What happens when the unstoppable force of liberalization collides with the immovable object of national financial institutions in the advanced industrial democracies? To answer this question and evaluate alternative mechanisms to explain institutional change, this article examines the cases of the three large European economies with concentrated share ownership—France, Germany, and Italy. In the formal legal mechanism, interest coalitions adopt new laws, leading actors to deviate from formerly stable patterns of behavior in shareholding. In the joint belief shift mechanism, collective actors use a triggering event to jointly reevaluate their views of how the world works and thus how their interests can best be pursued. Using the metric of patient capital, this article shows that institutional change took place in France but not in Germany or Italy, despite the fact that Germany and Italy experienced significant regulatory change in the area of corporate governance while France did not. This evidence fits joint belief shift and is inconsistent with the formal legal mechanism. It is likely that the importance of the two mechanisms of institutional change depends on the degree of strategic interdependence among institutional actors: where it is high, the joint belief shift mechanism is likely to precipitate change; and where it is low, the formal legal mechanism is likely to precipitate change.

A basic debate in world politics involves the impact of intergovernmental organizations (IGOs) on international conflict. Liberals, functionalists, and others see IGOs as capable of transforming global anarchy, while realists emphasize the essential irrelevance of IGOs in managing such fundamental processes as war and peace. Recent quantitative studies also yield disparate conclusions depending on particular econometric assumptions, implying variously that IGOs foster pacific relations among states, have no impact on dispute behavior, or even increase dispute propensity. At least part of the problem is a lack of theoretical and empirical specificity. The authors apply bargaining theory to develop a “middle path” between the realist and liberal perspectives. Only some IGOs, those with security mandates and the most sophisticated institutional structures, are likely to influence dispute behavior. The authors combine the theory with two improvements in research design. First, IGOs vary in capability, mandate, and cohesion. The authors construct a dataset of IGO institutional heterogeneity and member cohesiveness. Second, states join IGOs for reasons that are not unrelated to why states fight. The authors control for the level of international involvement among countries and find support for their arguments in initial tests.

The politics of stem cell research poses a puzzle: the explanation of different national responses to the same scientific breakthroughs. Policy struggles across the major scientific powers have revolved around similar values—the protection of human life and solidarity with the sick—but generated very different regulatory outcomes. Bringing in historical and institutional legacies can shed light on those differences. The article develops an analytical framework around the path-dependent effects of state institutions on value-driven issues and applies it to the politics of stem cell research in the United Kingdom and Germany. Historical institutionalism, it argues, can be extended beyond the study of political economy and the welfare state to issues marked by sharp value conflict.

Recent studies appear to show that democracy has no robust association with economic growth. Yet all such work assumes that the causal effect of democracy can be measured by a country's regime status in a particular year (T), which is correlated with its growth performance in a subsequent period (T+l). The authors argue that democracy must be understood as a stock, rather than a level, measure. That is, a country's growth performance is affected by the number of years it has been democratic, in addition to the degree of democracy experienced during that period. In this fashion, democracy is reconceptualized as a historical, rather than a contemporary, variable—with the assumption that long-run historical patterns may help scholars to understand present trends. The authors speculate that these secular-historical influences operate through four causal pathways, each of which may be understood as a type of capital: physical capital, human capital, social capital, and political capital. This argument is tested in a crosscountry analysis and is shown to be robust in a wide variety of specifications and formats.

Using data on bilateral trade flows from both before and after World War II, this article examines the impact of the General Agreement on Tariffs and Trade on trade between its members and on the system of interwar trade blocs. It shows that the distribution of the benefits produced by the GATT was much more highly skewed than conventional wisdom assumes. The article also shows that the gold, Commonwealth, Reichsmark, and exchange-control blocs exerted positive and significant effects on trade after 1945. The authors attribute these effects to the bargaining protocol that governed successive rounds of GATT negotiations, the signature element of the postwar trade regime.

Denmark and Britain have adopted quite similar “active” social reforms in which employers play a major role in the programmatic delivery of services; however, the implementation of the programs has differed dramatically in the two countries. Danish firms, despite having had virtually no prior involvement in administering social programs, have participated in far greater numbers than British employers, who, by contrast, have long provided private, employment-based social benefits.

Drawing from interviews with 107 randomly selected British and Danish corporations, this article seeks to explain why Danish employers have participated at higher rates than their British counterparts. Subtle programmatic differences that reflect each country's welfare regime have had profound feedback effects on firms' willingness to participate in the programs; these findings have implications for regimes' capacities both to correct for traps and to revise social protections to meet the needs of the new economy.

Previous research has documented only a modest success rate for imposed sanctions. By contrast, the success rate is higher in cases that are settled at the threat stage. In this article, the authors provide new insights about the circumstances under which sanctions cause behavioral change only after being imposed. First, the target must initially underestimate the impact of sanctions, miscalculate the sender's determination to impose them, or wrongly believe that sanctions will be imposed and maintained whether it yields or not. Second, the target's misperceptions must be corrected after sanctions are imposed. A game-theoretical model with incomplete information is used to develop and clarify the argument.

This article explores the sources of regime competitiveness in the post-cold war era through a structured comparison of regime trajectories in Belarus, Moldova, Russia, and Ukraine, for the period 1992–2004. An examination of these cases suggests the need for a fundamental rethinking of the commonly held view of the transition process—especially in countries that face relatively weak international democratizing pressures. Approaching these countries as unconsolidated autocracies rather than as simply emerging democracies draws attention to key sources of political competition that have largely been ignored in the literature on competitive regimes. Thus, competitive politics in Belarus, Moldova, Russia, and Ukraine were rooted less in robust civil societies, strong democratic institutions, or leadership than in the inability of incumbents to maintain power or concentrate political control by preserving elite unity, controlling elections, and/or using force against opponents. Such ”pluralism by default” has been the outgrowth of the strength of anti-incumbent national identity and incumbent weakness as defined by a lack of know-how, ineffective incumbent organization, and/or the weakness of certain dimensions of state power.

This article examines the paradox of how federal political institutions are created: how can a state-building core be unyielding enough to forge a union but accommodating enough to grant federal concessions to subunits? A comparison of the trajectories of national unification in nineteenth-century Germany and Italy indicates that the formation of federations does not come about exclusively through voluntary “contract”; instead, coercion and cooperation go hand in hand in the formation of all states, including federations. Whether the outcome is federal or unitary depends on the level of subunit infrastructural capacity at the moment of founding.

The article finds that where the constituents of a potential federation are parliamentary and well governed, they can deliver the benefits of state formation, assuring their continued existence in a federation. Where such subunits are patrimonial and poorly governed, they are absorbed within a unitary model of governance. This institutional explanation supplements accounts emphasizing the cultural sources of federalism and revises arguments that only militarily weak founding cores make federal concessions to their constituents.

How do fluid party systems that exist in many new democracies affect democratic accountability? To address this question, the authors analyze a new database of all legislative incumbents and all competitive elections that took place in Poland since 1991. They find that when district-level economic outcomes are bad, voters in that country punish legislators from a governing party and reward legislators from an opposition party. As a result, electoral control in Poland works through political parties just as it does in mature democracies. However, the authors also find that, in contrast to mature democracies, legislators from a governing party tend to switch to an opposition party when the economy in their district deteriorates. When they do so, their chances of reelection are better than those of politicians who remained loyal to governing parties and are no worse than those of incumbents who ran as opposition party loyalists. These empirical results suggest that while elections in new democracies function as a mechanism of political control, fluid party systems undermine the extent to which elections promote democratic accountability.

Ten Latin American presidents have a power that has not received the study that it deserves: the ability to make positive suggestions to vetoed bills. These “amendatory observations” return to Congress for afinalround of voting. Sometimes the presidential version of the bill becomes the default alternative automatically and may require qualified majorities to be overturned. The authors analyze veto procedures in eighteen Latin American countries and argue that amendatory veto power significantly increases presidential weight in legislative decision making.

Corruption is one of the key problems facing the Russian state as it seeks to evolve out of its socialist past. Naturally, regional patterns of corruption exist across a country as large and diverse as the Russian Federation. To explain these variations, the authors analyze 2002 data from Transparency International and the Information for Democracy Foundation that provide the first effort to measure differences in the incidence of corruption across forty Russian regions. They find that corruption in Russia is fueled by the size of government and by the level of development. Within each region, the amount of corruption increases as the number of bureaucrats grows and gross regional product per capita decreases. Russian policymakers can therefore work to reduce corruption by effectively reforming or scaling back bureaucracies and by encouraging economic development outside of the key centers of Moscow and St. Petersburg.

OECD economies were able to reconcile the pursuit of welfare state expansion and full employment during the first decades of the postwar period. Yet the trade-off between these two policy objectives widened in recent decades. To explore the question ofwhy this change occurred, this article extends familiar models of wage determination by adding a number of parameters that capture cross-national differences among welfare states. The model identifies the conditions under which unions deliver wage moderation in exchange for social policy benefits and transfers and explores how different labor-market institutions magnify or decrease the impact of wage choices on the equilibrium level of employment. Next, the author examines the impact of changes in the composition of social policy expenditures and in the level of the tax burden on. unions' wage choices. She shows that mature welfare states, characterized by high tax burdens and a high share of transfers devoted to labor-market outsiders, reduce the effectiveness ofwage moderation in lowering unemployment. The author tests the main propositions using OECD panel data for the period 1960–95.

What accounts for the waves of policy diffusion that increasingly sweep across regions of the world? Why do many diverse countries adopt similar changes? Focusing on the spread of Chilean-style pension privatization in Latin America, this article assesses the relative merit of four theoretical explanations that scholars of diffusion have proposed. As the principal mechanism driving innovations' spread, these approaches emphasize external pressures, emanating especially from international financial institutions; the quest for symbolic or normative legitimacy; rational learning and cost-benefit calculation; and cognitive heuristics, respectively. The article assesses which one of these frameworks can best account for the three distinctive features of diffusion, namely its wavelike temporal pattern; its geographical clustering; and the spread of similarity amid diversity. While several approaches contribute to understanding policy diffusion, the analysis suggests that the cognitive-psychological framework offers a particularly persuasive account of the spread of pension reform.

This article reviews three recent books critical of America's new “imperial” foreign policy, examines whether the United States can properly be compared to empires of the past, and identifies three aspects of contemporary American policy that may well be called imperialist. It also addresses some of the main objections to recent U.S. foreign policy made by American realist scholars and argues that traditional interstate realism can no longer readily apply to the problem ofAmerican unipolar preponderance over an anarchical, nuclear-armed world.

Using data from approximately ninety countries, the author shows that the more a state taxes the rich as a percentage of GDP, the more it protects property rights; and the more it taxes the poor, the more it provides basic public services. There is no evidence that states gouge the rich to benefit the poor or vice versa, contrary to state-capture theories. Nor is there any evidence that taxes and spending are unrelated, contrary to state-autonomy models. Instead, states operate much like fiscal contracts, with groups getting what they pay for.

China began to establish markets a quarter century ago, but only in the last decade has its government made a concerted effort to design new institutions to govern them. Hence, a “regulatory state” is emerging. The prevailing literature focuses on a seeming convergence of Chinas institutions with the dominant global model of the “independent regulator,” including the establishment of new regulatory commissions. Yet research on China's strategic industries—those in the infrastructure and financial services sectors—suggests that assumptions of convergence obscure key elements of a regulatory design characterized by continued state ownership (as opposed to privatization), maximization of the value of these assets, and active government structuring of these industries. Moreover, regulators in the existing party-state bureaucracy have relatively weak authority. This research cautions us to rethink dominant models of Chinese political economy so that we retain a place for the central state in directing market reform at the “commanding heights” of the economy.

This article develops a theory of single-party regime consolidation to explain the dramatic variation in longevity among these regimes. The strength of the opposition and rent scarcity during party consolidation, it argues, structure the choices available to elites as they decide how to build a support base. A weak opposition and ready access to rents makes a low-cost consolidation possible, but these conditions provide little incentive to build a robust coalition or strong party organization; this trajectory generates weak single-party rule that is likely to collapse in a crisis. Conversely, elites who face a powerful opposition and scarce rents have no choice but to offer potential allies access to policy-making and have powerful incentives to build a strong and broad-based party organization. Ruling parties that emerge from initial conditions like these prove more resilient during later crises. The author conducts an initial test of the argument against paired comparisons of Guinea-Bissau and Tanzania and of Indonesia and the Philippines.