The Social Context in Coercive International Bargainingweb.stanford.edu/class/ips216/Readings/schoppa_99.pdf · The Social Context in Coercive International Bargaining Leonard J

The Social Context in CoerciveInternational BargainingLeonard J Schoppa

Although international relations scholarship emphasizing the role of social con-structs such as norms and culture has established a beachhead in the area of securitystudies1 it has yet to take on another bastion of the rational materialist approachstudies of coercive international bargaining Scholarship in this area ranging fromthe work of Thomas Schelling to James Fearon has long argued that bargainingoutcomes re ect the material costs and bene ts faced by participants in negotia-tions2 Participants can in uence outcomes these models assume only through tac-tics such as credible threats and side payments that reshape the material context ofnegotiations

The assumption of rational materialism has been entrenched in the study of coer-cive internationalbargaining for the same reason it was widely adopted in the area ofsecurity studies because international relations scholars in both areas have boughtinto the view that the anarchic nature of the international system forces nations tooperate in a self-help world trust no one and concentrate on the all-important aim ofmaintaining your security by maximizing your own relative power Given this start-ing point studies of coercive international bargaining have naturally focused on theconcrete material context of negotiations the overall power resources of each side

Earlier versions of this article were presented at the 1996 annual meeting of the American PoliticalScience Association the 1996 special meeting of the International Studies Association the 1997 WorldCongress of International Political Science Association and in seminars at Duke University HarvardUniversity Stanford University and the University of Tokyo My thanks for all of the comments andadvice I received at these fora I would especially like to thank Dale Copeland Mac Destler Peter Goure-vitch Peter Viggo Jacobsen David Lake Jeff Legro John Odell Ken Oye T J Pempel Bob Uriu DavidWaldnerAlex Wendt Gilbert Winham Marshal Zeringue and four anonymous referees for the journal fortheir comments on earlier drafts of this article This research was supported in part by a summer researchgrant from the University of Virginia and builds on work done as an Abe Fellow funded by the JapanFoundation Center for Global Partnership and administered by the Social Science Research Council andthe American Council of Learned Societies

1 For example Katzenstein 1996b and Legro 19952 See Schelling 1960 and Fearon 1994

International Organization 53 2 Spring 1999 pp 307ndash342

r 1999 by The IO Foundation and the Massachusetts Institute of Technology

the speci c costs and bene ts involved in the issue at hand and material factors thataffect the credibility of commitments to impose costs or provide side payments

There has been one notable exception to this literaturersquos general neglect of thesocial context of negotiationsMuch of it has emphasized how a negotiatorrsquos reputa-tion for resolve can make a difference in international negotiations in uencing theway the negotiatorrsquos counterparts evaluate the credibility of his or her threats inde-pendent of the material costs and bene ts at stake3 Studies in the area of socialpsychology that inform some of this work on the effects of reputation on interna-tional bargaining outcomes however point to a number of additional dimensions ofthe social context that might matter at the international level as well Most impor-tantly these studies have identi ed norms de ning the range of legitimate bargainingtactics that in laboratory experiments in uence negotiationoutcomes Even in coer-cive bargaining situations these studies argue certain tactics are more legitimatethan others and in certain situations threats are more acceptable as part of the game4

Violations of these norms can cause a backlash that limits the gains that might havebeen expected based on a rational calculation of the material stakes In contrastbargaining tactics that take advantage of opportunities for coercion that lie within thebounds of these norms can elicit more concessions

I draw on this literature to generate a number of predictions about when and howthe social context should matter in coercive international negotiationsCoercive tac-tics should yield less of a backlash and more concessions I propose when they takeplace within a social context where the parties accept that they are operating within ahierarchy and when the speci c tactics employed fall within the range that are ac-cepted as legitimate in the terms of this relationship when the coercion takes placewithin an institutionalized process that establishes mutually accepted rules of thegame and when the parties trust each other I then demonstrate the plausibility ofthese hypotheses by examining how the social context has shaped the recent patternof bargaining outcomes in USndashJapan economic negotiations in ways that cannoteasily be understood in terms of lsquolsquopurersquorsquo material factors

This set of cases was chosen rst because the frequency of USndashJapan economicnegotiations allows us to look beyond the issue-speci c factors that affect the resultsof any single bargain so that we can concentrate on the material and social factorsthat drive the broader pattern of results over time Although I might have taken thislogic to the next step and examined additional cases involving other dyads I chose tolimit the sample to those involving the United States and Japan in order to holdconstant at least some of the factors that affect bargaining outcomes The choice ofcases was also driven by evidence that we have seen over the past decade a particu-larly dramatic shift in the pattern of bargaining results between the United States andJapan Through the end of the 1980s Japan was arguably the country that was mostresponsive to coercive US trade pressure5 In recent years however Japan has be-

3 See Schelling 1960 36ndash37 and Snyder and Diesing 1977 185ndash89 On how reputations for resolveform and matter see Mercer 1996 For another exception see footnote 12

4 See Pruitt and Carnevale 1993 and Tedeschi and Lindskold 19765 See Bayard and Elliott data discussed in more detail later Bayard and Elliott 1994

308 International Organization

gun to stand up to US demands with increasing frequency This signi cant move-ment on the dependent variable promises to provide us with an interesting opportu-nity to re ect on the role of changes in the material andor social context in propellingthis shift

Although in this article I focus primarily on the questions of when and how thesocial context affects coercive bargaining outcomes I also seek to use this set ofcases to suggest some answers to a second equally important question where dothese norms come from As Paul Kowert and Jeffrey Legro argue in their recentarticle surveying the state of the social constructivist project much of this work hasconcentrated on the task of showing that norms matter while leaving the question ofwhere these norms themselves come from lsquolsquoill-de ned incompletely theorized andunderstudiedrsquorsquo6 Applying this question to the cases at hand leads us to ask not onlywhether changes in the social context have affected patterns of USndashJapan bargain-ing outcomes but also where the norms that facilitated coercive bargaining untilrecently came from and what caused these norms to change

The norms that govern USndashJapan bargaining until recently I conclude were theproduct of a period four decades ago when Japan was heavily dependent on theUnited States for both its security and its economic well-being In that sense theyhad a material origin It was during this time that the Japanese came to accept theidea that their nation was in a hierarchical relationship with the United States andbegan to trust it as a partner Even as the underlying material world that had givenrise to these social norms began to change they retained a force of their own surviv-ing in the minds of the elites who managed the USndashJapan relationship Conse-quently they continued to facilitate the United Statesrsquouse of trade pressure to extractunilateral Japanese concessions

The cumulative effects of what Japan saw as the United Statesrsquo increasing abuse ofits position the establishment of the World Trade Organization and the abrupt end ofthe Cold War however nally triggered a change in the nature of this relationshipThis shift experienced in the form of a generational transition among elites broughtthe social context of bilateral relations more in line with an underlying materialpower balance that had been shifting steadily in the meantime This new context wasmuch less conducive to the United Statesrsquocontinuing use of coercive bargaining tac-tics

The story I tell about changing USndashJapan relations provides a variety of insightsinto the question of how norms shift First it reminds us that social phenomena suchas norms cannot be treated as completely lsquolsquoindependentrsquorsquo features of the internationalenvironment divorced from the material world and impervious to the actions ofagents such as nation-statesThe social context of bargaining is sticky (and thereforehas a signi cance of its own) but it is not immune to dramatic changes in the mate-rial world Similarly social norms tend to tolerate a measure of contrary action bystates but at a certain point they will begin to be transformed by such actions Sec-

6 Kowert and Legro 1996 454

Coercive International Bargaining 309

ond it points to the role of generational transitions of elites in delaying and eventu-ally facilitating the development of new norms

The connections I try to draw and the story I tell in this article are not simpleIdeally if all I wanted to do was examine whether social norms matter in coerciveinternational bargaining I would have chosen a set of cases where the material con-text was unambiguously constant so that the variation in my dependent variablecould be clearly linked to changes on the social dimension Given my interest inthinking about the relationship between changes in the material context and changesin the social however I needed to choose a set of cases where both were in play Todeal with the challenge of sorting out the effects of changes in the social and materialcontexts I therefore focus closely on the timing and extent of changes in all of myvariables The recent dramatic decline in the effectiveness of US pressure on JapanI argue cannot easily be explained by changes over the same time period in thematerial context of USndashJapan bargainingOnly by understandinghow recent changesin the material world and in the actions of the players have helped to transform thesocial context in which the two nations bargain can we understand why the effective-ness of US pressure has declined so abruptly

Ultimately my aim is to convince readers that the social context represents animportant part of what shapes international coercive bargaining outcomes Whetherit does or not is critical not just in terms of international relations theory but also interms of the practice of real-world negotiators If the rational materialists are rightand bargaining outcomes can be in uenced only through the exercise of materialpower negotiators seeking better terms have no choice but to up the ante makebigger threats tap new sources of leverage If norms play a role in shaping outcomesand norms themselves can be transformed over time by the actions of negotiatorshowever such aggressive strategies might actually produce fewer gains over the longterm Bargainers would instead maximize their gains by carefully limiting them-selves to coercive tactics that are viewed as a legitimate part of the game and bynurturing the kind of relationship that allows for their use

The article is organized as follows I rst make the case for why scholars whostudy coercive international bargaining ought to pay more attention to the socialcontext in which the parties negotiate I focus on the bargaining literature in the eldof social psychologyand draw out some speci c hypotheses about the ways in whichwe should expect the social context to matter I also examine the current state of ourknowledge about the process of international norm change I then examine the re-sults of USndashJapan economic negotiations over the period 1977ndash96 and show howmy hypotheses offer a plausible explanation for the pattern of outcomes Finally Iexamine a variety of materialist explanations for the empirical pattern of results andconclude that none of these adequately accounts for the timing and magnitude of therecent abrupt decline in the effectiveness of US pressure on Japan Only by appreci-ating the way in which material and social contexts combine and interact I argue canwe gain a full understanding of what drives coercive international bargaining out-comes


The Social Context of Bargaining

As noted at the outset most analysts of coercive internationalbargaininghave tendedto limit their focus to rational material factors To extract concessions the conven-tional models propose the state making demands must have the material capabilityto carry out a threat large enough to reverse the targetrsquos cost-bene t calculations aswell as a material interest in doing so that is sufficient to convince the target that thisthreat is credible7 More recent applications of bargaining theory to coercive interna-tional negotiations have shifted attention toward the material effects of domesticpolitical institutions focusing on how domestic institutions affect the ability of par-ties to establish the credibility of their threats by imposing (material) audience costson themselves8 and on how electoral cycles affect the rate at which parties discountfuture costs and bene ts relative to present values9

Although the formal models used by scholars who work in this vein have becomemore and more complex as they attempt to incorporate lsquolsquointerests institutions andinformationrsquorsquo at the domestic level into their studies of international bargaining10

they have retained the simplifying assumption that negotiationsbetween nations takeplace in an anarchic environment where because there is no supranational enforce-ment of rules states are driven to view all other states as potential threats and toobserve social norms (and expect other states to observe them) only when it is in theirmaterial interest to do so These assumptions are challenged by a growing volume ofliterature in the eld of international relations that insists that relations between statesare to one degree or another lsquolsquosocially constructedrsquorsquo Relations are not just a functionof the material capabilities and interests of nations they also re ect the way thismaterial is given meaning by the social process through which nations interact InAlexander Wendtrsquos illustration ve North Korean nuclear weapons are more threat-ening to the United States than ve hundred British nuclear weapons lsquolsquobecause theBritish are friends and the North Koreans are notrsquorsquomdashjudgments that re ect the UnitedStatesrsquo experience interacting with these two nations11

Even the lsquolsquodeterrence literaturersquorsquo generally associated with the materialist camp asnoted earlier gives pride of place to the essentially social concept of lsquolsquoresolversquorsquo

7 See Schelling 1960 and 1966 and Snyder and Diesing 19778 Fearon 1994 5829 Seawright and Way 199710 For example Milner 1997 OrsquoHalloran 1994 and Bueno de Mesquita and Lalman 199211 Wendt 1995 73 Stephen Waltrsquos much respected work on how states balance against lsquolsquothreatsrsquorsquo

rather than capabilities re ects the similar insight that nations inevitably make assumptions about theircounterpartsrsquo future behavior based on their past interactions not just on their power and lsquolsquointerestsrsquorsquoabstracted from their position in the international system Walt 1987 Walt himself does not regard himselfas a constructivist however and takes pains in his more recent book to argue that the empirical cases heexamines there do not accord with the predictions of lsquolsquocritical theoryrsquorsquo Walt 1996 Constructivists wouldpredict he claims that revolutions would be followed uniformly by long-term discontinuities in therevolutionary statesrsquo foreign policies because of their effect on statesrsquo self-identitiesmdasha pattern he does not nd Nevertheless Waltrsquos continuing focus on how states measure each otherrsquos lsquolsquointentionsrsquorsquo (where atleast part of how states evaluate each otherrsquos intentions is based on their experience interacting with them)cannot but be seen as importing an element of the social context distinct from the usual neorealist em-phasis on material capabilities


Reputations for resolve are social rather than material because they are constructedthrough statesrsquo interactions much in the way individuals in domestic society acquirereputations for being resolute or irresolute based on their interactions with peersThis fairly widely accepted social dimension of coercive bargaining provides us withthe rst basis for predicting patterns of negotiatingoutcomes based on changes in thesocial context changes over time in a nationrsquos reputation for following through on itsthreats and promises will other things being equal result in parallel shifts in itsability to prevail over its counterparts in coercive internationalnegotiations

Work in the eld of social psychology that is the source of theorizing about therole of reputations in coercive bargaining however also points to the importance ofother social constructs in shaping bargaining outcomes Nevertheless these phenom-enamdashincluding norms de ning the range of legitimate bargaining tactics and trustmdashhave curiously failed to receive signi cant attention in studies of coercive interna-tional bargaining This neglect probably re ects at least in part the dominance ofscholars studying cases of Cold War crisis bargaining in developing theory in thisarea When a state is threatening to invade or rain nuclear missiles on your countrylegitimacy and trust are not likely to be an important part of the story In coerciveeconomic bargaining of the type that has become much more common in the postndashCold War era however social constructs such as these are much more likely to play arole especially when bargaining involves states whose relations are generally ami-cable

All of the strands of rational materialism summarized earlier argue that coercionworks only to the extent that it can credibly threaten to impose sufficient costs on atarget Even reputation for resolve though part of the social context contributes tothe efficacy of threats through its role in enhancing the credibility of threats to im-pose costs12 The social phenomena I focus on in contrast derive their efficacy fromfeatures of the social context that facilitate the extraction of concessions independentof threat magnitude or credibility

The rst group of social phenomena I consider are norms de ning the range oflsquolsquolegitimatersquorsquo coercive bargaining tactics That the exercise of coercive power can belsquolsquolegitimatersquorsquo or not and that this makes a difference is something we take for grantedin thinking about domestic society Weberians have traditionally made the questionof whether or not an organizationrsquos exercise of coercive power is viewed as legiti-mate the de ning characteristic of the lsquolsquostatersquorsquo Sociologists have long recognizedhowever that other social actors (such as the boss at work) enjoy a measure oflegitimacy when they exercise certain kinds of coercive power A lsquolsquopersonrsquos percep-tion that another has legitimate authorityrsquorsquo social psychologists have found in a vari-

12 I am not implying that reputation for resolve is the only element of the social context that has beenimported into rational materialist bargaining models Much of the work on signaling by Schelling and hisfollowers for example has emphasized the role of discourse between leaders engaged in crisis bargainingAs with reputation for resolve however patterns of discourse have been seen to in uence bargainingoutcomes through their effects on perceptions of threat credibility Note too that more recent formalmodels focused on signaling (for example Fearon 1994) have moved away from Schellingrsquos interest indiscourse and emphasize how signals have an effect only when they are communicated in ways thatthreaten to impose material costs on the sender


ety of experiments substantially increases the likelihood that the former will complywith the latterrsquos demands independent of the material context13 Although the inter-national system does not have an equivalent to Weberrsquos sovereign authority lsquolsquointer-national societyrsquorsquo might sometimes create situations that approximate other domesticsocial settings where the exercise of coercive power is seen as legitimate and where agiven measure of coercion therefore yields more concessions with less of a backlash

First some international relationships may come to be seen by the elites involvedas essentially lsquolsquohierarchicalrsquorsquo creating a situation not unlike the one alluded to in thepreceding paragraph where demands made by lsquolsquothe bossrsquorsquo enjoy a measure of legiti-macy As Wendt and Daniel Friedheim argue international hierarchies are usuallyestablished when one state enjoys overwhelming material power over the other anduses it lsquolsquoto manipulate subordinates in a systematic way over timersquorsquo14 They arguethat over time however such relationships lsquolsquowill also affect statesrsquo identitiesrsquorsquo15

Those in the subordinate state sometimes come to accept the legitimate authority ofthe superior state within certain limits Once this happens hierarchy becomes a lsquolsquoso-cial constructrsquorsquo that is independent to some degree from the material power that gaverise to it in the rst place This line of argument thus presents us with the followinghypothesis that a decline (rise) in the degree to which elites in one nation see theirstate as being the subordinatepartner in a hierarchical relationshipwill other thingsbeing equal lead to a rise (decline) in that nationrsquos ability to stand up to coercivepressure from this partner

This social constructivist view of how role identity affects bargaining outcomesleads to predictions about how cross-issue lsquolsquolinkagersquorsquomight work that are very differ-ent from the usual materialist way of thinking about this tactic In rational materialistbargaining theory linkage has generally been seen as operating in the following waya nation with superior power resources in one issue area (for example it contributesmore than its share to a military alliance) trades what it could have obtained in thissame issue area for enhanced leverage in a second issue area where it has less lever-age (for example trade negotiations) Consequently though the nation employing amaterial linkage strategy gains more than it would have in one area it does so at theexpense of gains in another area16

If the efficacy of coercive pressure is in part the product of the social contexthowever it is possible that lsquolsquosocial linkagersquorsquomight operate in such a way that no tradeis necessary In a relationship where social ties in one issue area (such as the militaryside) are distinctly hierarchical patterns of relations in another area where they areless materially unbalanced (such as the economic side) might nevertheless be af-fected through patterns of social interaction Rather than relying on threats to with-draw favors on one side to extract concessions on the other lsquolsquosocial linkagersquorsquo mightwork through the process whereby elites in the subordinate partner who have been

13 For a review of the experimental evidence see Tedeschi and Lindskold 1976 341ndash42 See alsoPruitt and Carnevale 1993 31

14 Wendt and Friedheim 1995 69715 Ibid 702 For a similar argument see Ikenberry and Kupchan 199016 Wagner 1988


socialized to accept the authority of the superior partner on the one side of theirrelations carry their deference over to other issue areas where the partners are en-gaged in bargaining

Let us now turn to the second element of the social context that may affect coer-cive bargaining outcomes through its effects on perceptions of legitimacy proce-dural norms As bargaining theorists Dean Pruitt and Peter Carnevale argue thosewho would use threats to improve the terms of their deals can lsquolsquoreduce the resentmentand resistance against their tacticsrsquorsquo by being careful to employ only lsquolsquolegitimatethreatsrsquorsquo17 A disgruntled employee they note by way of example is likely to getbetter results by threatening to go to the president of the company with a complaintthan by threatening to sabotage the production line What makes the threat moreeffective in the former case is the social norm that going through organizationalchannels is acceptable whereas sabotaging production lines is not It is possible thatsimilar norms might affect coercive bargaining outcomes at the international level aswell despite the obvious fact that there is no sovereign authority to enforce lawsagainst the international equivalent of sabotaging production

The analogous possibility to be more precise is that the degree to which a statetargeted by a threat will offer concessions may vary according to how a senderrsquostactics accord with procedural rules stipulatedunder an international regime Interna-tional institutions and regimes are actually another element of the lsquolsquosocial contextrsquorsquothat have been taken seriously in rationalist bargaining theory Robert Keohane forexample has argued that international regimes facilitate cooperation by reducingtransaction costs and facilitating enforcement through tit-for-tat strategies that onlywork when relations are iterated18 Similarly Lisa Martin has argued that threatsmade within an institutionalizedenvironmentare more credible because of the greaterlsquolsquoaudience costsrsquorsquo at stake19 More recently Fearon has argued that reaching coopera-tive deals in institutionalizedenvironments will be more difficult because the greaterlikelihood that such agreements will be self-enforcing further into the future leadsstates to bargain harder over the distribution of gains20

Although this work goes part way toward recognizing the effects of institutionsonbargaining outcomes it has largely neglected the possibility that the normative con-tent of international rules might have an effect on the distributive terms of bargainsindependent of the power and interests of the nations that make the rules21 Morerecent social constructivist work as well as a longer tradition of work in the area of

17 Pruitt and Carnevale 1993 3118 Keohane 198419 Martin 199320 Fearon 199821 On this literaturersquos neglect of distributive terms see Krasner 1991 and Fearon 1998 The neglect

ows from the fact that neo-institutionalists like Keohane and Martin have accepted rational materialistassumptions about the way that anarchy constrains the degree to which states will respect internationalrules They will follow rules only when it is in their material interest to do so This view leads to theexpectation that institutions will re ect the interests of the most powerful state or states and that suchstrong states will rarely be constrained by norms that work in such a way as to limit their material gains orimpose material costs


international law takes norms seriously but most of this literature focuses on prescrip-tive norms such as those related to the use of unconventionalweapons22 Here I wantto take seriously the possibility that international regimes can facilitate the effective-ness of threats by giving them a measure of procedural legitimacy in the eyes of thetarget state Targets of threats should offer concessions more readily if they perceivethat threats are being made through a process that is lsquolsquofairrsquorsquomdashthat is in the sense thatthe process applies equally to weak and strong states If procedural norms matter weare presented with the following hypothesis the more a partyrsquos coercive tactics ac-cord with procedural norms governing international bargaining the more effectivethese tactics will be

The nal component of the social context with possible effects on the terms ofcoercive bargaining outcomes is trust In studies of bargaining great efforts havebeen made to show how certain institutionscan help self-interested parties cooperateeven under conditions (such as the Prisonersrsquo Dilemma) where there are incentivesfor one or both parties to take advantage of the situation by cheating or lying Increas-ingly however analysts have recognized that such institutions are a poor substitutefor the social phenomenon of trust lsquolsquoConcrete personal relations and the obligationsinherent in themrsquorsquo writes Mark Granovetter can do much more to foster cooperationthan reliance on lsquolsquoelaborate explicit and implicit contractsrsquorsquo that on their own leaveself-interested parties with incentives to devise ever more elaborate means to evadethe rules23 Consequently social psychologists have emphasized that the amount oftrust in a relationship dramatically affects the degree to which parties can arrive atcooperative agreements24 Trust is especially important they nd lsquolsquoin settings whereagreements must be implemented because trust should encourage a belief that theother party will uphold its end of the bargainrsquorsquo25

Although bargaining theorists have emphasized the role of trust in fostering inparticular lsquolsquocoordinativersquorsquo or lsquolsquointegrativersquorsquo deals there is no reason to expect it tomatter any less when the bargaining is more coercive Even under these conditionswe can expect that the willingness of negotiators in a nation that is the target of athreat to make concessions will be affected by their perceptions of whether theircounterparts in the nation making the threats can be trusted to respect the terms of the(albeit one-sided) deal If those in the target nation fear that the sender will cheat bystretching the concessions even further during the implementation phase or by com-ing back repeatedly with demands for more concessions they will come to the con-clusion that it is better to let the negotiations fail A decline in the degree to whichnegotiators in the nation making the threats trust the target can also adversely affectbargaining outcomes since it leads the sender to demand deeper and more explicitconcessions in the expectation that the target will cheat during the implementationphase and rob it of concessions it thought it had won The target may then nd these

22 For example Katzenstein 1996b and Legro 199523 Granovetter 1985 489 For similar arguments see Putnam 1993 167ndash85 Fukuyama 1995 and

Kramer and Tyler 199624 Pruitt 198125 Pruitt and Carnevale 1993 133


deeper and more explicit concessions unpalatable and refuse to come to a settlementThese observations lead us to the following hypothesis a decline over time in thedegree to which negotiators trust each other to carry out the terms of their agree-ments in good faith will negatively affect their nationsrsquo ability to reach (even one-sided) agreements thus making it more diffotildecult for one nation to prevail over theother in coercive bargaining

Measuring shifts in abstract qualities such as trust deference and attitudes towardthe procedural legitimacy of speci c types of sanction threats of course is not aneasy task Moreover to be con dent that we have identi ed an important cause ofchanging bargaining outcomes the evidence that shifts in the social context haveoccurred needs to be independent of the behavior that is being explained My analy-sis of changes in the social context is therefore based on extensive personal inter-views with Japanese elites spanning the period 1992ndash98 supplemented by an analy-sis of the language used by elites in published sources In judging whether elites seetheir nation playing a subordinate role for example I focus on the language they usein characterizing the relationship If we notice changes over time in the choice oflanguage used by elites this will be taken as evidence of a shift in role identitySimilarly the evaluation of whether trust has declined between US and Japaneseofficials will be based on comments made by officials during negotiations about thedegree to which they trust their counterparts Although public opinion polls haveperiodically attempted to gauge levels of trust and friendship betweenAmericans andJapanese I decided not to draw on this data because negotiators on both sides aremore likely to be in uenced by their personal experience of USndashJapan bargainingthan by the climate of public opinion

Changes in the Social Context

Social phenomena like norms tend to be lsquolsquostickyrsquorsquo and so are usually employed tohelp explain continuity in outcomes Peter Katzensteinrsquos recent work for examplehas looked at how norms developed over the postwar period in Japan have helpedperpetuate that nationrsquos passive and paci st security policies even as the underlyingmaterial context has changed26 All of the preceding hypotheses positing a link be-tween the social context and coercive bargaining outcomes in contrast focus on howchanges in the social context might lead to changes in outcomes Inevitably there-fore we are led to the question of what drives change in the social context itself

As noted earlier this question has received much less attention in social construc-tivist work to this pointThe chapter by Kowert and Legro in the Katzenstein volumethat raises this critique of the constructivist project to date however does offer auseful place to start thinking about the process of change in the social context Inbrief they identify three mechanisms through which the social context is generatedmaintained and changed that they term social ecological and internal27 I focus onthe rst two of these here

26 Katzenstein 1996a27 Kowert and Legro 1996 470ndash83


One way social phenomena evolve Kowert and Legro argue is through the pro-cess of social interaction That the social context emerges socially may not seemsurprising but it in fact contradicts assumptions that are at the heart of the dominantapproaches to social science in the contemporary disciplinesThese approachesmod-eled on neoclassical economics prefer to view the material and social context inwhich actors operate as an exogenous given an assumption that facilitates modelbuilding and empirical lsquolsquotestingrsquorsquo Social constructivists in a variety of disciplineshowever have begun to insist that this assumption misrepresents the way socialphenomena work As sociologist Granovetter notes lsquolsquoculture is not a once-for-allin uence but an ongoing process continuouslyconstructed and reconstructed duringinteraction It not only shapes its members but also is shaped by them in part for theirown strategic reasonsrsquorsquo28

If this is true in domestic society it ought to be true as well at the internationallevel where groups of negotiators and other elites from different nations interactregularly over time Especially in an important bilateral relationship of the type thatwill be examined later this view of social reality leads us to focus on how the actionsof leaders and negotiators in the two states may have reshaped the social context inwhich they bargain even as they have been constrained by it Trust for example maybe high at a given point in time but it should be expected to remain high only ifnegotiators representing the two nations regularly act in good faith respecting theiragreements and not twisting their termsActs of bad faith repeated often enough canat a certain point be expected to lead to a loss of trust

Kowert and Legro identify the second mechanism shaping the social context as anlsquolsquoecologicalrsquorsquo process de ned as lsquolsquothe patterned interaction of actors and their envi-ronmentrsquorsquo A stable environment they posit is likely to reinforce the social contextIn contrast lsquolsquodramatic shocks in the environment (to the international system forexample) loosen commitments to existing identities and behavioral normsrsquorsquo Thismechanism clearly links change in the social context to changes in the material butnot smoothly and continuously It suggests that though a feature of the social contextsuch as lsquolsquohierarchyrsquorsquo can survive a gradual shift in the material environment that gaverise to it it may not survive a lsquolsquodramatic shockrsquorsquo that leads the states that are involvedin the hierarchical relationship to reexamine their identities and roles

Whereas Kowert and Legro posit that change in the social context emerges inthese ways the cases in the Katzenstein volume do not provide them with the basisfor drawing many rm conclusions leaving them with more questions than answersThis is partly because the cases in the volume were chosen primarily with the aim ofevaluating the importance of social norms rather than with the aim of examining howthey changeThe period of USndashJapan bargaining to be examined in the next sectionin contrast was chosen partly because the changes in the material and social contextof the relationship over those years allow us to examine how changes in the twointeract to shape bargaining outcomes The empirical cases should also clarify howchanges in the social context are transmitted into changes in bargaining outcomes

28 Granovetter 1985 486


The Changing Social Context and the Pattern of USndashJapanBargaining Outcomes

Having surveyed the variety of ways in which the social context of bargaining can beexpected to in uence bargaining outcomes and the forces likely to shape and reshapethe social context itself we are now ready to turn our attention to the empirical casesof USndashJapan trade bargaining I rst examine how the features of the environmentidenti ed in the preceding hypotheses have changed over time for this particular setof cases arguing that a con uence of forces in the early 1990s combined to transformthe social context surrounding USndashJapan economic negotiations from one that hadbeen unusually supportive of coercive pressure into one that was much less support-ive of the use of aggressive unilateralism I then demonstrate the plausibility of myargument that changes in the social context played a key role in shaping bargainingoutcomes by examining the recent pattern of USndashJapan economic bargaining out-comes

Formulating Predictions Based on Changes in the Social Context

Changes in social norms de ning the range of legitimate coercive tactics I arguedearlier are likely to affect the degree to which a given coercive strategy will yield themost concessions with the least backlash In particular changes in the degree towhich the target of coercion views itself as being involved in a hierarchical relation-ship with the sender and changes in rules established under international regimes areamong the more speci c factors likely to rede ne the range of tactics viewed aslegitimate and thus affect the terms of bargaining outcomes At the same time theefficacy of coercive tactics will likely be affected by whether or not the parties trustone another Applying these insights to the USndashJapan relationship I argue in thissection that social norms de ning the range of legitimate tactics and the amount oftrust in the relationship remained remarkably stable and supportive of coercive bar-gaining by the United States over the postwar period shaped by the social structureof the Cold War actions that generally reinforced the tendency of the partners to trustone another and the terms of the original GATT (General Agreements on Tariffs andTrade) regime The end of the Cold War and the establishment of new rules under theWorld Trade Organization (WTO) in 1994 however rede ned norms in ways thatlimited the range of coercive tactics that were viewed as legitimate At about thesame time actions taken by the United States and Japan that were perceived respec-tively by officials on the other side to be in lsquolsquobad faithrsquorsquo reduced each nationrsquos trustthat the other would respect the terms of their economic agreements These changesin the social context all of them coming to a head at about the same time led to theprediction of a sharp downturn in the efficacy of US pressure in the early 1990s

Norms de ning the range of legitimate coercive tactics in USndashJapan relationswere shaped initially during the US occupation of Japan after World War II Devas-tated and forced to submit to unconditional surrender Japan was placed in the mostsubservient of positions in the aftermath of the war For the Japanese officials politi-


cians and even the public who lived through these years this period of indirect ruleby the United States was at once humbling and reassuring Humbling for obviousreasons Reassuring because the US occupation was relatively benign29 These ex-periences left many of those who began their careers during this era with a lingeringsense of deference toward the United States

These attitudes were further nurtured in the succeeding decades of the Cold WarDuring the Cold War the United Statesrsquo relationshipwith Japan as with its Europeanallies was constructed around their overriding common interest in containing SovietexpansionAlthough this was a cooperative effort with all parties contributing some-thing toward it it was also a hierarchical one in which the United States was clearlythe leader and the rest merely supporters Even more than in Europe where theUnited States was just the rst among equals and where the European nations werepledged to aid in a collective security effort the USndashJapan alliance was sociallyunbalanced by the absence of a collective security commitment from Japan TheUnited States was committed to aid Japan but Japan was not committed to aid theUnited States except in its own defense

This imbalance I want to emphasize was social and not material Materially theJapanese government from the beginning saw its provision of military basing rightsto US forces as largely balancing the accounts The US government in turn sawthese bases as vital to its own national interests going so far as to overlook tradebarriers in Japan in an effort to maintain smooth security ties in the early years of therelationship Even as late as the 1980s US government personnel on the politicalside devoted extraordinary efforts to making sure the two nationsrsquoeconomic con ictsdid not jeopardize US access to these bases and other forms of USndashJapan coopera-tion in military and political affairs30 Instead these officials sought to take advantageof growing friction on the economic side in effect using some of the leverage theUnited States enjoyed on this side of the relationship to get an even better deal on themilitary alliance coercing the Japanese into covering a growing share of the cost ofstationing US troops in Japan convincing them to share in the cost of RonaldReaganrsquos Star Wars initiative and pressing them to faithfully support US political-military initiatives such as the Soviet and Iran embargoes

That the material accounts were more than balanced in all of these ways howeverdoes not necessarily mean the allies were social equals A boss who pays his or herworkers is engaged in a balanced exchange but still enjoys a higher status In thesame way Japan provided bases and support to the United States during the ColdWar but the Japanese officials and politicians involved on the political-military sideof the relationship were never under the illusion that their nation was anything but ajunior partner

As the Cold War continued for forty years and absent any other dramatic shockthe pattern of the two nationsrsquo interactions reinforced Japanrsquos identity as a juniorpartner and the norms of deference toward US demands that accompanied this

29 On the occupation see Dower 1979 and Cohen 198730 Fukushima 1992


self-image This national identity and these norms of course were not experiencedmdashliterallymdashby the nation but by the political elites who managed the relationshipNotably the stability of the Liberal Democratic Partyrsquos (LDP) rule and the personnelsystem employed in the bureaucracy served to extend the effects of norms formedduring the occupation and nurtured during the height of the Cold War well into the1980s

First the strict workings of the Japanese bureaucracyrsquos seniority system meant thatofficials who were in senior positions in the Ministry of International Trade andIndustry (MITI) the Ministry of Finance and the Ministry of Foreign Affairs duringthe trade disputes of the 1980s all began their careers during the occupation andexperienced personally the cooperative spirit at the peak of the Cold War LikewiseJapanese prime ministers as recently as 1993 traced their careers back to the occupa-tion era Miyazawa Kiichi prime minister in 1991ndash93 had been a young aide toPrime Minister Yoshida Shigeru the architect of a foreign policy that institutional-ized deference and dependence in Japanese relations with the United States31 It isalso notable that the personnel institutions of Japan facilitated what I call lsquolsquosociallinkagersquorsquo since elites involved on the political-military side of relations were givenpositions of power in resolving economic disputes Until the early 1990s for ex-ample the Ministry of Foreign Affairs consistently promoted to its top positionsofficials who had extensive experience managing the political side of the USndashJapanrelationship32 The Cold War thus combined with these features of Japanese person-nel systems to prolong the tendency of the Japanese to view their role as a junior onethus facilitating the use of coercive pressure tactics by the United States long after itseconomic power had begun to decline

The rules of the GATT regime also facilitated the United Statesrsquo aggressive pursuitof its trade demands by legitimizing its coercive tactics It did so in two related waysFirst as long as Japan had formal trade barriers on the books that violated GATTrules and principles (such as its many quotas on agricultural imports) US pressuretargeting these barriers was likely to be seen as falling within the range of tactics thatwere legitimate under the rules of the GATT game33 At the same time the UnitedStatesrsquo use of what has been called lsquolsquoaggressive unilateralismrsquorsquo was legitimized tosome degree by the weakness of the formal dispute settlement mechanism underGATT The rules of this dispute settlement system allowed lengthy delays by partieswho sought to slow the process of establishing a tribunal and allowed a single GATTmember including the party charged with a violation by a dispute panel to block the nding on appealmdashleading many nations to view it as a largely ineffective remedy34

Until a new system was established under the WTO (discussed later) the UnitedStates defended its use of its own unilateral trade muscle by pointing to these weak-nesses in the regime Japanese officials did not readily accept these arguments butthe excusemdashcombined with the fact that Japan itself remained accused of violating

31 See Dower 1979 and Pyle 199232 Interviews by the author with Japanese officials TokyoAugust 199633 Ryan 199534 Schott 1994


GATT rules with its agricultural protectionsmdashleft their respective normative posi-tions balanced enough that Japan was not yet in a position to stake out the moral highground and rmly resist the United Statesrsquo aggressive unilateral tactics35

The nal feature of the social context that operated in a way predicted to facilitatethe use of coercive pressure through the 1980s was the two nationsrsquocareful effort torespect the terms of their agreements fostering a fairly high degree of trust Most ofthe agreements negotiated during this period involved formal government rules suchas tariff and quota levels and procurement practices Although these changes in rulesdid not always generate the kind of trade effects that the United States envisioned theJapanese government was very careful to make sure that it fully implemented all ofthe rule changes to which it agreed Thus Thomas Bayard and Kimberly Ann Elliottrsquossurvey of Section 301 cases involving Japan for example does not report any caseswhere the Japanese failed to implement agreed changes in rules36 US administra-tions too through 1987 were more likely to defend the Japanese government whenit was criticized in Congress than they were to press the Japanese for more when theoriginal terms of agreements did not yield the kind of trade effects they hoped to seeAs long as the Japanese could trust US administrations not to ask for more thanwhat the Japanese thought they had offered in formal trade agreements they weremore willing to enter into such deals The high degree of trust along with continu-ities in the hierarchy of the Cold War and in the GATT regime as discussed earliertherefore lead us to expect on all counts that the Japanese would remain willing totolerate and respond to US pressure with relativelygenerous concessionsuntil some-thing caused them to change the way they viewed their relationship with the UnitedStates

The rst factor causing the Japanese to change their view of the United States wasthe abrupt end of the Cold War The fall of the Berlin Wall in 1989 the subsequentbreakup of the Soviet Union and Boris Yeltsinrsquos success in consolidating his powercombined to present Japan with a genuine lsquolsquoshockrsquorsquo of the kind described by Kowertand Legro The hierarchical relationship between the United States and Japan hadbeen predicated on the Cold War con ict with the Soviet Union so the sudden disap-pearance of this threat naturally led the Japanese to question whether establishedways of relating to the United States were still appropriate Japanese politiciansofficials and academics published a barrage of books arguing over how Japan shouldadjust its foreign policy in the wake of the end of the Cold War37 Although theydisagreed about exactly how Japanrsquos policy should change all agreed that Japan hadcome to a turning point Prominent among those arguing for a new course was Ozawa

35 Representative of Japanese elite opinion challenging US claims that it was justi ed in resorting toaggressive unilateral tactics are the re ections of Ministry of Foreign Affairs official Yabunaka MitojiYabunaka 1991 103ndash106 MOFA and MITI officials I interviewed put primary emphasis on Japanrsquos ownproblems with GATT (on agriculture) in explaining why they did not resist the United Statesrsquo use ofunilateral tactics more rmly at this point Interviews by the author with MOFA and MITI officials TokyoAugust 1996

36 Bayard and Elliott 1994 371ndash465 They do note the failure to reach the semiconductor marketshare targets (a lsquolsquoresultrsquorsquo rather than a rule change) in the late 1980s

37 The most important were probably Ozawa 1994 and Funabashi 1993


Ichiro then a leading LDP politicianwho argued that the end of the Cold War meantit was time for Japan to become a lsquolsquonormal countryrsquorsquo38 And as part of this shift tobeing a normal country he argued Japan should stop relying on US pressure toachieve policy change Japan had grown up and it was now time for it to start actinglike it had

Part of what led Japanese leaders to think of their relations to the United States inmore equal terms of course was the growth in Japanrsquos economic power (furtherdiscussed in the section on possible materialist explanations)Although Japanrsquos eco-nomic power had been growing for many years however not until the end of theCold War transformed the way Japan related to the United States on the security sideof their relationship did mainstream Japanese elites began to speak of bargainingwith the United States as equals This turn of events thus acted as a kind of triggerleading the Japanese who were accustomed to thinking of Japan as the junior part-ner to change the way they viewed their role their identity Once they began toidentify themselves as equals they were much less likely to defer to US pressure inthe way they had before

The second transformative event for the Japanese was the often delayed but even-tually successful conclusion of the Uruguay Round trade talks in December 1993One part of this settlement revealed only at the very last minute was Japanrsquos accep-tance of a compromise agreement on agricultural market opening that committed itto lsquolsquotarri catersquorsquo and gradually open markets that had been governed by strict importquotasmdashincluding(at a future date) its market for rice Because this settlement broughtJapan into compliance with GATT law in areas where it had long been criticized andchallengedbefore GATT tribunals this developmentnulli ed the advantage the UnitedStates had enjoyed when its aggressive trade pressure had been legitimized by itsexercise in support of GATT norms It also freed Japan to use GATT and WTO normsto its own advantage in defense against US aggressive unilateralism with less worrythat these norms would be used against it

The other relevant part of the Uruguay Round deal pushed through with strongsupport from both the United States and Japan was a new dispute settlement mecha-nism Whereas nations charged with violating GATT rules had been able to delay andveto rulings of dispute panels under the old system the new one provided for stricttimetables and prevented a loser from blocking rulings on appeal39 Though the newrules promised to make Americarsquos defense of its trade rights through the multilateralregime more effective (this was the reason the United States advocated the change)they prevented the United States from using the weakness of this mechanism tolegitimize its use of aggressive unilateral measures like Section 301 against Japan Ineffect the adoption of a more effective dispute settlement mechanism shifted proce-dural norms as the United Statesrsquo trading partners became much more adamant thatall trade disputes should be routed through the WTO At the same time the new rulesallowed the United Statesrsquo trading partners to be more certain that they could press a

38 Ozawa 199439 Schott 1994 125ndash32


complaint against it to the point where a WTO panel would brand unilateral UStrade sanctions lsquolsquoillegalrsquorsquo Indeed Japanese officials trumpeted this change in thedispute mechanism as one of Japanrsquos primary gains in the Uruguay Round settle-ment One official for example claimed that lsquolsquounilateral US actions using theselaws [Section 301 and Super 301] will now be impossible where multilateral rulesare establishedrsquorsquo He added that the new rules would make it lsquolsquomorally difficultrsquorsquo forthe United States and Japan to reach results-oriented deals40

The officialrsquos use of the term morally diffotildecult points to the essential role played byshifting norms here The rule change it must be remembered did not change anynationrsquos material power resources With or without the WTOrsquos blessing Japan al-ways had the ability to impose countersanctionsagainst the United States if it thoughtthat would help it stand up to US pressure What changed was that under the newWTO rules US unilateral sanctions were likely to be judged lsquolsquoillegalrsquorsquo even asJapanrsquos countersanctionswould be dubbed lsquolsquolegalrsquorsquoThe new international rules shiftedthe meaning these two material exercises of power had in Japanese and third-countryeyes changing the social context in which Japan was operating in such a way as togive it added impetus to take advantage of its growing material power and nallystand up to US pressure

The nal change in the social context was more a product of the two nationsrsquoownactions and the effect these choices had on the social climate in which they negoti-ated Though Japanese officials were bothered by the incessant stream of trade de-mands by the United States what upset them most was what they perceived to beAmerican duplicity in interpreting the terms of their trade deals starting in the mid-1980s In the 1986 SemiconductorAgreement the Japanese government had agreedto help US rms achieve lsquolsquotheir goal of a 20 percent market sharersquorsquo Before longhowever the United States began telling the Japanese government that it would beheld responsible for making sure that Japanese semiconductor users were movingsteadily toward this lsquolsquogoalrsquorsquomdashleaving MITI officials with the uncomfortable task ofbegging and cajoling private rms into increasing their purchases of foreign chips41

Although some Japanese officials were willing to excuse a single experience of thissort as a misunderstanding a second similar experience served to convince eventhese officials that the United States could no longer be trusted

This second case involved the auto parts deal the Bush administration had won in1992 when it convinced Japanese auto rms to commit to lsquolsquovoluntaryrsquorsquo plans to pur-chase US-made parts Despite the fact that the Japanese government had made itclear that these were private forecasts Clinton administration officials Mickey Kan-tor and Ron Brown wrote a letter in early 1994 demanding that the governmentdeliver on the lsquolsquopledgersquorsquomdashor else Even the US officials who had been involved in

40 Nikkei Weekly 20 December 1993 1 In interviews in August 1996 with several officials fromMITI and the Ministry of ForeignAffairs all emphasized the signi cance of the WTO reforms and the rolethese played in leading their ministries to emphasize multilateral channels in economic negotiations withthe United States

41 US officials insisted they had been told at the time the Semiconductor Accords were negotiatedthat the lsquolsquogoalrsquorsquo was a guarantee Flamm 1996 229


negotiating the 1992 auto deal agreed that Clinton officials were acting in bad faithAs Robert Zoellick put it lsquolsquoyou canrsquot blame the Japanese for not trusting the USwhen they see an ambiguous agreementrsquorsquo42 That Japanese elites increasingly dis-trusted their US counterparts is evidenced by repeated references to the episode byJapanese officials Japanese officials repeatedly cited the letter as an example of howUS negotiators could not be trusted with numbers Any commitment they mightmake would be twisted after the fact into something more than what the Japanese hadactually promised43 Their trust having been violated the Japanese were likely to bemuch more resistant to US pressure to enter into additional deals of this sort

The decline in trust however was a characteristic of American attitudes towardJapan as much as it was a characteristic of the Japanese side The failure of thebilateral trade imbalance to decline signi cantly after repeated rounds of trade nego-tiations as well as complaints about how the Japanese had implemented speci cdeals led to growing frustration among US trade officials by the early 1990s44

Trade officials such as Glen Fukushima complained about how market access issuesthat the United States thought were settled through changes in Japanese governmentrules in the mid-1980s repeatedly reemerged after it became clear that barriers re-mained45 The way in which the Japanese implemented changes in the area of cellulartelecommunications (allowing the US rm Motorola access to outlying areas ofJapan but barring it from the Nagoya-Tokyo corridor) for example was seen asparticularly duplicitous46 This experience led US trade negotiators to put increas-ing emphasis on lsquolsquoresultsrsquorsquo If the Japanese had trouble trusting the United States withnumbers US negotiators insisted they could not trust the Japanese without them

All of the earlier mentioned changes in the social context on the Japanese side atleast were experienced by a new generation of political elites that had not experi-enced the US occupation and had more experience of USndashJapan economic con ictthan they did of USndashJapan security cooperation The process through which oldattitudes toward the United States were replaced by new attitudes therefore wasassisted by a generational transfer of power that was well under way by the early1990s The officials at the top of MITI the Ministry of Foreign Affairs (MOFA) andthe Ministry of Finance (MOF) were by that time uniformly members of classes thathad begun their careers in their ministries in the late 1950s and early 1960s Mostreached their rst positions of responsibility in the 1970s just as the US was begin-ning to step up its economic pressure MITI official Sakamoto Yoshihiro who playeda key role in the recent lm dispute for example began his career in 1962 well afterthe occupation His attitudes toward the United States were instead shaped muchmore by recent trade con icts such as the con ict over semiconductors that he expe-rienced from his position as director of the MITI division in charge of that industry

42 Washington Post 22 June 1995 D943 For published comments along these lines see the remarks of MITI vice-minister Noboru

Hatakeyama and one other unnamed Japanese official in the Washington Post 25 April 1993A2844 For a more detailed discussion of shifting attitudes on the US side see Schoppa 1997 51ndash7645 Fukushima 1992 19446 Tyson 1993 68


Even at the Ministry of Foreign Affairs long the agency most likely to urge modera-tion in dealing with the United States personnel moves had brought a different breedof official to top positions by the early 1990s Instead of promoting a man experi-enced in dealing with the United States on the political-security side as was custom-ary in 1995 that agency promoted to its top career position Hayashi Sadayuki a manwhose extensive experience on the economic side of the relationship meant that hehad been personally involved in almost all of the bilateral disputes of the previoustwo decades47

This discussion of the process of generational change completes the description ofa period of time in which Japanese attitudes toward the United States and its aggres-sive trade pressure was rapidly changing It was changing because of the lsquolsquoshockrsquorsquo ofthe end of the Cold War because new WTO rules took away an excuse that hadlegitimized US unilateralism because US actions led the Japanese to lose trust inthe United Statesrsquo respect for the terms of their agreements and because all of thesechanges were personally experienced by a new generation of political elites whowere rising to positions of power All of these changes in the social context of USndashJapan bargaining lead us to expect a sharp drop off in the effectiveness of USpressure in the early 1990s

The Empirical Record of USndashJapan Economic Bargaining Cases

The record of USndashJapan economic bargaining cases over the past two decadesclearly ts the preceding predictions based on shifts in the social context Membersof Congress may nd it hard to believe but the preponderance of evidence suggeststhat until the early 1990s Japan was more responsive than any other major tradingpartner to US unilateral trade pressure The best evidence for this comes from astudy by Bayard and Elliott that evaluated the results of all complaints brought underSection 301 of US trade law48 Though Bayard and Elliott do not average the resultsof US pressure by country (instead treating each episode as a discrete unit) theirdata show that on average Japan was more responsive than any other major tradingpartner of the United States signi cantly more responsive than the European Com-munity and more responsive even than neighboring East Asian nations such as Tai-wan and Korea that are much more dependent on US export markets than is Japan

Critics of Japan of course raise questions about whether these trade concessionswere lsquolsquorealrsquorsquo They claim that the Japanese market is like an onion peeling away onebarrier only exposes yet another one below But Bayard and Elliott report numbersshowing that over 75 percent of the real increases in sales resulting from concessionsnegotiated under Section 301 came in trade with Japan The barriers removed underUS pressure in just three Japanese sectors (beef tobacco and semiconductors) have

47 Interview by the author with senior MITI official TokyoAugust 1996 On generational change inJapanese officialsrsquo attitudes toward the United States see also Washington Post 20 May 1995 D1 andGlen Fukushima lsquolsquoThe US and Japan friends and rivalsrsquorsquo Japan Times 17 May 1996 1

48 Bayard and Elliott 1994


produced approximately $3 billion in additional exports to Japan49 Japanrsquos marketstill has its share of barriers but these data make it clear that US pressure hasresulted in meaningful liberalization

Bayard and Elliottrsquos data also allow us to plot the results of US efforts to useSection 301 against Japan across timemdashat least for cases resolved as of 1992 the lastyear covered in their data set This information is presented in Figure 1 The gureshows that though the results of US pressure varied a great deal across issues fromone year to the next re ecting the undoubtedlygreat variation in interests at stake foreach side there is no evidence of a secular decline in the degree to which the UnitedStates was able to win concessions over this fteen-year period50

Unfortunately Bayard and Elliottrsquos data cover Section 301 cases only through1992 so we have no strictly comparable data for the most recent period Further-more in the last couple of years only a few discrete cases have involved Japan so thelsquolsquosmall n rsquorsquo makes it possible that any attempt to generalize about recent results couldbe biased As I have argued in earlier work the results of US pressure on Japandepend very much on the nature of US demandsmdashon whether the domestic politicsin speci c issue areas is supportive of US pressure tactics51 If Clinton has been

49 Ibid 33450 In fact a trendline based on a bivariate linear regression model would slope slightly upward over

the period leading up to 1992 though the wide scattering of points would make the slope of this trendlinestatistically indistinguishable from zero The coefficient for the time variable in the linear regressionmodel is slightly positive at 046 but clearly insigni cant ( p 5 372) Note also that a linear regression istechnically an inappropriate way to model this relationship given the fact that the variable is ordinal anddiscrete An ordered probit model would be preferable here given the nature of the dependent variablelsquolsquoeffectivenessrsquorsquo but the small sample size makes its use problematic as well

51 Schoppa 1993 and 1997

FIGURE 1 US Section 301 cases 1977ndash92


making different kinds of demands the recent decline in the effectiveness of USpressure might be purely a function of this shift in US demands and not a decline inJapanrsquos general responsiveness The only way to determine if there has been a de-cline I propose is to compare like demands with like demands

Fortunately despite a general shift in emphasis during the Clinton administrationfrom lsquolsquorule-orientedrsquorsquo to lsquolsquoresults-orientedrsquorsquo demands we have a mixture of demandtypes that allows us to do the kind of like-to-like comparison I proposed Figure 2summarizes the results of ReaganndashBush and Clinton demands in each of the majorcategories of demands The efforts of the Clinton administrationhave produced fewerresults for each and every one of the demand types What follows is a brief summarycontrasting the results of US pressure before and after the start of the Clinton admin-istration for each demand type

Results-oriented demands Although the Reagan and Bush administrationsclaimed that they opposed the idea of lsquolsquomanaged tradersquorsquo they negotiated such dealsmdash

FIGURE 2 Record of USndashJapan trade talks by type


known as lsquolsquovoluntary import expansionsrsquorsquo (or VIEs)mdashwith Japan in two famous casesIn the SemiconductorAccords of 1986 (renewed in 1991) they convinced the Japa-nese to agree not just to changes in trade rules but to import targets Japan whichhad been importing about 10 percent of its semiconductors agreed to aim for 20percentmdasha gure it nally reached in the fourth quarter of 199252 Similarly in 1992(during the trip when Bush got sick all over Prime Minister Miyazawa) US andJapanese automakers came to an agreement under which the Japanese makers agreedto work their way up to the point where in scal year 1994 they would aim to buy $19billion of US-made parts including $4 billion in imports

These deals were in many ways the model for what the Clinton administrationsought in the USndashJapan Framework for a New Economic Partnership (or Frame-work) Talks that began in the summer of 1993 As Commerce Secretary Ron Brownput it during one of his early visits to Tokyo lsquolsquoRemoval of barriers will not be theultimate measure of success but rather sales will be Markets will be consideredopen not when rules and regulations and arrangements change but when we see thatAmerican products successful all over the world have equal success in Japanrsquorsquo53

The group of officials charged with drawing up the new administrationrsquos trade policyvis-a-vis Japan concluded in the spring of 1992 that future agreements had to include rm lsquolsquobenchmarksrsquorsquo for evaluating progress in market opening During the talks theClinton team repeatedly attempted to get the Japanese to agree to use market sharenumbers in other G-7 countries as a reference point for evaluating progress in thesectors under negotiation In February 1994 Clinton allowed his summit meetingwith Hosokawa to fail and withdrew the US negotiating team to bring home to theJapanese his resolve in insisting on lsquolsquoresultsrsquorsquoAnd in May 1995 the president threat-ened to impose prohibitive tariffs on $6 billion in Japanese luxury cars unless theJapanese agreed to put rm numbers in the auto and auto parts deal

Despite this focused attempt to get the Japanese to commit to a lsquolsquoresults-orientedrsquorsquodeal the Clinton administration completely failed to budge the Japanese who in-sisted from the beginning that they would lsquolsquonever againrsquorsquo agree to put numbers intrade deals with the United States For months the Japanese matched every Americanshow of resolve with an equal demonstration of their new willingness to say lsquolsquonorsquorsquoAs Hosokawa explained at the press conference in February 1994 after he had al-lowed a bilateral summit meeting to fail for the rst time in the postwar period overthis issue Japan had lsquolsquomaturedrsquorsquo to the point where it could now relate to the UnitedStates as one lsquolsquogrown-uprsquorsquo to another54 The language was an interesting expressionof a change in the way the Japanese perceived their relations with the United States inthe new postndashCold War era

In the rst set of Framework deals reached in September 1994 (for governmentprocurement in the telecommunications and medical technology areas) the United

52 On the semiconductor accords see Flamm 199653 Washington Post 24 April 199354 Text of Hosokawarsquos statement reprinted in Daily Yomiuri 13 February 1994 3 The choice of

language was not coincidental because Hosokawarsquos cabinet relied heavily on Ozawarsquos break-away conser-vative party for its support


States could not even get the Japanese to commit to lsquolsquoannual progressrsquorsquo in foreignaccess and sales settling for muddled language that did not commit the Japanese toany market share increase The United States refused to settle for such language inthe auto sectors at that point and upped the ante with a Section 301 case and threats ofsanctions A year later however Clinton settled for a deal where all of the numberswere in (vague) voluntary plans of Japanese auto makers or in side letters issued bythe US government alone The Japanese government the deal made clear had noth-ing to do with these estimates and the United States agreed that the numbers werelsquolsquonot commitments and are not subject to the trade remedy laws of either countryrsquorsquoWhile Clinton claimed victory analysts on both sides of the Paci c uniformly de-scribed the deal as a US defeat55

The last attempt by the Clinton administration to secure a lsquolsquoresults-orientedrsquorsquo dealits effort to win renewal of the SemiconductorAccords ended in August 1996 againwith US concessions on most key issues The Clinton team began the negotiationsby seeking a renewal of the market share commitment in the 1987 and 1991 Semicon-ductor Accords through language stressing the need to preserve and continue theprogress made in market access under the accords Finding no willingnesson the partof the Japanese to settle for such language (which the Japanese feared would beinterpreted as a guarantee that the foreign market share would not fall below levelsthat had by then reached 30 percent) the United States tried several other formula-tions including references to lsquolsquocomparable access to all marketsrsquorsquo56 None of theseformulations however proved acceptable to the Japanese

In the end the United States had to concede not only to leaving out all referencesto market share targets but also had to accept a deal that was downgraded from anlsquolsquoArrangement between the Government of Japan and the Government of the USrsquorsquo(a legally binding agreement clearly subject to enforcement under Section 301 ofUS trade law) to one that was merely a lsquolsquojoint statementrsquorsquo of the governments regard-ing their future intentionsThe government of Japan furthermore was absolved evenof its previous responsibility for collecting data on market shares That task would beleft to a separate private sector Semiconductor Council57 According to the Japanesethe combined effect of the US concessions was to eliminate the threat that theUnited States would ever again be able to hold the government accountable for mar-ket share results by using Section 301 as it had in 1987 In exactly the sector wherethe United States had previously won a lsquolsquoresults-orientedrsquorsquo deal therefore Clintonhad accepted something where the only Japanese lsquolsquoconcessionrsquorsquo was the govern-mentrsquos acceptance of a new multilateral Global Government Forum in which Japa-nese officials might still be asked to respond to concerns raised by other parties58

55 For details see Schoppa 1997 254ndash7056 Shikata Noriyuki lsquolsquoReviewing the JapanndashUnited States Semiconductor Consultationsrsquorsquo The Japan

Economic Review 15 September 1996 357 Nikkei Weekly 5 August 1996 158 Ibid See also Glen Fukushima lsquolsquoLet the Chips Fallrsquorsquo Asahi Evening News 13 August 1996 1 The

Japanese themselves had proposed this compromise and helped build momentum for it by solicitingsupport from the Europeans


Rule-oriented Section 301 cases A large number of this type of cases werepursued by the Reagan and Bush administrations and as seen in the Bayard andElliott evaluations cited earlier many of these resulted in the achievement of USnegotiating goals and measurable increases in US exports to Japan The Clintonadministration was less interested in rule changes than in lsquolsquoresultsrsquorsquo but it has made afew attempts withmdashI arguemdashmuch less success than its predecessors It had modestsuccess in its attempt to use Section 301 to get the Japanese to liberalize regulationsgoverning the auto parts aftermarket convincing the government to allow more ga-rages unaffiliated with Japanese makers into the business and to exempt more partsfrom inspection requirements59

In the most recent photographic lm case however the administration was noteven able to get the Japanese government to the negotiating table to talk about itsSection 301 complaint MITI announced in March 1996 that it would henceforthrefuse to negotiate bilaterally with the United States under unilateral threats insist-ing instead that the issue be referred to some multilateral organization60 When MITIstuck with this position up to the deadline by which the administration could haveimposed 301-based sanctions the US gave up on its unilateral pressure tacticstaking its case to the WTO insteadmdashwhere in December 1997 it lost on all majorpoints61 The ability of the Japanese to stand rm in this high pro le case stands instark contrast to the United Statesrsquo past success in using Section 301 to force changesin official Japanese rules and regulations

Macroeconomic demands The nal type of demand that the United States hasfrequently made of Japan has been in the area of macroeconomics Since bilateraltrade balances to a large extent re ect the savings and investment balances of theUnited States and Japan the United States has naturally attempted to reduce itsde cits with Japan by convincing it to spend and invest more money especiallythrough stimulative scal policy In 1978 and again in 1987 the United States playeda critical role in pushing Japan to adopt stimulus budgets And in 1990 the UnitedStates was even able to overcome stiff MOF resistance to get the Japanese govern-ment to agree that it would spend 430 trillion yen on public investment over the nextten years62

Clinton too has sought to put pressure on Japan in this area at several pointsduring his two terms again however with much less success The Clinton adminis-tration abandoned its rst demand in this area calling on the Japanese government tocommit to a speci c target for reducing the size of its trade surplus relative to itsgross domestic product (GDP) before the Framework Talks even began InsteadUS officials reverted to the familiar position of pressuring the Japanese to beef up

59 Schoppa 1997 273ndash7460 Sakamoto 199661 See Washington Post 12 June 1996 F1 Japan Times 14 August 1996 1 and Financial Times 6

December 199762 Schoppa 1997 117ndash45


their scal stimulus packages speci cally by incorporating large income tax cutsToward this end Clinton wrote Hosokawa in the fall of 1993 urging him to adopt atax cut much larger than the 5ndash6 trillion yen cut that was being discussed at the timein the government council Although Clinton did not recommend a speci c gurethe administration reportedly was seeking a cut on the order of 10 trillion yen Inaddition Clinton urged Hosokawa to delay by three to four years any increase in theconsumption tax designed to nance the tax cutmdasha move that would rob the incometax cut of its stimulative effect63

Although the Japanese government ultimately did adopt an income tax cut its sizeand the manner in which it was implemented left it without much punch The initialcut announced by Hosokawa in February 1994 amounted to just 55 trillion yen andwas limited to just one year after Hosokawa stumbled in his attempt to announcesimultaneously a plan to increase the consumption tax to 7 percent The nal planadopted after further delay still called for just a temporary cutmdashwith a permanentchange held hostage pending a government decision to go ahead with a consumptiontax increase in three years

Looking back on the budgets adopted during this period economist Adam Posenhas concluded that Japan adopted only a minimum of lsquolsquorealrsquorsquo scal stimulus64 Thesix stimulus packages announced between March 1992 and April 1995 containedstimulus spending worth 0ndash11 percent of Japanrsquos GDPmdashfar below the proportionsof GDP devoted to scal stimulus under similar circumstances in other advancedindustrialized nations The one stimulus budget of any signi cant size (the packagedated September 1995 that added up to 16 percent of GDP) did revive the Japaneseeconomy for a short period but Japan returned to scal restraint in 1997 with budgetcuts and a major tax increase throwing the economy back into recession As theUnited States pressed Japan again to revive its economymdashthis time in the interest ofhelpingAsia out of its new nancial crisismdashit continued to waffle and delay As lateas the spring of 1998 with the economy clearly in decline Prime Minister Hashi-moto was hesitant to suspend the governmentrsquos recently adopted scal austerity planthat called on it to steadily reduce reliance on de cit bonds

Given the small size of the income tax cut the delays and the linkage to aneventual consumption tax increase it is difficult to credit US pressure with havingdone anything signi cant to bolster scal policy during this whole period Through-out the debate MOF made every effort to limit US involvement vetoing a visit byTreasury Undersecretary Lawrence Summers to talk about the income tax cut in thefall of 1993 and makingAmbassador Walter Mondale wait a day before allowing himto set up a visit by Treasury Secretary Lloyd Bentsen in the spring of 199465 MOFmade it clear throughout the process that it did not consider tax policy a subject ofinternational negotiations

63 Daily Yomiuri 12 November 199364 Posen 199865 See Daily Yomiuri 12 November 1993 and Bruce Stokes lsquolsquoImmovable Mandarinsrsquorsquo National

Journal 30 April 1994 1008


In summary the experiences of the Clinton administration so far show that for alltypes of demands the United States has had much less success in convincing theJapanese to make concessions Relative to its position through 1992 when Japan wasmore responsive to US pressure than any other trading partner Japan seems to havebecome much more like a normal country in its resistance to foreign pressure If wewere to update Figure 1 we would nd a discontinuous pattern showing the effec-tiveness of US efforts to pressure Japan varying widely but rising slightly on aver-age through 1992 and then falling sharply since the Clinton administration came topowermdashexactly the pattern that was anticipated in the discussion of how the chang-ing social context surrounding USndashJapan economic negotiationswas likely to affectthe efficacy of US coercive pressure

Alternative Materialist Explanations

That the pattern of recent USndashJapan bargaining outcomes ts the predictions basedon changes in the social context of course does not necessarily mean that the socialcontext was the most important factor driving the shift in bargaining outcomes Myargument would be especially weak if there were obvious changes in the materialcontextmdashin the balance of power in interests in the ability to send costly signalsmdashthat t the pattern just as well What I try to do in this section is to anticipate some ofthe possible rational materialist explanations for the empirical results described ear-lier and to make the case that none of these are suffotildecient to account for the abruptdecline in the effectiveness of US trade pressure I want to emphasize again that theargument here is not that the material context of bargaining does not matter or eventhat it is less important than the social context Some of the changes in the materialcontext I will argue are actually a very important part of the explanation for shiftingUSndashJapan bargaining outcomes What we need to appreciate is that shifts in thesocial context are a necessary and important aspect of the explanation

As brie y summarized earlier rational materialist studies of coercive internationalbargaining stress the important role played by material capabilities and interests inshaping bargaining outcomes Within the category of material capabilities I rstwant to consider possible explanations for the shift in USndashJapan bargaining out-comes arising from changes in the economic power balanceAs scholars since AlbertHirschman have emphasized power arises from asymmetries in interdependent rela-tionships66 and throughout the postwar period Japanrsquos asymmetric dependence onthe US export market has provided the latter with its most important source ofleverage Changes in the degree of asymmetry in this trading relationship this strandof materialist theory suggests ought to drive a parallel shift in bargaining outcomes

The degree of asymmetry has actually changed signi cantly over the past severaldecades In the early 1970s Japanrsquos exports to the United States accounted for closeto 3 percent of its GDP at a time when US exports to Japan represented a barely

66 Hirschman 1945 See also Baldwin 1980


noticed fraction of the US economymdashmeaning that Japanrsquos dependence on the USmarket exceeded the inverse by factors ranging from 63 to 87 By the 1990s how-ever US exports to Japan had grown to around 07 percent of the US economy andthe ratio of Japanrsquos dependence to that of the United States had shrunk to around331 The degree of asymmetry was roughly cut in half At the same time Japan wasincreasingly able to turn to growing export markets in Asia as an alternative to itstraditionally greater dependence on exports to the United States (see Table 1)

Another dimension of the bilateral economic relationshipwhere asymmetries haveshifted in recent years is in the area of capital ows During the 1980s Japan emergedas the worldrsquos leading source of capital exports even as the United States became theworldrsquos leading capital importer In the process Japan arguably acquired a majorsource of economic leverage that it could use to offset US leverage arising fromasymmetries on the trade side R Taggart Murphy has argued for example that this

TABLE 1 Japanese and American dependence on bilateral exports

Date

Japanese exports toUnited States as shareof Japanrsquos GDP ()

US exports toJapan as share

of US GDP () Ratio

Japanese exportsto Asia as share

of Japanrsquos GDP ()

1970 24 038 63 211971 27 031 87 211972 25 034 74 191973 19 051 37 201974 24 060 40 271975 19 050 38 251976 24 047 51 241977 24 044 55 231978 22 048 46 231979 22 058 38 251980 25 063 40 291981 28 060 47 281982 28 055 51 271983 31 054 57 281984 40 053 75 291985 42 048 88 291986 35 053 66 221987 30 053 57 221988 26 065 40 221989 27 072 38 241990 26 074 35 251991 23 071 32 261992 22 067 33 261993 21 064 33 261994 21 064 33 281995 20 074 27 31

Source Calculated based on OECD data


US dependence on Japanese capital has dramatically reduced its leverage over itseconomic rival67

What is notable about all of these shifts in economicpower asymmetries howeveris that all have taken place gradually and were well underway by the Bush yearsAlthough Japanrsquos export dependence ratio shown in Table 1 rose for a few years inthe mid-1980s (when the strong dollar boosted Japanese exports to the United States)the numbers have tended to decline in a roughly linear fashion over the past twenty- ve years Similarly the inverse increase in Japanese exports going to Asia tookplace gradually over the course of the 1980s exceeding the share going to the UnitedStates already in the Bush years Finally the United Statesrsquodependence on Japan forcapital to nance the shortage of savings available for investment actually peakedduring the Bush administration when US budget de cits reached their highest level

What the data suggest is that if shifts in economic power were the main forcedriving USndashJapan bargaining outcomes the effectiveness of US pressure shouldhave declined steadily throughout the period under study Instead what we see in theBayard and Elliott data presented in Figure 1 is that no evidence indicates a decline inthe efficacy of US pressure through the end of the Bush administration When Ho-sokawa nally stood up and said lsquolsquonorsquorsquo to the United States in February 1994 theeconomic power shifts described here were no doubt an important part of what madethat possible but the fact that Japan did not take advantageof its gradually improvingpower position earlier tells us that shifts in capabilities by themselves were not suffi-cient to change bargaining outcomes

We thus turn to changes in the material context that might better account for thetiming of the shift in bargaining outcomes The rst obvious candidate is the end ofthe Cold War as a material event What happened to the Soviet Union between 1989and 1992 clearly reduced the nationrsquos military threat to US and Japanese interests inthe Far East and this change in the material context could account for the shift inUSndashJapan economic bargaining outcomes if its net effect was to shift asymmetriesin their security relationship such that the United States could less easily draw on theleverage it enjoyed because Japan depended on its security guarantee

The rst problem with this line of argument is that it is not clear whether theUnited States ever enjoyed material leverage on the economic side of its relationshipfrom Japanrsquos dependence on the US security guarantee during the Cold War Asdiscussed earlier the United States did take advantage of this asymmetry to extractconcessions from the Japanese on the security side it secured continued and liberaluse of bases located in Japan increasing Japanese nancial contributions to cover thecosts of stationing troops in Japan and Japanese support for US diplomatic initia-tives around the world There are no known cases prior to the end of the Cold Warhowever where the United States threatened to reduce its commitment to the allianceunless Japan made economic concessions If anythingAmericans seem to have val-ued the alliance so highly during the Cold War that they sometimes drew on theleverage they enjoyed due to Japanrsquos dependence on the US export market to win

67 Murphy 1996


greater burden-sharing commitments on the security side of their relationship If thesecurity alliance did not provide the United States with material leverage in its eco-nomic negotiations with Japan during the Cold War the end of the Cold War cannotbe seen as a material explanation for the shift in bargaining outcomes

The second problem with this line of argument is that since the end of the ColdWar Japan and the United States have mutually reduced their degree of dependenceon each other in their security relationship Although Japan needs the US securityguarantee somewhat less than it used to and hence can more credibly stand rm in itseconomic bargaining with the United States even at the risk of endangering thisrelationship the United States needs Japan less than it did when the military bases inOkinawa and elsewhere in Japan represented indispensableassets in the global strugglewith the Soviet Union The United Statesrsquo greater freedom to maneuver means itsown threats should now be more credible

Finally the argument overlooks the fact that the reductions in the degree to whichthe two countries need each other since the end of the Cold War have not been thatgreat For Japan the US alliance remains an essential part of its defense strategy inan uncertain world where Chinese power is growing and a rupture in USndashJapanrelations could fuel a regional power rivalry and arms race68 At the same time forthe United States the security relationship remains the indispensable cornerstone ofits security policy in a region where North Korea and China are seen respectively asnear-term and long-term security threats and where the Japanese alliance is seen asso important that the US government in 1995 committed to maintaining 45000troops in Japan and 100000 in the Far East for the foreseeable future69 Again ifJapan and the United States continue to need each other and the security alliancecontinues to be very important to both of them it is not clear how the end of the ColdWar could have shifted bargaining outcomes by reducing US material leverage overJapan

I have belabored the preceding points dealing with the Cold War materialist hy-pothesis in three ways because practitioners of materialist bargaining theory nd ithard to accept that the end of the Cold War could not have had more material effectson economic bargaining outcomes Instead I have argued its primary effect was toalter the social context in which the two sides bargained leading the Japanese tochange the way they looked at the alliance The shock of the Cold Warrsquos end ledJapanese elites to move away from the view that the alliance was a hierarchical onewhere they were the junior partner and toward the view that it was an alliance ofequal sovereign nations where they were contributing a great deal and so had lessneed to be deferential

The other development that can be dated to around the time of the shift in bargain-ing outcomes (which therefore might make it the basis for a materialist explanation)is the end of the LDPrsquos thirty-eight-year reign as a predominant party in 1993 and thereform of the Japanese Lower House electoral system in 1994 These domestic politi-

68 See Japan Defense Agency 1995 and Friedberg 1993 31ndash3269 Mochizuki 1997 10ndash13


cal events could be the basis for a materialist argument based on the strand of rationalmaterialist bargaining theory focusing on the effects of imperfect information oncoercive bargaining outcomes70 Bargaining only takes place these models assumewhen there is imperfect information about power and interests If one nation hasclearly superior power andor clearly more vital interests at stake it will prevailwithout the need for extended bargaining This assumption leads to the conclusionthat bargaining will tend to bog down at the point where the nations involved arefairly evenly matched once their perceived power and interests have been taken intoaccount In this standoff the key to whether a nation prevails depends on its ability toestablish the credibility of its bargaining positions (including threats) by imposingcosts on itself for example by having a leader incur domestic or foreign audiencecosts by stating publicly that he or she will not back down

With its focus on audience costs this strand of rational materialist theory points tothe role played by domestic and international institutions in shaping bargaining out-comes The argument has been used for example to explain the lsquolsquodemocratic peacersquorsquoby pointing to the ability of democracies to signal their resolve by incurring domesticaudience costs in ways that cannot be duplicated by nondemocracies71 Changes overtime in the ability of a given nation to prevail over another it therefore predicts willtend to re ect changes in domestic or international institutions that reduce or en-hance the ability of each nationrsquos negotiators to impose audience costs on them-selves

This strand of materialist bargaining theory could explain the recent decline in theefficacy of US pressure on Japan if the end of LDP supremacy and the electoralreform in 1993ndash94 have had the effect of enhancing the credibility of Japanese bar-gaining positions by making Japan into more of a lsquolsquoreal democracyrsquorsquo According tothis line of analysis Japan would be expected to have enjoyed relatively little successin resisting US demands before 1993ndash94 because its negotiatorsmdashsecure in officemdashcould not credibly threaten to impose domestic audience costs on themselvesAt thesame time Japan would be expected to have enjoyed much more success in recentyears because the LDPrsquos temporary loss of power and the adoption of electoral re-forms that eliminated some of the advantages it enjoyed under the old system havemade recent cabinets more vulnerable to electoral defeat and thus enhanced its abil-ity to impose audience costs on itself

I reject this line of analysis however on the grounds that it is a mistake to assumethat Japanese cabinets enjoyed security in office before 1993ndash94 or to characterizeJapanrsquos pre-reform system as undemocraticThe average duration of a Japanese cabi-net between 1972 and 1993 was less than two years and Japanese prime ministers infact spent a tremendous amount of time worrying about their security in officeAmongthe many factors that affected their ability to remain in office was their performancein managing the USndashJapan relationshipwith those who were successful (Nakasoneand Kaifu) managing to stay in office longer than expected and those who were

70 See Fearon 1994 and Martin 199371 Fearon 1994


unsuccessful (Suzuki) being forced to resign The LDPrsquos electoral hold on powerthough remarkable for its duration was also hardly secure It often had to rely onpostelection additions to its ranks to line up a majority of Diet members behind itscabinets and won an average of just fourteen seats more than it needed for a majorityin elections between 1972 and 1990 Given that Japanese governments were insecureand vulnerable to electoral results before 1993 I propose that there is no basis forpredicting any change in the pattern of USndashJapan economic bargaining results un-der this class of materialist bargaining theories

It is of course impossible for me to anticipate all possible materialist explanationsfor the pattern of USndashJapan economic bargaining described earlier Materialist bar-gaining models for example put great emphasis on differences in partiesrsquo discountfactorsmdashthe rates at which they discount costs and bene ts of a future deal relative tocosts and bene ts of a similar deal today One recent analysis has pointed to differ-ences in the discount factors of US presidents over the course of an electoral cycleas the possible basis for differences in the degree to which presidents stand tough ormake concessions in bargaining with the Japanese72 Whereas such shifts in discountfactors across electoral cycles cannot explain the long-term trend that I identify otherscholars may conceive of a rational materialist explanation rooted in discount factorsthat I have not anticipated

Similarly rational materialists might point to the recent prolonged period of stag-nant growth in Japan as an explanation arguing that this has raised Japanrsquos costs ofgiving in to US demands thus giving Japanese negotiators the credibility needed tomake their lsquolsquonorsquorsquo stick At the same time however the shift in the two nationsrsquoeconomic fortunes has reversed the previous trend toward rising Japanese economicpower relative to the United States so that this particular development could be thebasis for the oppositeprediction that the United States should be able to extract moreconcessions now than it did in the 1980s Given material factors that are this slipperyI prefer to offer my argument emphasizing changes in the social context as a plau-sible explanationfor the recent changes in USndashJapan bargaining results and to awaitfurther developments (for example will Japan begin giving in to US pressure againwhen the recession is over) to see if they can help us further sort out which factorshave been most important in shaping negotiation outcomes

Conclusions

This empirical record of USndashJapan economic bargaining over the past two decadesespecially the timing and magnitude of the shift in results ts very well with predic-tions based on an appreciation of how the social context surrounding internationalbargaining is likely to affect outcomes Until the 1990s a persistent Cold War thatnurtured deferential attitudes old GATT rules that allowed Americans to cast their

72 Seawright and Way 1997


aggressive unilateralism as a necessary substitute for a defective multilateral mecha-nism and the care taken by both sides to respect the terms of their bargains allworked in ways predicted to legitimize and facilitate the United Statesrsquo use of coer-cive tactics in economic bargaining with Japan The empirical record up until 1992con rms that Japan indeed remained much more responsive than one would haveexpected given its relatively strong (and improving) economic power position rela-tive to the United States

The end of the Cold War the inauguration of a new WTO dispute settlementmechanism behavior on both sides that reduced their trust of each other and theeffects of a generational transition of political elites however combined by the startof the Clinton administration to eliminate all of these advantageous features of thesocial context The Japanese viewed their nation as more of an equal to the UnitedStates in the aftermath of the Cold War saw the United States as the nation that wasviolating the new WTO norms and no longer trusted US economic negotiatorsWeexpected that the United States robbed of the advantages it had enjoyed under theold social context would no longer be able to extract concessions at the previousrate Once again with Japan refusing to accept US demands across a wide range ofissues the empirical record ts this prediction

My nding of a close t between the changing social context and the empiricalpattern in this set of casesmdashcombined with the analysis showing that none of theanticipated alternative materialist explanations can account for the timing and mag-nitude of the shift in bargaining resultsmdashis important for a number of reasons Firstit challenges the disciplinersquos tendency to model coercive international bargainingalmost exclusively in terms of the material context Scholars ranging from Schellingto Fearon concentrateon the rational material world in their efforts to explain bargain-ing outcomes For Schelling the emphasis is on material power and interests and theway these factors determine threat credibility For Fearon it is on the ability of thematerial world to convey lsquolsquocostly signalsrsquorsquo Although rationalist theories have incor-porated elements of the social context in their models (reputation for resolve) theyhave failed to recognize other important ways in which bargaining is shaped by thesocial climate that has developed through statesrsquo interactions A state that views itspartner as a superior with legitimate rights to exercise power that views this partneras a trusted patron and that views this partner as playing within the rules of the gameas set out in an international regime will respond to threats in a different way thanwill a state that views its partner as a distrusted rival who is in violation of interna-tional norms

There are two ways to view the theoretical contributionof this article One is to seeit as an argument for adding consideration of more social factors to material bargain-ing theories Materialists might be persuaded to add consideration of legitimacylsquolsquosocial linkagersquorsquo and trust in much the same way that deterrence theorists haveimported lsquolsquoresolversquorsquo into their otherwise material world I have not argued in any waythat material factors are unimportant in explaining bargaining outcomes I simplyargue that changes in material power alone are sometimes not sufficient to shift


bargaining outcomes In the cases examined here it took a combination of shifts ineconomic power and changes in the social context to drive Japan toward a moreassertive bargainingbehaviorThe underlyingshift in Japanrsquos relative economicpowerthe emergence of alternative markets in Asia and other material factors made itpossible for Japan to say lsquolsquonorsquorsquo but it didnrsquot actually do so until the social contextchanged as well

But there is also a more far-reaching way to view this articlersquos contribution that isto see it as an argument for recognizing that even lsquolsquomaterial bargaining theoriesrsquorsquoassume a certain social context one in which actors are self-interested rivals operat-ing in a context of distrust and latent hostility73 In some cases such as those involv-ing nuclear blackmail this may be a perfectly acceptable assumption but my exami-nation of the USndashJapan cases suggests that at least in some economic bargainingsituations the social context can be very different and can lead to very differentnegotiating outcomes Once we realize that the social context varies it is only onestep to the realization that the actors in the state system to one degree or another areresponsible for the social context in which they operate It can be a completely self-help world or it can be one where nations engage each other with trust and respect

This observation relates closely to my secondary interest in when and how thesocial context changesAs noted at the outset most studies that have taken the role ofnorms and other social constructs in international relations seriously have looked atcases where the social context is stable This study too showed the power of a stablesocial context to extend the in uence of the United States even after its materialpower began to decline The more novel characteristic of this inquiry however wasits focus on a set of cases where the social context was in the process of changingWhile showing that this kind of change matters we also had an opportunity to exam-ine what drove the process of change

What we saw is that social change is driven in part by changes in the broaderinternational environment (what Kowert and Legro called an lsquolsquoecologicalrsquorsquo process)especially when these shifts were dramatic enough to constitute a lsquolsquoshockrsquorsquo The endof the Cold War thus in uenced USndashJapan economic outcomes primarily by actingas a trigger that led the Japanese to re ect on their role in the world and to beginconstructing a new identity as a lsquolsquomaturersquorsquo lsquolsquonormalrsquorsquo nation deserving to be treatedas an equal by the United States The process of social change was not driven entirelyby exogenous change however Again as Kowert and Legro anticipated it was alsodriven by the process of social interaction Japan participated in the negotiationsleading to the establishment of a new WTO dispute settlement mechanism and itsofficials were quite conscious of how the rules of the new regime would present themwith a better opportunity to challenge American aggressive unilateralism on norma-tive grounds US officials though apparently less conscious of the effects of theirtactics also helped reshape the social context in which they bargained through theirdecision to stretch their interpretationof earlier trade agreementsAlthough the endo-

73 My thanks to Alexander Wendt for this point


geneity of this process of social change ts poorly with currently dominant socialscience approaches these complexities are no reason to assume away a process thatis apparently integral to understanding bargaining outcomes

My arguments that the social context matters and that negotiatorsrsquochoices helpshape the context in which they bargain lead us neatly to its implications for policy IfUS policymakers want to improve the terms of their deals with Japan and operateaccording to the assumption that the material context is all that matters they will dothe following they will try to augment US power they will try to identify untappedsources of US leverage perhaps even threatening to reduce the United Statesrsquosecuritycontribution in the region in order to get a better deal in economic negotiations74

they will continue to twist the terms of their deals whenever they can and they willtry to improve US threat credibility by having elected leaders stake out rmer andmore public positions If the social context is to some extent shaped by the bargain-ing process and it in turn has much to do with bargaining outcomes however thesemoves are actually more likely to harm the ability of the United States to win conces-sions Public posturing by US presidents will make the Japanese regard the UnitedStates as even more of a bully twisting will lead to a further loss of trust and effortsto increase US leverage especially if done unilaterally may make US pressureeven less legitimate

Instead a bargaining strategy sensitive to the social context would look for waysthe United States can pressure Japan while restoring the legitimacy and trust theUnited States once enjoyed To do so the United States needs rst to respect theterms of earlier agreements renounce its earlier strategy of seeking quantitative im-port expansion agreements and announce that it will henceforth impose sanctionsonly when authorized to do so by the WTO Instead switching to a strategy thatemploys only lsquolsquolegitimate threatsrsquorsquo it needs to work through the WTO to target barri-ers that are illegal under the rules of the international regime To restore a measure ofthe advantage it enjoyed under the Cold War the United States should be clear that itwill not employ security leverage to achieve economic gain but instead count onbene ting from lsquolsquosocial linkagersquorsquo as continued security cooperation fosters the kindof trust and communication that will facilitate agreements on the economic side aswell Realizing the limits of its leverage the United States should be much moreselective in choosing its demands and select only those (such as cases where USdemands are favored by a signi cant faction within Japanese domestic politics)wherethe balance of interests favors the United States It should then work to sell thesedemands to the Japanese public and elites instead of relying on brute and very publicthreats of trade retaliation75 Given that bargaining theories emphasizing materialversus social factors arguably lead to quite different policy prescriptions in at leastthis case it is all the more important that scholars pay close attention to the issueshighlighted here

74 This approach is advocated by Johnson and Keehn 1995 11275 These recommendations are developed in more detail in Schoppa 1997 311ndash18


References

Baldwin David A 1980 Interdependence and Power A ConceptualAnalysis InternationalOrganization34 (4)471ndash506

Bayard Thomas O and Kimberly Ann Elliott 1994 Reciprocity and Retaliation in US Trade PolicyWashington DC Institute for International Economics

Bueno de Mesquita Bruce and David Lalman 1992 War and Reason Domestic and International Im-peratives New Haven ConnYale University Press

Cohen Theodore 1987 Remaking Japan The American Occupation as New Deal Edited by HerbertPassin New York The Free Press

Dower John W 1979 Empire and Aftermath Yoshida Shigeru and the Japanese Experience 1878ndash1954Harvard East Asian Monograph 84 Cambridge Mass Harvard University Press

Fearon James D 1994Domestic PoliticalAudiences and the Escalation of InternationalDisputes AmericanPolitical Science Review 88577ndash92

mdashmdashmdash 1998 Bargaining Enforcement and International Cooperation International Organization 52(2)269ndash305

Flamm Kenneth 1996 Mismanaged Trade Strategic Policy and the Semiconductor Industry Wash-ington DC Brookings Institution Press

FriedbergAaron L 1993 Ripe for Rivalry Prospects for Peace in MultipolarAsia International Security18 (3)5ndash33

Fukushima Glen S 1992 Nichi-bei keizai masatsu no seijigaku (The Political Science of USndashJapanEconomic Disputes) TokyoAsahi Shimbunsha

Fukuyama Francis 1995 Trust Social Virtues and the Creation of Prosperity New York Free PressFunabashi Yoichi 1993 Nihon no taigai koso reisen go no bijon o kaku (A New Way for Japan to Think

About the World) Tokyo Iwanami ShotenGranovetter Mark 1985 EconomicAction and Social Structure The Problem of Embeddedness American

Journal of Sociology 91 (3)481ndash510Hirschman Albert O 1945 National Power and the Structure of Foreign Trade Berkeley University of

California PressIkenberry G John and Charles A Kupchan 1990 Socialization and Hegemonic Power International

Organization 44 (3)283ndash315Japan Defense Agency 1995 National Defense Program Outline TokyoJohnson Chalmers and E B Keehn 1995 The Pentagonrsquos Ossi ed Strategy Foreign Affairs 74 (4)

103ndash14Katzenstein Peter J 1996a Cultural Norms and National Security Police and Military in Postwar Japan

Ithaca NY Cornell University PressKatzenstein Peter J ed 1996b The Culture of National Security Norms and Identity in World Politics

New York Columbia University PressKeohane Robert O 1984 After Hegemony Cooperation and Discord in the World Political Economy

Princeton NJ Princeton University PressKowert Paul and Jeffrey Legro 1996 Norms Identity and Their Limits A Theoretical Reprise In The

Culture of National Security Norms and Identity in World Politics edited by Peter J Katzenstein451ndash97 New York Columbia University Press

Kramer Roderick M and Tom R Tyler eds 1996 Trust in Organizations Frontiers of Theory andResearch Thousand Oaks Calif Sage

Krasner Stephen D 1991 Global Communications and National Power Life on the Pareto FrontierWorld Politics 43 (3)336ndash66

Legro Jeffrey W 1995 Cooperation Under Fire Anglo-German Restraint During World War II IthacaNY Cornell University Press

Martin Lisa 1993 Credibility Costs and Institutions Cooperation on Economic Sanctions World Poli-tics 45 (3)406ndash32

Mercer Jonathan 1996 Reputation and International Politics Ithaca NY Cornell University Press


Milner Helen V 1997 Interests Institutions and Information Domestic Politics and International Rela-tions Princeton NJ Princeton University Press

Mochizuki Mike M ed 1997 Toward a True Alliance Restructuring USndashJapan Security RelationsWashington DC Brookings Institution

Murphy R Taggart 1996 The Weight of the Yen How Denial Imperils Americarsquos Future and Ruins anAlliance New York W W Norton

OrsquoHalloran Sharyn 1994 Politics Process and American Trade Policy Ann Arbor University ofMichigan Press

Ozawa Ichiro 1994 Blueprint for a New Japan Tokyo Kodansha InternationalPosen Adam S 1998 Restoring Japanrsquos Economic Growth Washington DC Institute for International

EconomicsPruitt Dean G 1981 Negotiation Behavior New York Academic PressPruitt Dean G and Peter J Carnevale 1993 Negotiation in Social Conict Buckingham Open Univer-

sity PressPutnam Robert D 1993 Making Democracy Work Civic Traditions in Modern Italy Princeton NJ

Princeton University PressPyle Kenneth B 1992 The Japanese Question Power and Purpose in a New Era WashingtonDCAEI

PressRyan Michael P 1995 Playing by the Rules American Trade Power and Diplomacy in the Pacic

Washington DC Georgetown University PressSakamoto Yoshihiro 1996 Moving to an Era of Cooperation The US and Japanese New Relationship

Speech of the MITI Vice-Minister for International Affairs before the Foreign CorrespondentsrsquoClub ofJapan 15 March

Schelling Thomas C 1960 The Strategy of Conict Cambridge Mass Harvard University Pressmdashmdashmdash 1966 Arms and In uence New Haven Conn Yale University PressSchoppa Leonard J 1993 Two-Level Games and Bargaining Outcomes Why Gaiatsu Succeeds in Japan

in Some Cases but Not Others International Organization 47 (3)353ndash86mdashmdashmdash 1997 Bargaining with Japan What American Pressure Can and Cannot Do New York Co-

lumbia University PressSchott Jeffrey J 1994 The Uruguay Round An Assessment Washington DC Institute for International

EconomicsSeawright Amy and Christopher Way 1997 Electoral Incentives and International Bargaining Prelimi-

nary Findingson USndashJapan Economic Disputes and Elections 1976ndash1997 Paper presented at the 92dAnnual Meeting of the American Political Science Association Washington DC

Snyder Glenn H and Paul Diesing 1977 Conict Among Nations Bargaining Decision Making andSystem Structure in International Crises Princeton NJ Princeton University Press

Tedeschi James T and Svenn Lindskold 1976 Social Psychology Interdependence Interaction andInuence New York John Wiley and Sons

Tyson Laura DrsquoAndrea 1993 Whorsquos Bashing Whom Trade Conict in High-Technology IndustriesWashington DC Institute for International Economics

Wagner R Harrison 1988 Economic Interdependence Bargaining Power and Political In uence Inter-national Organization 42 (3)461ndash83

Walt Stephen M 1987 The Origins of Alliances Ithaca NY Cornell University Pressmdashmdashmdash 1996 Revolution and War Ithaca NY Cornell University PressWendt Alexander 1995 Constructing International Politics International Security 20 (1)71ndash81Wendt Alexander and Daniel Friedheim 1995 Hierarchy Under Anarchy Informal Empire and the East

German State International Organization 49 (4)689ndash721Yabunaka Mitoji 1991 Taibei keizai kosho masatsu no jitsuzo (Economic Negotiations with the United

States Views from the Negotiating Table) Tokyo Saimaru Shuppankai


the speci c costs and bene ts involved in the issue at hand and material factors thataffect the credibility of commitments to impose costs or provide side payments

There has been one notable exception to this literaturersquos general neglect of thesocial context of negotiationsMuch of it has emphasized how a negotiatorrsquos reputa-tion for resolve can make a difference in international negotiations in uencing theway the negotiatorrsquos counterparts evaluate the credibility of his or her threats inde-pendent of the material costs and bene ts at stake3 Studies in the area of socialpsychology that inform some of this work on the effects of reputation on interna-tional bargaining outcomes however point to a number of additional dimensions ofthe social context that might matter at the international level as well Most impor-tantly these studies have identi ed norms de ning the range of legitimate bargainingtactics that in laboratory experiments in uence negotiationoutcomes Even in coer-cive bargaining situations these studies argue certain tactics are more legitimatethan others and in certain situations threats are more acceptable as part of the game4

Violations of these norms can cause a backlash that limits the gains that might havebeen expected based on a rational calculation of the material stakes In contrastbargaining tactics that take advantage of opportunities for coercion that lie within thebounds of these norms can elicit more concessions

I draw on this literature to generate a number of predictions about when and howthe social context should matter in coercive international negotiationsCoercive tac-tics should yield less of a backlash and more concessions I propose when they takeplace within a social context where the parties accept that they are operating within ahierarchy and when the speci c tactics employed fall within the range that are ac-cepted as legitimate in the terms of this relationship when the coercion takes placewithin an institutionalized process that establishes mutually accepted rules of thegame and when the parties trust each other I then demonstrate the plausibility ofthese hypotheses by examining how the social context has shaped the recent patternof bargaining outcomes in USndashJapan economic negotiations in ways that cannoteasily be understood in terms of lsquolsquopurersquorsquo material factors

This set of cases was chosen rst because the frequency of USndashJapan economicnegotiations allows us to look beyond the issue-speci c factors that affect the resultsof any single bargain so that we can concentrate on the material and social factorsthat drive the broader pattern of results over time Although I might have taken thislogic to the next step and examined additional cases involving other dyads I chose tolimit the sample to those involving the United States and Japan in order to holdconstant at least some of the factors that affect bargaining outcomes The choice ofcases was also driven by evidence that we have seen over the past decade a particu-larly dramatic shift in the pattern of bargaining results between the United States andJapan Through the end of the 1980s Japan was arguably the country that was mostresponsive to coercive US trade pressure5 In recent years however Japan has be-

3 See Schelling 1960 36ndash37 and Snyder and Diesing 1977 185ndash89 On how reputations for resolveform and matter see Mercer 1996 For another exception see footnote 12

4 See Pruitt and Carnevale 1993 and Tedeschi and Lindskold 19765 See Bayard and Elliott data discussed in more detail later Bayard and Elliott 1994









































































































































































Date



of US GDP () Ratio



1970 24 038 63 211971 27 031 87 211972 25 034 74 191973 19 051 37 201974 24 060 40 271975 19 050 38 251976 24 047 51 241977 24 044 55 231978 22 048 46 231979 22 058 38 251980 25 063 40 291981 28 060 47 281982 28 055 51 271983 31 054 57 281984 40 053 75 291985 42 048 88 291986 35 053 66 221987 30 053 57 221988 26 065 40 221989 27 072 38 241990 26 074 35 251991 23 071 32 261992 22 067 33 261993 21 064 33 261994 21 064 33 281995 20 074 27 31








67 Murphy 1996


















Conclusions





















References


























































































































































































































Date



of US GDP () Ratio



1970 24 038 63 211971 27 031 87 211972 25 034 74 191973 19 051 37 201974 24 060 40 271975 19 050 38 251976 24 047 51 241977 24 044 55 231978 22 048 46 231979 22 058 38 251980 25 063 40 291981 28 060 47 281982 28 055 51 271983 31 054 57 281984 40 053 75 291985 42 048 88 291986 35 053 66 221987 30 053 57 221988 26 065 40 221989 27 072 38 241990 26 074 35 251991 23 071 32 261992 22 067 33 261993 21 064 33 261994 21 064 33 281995 20 074 27 31








67 Murphy 1996


















Conclusions





















References



















































































































































































































Date



of US GDP () Ratio



1970 24 038 63 211971 27 031 87 211972 25 034 74 191973 19 051 37 201974 24 060 40 271975 19 050 38 251976 24 047 51 241977 24 044 55 231978 22 048 46 231979 22 058 38 251980 25 063 40 291981 28 060 47 281982 28 055 51 271983 31 054 57 281984 40 053 75 291985 42 048 88 291986 35 053 66 221987 30 053 57 221988 26 065 40 221989 27 072 38 241990 26 074 35 251991 23 071 32 261992 22 067 33 261993 21 064 33 261994 21 064 33 281995 20 074 27 31








67 Murphy 1996


















Conclusions





















References














































































































































































































Date



of US GDP () Ratio



1970 24 038 63 211971 27 031 87 211972 25 034 74 191973 19 051 37 201974 24 060 40 271975 19 050 38 251976 24 047 51 241977 24 044 55 231978 22 048 46 231979 22 058 38 251980 25 063 40 291981 28 060 47 281982 28 055 51 271983 31 054 57 281984 40 053 75 291985 42 048 88 291986 35 053 66 221987 30 053 57 221988 26 065 40 221989 27 072 38 241990 26 074 35 251991 23 071 32 261992 22 067 33 261993 21 064 33 261994 21 064 33 281995 20 074 27 31








67 Murphy 1996


















Conclusions





















References






































































































































































































Date



of US GDP () Ratio



1970 24 038 63 211971 27 031 87 211972 25 034 74 191973 19 051 37 201974 24 060 40 271975 19 050 38 251976 24 047 51 241977 24 044 55 231978 22 048 46 231979 22 058 38 251980 25 063 40 291981 28 060 47 281982 28 055 51 271983 31 054 57 281984 40 053 75 291985 42 048 88 291986 35 053 66 221987 30 053 57 221988 26 065 40 221989 27 072 38 241990 26 074 35 251991 23 071 32 261992 22 067 33 261993 21 064 33 261994 21 064 33 281995 20 074 27 31








67 Murphy 1996


















Conclusions





















References
































































































































































































Date



of US GDP () Ratio



1970 24 038 63 211971 27 031 87 211972 25 034 74 191973 19 051 37 201974 24 060 40 271975 19 050 38 251976 24 047 51 241977 24 044 55 231978 22 048 46 231979 22 058 38 251980 25 063 40 291981 28 060 47 281982 28 055 51 271983 31 054 57 281984 40 053 75 291985 42 048 88 291986 35 053 66 221987 30 053 57 221988 26 065 40 221989 27 072 38 241990 26 074 35 251991 23 071 32 261992 22 067 33 261993 21 064 33 261994 21 064 33 281995 20 074 27 31








67 Murphy 1996


















Conclusions





















References
























































































































































































Date



of US GDP () Ratio



1970 24 038 63 211971 27 031 87 211972 25 034 74 191973 19 051 37 201974 24 060 40 271975 19 050 38 251976 24 047 51 241977 24 044 55 231978 22 048 46 231979 22 058 38 251980 25 063 40 291981 28 060 47 281982 28 055 51 271983 31 054 57 281984 40 053 75 291985 42 048 88 291986 35 053 66 221987 30 053 57 221988 26 065 40 221989 27 072 38 241990 26 074 35 251991 23 071 32 261992 22 067 33 261993 21 064 33 261994 21 064 33 281995 20 074 27 31








67 Murphy 1996


















Conclusions





















References

















































































































































































Date



of US GDP () Ratio



1970 24 038 63 211971 27 031 87 211972 25 034 74 191973 19 051 37 201974 24 060 40 271975 19 050 38 251976 24 047 51 241977 24 044 55 231978 22 048 46 231979 22 058 38 251980 25 063 40 291981 28 060 47 281982 28 055 51 271983 31 054 57 281984 40 053 75 291985 42 048 88 291986 35 053 66 221987 30 053 57 221988 26 065 40 221989 27 072 38 241990 26 074 35 251991 23 071 32 261992 22 067 33 261993 21 064 33 261994 21 064 33 281995 20 074 27 31








67 Murphy 1996


















Conclusions





















References











































































































































































Date



of US GDP () Ratio



1970 24 038 63 211971 27 031 87 211972 25 034 74 191973 19 051 37 201974 24 060 40 271975 19 050 38 251976 24 047 51 241977 24 044 55 231978 22 048 46 231979 22 058 38 251980 25 063 40 291981 28 060 47 281982 28 055 51 271983 31 054 57 281984 40 053 75 291985 42 048 88 291986 35 053 66 221987 30 053 57 221988 26 065 40 221989 27 072 38 241990 26 074 35 251991 23 071 32 261992 22 067 33 261993 21 064 33 261994 21 064 33 281995 20 074 27 31








67 Murphy 1996


















Conclusions





















References




































































































































































Date



of US GDP () Ratio



1970 24 038 63 211971 27 031 87 211972 25 034 74 191973 19 051 37 201974 24 060 40 271975 19 050 38 251976 24 047 51 241977 24 044 55 231978 22 048 46 231979 22 058 38 251980 25 063 40 291981 28 060 47 281982 28 055 51 271983 31 054 57 281984 40 053 75 291985 42 048 88 291986 35 053 66 221987 30 053 57 221988 26 065 40 221989 27 072 38 241990 26 074 35 251991 23 071 32 261992 22 067 33 261993 21 064 33 261994 21 064 33 281995 20 074 27 31








67 Murphy 1996


















Conclusions





















References






























































































































































Date



of US GDP () Ratio



1970 24 038 63 211971 27 031 87 211972 25 034 74 191973 19 051 37 201974 24 060 40 271975 19 050 38 251976 24 047 51 241977 24 044 55 231978 22 048 46 231979 22 058 38 251980 25 063 40 291981 28 060 47 281982 28 055 51 271983 31 054 57 281984 40 053 75 291985 42 048 88 291986 35 053 66 221987 30 053 57 221988 26 065 40 221989 27 072 38 241990 26 074 35 251991 23 071 32 261992 22 067 33 261993 21 064 33 261994 21 064 33 281995 20 074 27 31








67 Murphy 1996


















Conclusions





















References
























































































































































Date



of US GDP () Ratio



1970 24 038 63 211971 27 031 87 211972 25 034 74 191973 19 051 37 201974 24 060 40 271975 19 050 38 251976 24 047 51 241977 24 044 55 231978 22 048 46 231979 22 058 38 251980 25 063 40 291981 28 060 47 281982 28 055 51 271983 31 054 57 281984 40 053 75 291985 42 048 88 291986 35 053 66 221987 30 053 57 221988 26 065 40 221989 27 072 38 241990 26 074 35 251991 23 071 32 261992 22 067 33 261993 21 064 33 261994 21 064 33 281995 20 074 27 31








67 Murphy 1996


















Conclusions





















References

















































































































































Date



of US GDP () Ratio



1970 24 038 63 211971 27 031 87 211972 25 034 74 191973 19 051 37 201974 24 060 40 271975 19 050 38 251976 24 047 51 241977 24 044 55 231978 22 048 46 231979 22 058 38 251980 25 063 40 291981 28 060 47 281982 28 055 51 271983 31 054 57 281984 40 053 75 291985 42 048 88 291986 35 053 66 221987 30 053 57 221988 26 065 40 221989 27 072 38 241990 26 074 35 251991 23 071 32 261992 22 067 33 261993 21 064 33 261994 21 064 33 281995 20 074 27 31








67 Murphy 1996


















Conclusions





















References











































































































































Date



of US GDP () Ratio



1970 24 038 63 211971 27 031 87 211972 25 034 74 191973 19 051 37 201974 24 060 40 271975 19 050 38 251976 24 047 51 241977 24 044 55 231978 22 048 46 231979 22 058 38 251980 25 063 40 291981 28 060 47 281982 28 055 51 271983 31 054 57 281984 40 053 75 291985 42 048 88 291986 35 053 66 221987 30 053 57 221988 26 065 40 221989 27 072 38 241990 26 074 35 251991 23 071 32 261992 22 067 33 261993 21 064 33 261994 21 064 33 281995 20 074 27 31








67 Murphy 1996


















Conclusions





















References




































































































































Date



of US GDP () Ratio



1970 24 038 63 211971 27 031 87 211972 25 034 74 191973 19 051 37 201974 24 060 40 271975 19 050 38 251976 24 047 51 241977 24 044 55 231978 22 048 46 231979 22 058 38 251980 25 063 40 291981 28 060 47 281982 28 055 51 271983 31 054 57 281984 40 053 75 291985 42 048 88 291986 35 053 66 221987 30 053 57 221988 26 065 40 221989 27 072 38 241990 26 074 35 251991 23 071 32 261992 22 067 33 261993 21 064 33 261994 21 064 33 281995 20 074 27 31








67 Murphy 1996


















Conclusions





















References






























































































































Date



of US GDP () Ratio



1970 24 038 63 211971 27 031 87 211972 25 034 74 191973 19 051 37 201974 24 060 40 271975 19 050 38 251976 24 047 51 241977 24 044 55 231978 22 048 46 231979 22 058 38 251980 25 063 40 291981 28 060 47 281982 28 055 51 271983 31 054 57 281984 40 053 75 291985 42 048 88 291986 35 053 66 221987 30 053 57 221988 26 065 40 221989 27 072 38 241990 26 074 35 251991 23 071 32 261992 22 067 33 261993 21 064 33 261994 21 064 33 281995 20 074 27 31








67 Murphy 1996


















Conclusions





















References






















































































































Date



of US GDP () Ratio



1970 24 038 63 211971 27 031 87 211972 25 034 74 191973 19 051 37 201974 24 060 40 271975 19 050 38 251976 24 047 51 241977 24 044 55 231978 22 048 46 231979 22 058 38 251980 25 063 40 291981 28 060 47 281982 28 055 51 271983 31 054 57 281984 40 053 75 291985 42 048 88 291986 35 053 66 221987 30 053 57 221988 26 065 40 221989 27 072 38 241990 26 074 35 251991 23 071 32 261992 22 067 33 261993 21 064 33 261994 21 064 33 281995 20 074 27 31








67 Murphy 1996


















Conclusions





















References















































































































Date



of US GDP () Ratio



1970 24 038 63 211971 27 031 87 211972 25 034 74 191973 19 051 37 201974 24 060 40 271975 19 050 38 251976 24 047 51 241977 24 044 55 231978 22 048 46 231979 22 058 38 251980 25 063 40 291981 28 060 47 281982 28 055 51 271983 31 054 57 281984 40 053 75 291985 42 048 88 291986 35 053 66 221987 30 053 57 221988 26 065 40 221989 27 072 38 241990 26 074 35 251991 23 071 32 261992 22 067 33 261993 21 064 33 261994 21 064 33 281995 20 074 27 31








67 Murphy 1996


















Conclusions





















References







































































































Date



of US GDP () Ratio



1970 24 038 63 211971 27 031 87 211972 25 034 74 191973 19 051 37 201974 24 060 40 271975 19 050 38 251976 24 047 51 241977 24 044 55 231978 22 048 46 231979 22 058 38 251980 25 063 40 291981 28 060 47 281982 28 055 51 271983 31 054 57 281984 40 053 75 291985 42 048 88 291986 35 053 66 221987 30 053 57 221988 26 065 40 221989 27 072 38 241990 26 074 35 251991 23 071 32 261992 22 067 33 261993 21 064 33 261994 21 064 33 281995 20 074 27 31








67 Murphy 1996


















Conclusions





















References































































































Date



of US GDP () Ratio



1970 24 038 63 211971 27 031 87 211972 25 034 74 191973 19 051 37 201974 24 060 40 271975 19 050 38 251976 24 047 51 241977 24 044 55 231978 22 048 46 231979 22 058 38 251980 25 063 40 291981 28 060 47 281982 28 055 51 271983 31 054 57 281984 40 053 75 291985 42 048 88 291986 35 053 66 221987 30 053 57 221988 26 065 40 221989 27 072 38 241990 26 074 35 251991 23 071 32 261992 22 067 33 261993 21 064 33 261994 21 064 33 281995 20 074 27 31








67 Murphy 1996


















Conclusions





















References


























































































Date



of US GDP () Ratio



1970 24 038 63 211971 27 031 87 211972 25 034 74 191973 19 051 37 201974 24 060 40 271975 19 050 38 251976 24 047 51 241977 24 044 55 231978 22 048 46 231979 22 058 38 251980 25 063 40 291981 28 060 47 281982 28 055 51 271983 31 054 57 281984 40 053 75 291985 42 048 88 291986 35 053 66 221987 30 053 57 221988 26 065 40 221989 27 072 38 241990 26 074 35 251991 23 071 32 261992 22 067 33 261993 21 064 33 261994 21 064 33 281995 20 074 27 31








67 Murphy 1996


















Conclusions





















References


















































































Date



of US GDP () Ratio



1970 24 038 63 211971 27 031 87 211972 25 034 74 191973 19 051 37 201974 24 060 40 271975 19 050 38 251976 24 047 51 241977 24 044 55 231978 22 048 46 231979 22 058 38 251980 25 063 40 291981 28 060 47 281982 28 055 51 271983 31 054 57 281984 40 053 75 291985 42 048 88 291986 35 053 66 221987 30 053 57 221988 26 065 40 221989 27 072 38 241990 26 074 35 251991 23 071 32 261992 22 067 33 261993 21 064 33 261994 21 064 33 281995 20 074 27 31








67 Murphy 1996


















Conclusions





















References











































































Date



of US GDP () Ratio



1970 24 038 63 211971 27 031 87 211972 25 034 74 191973 19 051 37 201974 24 060 40 271975 19 050 38 251976 24 047 51 241977 24 044 55 231978 22 048 46 231979 22 058 38 251980 25 063 40 291981 28 060 47 281982 28 055 51 271983 31 054 57 281984 40 053 75 291985 42 048 88 291986 35 053 66 221987 30 053 57 221988 26 065 40 221989 27 072 38 241990 26 074 35 251991 23 071 32 261992 22 067 33 261993 21 064 33 261994 21 064 33 281995 20 074 27 31








67 Murphy 1996


















Conclusions





















References




































































Date



of US GDP () Ratio



1970 24 038 63 211971 27 031 87 211972 25 034 74 191973 19 051 37 201974 24 060 40 271975 19 050 38 251976 24 047 51 241977 24 044 55 231978 22 048 46 231979 22 058 38 251980 25 063 40 291981 28 060 47 281982 28 055 51 271983 31 054 57 281984 40 053 75 291985 42 048 88 291986 35 053 66 221987 30 053 57 221988 26 065 40 221989 27 072 38 241990 26 074 35 251991 23 071 32 261992 22 067 33 261993 21 064 33 261994 21 064 33 281995 20 074 27 31








67 Murphy 1996


















Conclusions





















References





























































Date



of US GDP () Ratio



1970 24 038 63 211971 27 031 87 211972 25 034 74 191973 19 051 37 201974 24 060 40 271975 19 050 38 251976 24 047 51 241977 24 044 55 231978 22 048 46 231979 22 058 38 251980 25 063 40 291981 28 060 47 281982 28 055 51 271983 31 054 57 281984 40 053 75 291985 42 048 88 291986 35 053 66 221987 30 053 57 221988 26 065 40 221989 27 072 38 241990 26 074 35 251991 23 071 32 261992 22 067 33 261993 21 064 33 261994 21 064 33 281995 20 074 27 31








67 Murphy 1996


















Conclusions





















References






















































Date



of US GDP () Ratio



1970 24 038 63 211971 27 031 87 211972 25 034 74 191973 19 051 37 201974 24 060 40 271975 19 050 38 251976 24 047 51 241977 24 044 55 231978 22 048 46 231979 22 058 38 251980 25 063 40 291981 28 060 47 281982 28 055 51 271983 31 054 57 281984 40 053 75 291985 42 048 88 291986 35 053 66 221987 30 053 57 221988 26 065 40 221989 27 072 38 241990 26 074 35 251991 23 071 32 261992 22 067 33 261993 21 064 33 261994 21 064 33 281995 20 074 27 31








67 Murphy 1996


















Conclusions





















References
























































67 Murphy 1996


















Conclusions





















References



































































Conclusions





















References




























































Conclusions





















References






















































Conclusions





















References




































































References































































References

























































References



















































References











































































Documents

The Social Context in Coercive International Bargainingweb.stanford.edu/class/ips216/Readings/schoppa_99.pdf · The Social Context in Coercive International Bargaining Leonard J