Locating the Proper Authorities: The Interaction of Domestic and International Institutions.

Edited by Daniel W. Drezner. Ann Arbor: University of Michigan Press, 2003. 288p. $55.00.

Since Robert D. Putnam (“Diplomacy and Domestic Politics: The Logic of Two-Level Games,” International Organization 42:3 [1988]: 427–60), the work on two-level games has emphasized the effects of domestic politics on international institutions. The reverse process—the impact of international organizations on domestic political institutions—has, by contrast, received short shrift. Daniel Drezner and his colleagues fill this gap with clarity and creativity. Drezner offers two core hypotheses in the introduction—mechanisms by which international institutions can be used by political elites to overcome problems of domestic politics—and the subsequent chapters provide compelling arguments and evidence.

Hypothesis 1 (H1), so labeled by the excellent concluding chapter by Duncan Snidal and Alexander Thompson, declares that entrepreneurial elites will utilize international organizations (IOs) to overcome domestic veto players who might prefer no change to policy reform. This “veto player problem” is more acute, and hence this mechanism is more likely to be utilized by governments of “decentralized” states. International organizations, it is argued, can reward (or punish) veto players when they cooperate (or fail to cooperate), and they can provide information, expertise, and other resources in ways domestic authorities cannot, limiting the incentives for domestic players to veto the policies in question.

The second hypothesis (H2) addresses the “commitment problem” faced by governments in centralized states—governments anticipate domestic pressure to defect from a cooperative international regime, and are unable to commit to stable policies over time. The IO induces costs to defection, both for the regime and its political opposition, making abrogation of international agreements less likely.

H1 gets the most attention from the authors in the volume. Jon C. Pevehouse shows that new democracies use IOs to lock in economic reforms that may be unpopular with other veto players, thereby strengthening the hand of the new democratic elite; Eric Reinhardt shows that the dispute settlement procedure (DSP) at the World Trade Organization enhances compliance by forcing reluctant legislatures to agree to liberalization; Kenneth A. Schultz argues that the president can diffuse congressional opposition to the use of force abroad in humanitarian missions by obtaining IO support for the mission, raising the costs to Congress of opposing the deployment. Key to these arguments is the presumption that the international organization levels costs (either directly or indirectly) on the domestic veto players if the nation violates its international obligations.

International institutions facilitate cooperation in a number of ways: They provide information and expertise, coordinate expectations, and offer carrots and sticks. While threatened or actual retaliation can induce cooperation of a state's executive, these authors argue that the IO induces differential costs across domestic players. The IO imposes costs on obstinate domestic veto players (and not the cooperative ones) if they refuse to cooperate (or can reward them when they do), hence, extracting their cooperation.

First, the project is opaque as to how the IO impacts one domestic group and not another—are IOs so carefully selective in their punishments? Alternatively, what is it about the domestic polity than makes the costs incurred by the veto players different once the IO is in place? Ideally, the authors of the case study chapters would have spelled this out; Snidal and Thompson's comment that “the specific cases need more detailed investigation and theoretical guidance” (p. 210) certainly resonates. The case study authors might have delved more deeply into the structures of the IOs they analyze, to investigate if their impacts do differ across domestic agents. Notably, Snidal and Thompson remark that the IOs' rewards and punishments may also affect the executive (the “initiator,” in the parlance of the volume), but “they do not affect the analysis” (n. 8, p. 204). It is quite conceivable, however, that the degree to which the rewards and punishments affect the initiator will alter the decision calculus to engage in the cooperative endeavor in the first place.

Second, where the authors empirically test their claims, they often avoid the key issue—whether IOs alter the payoffs to the veto players—and instead test claims that while consistent with the models and arguments posited, are not central to the book's core hypotheses. Pevehouse shows that new democracies are more likely to join IOs, but he does not test the underlying argument—IOs can penalize domestic groups if they veto the executive's reforms. Reinhardt, who shows that early settlement is possible when the executive has a recalcitrant congress, neglects to test the links between the transaction costs associated with using the DSP and settlement of disputes. Schultz comes closest to linking the “audience costs” (that penalize any player that backs down from a commitment) with actual episodes of humanitarian intervention with IO involvement.

The case studies provide mixed evidence in support of H2; IOs may improve an executive's credibility in the face of domestic pressure to renege—especially in centralized states. This is a variation on the more standard “tying of hands argument” (for instance, Giovanni Maggi and Andres Rodriguez-Clare, “The Value of Trade Agreements in the Presence of Political Pressures,” Journal of Political Economy 106 [1998]: 574–601, where the executive is bound not to give in to protectionist demands), yet the authors did not tackle this hypothesis with nearly the same enthusiasm as H1. There is also an open question: Why does the commitment device have to be international in nature? Or more specifically, when might we expect a state to appeal to an international institution over the myriad domestic alternatives (such as independent agencies, central banks, judiciaries, etc.)?

Drezner also identifies three other hypotheses, none of which get the attention they deserve: Repeated interactions strengthen the power of the initiators over the ratifiers, IO design matters, and external initiators are less successful than internal initiators in their interaction with the domestic ratifiers. The two less formal (and more constructivist) chapters (both happen to use China as the case study) have the most success here: Jean-Marc F. Blanchard shows how an IO and internal initiators can change domestic policy in the face of opposition; Alastair Iain Johnston shows how persuasion and social influence matter for the design of regional security regimes.

Locating the Proper Authorities is a significant development in the two-level game literature. It reestablishes the importance of the interaction of domestic and international actors in world politics, and it produces highly suggestive arguments and evidence that IOs can change domestic policy choices. Sorely needed, however, is a simultaneous approach, one that permits a bidirectional causality or feedback between the levels of analysis. As in the general equilibrium approach from economic theory, equilibrium actions at the international level are in the end codetermined with equilibrium behavior among domestic political agents. A second generation of two-level games literature is now needed.