Circumstances, Domestic Audiences, and Reputational Incentives in International Crisis Bargaining

Abstract

We present a new theory of interstate crisis bargaining. A country's resolve is a function of intrinsic qualities of the government and external circumstances, both of which are unknown by the domestic electorate and the foreign country. When domestic political debate reveals that external circumstances favor the use of force, the government can extract better terms than if circumstances are revealed to be unfavorable. The revelation of circumstances, however, exacerbates reputational incentives. Because governments can no longer hide behind unknown circumstances, voters can better discern the government's type from its foreign policy actions, strengthening the incentives to appear resolved. The model bridges the gap between audience costs and its critiques, showing how domestic audiences punish leaders for inappropriate policies rather than empty threats. At the same time, it highlights how open and public competition for office may endanger peace.

Keywords: bargaining, domestic politics, game theory, interstate conflict