Publications

Books

Reputation and International Cooperation: Sovereign Debt across Three Centuries. Princeton, NJ: Princeton University Press, 2007.

The following summary is from the publisher's website:

How does cooperation emerge in a condition of international anarchy? Michael Tomz sheds new light on this fundamental question through a study of international debt across three centuries. Tomz develops a reputational theory of cooperation between sovereign governments and foreign investors. He explains how governments acquire reputations in the eyes of investors, and argues that concerns about reputation sustain international lending and repayment.

Tomz's theory generates novel predictions about the dynamics of cooperation: how investors treat first-time borrowers, how access to credit evolves as debtors become more seasoned, and how countries ascend and descend the reputational ladder by acting contrary to investors' expectations. Tomz systematically tests his theory and the leading alternatives across three centuries of financial history. His remarkable data, gathered from archives in nine countries, cover all sovereign borrowers. He deftly combines statistical methods, case studies, and content analysis to scrutinize theories from as many angles as possible.

Tomz finds strong support for his reputational theory while challenging prevailing views about sovereign debt. His pathbreaking study shows that, across the centuries, reputations have guided lending and repayment in consistent ways. Moreover, Tomz uncovers surprisingly little evidence of punitive enforcement strategies. Creditors have not compelled borrowers to repay by threatening military retaliation, imposing trade sanctions, or colluding to deprive defaulters of future loans. He concludes by highlighting the implications of his reputational logic for areas beyond sovereign debt, further advancing our understanding of the puzzle of cooperation under anarchy.

For a longer synopsis of the book, click here. The book is available from Princeton University Press, Amazon.com, and Barnes & Noble.

Modern Political Economy and Latin America: Theory and Policy (edited with Jeffry Frieden and Manuel Pastor). Boulder: Westview Press, 2000.

A collection of readings on the relationship between politics and economics in developing countries, with a special emphasis on Latin America. The book contains 35 essays that show students how modern political-economic tools can explain market failures and government policy in areas such as international trade and capital flows, economic growth and business cycles, income inequality, gender relations and the environment. The introduction provides an analytical framework; sections at the beginning of each chapter summarize the articles and discuss their relationship to the broader study of political economy. Modern Political Economy and Latin America is intended for use in undergraduate and graduate-level courses in political science and economics.

The book is available from Amazon.com and Barnes & Noble.

Articles

Domestic Audience Costs in International Relations: An Experimental Approach. International Organization 61, no. 4 (Fall 2007): 821-40.

What makes international threats credible? Recent theories point to domestic audience costs: the domestic price a leader would pay for making foreign threats and then backing down. This article provides the first direct evidence of audience costs. The analysis, based on experiments embedded in public opinion surveys, shows that audience costs exist across a wide range of conditions and increase with the level of escalation. The costs are evident throughout the population, and especially among politically active citizens who have the greatest potential to shape government policy. Finally, preliminary evidence suggests that audience costs arise because citizens care about the international reputation of the country or leader. These findings help identify how, and under what conditions, domestic audiences make commitments credible. At the same time, they demonstrate the promise of using experiments to answer previously intractable questions in the field of international relations. (For a longer version of the paper, click here.)

Membership Has Its Privileges: The Impact of the GATT on International Trade (with Judith Goldstein and Douglas Rivers). Forthcoming, American Economic Review 97, no. 5 (December 2007).

Recent research concludes that membership in the GATT/WTO had no effect on foreign trade. By mistakenly classifying many countries as outsiders, even though they had rights and obligations under the agreement, this work systematically underestimates the effect of GATT. We correct the downward bias in previous estimates. Our analyses show that GATT substantially increased trade, and that its effects were relatively stable across countries and over time. (For coverage in the Economist, click here.)

A complete replication archive (computer code, data, and output) is available here. If you would like the final dataset without associated computer code and output files, download this archive instead.

The General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO) have been touted as premier examples of international institutions, but few studies have offered empirical proof. This article comprehensively evaluates the effects of the GATT/WTO and other trade agreements since World War II. Our analysis is organized around two factors: institutional standing and institutional embeddedness. We show that many countries had rights and obligations, or institutional standing, in the GATT/WTO even though they were not formal members of the agreement. We also expand the analysis to include a range of other commercial agreements that were embedded with the GATT/WTO. Using data on dyadic trade since 1946, we demonstrate that the GATT/WTO substantially increased trade for countries with institutional standing, and that other agreements had similarly positive effects. Moreover, our evidence suggests that international trade agreements have complemented, rather than undercut, each other.

A replication archive (computer code, data, and output) is available here.

This paper uses a new dataset to study the relationship between economic output and sovereign default for the period 1820-2004. We find a negative but surprisingly weak relationship between economic output in the borrowing country and default on loans from private foreign creditors. Throughout history, countries have indeed defaulted during bad times (when output was relatively low), but they have also suspended payments when the domestic economy was favorable, and they have maintained debt service in the face of adverse shocks. This constitutes a puzzle for standard theories of international debt, which predict a much tighter negative relationship as default provides partial insurance against declines in output. (For a longer version of the paper, click here.)

An accumulating body of research suggests that African Americans cast invalid ballots at a higher rate than whites. Our analysis of a unique precinct-level dataset from South Carolina and Louisiana shows that the black-white gap in voided ballots depends crucially on the voting equipment people use. In areas with punch cards or optically scanned ballots, the black-white gap ranged from four to six percentage points. Lever and electronic machines, which prohibit overvoting and make undervoting more transparent and correctible, cut the discrepancy by a factor of ten. Judging from exit polls and opinion surveys, much of the remaining difference could be due to intentional undervoting, which African Americans profess to practice at a slightly higher rate than whites. In any case, the use of appropriate voting technologies can virtually eliminate the black-white disparity in invalid ballots.

We have also written a research note, Proxy Variables and the Racial Gap in Voided Ballots. In the note we discuss the consequences of using imperfect proxies, such as the nonwhite proportion of either registered voters or the general population, to characterize those who actually went to the polls. We argue that when the assumptions for unbiased ecological regression are otherwise satisfied, the use of proxies introduces nonrandom measurement error that depresses estimates of African American and white invalidation, as well as the difference between the two rates. Our AJPS article avoids these problems by employing direct measures of turnout by race.

An Easy and Accurate Regression Model for Multiparty Electoral Data (with Joshua Tucker and Jason Wittenberg). Political Analysis 10, no. 1 (Winter 2002): 66-83.

Katz and King (1999) propose a statistical model for multiparty election data. They argue that ordinary least squares (OLS) regression is inappropriate when the dependent variable measures the share of the vote going to each party, and they recommend a superior technique. Regrettably, the Katz-King model requires a high level of statistical expertise and is computationally impractical for more than three political parties. We offer a sophisticated yet convenient alternative that involves seemingly unrelated regression (SUR). SUR is nearly as easy to use as OLS, yet performs as well as the Katz-King model in predicting the distribution of votes and the composition of parliament. Moreover, it scales easily to an arbitrarily large number of parties. The model has been incorporated into Clarify, a statistical suite that is available for free on the Internet.

Making the Most of Statistical Analysis: Improving Interpretation and Presentation (with Gary King and Jason Wittenberg) American Journal of Political Science 44, no. 2 (April 2000): 347-61.

We demonstrate that social scientists rarely take full advantage of the information available in their statistical results. As a consequence, they miss opportunities to present quantities that are of greatest substantive interest for their research, and to express their degree of certainty about these quantities. In this paper, we offer an approach, built on the technique of statistical simulation, to extract the currently overlooked information from any statistical method, no matter how complicated, and to interpret and present it in a reader-friendly manner. Using this technique requires some sophistication, which we try to provide herein, but its application should make the results of quantitative articles more informative and transparent to all. To illustrate our recommendations, we replicate the results of several published works, showing in each case how the authors' own conclusions can be expressed more sharply and informatively, and how our approach reveals important new information about the research questions at hand. We also offer very easy-to-use software that implements our suggestions.

Electoral Surprise and the Midterm Loss in US Congressional Elections (with Kenneth Scheve). British Journal of Political Science 29 (July 1999): 507-21.

Alberto Alesina and Howard Rosenthal argue that surprise about the outcomes of US presidential elections accounts for two important features of the American political economy: the regular loss of votes experienced by the president's party in midterm congressional elections, and the systematic relationship between the party of the incoming president and macroeconomic performance. Scholars recently have begun conducting rigorous tests of the relationship between surprise and economic performance, but no similar empirical work exists on how surprise affects midterm elections. In this article, we offer the first direct test of the proposition that electoral surprise drives the midterm loss. Our analysis shows that the more surprised moderate voters are about the outcome of a presidential election, the lower is the probability that they will support the president's party in the subsequent midterm contest.

The Long-Run Advantages of Centralization for Collective Action (with Edward Schwartz). American Political Science Review 91 (September 1997): 685-93.

Institutional design can affect the logic of ongoing collective action in groups with heterogeneous members. This article corrects a mathematical error in a seminal article by Bendor and Mookherjee (1987) and shows how the amended result strengthens the case for centralized monitoring and enforcement mechanisms. In solving their original model, Bendor and Mookherjee neglected that groups under centralized control will become increasingly talented over time, as headquarters detects and replaces untalented members. Expected improvements in the talent of the group should heighten the incentive for its members to work and curtail the incidence of costly free-riding, as well as reduce the average per-worker cost of production. These gains in efficiency will not materialize in decentralized regimes, where the fraction of talented members will remain constant over time. Depending on the effectiveness of monitoring in the centralized group and the level of patience and talent in society as a whole, centralized regimes can produce greater group welfare than decentralized ones, even when decentralized institutions operate flawlessly.