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I use the nuclear proliferation regime to show that dyadic diplomacy is not necessarily incompatible with the building of a multilateral regime; bilateralism is not the opposite of multilateralism, but an efficient component thereof. Although this point will not be new to most students of institutions, no general rationale has so far been offered on the complementarity of bilateral and multilateral diplomacy. Starting from a characterization of proliferation as the result of a large number of prisoner's dilemmas played out between states engaged in local dyadic rivalries, I demonstrate that it is possible for the superpowers to design an optimal mix of threats and bribes in which states with low compliance costs join the regime on the terms of the multilateral treaty alone; states with intermediate compliance costs need additional customized incentives, delivered through bilateral agreements; and states with high compliance costs are not only left out of the regime but also punished for nonparticipation. I draw a few comparative statics that I systematically test on Nuclear Proliferation Treaty (NPT) membership data. I discuss the applicability of the model to the currency, trade, and aid regimes.

Politische Institutionen beeinflussen die Faktormobilität über einzelne Sektoren, Räume und Grenzen hinweg. Der Text illustriert diese weithin akzeptierte, jedoch wenig erforschte Idee, indem er einen Blick auf die Entstehung der modernen Kapitalmärkte im neunzehnten Jahrhundert wirft. Das Aufkommen der Unternehmensfinanzierung drohte, finanzielle Ressourcen von Agrar- bzw. traditionellen Sektoren abzuziehen und sie stattdessen der Schwerindustrie zukommen zu lassen. Der Autor stellt die Hypothese auf, dass funktionsfähige und integrierte Märkte dort heranwuchsen, wo es Koalitionen nicht gab, die ein Interesse besassen, das Finanzsystem lokal zu halten und deshalb diese Entwicklung behinderten. Es wird gezeigt, das die Macht dieser blockierenden Interessengruppen eine inverse Funktion des Grades der Zentralisierung der staatlichen Institutionen war. Zu Beginn wird eine konzeptionelle Verbindung zwischen der abstrakten Idee vom Kapital, die in der Aussenhandelstheorie zum Einsatz kommt, und den unterschiedlichen Formen, in denen Kapital tatsächlich in Erscheinung tritt, wie z.B. Bargeld, Fremdkapital, Eigenkapital, Patente, Maschinen, usw., hergestellt. (SWP-Jns)

I illustrate the accepted, though hardly researched, idea that political institutions play a role in locking in factor specificity across sectors, space, and borders. I use the emergence of modern capital markets in the nineteenth century, a process that threatened to redeploy financial resources away from land and traditional sectors to heavy industry, as a test case to ascertain the degree of domestic financial capital mobility in nine advanced industrialized countries. The main finding is that cross-national variations in financial capital mobility, holding constant the level of economic development, reflect the degree of state centralization.

State banking is the intervention of the state in the allocation of credit. State banking became important during the course of this century in some Organization for Economic Cooperation and Development (OECD) countries but not in others and then declined in the 1980s. Why? State banking was demanded by sectors that were pressed to invest but that could not find access to long-term credit because of the marginal importance of small and local banks in countries with centralized market and state institutions. The class cleavage enabled these groups to extract state banking from central governments thanks to their pivotal role in the Right-Left rivalry. The current demise of state banking reflects the shift from class to territorial modes of interest articulation in capital markets.

For the first time in modern history, free trade coexists with free finance. Free trade and free finance (defined as the deregulation and internationalization of banking and finance) are not mutually reinforcing, but cause a mismatch between the demand and supply of financial instruments. Investors want more marketable instruments whereas entrepreneurs want more transaction-specific instruments. This mismatch potentially hurts small firms and local interests most. What can they do about it? It depends on state institutions. The more centralized the state, the fewer opportunities available to potential losers to curb free finance. Free finance is most successful in centralized countries, where resistance to free finance is least strongly felt. This hypothesis is systematically tested on a sample of OECD countries.

Die Internationalisierung der Kapitalmärkte während der Gold-Standard-Ära führte zu einer Verlagerung des Kapitals von lokalen Finanzmärkten zu den nationalen, und von dort aus zu ausländischen Finanzzentren. Der Umfang der Verlagerung, so die These des Artikels, war abhängig vom Staatsaufbau des jeweiligen Landes. Dezentrale Strukturen ermöglichten es potentiellen Verlierern einer Politik der Internationalisierung entgegenzuwirken, während es zentrale Strukturen den potentiellen Gewinnern erleichterte, eine solche Politik zu unterstützen. Als Folge davon waren Länder mit zentralistischem Staatsaufbau am stärksten in den internationalen Kapitalmarkt eingebunden, während Länder mit föderalen Strukturen eine weniger aktive Rolle in der Globalisierung der Finanzmärkte spielten. (SWP-Clv)

The internationalization of capital markets that occurred during the era of the classical gold standard (1870-1914) was part of a broader set of trends that threatened to drain local markets from capital and channel that capital to the national financial center and, from there, toward other national financial centers. Still, internationalization was neither inevitable, uniform, nor irreversible but was a political choice informed by redistributional considerations between rival domestic interests and decided by politically dominant coalitions. The domestic institutional structure in each country determined the composition of the politically dominant coalition. Decentralized structures allowed potential losers to curb public policies favorable to capital market internationalization, whereas centralized structures allowed expected winners to promote such policies. As a result, economies with centralized states ended up being the most dependent on the international capital market, whereas economies with decentralized states took a less active part in the globalization of finance.