Diplomacy in Times of Change

• In Event: Formal Models of Domestic and International Politics

Abstract

We develop a formal theory of how states use diplomacy to identify friends and foes when new issues arise in the international system. In the model, two states engage in costly competition over where the new policy outcome will be set. The more effort each state exerts, the closer the final outcome is to its own ideal point. However, at the outset of the interaction, each state is initially uncertain where the other's ideal point lies, reflecting the uncertainty that arises at times of change or crisis in the international system. We investigate the circumstances under which states can use cheap talk diplomacy --- costless, unverifiable messages --- to learn each other's ideal points before choosing how much effort to exert in the policy competition.

The efficacy of cheap talk depends primarily on the strategic incentives of states with similar preferences. If states with the same ideal point have an incentive to free-ride on each other's efforts, then costless diplomacy cannot help states coordinate their expectations about each other's policy preferences. In this case, there is an incentive to pretend to be a foe to a state that is actually one's friend, thereby impelling that state to spend more on the competition than it would if it knew it had a friend. On the other hand, if the efforts of states with similar preferences are sufficiently complementary, then it is in their best interests to communicate honestly --- cheap talk diplomacy works. We show that this kind of complementarity between allies' efforts holds when there are high fixed costs to establishing a particular position on the issue in question.

Substantively, our analysis provides a rationalist explanation for why interstate diplomatic communication has historically been more influential in the economic and institutional realm than in security matters. International economic institutions have high start-up costs; states are unlikely to invest in such institutions unless they can trust that their partners will participate and that their investments will pay off. By contrast, in a world where states maintain standing armies, the fixed costs of deploying these forces are relatively low. Here the free-riding incentive dominates between states with similar goals, eroding the ability of diplomacy to coordinate their expectations about each other's preferences.

Authors

• Bradley C. Smith, Vanderbilt University

• Brenton Kenkel, Vanderbilt University