This book presents a general explanation of how states develop their foreign policy. The theory stands in contrast to most approaches--which assume that states want to maximize security--by assuming that states pursue two things, or goods, through their foreign policy: change and maintenance. States, in other words, try both to change aspects of the international status quo that they don't like and maintain those aspects they do like. A state's ability to do so is largely a function of its relative capability, and since national capability is finite, a state must make trade-offs between policies designed to achieve change or maintenance.
Glenn Palmer and Clifton Morgan apply their theory to cases ranging from American foreign policy since World War II to Chinese foreign policy since 1949 to the Suez Canal Crisis. The many implications bear upon specific policies such as conflict initiation, foreign aid allocation, military spending, and alliance formation. Particularly useful are the implications for foreign policy substitutability. The authors also undertake statistical analyses of a wide range of behaviors, and these generally support the theory.
A Theory of Foreign Policy represents a major advance over traditional analyses of international relations. Not only do its empirical implications speak to a broader range of policies but, more importantly, the book illuminates the trade-offs decision makers face in selecting among policies to maximize utility, given a state's goals.
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About the Author
Glenn Palmer is Associate Professor of Political Science at Pennsylvania State University. T. Clifton Morgan is Albert Thomas Professor of Political Science at Rice University. His books include Untying the Knot of War.
Read an Excerpt
A Theory of Foreign Policy
By Glenn Palmer T. Clifton Morgan
Princeton University PressCopyright © 2006 Princeton University Press
All right reserved.
WHY DO COUNTRIES do what they do in their dealings with other states? That question is at the heart of much of the discourse and analysis that has been focused on international relations, and it is the question we seek to answer in this book. Answers to that question can be fruitful, and we see these answers as having four applications. The first regards individual policies that states choose and is typically the focus of much of the work on international behavior. Valuable work has been done, for instance, on why states choose to start wars, wars that may kill millions of people. Why do states impose sanctions that may inflict suffering on the innocent citizens of another state? Why do states make alliances? These types of questions address the issues that most directly affect all of our lives and pique the interests of scholars and policymakers. As a research community, we have spent centuries investigating questions like these, and while we now know a great deal about the causes of such behaviors, much more remains to be learned.
The second application is about the relationship between a state's policies in a specific situation or at a specific time. Policies are tools that states use to get what theywant. Why do states choose particular policies? For instance, why might a state choose to impose sanctions on another state instead of attacking it? Why might a state increase its foreign aid allocation and simultaneously decrease its military spending? Why might a state break an alliance with another country and decrease its trade barriers with it? All foreign policy actions are a matter of the choices made by the leaders of states (or nonstate organizations). These leaders often have several options for dealing with any particular issue, and we would like to know what influences the particular choices they make.
The third application is relevant to choices leaders make between similar sets of policies in different situations. The United States, to take an example, is friendly with Denmark and Israel, states with about the same population and with similar levels of wealth. The United States, however, has a formal military alliance with Denmark but not with Israel, and gives Denmark no foreign aid while Israel receives approximately $3 billion from the United States annually. Why do these differences in policies exist? In many instances the answer to this question might appear obvious. That does not relieve us of the necessity of developing systematic and generalizable explanations for such observations. An explanation based only on size, wealth, and amity would not be able to explain the differences in U.S. policy toward Denmark and Israel.
The final application is to provide an understanding about the relationships among policies. For instance, should a leader decide to use sanctions as an instrument of her state's foreign policy, does that imply that the frequency of conflict will subsequently diminish? Does joining an alliance lead to an increase or a decrease in defense spending? To understand the relationship between and among policies requires that we understand why states pursue their policies, which in turn should help us understand foreign policy substitutability. In this book we will offer an approach to the study of foreign policy that provides answers relating to all four applications.
We try to answer the first question posed in this chapter above by doing three things in our analysis that are uncommon in approaches to the study of international relations. First, we view states' actions as components of portfolios, which consist of all their foreign policy behaviors. We do not focus exclusively on conflict behavior, or trade policy, or foreign aid allocations as discrete policies that can be discussed and analyzed without reference to other policies, though our theory has things to say about those separate policies. Instead, we see a state constructing bundles of policies-what we will call portfolios-that, in combination, are designed to achieve things-outcomes-that the state wants. Second, we adopt a general perspective of foreign policy that is designed to apply to all states at all times. Our focus is on a few independent variables and their general effects. While the main focus of the theory is not on explaining, for instance, German foreign policy in the interwar years or American foreign policy during the cold war, we will demonstrate that our theory can be applied to the policies of specific countries. Third, contrary to much theorizing about international relations, we assume that states pursue two general goals through their foreign policies. Typically, international relations theorists argue that states can be analyzed as if they want one thing only-greater security. We will assume that states want to protect things that they value and that they will try to alter things in the international systems they do not like. Since the ability of any state, no matter how powerful, to accomplish what it wants is limited, leaders have to make choices. Leaders have to decide whether they want to protect something they like or attempt to bring about a change in some situation to conform more to their preferences. And it is this choice that we seek to understand and explain in this volume.
The theory presented here is based on a relatively simple formal model. Since many readers might be put off by the technical presentation of the model, we delay that until chapter 5. We introduce the reader to the concepts and general argument of the theory in the next chapter, in which we present a nonmathematical version of the two-good theory more fully. There, we will ask the reader to think about international relations differently from other approaches. So that we may start that presentation cleanly, we use this chapter, first, to introduce the idea of the foreign policy portfolio, that set of policies a state adopts to meet its foreign policy objectives. Changes in a state's foreign policy portfolio represent the key factor that is to be explained by our theory. Second, of course, we want to outline the particulars of the two-good theory and present the main assumptions we make. Our third task in this chapter is to highlight the elements of our approach that distinguish it from other, more traditional theories of international relations.
Foreign Policy Portfolios
One of the central axioms of the two-good theory that separates it from other ways of thinking about international relations is the belief that a state's foreign policy behaviors, the individual policies a state adopts in pursuit of its interests, should be viewed as a bundle of policies. States, in other words, create their foreign policy portfolios to achieve the things that they want, given existing constraints.
Consider some of the actions the United States has taken within the last ten years or so in its dealings with other states:
During much of the 1990s the United States supported expanding the North Atlantic Treaty Organization (NATO) by admitting states that had previously been members of the Warsaw Pact. This support was essential to the success of the negotiations that resulted in Poland, the Czech Republic, and Hungary joining NATO on March 12, 1999.
On April 2, 1996, Secretary of Defense William Perry reported that Libya was constructing an underground chemical weapons facility and warned that the United States would use force, if necessary, to halt construction rather than allow the plant to operate. Libya halted work on the facility immediately, and after diplomatic intercession by Hosni Mubarak of Egypt, Libya agreed not to resume construction.
On April 30, 2001, the United States announced a major arms deal with Taiwan. The United States agreed to sell Taiwan four Kidd class destroyers, twelve P3 Orion anti-submarine planes, and eight diesel submarines.
In the spring of 2001, the United States reversed its long-held opposition to allowing the People's Republic of China to join the World Trade Organization (WTO). On November 10, 2001, the WTO welcomed China as a member.
On January 5, 2002, the United States announced that it would not bail Argentina out of its financial crisis; the United States said it wanted to avoid being a "financial firefighter." Argentine President Eduardo Duhalde placed blame for Argentina's situation on the American economic model, pushed by Washington, which stressed deregulation and decentralization. On January 15, President Bush warned Argentina not to use its difficulties as an excuse to back down from its free-market reforms. On January 31, the United States cut foreign aid to Argentina because, in the words of Treasury Secretary Paul O'Neill, "it just didn't reform."
On January 14, 2002, the United States and the Philippines prepared for joint military operations against Abu Sayyaf, an extremist Muslim group with links to Al Qaeda. A plan was agreed to by the two countries whereby 650 U.S. military personnel were to be sent to the Philippines within weeks.
On April 11, 2003, the U.S. government announced that it had reached a settlement with the New York Yankees, in which the baseball team would pay a penalty of $75,000 for violating U.S. economic sanctions against Cuba by negotiating a contract with a Cuban baseball player.
We chose these actions not because they are exceptional but because they are ordinary and constitute good examples of the elements that make up a foreign policy portfolio. Represented among these actions are issues of alliance politics, decisions about foreign aid, matters of trade policy, and steps to enforce a longstanding embargo. Some of the actions are relatively routine or undertaken by officials not at the top of the bureaucratic hierarchy, while others represent decisions made by U.S. leaders. The targets of the actions include states friendly to the United States as well as adversaries. In other words, they reflect the range of actions that a major state can be expected to take in pursuit of its interests during any particular period.
These actions are elements of the American foreign policy portfolio. The United States chose the policies (and others not included here) from among all actions available to it in order to create the most desirable set of international arrangements under the circumstances. Several things are implied by that. First, this means that the United States wanted to change some things in the world that it does not like, such as the regime in Cuba. Other actions, such as the arms deal with Taiwan, were meant to reinforce an existing outcome. The United States, we assume, has preferences and it attempts to realize those preferences through its actions.
A second implication is that these actions all used resources: some required time to reach a decision or to carry out that decision; some needed money; some the extension of U.S. security guarantees; and some the dispersion of military personnel into dangerous places. But none of the acts is free and without cost. If the United States, or any actor, is rational, before undertaking an action it must decide that spending limited resources on a particular policy is a good idea. This means that the actor must determine that two things are true. For the United States-or any actor-to do something, it must decide, first, that the expected benefits of undertaking the action surpass the direct expected costs of the action: the expected value must be greater than the transaction costs. If the costs are greater than the benefits, the actor is better off not adopting the policy and presumably the action would not be selected. The United States prepared to send the 650 troops to the Philippines because it expected a benefit from doing so, and that benefit was greater than the costs in money and threat to lives that sending the troops to the Philippines would entail. A second necessary condition is that the expected benefits of the action be greater than the opportunity costs. That is, the United States-or any actor-places its limited resources into one particular policy, P, rather than putting them into any other policy or policies because its expected return is greatest for policy P. The policy chosen is the most efficient one available at the time for achieving the actor's goals. The United States decided to send its 650 troops to the Philippines, not to Cuba.
The third implication is that we see states as selecting from the menu of available policies the bundle of policies that best suits their needs and goals at a particular time, given their preferences and constraints. Much as an individual consumes a bundle of goods designed to satisfy a range of wants-subject to the limits of the individual's wealth-states adopt policy portfolios to maximize the utility they derive from the world political environment, subject to the constraints imposed by their limited resources and the international system.
Throughout much of this work we will be analyzing foreign policy behavior as a portfolio of policies. In approaching matters this way, we can represent a state's foreign policy as an identifiable point in a two-dimensional space. (Those two dimensions will be defined as we progress.) This allows us to generalize about foreign policy behavior across states and across time. This is critical to our work; we want to look at the effects of changes in environmental factors-an increase in state capability, for example-on various aspects of state behavior so that we can analyze a large number of states simultaneously. More important, we want to say things about how changes in resources given over to one policy are likely to affect the resources given over to another policy. We also want to address the issue of how portfolios might be expected to change if the goals of the state change.
This view of policies making up a portfolio admittedly is an abstraction, but it is an abstraction with which most of us are familiar. It is common for states' foreign policies to be described and analyzed as if they had one purpose motivating them, such that the elements of the policy were tied together, reinforcing and interdependent-that is, as if they were portfolios. During the cold war, the underlying purpose of American foreign policy was held to be the containment of Soviet influence. Elements of that policy included the formation of NATO, allocation of foreign aid to the militaries of friendly states, participation in the Korean War, the development the hydrogen bomb, the establishment of the Marshall Plan, the formation of defense pacts with Taiwan and Japan, and the centralization of military planning. Surely some of these policies were uniquely affected by local, parochial, bureaucratic, or historical circumstances, but those of us who study American foreign policy see them as tied together and designed to accomplish a common end. That they were seen as interdependent by decision makers is demonstrated by the Eisenhower administration's belief that a reliance on nuclear deterrence through the doctrine of massive retaliation would allow the United States to decrease its military spending. Against such a background of generalization, our notion of portfolio does not seem out of place or extraordinary.
The use of foreign policy portfolios allows us to make generalizations and comparisons that are vital to the development of theory. The level of generality achieved permits comparisons of the policies of a state at different points in time or of the different portfolios of different states. We want to be able to say such things as, "As a state becomes more powerful it will attempt more to change the status quo, other things being equal." Such statements have meaning at a very general level, but they are also useful empirically, and using our concept of portfolios does not preclude more focused statements and expectations. Once we are able to identify what elements of a portfolio are designed to accomplish, we will be able to translate general statements into more precise expectations. For instance (without looking too far ahead), if we were to say that, in general, conflict initiation and the granting of foreign aid are good policies for changing the behavior of others, then our general statement is equivalent to saying that states that become more powerful are more likely to initiate conflict and to allocate greater resources to foreign aid, other things being equal. In other words, while the use of portfolios allows us to generalize, we can also disaggregate them into their component parts to analyze specific aspects of states' foreign policies.
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Table of Contents
List of Figures ix
List of Tables x
Preface: A Theory of Foreign Policy xi
Chapter 1: Introduction 1
Chapter 2: The Two-Good Theory Presented 14
Chapter 3: American Foreign Policy since World War II from the Two-Good Perspective 43
Chapter 4: Three Applications of the Two-Good Theory 69
Chapter 5: The Two-Good Theory Formalized 96
Chapter 6: Tests of the Two-Good Theory 114
Conflict, Foreign Aid, and Military Spending
Chapter 7: Substitutability and Alliances 137
Chapter 8: Conclusion 173
What We Have Learned
What People are Saying About This
A Theory of Foreign Policy is a major book that advances our knowledge of foreign policy generally and of alliances in particular. Its authors develop an innovative formal theory of foreign policy that goes beyond realism and liberalism and pushes the field toward new and fruitful directions.
John Vasquez, University of Illinois at Urbana-Champaign, author of "The Power of Power Politics"