Domestic Institutional Constraints Research Articles

Making It Personal? A Comparative Study of Institutional Constraints on Foreign Policy in Russia and China

By treating militarism and personalism as institutional constraints on foreign policy, this article examines the role and influence of these constraints on the foreign policies of Russia and China. By looking at empirical evidence the authors argue that domestic institutional constraints in each country have exhibited distinctly different patterns throughout the last twenty years, and this can to some extent explain the difference in their respective foreign policies. However, institutional personalism in China has recently become more similar to that of Russia. The authors argue that current Russian foreign policy bears some elements of similarity suggesting future developments in Chinese foreign policy.

Keeping control of regulation? Domestic constraints on the creation of independent authorities in emerging and developing economies

AbstractRegulatory independence has become an international norm over the past decades. Yet, governments in some emerging and developing economies have eschewed the model. We argue that this outcome is shaped by the domestic institutional context; in particular, authoritarianism and traditions of state control over the economy. Analyzing new data on the adoption and operation of independent competition authorities between 1990 and 2017, we find that authoritarianism and, to some extent, state‐led economic traditions negatively affect formal adoption. By contrast, these institutional constraints do not have much impact on the start of the operations, which seems to be driven primarily by capacity and economic need. Our findings shed light on domestic institutional constraints on the spread of international norms and the limits of “regulatory transplants” in the Global South.

Shared Neoliberal Ideals: How Borrowers Become Favored by the IMF

Why does the International Monetary Fund (IMF) treat some borrowers differently than others? This question is certainly not new. In fact, in The Currency of Confidence, Stephen C. Nelson notes that existing scholarship provides well-known answers; powerful states’ preferences, the domestic institutional constraints of the borrower, and the bureaucratic motives of IMF staff all affect conditional loans (Barnett and Finnemore 2004; Copelovitch 2010). Nonetheless, Nelson makes the case that existing explanations miss a fundamental reason why IMF loan conditionality is not uniform across cases: the convergence of neoliberal economic ideas between top IMF officials and those in the receiving country determine the loan size, severity of strings attached, and strictness of enforcement. When the borrowing country's economic policy-makers share a common set of neoliberal ideals with IMF economists, the borrower quickly becomes the IMF teacher's pet. The most laudable aspect of The Currency of Confidence is the prodigious data with which Nelson tests the strength of his ideational argument. International relations (IR) scholars who are doubtful of constructivist explanations often suggest they are too “soft and fuzzy” to prove. Nelson goes to great lengths, however, to convince the hesitant reader. He carefully explains an expertly collected original dataset of IMF loan sizes, conditions, and enforcement (1980–2000), which he subsequently analyzes. He also codes the same twenty years of educational backgrounds from the resumes of over two thousand top policymakers in more than ninety developing countries. These data support his argument and provide both a significant public good and model for future work; yet Nelson does not stop there. He also incorporates interviews and archival studies into the process tracing of historical cases, including an analysis of Argentina's turbulent times from 1976–2002.

Explaining Peaceful Change without Democracy: The Case of the Sino-Soviet Security Community

Some scholars have claimed that democratic regime type needs to be treated as a necessary precondition for the formation of a pluralistic security community. This essay argues that one should not overestimate the explanatory power of linking the democratic peace proposition to the study of security communities. Democratic values, norms, institutions, and practices may certainly facilitate the formation of a security community, but it is by no means the only or even most plausible path to assure dependable expectations of peaceful change. While a number of authors have of late made similar claims, what is not settled is why non-democracies can form security communities. The findings in this essay advance scholarship on this issue by showing that the same causal logics commonly attributed exclusively to democratic security community formation are also present in the formation of non-democratic security communities. The study adds empirical evidence to this argument by developing a historical case study of the Sino-Soviet relationship. In sum, the findings demonstrate that (1) democracy is not a necessary (though facilitating) precondition for the development of a pluralistic security community and (2) a pluralistic security community may form between autocratic regimes based on the causal logical nexus of non-democratic norm externalization, ideological coherence, a common Other (normative logic) and autocratic domestic institutional constraints (institutional logic).

Is there a parliamentary peace? Parliamentary veto power and military interventions from Kosovo to Daesh.

This article studies the effect of parliamentary involvement on security policy. Building on Democratic Peace Theory, it examines whether democracies with a parliamentary veto power are indeed less likely to participate in military interventions, than democracies without such a veto power, ceteris paribus. By studying patterns of participation across 25 to 35 countries in five military missions, this paper finds modest evidence for such a parliamentary peace and suggests that it depends on the character of the military mission in question. If a mission is framed as a test case of alliance solidarity, as was the case with OEF and the Iraq War, domestic institutional constraints can be trumped by alliance politics. If, however, countries enjoy more discretion in deciding on the use of force, domestic constraints such as parliamentary war powers have a tangible impact on government policy.

China and Africa: Model of South-South Cooperation?

Chinese officials often claim that their country’s massive involvement in Africa is an example of “South-South cooperation” with tremendous potential to unlock Africa’s development prospects. They maintain that China’s economic involvement in the continent is less exploitative and more relevant to local needs than the North’s. Starting from a relatively small amount of investment in the early 1990s, China has become Africa’s biggest economic partner. Yet, as the United Nations Conference on Trade and Investment (UNCTAD) and other studies have shown, Chinese trade and investment in Africa are reproducing African countries as exporters of raw materials and importers of manufactured goods. This paper deconstructs the uncritical view of China’s development cooperation with Africa as “South-South” cooperation, highlighting its potential tensions, incongruities, downsides, and dilemmas. It demonstrates both good and bad news. Recent data show that despite the slowdown of the Chinese economy and slump in prices of certain raw materials, the total value of China-Africa trade is on the rise, with Africa’s exports to China growing rapidly, indicating a narrowing gap between imports and exports in the bilateral trade. However, whether this phenomenon is sustainable remains in doubt. Dynamics of the boom and bust cycles of commodity markets, limited diversification, domestic institutional constraints, limited tariff exemptions and rising debt on African countries can all compromise the recent progress in China-Africa trade and exacerbate their asymmetrical relationship, reproducing the trade pattern between the West and African countries.

Domestic Institutional Constraints, Veto Players, and Sanction Effectiveness

What effect do the domestic institutional constraints in target states have on sanction outcomes? Other than the narrow focus on political regime type, little is known about how the institutional makeup of target states might affect leaders’ ability to adjust their policies to defy sanctions. We assert that the size of veto players in targets is a crucial yet overlooked institutional factor in explaining sanction effectiveness. We contend that political leaders subject to the approval of multiple veto players are more likely to concede as they are less likely to develop polices to counter the sanctions. We assess the empirical merits of our theoretical claims by combining data on sanctions from the Threat and Imposition of Economic Sanctions data set with the veto points data from the Political Constraints data set. Results from the data analysis for the 1946 to 2005 period indicate that the size of veto players is a significant predictor of sanction success even when we control for political regime type and other major political and economic covariates of sanction effectiveness.

Democratic Participation in the Air Strikes Against Islamic State: A Qualitative Comparative Analysis

Although over sixty partners have joined the US-led coalition against the Islamic State (IS), only a handful of states was willing to carry out air strikes against IS-targets. This article aims to explain the pattern of democratic participation in the air campaign. It builds on the rich literature on military burden sharing and democratic peace theory to develop a multi-causal model, which is tested with Qualitative Comparative Analysis. The results of the analysis suggest that the pattern of participation in the air strikes results from a complex interplay between alliance politics, threat perception and domestic institutional constraints. The threat posed by foreign fighters and a strong interest in a good relationship with the US constituted important incentives to participate in the air strikes, while a high level of parliamentary involvement in military deployment decisions inhibited participation. Furthermore, states that were situated in Russia's immediate vicinity refrained from participating, in spite of their strong dependence on the US' security guarantee. Lastly, the analysis did not provide convincing evidence that partisan politics had an impact on participation in the air strikes.

State, Market and Social Order

Since the beginning of the latest and most convincing phase of transition, Myanmar has emerged as the new possible frontier of economic development in Southeast Asia. Investors, political analysts, businessmen and NGOs alike have all rushed to the country in search of a new El Dorado. Are these hopes justified? Can Myanmar—one of the poorest countries in Asia—start a new phase of economic development which would not only benefit the owners of global capital, but also lift Myanmar’s population from poverty? Drawing on the literature on the political economy of institutions and some field research, the paper assesses whether policy choices made by the new government are heading the country in a direction which could generate a ‘new miracle’ in East Asia. To this purpose, domestic institutional constraints and the system of patronage are examined. Looking beyond the democracy vs dictatorship debate, the paper finds that Myanmar could well start a new phase of economic growth, provided that the government builds a strong vertical and horizontal institutional capacity. However, a more open political environment, and the consequent multiplication of economic interests, could hijack the reform plan the government has adopted, unless these stakeholders are inserted into a coordinated framework revolving around a transformational project of national development.

Expanding the Electorate: Comparing the Noncitizen Voting Practices of 25 Democracies

Historically, citizenship has been the sine qua non for the franchise. Yet in the last several decades, dozens of democracies have created some form of voting rights for resident aliens. Noncitizen voting rights are conceptually important because they suggest some democracies have fundamentally redefined the body politic. What explains the emergence of the noncitizen franchise? Why do some democracies limit these rights to municipal elections while others allow resident aliens to vote in parliamentary elections? To answer these questions, this study tests two competing theses: the national process thesis that emphasizes domestic institutional constraints and political contestation, and the liberal convergence thesis that emphasizes international and transnational factors that shape states’ citizenship regimes. The study uses a time-series cross-section research design to explain both variations in the content of noncitizen voting rights and the timing of these policy changes. The study finds that although international factors may explain the timing of enfranchisement of noncitizens, domestic factors explain why the content of these rights vary considerably from state to state.

Autonomy delegation to foreign subsidiaries: An enabling mechanism for emerging-market multinationals

Current theory on foreign subsidiary autonomy is insufficient to examine a situation where a multinational lacks experience to organize global operations, and yet intends to compete extensively with established multinational enterprises (MNEs) from advanced economies. By building on theoretical perspectives developed for emerging-market multinational enterprises (EMNEs), we advance the idea that foreign subsidiary autonomy is a strategic mechanism to overcome the EMNE’s weaknesses in managing globally dispersed businesses and their home-country disadvantages after foreign entry. Subsidiary autonomy delegation assists in performing the learning functions necessary for overcoming resource and capability voids, as well as for distancing the subsidiary administratively from the parent’s negative home-country institutional heritage. Analyses of survey data collected from headquarter senior executives of 240 Chinese MNEs suggest that subsidiary autonomy delegation is higher among firms relying on foreign markets as a springboard to acquire strategic assets, whose top managers at the headquarters perceive high domestic institutional constraints, and which do not count on government assistance to expand internationally. Further, we demonstrate that these relationships are strengthened with greater inward foreign direct investment cooperative experience, and with the use of merger and acquisition entry modes. These findings have important implications for theories on subsidiary autonomy.

Domestic Institutional Constraints on China's Leadership in East Asian Economic Cooperation Mechanisms

The study of Chinese foreign policy has long shown that domestic politics and domestic constraints are sources of foreign policy, albeit generally considered less potent than ideology and interests. Domestic political constraints should also be explored as factors in Chinese regional policies toward East Asia, including regional economic institutions. This paper examines three domestic institutional constraints on regional foreign policy in the area of trade and economics: a fragmented decision-making structure that has difficulty with coordination, a relatively heavy reliance on top level decision-makers at a time when issues of Asian economic policy have relatively low priority for these same decision-makers, and the relatively extreme lack of autonomy for negotiators vis-á-vis top decision-makers in Beijing. These constraints are by any means unique to China. However, at a time when many observers and participants are expecting—indeed, often hoping for—Chinese leadership in the region, the paper posits that these constraints hinder the PRC's ability to fill this role. The key empirical focus is regional trade agreements and regional economic organizations.

International Listing as a Means to Mobilize the Benefits of Financial Globalization: Micro-level Evidence from China

Summary This paper proposes a micro-level framework to account for how firms in developing economies overcome domestic institutional constraints. It illustrates that the mechanisms enabling those firms to benefit from financial globalization are more complex than the “direct” financial channels outlined in the neo-classical approach. China provides an important example in this context, as its capital market liberalization has been limited and neither the legal nor the financial system is well developed. Yet micro-level evidence from China’s internationally listed enterprises indicates that innovative firms can overcome institutional thresholds, secure access to international capital, and benefit and learn from international capital markets. This can in turn induce market-level improvements through regulatory competition and demand for a more standardized system of economic regulation.

Japan’s ODA at the Crossroads: Disbursement Patterns of Japan’s Development Assistance to Southeast Asia

The article examines the recent changes in Japan's official development assistance (ODA) to Southeast Asia in response to domestic and international challenges after the cold war. It argues that Japan is in a position where it has to choose between spending and earning strategies in the disbursement of aid. Influenced by external and internal developments, Japan has tilted toward a spending approach over the last decade. Due to a limited ODA budget, Japan has to optimize the use of aid and disburse it more strategically. Also significant is the noticeable across-the-board increase in the grant allocation to Southeast Asia and Vietnam's emergence as a major recipient. Key words: foreign aid in Asia, Japan, ASEAN Introduction On several occasions, Japan has utilized its official development assistance (ODA) to confront issues and problems both at home and abroad. Japan's record as an aid donor dates back to the period of reparations in the 1950s. Indeed, Japan has come a long way from being a capital supplier of a few million dollars to being one of the largest sources of official development assistance, with billions of dollars at its disposal. Since the first disbursal, Japan's ODA has helped accomplish many of the country's foreign-policy objectives. Apart from reparations and export promotion, the Japanese have also used aid as a form of investment, a confidence-building measure, a solution for bilateral problems, a manifestation of economic power and global leadership, and a tool for buying power and influence in various international organizations. For many years, the conventional notion has been that Japan's aid disbursement is oriented toward its geoeconomic interests. In the 1980s, observers noted the lack of philosophy in Japanese aid, while some Japanese scholars struggled to justify the close alignment of Japan's aid with U.S. strategic interests. A more coherent direction in aid disbursement began to take shape in the early 1990s in response to domestic and international challenges. The end of the cold war, for instance, provided more leeway to Japan's conduct of its foreign policy, which meant flexibility in aid disbursement beyond U.S. strategic considerations. Several studies also noted the improvement of Japan's aid in the 1990s in terms of its quality and characteristics. Since the 1990s, Japan's disbursement of aid has diverged into two paths. One track follows the traditional geoeconomic orientation, the other more humanitarian goals. Hook and Zhang attributed the divergence to Japan's bureaucratic rivalry, particularly between the Ministry of Foreign Affairs (MFA) and the Ministry of Economy, Trade and Industry (METI, formerly MITI), over the management of aid.1 The METI promotes the mercantilist uses of aid that advance Japan's economic interests while the MFA emphasizes the political uses of aid in ways commensurate with Japan's post-cold war regional and global responsibilities. The Hook and Zhang study, however, maintained that the actual disbursement of aid in the 1990s followed the METI rather than the MFA discourse and dismissed the latter as merely rhetoric. On the other hand, Katada examined the domestic and international forces behind the development of Japan's two- track aid approach.2 He averred that domestic institutional constraints and budgetary limitations have made the divergence possible. Certain international factors such as Japan's membership in the Organization for Economic Cooperation and Development (OECD) have improved the quality of Japan's aid, particularly the untying of its aid and the allocation of more grants. As human security began to emerge as an important issue in the post-cold war era, in 1998 Japan's MFA incorporated the concept in its international cooperation and declared that Japan would strive to make the 21st century a human-centered century.3 Following this announcement, the government of Japan and the United Nations Secretariat established the UN Trust Fund for Human Security (UNTFHS). …

The Link Between Domestic Political Institutions and Commitments to Tariff Reduction Agreements

Lately countries have concluded many free trade agreements. However, the puzzle scholars face is why so many countries have rushed to enter a free trade agreement. In this study, I ask how and whether domestic institutions of a country make a difference in committing to tariff reduction agreements. I argue that the rush to PTAs since the 1980s is linked to the domestic constraints. I claim that the propensity of signing a trade agreement increases as the survival of political leaders becomes more dependent on having a large size of winning coalition. Decision-makers have greater political motivations to enter international trade agreements as the level of democracy increases as well. This study tests key propositions drawing on a comprehensive database of international trade agreements from 1950 to 1992 with 150 countries. I find that leaders have greater political incentives to conclude international trade agreements as the size of their winning coalition grows. The results also suggest that the level of democracy is associated with a leader's political motivation to conclude international trade agreements. I also find that electoral rule and the number of veto players have an impact on interstate commercial cooperation. By highlighting this dynamic, I demonstrate that domestic institutional constraints deserve more attention in international political economy.