Tag: complex interdependence

Challenges to the Contemporary World Order

A guest post by Thomas Pepinsky, is Associate Professor of Government at Cornell University and Stefanie Walter,  Full Professor for International Relations and Political Economy at the Department of Political Science at the University of Zurich.

Many observers of contemporary global politics conclude that the present moment represents one of the most unsettled times in global politics since the fall of the Berlin Wall. Shock events such as the Brexit vote, the continued success of radical right populists in continental Europe, the continuing Eurozone crisis, and the unprecedented foreign relations of the Trump presidency all point to a global liberal order under stress. Scholars of comparative and international politics and political economy are now asking questions that would have seemed far-fetched only years ago: how durable is liberal internationalism and the North Atlantic alliance? Will mercantilism replace neoliberalism? Can central bank and supranational economic institutions perform the functions required of them?  Continue reading

ABM in the Social Sciences

While I am in the throes of designing and implementing an agent-based modeling approach to study how democracies react to extreme external shocks, I wanted to take a brief break from coding and writing to highlight two very interesting pieces in the current issue of Nature that address ABM directly. The first, “Economics: Meltdown modelling,” discusses how advanced agent-based models might be able to help predict future economic crashes—complete with a vignette where a futuristic ABM prevents a collapse. The problem, as the article asserts, is that ABM is often rejected by mainstream economists.

Many [economists] argue that agent-based models haven’t had the same level of testing…agent-based model of a market with many diverse players and a rich structure may contain many variable parameters. So even if its output matches reality, it’s not always clear if this is because of careful tuning of those parameters, or because the model succeeds in capturing realistic system dynamics. That leads many economists and social scientists to wonder whether any such model can be trusted. But agent-based enthusiasts counter that conventional economic models also contain many tunable parameters and are therefore subject to the same criticism.

This aversion to ABM is persistent throughout the social sciences, which creates an odd dynamic where ABM enthusiasts must often spend a great deal of time justifying their use before research can even begin. What’s baffling about this situation, however, is that ABM is just a tool; useful in for some research questions, but ultimately an imperfect device—just as nearly all other research methods in the social sciences are imperfect. This is precisely the sentiment of the authors of the second article, an op-ed entitled, “The economy needs agent-based modelling.” In discussing the current state of the art in analytical economic models the authors note:

The best models they have are of two types, both with fatal flaws. Type one is econometric: empirical statistical models that are fitted to past data. These successfully forecast a few quarters ahead as long as things stay more or less the same, but fail in the face of great change. Type two goes by the name of ‘dynamic stochastic general equilibrium’. These models assume a perfect world, and by their very nature rule out crises of the type we are experiencing now…As a result, economic policy-makers are basing their decisions on common sense, and on anecdotal analogies to previous crises such as Japan’s ‘lost decade’ or the Great Depression. The leaders of the world are flying the economy by the seat of their pants.

Why then, is ABM treated as being particularly fallible? As a user and developer I have pondered this many times. I believe the primary issue for many critics is the notion of “creating a universe for experimentation,” i.e. the belief that an ABM can account for all of the complexity. The easy response to such a critique is simple: no one believes that. My first exposure to ABM were zero intelligence agents, and I was struck by how such simple models could predict the dynamics of real markets (so much so, that I thought I might name a blog after them someday). Quality ABM’s focus on a narrow set of agent attributes, and attempt to glean the maximum insight from these simple mechanics. For a more philosophical response I will paraphrase the great econometrician Neal Beck in saying that, “all of statistics is a sub-field of theology.” That is, with any model we assume to know the “real truth,” but accept the inherent error and still attempt to build knowledge from the analytsis. ABM are no different, however, these models simply leverage a different technology and analytical framework to produce conclusions.

I welcome both critics and supporters of ABM to make the case for and against their use. It should be noted, however, that those railing against new technology often become victims of their own shortsightedness.

Photo: Nature

Balancing, Uncertainty, and Domestic Politics

Peter brings up an interesting question and one that we don’t yet have a final answer on: Under what circumstances will states balance against another? If shifts in the balance of power are not enough to provoke balancing, what does? I think the notion that Japan could be provoked into balancing by the DPRK rather than China certainly has merit. A few initial thoughts as to why this may be the case:

1) Increased Economic Dependence: China’s military modernization has been and will continue to be fueled by its growing economy. Japan has become arguably China’s most important economic partner (both in terms of trade and investment) over the past few decades. With Japan being China’s third largest export market it would seem that the PRC would have less incentive to militarily threaten the Land of the Rising Sun. There is no such interdependence with the North Koreans. Wait, you might say, Japan does provide a ton of aid to the DPRK. Surely that can create a form of dependence that would deincentivise military provocation. Except that historically it hasn’t stopped the DPRK from continuous provocations. And Japan has repeatedly suspended aid in the wake of missile and nuclear tests.

2) Provocative Signals and Established Images: North Korea has repeatedly test-fired missiles in Japan’s direction, recently test-fired a ballistic missile over Japan, has a history of naval incidents with the Japanese, and as is well known recently conducted an underground nuclear test. Taken together, these are recent provocative signals that make it more likely Japan will see North Korea as a threat. At the very least, it makes it much harder for Japan to comfortably predict status quo behavior from the DPRK. There hasn’t been much for Japan to use to build a status-quo image of the DPRK in the last few decades, meaning most actions by the North are likely to be interpreted as evidence of their hostile and revisionist nature. Simply reviving aid will not be enough to reliably predict status-quo behavior going forward.

3) Domestic Politics: Over the past few decades there has been a growing call with Japan to re-examine its role internationally, particularly with regards to military affairs and the projection of power. At a minimum, many have called for greater participation in collective defense, which by definition of late has meant the ability to project power and not merely defend the home front. International events can create “windows of opportunity” for domestic policy entrepreneurs looking to alter the status-quo. Various scholars, including so-called “neo-classical realists” focus on the influence that domestic political players can have in shaping a state’s foreign policy.

For me, the two most important factors related to reactionary balancing (as opposed to long-term balancing which does not require a catalytic event) are uncertainty and domestic politics. The role of uncertainty in international politics (and social life in general) cannot be understated, and has certainly been highlighted by scholars from various paradigmatic points of view. The fact that the DPRK isn’t as tightly interwoven and dependent on Japan’s market as, say, China combined with their repeated and recent provocations which bring about detrimental sanctions from the Japanese (in the form of cutting of food aid, etc.) may lead Japan to view the North as unpredictable (or, possibly as predictably hostile). Combining unpredictability with a track record of hostility towards Japan as well as significant military capabilities will likely lead Japan to perceive the DPRK as the more significant threat.
Secondly, and building on the first point, domestic politics is always lurking. Yes, Japan was humbled and restrained as a military power after World War II and Article 9 constrains their ability to project power. However, there are significant parts of the Japanese body politic that have and continue to push for ‘normalization’ regarding their military, whether that be conventional or nuclear. In fact, the lifting of the rhetorical taboo on these topics as been steadily declining for years, and calls for revision has not been limited to right-wing circles. Proponents of revisionist policies often need a catalyst, an opening to allow them to push through a major change in policy. Given the continuing normalization in relations with China, economic integration, and the lack of bold, provocative military signals from China of late makes them a less likely candidate to supply the kind of ‘perturbation’ necessary to bring about change in policy.

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