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- Domestic politics and international relations are often somehow entangled,
- but our theories have not yet sorted out the puzzling tangle. It is fruitless
- to debate whether domestic politics really determine international relations,
- or the reverse. The answer to that question is clearly "Both, sometimes."
- The more interesting questions are "When?" and "How?" This article offers
- a theoretical approach to this issue, but I begin with a story that illustrates
- the puzzle.
- One illuminating example of how diplomacy and domestic politics can
- become entangled culminated at the Bonn summit conference of 1978.' In
- the mid-1970s, a coordinated program of global reflation, led by the "locomotive"
- economies of the United States, Germany, and Japan, had been
- proposed to foster Western recovery from the first oil shock.2 This proposal
- An earlier version of this article was delivered at the 1986 annual meeting of the American
- Political Science Association. For criticisms and suggestions, I am indebted to Robert Axelrod,
- Nicholas Bayne, Henry Brady, James A. Caporaso, Barbara Crane, Ernst B. Haas, Stephan
- Haggard, C. Randall Henning, Peter B. Kenen, Robert 0. Keohane, Stephen D. Krasner, Jacek
- Kugler, Lisa Martin, John Odell, Robert Powell, Kenneth A. Shepsle, Steven Stedman, Peter
- Yu, members of research seminars at the Universities of Iowa, Michigan, and Harvard, and
- two anonymous reviewers. I am grateful to the Rockefeller Foundation for enabling me to
- complete this research.
- 1. The following account is drawn from Robert D. Putnam and C. Randall Henning, "The
- Bonn Summit of 1978: How Does International Economic Policy Coordination Actually Work?"
- Brookings Discussion Papers in International Economics, no. 53 (Washington, D.C.: Brookings
- Institution, October 1986), and Robert D. Putnam and Nicholas Bayne, Hanging Together:
- Cooperation and Conflict in the Seven-Power Summits, rev. ed. (Cambridge, Mass.: Harvard
- University Press, 1987), pp. 62-94.
- 2. Among interdependent economies, most economists believe, policies can often be more
- effective if they are internationally coordinated. For relevant citations, see Putnam and Bayne,
- Hanging Together, p. 24.
- International Organization 42, 3, Summer 1988
- © 1988 by the World Peace Foundation and the Massachusetts Institute of Technology
- 428 International Organization
- had received a powerful boost from the incoming Carter administration and
- was warmly supported by the weaker countries, as well as the Organization
- for Economic Co-operation and Development (OECD) and many private
- economists, who argued that it would overcome international payments imbalances
- and speed growth all around. On the other hand, the Germans and
- the Japanese protested that prudent and successful economic managers should
- not be asked to bail out spendthrifts. Meanwhile, Jimmy Carter's ambitious
- National Energy Program remained deadlocked in Congress, while Helmut
- Schmidt led a chorus of complaints about the Americans' uncontrolled appetite
- for imported oil and their apparent unconcern about the falling dollar.
- All sides conceded that the world economy was in serious trouble, but it
- was not clear which was more to blame, tight-fisted German and Japanese
- fiscal policies or slack-jawed U.S. energy and monetary policies.
- At the Bonn summit, however, a comprehensive package deal was approved,
- the clearest case yet of a summit that left all participants happier
- than when they arrived. Helmut Schmidt agreed to additional fiscal stimulus,
- amounting to 1 percent of GNP, Jimmy Carter committed himself to decontrol
- domestic oil prices by the end of 1980, and Takeo Fukuda pledged new
- efforts to reach a 7 percent growth rate. Secondary elements in the Bonn
- accord included French and British acquiescence in the Tokyo Round trade
- negotiations; Japanese undertakings to foster import growth and restrain
- exports; and a generic American promise to fight inflation. All in all, the
- Bonn summit produced a balanced agreement of unparalleled breadth and
- specificity. More remarkably, virtually all parts of the package were actually
- implemented.
- Most observers at the time welcomed the policies agreed to at Bonn,
- although in retrospect there has been much debate about the economic
- wisdom of this package deal. However, my concern here is not whether the
- deal was wise economically, but how it became possible politically. My
- research suggests, first, that the key governments at Bonn adopted policies
- different from those that they would have pursued in the absence of international
- negotiations, but second, that agreement was possible only because
- a powerful minority within each government actually favored on domestic
- grounds the policy being demanded internationally.
- Within Germany, a political process catalyzed by foreign pressures was
- surreptitiously orchestrated by expansionists inside the Schmidt government.
- Contrary to the public mythology, the Bonn deal was not forced on
- a reluctant or "altruistic" Germany. In fact, officials in the Chancellor's
- Office and the Economics Ministry, as well as in the Social Democratic party
- and the trade unions, had argued privately in early 1978 that further stimulus
- was domestically desirable, particularly in view of the approaching 1980
- elections. However, they had little hope of overcoming the opposition of
- the Finance Ministry, the Free Democratic party (part of the government
- coalition), and the business and banking community, especially the leaderDiplomacy
- and domestic politics 429
- ship of the Bundesbank. Publicly, Helmut Schmidt posed as reluctant to the
- end. Only his closest advisors suspected the truth: that the chancellor "let
- himself be pushed" into a policy that he privately favored, but would have
- found costly and perhaps impossible to enact without the summit's package
- deal.
- Analogously, in Japan a coalition of business interests, the Ministry of
- Trade and Industry (MITI), the Economic Planning Agency, and some expansion-
- minded politicians within the Liberal Democratic Party pushed for
- additional domestic stimulus, using U.S. pressure as one of their prime
- arguments against the stubborn resistance of the Ministry of Finance (MOF).
- Without internal divisions in Tokyo, it is unlikely that the foreign demands
- would have been met, but without the external pressure, it is even more
- unlikely that the expansionists could have overridden the powerful MOF.
- "Seventy percent foreign pressure, 30 percent internal politics," was the
- disgruntled judgment of one MOF insider. "Fifty-fifty," guessed an official
- from MITI.3
- In the American case, too, internal politicking reinforced, and was reinforced
- by, the international pressure. During the summit preparations American
- negotiators occasionally invited their foreign counterparts to put more
- pressure on the Americans to reduce oil imports. Key economic officials
- within the administration favored a tougher energy policy, but they were
- opposed by the president's closest political aides, even after the summit.
- Moreover, congressional opponents continued to stymie oil price decontrol,
- as they had under both Nixon and Ford. Finally, in April 1979, the president
- decided on gradual administrative decontrol, bringing U.S. prices up to world
- levels by October 1981. His domestic advisors thus won a postponement of
- this politically costly move until after the 1980 presidential election, but in
- the end, virtually every one of the pledges made at Bonn was fulfilled. Both
- proponents and opponents of decontrol agree that the summit commitment
- was at the center of the administration's heated intramural debate during
- the winter of 1978-79 and instrumental in the final decision.4
- In short, the Bonn accord represented genuine international policy coordination.
- Significant policy changes were pledged and implemented by the
- key participants. Moreover—although this counterfactual claim is necessarily
- harder to establish—those policy changes would very probably not
- have been pursued (certainly not the same scale and within the same time
- frame) in the absence of the international agreement. Within each country,
- one faction supported the policy shift being demanded of its country inter-
- 3. For a comprehensive account of the Japanese story, see I. M. Destler and Hisao Mitsuyu,
- "Locomotives on Different Tracks: Macroeconomic Diplomacy, 1977-1979," in I. M. Destler
- and Hideo Sato, eds., Coping with U.S.-Japanese Economic Conflicts (Lexington, Mass.:
- Heath, 1982).
- 4. For an excellent account of U.S. energy policy during this period, see G. John Ikenberry,
- "Market Solutions for State Problems: The International and Domestic Politics of American
- Oil Decontrol," International Organization 42 (Winter 1988).
- 430 International Organization
- nationally, but that faction was initially outnumbered. Thus, international
- pressure was a necessary condition for these policy shifts. On the other
- hand, without domestic resonance, international forces would not have sufficed
- to produce the accord, no matter how balanced and intellectually persuasive
- the overall package. In the end, each leader believed that what he
- was doing was in his nation's interest—and probably in his own political
- interest, too, even though not all his aides agreed.5 Yet without the summit
- accord he probably would not (or could not) have changed policies so easily.
- In that sense, the Bonn deal successfully meshed domestic and international
- pressures.
- Neither a purely domestic nor a purely international analysis could account
- for this episode. Interpretations cast in terms either of domestic causes and
- international effects ("Second Image"6) or of international causes and domestic
- effects ("Second Image Reversed"7) would represent merely "partial
- equilibrium" analyses and would miss an important part of the story, namely,
- how the domestic politics of several countries became entangled via an
- international negotiation. The events of 1978 illustrate that we must aim
- instead for "general equilibrium" theories that account simultaneously for
- the interaction of domestic and international factors. This article suggests a
- conceptual framework for understanding how diplomacy and domestic
- politics interact.
- Domestic-international entanglements: the state of the art
- Much of the existing literature on relations between domestic and international
- affairs consists either of ad hoc lists of countless "domestic influences"
- on foreign policy or of generic observations that national and international
- affairs are somehow "linked."8 James Rosenau was one of the first scholars
- to call attention to this area, but his elaborate taxonomy of "linkage politics"
- generated little cumulative research, except for a flurry of work correlating
- domestic and international "conflict behavior."9
- A second stream of relevant theorizing began with the work by Karl
- 5. It is not clear whether Jimmy Carter fully understood the domestic implications of his
- Bonn pledge at the time. See Putnam and Henning, "The Bonn Summit," and Ikenberry,
- "Market Solutions for State Problems."
- 6. Kenneth N. Waltz, Man, the State, and War: A Theoretical Analysis (New York: Columbia
- University Press, 1959).
- 7. Peter Gourevitch, "The Second Image Reversed: The International Sources of Domestic
- Politics," International Organization 32 (Autumn 1978), pp. 881-911.
- 8. I am indebted to Stephan Haggard for enlightening discussions about domestic influences
- on international relations.
- 9. James Rosenau, "Toward the Study of National-International Linkages," in his Linkage
- Politics: Essays on the Convergence of National and International Systems (New York: Free
- Press, 1969), as well as his "Theorizing Across Systems: Linkage Politics Revisited," in Jonathan
- Wilkenfeld, ed., Conflict Behavior and Linkage Politics (New York: David McKay, 1973),
- especially p. 49.
- Diplomacy and domestic politics 431
- Deutsch and Ernst Haas on regional integration.10 Haas, in particular, emphasized
- the impact of parties and interest groups on the process of European
- integration, and his notion of "spillover" recognized the feedback between
- domestic and international developments. However, the central dependent
- variable in this work was the hypothesized evolution of new supranational
- institutions, rather than specific policy developments, and when European
- integration stalled, so did this literature. The intellectual heirs of this tradition,
- such as Joseph Nye and Robert Keohane, emphasized interdependence
- and transnationalism, but the role of domestic factors slipped more and
- more out of focus, particularly as the concept of international regimes came
- to dominate the subfield."
- The "bureaucratic politics" school of foreign policy analysis initiated
- another promising attack on the problem of domestic-international interaction.
- As Graham Allison noted, "Applied to relations between nations,
- the bureaucratic politics model directs attention to intra-national games, the
- overlap of which constitutes international relations."12 Nevertheless, the
- nature of this "overlap" remained unclarified, and the theoretical contribution
- of this literature did not evolve much beyond the principle that bureaucratic
- interests matter in foreign policymaking.
- More recently, the most sophisticated work on the domestic determinants
- of foreign policy has focused on "structural" factors, particularly "state
- strength." The landmark works of Peter Katzenstein and Stephen Krasner,
- for example, showed the importance of domestic factors in foreign economic
- policy. Katzenstein captured the essence of the problem: "The main purpose
- of all strategies of foreign economic policy is to make domestic policies
- compatible with the international political economy."13 Both authors stressed
- the crucial point that central decision-makers ("the state") must be concerned
- simultaneously with domestic and international pressures.
- 10. Karl W. Deutsch et al., Political Community in the North Atlantic Area: International
- Organization in the Light of Historical Experience (Princeton: Princeton University Press,
- 1957) and Ernst B. Haas, The Uniting of Europe: Political, Social, and Economic Forces,
- 1950-1957 (Stanford, Calif.: Stanford University Press, 1958).
- 11. Robert 0. Keohane and Joseph S. Nye, Power and Interdependence (Boston: Little,
- Brown, 1977). On the regime literature, including its neglect of domestic factors, see Stephan
- Haggard and Beth Simmons, "Theories of International Regimes," International Organization
- 41 (Summer 1987), pp. 491-517.
- 12. Graham T. Allison, Essence of Decision: Explaining the Cuban Missile Crisis (Boston:
- Little, Brown, 1971), p. 149.
- 13. Peter J. Katzenstein, ed., Between Power and Plenty: Foreign Economic Policies of
- Advanced Industrial States (Madison: University of Wisconsin Press, 1978), p. 4. See also
- Katzenstein, "International Relations and Domestic Structures: Foreign Economic Policies of
- Advanced Industrial States," International Organization 30 (Winter 1976), pp. 1-45; Stephen
- D. Krasner, "United States Commercial and Monetary Policy: Unravelling the Paradox of
- External Strength and Internal Weakness," in Katzenstein, Between Power and Plenty, pp.
- 51-87; and Krasner, Defending the National Interest: Raw Materials Investments and U.S.
- Foreign Policy (Princeton: Princeton University Press, 1978).
- 432 International Organization
- More debatable, however, is their identification of "state strength" as the
- key variable of interest. Given the difficulties of measuring "state strength,"
- this approach courts tautology,14 and efforts to locate individual countries
- on this ambiguous continuum have proved problematic.15 "State strength,"
- if reinterpreted as merely the opposite of governmental fragmentation, is no
- doubt of some interest in the comparative study of foreign policy. However,
- Gourevitch is quite correct to complain that "the strong state-weak state
- argument suggests t h a t . . . the identity of the governing coalition does not
- matter. This is a very apolitical argument."16 Moreover, because "state
- structures" (as conceived in this literature) vary little from issue to issue or
- from year to year, such explanations are ill-suited for explaining differences
- across issues or across time (unless "time" is measured in decades or centuries).
- A more adequate account of the domestic determinants of foreign
- policy and international relations must stress politics: parties, social classes,
- interest groups (both economic and noneconomic), legislators, and even
- public opinion and elections, not simply executive officials and institutional
- arrangements.17
- Some work in the "state-centric" genre represents a unitary-actor model
- run amok. "The central proposition of this paper," notes one recent study,
- "is that the state derives its interests from and advocates policies consistent
- with the international system at all times and under all circumstances."18 In
- fact, on nearly all important issues "central decision-makers" disagree about
- what the national interest and the international context demand. Even if we
- arbitrarily exclude the legislature from "the state" (as much of this literature
- does), it is wrong to assume that the executive is unified in its views. Certainly
- this was true in none of the states involved in the 1978 negotiations. What
- was "the" position of the German or Japanese state on macroeconomic
- policy in 1978, or of the American state on energy policy? If the term "state"
- is to be used to mean "central decision-makers," we should treat it as a
- plural noun: not "the state, it . . ." but "the state, they . . ." Central executives
- have a special role in mediating domestic and international pressures
- precisely because they are directly exposed to both spheres, not because
- 14. For example, see Krasner, "United States Commercial and Money Policy," p. 55: "The
- central analytic characteristic that determines the abiliiy of a state to overcome domestic
- resistance is its strength in relation to its own society."
- 15. Helen Milner, "Resisting the Protectionist Temptation: Industry and the Making of Trade
- Policy in France and the United States during the 1970s," International Organization 41
- (Autumn 1987), pp. 639-65.
- 16. Gourevitch, "The Second Image Reversed," p. 903.
- 17. In their more descriptive work, "state-centric" scholars are often sensitive to the impact
- of social and political conflicts, such as those between industry and finance, labor and business,
- and export-oriented versus import-competing sectors. See Katzenstein, Between Power and
- Plenty, pp. 333-36, for example.
- 18. David A. Lake, "The State as Conduit: The International Sources of National Political
- Action," presented at the 1984 annual meeting of the American Political Science Association,
- p. 13.
- Diplomacy and domestic politics 433
- they are united on all issues nor because they are insulated from domestic
- politics.
- Thus, the state-centric literature is an uncertain foundation for theorizing
- about how domestic and international politics interact. More interesting are
- recent works about the impact of the international economy on domestic
- politics and domestic economic policy, such as those by Alt, Evans, Gourevitch,
- and Katzenstein.19 These case studies, representing diverse methodological
- approaches, display a theoretical sophistication on the international-
- to-domestic causal connection far greater than is characteristic of
- comparable studies on the domestic-to-international half of the loop. Nevertheless,
- these works do not purport to account for instances of reciprocal
- causation, nor do they examine cases in which the domestic politics of
- several countries became entangled internationally.
- In short, we need to move beyond the mere observation that domestic
- factors influence international affairs and vice versa, and beyond simple
- catalogs of instances of such influence, to seek theories that integrate both
- spheres, accounting for the areas of entanglement between them.
- Two-level games: a metaphor
- for domestic-international interactions
- Over two decades ago Richard E. Walton and Robert B. McKersie offered
- a "behavioral theory" of social negotiations that is strikingly applicable to
- international conflict and cooperation.20 They pointed out, as all experienced
- negotiators know, that the unitary-actor assumption is often radically misleading.
- As Robert Strauss said of the Tokyo Round trade negotiations:
- "During my tenure as Special Trade Representative, I spent as much time
- negotiating with domestic constituents (both industry and labor) and members
- of the U.S. Congress as I did negotiating with our foreign trading
- partners."2 1
- 19. James E. Alt, "Crude Politics: Oil and the Political Economy of Unemployment in Britain
- and Norway, 1970-1985," British Journal of Political Science 17 (April 1987), pp. 149-99; Peter
- B. Evans, Dependent Development: The Alliance of Multinational, State, and Local Capital
- in Brazil (Princeton: Princeton University Press, 1979); Peter Gourevitch, Politics in Hard
- Times: Comparative Responses to International Economic Crises (Ithaca, N.Y.: Cornell University
- Press, 1986); Peter J. Katzenstein, Small States in World Markets: Industrial Policy in
- Europe (Ithaca, N.Y.: Cornell University Press, 1985).
- 20. Richard E. Walton and Robert B. McKersie, A Behavioral Theory of Labor Negotiations:
- An Analysis of a Social Interaction System (New York: McGraw-Hill, 1965).
- 21. Robert S. Strauss, "Foreword," in Joan E. Twiggs, The Tokyo Round of Multilateral
- Trade Negotiations: A Case Study in Building Domestic Support for Diplomacy (Washington,
- D.C.: Georgetown University Institute for the Study of Diplomacy, 1987), p. vii. Former
- Secretary of Labor John Dunlop is said to have remarked that "bilateral negotiations usually
- require three agreements—one across the table and one on each side of the table," as cited in
- Howard Raiffa, The Art and Science of Negotiation (Cambridge, Mass.: Harvard University
- Press, 1982), p. 166.
- 434 International Organization
- The politics of many international negotiations can usefully be conceived
- as a two-level game. At the national level, domestic groups pursue their
- interests by pressuring the government to adopt favorable policies, and politicians
- seek power by constructing coalitions among those groups. At the
- international level, national governments seek to maximize their own ability
- to satisfy domestic pressures, while minimizing the adverse consequences
- of foreign developments. Neither of the two games can be ignored by central
- decision-makers, so long as their countries remain interdependent, yet sovereign.
- Each national political leader appears at both game boards. Across the
- international table sit his foreign counterparts, and at his elbows sit diplomats
- and other international advisors. Around the domestic table behind him sit
- party and parliamentary figures, spokespersons for domestic agencies, representatives
- of key interest groups, and the leader's own political advisors.
- The unusual complexity of this two-level game is that moves that are rational
- for a player at one board (such as raising energy prices, conceding territory,
- or limiting auto imports) may be impolitic for that same player at the other
- board. Nevertheless, there are powerful incentives for consistency between
- the two games. Players (and kibitzers) will tolerate some differences in
- rhetoric between the two games, but in the end either energy prices rise or
- they don't.
- The political complexities for the players in this two-level game are staggering.
- Any key player at the international table who is dissatisfied with the
- outcome may upset the game board, and conversely, any leader who fails
- to satisfy his fellow players at the domestic table risks being evicted from
- his seat. On occasion, however, clever players will spot a move on one board
- that will trigger realignments on other boards, enabling them to achieve
- otherwise unattainable objectives. This "two-table" metaphor captures the
- dynamics of the 1978 negotiations better than any model based on unitary
- national actors.
- Other scholars have noted the multiple-game nature of international relations.
- Like Walton and McKersie, Daniel Druckman has observed that a
- negotiator "attempts to build a package that will be acceptable both to the
- other side and to his bureaucracy." However, Druckman models the domestic
- and international processes separately and concludes that "the interaction
- between the processes . . . remains a topic for investigation."22
- Robert Axelrod has proposed a "Gamma paradigm," in which the U.S.
- president pursues policies vis-a-vis the Soviet Union with an eye towards
- maximizing his popularity at home. However, this model disregards domestic
- 22. Daniel Druckman, "Boundary Role Conflict: Negotiation as Dual Responsiveness," in
- I. William Zartman, ed., The Negotiation Process: Theories and Applications (Beverly Hills:
- Sage, 1978), pp. 100-101, 109. For a review of the social-psychological literature on bargainers
- as representatives, see Dean G. Pruitt, Negotiation Behavior (New York: Academic Press,
- 1981), pp. 41-43.
- Diplomacy and domestic politics 435
- cleavages, and it postulates that one of the international actors—the Soviet
- leadership—cares only about international gains and faces no domestic constraint
- while the other—the U.S. president—cares only about domestic gains,
- except insofar as his public evaluates the international competition.23 Probably
- the most interesting empirically based theorizing about the connection
- between domestic and international bargaining is that of Glenn Snyder and
- Paul Diesing. Though working in the neo-realist tradition with its conventional
- assumption of unitary actors, they found that, in fully half of the crises
- they studied, top decision-makers were not unified. They concluded that
- prediction of international outcomes is significantly improved by understanding
- internal bargaining, especially with respect to minimally acceptable compromises.
- 24
- Metaphors are not theories, but I am comforted by Max Black's observation
- that "perhaps every science must start with metaphor and end with
- algebra; and perhaps without the metaphor there would never have been
- any algebra."25 Formal analysis of any game requires well-defined rules,
- choices, payoffs, players, and information, and even then, many simple twoperson,
- mixed-motive games have no determinate solution. Deriving analytic
- solutions for two-level games will be a difficult challenge. In what follows I
- hope to motivate further work on that problem.
- Towards a theory of ratification:
- the importance of "win-sets"
- Consider the following stylized scenario that might apply to any two-level
- game. Negotiators representing two organizations meet to reach an agreement
- between them, subject to the constraint that any tentative agreement
- must be ratified by their respective organizations. The negotiators might be
- heads of government representing nations, for example, or labor and management
- representatives, or party leaders in a multiparty coalition, or a
- finance minister negotiating with an IMF team, or leaders of a House-Senate
- conference committee, or ethnic-group leaders in a consociational democracy.
- For the moment, we shall presume that each side is represented by a
- single leader or "chief negotiator," and that this individual has no indepen-
- 23. Robert Axelrod, "The Gamma Paradigm for Studying the Domestic Influence on Foreign
- Policy," prepared for delivery at the 1987 Annual Meeting of the International Studies Association.
- 24. Glenn H. Snyder and Paul Diesing, Conflict Among Nations: Bargaining, Decision Making,
- and System Structure in International Crises (Princeton: Princeton University Press, 1977),
- pp. 510-25.
- 25. Max Black, Models and Metaphors (Ithaca, N.Y.: Cornell University Press, 1962), p.
- 242, as cited in Duncan Snidal, "The Game Theory of International Politics," World Politics
- 38 (October 1985), p. 36n.
- 436 International Organization
- dent policy preferences, but seeks simply to achieve an agreement that will
- be attractive to his constituents.26
- It is convenient analytically to decompose the process into two stages:
- 1. bargaining between the negotiators, leading to a tentative agreement;
- call that Level I.
- 2. separate discussions within each group of constituents about whether
- to ratify the agreement; call that Level II.
- This sequential decomposition into a negotiation phase and a ratification
- phase is useful for purposes of exposition, although it is not descriptively
- accurate. In practice, expectational effects will be quite important. There
- are likely to be prior consultations and bargaining at Level II to hammer
- out an initial position for the Level I negotiations. Conversely, the need for
- Level II ratification is certain to affect the Level I bargaining. In fact, expectations
- of rejection at Level II may abort negotiations at Level I without
- any formal action at Level II. For example, even though both the American
- and Iranian governments seem to have favored an arms-for-hostages deal,
- negotiations collapsed as soon as they became public and thus liable to de
- facto "ratification." In many negotiations, the two-level process may be
- iterative, as the negotiators try out possible agreements and probe their
- constituents' views. In more complicated cases, as we shall see later, the
- constituents' views may themselves evolve in the course of the negotiations.
- Nevertheless, the requirement that any Level I agreement must, in the end,
- be ratified at Level II imposes a crucial theoretical link between the two
- levels.
- "Ratification" may entail a formal voting procedure at Level II, such as
- the constitutionally required two-thirds vote of the U.S. Senate for ratifying
- treaties, but I use the term generically to refer to any decision-process at
- Level II that is required to endorse or implement a Level I agreement,
- whether formally or informally. It is sometimes convenient to think of ratification
- as a parliamentary function, but that is not essential. The actors at
- Level II may represent bureaucratic agencies, interest groups, social classes,
- or even "public opinion." For example, if labor unions in a debtor country
- withhold necessary cooperation from an austerity program that the government
- has negotiated with the IMF, Level II ratification of the agreement
- may be said to have failed; ex ante expectations about that prospect will
- surely influence the Level I negotiations between the government and the
- IMF.
- Domestic ratification of international agreements might seem peculiar to
- democracies. As the German Finance Minister recently observed, "The limit
- of expanded cooperation lies in the fact that we are democracies, and we
- 26. To avoid unnecessary complexity, my argument throughout is phrased in terms of a single
- chief negotiator, although in many cases some of his responsibilities may be delegated to aides.
- Later in this article I relax the assumption that the negotiator has no independent preferences.
- Diplomacy and domestic politics 437
- need to secure electoral majorities at home."27 However, ratification need
- not be "democratic" in any normal sense. For example, in 1930 the Meiji
- Constitution was interpreted as giving a special role to the Japanese military
- in the ratification of the London Naval Treaty;28 and during the ratification
- of any agreement between Catholics and Protestants in Northern Ireland,
- presumably the IRA would throw its power onto the scales. We need only
- stipulate that, for purposes of counting "votes" in the ratification process,
- different forms of political power can be reduced to some common denominator.
- The only formal constraint on the ratification process is that since the
- identical agreement must be ratified by both sides, a preliminary Level I
- agreement cannot be amended at Level II without reopening the Level I
- negotiations. In other words, final ratification must be simply "voted" up
- or down; any modification to the Level I agreement counts as a rejection,
- unless that modification is approved by all other parties to the agreement.29
- Congresswoman Lynn Martin captured the logic of ratification when explaining
- her support for the 1986 tax reform bill as it emerged from the
- conference committee: "As worried as I am about what this bill does, I am
- even more worried about the current code. The choice today is not between
- this bill and a perfect bill; the choice is between this bill and the death of
- tax reform."30
- Given this set of arrangements, we may define the "win-set" for a given
- Level II constituency as the set of all possible Level I agreements that would
- "win"—that is, gain the necessary majority among the constituents—when
- simply voted up or down.31 For two quite different reasons, the contours of
- the Level II win-sets are very important for understanding Level I agreements.
- First, larger win-sets make Level I agreement more likely, ceteris paribus.32
- By definition, any successful agreement must fall within the Level II win-
- 27. Gerhardt Stoltenberg, Wall Street Journal Europe, 2 October 1986, as cited in C. Randall
- Henning, Macroeconomic Diplomacy in the 1980s: Domestic Politics and International Conflict
- Among the United States, Japan, and Europe, Atlantic Paper No. 65 (New York: Croom Helm,
- for the Atlantic Institute for International Affairs, 1987), p. 1.
- 28. Ito Takashi, "Conflicts and Coalition in Japan, 1930: Political Groups and the London
- Naval Disarmament Conference," in Sven Groennings et al., eds, The Study of Coalition
- Behavior (New York: Holt, Rinehart, & Winston, 1970); Kobayashi Tatsuo, "The London
- Naval Treaty, 1930," in James W. Morley, ed., Japan Erupts: The London Naval Conference
- and the Manchurian Incident, 1928-1932 (New York: Columbia University Press, 1984), pp.
- 11-117. I am indebted to William Jarosz for this example.
- 29. This stipulation is, in fact, characteristic of most real-world ratification procedures, such
- as House and Senate action on conference committee reports, although it is somewhat violated
- by the occasional practice of appending "reservations" to the ratification of treaties.
- 30. New York Times, 26 September 1986.
- 31. For the conception of win-set, see Kenneth A. Shepsle and Barry R. Weingast, "The
- Institutional Foundations of Committee Power," American Political Science Review 81 (March
- 1987), pp. 85-104. I am indebted to Professor Shepsle for much help on this topic.
- 32. To avoid tedium, I do not repeat the "other things being equal" proviso in each of the
- propositions that follow. Under some circumstances an expanded win-set might actually make
- practicable some outcome that could trigger a dilemma of collective action. See Vincent P.
- Crawford, "A Theory of Disagreement in Bargaining," Econometrica 50 (May 1982), pp. 607-
- 37.
- 438 International Organization
- sets of each of the parties to the accord. Thus, agreement is possible only
- if those win-sets overlap, and the larger each win-set, the more likely they
- are to overlap. Conversely, the smaller the win-sets, the greater the risk that
- the negotiations will break down. For example, during the prolonged prewar
- Anglo-Argentine negotiations over the Falklands/Malvinas, several tentative
- agreements were rejected in one capital or the other for domestic
- political reasons; when it became clear that the initial British and Argentine
- win-sets did not overlap at all, war became virtually inevitable.33
- A brief, but important digression: The possibility of failed ratification
- suggests that game theoretical analyses should distinguish between voluntary
- and involuntary defection. Voluntary defection refers to reneging by a rational
- egoist in the absence of enforceable contracts—the much-analyzed
- problem posed, for example, in the prisoner's dilemma and other dilemmas
- of collective action. Involuntary defection instead reflects the behavior of
- an agent who is unable to deliver on a promise because of failed ratification.
- Even though these two types of behavior may be difficult to disentangle in
- some instances, the underlying logic is quite different.
- The prospects for international cooperation in an anarchic, "self-help"
- world are often said to be poor because "unfortunately, policy makers generally
- have an incentive to cheat."34 However, as Axelrod, Keohane, and
- others have pointed out, the temptation to defect can be dramatically reduced
- among players who expect to meet again.35 If policymakers in an anarchic
- world were in fact constantly tempted to cheat, certain features of the 1978
- story would be very anomalous. For example, even though the Bonn agreement
- was negotiated with exquisite care, it contained no provisions for
- temporal balance, sequencing, or partial conditionality that might have protected
- the parties from unexpected defection. Moreover, the Germans and
- the Japanese irretrievably enacted their parts of the bargain more than six
- months before the president's action on oil price decontrol and nearly two
- years before that decision was implemented. Once they had done so, the
- temptation to the president to renege should have been overpowering, but
- in fact virtually no one on either side of the decontrol debate within the
- administration dismissed the Bonn pledge as irrelevant. In short, the Bonn
- "promise" had political weight, because reneging would have had high political
- and diplomatic costs.
- 33. The Sunday Times Insight Team, The Falklands War (London: Sphere, 1982); Max
- Hastings and Simon Jenkins, The Battle for the Falklands (New York: Norton, 1984); Alejandro
- Dabat and Luis Lorenzano, Argentina: The Malvinas and the End of Military Rule (London:
- Verso, 1984). I am indebted to Louise Richardson for these citations.
- 34. Matthew E. Canzoneri and Jo Anna Gray, "Two Essays on Monetary Policy in an
- Interdependent World," International Finance Discussion Paper 219 (Board of Governors of
- the Federal Reserve System, February 1983).
- 35. Robert Axelrod, The Evolution of Cooperation (New York: Basic Books, 1984); Robert
- 0. Keohane, After Hegemony: Cooperation and Discord in the World Political Economy
- (Princeton: Princeton University Press, 1984), esp. p. 116; and the special issue of World
- Politics, "Cooperation Under Anarchy," Kenneth A. Oye, ed., vol. 38 (October 1985).
- Diplomacy and domestic politics 439
- On the other hand, in any two-level game, the credibility of an official
- commitment may be low, even if the reputational costs of reneging are high,
- for the negotiator may be unable to guarantee ratification. The failure of
- Congress to ratify abolition of the "American Selling Price" as previously
- agreed during the Kennedy Round trade negotiations is one classic instance;
- another is the inability of Japanese Prime Minister Sato to deliver on a
- promise made to President Nixon during the "Textile Wrangle."36 A key
- obstacle to Western economic coordination in 1985-87 was the Germans'
- fear that the Reagan administration would be politically unable to carry out
- any commitment it might make to cut the U.S. budget deficit, no matter
- how well-intentioned the president.
- Unlike concerns about voluntary defection, concern about "deliver-ability"
- was a prominent element in the Bonn negotiations. In the post-summit
- press conference, President Carter stressed that "each of us has been careful
- not to promise more than he can deliver." A major issue throughout the
- negotiations was Carter's own ability to deliver on his energy commitments.
- The Americans worked hard to convince the others, first, that the president
- was under severe domestic political constraints on energy issues, which
- limited what he could promise, but second, that he could deliver what he
- was prepared to promise. The negotiators in 1978 seemed to follow this
- presumption about one another: "He will do what he has promised, so long
- as what he has promised is clear and within his power."
- Involuntary defection, and the fear of it, can be just as fatal to prospects
- for cooperation as voluntary defection. Moreover, in some cases, it may be
- difficult, both for the other side and for outside analysts, to distinguish
- voluntary and involuntary defection, particularly since a strategic negotiator
- might seek to misrepresent a voluntary defection as involuntary. Such behavior
- is itself presumably subject to some reputational constraints, although
- it is an important empirical question how far reputations generalize from
- collectivities to negotiators and vice versa. Credibility (and thus the ability
- to strike deals) at Level I is enhanced by a negotiator's (demonstrated) ability
- to "deliver" at Level II; this was a major strength of Robert Strauss in the
- Tokyo Round negotiations.37
- Involuntary defection can only be understood within the framework of a
- two-level game. Thus, to return to the issue of win-sets, the smaller the winsets,
- the greater the risk of involuntary defection, and hence the more applicable
- the literature about dilemmas of collective action.38
- 36.1. M. Destler, Haruhiro Fukui, and Hideo Sato, The Textile Wrangle: Conflict in Japanese-
- American Relations, 1969-1971 (Ithaca, N.Y.: Cornell University Press, 1979), pp. 121-57.
- 37. Gilbert R. Winham, "Robert Strauss, the MTN, and the Control of Faction," Journal
- of World Trade Law 14 (September-October 1980), pp. 377-97, and his International Trade
- and the Tokyo Round (Princeton: Princeton University Press, 1986).
- 38. This discussion implicitly assumes uncertainty about the contours of the win-sets on the
- part of the Level I negotiators, for if the win-sets were known with certainty, the negotiators
- would never propose for ratification an agreement that would be rejected.
- 440 International Organization
- The second reason why win-set size is important is that the relative size
- of the respective Level II win-sets will affect the distribution of the joint gains
- from the international bargain. The larger the perceived win-set of a negotiator,
- the more he can be "pushed around" by the other Level I negotiators.
- Conversely, a small domestic win-set can be a bargaining advantage: "I'd
- like to accept your proposal, but I could never get it accepted at home."
- Lamenting the domestic constraints under which one must operate is (in the
- words of one experienced British diplomat) "the natural thing to say at the
- beginning of a tough negotiation."39
- This general principle was, of course, first noted by Thomas Schelling
- nearly thirty years ago:
- The power of a negotiator often rests on a manifest inability to make
- concessions and meet demands. . . . When the United States Government
- negotiates with other goverments . . . if the executive branch negotiates
- under legislative authority, with its position constrained by
- law, . . . then the executive branch has a firm position that is visible to
- its negotiating partners. . . . [Of course, strategies such as this] run the
- risk of establishing an immovable position that goes beyond the ability
- of the other to concede, and thereby provoke the likelihood of stalemate
- or breakdown.40
- Writing from a strategist's point of view, Schelling stressed ways in which
- win-sets may be manipulated, but even when the win-set itself is beyond
- the negotiator's control, he may exploit its leverage. A Third World leader
- whose domestic position is relatively weak (Argentina's Alfonsin?) should
- be able to drive a better bargain with his international creditors, other things
- being equal, than one whose domestic standing is more solid (Mexico's de
- la Madrid?).41 The difficulties of winning congressional ratification are often
- exploited by American negotiators. During the negotiation of the Panama
- Canal Treaty, for example, "the Secretary of State warned the Panamanians
- several times . . . that the new treaty would have to be acceptable to at least
- sixty-seven senators," and "Carter, in a personal letter to Torrijos, warned
- that further concessions by the United States would seriously threaten chances
- for Senate ratification."42 Precisely to forestall such tactics, opponents may
- demand that a negotiator ensure himself "negotiating room" at Level II
- before opening the Level I negotiations.
- The "sweet-and-sour" implications of win-set size are summarized in
- Figure 1, representing a simple zero-sum game between X and Y. XM and
- 39. Geoffrey W. Harrison, in John C. Campbell, ed., Successful Negotiation: Trieste 1954
- (Princeton: Princeton University Press, 1976), p. 62.
- 40. Thomas C. Schelling, The Strategy of Conflict (Cambridge, Mass.: Harvard University
- Press, 1960), pp. 19-28.
- 41. I am grateful to Lara Putnam for this example. For supporting evidence, see Robert R.
- Kaufman, "Democratic and Authoritarian Responses to the Debt Issue: Argentina, Brazil,
- Mexico," International Organization 39 (Summer 1985), pp. 473-503.
- 42. W. Mark Habeeb and I. William Zartman, The Panama Canal Negotiations (Washington,
- D.C.: Johns Hopkins Foreign Policy Institute, 1986), pp. 40, 42.
- Diplomacy and domestic politics 441
- XM|
- Y, Y2 X, Y3
- FIGURE l. Effects of reducing win-set size
- YM represent the maximum outcomes for X and Y, respectively, while Xi
- and Y, represent the minimal outcomes that could be ratified. At this stage
- any. agreement in the range between X, and Yi could be ratified by both
- parties. If the win-set of Y were contracted to, say, Y2 (perhaps by requiring
- a larger majority for ratification), outcomes between Y, and Y2 would no
- longer be feasible, and the range of feasible agreements would thus be truncated
- in Y's favor. However, if Y, emboldened by this success, were to
- reduce its win-set still further to Y3 (perhaps by requiring unanimity for
- ratification), the negotiators would suddenly find themselves deadlocked,
- for the win-sets no longer overlap at all.43
- Determinants of the win-set
- It is important to understand what circumstances affect win-set size. Three
- sets of factors are especially important:
- 43. Several investigators in other fields have recently proposed models of linked games akin
- to this "two-level" game. Kenneth A. Shepsle and his colleagues have used the notion of
- "interconnected games" to analyze, for example, the strategy of a legislator simultaneously
- embedded in two games, one in the legislative arena and the other in the electoral arena. In
- this model, a given action is simultaneously a move in two different games, and one player
- maximizes the sum of his payoffs from the two games. See Arthur Denzau, William Riker, and
- Kenneth Shepsle, "Farquharson and Fenno: Sophisticated Voting and Home Style," American
- Political Science Review 79 (December 1985), pp. 1117-34; and Kenneth Shepsle, "Cooperation
- and Institutional Arrangements," unpublished manuscript, February 1986. This approach is
- similar to models recently developed by economists working in the "rational expectations"
- genre. In these models, a government contends simultaneously against other governments and
- against domestic trade unions over monetary policy. See, for example, Kenneth Rogoff, "Can
- International Monetary Policy Cooperation be Counterproductive," Journal of International
- Economics 18 (May 1985), pp. 199-217, and Roland Vaubel, "A Public Choice Approach to
- International Organization," Public Choice 51 (1986), pp. 39-57. George Tsebelis ("Nested
- Games: The Cohesion of French Coalitions," British Journal of Political Science 18 [April
- 1988], pp. 145-70) has developed a theory of "nested games," in which two alliances play a
- competitive game to determine total payoffs, while the individual players within each alliance
- contend over their shares. Fritz Sharpf ("A Game-Theoretical Interpretation of Inflation and
- Unemployment in Western Europe," Journal of Public Policy 7 [1988], pp. 227-257) interprets
- macroeconomic policy as the joint outcome of two simultaneous games; in one, the government
- plays against the unions, while in the other, it responds to the anticipated reactions of the
- electorate. James E. Alt and Barry Eichengreen ("Parallel and Overlapping Games: Theory
- and an Application to the European Gas Trade," unpublished manuscript, November 1987)
- offer a broader typology of linked games, distinguishing between "parallel" games, in which
- "the same opponents play against one another at the same time in more than one arena," and'
- "overlapping" games, which arise "when a particular player is engaged at the same time in
- games against distinct opponents, and when the strategy pursued in one game limits the strategies
- available in the other." Detailed comparison of these various linked-game models is a
- task for the future.
- 442 International Organization
- • Level II preferences and coalitions
- • Level II institutions
- • Level I negotiators' strategies
- Let us consider each in turn.
- /. The size of the win-set depends on the distribution of
- power, preferences, and possible coalitions among Level II
- constituents.
- Any testable two-level theory of international negotiation must be rooted
- in a theory of domestic politics, that is, a theory about the power and
- preferences of the major actors at Level II. This is not the occasion for even
- a cursory evaluation of the relevant alternatives, except to note that the twolevel
- conceptual framework could in principle be married to such diverse
- perspectives as Marxism, interest group pluralism, bureaucratic politics, and
- neo-corporatism. For example, arms negotiations might be interpreted in
- terms of a bureaucratic politics model of Level II politicking, while class
- analysis or neo-corporatism might be appropriate for analyzing international
- macroeconomic coordination.
- Abstracting from the details of Level II politics, however, it is possible
- to sketch certain principles that govern the size of the win-sets. For example,
- the lower the cost of "no-agreement" to constituents, the smaller the winset.
- 44 Recall that ratification pits the proposed agreement, not against an
- array of other (possibly attractive) alternatives, but only against "no-agreement."
- 45 No-agreement often represents the status quo, although in some
- cases no-agreement may in fact lead to a worsening situation; that might be
- a reasonable description of the failed ratification of the Versailles Treaty.
- Some constituents may face low costs from no-agreement, and others high
- costs, and the former will be more skeptical of Level I agreements than the
- latter. Members of two-wage-earner families should be readier to strike, for
- example, than sole breadwinners, and small-town barbers should be more
- isolationist than international bankers. In this sense, some constituents may
- offer either generic opposition to, or generic support for, Level I agreements,
- more or less independently of the specific content of the agreement, although
- naturally other constituents' decisions about ratification will be closely conditioned
- on the specifics. The size of the win-set (and thus the negotiating
- 44. Thomas Romer and Howard Rosenthal, "Political Resource Allocation, Controlled Agendas,
- and the Status Quo," Public Choice 33 (no. 4, 1978), pp. 27-44.
- 45. In more formal treatments, the no-agreement outcome is called the "reversion point."
- A given constituent's evaluation of no-agreement corresponds to what Raiffa terms a seller's
- "walk-away price," that is, the price below which he would prefer "no-deal." (Raiffa, Art and
- Science of Negotiation.) No-agreement is equivalent to what Snyder and Diesing term "breakdown,"
- or the expected cost of war. (Snyder and Diesing, Conflict Among Nations.)
- Diplomacy and domestic politics 443
- room of the Level I negotiator) depends on the relative size of the "isolationist"
- forces (who oppose international cooperation in general) and the
- "internationalists" (who offer "all-purpose" support). All-purpose support
- for international agreements is probably greater in smaller, more dependent
- countries with more open economies, as compared to more self-sufficient
- countries, like the United States, for most of whose citizens the costs of noagreement
- are generally lower. Ceteris paribus, more self-sufficient states
- with smaller win-sets should make fewer international agreements and drive
- harder bargains in those that they do make.
- In some cases, evaluation of no-agreement may be the only significant
- disagreement among the Level II constituents, because their interests are
- relatively homogeneous. For example, if oil imports are to be limited by an
- agreement among the consuming nations—the sort of accord sought at the
- Tokyo summit of 1979, for example—then presumably every constituent
- would prefer to maximize his nation's share of the available supply, although
- some constituents may be more reluctant than others to push too hard, for
- fear of losing the agreement entirely. Similarly, in most wage negotiations,
- the interests of constituents (either workers or shareholders) are relatively
- homogeneous, and the most significant cleavage within the Level II constituencies
- is likely to be between "hawks" and "doves," depending on their
- willingness to risk a strike. (Walton and McKersie refer to these as "boundary"
- conflicts, in which the negotiator is caught between his constituency
- and the external organization.) Other international examples in which domestic
- interests are relatively homogeneous except for the evaluation of
- no-agreement might include the SALT talks, the Panama Canal Treaty negotiations,
- and the Arab-Israeli conflict. A negotiator is unlikely to face
- criticism at home that a proposed agreement reduces the opponents' arms
- too much, offers too little compensation for foreign concessions, or contains
- too few security guarantees for the other side, although in each case opinions
- may differ on how much to risk a negotiating deadlock in order to achieve
- these objectives.
- The distinctive nature of such "homogeneous" issues is thrown into sharp
- relief by contrasting them to cases in which constituents' preferences are
- more heterogeneous, so that any Level I agreement bears unevenly on them.
- Thus, an internationally coordinated reflation may encounter domestic opposition
- both from those who think it goes too far (bankers, for example)
- and from those who think it does not go far enough (unions, for example).
- In 1919, some Americans opposed the Versailles Treaty because it was too
- harsh on the defeated powers and others because it was too lenient.46 Such
- patterns are even more common, as we shall shortly see, where the negotiation
- involves multiple issues, such as an arms agreement that involves
- tradeoffs between seaborne and airborne weapons, or a labor agreement that
- 46. Thomas A. Bailey, Woodrow Wilson and the Great Betrayal (New York: Macmillan,
- 1945), pp. 16-37.
- 444 International Organization
- involves tradeoffs between take-home pay and pensions. (Walton and McKersie
- term these "factional" conflicts, because the negotiator is caught between
- contending factions within his own organization.)
- The problems facing Level I negotiators dealing with a homogeneous (or
- "boundary") conflict are quite different from those facing negotiators dealing
- with a heterogeneous (or "factional") conflict. In the former case, the more
- the negotiator can win at Level I—the higher his national oil allocation, the
- deeper the cuts in Soviet throw-weight, the lower the rent he promises for
- the Canal, and so one—the better his odds of winning ratification. In such
- cases, the negotiator may use the implicit threat from his own hawks to
- maximize his gains (or minimize his losses) at Level I, as Carter and Vance
- did in dealing with the Panamanians. Glancing over his shoulder at Level
- II, the negotiator's main problem in a homogeneous conflict is to manage
- the discrepancy between his constituents' expectations and the negotiable
- outcome. Neither negotiator is likely to find much sympathy for the enemy's
- demands among his own constituents, nor much support for his constituents'
- positions in the enemy camp. The effect of domestic division, embodied in
- hard-line opposition from hawks, is to raise the risk of involuntary defection
- and thus to impede agreement at Level I. The common belief that domestic
- politics is inimical to international cooperation no doubt derives from such
- cases.
- The task of a negotiator grappling instead with a heterogeneous conflict
- is more complicated, but potentially more interesting. Seeking to maximize
- the chances of ratification, he cannot follow a simple "the more, the better"
- rule of thumb; imposing more severe reparations on the Germans in 1919
- would have gained some votes at Level II but lost others, as would hastening
- the decontrol of domestic oil prices in 1978. In some cases, these lines of
- cleavage within the Level II constituencies will cut across the Level I division,
- and the Level I negotiator may find silent allies at his opponent's
- domestic table. German labor unions might welcome foreign pressure on
- their own government to adopt a more expansive fiscal policy, and Italian
- bankers might welcome international demands for a more austere Italian
- monetary policy. Thus transnational alignments may emerge, tacit or explicit,
- in which domestic interests pressure their respective governments to
- adopt mutually supportive policies. This is, of course, my interpretation of
- the 1978 Bonn summit accord.
- In such cases, domestic divisions may actually improve the prospects for
- international cooperation. For example, consider two different distributions
- of constituents' preferences as between three alternatives: A, B, and noagreement.
- If 45 percent of the constituents rank these A > no-agreement >
- B, 45 percent rank them B > no-agreement > A, and 10 percent rank them
- B > A > no-agreement, then both A and B are in the win-set, even though
- B would win in a simple Level-II-only game. On the other hand, if 90 percent
- rank the alternatives A > no-agreement > B, while 10 percent still rank
- them B > A > no-agreement, then only A is in the win-set. In this sense,
- Diplomacy and domestic politics 445
- a government that is internally divided is more likely to be able to strike a
- deal internationally than one that is firmly committed to a single policy.47
- Conversely, to impose binding ex ante instructions on the negotiators in
- such a case might exclude some Level I outcomes that would, in fact, be
- ratifiable in both nations.48
- Thus far we have implicitly assumed that all eligible constituents will
- participate in the ratification process. In fact, however, participation rates
- vary across groups and across issues, and this variation often has implications
- for the size of the win-set. For example, when the costs and/or benefits
- of a proposed agreement are relatively concentrated, it is reasonable to
- expect that those constituents whose interests are most affected will exert
- special influence on the ratification process.49 One reason why Level II games
- are more important for trade negotiations than in monetary matters is that
- the "abstention rate" is higher on international monetary issues than on
- trade issues.50
- The composition of the active Level II constituency (and hence the character
- of the win-set) also varies with the politicization of the issue. Politicization
- often activates groups who are less worried about the costs of noagreement,
- thus reducing the effective win-set. For example, politicization
- of the Panama Canal issue seems to have reduced the negotiating flexibility
- on both sides of the diplomatic table.51 This is one reason why most professional
- diplomats emphasize the value of secrecy to successful negotiations.
- However, Woodrow Wilson's transcontinental tour in 1919 reflected the
- opposite calculation, namely, that by expanding the active constituency he
- could ensure ratification of the Versailles Treaty, although in the end this
- strategy proved fruitless.52
- Another important restriction of our discussion thus far has been the
- 47. Raiffa notes that "the more diffuse the positions are within each side, the easier it might
- be to achieve external agreement." (Raiffa, Art and Science of Negotiation, p. 12.) For the
- conventional view, by contrast, that domestic unity is generally a precondition for international
- agreement, see Michael Artis and Sylvia Ostry, International Economic Policy Coordination,
- Chatham House Papers: 30 (London: Routledge & Kegan Paul, 1986), pp. 75-76.
- 48. "Meaningful consultation with other nations becomes very difficult when the internal
- process of decision-making already has some of the characteristics of compacts between quasisovereign
- entities. There is an increasing reluctance to hazard a hard-won domestic consensus
- in an international forum." Henry A. Kissinger, "Domestic Structure and Foreign Policy," in
- James N. Rosenau, ed., International Politics and Foreign Policy (New York: Free Press,
- 1969), p. 266.
- 49. See James Q. Wilson, Political Organization (New York: Basic Books, 1975) on how the
- politics of an issue are affected by whether the costs and the benefits are concentrated or
- diffuse.
- 50. Another factor fostering abstention is the greater complexity and opacity of monetary
- issues; as Gilbert R. Winham ("Complexity in International Negotiation," in Daniel Druckman,
- ed., Negotiations: A Social-Psychological Perspective [Beverly Hills: Sage, 1977], p. 363)
- observes, "complexity can strengthen the hand of a negotiator vis-a-vis the organization he
- represents."
- 51. Habeeb and Zartman, Panama Canal Negotiations.
- 52. Bailey, Wilson and the Great Betrayal.
- 446 International Organization
- assumption that the negotiations involve only one issue. Relaxing this assumption
- has powerful consequences for the play at both levels.53 Various
- groups at Level II are likely to have quite different preferences on the several
- issues involved in a multi-issue negotiation. As a general rule, the group
- with the greatest interest in a specific issue is also likely to hold the most
- extreme position on that issue. In the Law of the Sea negotiations, for
- example, the Defense Department felt most strongly about sea-lanes, the
- Department of the Interior about sea-bed mining rights, and so on.54 If each
- group is allowed to fix the Level I negotiating position for "its" issue, the
- resulting package is almost sure to be "non-negotiable" (that is, non-ratifiable
- in opposing capitals).55
- Thus, the chief negotiator is faced with tradeoffs across different issues:
- how much to yield on mining rights in order to get sea-lane protection, how
- much to yield on citrus exports to get a better deal on beef, and so on. The
- implication of these tradeoffs for the respective win-sets can be analyzed in
- terms of iso-vote or "political indifference" curves. This technique is analogous
- to conventional indifference curve analysis, except that the operational
- measure is vote loss, not utility loss. Figure 2 provides an illustrative
- Edgeworth box analysis.56 The most-preferred outcome for A (the outcome
- which wins unanimous approval from both the beef industry and the citrus
- industry) is the upper right-hand corner (AM), and each curve concave to
- point AM represents the locus of all possible tradeoffs between the interests
- of ranchers and farmers, such that the net vote in favor of ratification at A's
- Level II is constant. The bold contour A,-A2 represents the minimal vote
- necessary for ratification by A, and the wedge-shaped area northeast of
- A,-A2 represents A's win-set. Similarly, B,-B2 represents the outcomes that
- are minimally ratifiable by B, and the lens-shaped area between Ai-A2 and
- Bi-B2 represents the set of feasible agreements. Although additional subtleties
- (such as the nature of the "contract curve") might be extracted from
- this sort of analysis, the central point is simple: the possibility of package
- deals opens up a rich array of strategic alternatives for negotiators in a twolevel
- game.
- One kind of issue linkage is absolutely crucial to understanding how domestic
- and international politics can become entangled.57 Suppose that a
- majority of constituents at Level II oppose a given policy (say, oil price
- 53. I am grateful to Ernst B. Haas and Robert O. Keohane for helpful advice on this point.
- 54. Ann L. Hollick, U.S. Foreign Policy and the Law of the Sea (Princeton: Princeton
- University Press, 1981), especially pp. 208-37, and James K. Sebenius, Negotiating the Law
- of the Sea (Cambridge, Mass.: Harvard University Press, 1984), especially pp. 74-78.
- 55. Raiffa, Art and Science of Negotiation, p. 175.
- 56.1 am indebted to Lisa Martin and Kenneth Shepsle for suggesting this approach, although
- they are not responsible for my application of it. Note that this construction assumes that each
- issue, taken individually, is a "homogeneous" type, not a "heterogeneous" type. Constructing
- iso-vote curves for heterogeneous-type issues is more complicated.
- 57. I am grateful to Henry Brady for clarifying this point for me.
- Diplomacy and domestic politics 447
- A,
- FIGURE 2. Political indifference curves for two-issue negotiation
- decontrol), but that some members of that majority would be willing to switch
- their vote on that issue in return for more jobs (say, in export industries).
- If bargaining is limited to Level II, that tradeoff is not technically feasible,
- but if the chief negotiator can broker an international deal that delivers more
- jobs (say, via faster growth abroad), he can, in effect, overturn the initial
- outcome at the domestic table. Such a transnational issue linkage was a
- crucial element in the 1978 Bonn accord.
- Note that this strategy works not by changing the preferences of any
- domestic constituents, but rather by creating a policy option (such as faster
- export growth) that was previously beyond domestic control. Hence, I refer
- to this type of issue linkage at Level I that alters the feasible outcomes at
- Level II as synergistic linkage. For example, "in the Tokyo Round . . .
- nations used negotiation to achieve internal reform in situations where constituency
- pressures would otherwise prevent action without the pressure
- 448 International Organization
- (and tradeoff benefits) that an external partner could provide."58 Economic
- interdependence multiplies the opportunities for altering domestic coalitions
- (and thus policy outcomes) by expanding the set of feasible alternatives in
- this way—in effect, creating political entanglements across national boundaries.
- Thus, we should expect synergistic linkage (which is, by definition,
- explicable only in terms of two-level analysis) to become more frequent as
- interdependence grows.
- 2. The size of the win-set depends on the Level II
- political institutions.
- Ratification procedures clearly affect the size of the win-set. For example,
- if a two-thirds vote is required for ratification, the win-set will almost certainly
- be smaller than if only a simple majority is required. As one experienced
- observer has written: "Under the Constitution, thirty-four of the one
- hundred senators can block ratification of any treaty. This is an unhappy
- and unique feature of our democracy. Because of the effective veto power
- of a small group, many worthy agreements have been rejected, and many
- treaties are never considered for ratification."59 As noted earlier, the U.S.
- separation of powers imposes a tighter constraint on the American win-set
- than is true in many other countries. This increases the bargaining power
- of American negotiators, but it also reduces the scope for international
- cooperation. It raises the odds for involuntary defection and makes potential
- partners warier about dealing with the Americans.
- The Trade Expansion Act of 1974 modified U.S. ratification procedures
- in an effort to reduce the likelihood of congressional tampering with the final
- deal and hence to reassure America's negotiating partners. After the American
- Selling Price fiasco, it was widely recognized that piecemeal congressional
- ratification of any new agreement would inhibit international negotiation.
- Hence, the 1974 Act guaranteed a straight up-or-down vote in Congress.
- However, to satisfy congressional sensitivities, an elaborate system of private-
- sector committees was established to improve communication between
- the Level I negotiators and their Level II constituents, in effect coopting
- the interest groups by exposing them directly to the implications of their
- demands.60 Precisely this tactic is described in the labor-management case
- by Walton and McKersie: "Instead of taking responsibility for directly persuading
- the principals [Level II constituents] to reduce their expectations,
- [the Level I negotiator] structures the situation so that they (or their more
- immediate representatives) will persuade themselves."61
- 58. Gilbert R. Winham, "The Relevance of Clausewitz to a Theory of International Negotiation,"
- prepared for delivery at the 1987 annual meeting of the American Political Science
- Association.
- 59. Jimmy Carter, Keeping Faith: Memoirs of a President (New York: Bantam Books, 1982),
- p. 225.
- 60. Winham (see note 37); Twiggs, The Tokyo Round.
- 61. Walton and McKersie, Behavioral Theory of Labor Organizations, p. 321.
- Diplomacy and domestic politics 449
- Not all significant ratification practices are formalized; for example, the
- Japanese propensity for seeking the broadest possible domestic consensus
- before acting constricts the Japanese win-set, as contrasted with majoritarian
- political cultures. Other domestic political practices, too, can affect the size
- of the win-set. Strong discipline within the governing party, for example,
- increases the win-set by widening the range of agreements for which the
- Level I negotiator can expect to receive backing. For example, in the 1986
- House-Senate conference committee on tax reform, the final bill was closer
- to the Senate version, despite (or rather, because of) Congressman Rostenkowski's
- greater control of his delegation, which increased the House winset.
- Conversely, a weakening of party discipline across the major Western
- nations would, ceteris paribus, reduce the scope for international cooperation.
- The recent discussion of "state strength" and "state autonomy" is relevant
- here. The greater the autonomy of central decision-makers from their
- Level II constituents, the larger their win-set and thus the greater the likelihood
- of achieving international agreement. For example, central bank insulation
- from domestic political pressures in effect increases the win-set and
- thus the odds for international monetary cooperation; recent proposals for
- an enhanced role for central bankers in international policy coordination
- rest on this point.62 However, two-level analysis also implies that, ceteris
- paribus, the stronger a state is in terms of autonomy from domestic pressures,
- the weaker its relative bargaining position internationally. For example,
- diplomats representing an entrenched dictatorship are less able than
- representatives of a democracy to claim credibly that domestic pressures
- preclude some disadvantageous deal.63 This is yet another facet of the disconcerting
- ambiguity of the notion of "state strength."
- For simplicity of exposition, my argument is phrased throughout in terms
- of only two levels. However, many institutional arrangements require several
- levels of ratification, thus multiplying the complexity (but perhaps also the
- importance) of win-set analysis. Consider, for example, negotiations between
- the United States and the European Community over agricultural trade.
- According to the Treaty of Rome, modifications of the Common Agricultural
- Policy require unanimous ratification by the Council of Ministers, representing
- each of the member states. In turn, each of those governments must,
- in effect, win ratification for its decision within its own national arena, and
- in coalition governments, that process might also require ratification within
- each of the parties. Similarly, on the American side, ratification would (informally,
- at least) necessitate support from most, if not all, of the major
- agricultural organizations, and within those organizations, further ratification
- by key interests and regions might be required. At each stage, cleavage
- patterns, issue linkages, ratification procedures, side-payments, negotiator
- 62. Artis and Ostry, International Economic Policy Coordination. Of course, whether this
- is desirable in terms of democratic values is quite another matter.
- 63. Schelling, Strategy of Conflict, p. 28.
- 450 International Organization
- strategies, and so on would need to be considered. At some point in this
- analytic regress the complexity of further decomposition would outweigh
- the advantages, but the example illustrates the need for careful thought about
- the logic of multiple-level games.
- 3. The size of the win-set depends on the strategies of the
- Level I negotiators.
- Each Level I negotiator has an unequivocal interest in maximizing the
- other side's win-set, but with respect to his own win-set, his motives are
- mixed. The larger his win-set, the more easily he can conclude an agreement,
- but also the weaker his bargaining position vis-a-vis the other negotiator.
- This fact often poses a tactical dilemma. For example, one effective way to
- demonstrate commitment to a given position in Level I bargaining is to rally
- support from one's constituents (for example, holding a strike vote, talking
- about a "missile gap," or denouncing "unfair trading practices" abroad).
- On the other hand, such tactics may have irreversible effects on constituents'
- attitudes, hampering subsequent ratification of a compromise agreement.64
- Conversely, preliminary consultations at home, aimed at "softening up"
- one's constituents in anticipation of a ratification struggle, can undercut a
- negotiator's ability to project an implacable image abroad.
- Nevertheless, disregarding these dilemmas for the moment and assuming
- that a negotiator wishes to expand his win-set in order to encourage ratification
- of an agreement, he may exploit both conventional side-payments
- and generic "good will." The use of side-payments to attract marginal supporters
- is, of course, quite familiar in game theory, as well as in practical
- politics. For example, the Carter White House offered many inducements
- (such as public works projects) to help persuade wavering Senators to ratify
- the Panama Canal Treaty.65 In a two-level game the side-payments may
- come from unrelated domestic sources, as in this case, or they may be
- received as part of the international negotiation.
- The role of side-payments in international negotiations is well known.
- However, the two-level approach emphasizes that the value of an international
- side-payment should be calculated in terms of its marginal contribution
- to the likelihood of ratification, rather than in terms of its overall value to
- the recipient nation. What counts at Level II is not total national costs and
- benefits, but their incidence, relative to existing coalitions and protocoalitions.
- An across-the-board trade concession (or still worse, a concession
- on a product of interest to a committed free-trade congressman) is less
- effective than a concession (even one of lesser intrinsic value) that tips the
- balance with a swing voter. Conversely, trade retaliation should be targeted,
- 64. Walton and McKersie, Behavioral Theory of Labor Organizations, p. 345.
- 65. Carter, Keeping Faith, p. 172. See also Raiffa, Art and Science of Negotiation, p. 183.
- Diplomacy and domestic politics 451
- neither at free-traders nor at confirmed protectionists, but at the uncommitted.
- An experienced negotiator familiar with the respective domestic tables
- should be able to maximize the cost-effectiveness (to him and his constituents)
- of the concessions that he must make to ensure ratification abroad,
- as well as the cost-effectiveness of his own demands and threats, by targeting
- his initiatives with an eye to their Level II incidence, both at home and
- abroad. In this endeavor Level I negotiators are often in collusion, since
- each has an interest in helping the other to get the final deal ratified. In
- effect, they are moving jointly towards points of tangency between their
- respective political indifference curves. The empirical frequency of such
- targeting in trade negotiations and trade wars, as well as in other international
- negotiations, would be a crucial test of the relative merits of conventional
- unitary-actor analysis and the two-level approach proposed here.66
- In addition to the use of specific side-payments, a chief negotiator whose
- political standing at home is high can more easily win ratification of his
- foreign initiatives. Although generic good will cannot guarantee ratification,
- as Woodrow Wilson discovered, it is useful in expanding the win-set and
- thus fostering Level I agreement, for it constitutes a kind of "all-purpose
- glue" for his supporting coalition. Walton and McKersie cite members of
- the United Auto Workers who, speaking of their revered leader, Walter
- Reuther, said, "I don't understand or agree with this profit-sharing idea, but
- if the Red Head wants it, I will go along."67 The Yugoslav negotiator in the
- Trieste dispute later discounted the difficulty of persuading irredentist Slovenes
- to accept the agreement, since "the government [i.e., Tito] can always
- influence public opinion if it wants to."68
- Note that each Level I negotiator has a strong interest in the popularity
- of his opposite number, since Party A's popularity increases the size of his
- win-set, and thus increases both the odds of success and the relative bargaining
- leverage of Party B. Thus, negotiators should normally be expected
- to try to reinforce one another's standing with their respective constituents.
- 66. The strategic significance of targeting at Level II is illustrated in John Conybeare, "Trade
- Wars: A Comparative Study of Anglo-Hanse, Franco-Italian, and Hawley-Smoot Conflicts,"
- World Politics 38 (October 1985), p. 157: Retaliation in the Anglo-Hanse trade wars did not
- have the intended deterrent effect, because it was not (and perhaps could not have been) targeted
- at the crucial members of the opposing Level II coalition. Compare Snyderand Diesing, Conflict
- Among Nations, p. 552: "If one faces a coercive opponent, but the opponent's majority coalition
- includes a few wavering members inclined to compromise, a compromise proposal that suits
- their views may cause their defection and the formation of a different majority coalition. Or if
- the opponent's strategy is accommodative, based on a tenuous soft-line coalition, one knows
- that care is required in implementing one's own coercive stretegy to avoid the opposite kind
- of shift in the other state."
- 67. Walton and McKersie, Behavioral Theory of Labor Negotiations, p. 319.
- 68. Vladimir Velebit, in Campbell, Trieste 1954, p. 97. As noted earlier, our discussion here
- assumes that the Level I negotiator wishes to reach a ratifiable agreement; in cases (alluded
- to later) when the negotiator's own preferences are more hard-line than his constituents, his
- domestic popularity might allow him to resist Level I agreements.
- 452 International Organization
- Partly for this reason and partly because of media attention, participation
- on the world stage normally gives a head of government a special advantage
- vis-a-vis his or her domestic opposition. Thus, although international policy
- coordination is hampered by high transaction costs, heads of government
- may also reap what we might term "transaction benefits." Indeed, the recent
- evolution of Western summitry, which has placed greater emphasis on publicity
- than on substance, seems designed to appropriate these "transaction
- benefits" without actually seeking the sort of agreements that might entail
- transaction costs.69
- Higher status negotiators are likely to dispose of more side-payments and
- more "good will" at home, and hence foreigners prefer to negotiate with a
- head of government than with a lower official. In purely distributive terms,
- a nation might have a bargaining advantage if its chief negotiator were a
- mere clerk. Diplomats are acting rationally, not merely symbolically, when
- they refuse to negotiate with a counterpart of inferior rank. America's negotiating
- partners have reason for concern whenever the American president
- is domestically weakened.
- Uncertainty and bargaining tactics
- Level I negotiators are often badly misinformed about Level II politics,
- particularly on the opposing side. In 1978, the Bonn negotiators were usually
- wrong in their assessments of domestic politics abroad; for example, most
- American officials did not appreciate the complex domestic game that Chancellor
- Schmidt was playing over the issue of German reflation. Similarly,
- Snyder and Diesing report that "decision makers in our cases only occasionally
- attempted such assessments, and when they tried they did pretty
- miserably. . . . Governments generally do not do well in analyzing each
- other's internal politics in crises [and, I would add, in normal times], and
- indeed it is inherently difficult."70 Relaxing the assumption of perfect information
- to allow for uncertainty has many implications for our understanding
- of two-level games. Let me illustrate a few of these implications.
- Uncertainty about the size of a win-set can be both a bargaining device
- and a stumbling block in two-level negotiation. In purely distributive Level
- I bargaining, negotiators have an incentive to understate their own win-sets.
- Since each negotiator is likely to know more about his own Level II than
- his opponent does, the claim has some plausibility. This is akin to a tactic
- 69. Transaction benefits may be enhanced if a substantive agreement is reached, although
- sometimes leaders can benefit domestically by loudly rejecting a proffered international deal.
- 70. Snyder and Diesing, Conflict Among Nations, pp. 516,522-23. Analogous misperceptions
- in Anglo-American diplomacy are the focus of Richard E. Neustadt, Alliance Politics (New
- York: Columbia University Press, 1970).
- Diplomacy and domestic politics 453
- that Snyder and Diesing describe, when negotiators seek to exploit divisions
- within their own government by saying, in effect, "You'd better make a
- deal with me, because the alternative to me is even worse."71
- On the other hand, uncertainty about the opponent's win-set increases
- one's concern about the risk of involuntary defection. Deals can only be
- struck if each negotiator is convinced that the proposed deal lies within his
- opposite number's win-set and thus will be ratified. Uncertainty about party
- A's ratification lowers the expected value of the agreement to party B, and
- thus party B will demand more generous side-payments from party A than
- would be needed under conditions of certainty. In fact, party B has an
- incentive to feign doubt about party A's ability to deliver, precisely in order
- to extract a more generous offer.72
- Thus, a utility-maximizing negotiator must seek to convince his opposite
- number that his own win-set is "kinky," that is, that the proposed deal is
- certain to be ratified, but that a deal slightly more favorable to the opponent
- is unlikely to be ratified. For example, on the energy issue in 1978, by sending
- Senator Byrd on a personal mission to Bonn before the summit and then by
- discussing his political problems in a length tete-a-tete with the chancellor,
- Carter sought successfully to convince Schmidt that immediate decontrol
- was politically impossible, but that decontrol by 1981 was politically doable.
- Kinky win-sets may be more credible if they pivot on what Schelling
- calls a "prominent" solution, such as a 50-50 split, for such outcomes may
- be distinctly more "saleable" at home. Another relevant tactic is for the
- negotiator actually to submit a trial agreement for ratification, in order to
- demonstrate that it is not in his win-set.
- Uncertainty about the contours of the respective "political indifference
- curves" thus has strategic uses. On the other hand, when the negotiators
- are seeking novel packages that might improve both sides' positions, misrepresentation
- of one's win-set can be counterproductive. Creative solutions
- that expand the scope for joint gain and improve the odds of ratification are
- likely to require fairly accurate information about constituents' preferences
- and points of special neuralgia. The analysis of two-level games offers many
- illustrations of Zartman's observation that all negotiation involves "the controlled
- exchange of partial information."73
- 71. Synder and Diesing, Conflict Among Nations, p. 517.
- 72. I am grateful to Robert 0. Keohane for pointing out the impact of uncertainty on the
- expected value of proposals.
- 73. I. William Zartman, The 50% Solution (Garden City, N.J.: Anchor Books, 1976), p. 14.
- The present analysis assumes that constituents are myopic about the other side's Level II, an
- assumption that is not unrealistic empirically. However, a fully informed constituent would
- consider the preferences of key players on the other side, for if the current proposal lies well
- within the other side's win-set, then it would be rational for the constituent to vote against it,
- hoping for a second-round proposal that was more favorable to him and still ratifiable abroad;
- this might be a reasonable interpretation of Senator Lodge's position in 1919 (Bailey, Wilson
- and the Great Betrayal). Consideration of such strategic voting at Level II is beyond the scope
- of this article.
- 454 International Organization
- Restructuring and reverberation
- Formally speaking, game-theoretic analysis requires that the structure of
- issues and payoffs be specified in advance. In reality, however, much of
- what happens in any bargaining situation involves attempts by the players
- to restructure the game and to alter one another's perceptions of the costs
- of no-agreement and the benefits of proposed agreements. Such tactics are
- more difficult in two-level games than in conventional negotiations, because
- it is harder to reach constituents on the other side with persuasive messages.
- Nevertheless, governments do seek to expand one another's win-sets. Much
- ambassadorial activity—wooing opinion leaders, establishing contact with
- opposition parties, offering foreign aid to a friendly, but unstable government,
- and so on—has precisely this function. When Japanese officials visit
- Capitol Hill, or British diplomats lobby Irish-American leaders, they are
- seeking to relax domestic constraints that might otherwise prevent the administration
- from cooperating with their governments.
- Another illuminating example of actions by a negotiator at the opposing
- Level II to improve the odds of ratification occurred during the 1977 negotiations
- between the International Monetary Fund and the Italian government.
- Initial IMF demands for austerity triggered strong opposition from
- the unions and left-wing parties. Although the IMF's bargaining position at
- Level I appeared strong, the Fund's negotiator sought to achieve a broader
- consensus within Italy in support of an agreement, in order to forestall
- involuntary defection. Accordingly, after direct consultations with the unions
- and leftist leaders, the IMF restructured its proposal to focus on long-term
- investment and economic recovery (incidentally, an interesting example of
- targeting), without backing off from its short-term demands. Ironically, the
- initial Communist support for this revised agreement subsequently collapsed
- because of conflicts between moderate and doctrinaire factions within the
- party, illustrating the importance of multilevel analysis.74
- In some instances, perhaps even unintentionally, international pressures
- "reverberate" within domestic politics, tipping the domestic balance and
- thus influencing the international negotiations. Exactly this kind of reverberation
- characterized the 1978 summit negotiations. Dieter Hiss, the German
- sherpa and one of those who believed that a stimulus program was in
- Germany's own interest, later wrote that summits change national policy
- only insofar as they mobilize and/or change public opinion and the attitude
- of political groups. . . . Often that is enough, if the balance of
- 74. John R. Hillman, "The Mutual Influence of Italian Domestic Politics and the International
- Monetary Fund," The Fletcher Forum 4 (Winter 1980), pp. 1-22. Luigi Spaventa, "Two Letters
- of Intent: External Crises and Stabilization Policy, Italy, 1973-77," in John Williamson, ed.,
- IMF Conditionality (Washington, D.C.: Institute for International Economics, 1983), pp. 441-73,
- argues that the unions and the Communists actually favored the austerity measures, but found
- the IMF demands helpful in dealing with their own internal Level II constituents.
- Diplomacy and domestic politics 455
- opinion is shifted, providing a bare majority for the previously stymied
- actions of a strong minority. . . . No country violates its own interests,
- but certainly the definition of its interests can change through a summit
- with its possible tradeoffs and give-and-take.75
- From the point of view of orthodox social-choice theory, reverberation is
- problematic, for it implies a certain interconnectedness among the utility
- functions of independent actors, albeit across different levels of the game.
- Two rationales may be offered to explain reverberation among utilitymaximizing
- egoists. First, in a complex, interdependent, but often unfriendly
- world, offending foreigners may be costly in the long run. "To get along,
- go along" may be a rational maxim. This rationale is likely to be more
- common the more dependent (or interdependent) a nation, and it is likely
- to be more persuasive to Level II actors who are more exposed internationally,
- such as multinational corporations and international banks.
- A second rationale takes into account cognitive factors and uncertainty.
- It would be a mistake for political scientists to mimic most economists'
- disregard for the suasive element in negotiations.76 Given the pervasive
- uncertainty that surrounds many international issues, messages from abroad
- can change minds, move the undecided, and hearten those in the domestic
- minority. As one reluctant German latecomer to the "locomotive" cause in
- 1978 explained his conversion, "In the end, even the Bank for International
- Settlements [the cautious Basle organization of central bankers] supported
- the idea of coordinated relation." Similarly, an enthusiastic advocate of the
- program welcomed the international pressure as providing a useful "tailwind"
- in German domestic politics.
- Suasive reverberation is more likely among countries with close relations
- and is probably more frequent in economic than in political-military negotiations.
- Communique's from the Western summits are often cited by participants
- to domestic audiences as a way of legitimizing their policies. After
- one such statement by Chancellor Schmidt, one of his aides privately characterized
- the argument as "not intellectually valid, but politically useful."
- Conversely, it is widely believed by summit participants that a declaration
- contrary to a government's current policy could be used profitably by its
- opponents. Recent congressional proposals to ensure greater domestic publicity
- for international commentary on national economic policies (including
- hitherto confidential IMF recommendations) turn on the idea that reverberation
- might increase international cooperation.77
- 75. Dieter Hiss, "Weltwirtschaftsgipfel: Betrachtungen eines Insiders [World Economic Summit:
- Observations of an Insider]," in Joachim Frohn and Reiner Staeglin, eds., Empirische
- Wirtschaftsforschung (Berlin: Duncker and Humblot, 1980), pp. 286-87.
- 76. On cognitive and communications explanations of international cooperation, see, for
- example, Ernst B. Haas, "Why Collaborate? Issue-Linkage and International Regimes," World
- Politics 32 (April 1980), pp 357-405; Richard N. Cooper, "International Cooperation in Public
- Health as a Prologue to Macroeconomic Cooperation," Brookings Discussion Papers in International
- Economics 44 (Washington, D.C.: Brookings Institution, 1986); and Zartman, 50%
- Solution, especially Part 4.
- 77. Henning, Macroeconomic Diplomacy in the 1980s, pp. 62-63.
- 456 International Organization
- Reverberation as discussed thus far implies that international pressure
- expands the domestic win-set and facilitates agreement. However, reverberation
- can also be negative, in the sense that foreign pressure may create
- a domestic backlash. Negative reverberation is probably less common empirically
- than positive reverberation, simply because foreigners are likely to
- forgo public pressure if it is recognized to be counterproductive. Cognitive
- balance theory suggests that international pressure is more likely to reverberate
- negatively if its source is generally viewed by domestic audiences as
- an adversary rather than an ally. Nevertheless, predicing the precise effect
- of foreign pressure is admittedly difficult, although empirically, reverberation
- seems to occur frequently in two-level games.
- The phenomenon of reverberation (along with synergistic issue linkage of
- the sort described earlier) precludes one attractive short-cut to modeling
- two-level games. If national preferences were exogenous from the point of
- view of international relations, then the domestic political game could be
- molded separately, and the "outputs" from that game could be used as the
- "inputs" to the international game.78 The division of labor between comparative
- politics and international relations could continue, though a few
- curious observers might wish to keep track of the play on both tables. But
- if international pressures reverberate within domestic politics, or if issues
- can be linked synergistically, then domestic outcomes are not exogenous,
- and the two levels cannot be modeled independently.
- The role of the chief negotiator
- In the stylized model of two-level negotiations outlined here, the chief negotiator
- is the only formal link between Level I and Level II. Thus far, I
- have assumed that the chief negotiator has no independent policy views, but
- acts merely as an honest broker, or rather as an agent on behalf of his
- constituents. That assumption powerfully simplifies the analysis of two-level
- games. However, as principal-agent theory reminds us, this assumption is
- unrealistic.79 Empirically, the preferences of the chief negotiator may well
- diverge from those of his constituents. Two-level negotiations are costly and
- 78. This is the approach used to analyze the Anglo-Chinese negotiations over Hong Kong
- in Bruce Bueno de Mesquita, David Newman, and Alvin Rabushka, Forecasting Political
- Events: The Future of Hong Kong (New Haven: Yale University Press, 1985).
- 79. For overviews of this literature, see Terry M. Moe, "The New Economics of Organization,"
- American Journal of Political Science 28 (November 1984), pp. 739-77; John W. Pratt
- and Richard J. Zeckhauser, eds., Principals and Agents: The Structure of Business (Boston,
- Mass.: Harvard Business School Press, 1985); and Barry M. Mitnick, "The Theory of Agency
- and Organizational Analysis," prepared for delivery at the 1986 annual meeting of the American
- Political Science Association. This literature is only indirectly relevant to our concerns here,
- for it has not yet adequately addressed the problems posed by multiple principals (or constituents,
- in our terms). For one highly formal approach to the problem of multiple principals, see
- R. Douglas Bernheim and Michael D. Whinston, "Common Agency," Econometrica 54 (July
- 1986), pp. 923-42.
- Diplomacy and domestic politics 457
- risky for the chief negotiator, and they often interfere with his other priorities,
- so it is reasonable to ask what is in it for him.
- The motives of the chief negotiator include:
- 1. Enhancing his standing in the Level II game by increasing his political
- resources or by minimizing potential losses. For example, a head
- of government may seek the popularity that he expects to accrue to
- him if he concludes a successful international agreement, or he may
- anticipate that the results of the agreement (for example, faster
- growth or lower defense spending) will be politically rewarding.
- 2. Shifting the balance of power at Level II in favor of domestic policies
- that he prefers for exogenous reasons. International negotiations
- sometimes enable government leaders to do what they privately wish
- to do, but are powerless to do domestically. Beyond the now-familiar
- 1978 case, this pattern characterizes many stabilization programs that
- are (misleadingly) said to be "imposed" by the IMF. For example, in
- the 1974 and 1977 negotiations between Italy and the IMF, domestic
- conservative forces exploited IMF pressure to facilitate policy moves
- that were otherwise infeasible internally.80
- 3. To pursue his own conception of the national interest in the international
- context. This seems the best explanation of Jimmy Carter's
- prodigious efforts on behalf of the Panama Canal Treaty, as well as
- of Woodrow Wilson's ultimately fatal commitment to the Versailles
- Treaty.
- It is reasonable to presume, at least in the international case of two-level
- bargaining, that the chief negotiator will normally give primacy to his domestic
- calculus, if a choice must be made, not least because his own incumbency
- often depends on his standing at Level II. Hence, he is more likely
- to present an international agreement for ratification, the less of his own
- political capital he expects to have to invest to win approval, and the greater
- the likely political returns from a ratified agreement.
- This expanded conception of the role of the chief negotiator implies that
- he has, in effect, a veto over possible agreements. Even if a proposed deal
- lies within his Level II win-set, that deal is unlikely to be struck if he opposes
- it.81 Since this proviso applies on both sides of the Level I table, the actual
- international bargaining set may be narrower—perhaps much narrower—
- than the overlap between the Level II win-sets. Empirically, this additional
- constraint is often crucial to the outcome of two-level games. One momentous
- example is the fate of the Versailles Treaty. The best evidence suggests,
- first, that perhaps 80 percent of the American public and of the Senate in
- 1919 favored ratification of the treaty, if certain reservations were attached,
- and second, that those reservations were acceptable to the other key sig-
- 80. Hillman, "Mutual Influence," and Spaventa, "Two Letters of Intent."
- 81. This power of the chief negotiator is analogous to what Shepsle and Weingast term the
- "penultimate" or "ex post veto" power of the members of a Senate-House conference committee.
- (Shepsle and Weingast, "Institutional Foundations of Committee Power.")
- 458 International Organization
- natories, especially Britain and France. In effect, it was Wilson himself who
- vetoed this otherwise ratifiable package, telling the dismayed French Ambassador,
- "I shall consent to nothing."82
- Yet another constraint on successful two-level negotiation derives from
- the leader's existing domestic coalition. Any political entrepreneur has a
- fixed investment in a particular pattern of policy positions and a particular
- supporting coalition. If a proposed international deal threatens that investment,
- or if ratification would require him to construct a different coalition,
- the chief negotiator will be reluctant to endorse it, even if (judged abstractly)
- it could be ratified. Politicians may be willing to risk a few of their normal
- supporters in the cause of ratifying an international agreement, but the greater
- the potential loss, the greater their reluctance.
- In effect, the fixed costs of coalition-building thus imply this constraint
- on the win-set: How great a realignment of prevailing coalitions at Level II
- would be required to ratify a particular proposal? For example, a trade deal
- may expand export opportunities for Silicon Valley, but harm Aliquippa.
- This is fine for a chief negotiator (for example, Reagan?) who can easily add
- Northern California yuppies to his support coalition and who has no hope
- of winning Aliquippa steelworkers anyhow. But a different chief negotiator
- with a different support coalition (for example, Mondale?) might find it costly
- or even impossible to convert the gains from the same agreement into politically
- usable form. Similarly, in the 1978 "neutron bomb" negotiations
- between Bonn and Washington, "asking the United States to deploy [these
- weapons] in West Germany might have been possible for a Christian Democratic
- Government; for a Social Democratic government, it was nearly
- impossible."83 Under such circumstances, simple "median-voter" models
- of domestic influences on foreign policy may be quite misleading.
- Relaxing the assumption that the chief negotiator is merely an honest
- broker, negotiating on behalf of his constituents, opens the possibility that
- the constituents may be more eager for an agreement (or more worried about
- "no-agreement") than he is. Empirical instances are not hard to find: in
- early 1987, European publics were readier to accept Gorbachev's "doublezero"
- arms control proposal than European leaders, just as in the early 1970s
- the American public (or at least the politically active public) was more eager
- for a negotiated end to the Vietnam War than was the Nixon administration.
- As a rule, the negotiator retains a veto over any proposed agreement in such
- cases. However, if the negotiator's own domestic standing (or indeed, his
- incumbency) would be threatened if he were to reject an agreement that falls
- within his Level II win-set, and if this is known to all parties, then the other
- side at Level I gains considerable leverage. Domestic U.S. discontent about
- 82. Bailey, Wilson and the Great Betrayal, quotation at p. 15.
- 83. Robert A. Strong and Marshal Zeringue, "The Neutron Bomb and the Atlantic Alliance,"
- presented at the 1986 annual meeting of the American Political Science Association, p. 9.
- Diplomacy and domestic politics 459
- the Vietnam War clearly affected the agreement reached at the Paris talks.84
- Conversely, if the constituents are (believed to be) hard-line, then a leader's
- domestic weakness becomes a diplomatic asset. In 1977, for example, the
- Americans calculated that "a delay in negotiating a treaty . . . endangered
- [Panamanian President Omar] Torrijos' position; and Panama without Torrijos
- most likely would have been an impossible negotiating partner."85 Similarly,
- in the 1954 Trieste negotiations, the weak Italian government claimed
- that '"Unless something is done in our favor in Trieste, we can lose the
- election.' That card was played two or three times [reported the British
- negotiator later], and it almost always took a trick."86
- My emphasis on the special responsibility of central executives is a point
- of affinity between the two-level game model and the "state-centric" literature,
- even though the underlying logic is different. In this "Janus" model
- of domestic-international interactions, transnational politics are less prominent
- than in some theories of interdependence.87 However, to disregard
- "cross-table" alliances at Level II is a considerable simplification, and it is
- more misleading, the lower the political visibility of the issue, and the more
- frequent the negotiations between the governments involved.88 Empirically,
- for example, two-level games in the European Community are influenced
- by many direct ties among Level II participants, such as national agricultural
- spokesmen. In some cases, the same multinational actor may actually appear
- at more than one Level II table. In negotiations over mining concessions in
- some less-developed countries, for example, the same multinational corporation
- may be consulted privately by both the home and host governments.
- In subsequent work on the two-level model, the strategic implications of
- direct communication between Level II players should be explored.
- Conclusion
- The most portentous development in the fields of comparative politics and
- international relations in recent years is the dawning recognition among
- practitioners in each field of the need to take into account entanglements
- between the two. Empirical illustrations of reciprocal influence between
- domestic and international affairs abound. What we need now are concepts
- 84. I. William Zartman, "Reality, Image, and Detail: The Paris Negotiations, 1969-1973,"
- in Zartman, 50% Solution, pp. 372-98.
- 85. Zbigniew Brzezinski, Power and Principle (New York: Farrar, Straus and Giroux, 1983),
- p. 136, as quoted in Habeeb and Zartman, Panama Canal Negotiations, pp. 39-40.
- 86. Harrison in Campbell, Trieste 1954, p. 67.
- 87. Samuel P. Huntington, "Transnational Organizations in World Politics," World Politics
- 25 (April 1973), pp. 333-68; Keohane and Nye, Power and Interdependence; Neustadt, Alliance
- Politics.
- 88. Barbara Crane, "Policy Coordination by Major Western Powers in Bargaining with the
- Third World: Debt Relief and the Common Fund," International Organization 38 (Summer
- 1984), pp. 399-428.
- 460 International Organization
- and theories that will help us organize and extend our empirical observations.
- Analysis in terms of two-level games offers a promising response to this
- challenge. Unlike state-centric theories, the two-level approach recognizes
- the inevitability of domestic conflict about what the "national interest"
- requires. Unlike the "Second Image" or the "Second Image Reversed,"
- the two-level approach recognizes that central decision-makers strive to
- reconcile domestic and international imperatives simultaneously. As we have
- seen, statesmen in this predicament face distinctive strategic opportunities
- and strategic dilemmas.
- This theoretical approach highlights several significant features of the links
- between diplomacy and domestic politics, including:
- • the important distinction between voluntary and involuntary defection
- from international agreements;
- • the contrast between issues on which domestic interests are homogeneous,
- simply pitting hawks against doves, and issues on which domestic
- interests are more heterogeneous, so that domestic cleavage may actually
- foster international cooperation;
- • the possibility of synergistic issue linkage, in which strategic moves at
- one game-table facilitate unexpected coalitions at the second table;
- • the paradoxical fact that institutional arrangements which strengthen
- decision-makers at home may weaken their international bargaining position,
- and vice versa;
- • the importance of targeting international threats, offers, and sidepayments
- with an eye towards their domestic incidence at home and
- abroad;
- • the strategic uses of uncertainty about domestic politics, and the special
- utility of "kinky win-sets";
- • the potential reverberation of international pressures within the domestic
- arena;
- • the divergences of interest between a national leader and those on
- whose behalf he is negotiating, and in particular, the international implications
- of his fixed investments in domestic politics.
- Two-level games seem a ubiquitous feature of social life, from Western
- economic summitry to diplomacy in the Balkans and from coalition politics
- in Sri Lanka to legislative maneuvering on Capitol Hill. Far-ranging empirical
- research is needed now to test and deepen our understanding of how such
- games are played.
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