Dental Hygiene and Nuclear War: How International Relations look from Economics

Barry Eichengreen’s article was published in International Organization, Vol. 52, No. 4 (Autumn, 1998).

The article has nothing to do with dental hygiene or nuclear war. The title derives from the introduction where he makes a short reference to how economists apply their theoretical tools to everything, from dental hygiene to nuclear war. The article is an understanding of international relations as an academic discipline from the view point of economics.

Eichengreen makes a review of the most important schools of international relations: Interest group model, Institutional approach, Endogenous preferences, Waltz’ system of level analysis. The constant structure in his review of each model is that at the beginning he argues that the assumptions made are fairly close to those used in many economic models; but later he says that the inclusion of politics, ideology or international organizations make the hypothesis formulated by these theories hard to test. For example he compares the Interest Group model that assumes countries to be “black boxes” with the assumption made in microeconomics of firms following profit maximization. However in a second part of his arguments he says that, although it is easy to understand the interest of a firm, it is much harder to define the interest of a country when you include its politics, culture and history. Most importantly, an approach that includes any interest beyond the increase in wealth, though it creates interesting theories, it is hard to test empirically.

The paper finishes with a call for political scientist specialized in international relations to apply more statistical elements in their analysis. Or in other words, to move away from the case study methodology.

Interest Group Models

Models provide predictions about the interests of individuals which are dependent on underlying structures. We are attentive to the interests of individuals because different interest groups favor different public policies. One example of an interest group model is the Heckscher-Ohlin-Samuelson model. Interest Group Models are useful in IPE with respect to issues of trade and currency policies, as such models lay the groundwork for empirical study. Limitations of interest group models are their inability to capture the finest details, applicability to noneconomic issues, and its weakness in capturing the element of time (in the case that the model is static)

Institutional Approaches

Institutional approaches emphasize the role of institutions: political, social and economic. Institutions can be viewed as "mechanisms of collective choice" in the sense that they highlight particular group interests and policy preferences while muting those of others. Because it is costly for constituents to monitor the acts of each elected official, institutions are imperfect mechanisms for monitoring and sanctioning political agents. Additionally, Eichengreen notes that because institutions are a source of network externalities, modifying their structure requires the coordination of the preferences of a large number of individuals. Furthermore, institutions may be purposely structured to resist change making it difficult to change rules and even harder to have efficiency enhancing effects. However, according to the functionalist perspective, the evolution of political institutions is a consequence of the ability of institutions to play an efficiency-enhancing role. Inefficient institutions that fail to do so face inevitable replacement by better systems. Because there exist conflicting interpretations of the role of institutions by scholars, there is also divergence regarding their characterization

Endogenous Preferences

Endogenous preferences are characterized as the preferences of agents (apparent self-interest) that propel political and strategic advancement. However, even when self-interest is known, there may not be a mechanism for achieving said interest. According to Eichengreen, ideas, ideology and elite consensus must be received and bolstered by a "socially constructed conveyance mechanism"_ an institution. Eichengreen highlights that the use of endogenous preferences is controversial as they are hard to quantify and derive empirical results from

Implications of the International Dimension

The challenge of analysis involving an international dimension is quantitative. That is, it is often difficult to decipher transnational as opposed to nation-bound, interests, and institutions. Because empirical verification is difficult, analytical consensus among scholars is rare

Level-of-Analysis Problem

According to Kenneth Waltz, international relations can be explained by level one, the actions of individuals, level two, the actions of states, or level three, systemic factors. One weakness of the approach is that it poses the study of international relations vis a vis systemic factors as an alternative to studying the actions of states and individuals (the other two levels). Eichengreen expresses his viewpoint with the analogy that economists can rarely understand behavior and consequences of the macro economy without studying the behavior of individuals and firms (micro economy). Similarly, analysis in international relations is not complete without the full picture; simultaneously studying all three levels of analysis

References

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