A Simultaneous-Equations Model of Trade, Conflict, and Cooperation

A simultaneous-equations model is developed for the reciprocal relationship among bilateral trade value, conflict, and cooperation by modeling the actions of exporters, importers, and governments. The model is estimated separately for each of the dyads among the US, the USSR, China, Japan, and (West) Germany for the yearly data from 1948 to 1992. The direction of the effects of conflict or cooperation on trade and that of trade on conflict or cooperation are generally mixed, as expected. Certain reciprocal relationship patterns emerge depending on whether countries belong to the East or West block.     

基于管理者与股东冲突行为的并购价值悖论分析

2002年Cording提出并购价值悖论,引起了学界对此命题的关注与研究热潮。本文借鉴社会冲突理论,对并购交易过程中管理者与股东之间冲突行为进行理论建模,通过模型分析得出冲突行为如何影响并购价值创造的作用机制。结论如下：在公司并购过程中,管理者可能会选择冲突,也可能选择合作。这主要由并购规模、激励水平、社会保护力量和冲突技术水平等因素决定。一般地,并购规模越大,管理者更倾向选择冲突。此外,激励水平越高、社会保护力量越强和股东的冲突技术水平越高,管理者越倾向选择合作。并购交易中管理者与股东的冲突模型较好地解释了现实中为什么有些并购交易能够创造价值而有些并购交易却损毁公司价值,为解释并购价值悖论现象提供了一个新的视角。     

Domestic institutions and the ratification of international agreements in a panel of democracies

A recent literature explores how domestic institutions affect politicians’ incentives to enter into international agreements (IAs). We contribute to this field by systematically testing the impact of a broad set of domestic institutional design features. This allows us to compare new and established political economy explanations of IA entry. For this purpose, 99 democracies are analyzed over the period 1975–2010. We find that domestic institutions determine countries’ disposition to enter into IAs, as predicted by political economic theory. For example, democracies with majoritarian electoral institutions are less likely to conclude IAs than other democracies. Countries also conclude more IAs when their democratic institutions are long-lived and they lack an independent judiciary. However, programmatic parties and the number of domestic veto players are not associated with IA-making. The key take-away of this study is that specific domestic institutions matter for how frequently states make formal deals with each other.     

The thrust to free trade: Conviction or fashion

Recently many developing countries flocked to free trade because the forces that led policymakers to resist trade reforms in the past have weakened. Apart from obvious external pressures from lending institutions, developing countries may simply have seen that cooperation promises more benefits than conflict in the area of international trade. The ideological debate between market forces and government planning has been decided in favor of market forces. However, another possibility not much considered is that trade reform is in vogue and this provides the motivation for following suit. Thus, trade reform can precipitate a cascade effect (Hirshleifer's term) of countries queuing up to adopt trade reform policies. A country is more likely to favor the notion of trade reform if two or more other countries have already successfully moved in that direction.     

Does Trade Integration Contribute to Peace?

We investigate the effect of trade integration on interstate military conflict. Our empirical analysis, based on a large panel data set of 243,225 country‐pair observations from 1950 to 2000, confirms that an increase in bilateral trade interdependence significantly promotes peace. It also suggests that the peace‐promotion effect of bilateral trade integration is significantly higher for contiguous countries that are likely to experience more conflict. More importantly, we find that not only bilateral trade but global trade openness also significantly promotes peace. It shows, however, that an increase in global trade openness reduces the probability of interstate conflict more for countries far apart from each other than it does for countries sharing borders. The main finding of the peace‐promotion effect of bilateral and global trade integration holds robust when controlling for the simultaneous determination of trade and peace.     

Trade costs and foreign direct investment

This paper focuses on an apparent conflict between the theory of foreign direct investment (FDI) and recent trends in the globalized world. The bulk of FDI is horizontal rather than vertical, and standard theory predicts that horizontal FDI is discouraged when trade costs fall. This seems to conflict with the experience of the 1990s, when trade liberalisation and technological change led to dramatic reductions in trade costs yet FDI grew much faster than trade. Two possible resolutions to this paradox are explored. First, horizontal FDI in trading blocs is encouraged by intra-bloc trade liberalisation, because foreign firms establish plants in one country as export platforms to serve the bloc as a whole. Second, cross-border mergers, quantitatively more important than greenfield FDI, are encouraged rather than discouraged by falling trade costs.     

Trade and civil conflict: Revisiting the cross‐country evidence

We revisit and expand the evidence on the impact of trade shocks on intra‐state conflict by using a large sample of developing countries in the 1960–2010 period. The results suggest that increases in the price of a country's exported commodities raise the country's risk of civil conflict and its duration. The effect on conflict risk is mainly driven by the price of point‐source commodities, in line with the rapacity effect theory of conflict. Intense trading with contiguous countries is associated with lower duration of conflict, consistent with the idea that such trade reduces the incentive of these countries to fuel conflict in their neighbor. Trading with neighbors is also associated with a lower risk of conflict when such trade occurs under trade agreements. On the other hand, we find no support for the opportunity cost theory via exported and imported commodities, nor via the economic cycle in export markets. We also identify a number of conditions under which the changes in the value of exported commodities cease to matter for conflict probability.     

MIMICKING THE WINNER LEADS TO WAR: AN EVOLUTIONARY ANALYSIS OF CONFLICT AND COOPERATION*

This note applies an evolutionary analysis to Skaperdas's (1992) static model of conflict and cooperation, in which agents are faced with trade‐offs between joint production and share competition. We adopt the stochastic evolution approach, and assume that each agent occasionally mimics the action of the winner of the stage. In contrast to Skaperdas's results that justify full or partial cooperation in productive activity, the long‐run equilibrium must exhibit total conflict; nobody engages in production at all.     

THE DEMOCRATIC PEACE AFTER THE COLD WAR

Political scientists and policy‐makers agree that democratic states were less likely to engage each other in militarized disputes than were other states during the Cold War. Most among them attribute this to their domestic political structures. Some, however, believe that the common and conflicting interests that the East–West conflict induced explain the relatively low democratic‐dispute rate. Evidence from the post‐Cold War world can help to arbitrate between these very different claims, as the collapse of the Soviet Union destroyed the bipolar system, precipitated a sharp rise in the number of democracies, and shifted dispute‐rate patterns. The analyses in this paper show that dyadic dispute rates converge after the Cold War, casting doubt on the existence of a democratic peace.     

SOCIAL NORMS,LOCAL INTERACTION,AND NEIGHBORHOOD PLANNING*

This article examines optimal social linkage when each individual's repeated interaction with each of his neighbors creates spillovers. Each individual's discount factor is randomly determined. A planner chooses a local interaction network or neighborhood design before the discount factors are realized. Each individual then plays a repeated Prisoner's Dilemma game with his neighbors. A local trigger strategy equilibrium (LTSE) describes an equilibrium in which each individual conditions his cooperation on the cooperation of at least one “acceptable” group of neighbors. Our main results demonstrate a basic trade‐off in the design problem between suboptimal punishment and social conflict. Potentially suboptimal punishment arises in designs with local interactions since in this case monitoring is imperfect. Owing to the heterogeneity of discount factors, however, greater social conflict may arise in more connected networks. When individuals' discount factors are known to the planner, the optimal design exhibits a cooperative “core” and an uncooperative “fringe.”“Uncooperative” (impatient) types are connected to cooperative ones who tolerate their free riding so that social conflict is kept to a minimum. By contrast, when the planner knows only the ex ante distribution over individual discount factors, then in some cases the optimal design partitions individuals into maximally connected cliques (e.g., cul‐de‐sacs), whereas in other cases incomplete graphs with small overlap (e.g., grids) are possible.     

产业内贸易中的企业行为与贸易政策——基于古诺双寡头垄断模型的分析

20世纪60年代以后,学者研究发现,传统的贸易理论无法解释大量工业化国家之间的贸易,从而使产业内贸易的研究成为国际贸易的核心问题之一。本文建立古诺双寡头垄断模型对同质产品产业内贸易中的企业行为与贸易政策进行了博弈分析,通过研究发现：寡头垄断企业之间即使在比较优势和报酬递增都不存在的条件下也会互相向对方市场销售商品;追求社会福利最大化的政府很容易陷入贸易保护的囚徒困境,从而导致双方社会福利恶化。本文认为,政府之间应该加强交往,深化合作,通过谈判解决贸易争端,避免陷入贸易保护的囚徒困境。     

Conflicting tasks and moral hazard: Theory and experimental evidence

We study a multi-task principal-agent problem in which tasks can be in direct conflict with each other. In theory, it is difficult to induce a single agent to exert efforts in two conflicting tasks, because effort in one task decreases the success probability of the other task. We have conducted an experiment in which we find strong support for the relevance of this incentive problem. In the presence of conflict, subjects choose two efforts significantly less often when both tasks are assigned to a single agent than when there are two agents each in charge of one task.     

Trade liberalization,democratization, and technology adoption

A general equilibrium theory with heterogeneous skills predicts a complementarity between trade and democracy in creating demand for superior technologies. Trade liberalization or democratization alone may lead to vested interests that limit technology adoption. We use panel data on technology adoption, at a disaggregated level, for the period 1980–2000. Exploiting within-country variation over time and the heterogeneous timing of trade liberalization and democratization, we document a significant and sizable positive interaction between trade openness and democratization for technology adoption. The result that transitions to open democracies are beneficial for technological dynamics is robust to a large set of checks.     

The high road and the low road to international competitiveness: Extending the neo‐Schumpeterian trade model beyond technology

Extending the neo‐Schumpeterian trade model, we estimate a ‘social‐gap’ model for a group of 17 OECD countries over the period 1975–1995. We find that government spending on social protection, employment protection regulations, union density, strike activity, and income security in the labor market (all measured in ‘gap’ form) are statistically significantly related to changes in international competitiveness. Specifically, we find some support for a Calmfors–Driffil, nonlinear, relation between cooperative labor relations and social spending patterns on the one hand, and international trade (and inward foreign investment) competitiveness on the other, implying that countries with relatively stronger institutional arrangements have better international economic performance than countries in the middle of the scale of conflict and cooperation. Our results indicate that models focusing solely on innovative effort are misspecified, and may suffer from an omitted variable bias caused by the absence of consideration of other institutional factors influencing international trade and investment.     

Games of Climate Change with International Trade

We analyse games of greenhouse gas emission reduction in which the emissions and the emission reduction costs of one country depend on other countries' emission abatement. In an analytically tractable model, we show that international trade effects on costs and emissions can either increase or decrease incentives to reduce emissions and to cooperate on emission abatement; in some specifications, optimal emission reduction is unaffected by trade. We therefore specify the model further, calibrating it to larger models that estimate the costs of emission reduction, trade effects, and impacts of climate change. If trade effects are driven by total emission reduction costs of other countries cooperation is slightly more difficult than in the case without trade effects. If trade effects are determined by relative emission reduction efforts in other countries, cooperation becomes easier. Carbon leakage does not affect our qualitative insights, although it does change the numbers.     

Social transfers and conditionalities under different regime types

This paper examines the implications of political factors for social policy choices. Specifically, we explore the link between regime type and adoption of unconditional transfers versus transfers conditioned on beneficiaries’ investments in human capital. Due to the direct nature of benefits, unconditional transfers are more likely to be used to buy off opposition and prevent social unrest. As transfers that are conditioned on education and health pay off only in a relatively distant future, they are rarely initiated for political motives and rather defined by interests of long-term development and human capital accumulation. Using the new dataset on Non-Contributory Social Transfer Programs (NSTP) in developing countries, we find that transfers are indeed chosen so as to be unconditional under less democratic regimes. There is some evidence that conditional transfers are more likely to be adopted in democracies. In particular, democracies tend to increase the number of conditional schemes once any social transfer program is introduced.     

More for everyone: The effect of local interests on spending on infrastructure

A central question in political economy is whether decision-making in representative democracies is biased towards local public investments or other types of policies which have locally concentrated benefits. The model by Weingast et al. (1981) predicts that a legislature with members from different areas will spend more in total on local public goods when the geographic constituency of each member is small. I test this prediction using panel data on the 18 Norwegian regional councils, exploiting that the geographic allocation of regional council seats varies considerably over time. Consistent with the theory, I find robust evidence that investments in regional public roads are lower when many council members come from the more populated areas in the region. This gives a more direct test of the prediction by Weingast et al. (1981) than existing empirical evidence, which concerns the relationship between public spending and legislature size. I find similar but less robust results for the maintenance of existing roads.     

Ancestry and international trade

This paper examines whether the relatedness of populations across the world shapes international trade flows. Using data on common ancestry for 172 countries covering more than 99% of global trade, we document that country pairs with weaker ancestral relationships are less likely to trade with each other (extensive margin) and, if they do trade, they exchange fewer goods and smaller volumes (intensive margin). The effect of ancestry is robust to a vast array of micro-geographic control variables and mitigated, yet still sizable and significant, when controlling for other measures of cultural distance as well as for current migrant stocks.     

A theory of efficient coexistence

Abstract

Neighbours have to coexist over an infinite horizon. Neither of them can eradicate the other or extricate him or herself from the bondage. Their respective resources regenerate themselves periodically. Hence, the capacities for production and war repeatedly recuperate from exhaustion. This paper uses a simple dynamic model to study the cooperation and conflict between two neighbours. It is shown that the way for one party to enhance its own prosperity without inducing a war with its neighbour is to collaborate on mutually beneficial projects and divide the output according to each side's contribution. Rejecting potential collaboration or dividing the joint output disproportionately risks the eruption of war. If the duration that one side is prepared to fight exceeds that of the other, the one with a shorter duration will concede defeat before the war starts. Nonetheless, when the planned durations of war of both sides are identical, the first-strike advantage induces them to wage war simultaneously.     

Consequences of increasing scarcity on affluent countries

A theory of continuous structural changes in countries and a theory of discontinuous structural changes are used to predict the consequences of increasing scarcity on countries with some affluence. The prognosis is disheartening. According to the theory of continuous change, increasing scarcity will directly or indirectly increase the inequality, centralization, disintegration, disturbances, repression, and both national and international conflict and will directly or indirectly decrease socioeconomic development, legitimacy, and democracy. These changes will be unpopular and create pressures for discontinuous change to prevent them. Furthermore, increasing scarcity will increase the desire for structural change and weaken the regime's capacity to manage the situation. Thus the pressure for structural change will be strong. Scarcity also interferes with the peaceful restructuring of democracies in their efforts to cope with the crisis. When these theories are used in predicting the future of modern countries under conditions of prolonged scarcity, they suggest that elitist democracies and elitist nondemocracies are likely to be restructured into egalitarian nondemocracies. Egalitarian democracies will survive as such if they are blessed with exceptional leadership. Otherwise they also might be restructured in the direction of egalitarian nondemocracy.