ECONOMY

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In place of a focus on states as decision-makers, the domestic perspective, as I will
call it here, draws attention to the taxing and spending incentives and constraints created
by different domestic governing institutions and to how those institutions help
shape variations in international and domestic policy choices. I briefly summarize
the key ideas, and then offer some examples of how these ideas work in elucidating
international politics and the study of conflict in particular.
Let us suppose that political leaders want to maximize their prospects of gaining
and staying in power (Downs 1957; Riker1962; DownsandRocke1995; Bueno de
Mesquita and Siverson 1995; Bueno de Mesquita et al. 1999, 2003; Goemans 2000).
They choose actions, therefore, that help advance that objective. If those actions
happen also to be beneficial for the rest of the people in the society they lead, so much
thebetter,butthatwhichmakesleadersbetteroff need not also make their subjects
better off (Robinson 1998; Bueno de Mesquita and Root 2000). Indeed, it is difficult
to see how we can explain the actions of totalitarians and even petty dictators if their
interests and the state’s interests—that is, the welfare of the citizenry—are taken as
being the same. Even when the state faces war, the interests of leaders and citizens can
diverge markedly depending on how governing institutions influence the tie between
victory or defeat in war and political survival for the incumbent leadership (Bueno
de Mesquita et al. 2004; Chiozza and Goemans 2003, 2004). Of course, these disparate
interests are taken as the same in theories that treat the state as a unitary actor.
Different theories—some complementary and some in competition with one
another—suggest explanations of international conflict from the perspective of domestic
politics, a topic also closely examined by Stam and Reiter in this volume.
Maoz and Russett (1993), Russett (1993), and others suggest a norms-based theory
of international conflict. Bueno de Mesquita et al. (1999, 2003) suggest what they call
the selectorate theory of politics to explain how political institutions shape leaders’
policy decisions. Fearon (1994) offers a perspective on crisis escalation grounded
in what he calls audience costs, with those costs varying as a function of key features
of a state’s institutional set-up. Smith (1996) points to selection effects overlooked
in Fearon’s treatment and that help refine predictions about the impact of
audience costs on conflict. Schultz (1998, 2001a) reflects on the role of opposition
parties in democracies in disciplining foreign policy choices in a way fundamentally
different from what one expects in autocracies, or other institutional arrangements
that make political opposition especially costly. These approaches lead to
propositions—many of which are testable and have been tested—that suggest empirical
patterns that ought not to be observed if neorealist or other structural perspectives
are correct.
3.1 Normative Explanation of Conflict and Regime Differences
The literature on the democratic peace creates a critical challenge to the core ideas
behind theories that treat the state as a unitary actor. In the latter theories, the internal
workings of states are thought to be irrelevant to decisions related to challenges to