Essays on the political economy of conflict and cooperation

Baser, Ekrem Taha

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Description

Title

Essays on the political economy of conflict and cooperation

Author(s)

Baser, Ekrem Taha

Issue Date

2020-08-07

Director of Research (if dissertation) or Advisor (if thesis)

Dai, Xinyuan

Doctoral Committee Chair(s)

Dai, Xinyuan

Committee Member(s)

• Chaudoin, Stephen
• Gaines, Brian
• Kuklinski, James

Department of Study

Political Science

Discipline

Political Science

Degree Granting Institution

University of Illinois at Urbana-Champaign

Degree Name

Ph.D.

Degree Level

Dissertation

Keyword(s)

• Reputation
• International Cooperation
• International Conflict
• Foreign Direct Investment
• Contract Breach
• Political Violence
• Nonviolent Movements
• Repression

Abstract

This dissertation includes three essays on the political economy of conflict and cooperation. In the first two essays, I study commitment problems in International Relations (IR) from a dynamic perspective. Trust and commitment problems are at the core of most frictions in any society. However, the lack of an international authority to enforce contracts makes commitment problems particularly salient for IR, explaining both the existence of inefficient conflicts and the difficulty of attaining mutually beneficial cooperation. IR scholars have long identified reputational concerns as the primary vehicle through which states can resolve their commitment problems. Yet, the field has overwhelmingly adopted a static perspective, on the implicit assumption that states' preferences do not change. As a consequence, we cannot explain why states might spend their hard-earned reputations and how tarnished reputations can be rebuilt, notwithstanding the fact that we observe such behavior frequently in the real world. More importantly, the static perspective is silent about how current reputations shape incentives to maintain them. That is, we do not know whose behavior is constrained by reputational concerns: should reputations be more valuable for states with better or worse reputations? The same is also true for the Political Science discipline at large, as reputations are relevant whenever commitment problems are situated in long-run relationships. The first two essays provide insight into the ways in which actors actively use their reputations to attend desired ends. In the first essay, ``Reputations in International Conflict and Cooperation,'' I offer a dynamic theory of reputations where I relax the assumption that states' preferences are immutable. I explain why states tarnish their hard-earned reputations, how tarnished reputations are rebuilt, and more generally, how states' current reputations shape their incentives to build future reputations. Reputational incentives arise because states' preferences and abilities are not fully known to others. The international milieu learns about these preferences by observing states' past behavior in order to predict their future behavior. However, states' preferences are not fixed. They vary over time and across interactions, which restricts how much an audience can infer states' future behavior based on observations of their past behavior. Knowing that preferences change leads the international milieu to doubt those with good reputations and extend the benefit of the doubt to those with poor reputations, because the audience has reason to believe that things might be different this time. Doubt limits the usefulness of reputations for their holders, and benefit of the doubt opens up the possibility of rebuilding tarnished reputations. I present these arguments via a dynamic game theoretic model, covering both cooperative and conflictual interactions. I show that once preferences are allowed to change, states with better reputations have reduced willingness to further invest in their reputations compared to states with better reputations. In other words, reputational incentives primarily constrain those with poor reputations. In cooperation, this means that the reputation mechanism is a double-edged sword. While it makes mutually beneficial outcomes attainable, this comes at the cost of letting states with good reputations take advantage of the trust their reputations generate. In conflict, states with poor reputations are more willing to impose on their society the burden of diverting limited resources to economically unproductive avenues. Further, there is an existing debate in IR over reputations, where both the empirical purchase and validity of the reputation mechanism has been questioned. I show that a number of the points raised by the reputation critics against the static perspective can be reconciled with the dynamic rational reputation logic I present. In the second essay, ``Et Tu Brute? Reputations, Foreign Direct Investment, and Contract Breach,'' I test the argument that states that are motivated by reputational concerns to achieve cooperative outcomes have reduced incentives to fulfill their promises the better their reputations. In order to test this argument, I focus on the empirical laboratory of foreign direct investment, where a core concern of potential foreign investors is whether the host-government will violate their contracts once the investment is made. Testing this argument is challenging, because the reputation mechanism involves states manipulating others' beliefs to their benefit --- bad apples hiding among the good ones. Therefore, naive comparisons of behavior across states with good and bad reputations for investor-friendliness cannot recover the postulated relationship. To circumvent this problem, I derive an empirical implication which suggests that states with good reputations should be more likely to violate contracts compared to states with bad reputations in the presence of an adverse and exogenous economic shock. I leverage as-if random occurrence of natural disasters to serve as exogenous shocks. Using matching designs to take into account ex-ante disaster risk, which I measure using gradient boosting machines on historical disaster data, I show that states with good prior reputations for investor-friendliness are indeed more likely to breach contract following disasters. Therefore, this paper provides evidence for the argument that good reputations generate opportunities for their holders to take advantage of the trust their reputations generate. In the third essay, ``Mobilization, Repression, and the Choice between Violent and Nonviolent Tactics,'' I examine, via a formal model and illustrative cases, how anti-government dissident groups decide on and switch between violent and nonviolent tactics. In particular, I argue that assuaged grievances can increase the likelihood that a group turns violent, while worsening conditions for the population can decrease violence. Assuaged grievances suppresses mobilization, which can push groups towards violence because ---unlike nonviolence,--- violence is more effective if groups cannot rely on broad participation. Moreover, uncertainty over the magnitude of future grievances exacerbates the likelihood that groups will challenge governments via violent ---but not nonviolent--- means. This is because future uncertainty incentivizes dissident groups to gamble by challenging their governments today with the hope of facing more favorable conditions tomorrow. Accordingly, this paper provides an example of how disputes can be induced solely by expectations about future shifts in circumstances. In recent years a consensus has emerged among scholars of nonviolent movements that nonviolent tactics are superior to violent tactics in helping groups achieve their goals. In this essay, I argue that because the choice of tactics is strategic, we observe that nonviolent movements succeed more often because the conditions under which nonviolent tactics are preferred are also the conditions under which both tactics are more effective. Therefore, if a violent movement would embrace nonviolent tactics, the group would not necessarily achieve greater success in the counterfactual world.

Graduation Semester

2020-12

Type of Resource

Thesis

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Copyright 2020 Ekrem T. Baser

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