“Sell your islands, you bankrupt Greeks!” – Exploring Public Opinion Towards International Financial Bailouts

Priding itself on openly saying what “the man on the street” thinks, the German tabloid Bild suggested a seemingly simple strategy to deal with Greece’s debt problems: rather than relying on other countries’ financial assistance, Greece should instead sell some of its islands and, if necessary, the Acropolis as well. Perhaps unsurprisingly, European finance ministers ignored this recommendation and instead set up an EU bailout fund of €800 billion. Although the IMF, the European Commission, and others demanded an increase of the fund upward of €1 trillion, German finance minister Wolfgang Schäuble opposed further expansion, deeming it unacceptable to the German public. Indeed, several snap polls reported that about two thirds of the German citizens oppose such bailouts for over-indebted Euro countries.

Although public opinion is widely regarded as a major constraint on governments’ actions in the ongoing debate over the bailouts, scholars know very little about the factors that underlie voters’ attitudes towards such international transfers. In particular, it is unclear whether voters’ opinions reflect their assessments of how the bailouts would affect their own well-being, that of their country, or perhaps that of their fellow Europeans. In a new paper, Jens Hainmueller, Yotam Margalit, and I begin addressing this question. We conducted two large-scale surveys in Germany, the country shouldering the largest share of the EU’s financial rescue fund. Our results show that while the economic features of the bailout package itself strongly affect voters’ willingness to support the bailouts, individuals’ own economic standing has limited explanatory power in accounting for their position on the issue. In contrast, social dispositions such as altruism and cosmopolitanism are robustly associated with support for the bailouts. This suggests that the current divide in public opinion towards the bailouts is generally not along distributive lines between domestic winners and losers. Instead, the divide is better understood as a foreign policy issue that pits economic nationalist sentiments versus greater cosmopolitan affinity and other-regarding preferences.

Gaddafi’s Demise Is Not The Only Reason for The Military Coup in Mali

A guest post by Jonathan van Eerd, a PhD candidate at the University of Zurich. He recently completed field work in Mali’s capital city, Bamako, and is currently a visiting scholar at Cornell University.


Mali was considered to be one of the few functioning democracies in West Africa. It never experienced a military coup since the introduction of multiparty democracy in 1992. Considering that, last Wednesday’s coup comes as a surprise.

The group under the lead of so far unknown Capt. Amadou Sonago claims that they have overthrown the democratically elected government of Amadou Toumani Touré (short: ATT) because of its “incompetence” in handling the Tuareg Rebellion in Mali’s North.

The Malian army was indeed poorly prepared for its newest task of defending the nation’s unity. The soldiers are badly trained, have outdated weaponry and not enough supply. There were failures in informing soldier’s families about fatalities in combat.

Mali is one of West Africa’s few fairly working democracies. Why was there no national or international political force that pleaded for the strengthening of the Malian forces in the combat against the rebellion?

Being one of the least developed countries in the world, the internationally supported downfall of the Gaddafi’s regime in Libya caught Mali on the wrong foot. Many of Gaddafi’s former Tuareg-soldiers became jobless and went back to the Sahel region, of which Mali’s North is a part. They have not been disarmed by anyone. And in January of this year they started a new Tuareg-rebellion in Mali’s North. Its goal is the independence of Mali’s northern regions.

Mali has experienced recurring Tuareg-rebellions since the sixties. However, the intensity of this new rebellion was unprecedented. Along with that appeared a new generation of well-armed Tuareg-fighters, which came back from Libya. Together with some factions of older Tuareg-rebellions, they formed the National Movement for the Liberation of Azawad (MNLA).

The Malian government and its army were taken by surprise. They were ill-prepared because the peace treaty they have signed after the last Tuareg-rebellion in 2008 with the old generation of Tuareg-rebells and the generous “development aid” of the Malian government for the Tuareg to keep them at ease gave the government a misleading feeling of security. Additionally, the foreign, most notably French, diplomatic and military aid for Mali was rather weak or even counterproductive: The French engaged in direct talks with the MNLA, because they hoped to gain their help in France’s battle against the terror-organization Al-Qaeda Organization in the Islamic Maghreb
(AQMI), which kidnapped and murdered French and other Western tourists and expats in the region. This boosted the MNLA’s self-confidence and led to diplomatic tension between France and its former colony.

But these are not the only causes of the coup. One important cause lies in the nature of ATT’s governing style and Mali’s political culture itself. ATT, who was without any partisan affiliation, preferred to govern with a consensual-styled all-party cabinet. Since his re-election in 2007 he included every important party – with one exception – in one way or another in his government: Out of 160 parliamentarians, only 4 of a small socialist party were in the opposition before the coup.

In such an ethnically heterogeneous country like Mali the inclusion of every important power-base has many advantages. The fact that Mali experienced relative stability or no ethnic conflicts in contrast to its neighbors Ivory Coast, Niger or other West African countries in the last 20 years proves this point.

However, Mali’s financially and organizationally weak political parties are not only in ATT’s all-party government due to political sanity, but also for their very political survival: In most African democracies and semi-democracies, access to state resources is crucial to win important client’s favor with gifts and other privileges, in order to make sure that they give support in elections. Consequently, no Malian political party was willing to occasionally play the indispensable part of the opposition, meaning that no important party pointed out to the deficiencies and failures of the ATT government in its handling of the newest Tuareg-rebellion. The parties did not want to risk their participation in the government and the consequential loss of access to state resources.

Switzerland is the world’s most famous example of a functioning consensus democracy. However, in contrast to Mali and most other democracies in the world, Switzerland’s democracy features extensive direct-democratic rights for Swiss citizens. This ensures that the citizens itself occasionally play the missing part of the opposition to a consensus government.

As no party wanted to harm its share in the Malian government, they criticized ATT only off the record for his lack of foresight on the fallout of the conflict in Libya, his hesitant diplomatic and military reaction, as well as his almost non-existent information policy regarding the rebellion in the North.

On the contrary, all political parties awaited ATT’s orderly replacement in April’s presidential elections. The unexpressed consensus was to first await the new president and only after that to strive for a solution of the conflict in the North. Until then, the parties concentrated on their preparations for the elections. Yet even while doing that, they did not consider to raise the issue of the Tuareg-rebellion as a topic for their individual election campaigns; again for the sake of the all-party consensus.

As a result, one part of the Malian army decided to take matters, or respectively, the part of the opposition in their own hands. In a drastic and non-democratic manner they pointed out the deficiencies and grievances of their army.

All about Osama

Via Ezra Klein, a list of The New Yorker articles on Osama bin Laden and al-Qaeda. Most are freely accessible (* subscription required).

The Real Bin Laden,” by Mary Anne Weaver, January 24, 2000*
Hunting bin Laden after the embassy bombings in Africa.

Across the Divide,” by William T. Vollmann, May 15, 2000*
The Taliban, Afghanistan, and bin Laden.

The Revolt of Islam,” by Bernard Lewis, November 19, 2001
Islam’s conflict with the West.

The Counter-Terrorist,” by Lawrence Wright, January 14, 2002
F.B.I. agent John O’Neill and the Al Qaeda threat.

The Man Behind Bin Laden,” by Lawrence Wright, September 16, 2002
Bin Laden’s second in command, Ayman al-Zawahiri.

The Twentieth Man,” by Seymour M. Hersh, September 30, 2002*
The case against Zacarias Moussaoui.

Manhunt,” by Seymour M. Hersh, December 23, 2002
Searching for Al Qaeda leader Qaed Salim Sinan al-Harethi.

Connecting the Dots,” by Malcolm Gladwell, March 10, 2003
Intelligence reform and 9/11.

The Search for Osama,” by Jane Mayer, August 4, 2003
Hunting bin Laden.

In the Hiding Zone,” by Eliza Griswold, July 26, 2004
Pakistan’s tribal borderlands.

Young Osama,” by Steve Coll, December 12, 2005
The education of bin Laden.

Osama’s Bank Account,” by Steve Coll, September 11, 2006
Bin Laden’s Swiss finances.

The Master Plan,” by Lawrence Wright, September 11, 2006
Conflicting theories of the jihad.

Junior,” by Jane Mayer, September 11, 2006
Al Qaeda operative Ahmed al-Fadl.

Azzam the American” by Raffi Khatchadourian, January 22, 2007
Adam Gadahn, American Al Qaeda.

The Rebellion Within,” by Lawrence Wright, June 2, 2008
Debating the future of Al Qaeda.

The Mastermind,” by Terry McDermott, September 13, 2010
Khalid Sheikh Mohammed.

The Political Economy of International Organizations

Upcoming  PEIO V: Villanova takes over from Zurich

The series of conferences on the Political Economy of International Organizations (PEIO) continues with PEIO V in Villanova (Philadelphia) on January 26-28, 2012. If you want to submit a paper, note that the call is already out. PEIO starts to be known for its good discussions, for the fruitful exchange between economists and political scientists, and for the broad mix of participants with a relatively even balance of people from both sides of the big pond.

But be aware, places are in high demand. For PEIO IV in Zurich (at the University of Zurich and ETH Zurich) on January 13-15, 2011, we could accept only about 15% of paper submissions for presentations and another 15% for posters. And this despite the fact that many other submissions were very interesting and of high quality, too! Hard decisions to make… But there is a deliberate choice to limit the number of participants to a group that allows exchange and network building, thereby generating a very special atmosphere.

The basic idea of the upcoming PEIO V and its predecessors in Zurich 2011 (Switzerland), Georgetown 2010 (USA), Geneva 2009 (Switzerland) and Ascona 2008 (Switzerland) is the following:

Many economists and political scientists work on the political economy of different international organizations, like the UN, the IMF, the World Bank, the WTO or the EU. And the work of these people largely overlaps. Yet, there are, so far, only few other platforms encouraging the exchange across disciplines. The current deficiencies in communication across disciplines are immediately obvious when looking at citations in economic and political science journals. With our series of conferences, we intend to bridge the communication gap and to establish a more sustainable basis for the international and interdisciplinary exchange on this subject.

Prior experience shows that this exchange can become very lively. And this is true not just for the individual presentations, but also for the poster session that is an important part of PEIO conferences with many first class papers and assigned discussants (in addition to discussions with other interested participants).

An international organizing committee was created in 2008 to ensure the follow-up, shape the orientation of future conferences and referee the papers submitted in response to our call for papers. The 2012 program committee includes:

Thomas Bernauer (ETH Zurich, CIS), Lawrence Broz (University of California, San Diego), Axel Dreher (University of Heidelberg), Simon Hug (University of Geneva), Christopher Kilby (Villanova University), Stephen Knack (World Bank), Helen Milner (Princeton University), Katharina Michaelowa (University of Zurich, CIS), Randall Stone (University of Rochester), Sturm, Jan-Egbert (ETH Zurich, KOF), Michael J. Tierney (College of William and Mary), James Raymond Vreeland (Georgetown University), Eric Werker (Harvard Business School).

The distinguished guest speaker for 2012 will be Jagdish N. Bhagwati, Professor of Economics and Law, Columbia University.

Interested? Then do not miss the deadline for submissions (only full papers!) on September 30. Papers should be mailed to conference@peio.me.

For further details on the upcoming conference in Villanova as well as on past conferences, please see our PEIO website at: www.peio.me

Adventures in international election monitoring

Switzerland regrets the conditions in which the elections in Myanmar were held, but isn’t the Swiss government being hypercritical considering that, after all, the elections were monitored by North Korean diplomats? (h/t James Vreeland)

By the way, here is a recent working paper on why even autocracies invite international monitors, with an interesting argument on how this practice can develop into a well-established norm endogenously, that is, without norm entrepreneurs playing a significant role.

The second WTO

The World Toilet Day of the WTO is in 10 days. Why do we have a World Toilet Day? It is nothing to celebrate. It is a reminder that more effort is needed to provide 2.6 billion people without access to sanitation with a toilet. Whereas a lot of progress has been made in the last decades to supply people around the world with access to safe drinking water, little or no progress has been made to provide them with adequate sanitation. But if we belief the health literature, adequate sanitation is as (if not more) effective to reduce child morbidity and mortality as safe water access (a recent literature review can be found on the website of 3ie). A recent Lancet’s editorial even argued that “adequate sanitation is the most effective public health intervention the international community has at its disposal” (The Lancet Editorial, 2007).

If the health impacts of improved sanitation are as large, why are still so many without it?  There are several economic reasons I can think of, why this might be the case: first, the direct health benefits of improved sanitation – involving invisible bacteria and parasites – are hard to understand and internalize, especially for populations with little or no formal education. Improved water access – in contrast – has in addition to health benefits often direct economic benefits in form of large time savings to collect water. Second, with high initial costs of sanitation facilities and (uncertain) health benefits that might only occur in the far future, individuals with limited access to credit and/or high discounting rates will generally under-invest in precautionary health care measures. Third, with disposal of human feces in public areas as a natural alternative to sanitation facilities, the social benefits of proper sanitation are likely to exceed the private ones: positive externalities of sanitation might lead to underinvestment.

But despite possible sub-optimal market outcomes, public investments remain low. Most donors focus their water and sanitation policies on water supply at the expense of sanitation and investments in adequate sanitation are usually not high on the policy agenda of domestic governments. The cynical observer might argue that sanitation, or the disposal of human waste, is an unpopular subject, which might not be appealing for both international aid agencies and national governments. But I can also think of two other closely linked reasons. First, there is still a lack of clearly defined solution strategies – not from an engineering but from a social science point of view – and second, and directly linked to the first point, the lack of research in social sciences on sanitation is striking. Being an economist, I did a quick economic literature review. Research on sanitation barely exists beyond cost-benefit analysis. Between 1970 and 2009 only ten articles with a focus on sanitation were published in 100 of the top economic journals. And the situation is probably not much different in political science…

How to Study Things that Can Go Around in Circles

Two voters plus three voters makes five voters. If a party that used to hold four ministries loses one, it still controls three ministries. For many phenomena that we analyze in political science this linear world view seems appropriate or at least an acceptable simplification. But for many it does not. If terrorists used to attack at around 11pm, but now these attacks tend to happen two hours later, this means that they occur at 1am. If political candidates compete on a circular issue space, then a candidate moving far enough to the left will eventually end up at the extreme right. We measure such phenomena on circular scales: the 24-hour clock, compass direction, or calendar measurement. They do not have an origin, since the endpoints are connected.

Although examples for political events measured on circular scales abound, we still lack appropriate methodological tools to analyse this type of data. In an article recently published in Political Analysis, Jeff Gill and Dominik Hangartner start filling this gap. One of their applications analyzes the direction of party movements. This relates to a post by Romain Lachat (“Which Way from Left to Right“), where he conceptualized political competition in the Zurich municipal elections as taking place on a circle. The figure below shows the direction in which parties moved from 2002 to 2006. Most parties shifted to what many would call the economic right.


Figure: Directions of party movements in Europe from 2002 to 2006. Source: Gill and Hangartner 2010 (working paper version)

Another application contributes to research on violent conflict. Experts estimate the number of civilian fatalities in Iraq since the beginning of the Second Iraq War to exceed 80’000 deaths. An analysis of the time at which these incidents occurred (table 1), measured on the 24-hour clock, suggests that fatalities due to gunfire or mortar rounds happen on average earlier during the day than incidents due to bomb attacks, which form the reference category.

Table: Results for timing of attacks involving civilian fatalities in Iraq


While the signs of the coefficients indicate the direction of the relationships between the predictors and the time of incident, interpreting their size requires some trigonometric computations which the article describes in detail. The results suggest that gunfire casualties happen on average about one hour earlier than bombings. Moreover, their timing has shifted over the years. Directly after U.S. forces had invaded Iraq in 2003, bomb attacks used to occur Saturdays shortly before 8am on average. Such attacks now happen later during the day. The annual shift equals about one hour on average. I look forward to seeing papers that analyze circular data in political science!

Just Another Talk Shop? International Institutions, European Summits and Financial Markets

Many commentators hold the view that international diplomacy does not affect financial markets in any notable way. Especially since international decisions require consent by all actors, this de facto unanimity requirement allows every government to torpedo any attempt to bring about a collectively binding agreement. What we observe then in the theatre of international diplomacy and negotiations is a sometimes entertaining, yet economically ineffective play. Governments meet in “talk shops” and make lofty proclamations, but produce nothing more than “hot air” that markets do not care about.

In a recently published article, Gerald Schneider (University of Konstanz) and I take issue with the view that the results of deliberations in multilateral fora are “hot air”. Our focus is on decision-making in the European Union’s (EU) key intergovernmental body in the domain of EU foreign and security affairs. As is the case for most international institutions, the unanimity requirement governing this body allows nationalist governments to torpedo any attempt to build up a credible European defense force and a unified foreign policy stance.

We argue that investors react positively to a successful strengthening of Europe’s military component – a vital part of the intensified cooperation within the European Security and Defense Policy (ESDP) – since such decisions increase the demand for military products and raise the expected profits in the European defense industry. We find that financial markets react positively to those summit decisions which consolidated EU military capabilities and the ESDP. Each of these substantial Council decisions increased the value of the European defense sector by about 4 billion Euros on average. This shows that multilateral decisions can have considerable economic and financial repercussions.

Clearly, this is not to say that the skeptical view many hold about the effectiveness of international institutions, diplomacy and their relevance for the economy is incorrect. Yet, the potential for effective decision-making within international institutions that is relevant for markets may be underestimated, because we lack systematic evidence on when and how it matters. Our results also suggest that political scientists may detect economically crucial events in international relations by studying the way in which markets differentiate in the short run between events that are important to them and those that will remain “hot air”.

Democracy promotion and civil society – impressions from field trips to Eastern Europe

A strong civil society is widely regarded as a “school of democracy“, a provider of social capital, and a protective counterpart to the power of the state. In post-communist Eastern Europe, however, civil society has often been described as weak – and as primarily based on private personal relations as a legacy of communism. External democracy promoters have thus made the development of civil society one of their primary goals in the region. What have they achieved?

In a series of field trips to some “late democratizers” of Eastern Europe organized by the Heinrich Böll Foundation and its regional offices, a group of PhD students and their supervisors from the Center of Comparative and International Studies and the Viadrina University (Frankfurt/Oder, Germany) visited Bosnia-Herzegovina, Georgia, Russia, Serbia, and Ukraine in 2009 and 2010. Here are some impressions and ideas resulting from our conversations with NGOs, donor organizations, political observers, and state officials.

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