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To purchase or authenticate to the full-text of this article, please visit this link: http://dx.doi.org/10.1111/j.1468-2478.2008.00527.x Byline: David H. Bearce (*) Abstract: This paper explores whether fixed exchange rate commitments and central bank independence have functioned more as institutional complements or as substitutes in achieving exchange rate stability. Focusing on the advanced industrial democracies in the post-Bretton Woods era, it argues that these two monetary institutions should have functioned in a non-complementary, but substitutable, manner with regards to this external policy goal. This argument is tested statistically using different measures of exchange rate variability and de facto exchange rate fixity. Finally, given evidence that fixed exchange rate commitments and central bank independence have not functioned as complementary institutions, this paper discusses why certain OECD (governments that are members of the Organization for Economic Cooperation and Development) governments nonetheless made fixed exchange rate commitments when their central bank was legally independent. Author Affiliation: (*)University of Pittsburgh

While the commercial institutional peace research program provides empirical evidence that international institutions, especially preferential trade arrangements, help reduce the incidence of militarized inter-state conflict, it fails to delineate clearly how such institutions matter. Building from the logic that low opportunity costs for fighting, private information, and commitment problems constitute important causes of war, this article explores three interrelated causal mechanisms. First, the state leaders' increased expectations about future commerce create an incentive for these actors to consider peaceful bargains as an alternative to costly war. Second, security coordination under the umbrella of a commercial institution provides fuller information about state military capabilities, thus making inter-state bargaining for dispute resolution more efficient. Third, in bringing together high-level state leaders on a regular basis, commercial institutions may create the trust necessary to overcome commitment problems in inter-state bargaining. I explore how these mechanisms have operated within the Gulf Cooperation Council and the Economic Community of West African States.

This article explores how the dramatic expansion of British trade in the decades prior to World War I affected Britain's ability to raise an army. We first develop a simple institutionally based model of British army recruiting which we then perturb by expanding trade while holding all other variables constant. Our theoretical analysis suggests that the expansion of trade would impede Britain's ability to raise an army, a prediction that finds substantial support in the historical record using both quantitative and qualitative analysis. Contrary to the conventional wisdom that trade enhances a state's military power, we find that the expansion of trade did not ease Britain's resource constraints by making labor more freely available for military purposes. Rather, by raising the civilian demand for labor, the expansion of trade made labor more expensive and difficult to mobilize, even as a more effective army became more important to British strategy.

This article explores the relationship between trade and war by applying an agent-based model of military conflict and economic exchange, focusing on an analysis of the economics of trading networks. The authors' model treats war as a breakdown of interstate bargaining due to incomplete information, and explores the economic geography, technological advancement, state revisionism and defensive advantages which affect trade and war; findings show that the relationship between war and trade depends on revisionist states within compact geographies.

Under capital mobility, governments face a political choice: hold an autonomous monetary policy with currency instability or stabilize exchange rates with the sacrifice of policy autonomy. This article examines what domestic political factors led the advanced industrial democracies to choose an autonomous monetary policy and what factors led them instead to choose stable exchange rates in the post-Bretton Woods era. Leftist-led governments have opted for an autonomous loose fiscal-tight monetary policy mix associated with exchange rate instability. Rightist-led governments have chosen a tight fiscal-loose monetary policy mix associated with exchange rate stability. These results are important because they help reestablish partisan agency in terms of monetary-exchange rate policy making, even under the structural constraint of international capital mobility.

Summary This paper considers the causality underlying the so-called political aid curse, which proposes that foreign aid, like oil, should hinder democracy. Using a theoretical model which identifies repression and appeasement as the primary alternatives to democratization, it argues that aid revenue should not produce a political curse because it is less fungible, more conditional, and less constant than state oil revenue, making it difficult for recipient governments to use their aid to fund either repression or appeasement. Using several different measures associated with repression and appeasement, the statistical results show that aid cannot be associated with any of these dependent variables. [ABSTRACT FROM AUTHOR]