Multiple Choice: Substitution and Complementarity in Policy Choice with Heterogeneity
I defended my dissertation on August 9, 2005 before a committee composed of Ronald W. Jones [Xerox Professor of Economics], Curtis S. Signorino [Political Science], Alan C. Stockman [Wilson Professor of Economics], and Randall W. Stone [Political Science]. You can view the entire dissertation at Rush Rhees Library at the University of Rochester, or by clicking here. The foils for the public presentation are also available.
- Partisan Substitution in International Finance and the accompanying foils
- I advance a choice theoretic model of capital controls and exchange rate policy among highly
developed countries. Conceptualizing capital controls and exchange rate regimes as jointly endogenous (as
Mundell demonstrates in a pure macroeconomic framework), I argue that differing preferences among broad
classes of political parties regarding the employment of monetary and fiscal tools explain the degree of
external commitment. In support of these claims, I find strong evidence consistent with a rational partisan
view of capital controls and exchange rate policy as a two-dimensional choice problem in the presence of
substitutable policies. To cross-validate the results and examine the mechanism, I develop and test partisan
hypotheses about the rate of substitution among policies and find evidence of strong left government support
for capital controls, increasing in the rigidity of the exchange rate regime. I conclude with a discussion
of the promise of models of substitution for the study of politics and the need for careful attention to the
empirical implications of theoretical models.
- Statistical Models for Policy Substitutes
- I analyze research design and estimation techniques for policy substitutability with explicit attention to
the role of strategy. Foreign policy substitutability requires an examination of the factors that link choices to the
broader themes that particular actions represent. This analysis leads to a simultaneous equations framework with a
specific view toward testing hypotheses of substitution, complementarity, and no relation among distinct policy
choices. I analyze issues concerning the estimation of models in this class analytically and in a series of Monte
Carlo analyses of the appropriateness of various techniques. I then extend the theoretical and empirical models to
analyze agent-specific substitution patterns in a study of uses of force and economic sanctions by the United States in
the post-World War II period.
- Political Instability and Exchange Rate Regimes: The Intervening Role of Domestic Political Institutions
- This paper explores the logical underpinnings of the oft-reported relationship between political instability and the propensity for less rigid nominal exchange rate regimes. In short, I argue that competitive reselection in democratic societies is responsible for this relationship, while nondemocracies are likely to adopt more rigid exchange rate regimes as political instability increases. Using a sample from the developing world, I find significant evidence in support of this view and then apply the insights to the vanishing intermediate exchange rate or two poles hypothesis. In effect, democratization and a greater number of democratic societies make intermediate regimes more rather than less likely.
