US Crises and Domestic Politics: Crisis Outcomes, Reputation, and Domestic Consequences

Abstract

The analogy that states in the international system act as firms in a market has been used by scholars to explain the initiation of war and the formation of balances of power, among other things. Here, this analogy is explored further in an attempt to formalize and quantify the age‐old concept of diplomatic reputation. In this paper, I argue that states, like firms, invest in their reputation in order to secure future benefits, which might take the form of bargaining advantages. Investment in reputation is accomplished by escalating crises, in order to deter other states from initiating future crises. The resulting model of reputation‐building is tested empirically using International Crisis Behavior data on United States involvement in international crises for the years 1918–1988. The results support the model developed here; it appears that we can measure the concept of diplomatic reputation, and once a strong reputation is established, the United States does become involved in fewer crises. Furthermore, a hypothesis predicting more crisis activity during new presidential administrations is supported. Domestically, empirical evidence also is found linking diplomatic reputation with presidential approval levels.