Applying our analytical tools to Student Research!

1. Applying our analytical toolsto Student Research! READING: Holkeboer, Christian and James Raymond Vreeland. 2011. Calling Democracies and Dictatorships: The effect of political regime on international long-distance rates. Paper presented at the 2012 Meeting of the Public Choice Societies, Miami, Florida.

3. Plan • Canadian foreign aid: Buying political support • Korean foreign aid: Buying export markets • Trading market access for political influence: The effect of recognizing Taiwan on trade with China • Calling Democracies and Dictatorships: The effect of political regime on international long-distance rates • Regional Organizations and International Politics The effect of Security Council membership on ADB loans

4. O Canada, we stand on guard for thee:Foreign aid benefits for members of the Bretton Woods Canadian-bloc

5. Big Picture • What drives Canadian foreign aid patterns? • Canada engages in vote-buying in international organizations • Middle-power states act strategically

6. Roadmap • Hypothesis/Argument • Evidence • Concluding Thoughts

7. Argument • Foreign Aid as a foreign policy instrument • States act strategically • Executive Board of IMF/World Bank incredibly powerful

8. The IMF Governance Structure

9. The Executive Board

10. Who Votes for Canada?

11. Evidence

12. Results

13. Takeaways • Canada engages in vote-buying • Middle-Power States act strategically too! • Problems of legitimacy in global governance?

14. Korean foreign aid: Buying export markets

15. It is well known that foreign aid is correlated with trade for large-country donors (United States, Japan)

16. As Jaffe and Oak (2010:59) explain, “when your country’s economic health depends on exports, the economic fundamentals of the countries to which you are exporting most of your goods are just as important as your fundamentals.”

17. South Korea • A relatively small donor (used to be a recipient!) • HOWEVER: No correlation between its trade and foreign aid • Is Korean aid a-political? Altruistic? • Started giving aid around the time of democratization (1988)

18. Still, Korean aid is controlled by: • The Export-Import Bank of Korea • The Ministry of Foreign Affairs and Trade • Maybe Korea is too small to influence all countries • Many rich trade partners • Test for the conditional effect of trade - conditioned on level of development! • INTERACTION EFFECT

20. Trade for the Strait: The effect of recognition on bilateral trade with China

21. Countries recognizing the PRC

22. Countries recognizing the ROC

23. Empirical tests: (DV: Exports to China)

24. Calling Democracies and Dictatorships:The effect of political regime on international long-distance rates Christian Holkeboer and James Raymond Vreeland Edmund A. Walsh School of Foreign Service, Georgetown University 2012 PUBLIC CHOICE SOCIETY

26. Plan • Background • Theory • Descriptive data • Regression analysis • Conclusion

27. Regulation theory & accountability • Idea in Zurich… • Telecommunications: • Increasing returns to scale • Naturally Monopolistic • Democracies regulate better than autocracies?

28. 1st argument: Regulation of Monopolies

29. “Majority” indifference curve

30. POLITICAL SUPPORT AS A FUNCTION OF MONOPOLIST AND CONSUMERS/VOTERS

31. THE PELTZMAN MODEL: *

32. Government preferences if “captured” by monopolist *

33. Government preference if controlled by consumers/voters *

34. The shape of the indifference curves: A function of political regime

35. 2nd Argument: • Political control! • Autocracies desire higher prices to lower communication with the outside world.

36. Hypothesis: • Cheaper to call democracies than dictatorships

37. Data • Cross-section: 156 countries • Dep. variable: • Average Revenue Per Minute (ARPM) • Indep. variable: • Political regime

39. Do other factors matter?

41. The effect • Fixed-line: 3.3 cents per minute • 39% democracy discount • 95% confidence interval: 14%-64% • Mobile: 2.6 cents per minute • 19% democracy discount • 95% confidence interval: 3%-35%

42. Implications March 2011 August 2011 • Democracy is good for cross-border communication in a very real sense: • It lowers the price Syriatel owner: Rami Makhlouf

44. Regional Organizations and International Politics: Trading Asian Development Bank Loans for United Nations Security Council Votes The International Sources of Intrastate Conflict: Daniel Yew Mao Lim and James Raymond VreelandGeorgetown University January 2011

45. Puzzle Argument Tests Implications Discussion

46. The Asian Development Bank and the UNSC ADB Prominent role of Japan UNSC Exogenous measure of political importance Puzzle Argument Findings Implications Discussion

47. Global Horse-Trading: OverviewTrades of political influence for money are possible because governments sometimes have divergent preferences Developing Countries Loans > UNSC votes Developed Countries UNSC votes > Loans Puzzle Argument Findings Implications Discussion

48. Descriptive Evidence

50. Empirical Models and Substantive Findings Propensity Score Matching • UNSC member: +87% Country & Year Fixed Effects, Lagged Dependent Variable, Control Variables • UNSC member: +38% Puzzle Argument Findings Implications Discussion