AJPS Author Summary: Legislative Capacity and Credit Risk

Author Summary by David Fortunato and Ian R. Turner

AJPS Author Summary - Legislative Capacity and Credit Risk

American state legislatures vary widely in the degree to which they provide legislators with the tools to efficiently translate policy preferences into policy outcomes. The world is complex and legislating is difficult; having more staff that can share the burden of research and bill-writing, more time to craft and scrutinize legislation, and alleviating the need for additional income (apart from one’s legislative salary) allows state legislators to better understand the world and draft policies to more closely reflect their voters’ will. We call the provision of these goods “legislative capacity” and previous research has found that in states where capacity is higher, legislators are more active and voters are substantially more likely to get the policies they want (e.g., Lax and Phillips 2012).[1]

But voters can be fickle, preferring one type of policy today and another tomorrow. Similarly, policy environments are affected by economic shocks and persistent drift. This means that, in states with high capacity legislatures, we should expect more policy change, on average, than in states with low capacity legislatures. This change can make it difficult for lending markets (the individual or institutional investors who buy and sell debt) to predict what a state’s political economic environment — its regulatory regimes, tax codes, etc. that determine its willingness and ability to service its debt — will look like 5, 10, or 20 years in the future. That is, states with high capacity legislatures are better equipped to alter policy in response to changing voter preferences, environmental considerations, or economic shocks, which can introduce variability into the political-economic environment of the state. As a result, we predict that high capacity states will be evaluated as riskier and will have to pay higher premiums to borrow.

We evaluate this claim empirically by comparing states’ credit risk evaluations (estimated from the general obligation bond ratings) to their legislative capacity (legislator salary, legislative session length, and the legislators’ informational resources). In the article we estimate more advanced statistical models, providing robust support for our hypothesized association, but here we simply show the correlation between the two values in all American states over a period of 16 years. In each year the relationship is positive and the modeling we perform in the article reveals that we are confident in this relationship.

Figure 1 - Credit Risk and Legislative Capacity in the American States

Figure 1

 

What these data suggest is that lending markets negatively evaluate states with the legislative resources to more effectively represent their constituents by lowering their credit ratings. That is, we provide evidence that there is a real cost of democratic responsiveness that has thus far remained relatively unexplored. To put this in perspective substantively: On average, the increase in debt maintenance costs necessary to improve capacity from among the lowest ranking states (e.g., New Hampshire, New Mexico, Alabama) to states in middle of the pack (e.g., South Carolina, Connecticut, Arizona) is about $1 per capita, per year in additional debt maintenance costs — a cost that compounds over time as debts inevitably grow.

Of course, we do not argue that our study implies that states would be better off with low capacity policymaking institutions. There are myriad benefits associated with high capacity legislatures, not the least of which is increased policy responsiveness. However, we do suggest that treating democratic responsiveness as an unconditional public good misses important, and potentially very costly, perverse effects that may simultaneously manifest as responsiveness increases. In short, to understand the trade-offs associated with institutional development, such as legislative capacity, for democratic representation and accountability we need to continue to explore both the upsides and the (perhaps unintended) downsides.

About the Authors: David Fortunato is an Assistant Professor in the Department of Political Science at Texas A&M University. Ian R. Turner is an Assistant Professor in the Department of Political Science at Yale University. Their research “Legislative Capacity and Credit Risk” appears in the July 2018 issue (Volume 62, issue 3) of the American Journal of Political Science.

[1] Lax, Jeffrey R., and Justin H. Phillips. 2012. “The Democratic Deficit in the States.” American Journal of Political Science 56(1): 148—166.

AJPS Author Summary: Narcissism and Political Orientations

Author Summary by Peter K. Hatemi and Zoltán Fazekas

AJPS Author Summary: Narcissism and Political OrientationsPolitics and narcissism go hand-in-hand. The relentless trading of insults and scaremongering tactics that spew forth from politicians and political parties declaring that “your” needs are more important than others but are not being met because some group other than the one you “belong to” is to blame; and the sheer joy people experience from watching their favorite pundits degrade their opponents combined with hyper-polarized social media echo-chambers, puts narcissism on display and activates it in the public like no other vehicle can.  We now live in the post-truth age, the “Me Millennium” that promotes the self over society and the superiority of one’s ideas versus a plurality of voices, lacking in honesty and civility.

It is well known that politicians are among the most narcissistic members of society; Hillary Clinton’s Grandiose Narcissism and Donald Trump’s Vulnerable Narcissism are only two of the most high-profile and well-documented examples on an endless list. Surprisingly, however, we know almost nothing about how narcissism manifests in the political values of the general public.

We sought to shed some light on this relationship by conducting a nationally representative study of US citizens days before the 2016 US Presidential election. Despite rhetoric from politicians and the media, we found that those on the left and right are equally narcissistic. Nevertheless, those on the left and right differed in how their narcissism was expressed. This was not a case, however, of the more positive elements of narcissism, such as leadership and self-sufficiency, being assigned to one political viewpoint and the more negative traits such as superiority and exploitativeness being assigned to the other. Rather, between those on the left and right, we only found differences within the negative components of narcissism.

A higher sense of Entitlement is associated with more conservative views, and this association is strongest for immigration attitudes. It was not that Entitlement leads to being more Republican, however, but rather it appears to lead people away from supporting the Democratic party. On the other hand, Exhibitionism, also a maladaptive facet, is related to more liberal positions, and this relationship was strongest for being a Democrat.

These findings reflect many details about the 2016 election. Those who felt more entitled to certain benefits, in particular, those who were more concerned about illegal immigration, moved away from the left, while those whose voices appear the loudest about their entitlements and wanted others to recognize their values were more likely to self-identify as a liberal and Democrat. The mood of the voting public, certainly among the working class, was frustration at the lack of representation and benefits they believed they were due. This resulted in voting Republican in greater numbers. At the same time, mainstream media all but assured the public Hillary Clinton would be the next President. This over-represented voice of the left was partly responsible for polling discrepancies, where reports for Democratic support were exaggerated, while support for then-candidate Trump was under-reported. Overall, our results hint toward narcissism either reflecting or having a role in the rise of populism. Populism’s anti-establishment views focus on individualism, group superiority, and entitlement, rooted in identity-based politics that pit group needs over one another and say “look at me”, reflect the very dimensions of social narcissism.

About the Authors: Pete Hatemi is Distinguished Professor of Political Science at Penn State University, and Zoltán Fazekas is a Post-doctoral Researcher at the University of Oslo University. Their research “Narcissism and Political Orientations” is now available in Early View and will appear in a forthcoming issue of the American Journal of Political Science.

Targeting Ordinary Voters or Political Elites? Why Pork is Distributed Along Partisan Lines in India

Author Summary by Anjali Thomas Bohlken

AJPS - Targeting Ordinary Voters or Political ElitesIn many societies, governments are responsible for delivering a range of important goods and services to citizens such as water, sanitation, roads, and electrification. Yet, although these goods and services could potentially play a significant role in enhancing citizens’ well-being, they are often not allocated to the people and places that would benefit the most from them. Why is this the case? The dominant explanation offered by previous research is that government actors often seek to allocate public resources in such a way as to cater to those citizens who support their political party. But do the preferences of ordinary citizens – or at least certain groups of them – always remain central in shaping government actors’ allocation decisions? My forthcoming article entitled “Targeting Ordinary Voters or Political Elites?” in the American Journal of Political Science suggests that the answer is no. Specifically, I argue in the article that government actors often allocate public works projects not only with the goal of catering to ordinary citizens but also with the goal of winning over the co-operation of political elites occupying positions at lower levels of government.

To provide evidence for this argument, I utilize data on over 70,000 public works projects proposed by Members of Parliament (MPs) in India representing seven states in North India. Using these data, I show that these MPs allocated systematically higher project expenditures in the years just after a state election to areas controlled by state legislators belonging to their party than to otherwise similar areas controlled by opposition party state legislators. I provide further evidence to suggest that these state legislators used these allocations not to cater to ordinary voters at large, but to grant favors to individuals who provided them with electoral assistance or to derive opportunities for private kickbacks.

Why might MPs seek to benefit their partisan colleagues in the state legislature in this way? The reason – I argue – is that these colleagues often have control over the government machinery responsible for implementing public works projects and, if they choose, could help ensure that these projects are successfully implemented. In turn, the successful implementation of these projects could be important for the MP’s own re-election prospects. Thus, MPs may allocate these rewards as part of a quid pro quo exchange in order to win over the co-operation of their partisan colleagues. Consistent with this idea, I find that MPs belonging to the state ruling party who were facing imminent re-election witnessed a greater rate of success in the implementation of public works projects that were located in the areas controlled by co-partisan state legislators.

The findings advance our collective understanding of why, when and how national politicians may have an incentive to cater to political elites rather than citizens when allocating public works projects. In doing so, they shed new light on how citizens in multi-level systems may be disadvantaged by public programs that allow for political discretion in their implementation.

About the Author: Anjali Thomas Bohlken is Assistant Professor in the Sam Nunn School of International Affairs at Georgia Institute of Technology. Her research “Targeting Ordinary Voters or Political Elites? Why Pork Is Distributed Along Partisan Lines in India” is now available in Early View and will appear in a forthcoming issue of the American Journal of Political Science.

When Toleration Becomes a Vice: Naming Aristotle’s Third Unnamed Virtue

AJPS Author Summary - When Toleration Becomes a ViceAuthor Summary by Richard Avramenko and Michael Promisel

It is a curious pastime of modern man to profess—and even enjoy—that he faces challenges unparalleled in human history. This certainly may be the case. But when it comes to politics and our everyday relations with others, it often is not.

This presumption is apparent in our conceptions of toleration, the virtue pertaining to relations between individuals in disagreement. Many hold that toleration emerged in the early modern period when pacifists proposed the virtue as a remedy to political violence begotten by religious schism and discord. According to this tradition, toleration means finding positive reasons for putting up with—tolerating—conduct and beliefs we find objectionable.

In recent scholarship, however, toleration means something quite different. The virtue has been transformed to confront the supposedly unprecedented challenges of our time. Toleration now demands more than restraining interference or condemnation; the tolerant citizen, it is argued, should avoid causing the pain associated with uncomfortable conversations, personal criticism or even difference of opinion. The discomfort of ethical disagreement and contestation is now construed as cruelty, and cruelty is, of course, the antithesis of toleration. Should one want to defend some social practice, one need only point an accusing finger and level a charge of intolerance at opposition.

This transformation of a central liberal virtue leads to an unsettling conclusion: toleration has become a vice. Sensing this transformation, many desire a return to toleration’s early modern roots. While important, appeals to early modern conceptions do not mitigate the rise of excessive toleration—an extreme iteration of the original principles. After all, the problematic binary of tolerance and intolerance emerged from this period.

A better answer, we argue, can be found much earlier than the modern era. In fact, if we regard toleration as a virtue responding to a perennial human need—reconciling disagreements—many resources present themselves that were previously unthinkable. One such resource is Aristotle’s Nicomachean Ethics. In fact, hiding under the guise of a “nameless virtue” in Book IV, Chapter 6, is a disposition that looks a lot like toleration, a term unavailable to Aristotle.

When we examine Aristotle’s account, we discover several insights that illuminate the problems with toleration today. Most importantly, Aristotle regards all moral virtues, including toleration, as the balance between two extremes. Toleration is the mean between the deficiency of intolerance and the excess of obsequiousness. This explains how recent iterations can be understood as a vice—they take the virtue too far. Moreover, Aristotle’s treatment of pleasure and pain in social relations offers a nuanced framework for pursuing toleration at a time when emotional pain is often conflated with cruelty. Instead, he demonstrates that pleasure and pain in social relations are secondary to human flourishing and, therefore, that not all pain is cruel.

While his account offers much more to nuance our understanding of toleration, perhaps most striking of all is how helpful such a classical resource can be to diagnose our current predicament and reveal the parallels between political and ethical dilemmas across time.

About the authors: Richard Avramenko is an Associate Professor and Michael Promisel is a Ph.D. Candidate in the Department of Political Science at the University of Wisconsin–Madison. Their research, “When Toleration Becomes a Vice: Naming Aristotle’s Third Unnamed Virtue” is now available in Early View and will appear in a forthcoming issue of the American Journal of Political Science.

 

Coalitional Instability and the Three‐Fifths Compromise

Author Summary by Gordon Ballingrud and Keith L. Dougherty

AJPS Author Summary - Coalitional Instability and the Three‐Fifths CompromiseWere the Constitution’s two methods of legislative apportionment inevitable? This paper determines the coalitional stability of apportionment rules proposed at the Constitutional Convention assuming the Convention limited itself to the rules proposed. An apportionment rule is a criterion for dividing legislative seats, such as the relative populations of each state or the relative values of property within them. Such rules are coalitionally stable if there does not exist another apportionment rule that a majority of voters (in this case, states) prefers to it.

Using each state’s vote share as a measure of state preference, we find that the stability of the apportionment rules proposed at the Constitutional Convention depended upon which states were present. Equal apportionment was in equilibrium (stable) with thirteen states present, as in the Continental Congress, but when Rhode Island and New Hampshire were absent during the first third of the Convention, all of the apportionment rules proposed at the Convention were in a top cycle. That means that if delegates voted to increase their state’s vote share in a pairwise vote, the Convention could move from any one of the proposed rules of apportionment to any other through a series of majority-rule votes.

The Three-Fifths Clause was proposed by James Wilson during this chaotic period, perhaps as an attempt to ground the national legislature on popular rule. With New York departing near the middle of the Convention, equal apportionment and the Three-Fifths Clause became stable -— each of these could not be beaten by any of the other eight rules proposed at the Convention.

This helps us to explain why the Great Compromise was finally reached. We conclude that the Great Compromise was partly the result of historical contingency (i.e., which states participated in in voting and which apportionments were proposed), rather than necessity (as claimed by some historians and legal scholars).

About the Authors: Gordon Ballingrud is Ph.D. Candidate and Keith L. Dougherty is a Professor both in the Department of Political Science at the University of Georgia, Athens. Their research, ”Coalitional Instability and the Three‐Fifths Compromise“ is now available in Early View and will appear in a forthcoming issue of the American Journal of Political Science.

Does Compliance Pay? Social Standards and Firm-level Trade (an Author Summary)

Author Summary by Greg Distelhorst and Richard M. LockeAJPS Author Summary - Does Compliance Pay?

In an age of growing international trade and investment, one of the great public concerns is that globalization encourages a “race to the bottom.” Fatal accidents in overseas factories, modern slavery in global supply chains, and the long hours and low pay of workers in the developing world all raise the question: is globalization to blame?

The race to the bottom suggests that exporters compete, in part, by lowering labor or environmental standards to secure business. In this logic, exporters in developing countries face an unenviable choice. Either break the rules or lose your customers.

We noticed that previous research examined this issue at the macro-level, analyzing trade flows between national economies. Because the race-to-the-bottom logic involves decisions by trading firms, we designed a study to test its implication at the micro-level. We examined compliance and trade in individual firms by studying a global sourcing company that allocates orders from hundreds of importers to thousands of export factories around the world.

Surprisingly, we found the opposite pattern. Compliant exporters received more orders from importers. When firms moved from noncompliance into compliance, their average orders increased by 4 percentage points on average (approximately $110,000 USD per year). This was not the pattern expected if exporters compete with one another by lowering their labor standards. It’s worth noting that we observe this in authoritarian countries like China or Vietnam that simultaneously play an important role in global trade and have only limited labor rights and democratic freedoms.

We detect this compliance premium among importers in the apparel industry, where anti-sweatshop campaigns have pressured brands for years to clean up their global supply chains. Our findings suggest that these social movements have to some extent succeeded in shaping the trading patterns of western firms, who apparently prefer doing business with factories that observe minimum social standards.

On the other hand, we also find that these pressures for upward harmonization of standards—a phenomenon known as “California effects”—were far from sufficient to achieve global compliance with minimum standards. Most exporters in our remained noncompliant with basic standards throughout the period of our research. Future research might attempt to replicate these findings in new samples of trading firms and explore whether compliance premiums actually improve the financial performance of exporters that comply with basic labor and environmental standards.

About the Authors: Greg Distelhorst is Assistant Professor of Global Economics and Management at the MIT Sloan School of Management and Richard M. Locke is Provost and Professor of Political Science and Public and International Affairs at Brown University. Their research “Does Compliance Pay? Social Standards and Firm‐Level Trade” is now available in Early View and will appear in a forthcoming issue of the American Journal of Political Science.

 

Born Weak, Growing Strong: Anti‐Government Protests as a Signal of Rebel Strength in the Context of Civil Wars

Author Summary by Bahar Leventoğlu and Nils W. Metternich

 

Born Weak, Growing Strong: Anti‐Government Protests as a Signal of Rebel Strength in the Context of Civil WarsProtests during civil wars have received little attention in political science literature. This is surprising since protests are common in the context of civil wars and seem to be associated with the emergence of peace agreements. In our recent article we explore how strong rebel organizations can trigger larger anti-government movements by exposing weakness of the government, which in turn allows them to attain favorable civil conflict outcomes. We propose that urban middle-class individuals, who are less likely to express their discontent through joining rebel organizations, demonstrate their anti-government sentiments through protest and strikes. Based on cascade models (Granovetter, 1978; Kuran, 1989; Lohmann, 1993; Yin, 1998), we provide a theoretical argument demonstrating that governments faced with protest in the context of civil wars are more likely to enter peace agreements and negotiations.

Our article relates to a prominent debate in the social movement literature (Goodwin and Skocpol, 1989), namely the link between rebel organizations that operate on the periphery of the state and the middle-class that tends to organize in urban areas. In fact, Skocpol (1979: p.113) argues that: “Without peasant revolts, urban radicalism in predominantly agrarian countries has not in the end been able to accomplish social-revolutionary transformations.” This literature also suggests that supporters in urban areas can be involved in fighting (Gugler, 1982), but don’t necessarily engage in most costly forms of anti-government behavior (Almeida, 2003). Instead, they engage in protest and demonstrations to express their dissatisfaction with the state.  Our theoretical argument is inspired by this literature and highlights how wars expose the weakness of the state and create opportunities that can be exploited by social movements (Skocpol, 1979; Tarrow, 2011).

Current civil conflict research is realizing that battle related fighting is not the only factor that determines conflict outcomes. In particular, the recent literature on non-violent campaigns (e.g. Chenoweth and Stephan, 2011; Chenoweth and Cunningham, 2013) and earlier work on collective sentiments (e.g. Kuran, 1989) demonstrates that conflict dynamics are not simply a function of military strength. We contribute to this literature by arguing that political behavior short of fighting (e.g. demonstrations or strikes) can be the consequence of successful rebel organizations, which signal government weakness and enable larger spread anti-government behavior.

About the Authors: Bahar Leventoglu is Associate Professor of Political Science and Economics at Duke University. Nils W. Metternich is Reader in International Relations at the School of Public Policy at the University College London. Their research, “Born Weak, Growing Strong: Anti‐Government Protests as a Signal of Rebel Strength in the Context of Civil Wars” is now available in Early View and will appear in a forthcoming issue of the American Journal of Political Science.

 

References

Almeida, Paul D. 2003. “Opportunity Organizations and Threat-Induced Contention: Protest Waves in Authoritarian Settings.” American Journal of Sociology 109(2):345–400.

Chenoweth, Erica and Kathleen Gallagher Cunningham. 2013. “Understanding nonviolent resistance: An introduction.” Journal of Peace Research 50(3):271–276.

Chenoweth, Erica and Maria J Stephan. 2011. Why civil resistance works: The strategic logic of nonviolent conflict. New York: Columbia University Press.

Diaz, John. 2010. “Liberia: Women key to uneasy peace forged in 2003.” San Francisco Chronicle (12/12/2010) .

Goodwin, Jeff and Theda Skocpol. 1989. “Explaining Revolutions in the Contemporary Third World.” Politics & Society 17(4):489–509.

Granovetter, Mark. 1978. “Threshold models of collective behavior.” American Journal of Sociology 83(6):1420– 1443.

Gugler, Josef. 1982. “The urban character of contemporary revolutions.” Studies in Comparative International Development 17(2):60–73.

Hayward, Susan. 2015. Women, Religion, and Peacebuilding. In The Oxford Handbook of Religion, Conflict, and Peacebuilding, ed. Atalia Omer, R. Scott Appleby and David Little. Oxford: Oxford University Press pp. 307–332. Kuran, Timur. 1989. “Sparks and prairie fires: A theory of unanticipated political revolution.” Public Choice 61(1):41–74.

Lohmann, Susanne. 1993. “A Signaling Model of Informative and Manipulative Political Action.” American Political Science Review 87(2):319–333.

Pedersen, Jennifer. 2016. In the rain and in the sun: women?s peace activism in Liberia. In Handbook on Gender and War, ed. Simona Sharoni, Julia Welland, Linda Steiner and Jennifer Pedersen. Cheltenham: Edward Elgar Publishing pp. 400–418.

Sengupta, Somini. 2003. “In the Mud, Liberia’s Gentlest Rebels Pray for Peace.” New York Times (07/01/2003). Skocpol, Theda. 1979. States and social revolutions: A comparative analysis of France, Russia and China. New York: Cambridge University Press.

Tarrow, Sidney G. 2011. Power in Movement: Social Movements and Contentious Politics. New York: Cambridge University Press.

Yin, Chien-Chung. 1998. “Equilibria of collective action in different distributions of protest thresholds.” Public Choice 97(4):535–567.

AJPS Author Summary: The Two Income-Participation Gaps

Author Summary by Christopher Ojeda

AJPS Author Summary - The Two Income‐Participation Gaps

It is well-established in the United States that the rich participate in politics more than the poor. Given that income shapes how much Americans pay into and get out of the system, whose voices are heard by policymakers is of real consequence. But what does it mean to be rich or poor? Political scientists typically define these terms using household income in the year prior to the behavior being studied. For example, scholars might assess the income-participation gap by correlating income in 2015 with turnout in the 2016 presidential election.

This approach, however, overlooks Americans’ economic backgrounds. Yet given what we know about the long-term ramifications of childhood poverty, it seems likely that whether someone grew up in a rich or poor family affects whether they engage in politics. Many of the explanations offered for the income-participation gap—disparities in political interest, education, social networks, and mobilization by political parties—are rooted in adolescence and young adulthood, suggesting that economic background may be quite important.

To test whether economic background affects participation, I analyzed six survey-based studies that included measures of each respondent’s current income, economic background, and voter turnout. Some studies measured economic background by asking respondents to recall their family’s income from when they were an adolescent. Other studies interviewed respondents and their parents every year or two from childhood to adulthood and asked about current income each time; this approach provided me with more precise and reliable accounts of economic background.

Irrespective of measure, I consistently found that respondents who grew up in rich homes voted more often than those who grew up in poor homes. This difference remained even after accounting for factors like current income, gender, race, age, parental education, church attendance, and marital status. The results also indicated that economic background matters because it shapes important predictors of participation, such as interest in politics, partisan strength, education, health, and current income.

Altogether, the results reveal that there are two income-participation gaps: one that arises from inequalities in current income and another that arises from inequalities in economic background. That the income-participation gap originates in childhood—well before individuals have a political voice—should magnify our concerns about this problem. Even for those who achieve the American Dream and leave behind their class, the negative effects of growing up poor linger.

About the Author: Christopher Ojeda is Assistant Professor in the Department of Political Science at the University of Tennessee. “The Two Income‐Participation Gaps” is now available in Early View and will appear in a forthcoming issue of the American Journal of Political Science.

Chains of Love? Global Production and the Firm‐Level Diffusion of Labor Standards

Author Summary by Eddy Malesky and Layna Mosley

AJPS - Author Summary - Chains of Love

Can participation in global supply chains lead to improvements in worker rights in low and middle income countries? Past studies have found evidence, at the country-level (and occasionally industry-level), for the globalization-based diffusion of labor and environmental standards. Actors in developing countries appear to improve their standards in response to actual or perceived demands of export market investors, firms and consumers.

The country-level focus, however, obscures the actual decision-making progress of business managers. As a result, we explore the possibility at the firm level. Participation in global production allows firms to expand their sales and revenue, and to access new production and management technologies. We predict that developing country firms will be willing to expend significant resources on labor-related upgrading if doing so offers access to global supply chains. We expect that firms will be particularly willing to invest in upgrading when exporting to mature markets: managers assume that labor-related concerns are greater among firms and consumers in developed countries. This promises higher payoffs for labor-related upgrading.

We survey foreign-owned firms in exportable sectors in Vietnam about their willingness to make labor-related improvements. These firms are typically small, employing 125 workers on average, and most are owned by firms elsewhere in Asia (Japan, South Korea, Taiwan and China are the most common). These firms, which participated in the broader Provincial Competitiveness Index survey, were asked to imagine a scenario in which they were contacted by an international consulting company, which wants to shortlist their firm (along with two others in the region) as potential suppliers to a European/Indian company that sells primarily to the European/Indian market.

The vignette also stated that, to be eligible for the shortlist, the firm would need to adopt a Labor Code of Conduct for Suppliers, covering items such as worker representation, health and safety and over time. We then asked the firms’ managers how much, as a percentage of their current operating costs, they’d be willing to spend to make such improvements. Our “contingent valuation” question also had an experimental component: some firms were asked the question with the multinational and consumer market described as “European.” Other firms were asked the same question, but the multinational partner and market was “Indian.” By randomly varying this element, we sought to understand how incentives for labor rights improvement might vary with destination market (and with opportunities for higher product markups).

From the point of view of improving labor conditions, our findings were encouraging: firms were willing to spend 6.5 percent of their operating costs, on average. And firms that received the “Europe” version of the question were willing to spend more (about half a percent, a statistically and substantively significant amount) than those with the “Indian” version. We also find that it is firms selling products with the greatest markup differential – the gap between the price for the same product in India versus in Europe – that were most sensitive to our experimental manipulation.

Activism related to worker rights also plays a role: civil society groups have made worker rights salient in some industries, such as apparel and footwear; firms producing such goods have even greater incentives to focus on labor conditions. For instance, the Europe-India difference was especially pronounced for the firms in our survey that produce apparel, compared with those that produce plastic carrier bags. While both products have similar Europe-India markup differentials, labor rights activists have paid little attention to conditions in the plastics sector. And European demand for their product has fallen, as governments outlaw or tax plastic bags. Indeed, Vietnamese firms in the plastics sector reported being willing to invest more in labor-related improvements when India, rather than Europe, was named as the destination market.

Our analyses also indicate that we have much more to learn about how global supply chain involvement might be consistent with improvements to labor rights. Such a process likely requires sustained attention from lead firms, shareholders, consumers, activists, intergovernmental institutions, or some combination of these. Finally, capturing gains from multinational production is not simply an economic process. It is also a political one: if workers do not have the rights to form unions or to bargain collectively, then it may be factory owners and other elites who capture the bulk of the benefits from multinational production.

About the Authors: Edmund J. Malesky is Professor in the Department of Political Science at Duke University. Layna Mosley is Professor in the Department of Political Science at the University of North Carolina at Chapel Hill. Their research, “Chains of Love? Global Production and the Firm‐Level Diffusion of Labor Standards”, is now available in Early View and will appear in a forthcoming issue of the American Journal of Political Science.

Audience Costs and the Dynamics of War and Peace

Author Summary by Casey Crisman‐Cox and Michael Gibilisco

AJPS Author Summary - Audience Costs and the Dynamics of War and PeaceAudience costs—or the costs leaders pay from backing down before their opponents in interstate disputes—have a prominent place in international relations. Researchers use them to explain crisis bargaining, war duration, economic sanctions, and the democratic peace. After 20 years of research, conventional wisdom suggests we cannot measure audience costs: if they were indeed large enough to be observed, then leaders would rationally anticipate their application and never back down in a dispute. This strategic foresight has led some researchers to label audience costs “dark matter” of political science (Schultz 2012).

How can we measure audience costs? Previous work proxies audience costs with democracy measures or other regime type information based on a priori expectations (e.g., Partell and Palmer 1999). In our paper, we directly consider the strategic anticipation of leaders by modeling audience costs as a country-specific parameter in an infinitely repeated dynamic game of crisis escalation. Given fixed audience costs, the model predicts a specific distribution of conflict outcomes, e.g., initiation, backing down, standing firm, and escalation, between countries over time. We select the audience costs, along with other parameters, that best fit these predictions to observed data on interstate disputes, producing estimates for 125 countries. This approach allows us to then test the long-held conjecture that democracies have higher audience costs and analyze the substantive effects of audience cost on equilibrium behavior.

Contrary to previous intuition, our results demonstrate that increasing a country’s audience costs encourages it to initiate disputes. After disputes erupt, audience costs serve as a commitment device: they tie the hands of their respective countries, thereby encouraging them to stand firm and coercing their opponents to back down in disputes. Thus, countries with enhanced audience costs more freely initiate disputes to capitalize on these advantages, a result that does not emerge in reduced-form regressions (Clark and Nordstrom 2005; Prins 2003; Weeks 2012).

We find that previous proxies overlook important international and domestic factors that determine audience costs, although democracy measures positively correlate with our estimates. Interstate rivals attenuate audience costs within democracies. Democracies with rivals have, on average, audience costs that are roughly similar to autocratic regimes with legal provisions for executive removal (e.g., China), suggesting that voters may provide leaders leeway when escalating disputes with rivals. A free press can strongly increase audience costs, a finding that matches those from formal models (Slantchev 2006).

Finally, our paper helps scholars and policy practitioners appreciate the global effects of audience costs on peace. On the one hand, larger audience costs incentivize countries to stand firm and initiate disputes. On the other hand, increasing a country’s audience costs may deter others from initiating disputes against it, as they avoid entering a crisis against countries with that are committed to standing firm. We find that the second effect dominates in the data. That is, increasing audience costs in every country should increase peace worldwide.

About the Authors: Casey Crisman‐Cox is an Assistant Professor in the Department of Political Science at Texas A&M University and Michael Gibilisco is an Assistant Professor of Political Science at California Institute of Technology. Their research, “Audience Costs and the Dynamics of War and Peace”, is now available in Early View and will appear in a forthcoming issue of the American Journal of Political Science.



The American Journal of Political Science (AJPS) is the flagship journal of the Midwest Political Science Association and is published by Wiley.