Applying our analytical tools to Student Research! READING: Holkeboer, Christian and James Raymond Vreeland. 2011. Calling Democracies and Dictatorships:

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.

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Plan1. The deep historical origins of gender inequality

2. Canadian foreign aid: Buying political support

3. Korean foreign aid: Buying export markets

4. Trading market access for political influence: The effect of recognizing Taiwan on trade with China

5. Calling Democracies and Dictatorships: The effect of political regime on international long-distance rates

6. Regional Organizations and International Politics The effect of Security Council membership on ADB loans

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Political Economy, Culture, and Gender

• Women

– in the labor force

– as leaders of private firms

– as public leaders in government

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Vast cross-societal differences in cultural attitudes about the appropriate roles for women

• Reflected in both value-based survey responses & objective measures like female labor force participation

• World Values Survey example:– “When jobs are scarce, men should have more right to

a job than women”– Proportion of the population that answers “yes”:– Iceland 3.6%, USA 10.6%, Rwanda 28%, Switzerland

35.1%, Japan 60%, Pakistan 79%, Egypt 94.9%

• Female labor force participation rates in 2000:– Burundi 93.2%, Tanzania 89.3%, Iceland 83.3%, USA

70.4%, Japan 59%, Italy 46%, Pakistan 30.3%, Egypt 21.5% 5

Why do we have differences in gender norms?

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A new explanation

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The plough (or plow)

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Versus: Shifting cultivation

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Principal tools in shifting agriculture: The hoe & digging stick

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On the Origins of Gender Roles: Women & the Plough

Alberto Alesina, Paola Giuliano and Nathan Nunn

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Boserup’s hypothesis1. Certain parts of the world traditionally used plough agriculture

2. In these places, men had an advantage for work in the field

– The person had to pull the plough or control an animal that pulled the plough (neither of which is an easy task)

– The use of the plough also leaves little need for weeding, a job in which women almost always specialize (Foster and Rosenzweig, 1996)

– Plough agriculture was less compatible with simultaneous child care (Brown, 1970)

3. Therefore, men tended to work in the field outside of the home, while women worked within the home

4. Over centuries, the belief that the home was the “normal” or “natural” place for women evolved

5. These beliefs continue to persist today (even after a movement out of agriculture) 15

Division of labor in agriculture in ancient societies

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Country-level: Outcomes of interest

1. Female labor force participation:– Proportion of women in the labor force (employed or

seeking employment)

2. Female representation in positions of power:

– Proportion of firm owners/managers that are female

– Proportion of seats in national parliament held by women

• Control variable:

– Log real per capita income, log real per capita income squared

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Also consider labor force participation of US immigrants

• If a woman’s parents come from “traditional-plough-use” countries, participation in labor force is lower

• Splitting the effect between having an immigrant mother/father from “plough-country” – which effect is stronger?

– Mother

– Father

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Does culture exist?• Yes!

• Should be rigorously defined/measured

– e.g., Female labor force participation

• Can be treated as a dependent variable

– Caused by ancient agricultural practices

• Then you can think about its effects

– If you want to change culture, it is helpful to understand where it comes from

– In this case, a history of the plough should bear no relationship with life-choices

– There’s nothing “natural” about women working in the home24

Take awaysI. Vast cross-societal differences in cultural attitudes about the

“appropriate” roles for women

II. Differences in female participation in the labor force can be explained by

1. Discrimination in the workplace

2. Discrimination in the family

3. Maximizing family-income & age spouse

4. Culture???

a) YES!

b) Rooted in ancient agricultural practices

c) Plough-use led to men working in the field, women at home

d) A view that women belong at home developed and has been handed down generation to generation

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

Argument

• Foreign Aid as a foreign policy instrument

• States act strategically

• Buying seats on the Executive Boards of IMF & World Bank?

The Executive Board

Who Votes for Canada?

Evidence

ResultsMODEL(ALL W/ YEAR EFFECTS AND HUBER-WHITE STD. ERRORS)

ECONOMIC(INCLUDES LAGGED DEPENDENT VARIABLE)

POLITICAL-ECONOMIC(INCLUDES LAGGED DEPENDENT VARIABLE)

POLITICAL-ECONOMIC-CULTURAL (INCLUDES LAGGED DEPENDENT VARIABLE)

REGION FIXED EFFECTS(INCLUDES LAGGED DEPENDENT VARIABLE)

DEPENDENT VARIABLE

LOG REAL NET CANADIAN ODA

LOG REAL NET CANADIAN ODA

LOG REAL NET CANADIAN ODA

LOG REAL NET CANADIAN ODA

MEMBERSHIP IN THE CANADIAN EXECUTIVE DIRECTOR BLOC

1.14***

(6.74)

0.93***

(5.19) 1.16***

(5.38) 0.64**

(3.63)

LOG OF REAL GDP PER CAPITA

-0.34***

(-5.75) -0.40***

(-6.10) -0.41***

(-5.58) -1.15*

(-2.16)

LOG OF THE LAGGED POPULATION

0.19***

(4.64)0.20***

(4.84) 0.21***

(4.90) 1.16***

(4.56)

NET FDI (% OF GDP)

-0.02(-0.54)

-0.02(-0.62)

-0.02(-0.59)

-0.02(-1.11)

TRADE OPENNESS (IMPORTS+EXPORTS AS A % OF GDP)

0.002(1.13)

0.003(1.39)

0.004(1.77)

0.003(2.01)

LEVEL OF DEMOCRACY (POLITY II SCORES)

0.03**

(3.00)

0.03***

(3.34) 0.02

(1.77)

MEMBERSHIP IN LA FRANCOPHONIE

0.13(1.03)

0.28(0.97)

FORMER BRITISH COLONY

-0.21(-1.64)

0.26(1.15)

N 2398 2396 2396 2396

“It would be interesting to see if the membership in the IMF by the other small island state members of the constituency was stimulated not only by Australian diplomatic efforts but by increases in development aid, though there is no evidence to support or reject the case of which the author is yet aware” (Carroll 2011: 11).

Professor Peter Carroll, Australia Historian

Australia trades foreign aid for support in the Bretton Woods Institutions.

Mean of Australian ODA(Millions of constant 2010 USD)

Mean ODA Received within Oceania(Millions of constant 2010 USD)

Member of Australian BWI bloc

1.74*** 0.35*** -0.31*** -0.29***

-0.08 -0.07 -0.08 -0.08

Log of population -0.02** 0.14*** -0.05 -0.01 -0.03 -0.08Log of gdp per capita -0.41*** 0.09*** 0.08** -0.01 -0.03 -0.03Log of total flow of trade 0.32*** 0.07*** 0.08*** -0.01 -0.01 -0.01British colony 0.26*** 0.95*** 0.3 -0.03 -0.26 -0.3Oceania region 2.01*** 1.91*** 1.18*** -0.08 -0.28 -0.39_cons 2.94*** -3.22*** -1.03 -0.23 -0.54 -1.08Number of observations 5091 5091 5091Adj. R-squared 0.54 0.81 0.82Country FE No No Yes YesYear FE No No No Yes

Australian foreign aid:

Takeaways

• Australia & Canada engages in vote-buying

• Middle-Power States act strategically too!

Korean foreign aid: Buying export markets

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

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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.”40

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)

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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

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

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Countries recognizing the PRC

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Countries recognizing the ROC

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Empirical tests: (DV: Exports to China)

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Calling Democracies and Dictatorships:

The effect of political regime on international long-distance rates

Christian Holkeboerand

James Raymond VreelandEdmund A. Walsh School of Foreign Service, Georgetown

University 

2012 PUBLIC CHOICE SOCIETY

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Plan

• Background

• Theory

• Descriptive data

• Regression analysis

• Conclusion

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Regulation theory & accountability

• Idea in Zurich…

• Telecommunications:– Increasing returns to scale– Naturally Monopolistic

• Democracies regulate better than autocracies?

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1st argument: Regulation of Monopolies

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“Majority” indifference curve

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POLITICAL SUPPORT AS A FUNCTION OF MONOPOLIST AND CONSUMERS/VOTERS

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THE PELTZMAN MODEL:

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Government preferences if “captured” by monopolist

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Government preference if controlled by consumers/voters

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The shape of the indifference curves:

A function of political regime

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2nd Argument:

• Political control!• Autocracies desire higher prices to lower

communication with the outside world.

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Hypothesis:

• Cheaper to call democracies than dictatorships

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Data

• Cross-section: 156 countries

• Dep. variable: – Average Revenue Per Minute (ARPM)

• Indep. variable:– Political regime

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Do other factors matter?

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The effect

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• The coefficient of –0.31 suggests a democracy-discount of about 27 percent, statistically significant at the one percent level.

Implications

• Democracy is good for cross-border communication in a very real sense:

• It lowers the price

Syriatel owner: Rami Makhlouf

March 2011 August 2011

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The International Sources of Intrastate Conflict:

Regional Organizations and International Politics:Trading Asian Development Bank Loans for United Nations Security Council Votes

Regional Organizations and International Politics:Trading Asian Development Bank Loans for United Nations Security Council Votes

Daniel Yew Mao Lim and James Raymond VreelandGeorgetown University

January 2011

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Argument Tests Implications DiscussionPuzzle 69

ADBADB Prominent role of JapanProminent role of Japan

UNSCUNSC Exogenous measure of political importanceExogenous measure of political importance

Argument Findings Implications DiscussionPuzzle 70

Argument Findings Implications DiscussionPuzzle

Developing Countries

Developing Countries Loans > UNSC votesLoans > UNSC votes

Developed Countries

Developed Countries UNSC votes > LoansUNSC votes > Loans

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Descriptive Evidence

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Propensity Score

Matching

Propensity Score

Matching• UNSC member: +87%• UNSC member: +87%

Country & Year Fixed

Effects, Lagged

Dependent Variable, Control

Variables

Country & Year Fixed

Effects, Lagged

Dependent Variable, Control

Variables

• UNSC member: +38%• UNSC member: +38%

Argument Findings Implications DiscussionPuzzle 74

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Japan uses its influence at the ADB to gain influence over the UNSCJapan uses its influence at the ADB to gain influence over the UNSC

Regionalization of global governanceRegionalization of global governance

Argument Findings Implications DiscussionPuzzle 76

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Time-line

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Enrolls in Political Economy of International Organizations (MSFS)

Jan 2010

Paper idea

Mar 2010

Mortara Working Paper &Present research in Zurich

Jan 2011

Submit to World Politics

Feb 2011

R&R

June 2011

Resubmit

Mar 2012

Accepted!!!

Apr 2012

Take aways1. Political ties drive foreign aid

Canada provides more foreign aid to countries that vote for the Canadian Executive Directors at the IMF & World Bank

2. Trade ties drive foreign aid Korea provides more foreign aid to poor countries that buy more

Korean exports

3. Trade ties can be influenced by politics China rewards countries with market access – exports to China

go up when countries cease recognizing Taiwan

4. Global communication is influenced by political regime type It is cheaper to call democracies than dictatorships

5. International politics influences multilateral development banks Japan (& the United States) pressure the Asian Development

Bank to funnel loans to strategically important countries 79

Thank you

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USA:

81http://www.pay-equity.org/t