Shapiro presents research he conducted with David A. Siegel, a student in Stanford's Graduate School of Business:

A review of international terrorist activity reveals a recurring pattern of financially strapped operatives working for terrorist organizations that seem to have plenty of money. This observation is hard to square with traditional accounts of terrorist financial and logistical systems, accounts that stress the efficiency with which terrorist financial networks distribute funds while operating through a variety of covert channels. In order to explain the observed inefficiencies, we present a hierarchical model of terror organizations in which leaders must delegate financial and logistical tasks to middlemen for security reasons; however, these middlemen do not always share their leaders' interests. In particular, the temptation always exists to skim funds from any financial transaction. To counteract this problem, leaders can threaten to punish the middlemen. Because logisticians in international terrorist organizations are often geographically separated from leaders, and because they can defect to the government if threatened, violence is rarely the effective threat it is for localized groups such as the IRA. Therefore leaders must rely on more prosaic strategies to solve this agency problem; we focus on leaders' ability to remove middlemen from the network, denying them the rewards of future participation. We find that when the middlemen are sufficiently greedy, and when the organization suffers from a sufficiently strong budget constraint, that leaders will choose not to fund attacks in equilibrium because the costs of skimming are too great. Further, we show there can be important non-linearities in terrorists' response to government counter-terrorism. Specifically, we find that given constrained funding for terrorists, government efforts will yield few results until they reach a certain threshold, at which point cooperation between leaders and middlemen in terrorist groups breaks down leading to a dramatic drop in the probability of terrorist success.

Robert O. Keohane (PhD., Harvard University), James B. Duke Professor of Political Science, has taught at Swarthmore College, Stanford University, Brandeis University, and Harvard University where he was Stanfield Professor of International Peace.

He is the author of After Hegemony: Cooperation and Discord in the World Political Economy (Princeton University Press, 1984), for which he was awarded the second annual Grawemeyer Award in 1989 for Ideas Improving World Order. He is editor or co-editor of, and contributor to, eleven other books, most recently, Humanitarian Intervention (Cambridge 2003), with J.L. Holzgrefe. Between 1974 and 1980 he was editor of the journal, International Organization. He was president of the International Studies Association, 1988-89, and of the American Political Science Association, 1999-2000. He is a fellow of the American Academy of Arts and Sciences, and has held a Guggenheim Fellowship and fellowships at the Center for Advanced Study in the Behavioral Sciences and the National Humanities Center. He is on leave from Duke this year, conducting research at the Center for Advanced Study in the Behavioral Sciences.

The Anti-Secession Law recently passed by China's National People's Congress has generated a hostile response in Taiwan and sharp criticism by the U.S. government. It has been described by some as a war-authorization law. Does this signal that Beijing is on a path that reduces its scope for rational choices? Dr. Zhao's talk will analyze this development in light of the recent rise of Chinese nationalism.

A recipient of the 1999-2000 Campbell National Fellowship at the Hoover Institution at Stanford University, Dr. Zhao currently sits on the board of directors of the US Committee of the Council for Security Cooperation in the Asia Pacific (USCSCAP). He is the founder and editor of the Journal of Contemporary China, a member of the National Committee on US-China Relations, and a Research Associate at the Fairbank Center for East Asian Research in Harvard University.

Zhao is the author and editor of six books. His most recent A Nation-State by Construction: Dynamics of Modern Chinese Nationalism, was published by the Stanford University Press in 2004. He has also written articles for Political Science Quarterly, The China Quarterly, World Affairs, Asian Survey, Journal of Northeast Asian Studies, Journal of Democracy, and many others.