The Political Economy of the Asia Pacific Motoshi Suzuki Akira Okada Editors Games of Conflict and Cooperation in Asia The Political Economy of the Asia Pacific Series editor Vinod K Aggarwal More information about this series at http://www.springer.com/series/7840 Motoshi Suzuki • Akira Okada Editors Games of Conflict and Cooperation in Asia 123 Editors Motoshi Suzuki Graduate School of Law Kyoto University Kyoto, Japan Akira Okada KIER, Kyoto University Kyoto, Japan ISSN 1866-6507 ISSN 1866-6515 (electronic) The Political Economy of the Asia Pacific ISBN 978-4-431-56464-5 ISBN 978-4-431-56466-9 (eBook) DOI 10.1007/978-4-431-56466-9 Library of Congress Control Number: 2016963797 © Springer Japan KK 2017 This work is subject to copyright All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed The use of general descriptive names, registered names, trademarks, service marks, etc in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made Printed on acid-free paper This Springer imprint is published by Springer Nature The registered company is Springer Japan KK The registered company address is: Chiyoda First Bldg East, 3-8-1 Nishi-Kanda, Chiyoda-ku, Tokyo 101-0065, Japan Preface International relations in Asia are multifaceted Conflict coexists with cooperation across various issue realms On the one hand, in the realm of security, North Korea has been conducting tests of nuclear weapons and medium – and long-range missiles relentlessly in spite of opposition from many Asian and non-Asian states Territorial disputes are intensifying between China and neighboring states over islets in the South and East China Seas to the extent that, under a high level of uncertainty, a small miscalculation could precipitate the outbreak of armed conflict To counter North Korea or China or both, Japan, South Korea, and Taiwan are strengthening security ties with the United States In contrast, the North Korean and Chinese moves, which appear provocative to many, might be strategic responses to the improved security ties with the external great power that they find inimical to their own security interests On the other hand, both the depth and width of regional cooperation have been expanding steadily In the security field, internal wars in Cambodia and East Timor have been settled through UN peacekeeping operations to which both Asian and non-Asian states have contributed In currency matters, the swap agreements between central banks, which began in 2000 at the bilateral level, have expanded and become multilateral In the area of finance, China has established the Asian Infrastructure Investment Bank (AIIB) to satisfy strong demand for infrastructure development in a growing Asia, with participation by 56 states In trade matters, bilateral and subregional free trade agreements have been concluded between Asian states and between states inside and outside the region In general, a multilateral cooperation effort, found in these instances, faces a collective action problem, thus necessitating creative institutional arrangements to solve the problem and take effect The abovementioned outcomes indicate that Asian states have been using various arrangements skillfully to facilitate cooperation Yet this does not mean that Asian states are always successful in attaining regional cooperation Indeed, there are many other occasions in which cooperative efforts have failed due to informational or institutional defects with the continuation of interstate conflict and the impairment of states’ security and prosperity v vi Preface Beneath the blend of conflict and cooperation, we perceive goal-oriented behavior, which seeks to maximize a state’s preference for security, prosperity, or even domination A state’s goal-oriented behavior often takes place in reaction to another state’s similar behavior on an ex ante or ex post basis under various informational and institutional constraints The state’s goals may or may not be realized, depending on constraints and strategic complexity Hence, from an analyst’s vantage point, it takes an appropriate research method to explain or predict international outcomes that cannot be inferred directly from states’ goals To illuminate the strategic interactions of goal-oriented behavior and the consequences, we employ game theory as our research method In this volume, we try to show that Asian states play games of conflict and cooperation strategically by creating, changing, or destroying institutions in the issue realms of security, trade, and currency As noted by Robert Keohane, conflict or discord is a precursor to cooperation The creation of appropriate institutions that coordinate states’ actions can turn present conflict into future stable cooperation Therefore, conflict and cooperation are inseparable phenomena and are integral parts of states’ strategic interactions under constraints We believe that instrumental rationality is a principal behavioral guide for humanity and that there exists no discernible difference in the extent of instrumental rationality between the East and the West Despite our commitment to the assumption of instrumental rationality, we not disregard history and culture as determinants of international outcomes Rather, we see history and culture either as influencing states’ preferences and beliefs or as constituting social institutions to constrain states’ behavior and strategic interactions Accordingly, if a significant difference is found between the East and the West in the quality of regional relations, we will argue that a primary source of the difference rests upon variations between regions or even within a region in the institutions that are influenced by history and culture Historical and cultural variations divide contemporary Asia, making regional institutional cooperation difficult, thus prompting some Asian states to use global or interregional arrangements in order to obtain the benefits of cooperation As a result, Asia has increasingly been an open or porous region Qualifications are provided for this line of argument in the first chapter, which also discusses the affinity of international relations theory and game theory with special attention to Japan and Asia The following ten substantive chapters are developed based on the conceptual framework and, for integrity and coherence, are subgrouped into four parts that correspond to major issues in international relations scholarship: (1) conflict management, (2) arms control, (3) trade, and (4) currency Effective institutions in the four realms are crucial to a stable international order In fact, such institutions were found in the medieval China-centric order as well as in the post-World War II US-led order Each substantive chapter analyzes the nature of conflict and cooperation in a post-hegemonic era when institutions are in decay This edited volume, Games of Conflict and Cooperation in Asia, is an outcome of a truly collaborative work by a research team of Japanese scholars who specialize in game theory, international economics, international security, or international political economy This English volume has vastly expanded and improved on the Preface vii Japanese version, titled Kokusai Funso to Kyocho no Geimu (Games of International Conflict and Cooperation), published in 2013 by Yuhikaku, a superb publisher of academic books based in Tokyo Through substantial recalibrations, revisions, and the addition of new chapters (1, 2, 3, and 10), the English version has become completely different from the earlier Japanese version Furthermore, we have conducted mutual blind reviews to guarantee the quality of each chapter Our research team has held biannual workshops at Kyoto University every March and at Kobe University every September since 2008 The workshops have been extraordinarily productive and enjoyable because of the team members’ professionalism and humor We are grateful to Atsushi Ishida (the University of Tokyo) who had contributed his chapter to the Japanese version but whose administrative duties prevented him from doing the same for the English version Our special gratitude goes to Emeritus Professor Yoshinobu Yamamoto (the University of Tokyo) for his constructive comments in several workshop meetings and Professor Vinod Aggarwal (University of California at Berkeley) for allowing our volume to be part of the Springer Political Economy of the Asia Pacific series under his editorial aegis M Suzuki is also indebted to T.J Pempel (University of California at Berkeley) and Bill Grimes (Boston University), who visited Kyoto to provide their insightful analyses of Asian politics and international political economy We acknowledge the Japan Society for the Promotion of Science (JSPS) for the grants (#23330053 and #26245020) that made our research possible Last but not least, we thank Juno Kawakami, an editor in Springer’s Tokyo office who patiently waited for our belated book manuscripts during the editorial process and gave birth to her second child at the time leading up to publication Our book is dedicated to young scholars and students committed to systematic analyses of international relations in Asia Kyoto, Japan September 1, 2016 Motoshi Suzuki Akira Okada Contents A Rational Approach to the Study of International Relations in Asia Motoshi Suzuki Part I Security Cooperation and Conflict Management Signaling Game of Collective Self-Defense in the U.S.-Japan Alliance Shuhei Kurizaki 31 Information Sharing in Early Stage International Disputes: How China and Japan Communicate Shoko Kohama, Atsushi Tago, and Kazunori Inamasu 57 Peacekeeping by the UN and Regional Organizations: Sharing the Burden or Passing the Buck? Yukari Iwanami 83 Part II Security Cooperation and Arms Control Politics Over the Claim of Individual Self-Defense at Wars: Aid Conditionality and Reciprocity in Asian Regional Conflict 117 Atsushi TAGO International Cooperation and Institution Formation: A Game Theoretic Perspective 137 Akira Okada An Agenda-Setting Game of the Landmine Ban Treaty 159 Hikaru Hayashi ix x Contents Part III Trade Cooperation FTA/EPA Negotiations and Domestic Reforms in Two-Level Games Analysis 183 Kaoru Ishiguro The Paradox of Compliance: Does Legalization Increase Compliance in Trade Disputes? 207 Keisuke Iida Part IV Currency Cooperation 10 Analyzing International Developmental Loan Markets with Rival Lenders 227 Motoshi Suzuki, Keisuke Iida, and Shohei Doi 11 Globalism and Regionalism: The East Asian Currency Crisis and Institutional Building 249 Motoshi Suzuki Index 271 11 Globalism and Regionalism: The East Asian Currency Crisis 261 help M recognize their overlapping preferences in pursuit of efficient coordination Both J and M achieve an efficient cheap talk equilibrium (See Appendix 11.3) However, if the preference asymmetry is too large, the coordination effort is infertile Even for a small preference asymmetry, without partitioning, information transmission would be less efficient These results suggest that prior to establishing the CMI, the lack of a regional institution after repeated meetings may be due to a large preference asymmetry between states, inefficient communications, or both 11.4.3 Delegating to a Global Institution As noted above, an interstate negotiation is inefficient if the preference asymmetry is large This may be the case for East Asia where states have divergent political and economic systems However, an alternative approach for regional cooperation is to rely on a relevant global institution (G), which contains arrangements useful for designing a regional institution This approach is equivalent to delegation in the principal-agent theory (Milgrom and Roberts 1992) In the case of the CMI, its important arrangements concerning surveillance and moral hazard prevention are borrowed from the IMF In effect, the CMI liquidity providers, most likely Japan and China, would delegate the part of their decision authorities to the IMF to provide credibility to the CMI (Grimes 2009, p 94–99) In general, global institution G might entail its own bias, which is denoted by g Although the arrangements of global institution G are used, the states cannot completely eliminate the dilemma associated with institutional building Unlike a sovereign state such as J, global institution G is a non-strategic player in that it does not manipulate information because it is merely a transparent institution and is constrained by member states through relevant international treaties These constraints make a global institution’s proposal (rG D w C g) self-signaling Assume that state J has superior information and can decide whether to delegate to global institution G Thus, before it extends its proposal to M, J must decide whether to delegate to G This changes the game as follows: Nature determines the preferences of M, J, and G as w, w C c, and w C g, respectively (w [0, 1], c, g 0) J decides whether to delegate to G by comparing c and g If J delegates to G, G extends a proposal (rG D w C g) to M M chooses regional institution f based on rG ( f [0, 1]) The payoffs of M and J are determined Or, (30 ) If J chooses not to delegate to G, J extends a proposal rJ to M based on its preference of w C c (40 ) M chooses regional institution as f based on rJ without knowing w and w C c ( f [0, 1]) (50 ) The payoffs of M and J are determined 262 M Suzuki If J chooses to delegate, the game proceeds from (1), (2), (3), (4) to (5) However, if J chooses to make its own proposal without delegation, the game proceeds from (1), (2), (30 ), (40 ) to (50 ) Let g denote the critical value for G’s bias at which J’s utility in the case of delegation is equivalent to J’s utility in the case of nondelegation (its own proposal) The outcomes of this expanded game depend on the relationship between G’s bias g, J’s bias c, and the threshold g and are classified into the following cases: Case 11.1: g < c < g Case 11.2: c < g < g Case 11.3: c < g < g In Case 11.1, G’s bias is smaller than J’s bias and J delegates the coordination task to G because the large preference asymmetry between J and M makes J’s proposal an inefficient information transmitter As a result, the influence of the global institution looms large at the expense of regionalism This case approximates the pre-currency crisis East Asia, which was highly dependent on the IMF without a regional institution The most interesting is Case 11.2 in which G’s bias is greater than J’s but smaller than the critical value of g In this case, it is still rational for J to delegate to G because J is known to have a manipulative intent and a large bias, which makes J’s coordination effort with M is relatively inefficient In this scenario, global institution G has a transparency premium This case approximates the Japanese delegatory efforts when creating the CMI linked closely to the IMF system Conversely stated, the inability of Japanese authorities to solve the informational problem through an intra-regional (interstate) communication channel led them to delegate the decisionmaking power to the IMF In Case 11.3, because G’s bias is greater than J’s and g;J seeks coordination with M via its own proposal without delegation This means that the preference asymmetry between J and M is small enough for an autonomous regional institution to emerge Currently in East Asia, the IMF still has an enormous influence over the CMI Nonetheless, after observing the IMF’s inability to preempt and contain the global financial crisis in 2008 (i.e., recognizing the IMF’s bias being intolerably large), the member governments may reduce the IMF link substantially via an intraregional communication channel in the future Concerned about this scenario, the IMF has recently allowed greater East Asian participation in its system with respect to contributions and personnel This can be interpreted as an attempt at maintaining the IMF influence within the region by reducing preference divergence (g) between itself and East Asian states 11 Globalism and Regionalism: The East Asian Currency Crisis 263 11.4.4 Extension The preceding analyses suggest that the intra-regional preference divergence [denoted by J’s bias, (c)], the efficiency of intra-regional communication (the number of partitions in information transmission), and the global institution’s bias (g) are closely related Although the above assumes that the communication efficiency is fixed, an extended analysis, which considers communication efficiency as a variable, suggests the following two propositions: If J’s bias (c) is constant, as the communication efficiency (the number of partitions) increases, the expected utilities of the two states increase, reducing the critical value g/ and the likelihood of delegation to a global institution to design a regional institution If the communication efficiency is low, an increase in J’s bias (c) increases the likelihood of delegation to a global institution Proposition (1) predicts that states can increase the likelihood of an autonomous regional institution by improving the efficiency of intra-regional communications Consistent with this prediction, through multiple ministerial meetings on diverse topics (e.g., money, foreign exchange regimes, trade facilitation, food, energy, rural development, and communicable diseases), an effective intra-regional communication channel, such as the APT framework, has been realized since 2005 (Suzuki 2006) The improved APT framework arguably has had a positive effect on intraregional communicative efficiency and the multilateralization of the CMI in 2009 Similar to the initially proposed AMF, improved communications may be viewed as a step toward an autonomous CMI that is weakly linked to the IMF (Henning 2009) Realization of the CMI coincided with the 2008 global financial crisis, which uncovered the inadequacy of the IMF’s crisis management with respect to ex ante surveillance and ex post resolution While the revealed bias of the global institution is undoubtedly a motivator for a more autonomous CMI, the improved communicative efficiency of the APT framework may also be another important negotiation facilitator Thus, Proposition (1) finds a causal connection between the autonomization of the CMI and the improved communicative efficiency of the APT framework through specialization A corollary of Proposition (1) implies that expanding the membership diversifies preferences (larger c), which increases the difficulty of institution building without a measurable improvement in communicative efficiency Proposition (2) suggests that a group of states with an excessively large preference divergence must use the delegation approach to build an institution or efforts will fail The fate of APEC (Asia-Pacific Economic Cooperation) in which 21 states joined provides evidence for Proposition (2) Observing major progress in European integration and the conclusion of the Canada–U.S Free Trade Agreement (CUSFTA) in the late 1980s, East Asian states were concerned that they lagged behind in the regional integration movement Japan in association with Australia led negotiations to promote regional 264 M Suzuki or interregional economic cooperation and reached an agreement with East Asian and Pacific-Rim states, including the U.S., Canada, and New Zealand to establish APEC APEC uniquely embodied the principle of individual states’ initiatives in pursuit of trade and investment liberalization as well as economic development However, contrary to Proposition (2), APEC did not build an institutional link to the General Agreement on Tariffs and Trade (GATT)—a global trade institution based on the principles of multilateralism, nondiscrimination, and reciprocity Due to their divergent preferences over the extent and speed of liberalization, APEC states were faced with a serious coordination deadlock when they began to undertake substantive liberalization tasks—the Early Voluntary Sectoral Liberalization (EVSL) (Ravenhill 2001) Consequently, they were unable to agree on precise liberalization procedures, APEC became insignificant, and eventually was overshadowed by broader and more comprehensive trade agreements, such as the WTO and FTAs 11.5 Conclusion: Diplomacy and International Relations The existing international relations theories of realism, liberal institutionalism, and constructivism suggest that it is extremely difficult to establish a meaningful regional institution in East Asia where none of the institutional prerequisites, such as robust leadership, informational mechanisms, and shared identities, exist Herein the prospect of regional institutional building either through interstate (intra-regional) communication channels or delegation to a global (extra-regional) institution is analyzed via game theories of cheap talk and delegation The following implications are generated As for liberal institutionalism, my analytical results suggest that partitioning, such as the detailed negotiation agenda used in the APT ministerial meetings, provides an efficient intra-regional communication channel for coordination purposes However, if a large preference divergence exists between states, skillful negotiators may delegate to a global institution as a non-strategic, albeit biased, information provider to assist in the coordination efforts Despite its liberal institutionalist flavor, the informational argument here is nested within realism because it relies on global hegemony, which presumably underpins the global institution However, this global recourse becomes invalid if the global institution is nontransparent, biased, or both due to the manipulative pressure from the hegemonic state Like any other state, the hegemonic state has an incentive to manipulate the global institution for political purposes and is susceptible to a loss of credibility from doing so With respect to constructivism, my analysis supplants identities with expectations and suggests that an efficient communication channel can promote the converge of expectations for institutional building even for the highly technical issue of liquidity provisions rather than the abstract value of political democracy or human rights The convergence of expectations at the micro level cannot be equated with shared identities at the macro level, but may provide a practical step toward a broader ideational harmony 11 Globalism and Regionalism: The East Asian Currency Crisis 265 Finally, it is important to stress that institutional building relies on the informational initiative of a rational state that seeks to minimize negative externalities in order to create a mutually beneficial institution under complex interdependence This requires not a material capability, but a state’s communication technique to solve coordination and asymmetric information problems through either an interstate (intra-regional) communication channel or delegation to a global (extraregional) institution Depending on the distribution of states’ preferences and the extent of informational asymmetry, a state’s communication finesse can affect the institutional outcome Appendix 11.1 Babbling Equilibrium If c > 0, then J and M have divergent preferences J proposes r to maximize its utility unilaterally M knows that J has an incentive to misrepresent its true preference and consequently disregards r M uses its prior belief of a uniform distribution to predict w and determine f Because M ignores r, J’s best response is to propose r at any point between and 1, irrespective of w Because M cannot confirm J’s proposal, J has no incentive to reveal its true preference Thus, J’s proposal is not self-signaling and J offers the same proposal regardless of the true value of w This is a pooling equilibrium or a babbling equilibrium under which no meaningful information is transmitted from J to M Consider the states’ utilities under a babbling equilibrium M chooses the value of f to maximize its expected utility under the condition that there is no other meaningful information but its prior belief of a uniform distribution of w over [0, 1], which can be denoted as the density function h(w)D1 for w M’s expected utility is given by Z EU BM D f w/2 h.w/dw: Solving the equation gives EU BM D f2 C f dEU B The first-order condition is given by df M D 2f C D 0: This yields f D 12 Under a babbling equilibrium, M’s expected utility can be computed from Eq (11.1) in the main text and f D 12 as EU BM D 12 By combing the above result and Eq (11.2) in the main text, J’s expected utility is EU BJ D 12 C c 266 M Suzuki Appendix 11.2 Conditions for Partitioning As noted in the main text, J partitions f ( f 2[0, 1]) into two intervals at point w1 and proposes r within each interval J extends r1 for the interval [0 , w1 ) and r2 for the interval [w1 , 1] The quadratic loss function for J’s utility is symmetric at its ideal point, which is denoted by w1 C c For the two proposals to be in equilibrium, both need to provide J with equivalent utilities In other words, the distance between f1 pertaining to r1 and J’s ideal point, w1 C c has to be equal to the distance between f2 pertaining to r2 and J’s ideal point, w1 C c If this equidistance condition does not hold, there is no rationale for the partition (or no rationale for two proposals) and J would make a single proposal that produces a higher utility Thus, the following condition is necessary for partitioning: w1 C c D  à w1 w1 C C : 2 Rearranging this equation gives w1 D 2c: To make partitioning possible, w1 > and c < 14 If J’s bias (c) approaches the critical value of 14 , w1 approaches 0, indicating that the interval goes back to the original non-partition interval [0, 1] If c , partitioning becomes impossible On the contrary, if c approaches 0, w1 reaches ; maximizing the information transmission Appendix 11.3 Cheap Talk Equilibrium (Numerical Example) A numerical example of a cheap talk game with two intervals is analyzed when the two intervals represent the smallest partitioning and the least efficient cheap talk equilibrium (The greater the number of intervals, the more efficient the cheap talk equilibrium.) Thus, it is appropriate to compare the cheap talk game with two intervals and the delegation game analyzed in Appendix 11.4 In a cheap talk game with two intervals, J extends a proposal within each of two intervals (See Fig 11.1) Basically M knows that J’s proposal has a bias, but uses it to update the prior information and chooses f M updates its prior belief on w as follows M knows that w is uniformly distributed between and This prior belief is characterized as the density function h(w) D When J makes a proposal r1 for the interval w [0, w1 ), M updates its prior belief to the posterior belief 11 Globalism and Regionalism: The East Asian Currency Crisis Fig 11.1 Utility function and equilibrium (Note: w1 D 1/2 267 2c) h(wj r1 ) according to the Bayes theorem as h wjr1 / D h.w/ Pr r1 jw/ Pr w Œ0; w1 / where the prior belief h(w) D Because J always proposes r1 in the interval, Pr(r1 j w) D Because w is within the interval, Pr(w [0, w1 ]) D w1 Inserting these into the above equation gives h wjr1 / D w11 Consider M’s choice When J proposes r1 in the interval w [0 , w1 ), M chooses f1 in order to maximize its expected utility M’s expected utility is given by Z EU CM D w1 f1 w/2 h.w/dw: Solving this yields EU CM D f12 w1 C f1 w21 dEU C w: The first-order condition is df1M D 2f1 C w1 D f1 D w21 : Likewise, if J proposes r2 for the interval w [w1 , 1], M chooses f2 D w12C1 As for J’s other proposals in the two intervals, M does not change its posterior beliefs and choices as noted above Given M’s responses, J proposes r1 D w21 for the interval w [0 , w1 ) J proposes r2 D w12C1 for the internal w [w1 , 1].The stated J’s proposals are equilibrium strategies For instance, suppose that for the interval w [0 , w1 ), J extends a proposal r3 D w12C1 Then M holds the posterior belief (wj r3 )D0 and predicts w D 12 , with the game ending with a babbling equilibrium Since J’s expected utility in the babbling equilibrium is inferior to that in a cheap talk equilibrium (shown below), J has no incentive to deviate from r1 A cheap talk equilibrium is a separating equilibrium in the sense that J’s proposal will differ depending on the value of w 268 M Suzuki Using these results and Eq (11.1) in the main text, M’s expected utility can be calculated as Z EU CM D w1 w/2 h.w/dw C f Z w/2 h.w/dw; f w1 where for w [0 , w1 ), M chooses f1 D w21 in response to J’s r1 In contrast, for w [w1 , 1], M chooses f2 D w12C1 in response to J’s r2 M’s expected utility can be solved as Z EU CM D w1 w1 Z Á2 w h.w/dw C  w1 w1 C Ã2 w h.w/dw D 48 c2 Using Eq (11.2) in the main text, J’s expected utility is calculated as EU CJ D 48 2c2 Insofar as Ä c < 14 , M’s and J’s expected utilities in the cheap talk equilibrium are greater than those in the babbling equilibrium calculated in Appendix 11.1 Appendix 11.4 Critical Value for Delegation to the Global Institution If J delegates to global institution G, M uses G’s proposal rG to make its institutional D choice ( f D w C g) In this case, M’s expected utility is UM D g2 , while J’s expected utility is UJD D g2 c2 : If J chooses not to delegate, the game is the same as the one analyzed in Appendix 11.3 As argued in the main text, J must decide between delegation and non-delegation This delegation decision is made based on the following expected utility calculation Let g be the critical value for G’s bias If delegation and J’s utility are equal, UJD D g c/2 , but UJC D 48 2c2 for non-delegation and J uses its own proposal The critical value g; which is non-negative, is obtained as r gD˙ C 2c2 C c for g R c: 48 11 Globalism and Regionalism: The East Asian Currency Crisis 269 References Acharya, A (2000) Constructing a security community in Southeast Asia: ASEAN and the problem of regional order New York: Routledge Aggarwal, V., Koo, M G., Lee, S., & Moon, C.-i (Eds.) 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(2004) Rethinking security in East Asia: Identity, power and efficiency Stanford: Stanford University Press Suzuki, S (2006) Chairmanship in ASEANC3: A shared rule for behavior, Discussion paper (Vol 9) Chiba: Institute of Developing Economies Waltz, K N (1979) Theory of international politics Reading: Addison-Wesley Wendt, A (1999) Social theory of international politics New York: Cambridge University Press Index A Abandonment cost, 35 Agenda-setter model, 164, 166, 168, 169, 172, 173, 175–177 Agreement problem, 141–142 Agricultural ministry, 192 Aid conditionality, 120–121 Aircraft scrambling, 59 Alliance commitment, 33 Allies, 31 All necessary measures, 107 Anti-Personnel Landmine Ban Treaty (“Ottawa Convention”), 160 Appellate Body, 209 Armed attack, 31 Arms control, 16, 19, 20 Article (4), 118 Article of the Japanese constitution, 32 Article 51, 117 ASEAN plus Three (APT), 85, 251, 253, 254, 258, 263, 264 Asia, 229, 230, 237–240, 243, 244 Asia Europe Meeting (ASEM), 250 Asian countries, 161–165, 176, 177 Asian Development Bank (ADB), 23, 236–237 Asian Infrastructure Investment Bank (AIIB), 23, 236–237 Asian Monetary Fund (AMF), 253, 254, 257, 263 Asia-Pacific Economic Cooperation (APEC), 184, 250, 263 Asia-Pacific region, 162 Association of Southeast Asian Nations (ASEAN), 257 The Association of Southeast Asian Nations (ASEAN) Regional Forum (ARF), 85 Asymmetric defense commitment, 32 Asymmetric information, 250, 259, 260, 264 B Babbling equilibrium, 260, 265, 267, 268 Backward induction, 95, 193 Balance-of-power, 9, 19 Bargaining over the distributional outcomes, 164 Bayesian Nash equilibrium, 172, 176 Bayes’ rule, 36 Belief(s), 36 Best replies, 36 Bias involved in informational transmission, 66 Bilateral lending, 230–231 Borrower’s strategy, 234–235 Brahimi report, 84 Burden, 84 Burden-sharing, 88 Bureau pluralism, 185 C The Cambodian civil war, 105 Canada, 163, 164 CCW, 159 Ceasefire, 84 Centralized institution, 146–147 Chapter 717 VII of the UN Charter, 107 Cheap talk equilibrium, 260, 264, 266–268 Chiang Mai Initiative (CMI), 250, 251, 253–258, 260, 261, 263 © Springer Japan KK 2017 M Suzuki, A Okada (eds.), Games of Conflict and Cooperation in Asia, The Political Economy of the Asia Pacific, DOI 10.1007/978-4-431-56466-9 271 272 Chief negotiator, 192 Chinese empire, 3, 7–11, 13–17, 19, 21, 23 Civil liberty, 59 Coalition of the willing, 84, 107 Cold War, 105, 237–244 Collective self-defense (CSD), 31 Common agency, 230, 231, 234, 245, 246 Common knowledge, 36, 41, 141, 193 Commonwealth of Independent States (CIS), 84 Communication, 250, 251, 260–264 Complete information, 95, 165, 166, 175, 176 Compliance, 142, 208 Conference of Disarmament (CD), 162, 163 Conflict management, 11, 13, 16–19, 84 Confucian, 3, 8–13, 16 Confucianism, Consensus, 167 Constitutional violation, 43 Constructivism, 6, 264 Constructivist, 166, 167 Consumer surplus, 195 Cooperation, 138–140, 143, 145, 146, 148 threshold, 144 Cooperator, 143, 144 Coordination, 135, 228–230, 250, 255–257, 259, 260, 262, 264 Correlates of War (COW), 133, 161 Correspondence analysis, 73 Costly lottery, 34 Countries in Asia, 161 Cournot-competitive, 194 Credibility, 12, 15, 17, 18 Credibility of Japan’s alliance commitments, 33 Credibility problem, 45 Crisis bargaining, 33 Customary international law, 165 D Decentralized institution, 147 Defector, 143 Defense commitment, 32 Delegation, 208, 250, 261 Demobilization, 86 Denouncement, 64 Deterrence, 32, 60 Direct payment, 187, 195 Disengagement, 84 Dispute settlement (DS), 214 Dispute Settlement Mechanism (DSM), 213 Dispute Settlement Understanding (DSU), 209 Distributional conflicts, 163 Distributive effects, 241–242 Index Doha Development Round, 187 Domestic reforms, 200–202 Downward concavity, 235 Dyad, 122 E Early stages of international disputes, 58 Early Voluntary Sectoral Liberalization (EVSL), 184 The East China Sea, 61 East Timor, 105 The Economic Community of West African States’ (ECOWAS), 84 Economic partnership agreement (EPA), 185, 187 Election observation, 86 Embeddedness, 209 Escalation, 67 European Community (EC), 211 European Union (EU), 212 Exogenous agencies, 59 Extended deterrence, 32, 33 F Falklands War, 133 Finance, 228–230, 236–238, 246 Fixed-effect time-series cross-national regression analysis, 238–239 Folk theorem, 139 Food, Agriculture, and Rural Areas Basic Act, 190 Football War, 133 Freedom of press, 70 Free-riding, 85 Free trade agreement (FTA), 21, 22, 185,187 G Game-theoretic model, 109 Game tree, 192–193 General Agreement on Tariffs and Trade (GATT), 185, 209, 263 General deterrence, 60 Group-trigger strategy, 146 H Hard law, 250, 258 Hard legalization, 208 Hegemonic order, 12, 13 Hegemonic state, 3, 11, 17, 19, 20 Index Hegemony, 136 Honor the alliance commitment, 44 Humanitarian aid, 84 I Ideal point(s), 165, 167–176 Immediate deterrence, 60 Impure, 88 Incomplete information, 165, 172, 173, 175, 176 India-Pakistani territorial dispute, 118 Individual income compensation, 191 Individually rational, 144 Individual rationality, 156–157 Indonesia, 242 Information sharing, 58 Institution, 138–140, 146–153 Institutional cooperation failure, 228–230 Institutional equilibrium, 150 Institution formation game, 147–153 Instrumental rationality, 2, 5–7, 17 International, 228–237 International Atomic Energy Agency (IAEA), 139 International Campaign to Ban Landmines (ICBL), 160 International cooperation, 140–143 International development, 230–237, 244 International financial institution (IFI), 235–236 The International Force for East Timor (INTERFET), 107 International humanitarian law, 159, 177 International institutions, 163, 164 International Monetary Fund (IMF), 24, 250, 252–257, 259, 261–263 The International Peace Co-operation Law, 106 International public goods, 139–144 The internet, 70 Intervention, 33 commitments, 33 Intuitive criterion, 43 Investiture(s), 7, 10, 11, 19 Inward-looking ministry, 200–202 J Japan, 7, 11, 12, 14, 15, 18–20, 22, 23, 33, 140, 154 Japanese constitution, 31 273 K Korea, 7, 10–12, 18–20, 140, 154 Korean Peninsula Energy Development Organization (KEDO), 139 L Large-N analysis, 109 Least-developed states (LDCs), 244 Legalization, 208 Liberal institutionalism, 264 Liquor tax, 210 M Majority rule, 167, 168, 176 Majority voting, 165 Mandate, 108 Marginal costs, 194 Media, 59 Moral rationalism, 5, 9, 12 Multiple lenders, 231–237 Multiplicity of equilibria, 46 Multi-stage game, 139, 140, 147 N Nash equilibrium, 129, 138–139, 197 National security, 31 Negative consensus rule, 209 Negative externalities, 88 Noisy signals, 59, 66 Non-Aligned Movement (NAM), 239–240 Non-cooperative outcome, 138–139 Nongovernmental organizations (NGOs), 163, 176 Non-UN peacekeeping operations, 84 The North Atlantic Treaty Organization’s (NATO), 84 O Objective function, 197 Obligation, 208 Open regionalism, 250 Optimal tariff rate, 196–197 Ottawa Convention, 160–162, 164, 166, 168 Ottawa Group, 162 Ottawa process, 160, 161, 164, 167, 169, 176 274 P Pacifist constitution, 47 Pareto optimal, 144–145 Pareto sub-optimal, 132 Pareto superior, 138, 144 Partitioning, 260, 264, 266 Partition signals, 40 Payoff matrix, 152–153 Peace enforcement, 84 Peacekeeping missions, 84 Perfect Bayesian equilibrium (PBE), 36 Perfect information, 95 Personnel contributions, 88 Political pressures, 195, 196 Political support function, 195 POLITY, 162 Polity IV Annual Time-Series, 1800–2013, 162 Pooling equilibrium, 41, 42 Post-conflict peacemaking, 84 Posterior beliefs, 42 Power-politics approach, 87 Precision, 208 Preference-based neoliberalism, 236 Preferred-to set, 170, 171, 173, 174 President Kennedy’s grand strategy, 243 Price supporting, 187 Prime Minister Shinzo Abe, 31 The principle of non-interference, 85 Prior belief, 41 Prisoners’ dilemma game, 130–132 Private information, 36 Private signal, 67 Procedural rules, 164, 166–168, 176, 177 Production subsidy, 194 Public goods game, 88, 152–153 Q Qualified majority, 165 Quantitative text analysis (QTA) method, 59 R Rann of Kutch, 122 Ratification, 193 Rationalist, 166–168 Reasonable period of time (RPT), 217 Reciprocity, 121 Regional organizations, 84 Rejection equilibrium, 150 Resolve, 36 Right of self-defense, 117 Index S Sadae, 11 The Secretariat, 88 The Secretary-General, 88 The Security Council, 86 Self-defense, 117 Self-Defense Forces (SDF), 106 Self-promotion, 64 Separating equilibria, 41 Shochu, 212 Side payment, 200 Signaling game, 36 Silver standards, 15 Simple majority, 165 Single-peaked preference functions, 231–232 Sino-Indian War of 1962, 123 Six Party Talks, 140, 154 Soft law, 250, 258 Soviet foreign policy, 242 Stag-hunt game, 127–130 Statements, 59 Status-quo equilibrium, 150–151 Strategies, 36 Strictly dominated, 37 Structural reforms, 196 Subgame perfect, 36 Subgame perfect equilibrium (SPE), 95, 149, 193 T Taiwan, 7, 13 Take-it-or-leave-it, 192 Tariffication, 186 Trans-Pacific Partnership (TPP), 184 Tributary trade, 13–16, 19, 21, 23 Troop-contributing countries, 88 Trust, 49 Two-level games, 185 Two-thirds majority, 160, 165, 177 U Unanimity rule, 167, 168, 176 The UN Charter, 86 United Nations (UN), 84, 117 United Nations Framework Convention on Climate Change (UNFCCC), 141 United Nations Security Council, 118 The United Nations Transitional Authority in Cambodia (UNTAC), 105 United States, 3, 18–20, 22, 23, 33, 140, 154, 161, 162, 165, 176 Index The UN Mission in East Timor (UNAMET), 106 UN Security Council permanent members, 87 The UN Transitional Administration in East Timor (UNTAET), 108 Uruguay Round, 184 U.S.-Japan alliance, 32 Utility, 90 V Verbal fights, 61 Veto, 192 275 Vietnam, 7, 12, 13 Voluntary participation, 142, 148, 155 Voting rules, 164, 166, 167, 169, 176, 177 Voting system(s), 165, 177 W Washington Consensus, 253 Weighted-vote scheme, 236 Willingness to use force, 35, 36 Win set, 198 World Trade Organization (WTO), 21, 22, 186, 207 World War II, 47 ... analyzes the nature of conflict and cooperation in a post-hegemonic era when institutions are in decay This edited volume, Games of Conflict and Cooperation in Asia, is an outcome of a truly collaborative... utility in explaining institutional arrangements and their effects insofar as it is well informed of structural constraints and agents’ interests that affect their behavioral choices and their use of. .. analyze conflict and cooperation in specific areas of importance to the strategic management of international relations in Asia, using the concept of instrumental rationality In each chapter, instrumental