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The behavioral economics of international diplomacy

- November 20, 2014

Trade ministers and representatives attended the Trans-Pacific Partnership ministerial meeting in Singapore on Dec. 7. (AFP Photo / Roslan Rahman)
When America sends diplomats to international negotiations over big-ticket items like the new Trans-Pacific Partnership agreement, does it matter who they send, or how those diplomats think about cooperation? Is it better if the people we put on the airplane to Geneva have certain character traits? Should they be patient or seek more immediate rewards?  Should our diplomats be good at chess — able to think many moves ahead — or altruistic?
International relations scholars have typically ignored the personal characteristics of diplomats in favor of explanations that highlight underlying interests and power relations between governments and economies.  These factors are obviously important, but our new study (with Brad LeVeck and James Fowler) in the journal International Organization finds that American diplomats vary dramatically on how they perceive the value of international cooperation and the best ways to achieve it. It’s their personalities and skills, not how an agreement is designed, that explain these differences.
We surveyed 92 high-level policy elites who are responsible for making and implementing U.S. foreign economic policy.  Our sample includes former members of Congress, Cabinet members, senior officials at key government departments, heads of strategy of major corporations that are exposed to such policy decisions, and others. We asked these elites some questions about whether and how best to negotiate trade policy and also administered “games” drawn from cognitive psychology and behavioral economics that measured their individual traits, such as patience and strategic skills.
We found a striking correlation between the subjects’ personalities and the kinds of agreements they favor. Leaders who are more patient and more strategic are more likely to embrace global cooperation. They are also more likely to favor agreements that are inclusive, involving a large number of countries.  These types of elites are able to see (and will wait for) the larger benefits of more complex agreements.
Yet not all U.S. policy elites are so patient or strategic. A sizable number of them are focused on the near term and are unable to anticipate the next move or two by counterparts in a negotiation. These less patient and strategic elites are also less inclined to want international cooperation. When they are willing to cooperate, they favor exclusive agreements with timelier but smaller gains.
We also subjected these elites to an experiment to determine whether procedures to enforce international agreements make those pacts more attractive avenues for cooperation.  After all, the World Trade Organization is widely praised for its enforcement system. And many people think enforcement is the most pivotal part of any international agreement. But we found that American policy makers are not very impressed by enforcement. They are willing to negotiate and join international agreements without provisions for enforcement.
These findings tell us that if the United States wants to achieve big-ticket international agreements that are complicated to negotiate among many parties — on climate, trade, financial regulation or other such topics — it should focus not just on whether the design of agreements serve the national interest but also on the envoys it sends to hammer out the deals.   It should send its most patient and strategic diplomats who favor accords that create long-term benefits. And when those envoys come to design agreements, we should not be surprised if they think formal enforcement procedures are overrated.