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• Institutions matter…
• The international arena partly depends on domestic & international institutions.
• What is an institution?
– A set of rules
(structures/constraints/mechanisms) that govern the behavior of a given set of actors in a given context.
– (An equilibrium)

• Cooperation – especially coordinating actors on Pareto superior equilibria in prisoner-dilemma-esque situations
• Commitment
– Hands tying of present government (two level game) – change the payoffs for other veto players
– Hands tying of future governments – LOCK-IN!
– Hands tying of present governments – signaling resolve to foreign and/or domestic audiences
• Laundering / Dirty work
• (A 3 rd -party source of information)

Goal: Replace proper nouns & dates with the names of variables !
• Political + Exchange-rate regime
• Multi-party dictatorships
• Age of democracy
• # of checks and balances
• Focal point
• Precedent on trade policy
•
Domestic political constraints
• Political importance (UNSC)
• Alliance (voting at the UNGA)
• Economic ties
• Regional Organization Membership
• Distribution of global economic power
• population, GDP/capita, host-country,
Soviet/planned country
• International Institution (the IMF)
• CAT membership (Vreeland)
• ECHR membership (Moravcsik)
• Slow, steady success of EU
• International reserve currency
(McNamara)
• Choosing NAFTA or WTO (Busch)
• China’s internat’l negotiat’n posture (Weiss)
• IMF/WB loans (Dreher et al.)
• ADB loans (ADB – Kilby)
• Conditionality (Lipscy)
• Democracy (Pevehouse)
• Global governance
• Olympic medals!

Take-home analytical tools from the course
• Time-inconsistent preference problem / Shadow of the future /
Commitment problem
• Prisoner’s dilemma / Collective action problem / Free rider problem
• Coordination games
• Repeated games
• Principal-agent problem
• Equilibrium (Nash)
• Factors & sectors
• Broad & shallow v. narrow & deep organizations
• Veto players
• Domestic sources of International
Relations (2-level games)
• Audience costs
• Laundering
• Defining variables
• Coefficient / standard error
• Linear regression
• Logit, Probit
• Survival/hazard models
• Thinking dynamically
• Non-random selection & endogeneity
• Extreme bounds analysis
• 2 triangles…

Democracy
International Trade International Organizations

Free Capital Flow
Inconsistent/Unholy
Trinity
Or
“Trilemma”: a country can only have 2 out of
3 of these
Fixed Exchange Rate Sovereign Monetary Policy

Narrow and deep  Broad and deep may be more effective than
Broad and shallow  Broad and deep

• Normative incentives
• Institutional incentives
• Cooperating  sacrifice
• Fear the PD “sucker’s payoff”
• Solution?
– COMMITMENT MECHANISMS

Weighting the exams &
Rational expectations
• Rational expectations: the best predictor for future performance is past performance
• Expected final grade = midterm grade
• More precisely:
• Final grade = midterm grade + >shock<
• The shock is unobserved to me
• Still, unless your performance deviates a GREAT deal, you’ll end up with roughly the same grade as the mid-term
• So, for most of you, allowing you to weight the exam will make no difference

• Think big about global governance changes
• YOU are part of an ongoing global conversation
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And what you’re doing to shape yours…
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Typical “uniform” or rectangular distribution
(histogram)
Poor Lowincome
Lowermiddle
Middle Uppermiddle
Highincome
Rich
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Typical symmetrical distribution (histogram)
Poor Lowincome
Lowermiddle
Middle Uppermiddle
Highincome
Rich
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INCOME? SUCCESS? HAPPINESS?
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• Theory
– Philosophy (from ancient to modern thinkers)
– Logic (game theory)
• Empirics
– Data (qualitative, quantitative)
• History
• Statistics
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You need a broad liberal arts education
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Undergraduate education & the 3 r’s
• readin’
• ’ritin’
• ’rithmetic
• Broad education…
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• Become well-read
• Learn to write well
• Learn statistics
• Learn a foreign language (fluent!)
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Breadth of undergraduate education & life opportunities
Breadth of undergraduate education
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• Fewer hours in class, more hours studying
• Greater opportunity costs
• Grades not important
• Be focused!
• Statement of purpose
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• First sentence – most important!
• Organize your argument into sections
– What is the question?
– What is your answer (or what is the debate)?
– What is your methodology?
– What is your evidence?
– Why should we care?
• Lay this out in the 1 st para
• Return to each in its own section (paper outline):
1.
Background literature
2.
Your theory/argument
3.
Method
4.
Evidence
5.
The intro/conclusion should answer the “so what” question
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• Letter of recommendation
• Network of friends
– @ Georgetown
– Amazing
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• “What are you going to do when you graduate?”
=
• “How are you doing?”
=
• “Hello”
• I.e., well intentioned but vacuous question
• Don’t let it bring you down!
• No one knows @ 22 what life will present them
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Distribution of opportunities before education
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Distribution of opportunities after education
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that
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• No, Woman, Don’t Cry
• Multivocality
• “Hope” … “Change”
• Fugees
– Killing Me Softly
– The Government Yard in BROOKLYN
• So, what IS the song about?
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• Privilege
• Thank you
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