TexPool's Experiences in the 1990s: Policy Implications for Other State Investment Pools

The State of Texas's local government investment pool, TexPool, has faced major challenges in the 1990s. This article provides an overview of two major events involving TexPool: (1) a $2.2 billion "run" on the pool in 1994 and (2) the out-sourcing of TexPool's functions in 1997. The article describes these events and analyzes potential implications for other state-administered investment pools. The article addresses issues such as: (1) the need to develop investment policies and practices that are suitable for a particular pool's objectives and purpose, (2) whether a state government has a responsibility to ensure that participants in a state investment pool do not incur losses, (3) the possible implications of having an elected official as the person with primary responsibility for overseeing the pool, and (4) concerns related to the outsourcing of state investment pools. This article is intended to encourage debate on the policies and practices of state investment pools, which currently are serving more than 15,000 local governments in the United States.     

The U.S. and third World Revolutionary States: Understanding the Breakdown in Relations

Although scholars focused on Soviet–American relations during the Cold War, the greatest number of conflicts for the U.S. occurred in the Third World, and most of these were with revolutionary states. Could U.S. policies toward the new revolutionary states have prevented the almost universal collapse in relations? Two dominant explanations for this breakdown are (1) American hostility toward revolutionary change and (2) Stephen Walt's variant of the spiral model. Using the comparative case approach and selecting "hard cases," this article disputes these explanations and offers a new theory based on the externalization of domestic conflict in the revolutionary states. Given their ideological goals, the radicals externalized their domestic conflicts with the moderates, who had transnational ties with the U.S., by fomenting tensions with Washington. To demonstrate that this theory can be generalized, this article varies the dependent variable and shows through a critical case that its lack of conflict can best be explained by the absence of the conditions that lead to externalization. The foreign policies of both the U.S. and revolutionary states are explained by classical realism as opposed to Walt's structural realism, which fails to account for the foreign policies of Third World states.