This seminar is part of the "Europe and the Global Economy" series.

How do geopolitical forces influence international capital markets? In particular, do market actors condition their responses to crisis lending initiatives on the political incentives of major lenders? In this paper, Randall Stone and co-writers Terrence Chapman, Songying Fang and Xin Li  analyze a formal model which demonstrates that the effect of crisis lending announcements on international investment flows is conditional on how market actors interpret the political and economic motivations behind lending decisions on the part of the lender and borrower. If investors believe the decision to accept crisis lending is a sign of economic weakness and lending decisions are influenced by the political interests of the major donor countries, then crisis lending may not reduce borrowing costs or quell fears of international investors. On the other hand, if market actors believe that crisis lending programs, and attendant austerity conditions, will significantly reduce the risk of a financial crisis, they may respond with increased private investment, creating a "catalytic effect."  In this model, the political biases of key lending countries can affect the inferences market actors draw, because some sovereign lenders have strategic interests in ensuring that certain borrowing countries do not collapse under the strain of economic crisis. Although this theory applies to multiple types of crisis lending, it helps explain discrepant empirical findings about market reactions to IMF programs. The implications of their theory is tested by examining how sovereign bond yields are affected by IMF program announcements, loan size, the scope of conditions attached to loans, and measures of the geopolitical interests of the United States, a key IMF principal.

Randall Stone (Ph.D. 1993, Harvard) is Professor of Political Science at the University of Rochester.  His research is in international political economy and combines formal theory, quantitative methods, and qualitative fieldwork.  He is the author of Controlling Institutions:  International Organizations and the Global Economy (Cambridge University Press 2011), Lending Credibility:  The International Monetary Fund and the Post-Communist Transition (Princeton University Press, 2002) and Satellites and Commissars:  Strategy and Conflict in the Politics of Soviet-Bloc Trade  (Princeton University Press, 1996), as well as articles in the American Political Science Review, International Organization, International Studies Quarterly, the Journal of Conflict Resolution, Review of International Organizations, and Global Environmental Politics.  He has been awarded grants by the NSF, SSRC, NCEEER, and IREX, was the last recipient of the Soviet Peace Prize (1991), and has been a Senior Fulbright Scholar visiting the Stiftung Wissenschaft und Politik in Berlin.  He speaks German and Russian fluently and Polish moderately well, and reads all Slavic languages. 

This seminar is part of the "European Governance" program series.

The number of international courts/international tribunals has burgeoned in the past two decades, with the continued proliferation of international agreements and the growing importance of globalization for the world economy.  Do these courts matter?  We develop a theory of how an international court lacking any power to enforce its rulings can promote compliance among the member governments and enhance the performance of international agreements. We argue that the adjudication process can cause governments to comply with adverse rulings because it facilitates enforcement of the agreement by the other member states.  This argument implies two empirical predictions that we examine in the European Union using an original dataset of rulings of the European Court of Justice from 1960-1999. We show that ECJ rulings are sensitive to the enforcement concerns identified by our theory. Further, we show that ECJ rulings designed to liberalized trade (a key goal of the EU) are only effective when the adjudication process reveals that noncompliance will be punished by third-party governments.

Matthew Gabel is Professor of Political Science at Washington University in St. Louis. He has a Ph.D. from the University of Rochester and and M.A. from the College of Europe (Bruges).  He is the associate editor of the journal European Union Politics.  His research has examined a variety of topics of international political economy and comparative political economy in Europe, particularly in the context of European integration.  This includes public support for European integration, judicial politics at European Court of Justice, and the legislative politics in the European Parliament. Separately, he also collaborates with Neurologists and Psychiatrists on the diagnosis of Alzheimer's Disease.

1953 saw both the signing of the Korean Armistice Agreement and a Mutual Defense Treaty between the United States and the Republic of Korea. The uneasy and incomplete peace, coupled with a formalized U.S.-ROK security alliance relationship, ushered in a new era on the Korean Peninsula. 2013 marks the 60th anniversary of these pivotal events.

Ambassador Stephens will draw from her experience in Korean affairs over the past four decades, including her tenure as U.S. ambassador to the ROK 2008-2011, to discuss the evolution of the bilateral alliance, its challenges and achievements, and major issues now and going forward. This lunchtime seminar is scheduled to occur immediately upon Ambassador Stephens' return from a visit to Seoul where she will have participated in a first-ever gathering of former American ambassadors to Korea and former Korean ambassadors to the U.S. aimed specifically at reflecting on the U.S.-ROK alliance at 60.  Her comments will also be informed by these discussions.

Ambassador Stephens recently completed thirty-five years as a career diplomat in the U.S. Foreign Service. She was Acting Under Secretary of State for Public Diplomacy and Public Affairs in 2012, and U.S. Ambassador to the Republic of Korea, 2008 to 2011.

Ambassador Stephens has served in numerous posts in Washington, Asia, and Europe. From 2005 to 2007 she was Principal Deputy Assistant Secretary of State for the Bureau of East Asian and Pacific Affairs (EAP). While Deputy Assistant Secretary of State in the Bureau of European and Eurasian Affairs (EUR) from 2003 to 2005, she focused on post-conflict and stabilization issues in the Balkans. She was Director for European Affairs at the National Security Council during the Clinton Administration.

Ambassador Stephens’ overseas postings included service in China, Korea, Yogoslavia, Northern Ireland, Portugal, and Trinidad & Tobago.

Ambassador Stephens received the 2009 Presidential Meritorious Service Award. Other awards and recognition include the Korean government’s Sejong Cultural Prize (2013), and in 2011 the Pacific Century Institute’s Building Bridges Award, the Outstanding Achievement Award from the American Chamber of Commerce in Korea, and the Kwanghwa Medal of Diplomatic Merit from the Korean government. Her book, Reflections of an American Ambassador to Korea, based on her Korean-language blog, was published in 2010.

Ambassador Stephens graduated from Prescott College, and holds a master's degree from Harvard University, along with honorary doctoral degrees from Chungnam National University and the University of Maryland. Ambassador Stephens studied at the University of Hong Kong. She was a Peace Corps volunteer in Korea in the 1970s.