Do Sunspots Cause War?
Find the working paper here.
Using a simple formal model, I argue for extrinsic uncertainty, archetypified as a sunspot, as a (quasi-)rationalist explanation for war. A sunspot is a random variable that has no effect on any of the fundamentals of the setting: not the distribution of resources, nor the countries' preferences, nor the technology of militarization, nor the technology of conflict. Nevertheless, war can transpire with sunspots and not transpire without sunspots, so that sunspots cause war in a strictly counterfactualist sense. The phenomenon works through the mechanism of self-fulfilling prophecy: some of the countries think that sunspots matter, so they wind up mattering. The result obtains even when the countries are armed with objective and correct probabilities about sunspots and rational expectations about what happens within each sunspot-realized world. An empirical test confirms the result.
Using a simple formal model, I argue for extrinsic uncertainty, archetypified as a sunspot, as a (quasi-)rationalist explanation for war. A sunspot is a random variable that has no effect on any of the fundamentals of the setting: not the distribution of resources, nor the countries' preferences, nor the technology of militarization, nor the technology of conflict. Nevertheless, war can transpire with sunspots and not transpire without sunspots, so that sunspots cause war in a strictly counterfactualist sense. The phenomenon works through the mechanism of self-fulfilling prophecy: some of the countries think that sunspots matter, so they wind up mattering. The result obtains even when the countries are armed with objective and correct probabilities about sunspots and rational expectations about what happens within each sunspot-realized world. An empirical test confirms the result.
Prediction, Proxies, and Power (with Brenton Kenkel)
Find the paper and data at the DOE project's website.
Many enduring questions in international relations theory focus on power relations, so it is important that scholars have a good measure of relative power. The standard measure of relative military power, the capability ratio, is barely better than random guessing at predicting militarized dispute outcomes. We use machine learning to build a superior proxy, the Dispute Outcome Expectations score, from the same underlying data. Our measure is an order of magnitude better than the capability ratio at predicting dispute outcomes. We replicate Reed et al. (2008) and find, contrary to the original conclusions, that the probability of conflict is always highest when the state with the least benefits has a preponderance of power. In replications of 18 other dyadic analyses that use power as a control, we find that replacing the standard measure with DOE scores usually improves both in-sample and out-of-sample goodness of fit.
Many enduring questions in international relations theory focus on power relations, so it is important that scholars have a good measure of relative power. The standard measure of relative military power, the capability ratio, is barely better than random guessing at predicting militarized dispute outcomes. We use machine learning to build a superior proxy, the Dispute Outcome Expectations score, from the same underlying data. Our measure is an order of magnitude better than the capability ratio at predicting dispute outcomes. We replicate Reed et al. (2008) and find, contrary to the original conclusions, that the probability of conflict is always highest when the state with the least benefits has a preponderance of power. In replications of 18 other dyadic analyses that use power as a control, we find that replacing the standard measure with DOE scores usually improves both in-sample and out-of-sample goodness of fit.
War and Peace in the Marketplace
Read a working version of the paper.
I argue that competition is the driving force in international relations and that it manifests through exchange and conflict. Exchange plays out in markets, while conflict takes the form of war. Because of their shared heritage in competition, neither ought to be assigned primacy. These concerns necessitate the construction of a general formal framework of international politics. All states compete over all commodities, where both kinds of competition are made available to the states. Posited behavior takes the form of the dual-competitive equilibrium: a set of prices that clear markets and a set of military deployments that constitute mutual best response. I prove its existence under weak conditions, study its welfare properties, and demonstrate its ramifications for the study of international relations.
I argue that competition is the driving force in international relations and that it manifests through exchange and conflict. Exchange plays out in markets, while conflict takes the form of war. Because of their shared heritage in competition, neither ought to be assigned primacy. These concerns necessitate the construction of a general formal framework of international politics. All states compete over all commodities, where both kinds of competition are made available to the states. Posited behavior takes the form of the dual-competitive equilibrium: a set of prices that clear markets and a set of military deployments that constitute mutual best response. I prove its existence under weak conditions, study its welfare properties, and demonstrate its ramifications for the study of international relations.
Making Peace on the Cheap
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Scholars posit many ways by which third parties can pacify would-be belligerents. Peacemakers might resolve informational problems through mediation, or they might monitor compliance with peace agreements, or they may provide a security guarantee, and so on. In this paper, I argue for another method: third parties can adjust disputants' relative wealth and power and, what's more, they can do so in a way that trade, rather than heavy-handed intervention, performs part of the job. To formalize the mechanism, I develop and analyze a general equilibrium model of intervention, trade, and war. Due to a particular set of assumptions made to generate an ideal hard case, two states---characterized by relative endowments of two commodities and by the probability that one wins a war over the other---find themselves at a seemingly hopeless impasse: peace only obtains for a single bundle in the consumption space. A social planner attempts to bring about peace by adjusting the states' endowments of commodities and the war lottery probability, but these adjustments are costly. After the intervention, the states make a trade and determine whether to fight for the right to consume all of both commodities. While peace is infinitely improbable, it is supportable as a Walrasian equilibrium if the planner chooses the appropriate intervention, which has several interesting properties.
Scholars posit many ways by which third parties can pacify would-be belligerents. Peacemakers might resolve informational problems through mediation, or they might monitor compliance with peace agreements, or they may provide a security guarantee, and so on. In this paper, I argue for another method: third parties can adjust disputants' relative wealth and power and, what's more, they can do so in a way that trade, rather than heavy-handed intervention, performs part of the job. To formalize the mechanism, I develop and analyze a general equilibrium model of intervention, trade, and war. Due to a particular set of assumptions made to generate an ideal hard case, two states---characterized by relative endowments of two commodities and by the probability that one wins a war over the other---find themselves at a seemingly hopeless impasse: peace only obtains for a single bundle in the consumption space. A social planner attempts to bring about peace by adjusting the states' endowments of commodities and the war lottery probability, but these adjustments are costly. After the intervention, the states make a trade and determine whether to fight for the right to consume all of both commodities. While peace is infinitely improbable, it is supportable as a Walrasian equilibrium if the planner chooses the appropriate intervention, which has several interesting properties.
Civil War in the Shadow of Intervention
Read a working version of the paper.
Building upon the usual domestic foundations, I argue that expectations of third party intervention shape the decision to start a civil war. To assess the claim, I extend the traditional statistical model of strategic interaction to include an arbitrary number of respondents, an approach called n-player statistical backward induction. Intervention expectations improve model fit and out-of-sample performance relative to standard within-country models. In particular, civil war is less likely when the relevant parties think government-biased intervention is probable for major powers. Dynamic changes in the likelihood of such intervention seem to explain temporal clusters of violence, and traditionally strong domestic predictors like population see weakened effects when intervention expectations are included. These results suggest that the shadow of intervention looms large in remarkable ways.
Building upon the usual domestic foundations, I argue that expectations of third party intervention shape the decision to start a civil war. To assess the claim, I extend the traditional statistical model of strategic interaction to include an arbitrary number of respondents, an approach called n-player statistical backward induction. Intervention expectations improve model fit and out-of-sample performance relative to standard within-country models. In particular, civil war is less likely when the relevant parties think government-biased intervention is probable for major powers. Dynamic changes in the likelihood of such intervention seem to explain temporal clusters of violence, and traditionally strong domestic predictors like population see weakened effects when intervention expectations are included. These results suggest that the shadow of intervention looms large in remarkable ways.
Policy Devolution and Cooperation Dilemmas
(with David Konisky and Christopher Reenock)
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How do public good spillovers influence agent effort in an interconnected environment? We develop a model for a general class of problems in which agents share the provision of a public good and ‘downstream’ agents experience positive spillovers. We characterize endogenous agent effort as the result of the boundary quality within which agents operate, the size of their relative jurisdiction and their reward structure. We examine our findings with an empirical exercise centered on the regulation of 6,000 major water pollution sources under the U.S. Clean Water Act. We construct a novel dataset of U.S. state water pollution regional offices and use geographic information on agency jurisdictions, watershed boundaries, and elevation-induced streamflow to characterize the propensity for shirking in an agent’s local environment. Our empirical results support our expectations.
How do public good spillovers influence agent effort in an interconnected environment? We develop a model for a general class of problems in which agents share the provision of a public good and ‘downstream’ agents experience positive spillovers. We characterize endogenous agent effort as the result of the boundary quality within which agents operate, the size of their relative jurisdiction and their reward structure. We examine our findings with an empirical exercise centered on the regulation of 6,000 major water pollution sources under the U.S. Clean Water Act. We construct a novel dataset of U.S. state water pollution regional offices and use geographic information on agency jurisdictions, watershed boundaries, and elevation-induced streamflow to characterize the propensity for shirking in an agent’s local environment. Our empirical results support our expectations.
Using Item Response Theory to Improve Measurement in Strategic Management Research: An Application to Corporate Social Responsibility
(with David M. Primo and Brian Kelleher Richter)
Read a working version of the paper.
We introduce item response theory (IRT) to management and strategy research. IRT explicitly models firms’ and individuals’ observable actions in order to measure unobserved, latent characteristics. IRT models have helped researchers in other social science disciplines measure traits like political ideology, and they can help strategic management researchers improve their measures. To demonstrate this potential, we show how the method improves upon the de facto best measure of corporate social responsibility (CSR), the KLD Index, by creating IRT Responsibility scores from the underlying data along with estimates of how accurate these measures are. We show, for instance, that firms like Apple may not be as socially responsible as previously thought, while firms like Walmart may be more responsible than typically believed.
We introduce item response theory (IRT) to management and strategy research. IRT explicitly models firms’ and individuals’ observable actions in order to measure unobserved, latent characteristics. IRT models have helped researchers in other social science disciplines measure traits like political ideology, and they can help strategic management researchers improve their measures. To demonstrate this potential, we show how the method improves upon the de facto best measure of corporate social responsibility (CSR), the KLD Index, by creating IRT Responsibility scores from the underlying data along with estimates of how accurate these measures are. We show, for instance, that firms like Apple may not be as socially responsible as previously thought, while firms like Walmart may be more responsible than typically believed.
Rubberstamping (with Peter Bils and Lawrence Rothenberg)
Read a working version of the paper.
Informal, "notice-and-comment," rulemaking is the prototypical mechanism employed by U.S. regulators. However, agencies frequently claim themselves exempt from notice-and-comment, and courts typically agree. Hence, agencies face a strategic choice between rulemaking processes. To assess the implications, we study a series of models with possible exemption. In a baseline model with one group and a policy-agnostic agency, there is rubberstamping: the agency always successfully applies for an exemption. However, the group captures the agency, as its preferred rule is promulgated. When first competing groups are added and, then, the agency is assumed to have policy preferences, not only does notice-and-comment sometimes occur but there are conditions when a strong form of rubberstamping takes place by which the agency is exempt and implements its ideal policy. Our results are roughly consistent with empirical observations, provide a variety of testable observations, and offer insights into how the rulemaking structure impacts societal welfare.
Informal, "notice-and-comment," rulemaking is the prototypical mechanism employed by U.S. regulators. However, agencies frequently claim themselves exempt from notice-and-comment, and courts typically agree. Hence, agencies face a strategic choice between rulemaking processes. To assess the implications, we study a series of models with possible exemption. In a baseline model with one group and a policy-agnostic agency, there is rubberstamping: the agency always successfully applies for an exemption. However, the group captures the agency, as its preferred rule is promulgated. When first competing groups are added and, then, the agency is assumed to have policy preferences, not only does notice-and-comment sometimes occur but there are conditions when a strong form of rubberstamping takes place by which the agency is exempt and implements its ideal policy. Our results are roughly consistent with empirical observations, provide a variety of testable observations, and offer insights into how the rulemaking structure impacts societal welfare.
