A note on household approach to credit rationing in agrarian economies

Using clues from transaction cost economics this note develops an intertemporal agricultural household model to explain the demand-side credit rationing from formal financial institutions in agrarian economies. The model employs ex-ante transaction costs, namely search cost and negotiation cost to explain this phenomenon. The model shows that with market failure an agricultural household's production decision is not separate from its consumption decision. This is when the policy analysis household approach, which includes simultaneous decision making in production and consumption side, becomes essential.     

The EU's security and the sea: defining a maritime security strategy

Abstract

This article comprehensively discusses the maritime dimension of the European Union's (EU's) security, which encompasses military and civilian aspects, intergovernmental and community components as well as institutional and geopolitical elements. First, the article provides a narrative of the development of the maritime element in the EU's security policy since the adoption of the European Security Strategy in 2003. By depicting the interrelations between the sea and the EU's security, the article shows that the maritime dimension of EU security is generally well established, but often obscured by the complicated institutional structure of the Union. Thereafter, the article emphasises the need to define an effective EU Maritime Security Strategy, which would provide a strategic framework for the Union's security-related activities regarding the sea that encompass maritime power projection, as well as maritime security and safety. Accordingly the article provides some recommendations concerning the definition of such a strategy and for appropriate constituting elements: the maritime-related risks and threats, the maritime strategic objectives, the means to implement the strategy, and the theatres of EU maritime operations.     

The EU's role in developing security cooperation with Myanmar at the ASEAN Regional Forum: 2004–2008

This article tracks the European Union’s efforts at the Association of Southeast Asian Nations (ASEAN) Regional Forum (ARF), from 2004 to 2008, to encourage Myanmar directly or indirectly to engage in security cooperation. It, then, explores Myanmar and ASEAN's reactions to the devastation caused by Cyclone Nargis to Myanmar’s Irrawaddy delta in 2008. It focuses on ARF as a forum whereby interactions take place. It examines whether the complementary of the analytical variables provided by the logic of consequences and appropriateness [March, J.G. and Olsen, J.P., 1998. The institutional dynamics of international political orders. Oslo, Arena Working Paper No. 5; 2004. The logic of appropriateness. Oslo, Arena Working Paper No. 9], social mechanisms [Checkel, J., 1999. Social construction and integration. Journal of European public policy, 6 (4), 545–560.] and observations derived from interviews (Southeast Asia and Brussels) can explain ASEAN and Myanmar’s reactions and, also, the EU’s behaviour in relation to the Myanmar-Nargis event. The EU’s role is explored through the co-chair’s summary reports of the meetings that the EU co-chaired with ASEAN. The article uncovers the EU’s efforts to encourage ASEAN to take up responsibilities and Myanmar to accept multilateral security options. It argues that, as the EU tried to inspire Myanmar to connect with cooperation, “Myanmar hit by Cyclone Nargis” motivated the EU Council to include the "responsibility to protect" as a new goal of the European foreign and security policy of December 2008.     

Institutionalizing ASEAN: celebrating Europe through network governance

This article provides a new piece for two of the puzzles of institutionalized cooperation in Association of Southeast Asian Nations (ASEAN). First, with regard to the organization's four decades of existence, there has always been a marked gap between ASEAN's rhetorical goals of cooperation and its actual achievements. What explains these systematic failures of implementation? Second, from the outset, ASEAN was criticized for its light institutionalization, which failed to deliver the substantial cooperation goals. Despite selected institutional reforms, ASEAN's autonomy has not increased remarkably and it has not made any major institutional innovations. Why does ASEAN design institutions it does not use? Why does this transformation gap occur? The author suggests a sociological institutional explanation and argues that major impulses for cooperation have come from outside Southeast Asia, most importantly from Europe. By mimicking the European integration process, ASEAN member states have effectively created an isomorphic organization. The Association's institutional development reflects a concern for international legitimacy and less an objective functional demand arising from the specific interactions of member states. This copying process has led to network governance within the organization.     

Making sense of EU comprehensive security towards conceptual and analytical clarity

Abstract

European leaders frequently vaunt the European Union's distinctiveness in adopting and pursuing a comprehensive approach to security. The EU's profile as an international actor is designed to span across all dimensions of security. As a result, its security policy portfolio involves a large number of institutional actors and policies that need to be coordinated. The ambition of the EU to provide security in a comprehensive manner raises challenges at the politico–strategic level, at the level of operational and policy planning and in day-to-day implementation. So far, the field is lacking an inclusive analytical framework for the analysis of providing security through a distinctively comprehensive civil–military, economic and political organisation. This article seeks to close this gap by providing suggestions for how the wide range of issues related to comprehensive security could be structured, and by framing the matter theoretically and with reference to existing conceptual work and empirical research.     

Hierarchy Amidst Anarchy: A Transaction Costs Approach to International Security Cooperation

This article provides an interest-based explanation for hierarchy in international politics. The study suggests that—even in a self-help system—self–interested actors voluntarily curtail their sovereignty to obtain needed assurances, yet that these actors have a choice among cooperative security arrangements with different degrees of "bindingness." The key to understanding countries' international institutional choices is in focusing on economic theories of organization and, more specifically, transaction costs. The study begins with the conceptualization of a continuum of cooperative security arrangements with different degrees of bindingness. It then examines different bodies of literature—the traditional realist model and economies–of–scale arguments—and claims that both fail to account for hierarchical security structures in the international system. Recognizing that economists explain hierarchy amidst market anarchy by examining transaction costs, the study makes use of this insight by developing an analogous argument for hierarchy in international politics. Finally, to test the propositions advanced in this article, a brief case study examines plans for the creation of a European Defense Community.     

The future of the United States as a European power: The case of NATO enlargement

Abstract

European Union enlargement has left Russia on the margins of European political processes and led to widespread suspicion in the Moscow foreign policy establishment of European motives. This has resulted in, first, increasing resistance to the imposition of European norms and, second, a more assertive policy, particularly in the EU's and Russia's ‘overlapping neighbourhoods’. Although Moscow is likely to continue the strategy of engagement initiated under Putin, Brussels must radically rethink the nature and extent of Russia's ‘Europeanisation’. Russia's drive for modernisation will coexist with the strengthening of sovereignty and the power of the state, seen by the Putin administration as key to external and internal security. The EU will have to limit its ambition and work within this ‘window’—wider or narrower depending on state of play—of policy possibilities.     

Pierre Bourdieu and the Birth of European Defense

This paper uses an analytical framework derived from Pierre Bourdieu's sociology to explain the genesis of the European Security and Defense Policy (ESDP). Long-term social and institutional processes at work in the making of ESDP are addressed through an emphasis on the institutionalization of social fields, the impact of structural crises, and the socialization of policy makers into specific schemes of perception and action (habitus). Two arguments follow from this framework. First, the paper shows that the creation of ESDP after 1998 would have been impossible without the prior institutionalization of two transgovernmental arenas: (1) the European foreign policy field, wherein EU diplomats vie for influence over EU policies; and (2) the international defense field, centered upon military relations within NATO. Second, ESDP results from the strategies of a number of diplomats and military leaders who, following the end of the Cold War, perceived that they faced important organizational crises in their respective fields. This sociological framework provides a more nuanced account of ESDP's creation than that proposed by the two dominant explanations in international relations theory—realism's balancing and constructivism's strategic culture convergence. Combining structural and ideational factors, it elucidates three empirical puzzles: the lack of opposition to ESDP when it was launched, the motives of policy makers who proposed ESDP, and the disappearance of alternative options for the European security architecture.     

How the court made a federation of the EU

We analyze the European institutional integration that took place in the 1950s and 1960s as a two-stage process. Firstly, an explicitly political project aims at establishing a European political community. The project is abandoned in the mid-1950s and political integration stops. At that time, the institutions of the Union take the form of a confederation. In a second stage, because of the failure of the European political community, a legal process of integration driven by the European Court of Justice takes place. This second stage of unification is more centralizing and in effect leads to a federalization of the European institutional structure. The transformation of the political structure of the European Union thus appears to result from the actions and decisions of a legal entity, the European Court of Justice.      

Voluntary organizations and society–military relations in contemporary Russia

The 2014 crisis in Ukraine has refocused attention on Russia as a European security actor. Despite showing renewed military capability, compared to the post-Soviet period, Russian society–military relations have remained the same. This relationship (between society and the security organs) provides the key context for assessing security. Analysis of everyday militarization and the role of voluntary organizations (such as DOSAAF [Dobrovol'noe obshchestvo sodeistviya armii, aviatsii i flotu] and Nashi [Molodezhnoe demokraticheskoe antifashistskoe dvizheni]) in supporting the military can provide an important insight into Russian behaviour as a security actor. These organizations generate a pro-military outlook and at the same time provide training and activities, thus contributing to military effectiveness by developing the competency of young people prior to military service as well as increasing public knowledge of military affairs. However, strong support for the military, a lack of independent information, and an absence of a shared vision on how society–military relations should be developed and also represent political challenges in terms of everyday militarization. This dynamic is important for understanding both Russia's security posture and wider security implications for Europe.     

Does Russia need a general staff?

The institutional arrangements and mechanisms for preventing and managing conflicts will determine the future of European security and the balance of power in a wider Europe. Russian policy and Russia‐NATO relations are anaylsed within the context of the ongoing changes at Russia's southern periphery. The embryos of three distinct security systems are developing ‐ a Russia‐led, a NATO‐led and one led by the international community. The article suggests that instability in the southern periphery in the future will require security cooperation and a joint approach by Russia and NATO countries.     

Understanding EU crisis diplomacy in the European neighbourhood: strategic narratives and perceptions of the EU in Ukraine,Israel and Palestine

ABSTRACT

This Special Issue seeks to better understand the role of communication and perception in EU crisis diplomacy. In a recent Special Issue in this journal, Catarina Kinnvall, Ian Manners and Jennifer Mitzen argue that, “?…?the greatest security challenge facing people across Europe is not physical, despite the threats of Putin and ISIS, but is a sense of fear and anxiety over their daily lives” [2018. Introduction to 2018 Special Issue of European Security: “Ontological (in)security in the European Union”. European security, 27 (3), 249–265]. We take an interdisciplinary approach to widen the scope of studies on European security and offer new avenues for further research into how citizens in the EU’s neighbourhood understand the security challenges they face and the role the EU plays in addressing these. Through this, we aim to bring theoretical and methodological innovation to understanding the role of the EU as an external actor.     

Germany and European security governance: how well does the Birmingham model perform?

Abstract

The expansion of the security agenda after the end of the Cold War, propelled by the blowback of 11 September 2001, raises questions about the German ability and willingness to contribute to the regional and global security governance tasks facing Europe and Germany's continuing fidelity to its post-war European avocation. It also calls for a reconsideration of the Birmingham model of foreign policy analysis, particularly its emphasis on (and interpretation of) the ideational and institutional factors defining the German foreign policy agenda and shaping German foreign policy behaviour, at least with respect to the implementation (rather than formulation) of European Union security policies. Towards assessing the continuing utility of the Birmingham model, this article proceeds in three steps: the presentation of the Birmingham model and its restatement as six conjectures; a discussion of the security governance functions undertaken by the EU and the collective action problem facing Europe (and Germany) in executing them; and an empirical investigation of Germany's contribution to the EU as a security actor since 1990.     

再论振兴东北老工业基地的新思路

东北老工业基地特殊性在于:计划经济体制浓厚、国有经济比重大、重化产业比例大形成的“铁三角”架构,从而在向市场经济体制过渡的同时,会产生显著的沉淀成本。补偿或降低这些沉淀成本,构建完全的市场竞争环境是新形势下振兴东北老工业基地的关键。     

Europe after the U.S. Pivot

Insofar as Europe's security and cohesion have for decades been premised upon a strong American political and strategic engagement, Washington's intention to “rebalance” to Asia casts a shadow over the sustainability of a stable and coherent geopolitical order on the continent. This article argues that as the United States seeks to rebalance strategically towards the Asia-Pacific region a number of “indigenous” geopolitical trends are becoming increasingly important in Europe: an Anglo-French entente for a “maritime” Europe, a German-French “continental” project of economic and political integration, and Russia's resurgence across Europe's East. The growing prominence of competing geopolitical visions for Europe might even call into question the cohesion and direction of the institutional expressions of the U.S.- engineered Western order in Europe, namely the Atlantic Alliance and the European Union. Increasing geopolitical and institutional contestation, we contend, pose a number of challenges for both U.S. interests and European security.     

Asset Specificity and State Subsidies in Industrialized Countries

Why do national governments in industrialized countries subsidize many of their industries? Borrowing insights from literature on transaction cost economics and international trade, I build a model which tests the hypothesis that under threat of international competition disbursement of state subsidies varies systematically with the degree of asset (factor) specificity employed in a national economy. Asset specificity refers to the cost of moving factors (assets) from one activity to the next. I pool annual data on state subsidies in thirteen OECD countries during the period 1990–93 and regress them on two measures of asset specificity (physical and human capital) in the face of competition from abroad. Physical capital exercises a significant u-shaped effect on total and sectoral subsidies. Human capital has a weak negative effect on horizontal subsidies. The results extend the literature on asset specificity and trade in two ways. First, they provide empirical support in favor of the argument that asset specificity and subsidy protection are related. While theoretical claims concerning asset specificity abound, the literature is generally short of empirical studies. Second, asset specificity helps determine the scope of subsidies.     

Modeling alliance membership in a three‐dimensional space

Both Altfeld (1984) and Morrow (1991) offer theoretical foundations that explain why alliances form. Security concerns and autonomy desires are the driving force for the pursuit of allies. While this response explains why states become allies, it does not address which do. To explain with which potential allies states choose to share alliance membership, I construct a three‐dimensional space in which security, autonomy, and political system structure are each represented as one of the three dimensions of ally choice. Every state that shared alliance membership with any other given state from 1946–1992, on a yearly basis, is assigned a unique, tri‐component point in the three‐dimensional space. The distances in the space between each state and all other states’ tri‐component points are calculated, and this distance is then incorporated into a probit estimation of ally choice. By examining the role that security and autonomy trade‐offs and level of political system structure similarity play in determining ally choice, I conclude that two states are more likely to share alliance membership the more symmetrical they are in security and autonomy considerations and the more similar they are in political system structure.     

The security–development nexus and securitization in the EU's policies towards developing countries

This article assesses how and to what extent the European Union (EU) uses a security perspective to define and shape its relationship with the developing world. In order to evaluate the EU's development policy and its relations with developing countries we link the concept of ‘security–development nexus’ with the concept of ‘securitization’. The article examines whether securitization can be observed with regard to four dimensions: discourse, policy instruments, policy actions and institutional framework. The analysis demonstrates a securitization of the EU's development policy and its relations with developing countries, particularly in Africa. However, paradoxically, the securitization's extent and nature suggest that the EU can also use it as a way to avoid a more direct involvement in conflict areas.     

Political Markets, Bond Markets, and the Effects of Uncertainty: A Cross-National Analysis

One of the critical challenges of contemporary democracy is securing a balance between the markets of representation and the markets of exchange and capital within democracies. This article explores the effect that political markets have upon capital markets' performance as measured by the market risks within the long-term government bond markets in nineteen democracies of the Organization for Economic Cooperation and Development (OECD) between 1955 and 1992. Our theory linking political markets and capital markets will be developed around the logic of transaction cost economics. We will argue that critical aspects of transaction costs within political markets generate corresponding transaction costs and risks within capital markets thereby reducing market efficiency. Specifically, we demonstrate that, based on cross-national evidence drawn from three panels over the time period 1955–1992, stochastic political markets generate transaction costs within long-term government bond markets, the consequences of which are reflected in rising market risk within these capital markets. Our pooled cross-sectional sample confirms that stochasticity in institutional structure presents trade-offs for democracy. Stochasticity may reflect more responsive and generally sensitive representative institutions, but often at the price of risk-laden capital markets. We consider the implications of these findings at the conclusion of the article.