Diplomacy and Domestic Stability

• In Event: The Political Economy of Security: People, Firms, States and Institutions

Abstract

Why do political leaders travel abroad? This project proposes an informational mechanism linking in-person diplomacy to domestic stability, and tests a broad set of the theory's empirical implications. A major world power can conduct a diplomatic visit with another incumbent leader in order to reap a future policy concession; the visit is not worth the effort unless the incumbent remains in power long enough to deliver on the deal. A diplomatic visit thus provides a visible and credible signal of the visitor’s high confidence in the incumbent’s stability in office. Domestic opponents, facing incomplete information as to the incumbent’s strength, observe the signal and are deterred from mounting a challenge. Our theory implies that top-level diplomatic activity is both cause and consequence of domestic political stability, precisely because of the transactional nature of interstate diplomacy.

Using data on US diplomatic visits from 1960-2013, we find strong empirical support for the theory's main predictions: a visit with the US President substantially reduces the risk of a leader’s removal from office. Consistent with our proposed informational mechanism, we find that the impact of a visit is strongest under conditions that suggest a visit is ex-ante least likely to occur. We further demonstrate that visits are systematically reciprocated with international policy concessions, in the form of trade access and voting alignment in the UN General Assembly.

Additional analyses test some more subtle implications of the domestic (de)stabilization that follows from top-level diplomatic exchange. Previous studies have used sovereign bond indices as indicators of market perceptions of a nation's political stability; we examine how the pricing of these indices responds to the announcement and occurrence of a diplomatic visit. Further, we design a set of panel surveys targeting citizens in countries whose leaders are receiving a diplomatic visit with the US President, to be administered in waves immediately before and after the occurrence of the visit. These surveys allow us to obtain direct measures of citizens' responses to diplomatic visits, and how these events shape citizens' willingness to engage in political activities that challenge the incumbent regime. Finally, we complement our quantitative empirical tests with a set of in-depth qualitative analyses. Relying on declassified archival evidence from the early Cold War period, we examine the deliberations and negotiations surrounding top-level US diplomatic visits with the leaders of Austria in 1951, the Republic of Korea in 1964, and Bolivia in 1973.

In sum, this project demonstrates that in-person diplomacy is a powerful instrument of statecraft through which world leaders can influence the domestic stability of foreign nations.

Authors

• Matt Malis, New York University

• Alastair Smith, New York University