Essays on international macroeconomics and conflict analysis

This dissertation addressed two broad problems in international macroeconomics and conflict analysis. The first problem in the first chapter looked at the behavior of exchange rate and its interaction with industry-level tradable goods prices for three countries, USA, UK and Japan. This question has important monetary policy implications. Here, I computed to what extent changes in exchange rate affected prices of consumer, producer, and export goods. I also studied the timing of these changes in these prices. My results, based on thirty-four industrial prices for USA, UK and Japan, supported the view that changes in exchange rates significantly affect prices of industrial and consumer goods. It also provided an insight to the underlying economic process that led to changes in relative prices. ^ In the second chapter, I explored the predictability of future inflation by incorporating shocks to exchange rates and clearly specified the transmission mechanisms that link exchange rates to industry-level consumer and producer prices. Employing a variety of linear and state-of-the-art nonlinear models, I also predicted growth rates of future prices. Comparing levels of inflation obtained from the above approaches showed superiority of the structural model incorporating the exchange rate pass-through effect. ^ The second broad issue addressed in the third chapter of the dissertation investigated the economic motives for conflict, manifested by rebellion and civil war for seventeen Latin American countries. Based on the analytical framework of Garfinkel, Skaperdas and Syropoulos (2004), I employed ordinal regressions and Markov switching for a panel of seventeen countries to identify trade and openness factors responsible for conflict occurrence and intensity. The results suggested that increased trade openness reduced high intensity domestic conflicts but overdependence on agricultural exports, along with a lack of income earning opportunities lead to more conflicts. Thereafter, using the Cox Proportional Hazard model I studied “conflict duration” and found that over-reliance on agricultural exports explained a major part of the length of conflicts in addition to various socio-political factors. ^

Essays on international lending and increasing returns to scale

Standard economic theory suggests that capital should flow from rich countries to poor countries. However, capital has predominantly flowed to rich countries. The three essays in this dissertation attempt to explain this phenomenon. The first two essays suggest theoretical explanations for why capital has not flowed to the poor countries. The third essay empirically tests the theoretical explanations.^ The first essay examines the effects of increasing returns to scale on international lending and borrowing with moral hazard. Introducing increasing returns in a two-country general equilibrium model yields possible multiple equilibria and helps explain the possibility of capital flows from a poor to a rich country. I find that a borrowing country may need to borrow sufficient amounts internationally to reach a minimum investment threshold in order to invest domestically.^ The second essay examines how a poor country may invest in sectors with low productivity because of sovereign risk, and how collateral differences across sectors may exacerbate the problem. I model sovereign borrowing with a two-sector economy: one sector with increasing returns to scale (IRS) and one sector with diminishing returns to scale (DRS). Countries with incomes below a threshold will only invest in the DRS sector, and countries with incomes above a threshold will invest mostly in the IRS sector. The results help explain the existence of a bimodal world income distribution.^ The third essay empirically tests the explanations for why capital has not flowed from the rich to the poor countries, with a focus on institutions and initial capital. I find that institutional variables are a very important factor, but in contrast to other studies, I show that institutions do not account for the Lucas Paradox. Evidence of increasing returns still exists, even when controlling for institutions and other variables. In addition, I find that the determinants of capital flows may depend on whether a country is rich or poor.^

International education and the post-9/11 syndrome: A study of international educators in selected Miami-area colleges

This dissertation investigated the relationship between the September 11, 2001 terrorist attacks and the internationalization agenda of U.S. colleges and universities. The construct, post-9/11 syndrome, is used metaphorically to delineate the apparent state of panic and disequilibrium that followed the incident. Three research questions were investigated, with two universities in the Miami-area of South Florida, one private and the other public, as qualitative case studies. The questions are: (a) How are international student advisors and administrators across two types of institutions dealing with the post-9/11 syndrome? (b) What, if any, are the differences in international education after 9/11? (c) What have been the institutional priorities in relation to international education before and after 9/11? Data-gathering methods included interviews with international student/study abroad advisors and administrators with at least 8 years of experience in the function(s) at their institutions, document and institutional data analysis. The interviews were based on the three-part scheme developed by Schuman (1982): context of experience, details of experience and reflection on the meaning of experiences. Taped interviews, researcher insights, and member checks of transcripts constituted an audit trail for this study. Key findings included a progressive decline in Fall to Fall enrollment of international students at UM by 13.05% in the 5 years after 9/11, and by 6.15% at FIU in the seven post-9/11 years. In both institutions, there was an upsurge in interest in study abroad during the same period but less than 5% of enrolled students ventured abroad annually. I summarized the themes associated with the post-9/11 environment of international education as perceived by my participants at both institutions as 3Ms, 3Ts, and 1D: Menace of Anxiety and Fear, Menace of Insularity and Insecurity, Menace of Over-Regulation and Bigotry, Trajectory of Opportunity, Trajectory of Contradictions, Trajectory of Illusion, Fatalism and Futility, and Dominance of Technology. Based on these findings, I recommended an integrated Internationalization At Home Plus Collaborative Outreach (IAHPCO) approach to internationalization that is based on a post-9/11 recalibration of national security and international education as complementary rather than diametrically opposed concepts.

A fresh look at decision making in international investment choices: Firm international coherence and home-host country relatedness

Understanding how decisions for international investments are made and how this affects the overall pattern of investments and firm’s performance is of particular importance both in strategy and international business research. This dissertation introduced first home-host country relatedness (HHCR) as the degree to which countries are efficiently combined within the investment portfolios of firms. It theorized and demonstrated that HHCR will vary with the motivation for investments along at least two key dimensions: the nature of foreign investments and the connectedness of potential host countries to the rest of the world. Drawing on cognitive psychology and decision-making research, it developed a theory of strategic decision making proposing that strategic solutions are chosen close to a convenient anchor. Building on research on memory imprinting, it also proposed that managers tend to rely on older knowledge representation. In the context of international investment decisions, managers use their home countries as an anchor and are more likely to choose as a site for foreign investments host countries that are ‘close’ to the home country. These decisions are also likely to rely more strongly on closeness to time invariant country factors of historic and geographic nature rather than time-variant institutions. Empirical tests using comprehensive investments data by all public multinational companies (MNC) worldwide, or over 15,000 MNCs with over half a million subsidiaries, support the claims. Finally, the dissertation introduced the concept of International Coherence (IC) defined as the degree to which an MNE’s network comprises countries that are related. It was hypothesized that maintaining a high level of coherence is important for firm performance and will enhance it. Also, the presence of international coherence mitigates some of the negative effects of unrelated product diversification. Empirical tests using data on foreign investments of over 20,000 public firms, while also developing a home-host country relatedness index for up to 24,300 home-host pairs, provided support for the theory advanced.

Disciplining democracy: United Nations peacekeeping, international security and democratization in the post -Cold War era

After the end of the Cold War, democratization and good governance became the organizing concepts for activities of the United Nations, regional organizations and states in the fields of peace, development and security. How can this increasing interest in democratization and its connection with international security be explained? This dissertation applies the theoretical tools developed by Michel Foucault in his discussions of disciplinarity and government to the analysis of the United Nations debate on democracy in the 1990s, and of two United Nations pro-democracy peacekeeping operations and their aftermath: the United Nations interventions in Haiti and Croatia. It probes “how” certain techniques of power came into being and describes their effects, using as data the texts that elaborate the United Nations understanding of democracy and the texts that constitute peacekeeping. ^ In the face of the proliferation of unpredictable threats in the last decades of the twentieth century a new form of international power emerged. Order in the international arena increasingly was maintained through activities aimed at reducing risk and increasing predictability through the normalization of “rogue” states. The dissertation shows that in the context of these activities, which included but were not limited to UN peacekeeping, normality was identified with democracy, non-democratic regimes with international threats, and democratization with international security. “Good governance” doctrines translated the political debate on democracy into the technical language of functioning state institutions. International organizations adopted good governance as the framework that made democratization a universal task within the reach of their expertise. In Haiti, the United Nations engaged in efforts to transform punishment institutions (the judiciary, police and the prison) into disciplined and disciplinary machines. In Croatia, agreements signed in the context of peacekeeping established in detail the rules of functioning of administrations and the monitoring mechanisms for their implementation. However, in Haiti, the institutions promoted were not sustainable. And in Croatia reforms are stalled by lack of consensus. ^ This dissertation puts efforts to bring about democracy through peacekeeping in the context of a specific modality of power and suggests caution in engaging in universal normalizing endeavors. ^

International tourism and socio-economic development in the Caribbean : are they compatible?

Plagued with poverty, the countries of the Caribbean have grappled for years with numerous development models. As in many Third World countries, tourism has been used as an economic development strategy. Criticisms of the tourism industry have frequently been severe. So much that during the formation of the Caribbean Basin Initiative, the tourism industry was intentionally avoided and other industries favored. One of the most critical questions asked of tourism is whether or not the economic gains of the industry are worth the detrimental social, political and environmental effects on the host country. It is the objective of this thesis to examine the relationship between international tourism and socio-economic development in the Caribbean, and to determine whether or not the deficiencies of the industry prevent it from being a beneficial development tool.

Gender, identity, and the security state: The politics of international drug trafficking

This dissertation examined how United States illicit drug control policy, often commonly referred to as the "war on drugs," contributes to the reproduction of gendered and racialized social relations. Specifically, it analyzed the identity producing practices of United States illicit drug control policy as it relates to the construction of U.S. identities. ^ Drawing on the theoretical contributions of feminist postpositivists, three cases of illicit drug policy practice were discussed. In the first case, discourse analysis was employed to examine recent debates (1986-2005) in U.S. Congressional Hearings about the proper understanding of the illicit drug "threat." The analysis showed how competing policy positions are tied to differing understandings of proper masculinity and the role of policymakers as protectors of the national interest. Utilizing critical visual methodologies, the second case examined a public service media campaign circulated by the Office of National Drug Control Policy that tied the "war on drugs" with another security concern in the U.S., the "war on terror." This case demonstrated how the media campaign uses messages about race, masculinity, and femininity to produce privileged notions of state identity and proper citizenship. The third case examined the gendered politics of drug interdiction at the U.S. border. Using qualitative research methodologies including semi-structured interviews and participant observation, it examined how gender is produced through drug interdiction at border sites like Miami International Airport. By paying attention to the discourse that circulates about women drug couriers, it showed how gender is normalized in a national security setting. ^ What this dissertation found is that illicit drug control policy takes the form it does because of the politics of gender and racial identity and that, as a result, illicit drug policy is implicated in the reproduction of gender and racial inequities. It concluded that a more socially conscious and successful illicit drug policy requires an awareness of the gendered and racialized assumptions that inform and shape policy practices.^

Gender politics, women's rights and international norms in Lebanon

The purpose of this dissertation is to investigate the reasons for the under-representation of women in politics in Lebanon, and the role of international norms of gender equality in bringing about change. For those questions, I examined the particular relevance of confessionalism arguing that a confessional social structure and political system empower patriarchal forms of organization with detrimental effects to women's political participation. This dissertation makes innovative contributions to two types of literature. First, literature on the barriers to women being elected into political office has put strong emphasis on electoral systems of representation, but has rarely addressed the way in which electoral systems that seek to ensure minority representation – such as the confessional system in Lebanon – operate to keep women out of politics. This study provides an important corrective to this literature by exploring a non-Western case and broadening theorizing on the issue. Second, constructivist literature in the field of International Relations has argued that international norms of gender equality – including gender quotas – have diffused throughout the 20th century. This research illustrates the mechanisms that counteract international diffusion, and adds to our understanding of how international norms are translated into domestic contexts.