Transparency, Protest, and Democratic Stability

Democratic rule is maintained so long as all relevant actors in the political system comply with the institutional rules of the game – democratic institutions must be self-enforcing. We examine the role of transparency in supporting a democratic equilibrium. Transparency improves the functioning of elections: In transparent polities, elections more effectively resolve adverse selection problems between the public and their rulers. Transparency increases popular satisfaction with democracy and inhibits challenges to the democratic order. We provide a game-theoretic model, test these claims, and find they enjoy empirical support. Transparency is associated with a reduction in both the probability of democratic collapse and of the irregular removal of democratic leaders. Transparency stabilizes democratic rule

Voluntary Export Restraints, Antidumping Procedure, and Domestic Politics.

A voluntary export restraint (VER) is preferred to a tariff by a government concerned about electoral returns when the influence of industry profits is large relative to the losses to consumers from higher prices. If the foreign firm is uncertain of these pressures, the antidumping code facilitates the complete transfer of the relevant information and generates a VER rather than a tariff in equilibrium. The choice across instruments is determined by the political attributes. Domestic and foreign profits rise with the antidumping-generated VER, and the VER lowers the volume of trade by more than the expected duty. Copyright 1996 by American Economic Association.

Choosing Democracy

In an autocracy, the ruling elite allocates resources to unproductive contest activities in order to protect its power. This paper establishes that a flatter income distribution, a slow-growing or shrinking capital stock, and a decrease in the relative size of the workforce increases the likelihood of a decision by the ruling elite to negotiate a transition to democracy. In a model of economic cooperation and political conflict, the losses from ceding control over the tax rate may be lower than the costs of defending minority privilege. These predictions are evaluated in the light of the South African and other recent transitions. Copyright Blackwell Publishers Ltd.

Political Economy in Macroeconomics. By Allan Drazen. Princeton, NJ: Princeton University Press, 2000. Pp. xiv, 775. $55.00, 35.00.

This is a colossal volume it is at once a compendium, a survey, a critical evaluation, and a clear exposition of a burgeoning field. It is a study of macroeconomic policy-making in the presence of heterogeneity across actors. Allan Drazen argues that the sine qua non of politics is the conflict of interests; and the core of political economy is that policies are the outcome of the interaction of competing individuals and groups whose concern is their own welfare and not necessarily that of any other individuals or the society as a whole.

Too much of a good thing? The proactive response dilemma

for International Studies, University of Southern California. The authors have profited from comments provided by an anonymous referee, Barry O’Neill, Geoffrey Heal, and Bruce Russett on an earlier draft. TOO MUCH OF A GOOD THING? THE PROACTIVE RESPONSE DILEMMA This paper presents a two-player proactive response game: the targeted government first chooses its measures to weaken the terrorists, and the terrorists then choose the type of event – normal or spectacular – whose outcome is dependent on proactive responses and nature. Unlike previous analyses, proactive policy has a downside by increasing grievances and, consequently, terrorist recruitment. If the government responds too harshly, its actions can empower the terrorists by providing a larger constituency. Aggressive antiterrorist actions, encouraged by a high perceived loss from terrorism and low marginal proactive costs, may result in spectacular events with dire consequences. If spectaculars are transferred abroad to soft targets, then proactive operations may be excessive from a global viewpoint as external costs are ignored. The analysis explains why some target nations engage in a modest level of offense, while a prime target chooses a large level

SUICIDE TERRORISM AND THE BACKLASH EFFECT

This paper presents a game-theoretic model of suicide terrorism containing three agents: the terrorist leader; a targeted government; and potential terrorist supporters. Supporters join the terrorist group if they gain more from their participation than from their economic opportunities. Preemptive measures by the government can result in a backlash that encourages recruitment through new grievances. Suicide attacks can also lead to recruitment. Increases in preemption costs and/or economic opportunities can reduce the overall level of terrorism, while increasing the proportion of suicide to normal attacks. An increase in the effect of preemption on recruitment, or the propaganda effect of suicide bombings has the opposite effect of increasing normal and suicide attacks, but decreasing the proportion of suicide to normal attacks in the terrorist organization's strategy profile.Backlash, Suicide terrorism, Game theory, Preemption, Terrorism, Recruitment, Mobilization,