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21. Linkage Diplomacy: Economic and Security Bargaining in the Anglo-Japanese Alliance, 1902-23

Author:
Christina L. Davis
Publication Date:
03-2009
Content Type:
Journal Article
Journal:
International Security
Institution:
Belfer Center for Science and International Affairs, Harvard University
Abstract:
How do states use economic-security linkages in international bargaining? Governments can provide economic benefits as a side payment to reinforce security cooperation and use close security ties as a source of bargaining leverage in economic negotiations. Domestic political pressures, however, may constrain the form of linkage. First, economic side payments are more likely to be chosen in areas that will not harm the key interests of the ruling party. Second, involvement by the legislature pushes governments toward using security ties as bargaining leverage for economic gains. Evidence from negotiations between Britain and Japan during the Anglo-Japanese alliance of 1902 to 1923 supports the constraining role of domestic politics. Economic-security linkages occurred as Britain gave favorable economic treatment to Japan in order to strengthen the alliance. Economic competition between the allies, however, made it difficult for Britain to grant asymmetrical economic benefits. In tariff negotiations where business interests had more influence in the domestic policy process, the alliance was used as leverage to force reciprocity.
Topic:
Security, Diplomacy, Economics, and Government
Political Geography:
Britain and Japan

22. Sovereign Wealth and Sovereign Power: The Strategic Consequences of American Indebtedness

Author:
Brad W. Setser
Publication Date:
09-2008
Content Type:
Working Paper
Institution:
Council on Foreign Relations
Abstract:
In the 1870s, the scope of Great Britain's financial empire exceeded the scope of its political empire. Dependence on British investors sometimes was a precursor, though, to informal—or even formal— political control. When Egypt's khedive needed to raise cash to cover his personal debt to private British banks, he sold his large personal stake in the Suez Canal to the British state. Egypt's ruler did little better managing Egypt's public debt: difficulties making payments led Britain and France to assume control over Egypt's treasury and, by 1882, to full British political control.
Topic:
Economics, Government, International Political Economy, and International Trade and Finance
Political Geography:
Britain, United States, America, and Egypt

23. Finance and the Macro-economy: The Politics of Regulatory Reform in Europe

Author:
Sofía Perez and Jonathan Westrup
Publication Date:
01-2008
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
This paper analyzes major changes in the regulation of the financial sector in Europe over the last three decades. Focusing on the pattern of change across five countries (Britain, France, Germany, Italy and Spain), the paper identifies two major periods of regulatory change: first, the shift away from postwar patterns of credit regulation in the 1970s and 1980s, and second, the intensification of state supervisory powers and the introduction of new regulatory structures from the 1990s to the present. In both cases, the authors point to the way in which different models of financial sector regulation affect the political consequences of macro-economic policy for political elites as an explanation for choices that governments have made in the regulatory arena. More specifically, while regulatory change in the first period may be largely explained by the way in which different postwar models of credit regulation impinged upon a government's political ability to impose disinflation, choices in favor of different regulatory structures in the second period (single regulator in Britain and Germany versus multiple regulators in the other countries) can be related to differences in the area of pension reform. By focusing on the political implications that different modes of financial regualtion can have for elected officials in the context of different macroeconomic scenarios, the authors offer an explanation of regualtory change that differs from accounts which emphasize the primacy of financial market forces in driving such change.
Topic:
Economics and Government
Political Geography:
Britain, Europe, France, Germany, Spain, and Italy

24. 'Cast the Net Wider': How a Vision of Global Halal Markets is Overcoming Network Envy

Author:
Johan Fischer
Publication Date:
11-2008
Content Type:
Working Paper
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
This paper explores Malaysia's bid to become the world leader in rapidly expanding halal (lawful or permitted) markets on a global scale. Over the last three decades, a powerful state nationalism has emerged, represented by the United Malays National Organisation (UMNO), the dominant political party in Malaysia. The state has effectively certified standardised and bureaucratised Malaysian halal production, trade and consumption. Now, the vision is to export this model, and for that purpose the network as a strategic metaphor is being evoked to signify connectedness and prescriptions of organisation vis-à-vis more deep-rooted networks. Building on empirical material from research in Malaysia and Britain, I shall show how networks are understood and practised in a metaphorical sense.
Topic:
Development, Economics, and Nationalism
Political Geography:
Britain, Malaysia, and Asia

25. The End of Monetary Dominance? How Crises Can Influence Monetary Policy Decisions and Institutions

Author:
Pierre L. Siklos
Publication Date:
11-2008
Content Type:
Policy Brief
Institution:
Centre for International Governance Innovation
Abstract:
Has the global financial crisis made monetary policy more powerful, or it has exposed its limitations? For the most part, the answer is the former, at least today, but the outlook may not be so rosy. When the former British Prime Minister, Harold Macmillan, was asked what were the greatest challenges he faced, he replied: “Events, my dear boy, events.” We have certainly witnessed in the last year a series of events that are challenging policy makers as well as their beliefs about how monetary policy ought to be conducted in future. Indeed, these same events may come to haunt the monetary authorities, and we may well see a return to a period when monetary policy was subservient to a fiscal policy that steps in, ostensibly to impose order on an apparently unruly private sector. Central banks, among other players, appear to have unwittingly put in place the conditions necessary for what we can now confidently call the perfect storm of 2008. There were several observers who predicted that a train wreck was looming on the horizon. Indeed, perhaps most stunning of all, the Bank for International Settlements (BIS), created from the ashes of World War I and which quickly became the forum for central bank cooperation, a role it continues to fill to this day, had repeatedly warned about the troubles that lay ahead. “…these facts also suggest that the magnitude of the problems yet to be faced could be much greater than many now perceive” (BIS Annual Report, 2008: 9). The failure of central banks to act on these warnings may come back to haunt them in the near future.
Topic:
Economics, International Cooperation, International Trade and Finance, Monetary Policy, and Financial Crisis
Political Geography:
Britain

26. The Formation of a Mercantilist State and the Economic Growth of the United Kingdom 1453-1815

Author:
Patrick Karl O'Brien
Publication Date:
07-2006
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
New institutional economics lacks a theory of state formation which could help us to deal with the mega question of why some states became more efficient than others at establishing and and sustaining institutions. Some kind of middle range theory could be formulated based upon historical case studies. This paper considers the case of Britain and as its title suggests degrades the myth of the United Kingdom as the paradigmn example of liberalism and laisser faire. In making its precocious transition to and industrial market economy the kingom's history is best represented as a case of successful mercantilism.
Topic:
Development, Economics, and Sovereignty
Political Geography:
Britain, United Kingdom, and Europe

27. EU Accession and the Euro: Close Together or Far Apart?

Author:
Peter B. Kenen and Ellen E. Meade
Publication Date:
10-2003
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
In May 2004, ten countries are due to join the European Union. They are therefore obliged to join the European Monetary Union (EMU) and adopt the euro as their national currency. Most of them, moreover, have been eager to do that. None of them sought an opt-out of the sort that Britain and Denmark obtained in 1991, when the Maastricht Treaty was drafted. Membership in EMU is not automatic, however, because the accession countries must first satisfy the preconditions contained in the Maastricht Treaty. Although those preconditions are rigorous, and some of the accession countries are still far from meeting them, most of those countries have indicated that they want to enter EMU at the earliest possible date.
Topic:
Economics and International Trade and Finance
Political Geography:
Britain, Europe, and Denmark

28. Crime, Terror and the Central Asia Drug Trade

Author:
Tamara Makarenko
Publication Date:
06-2002
Content Type:
Working Paper
Institution:
Centre for the Study of Terrorism and Political Violence, St. Andrews University, Scotland
Abstract:
Over the last decade, opium poppy cultivation in Afghanistan has been rising incrementally, culminating in a bumper crop in 1999 that produced approximately 80 percent of the global supply of illicit opium. Despite this predicament, the dynamics of the illicit drugs trade in Afghanistan has received little attention. Most media reports and government statements over-simplify the situation, making it appear as though the Taliban controlled the planting, cultivation, production and trafficking of all opiates. For example, The Times, in an article published in January 2000, reported “The Taliban rulers of Afghanistan have become the world's biggest producers and smugglers of hard drugs, overtaking rings in Colombia and Burma. They are now responsible for 95 per cent of all the heroin entering Britain.” Following the September 11 attacks, this responsibility was shared with Usama bin Laden and the Al-Qaeda network. British Prime Minister Tony Blair thus stated that the “arms the Taliban are buying today are paid for with the lives of young British people buying their drugs on British streets”, and subsequently added that the Taliban and Usama bin Laden “jointly exploited the drugs trade.” This view has also been propagated in the United States by leading news agencies. CNN, for example, explicitly reported that the Taliban both taxed and trafficked in narcotics, which were directly used to finance their military operations.
Topic:
Crime, Economics, and Terrorism
Political Geography:
Britain, Afghanistan, Central Asia, Taliban, Colombia, and Burma

29. Precocious British Industrialization: A General Equilibrium Perspective

Author:
N.F.R. Crafts and C. Knick Harley
Publication Date:
01-2002
Content Type:
Working Paper
Abstract:
The British industrial revolution created an industrial economy. While casual discourse conflates industrialization and economic growth, Britain was remarkable primarily for the pronounced structural change that occurred rather than for rapid economic growth. Uniquely the British labour force became highly industrialized even prior to the move to free trade in the 1840s. On the eve of the abolition of the Corn Laws the share of agriculture in employment had already declined to levels that were not reached in France and Germany until the 1950s.
Topic:
Economics and Industrial Policy
Political Geography:
Britain, Europe, France, and Germany

30. Creating Stability: National Preferences and the Origins of European Monetary System

Author:
Mark Aspinwall
Publication Date:
12-2000
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
This essay compares the preferences of France, Italy, and Britain on the creation of the European Monetary System in 1978-1979, especially the Exchange Rate Mechanism, which stabilised nominal exchange rates. My claim is that the different conclusions reached by the governments (France and Italy in, Britain out) cannot be explained by economic circumstances or by interests, and I elaborate an intervening institutional variable which helps explain preferences. Deducing from spatial theory that where decisionmakers 'sit' on the left-right spectrum matters to their position on the EMS, I argue that domestic constitutional power-sharing mechanisms privilege certain actors over others in a predictable and consistent way. Where centrists were in power, the government's decision was to join. Where left or right extremists were privileged, the government's decision was negative. The article measures the centrism of the governments in place at the time, and also reviews the positions taken by the national political parties in and out of government. It is intended to contribute to the growing comparativist literature on the European Union, and to the burgeoning literature on EU-member-state relations.
Topic:
Economics, Government, and International Cooperation
Political Geography:
Britain, Iraq, Europe, and France