuss these issues in terms of the aid-foreign policy compliance nexus. The empirical portion of our paper tests whether US military and non-military aid are correlated with foreign policy similarity. The main merits of our study are that: (1) we test a new measure of foreign policy similarity developed by Signorino and Ritter (1999) and compiled by Gartzke et al. (1999); (2) we relax the causality issue and test using vector autoregression (VAR) for 76 developing countries; and (3) our time horizon is a minimum of 30 years for each country. Our central finding is that aid is most often used as a reward. More specifically, foreign policy similarity leads to greater economic aid for most African countries, foreign policy similarity leads to greater military aid for a majority of Latin American states, and there are no overarching patterns for Asia and the Middle East. We discuss the implications of our findings in the context of the bargaining and structural approaches to statecraft.US economic and military aid, Reward, Punishment,

Routledge Handbook of Civil Wars

Chapter 20: Military Tactics in Civil War is authored by Erin M. Kearns of the University of Nebraska at Omaha and Joesph K. Young. This comprehensive new Handbook explores the significance and nature of armed intrastate conflict and civil war in the modern world. Civil wars and intrastate conflict represent the principal form of organised violence since the end of World War II, and certainly in the contemporary era. These conflicts have a huge impact and drive major political change within the societies in which they occur, as well as on an international scale. The global importance of recent intrastate and regional conflicts in Afghanistan, Pakistan, Iraq, Somalia, Nepal, Cote d\u27Ivoire, Syria and Libya – amongst others – has served to refocus academic and policy interest upon civil war. Drawing together contributions from key thinkers in the field who discuss the sources, causes, duration, nature and recurrence of civil wars, as well as their political meaning and international impact, the Handbook is organized into five key parts: Part I: Understanding and Explaining Civil Wars: Theoretical and Methodological Debates Part II: The Causes of Civil Wars Part III: The Nature and Impact of Civil Wars Part IV: International Dimensions Part V: Termination and Resolution of Civil Wars Covering a wide range of topics including micro-level issues as well as broader debates, Routledge Handbook of Civil Wars will set a benchmark for future research in the field. This volume will be of much interest to students of civil wars and intrastate conflict, ethnic conflict, political violence, peace and conflict studies, security studies and IR in general.https://digitalcommons.unomaha.edu/criminaljusticefacbooks/1004/thumbnail.jp

Introducing the Civil Wars mediation (CWM) dataset

Mediation is one of the few mechanisms the international community can deploy that will affect civil wars. This article introduces the dataset on mediation in civil wars – termed the Civil War Mediation (CWM) dataset. This is the first dataset to focus solely on civil war mediation. These data contribute to the present state of quantitative research on mediation in three important respects: the data are collected for the period of 1946–2004, are organized by mediation cases and by civil war episode, and provide detailed information about mediation incidences. The article first presents a few variables included in the dataset that are motivated by theoretical arguments from the literature. After a presentation of summary statistics, attention is turned to using the CWM data to explore the determinants of mediation. Mediation is shown to be a function of war type (territorial and internationalized wars are more likely to be mediated), war duration (the longer the war the higher the probability of mediation), supply-side factors (the number of democracies in the world and the global polity average), and stratum (subsequent wars are less likely to be mediated). Battle-related deaths also seem to increase the chances of mediation, though the relationship is only weakly significant. The article concludes with suggestions for future research that can benefit from the dataset

Replication data for: Sovereign Bond Ratings and Neoliberalism in Latin America

The importance of credit rating agencies (CRAs) in rating sovereign bonds has grown as developing countries increasingly issue bonds to attract foreign capital. Although in their methodologies CRAs claim that the initiation of neoliberal reforms influences bond ratings, given the secrecy surrounding ratings, it is unclear what impact reforms actually have on CRAs. Controlling for macroeconomic and political determinants, we use statistical analyses, as well as recent qualitative evidence, for some 16 Latin American countries from 1992 to 2003 to assess the effects of economic reforms on CRA decisions. We find that among neoliberal policies only trade liberalization positively and consistently impacts bond ratings. The relative ease of implementation along with the credible commitment to maintain trade policies help explain higher bond ratings. The results also show that inflation and bond defaults negatively affect CRA assessments. The findings provide reasons for optimism. Many economic policies, often politically difficult to implement, do not lead to higher ratings. Others that are relatively easy to implement do. Policy makers in Latin American countries have more options to lessen political tensions, lower the cost of capital, and increase its availability for investment and growth than previously predicte

A Nested Game Approach to Political and Economic Liberalization in Democratizing States: The Case of South Korea

South Korea enjoyed high rates of economic growth until the mid-1990s. However in mid-1997 the country went into a severe economic crisis which ultimately resulted in a request for an IMF bailout. Leading up to the crisis, the government had embarked upon democratic liberalization but not much economic liberalization. This research explores why the government would lay the foundation for political reform with-out creating institutions capable of imposing economic reform on the politically powerful business sector. The absence of such institutions put the government in a position where it could not respond to the emerging economic crisis. The government’s inability to act eroded its own position of power and governance. From this perspective, the government’s inattention to economic reform appears irrational as it led to a weakening of its own position. We build a model of political and economic liberalization showing that the government was engaged in nested games ~i.e., games in multiple arenas! with the political opposition, the labor unions, and the powerful business sector. We develop an argument that strong, antiliberal economic actors create incentive for the government in a democratizing state to refrain from economic liberalization, even while moving forward with democratic liberalization

Introducing the Civil Wars Mediation (CWM) dataset

Mediation is one of the few mechanisms the international community can deploy that will affect civil wars. This article introduces the dataset on mediation in civil wars - termed the Civil War Mediation (CWM) dataset. This is the first dataset to focus solely on civil war mediation. These data contribute to the present state of quantitative research on mediation in three important respects: the data are collected for the period of 1946-2004, are organized by mediation cases and by civil war episode, and provide detailed information about mediation incidences. The article first presents a few variables included in the dataset that are motivated by theoretical arguments from the literature. After a presentation of summary statistics, attention is turned to using the CWM data to explore the determinants of mediation. Mediation is shown to be a function of war type (territorial and internationalized wars are more likely to be mediated), war duration (the longer the war the higher the probability of mediation), supply-side factors (the number of democracies in the world and the global polity average), and stratum (subsequent wars are less likely to be mediated). Battle-related deaths also seem to increase the chances of mediation, though the relationship is only weakly significant. The article concludes with suggestions for future research that can benefit from the dataset.civil war; dataset; mediation