Causal Arrow Research Articles

Global Institutions and Social Knowledge: Generating Research at the Scripps Institution and the Inter-American Tropical Tuna Commission, 1900s–1990s

Global Institutions and Social Knowledge: Generating Research at the Scripps Institution and the Inter-American Tropical Tuna Commission, 1900s–1990s. By Virginia M. Walsh. Cambridge, MA: MIT Press, 2004. 208p. $50.00 cloth, $20.00 paper.What is the interrelating link between institutions and knowledge, primarily scientific knowledge? Conventional international relations literature focuses typically on the impact of knowledge on institutions. Virginia Walsh's interest, however, is to “turn the causal arrow” by focusing on the “institutional dimension” of knowledge creation: How do global political and economic, but also epistemic, institutions shape knowledge generation? (pp. 4–5, 38, 128, 130). Here, the scientific disciplines qualify as epistemic institutions (p. 34). From that point of departure, underscoring an institutional perspective, the emphasis concentrates on the “institutional mechanisms” through which knowledge is being formed. Groups leverage institutional mechanisms to “generate knowledge and fix beliefs” for the purposes of 1) establishing common understandings, 2) repairing uncertainties, and 3) directing inquiry by “fixing its direction” (pp. 3, 9, 38).

Discerning the Causal Relationships Between Great Powers' Membership in Intergovernmental Organizations and Their Initiation of Militarized Disputes

Recent research suggests that intergovernmental organizations (IGOs) contribute to peace. The relevant evidence is based on shared IGO memberships by two states which manage to stay in peace. This article seeks to determine whether, in and of itself, the number of IGOs to which a state belongs is a predictor of its propensity to initiate militarized disputes (that is, whether the causal inference based on dyadic data is sustained when one turns to monadic evidence). Moreover, it seeks to discern any selection bias to the extent that peaceful states may be predisposed to join IGOs, so that both their membership in IGOs and their peaceful foreign relations are due to this same predisposition (implying that participation in IGOs does not make an independent and separate contribution to this state's peacefulness). This article also takes up the endogeneity question, which asks whether membership in IGOs may itself be encouraged by a prior history of peaceful relations. A number of hypotheses regarding the relationship between IGO membership and initiation of militarized disputes are analyzed for the historical data series of eight states which have been great powers at one time or another. Autoregression results show that the predominant causal flow goes from these states' membership in intergovernmental organizations to their incidence of initiating militarized disputes, with the former having a positive impact on the latter. There are, however, some instances when the causal arrow is reversed and when a negative effect between the two variables is indicated. In these latter instances, less conflictual foreign relations have apparently encouraged greater involvement in intergovernmental organizations at a subsequent time. Contrary to our expectation, after controlling for autocorrelation in the time series, the number of IGO memberships for the states studied in this article has not, with the seeming partial exception of Italy, tended to discourage their proclivity to initiate militarized disputes.

The Democratic Peace and a Sequential, Reciprocal, Causal Arrow Hypothesis

One of the democratic peace puzzles is the question of whether and to what extent the democracy → peace relationship underestimates the possibility that peace precedes democracy: the reversed causal arrow hypothesis. From a war making–state making perspective, democratization needs to be viewed as a partial function of external threat and domestic power concentration. All three variables are found to be interrelated as predicted and related in turn to the external conflict behavior of major powers from 1816 to 1992. These monadic findings, however, do not appear to negate the dyadic relationship between democratization and selectively reduced conflict behavior. In sum, there is substantial support for the reversed causal arrow hypothesis, but it does not render the regime type → conflict behavior relationships spurious. Rather, it enriches the understanding of the context in which democratization has emerged to have some effect on international politics.

Non-Parametric Determination of Real-Time Lag Structure between Two Time Series: The 'Optimal Thermal Causal Path' Method

We introduce a novel non-parametric methodology to test for the dynamical time evolution of the lag-lead structure between two arbitrary time series. The method consists in constructing a distance matrix based on the matching of all sample data pairs between the two time series. Then, the lag-lead structure is searched as the optimal path in the distance matrix landscape that minimizes the total mismatch between the two time series, and that obeys a one-to-one causal matching condition. To make the solution robust to the presence of large noise that may lead to spurious structures in the distance matrix landscape, we then generalize this optimal search by introducing a fuzzy search by sampling over all possible paths, each path being weighted according to a multinomial logit or equivalently Boltzmann factor proportional to the exponential of the global mismatch of this path. We present the efficient transfer matrix method that solves the problem and test it on simple synthetic examples to demonstrate its properties and usefulness compared with the standard running-time cross-correlation method. We then apply our Optimal Thermal Causal Path method to the question of the causality between the US stock market and the treasury bond yields and confirm our earlier results on a causal arrow of the stock markets preceding the Federal Reserve Funds adjustments, as well as the yield rates at short maturities in the period 2000-2003. Our application of this technique to inflation, inflation change, GDP growth rate and unemployment rate unearths non-trivial causal relationships: the GDP changes lead inflation especially since the 1980s, inflation changes leads GDP only in the 1980 decade, and inflation leads unemployment rates since the 1970s. In addition, our approach seems to detect multiple competing causality paths in which one can have inflation leading GDP with a certain lag time and GDP feeding back/leading inflation with another lag time.

What Explains Credible Apologies? A Comment on Yaps Non-Electoral Responsiveness Mechanisms

In a recent issue of this Journal Professor Yap asks whether and how governments in what she calls ‘less-democratic’ countries, that is those where elections are uncompetitive due to a lack of democratic safeguards or opposition parties, are held accountable for the effects of their policies on economic performance. She argues that governments in these countries have an interest in avoiding strife and inducing private actors to provide resources necessary for economic prosperity. Because of this, ‘when their economies are performing less than optimally, these governments tend to offer credible apologies in the same year to attenuate the potential labour disquiet and loss in production investment.’ Yap develops the concept of a credible apology as the joint occurrence of punishment of responsible actors or reparations to injured parties, and an increase in monitoring activity by non-government actors. She then presents evidence for South Korea for 1964–87 and Singapore and Malaysia for 1966–94 showing that, ceteris paribus, the tendency of production investment to decrease and strike activity to increase in years with high unemployment is offset if the government makes a credible apology.Yap is quite clear that she assumes a causal arrow running from poor economic performance to credible apologies. Indeed, such a causal relationship is necessary for the concept of accountability; the events that Yap classifies as credible apologies must be made in response to unsatisfactory economic performance in order for us to say that these governments are being held (or are holding themselves) accountable for the consequences of their policies.

Theory and Testing of Governments' Credible Apologies: A Reply to Lowry' ‘Comment on Yap's “Non-Electoral Responsiveness Mechanisms”’

I appreciate the work that Professor Lowry has put into the evaluation of the credible apologies argument presented in my article, ‘Non-Electoral Responsiveness Mechanisms’. Lowry states that I assume ‘a causal arrow running from poor economic performance to credible apologies’. I am obliged to point out that this is inaccurate – I make no such assumption. What does cause the government's credible apologies? It is the need for the economic resources of labour quiescence and production investment from the respective resource-owners. Theory and empirical studies suggest that the withdrawal of such resources follows less-than-optimal economic performance; it follows, then, that governments in the less-democratic countries who need these resources are forced to pay attention to economic performance and offer credible apologies following sub-optimal economic performance.

What Explains Credible Apologies? A Comment on Yap' ‘Non-Electoral Responsiveness Mechanisms’

In a recent issue of this Journal Professor Yap asks whether and how governments in what she calls ‘less-democratic’ countries, that is those where elections are uncompetitive due to a lack of democratic safeguards or opposition parties, are held accountable for the effects of their policies on economic performance. She argues that governments in these countries have an interest in avoiding strife and inducing private actors to provide resources necessary for economic prosperity. Because of this, ‘when their economies are performing less than optimally, these governments tend to offer credible apologies in the same year to attenuate the potential labour disquiet and loss in production investment.’ Yap develops the concept of a credible apology as the joint occurrence of punishment of responsible actors or reparations to injured parties, and an increase in monitoring activity by non-government actors. She then presents evidence for South Korea for 1964–87 and Singapore and Malaysia for 1966–94 showing that, ceteris paribus, the tendency of production investment to decrease and strike activity to increase in years with high unemployment is offset if the government makes a credible apology.Yap is quite clear that she assumes a causal arrow running from poor economic performance to credible apologies. Indeed, such a causal relationship is necessary for the concept of accountability; the events that Yap classifies as credible apologies must be made in response to unsatisfactory economic performance in order for us to say that these governments are being held (or are holding themselves) accountable for the consequences of their policies.

The Impact of External Threat on States and Domestic Societies1

I begin with the premise, amply validated, that liberal democracy is the best form of government for the avoidance of ethnic conflict. And by ethnic conflict, I mean violence to persons or property committed by members of one ethnic group against those of another, or by the state (often controlled by an ethnic majority) against members of any ethnic minority. Events occurring in the international arena that negatively influence democratic governance also can increase the probability of ethnic conflict. State security, which frequently is highly dependent on the state's immediate environment, is critically important in the maintenance of liberal democracy. The concept of state security has been at the core of international relations (IR) theorizing, at least in the post-World War II period, if not earlier. The security dilemma as developed by Robert Jervis (1978) and Jack Snyder (1985), of course, has been at the heart of IR theory, as has the related concept of threat in Stephen Walt's (1987) transformation of the balance of power into the balance of threat. But in most IR applications, state security was deemed a function of interstate relations, without necessarily having an impact on either the state itself or on domestic societies. Quantitative analyses of arms races were exemplars of this interstate emphasis. Several years ago I found that state security had an impact on the inner workings of the state itself, particularly on the extent of its democratic governance. Diminished state security is associated with less democracy cross-nationally, and with the overthrow of democracy in favor of autocratic government (Midlarsky 1995, 1998, 2002). These findings are related to the “reversal of the causal arrow” in democratic peace theory suggested by me, and others such as William Thompson (1996) and Patrick James and his colleagues (1999). Of course, the …

Insuring against Terrorism -- and Crime

The attacks of September 11th produced staggering losses of life and property. They also brought forth substantial private-insurance payouts, as well as federal relief for the City of New York and for the families of individuals who perished on that day. The losses suffered during and after the attacks, and the structure of the relief effort, have raised questions about the availability of insurance against terrorism, the role of government in providing for, subsidizing, or ensuring the presence of such insurance, as well as the interaction between relief and the incentives for taking precautions against similar losses in the future. In response to such losses, and in anticipation of others, one might imagine an array of government responses ranging from nonintervention, to subsidized private insurance, to after-the-fact government payments of a fixed or uncertain kind. It is our claim that the particular mix of responses the government has chosen with respect to 9/11, including the September 11th Victims' Compensation Fund1 and the Terrorism Risk Insurance Act of 2002,2 will significantly affect private expectations about the government's likely response to future terrorist attacks. These expectations will in turn affect future private actions, ranging from the types of insurance policies that will be written, to the character of real estate development that will take place (especially in the country's largest cities), and to the level of charitable contributions that will be made following any future terrorist attack. The causal arrow can also point

Democratic Survival, Peace, and War in the International System

Post‐World War II Western foreign policies are often based on the claim that the spread of democracy will result in global peace. Our understanding of how this propagation can bring about peace is limited, and we have little reason to believe that the causal arrow points only in one direction. We tackle these issues by modeling the linkages between states' regime types, interstate conflict, and the strength of the democratic community relative to the autocratic community. Analysis of our model suggests initial increases in the strength of the democratic community increase the level of conflict in a system. Beyond a threshold of democratic strength, however, conflict wanes as the democratic community waxes. Our model also suggests that the survival rate of democracies increases as the material strength of the democratic community increases and decreases as systemic conflict rises. Empirical analyses offer support for the survival propositions.

Becoming the Red Bishop of Cuernavaca: Rethinking Gill's Religious Competition Model

Many explanations for the rise of progressive Catholicism in Latin America draw on internal and external factors. Gill (1994, 1998) breaks with this trend arguing that competition from Protestantism is key. After providing some methodological criticisms of Gill's work, the case of Cuernavaca, Mexico under the so-called Red Bishop Sergio Mendez Arceo is presented. This case suggests that competition from Protestantism played little or no role in his radicalization; rather, other factors (the Second Vatican Council and a radical worker's movement, among others) explain his transformation. In addition, it is suggested that for this case Gill's causal arrow should be reversed: Protestantism did not lead to the bishop's radicalization; rather his radicalization facilitated the growth of non-Catholic churches. The concluding section relates this study to recent research on religious pluralism and religious participation suggesting that for Gill's model religions pluralism is not a good indication of religious competition.

Why do “Women’s jobs” have low pay for their educational level?

Jobs held largely by women have low pay for the amount of education they require. Why is this? One hypothesis is that employers prefer to hire men, and all workers prefer better jobs, so that women can get in only when a job's rewards (relative to its skill requirements) are low enough that men no longer want the job. Thus, wages affect sex composition. Others see the causal arrow to run the other way. In this view, the sex composition of jobs affects the wage that employers offer; employers' biased perceptions lead them to see jobs as less important and less payworthy if they are filled largely by women. These explanations are not mutually exclusive; the causal arrow may run both ways (or neither way). In this paper we use CPS data from 1984 to 1991 and a cross-lag panel model to examine these effects. Jobs are defined with a detailed occupational category within a specific broad industry category. We find that jobs with a higher percentage of females at one point have slower wage growth (or steeper wage decline) for both men and women in the ensuing years. But we find no effect of earlier wage rate on later sex composition. For those interested in reducing gender inequality in earnings, these findings suggest the utility of “comparable worth” policies.

Causation of bias: the episcope.

A risk ratio or difference from a meta-analysis is as many as ten steps away from the unobservable causal risk ratios and differences in target populations. The steps are like lenses, filters, or other fallible components of the epidemiologist's "telescope" for observing populations. Each step is another domain where different biases can be caused. How biases combine across domains in the production of epidemiologic evidence can be quickly explained to nonepidemiologists by using a sequence of causal arrow diagrams with easy notation: (a) agent of interest, (b) background risk factors, (c) correlated causes, (d) diagnosis, (e) exposure measurement, (f) filing of data, (g) grouping of cohorts, (h) harvesting of cases and controls, (i) interpretations of investigators, (j) judgments of journals, and (k) knowledge of meta-analysts. For epidemiologists, this article serves as a review of ideas about confounding, information bias, and selection bias and underscores the need for routinely analyzing the sensitivity of study findings to multiple hypothesized biases.

Less Crime Without More Punishment

At its best, criminology is a dialogue between theories of crime and evidence about behaviour and social practices. The purpose of the enterprise is to inform moral and political choices. A particularly important decision, which ought to be illuminated by criminological theory and evidence, is whether to punish more, or to use alternative methods of tackling crime. This article argues that it is possible to have less crime without more punishment. Comparisons between trends in crime and punishment in the United States and England and Wales between 1981 and 1994 show an association between changes in the crime rate and changes in the probability of punishment, given an offence. However, three lines ofargument can be developed against the proposition that changes in the probability ofpunishment caused changes in the crime rate. First, it is more likely that the causal arrow points the other way. Second, detailed causal mechanisms have not been adequately described, and there is little evidence to support any particular description. Third, trends in crime and punishment in Scotland do not fit well with the hypothesis. Crime survey results suggest there has been little increase in crime in Scotland since 1981, without any appreciable increase in the quantity or probability of punishment. The enormous post-war growth in crime in the developed world, and the subsequent reversal of this trend, are linked to a range offundamental social and economic changes, which have probably beenfar more influential than the criminaljustice system.

Comparative Democracy and Income Distribution: Shape and Direction of the Causal Arrow

Few research studies examine the effect of income distribution on democracy cross-nationally in a simultaneous equation environment (with democracy also influencing income distribution). The most recent such study asserts that no linear relationship exists between the two variables, without testing for nonlinear relationships. In this study, I operationalize democracy and income distribution for 56 countries over the years 1973-1988. I find through pooled two-stage least-squares estimation that democracy and income distribution have nonlinear effects on each other (inverted U-shaped curves). I reflect on these findings as they affect public policy.

The Tie That Binds: Downtowns, Suburbs, and the Dependence Hypothesis

Urban scholars have been debating the causal arrow of the geographic dependence of cities and suburbs. The arguments center around whether the core city depends on the suburbs for economic vitality...

Environmental Influences on Democracy

The origins of autocracy in hydraulic civilization and the threat of war emerging from many land borders lead to an examination of two environmental sources of democracy—rainfall and sea borders. Karl Wittfogel's theory of Eastern autocracy arising from the need for centralized irrigation systems is generalized to include rainfall as a correlate of democracy. Findings concerning the absence of warfare between democracies are used to reverse the causal arrow and suggest that warfare is inimical to democratic development. Four ancient civilizations, Sumer, Mesoamerica, Crete, and China, are examined for the existence of early democracy and its inhibition by the onset of widespread warfare. Rainfall and sea borders as two dimensions of minimized environmental threat are tested systematically in a multivariate analysis, along with two societal variables, land inequality and economic development. The two environmental variables as well as the two societal variables are strongly associated with the political rights index, a measure of democracy. The additional and independent significance of a third societal variable, agricultural density, in one of the analyses, suggests connections with another theory of early democracy emerging from a technoecological perspective.

Causal models and the acquisition of category structure.

This article proposes that learning of categories based on cause-effect relations is guided by causal models. In addition to incorporating domain-specific knowledge, causal models can be based on knowledge of such general structural properties as the direction of the causal arrow and the variability of causal variables. Five experiments tested the influence of commoncause models and common-effect models on the ease of learning linearly separable and nonlinearly separable categories. The results show that causal models guide the interpretation of otherwise identical learning inputs, and that learning difficulty is determined by the fit between the structural implications of the causal models and the structure of the learning domain. These influences of the general properties of causal models were obtained across several different content domains, including domains for which subjects lacked prior knowledge. Tasks as apparently diverse as classical conditioning, category learning, and causal induction often require the learner to combine multiple cues in order to elicit a response. The cues may be conditioned stimuli (in conditioning), features of category instances (in category learning), or possible causes (in causal induction). Numerous learning models have been proposed in each of these areas, and a great deal of theoretical interest has focused on the extent to which common learning mechanisms may operate across these formally similar tasks. Most of these theories model learning as a domain-general process, bottom-up and basically associative in nature, that applies across diverse domains. Recently, more top-down or theory-based approaches have been proposed, which view learning as guided by domain-specific theories. In the present article we outline a position that is intermediate between these two views. We claim that a major subset of learning situations—

Saving, Economic Growth, and the Arrow of Causality

its potential contribution to growth. Indeed, it probably causes it to decline in the future. Business will not continue to invest, if it can't sell its products. If we understood this, our view of the futility of many measures to promote saving would become clear. Individuals may be persuaded to save more by some tax incentive. But that might be more difficult to accomplish than some think. This means that individuals would

Causal models and the acquisition of category structure.

This article proposes that learning of categories based on cause-effect relations is guided by causal models. In addition to incorporating domain-specific knowledge, causal models can be based on knowledge of such general structural properties as the direction of the causal arrow and the variability of causal variables. Five experiments tested the influence of commoncause models and common-effect models on the ease of learning linearly separable and nonlinearly separable categories. The results show that causal models guide the interpretation of otherwise identical learning inputs, and that learning difficulty is determined by the fit between the structural implications of the causal models and the structure of the learning domain. These influences of the general properties of causal models were obtained across several different content domains, including domains for which subjects lacked prior knowledge. Tasks as apparently diverse as classical conditioning, category learning, and causal induction often require the learner to combine multiple cues in order to elicit a response. The cues may be conditioned stimuli (in conditioning), features of category instances (in category learning), or possible causes (in causal induction). Numerous learning models have been proposed in each of these areas, and a great deal of theoretical interest has focused on the extent to which common learning mechanisms may operate across these formally similar tasks. Most of these theories model learning as a domain-general process, bottom-up and basically associative in nature, that applies across diverse domains. Recently, more top-down or theory-based approaches have been proposed, which view learning as guided by domain-specific theories. In the present article we outline a position that is intermediate between these two views. We claim that a major subset of learning situations—