A Theory of Foreign Policy by Morgan T. Clifton Palmer Glenn

Author:Morgan, T. Clifton, Palmer, Glenn
Language: eng
Format: epub
ISBN: 9781400832644
Publisher: Princeton University Press

The Two-Good Theory Formalized

Since we can maximize U by maximizing ln U, we solve

Taking the partial derivative of L with respect to each good, setting this equal to zero, and solving for the good, gives

Equations 9 and 10 specify the optimal quantities of maintenance and change that can be produced by a state’s having a utility function of the specified form (that is, ) and constrained by a PPF of the form Qm = b - ΩQc. It is a straightforward exercise to use these equations to determine how foreign policy, in terms of the amounts of maintenance and change produced, will respond to variations in the parameters making up the model. First, if π1 increases relative to π2, indicating that the state has a higher salience for maintenance, the production of maintenance will increase and the production of change will decrease. Thus, states that place a greater emphasis on maintenance than change are expected to devote a greater proportion of their foreign policy resources to the production of maintenance and should engage in more behaviors intended to produce maintenance, on average, than do states that place a greater emphasis on change. Of course, the converse is true if π2 increases relative to π1.

Second, since b is in the numerator of both ratios, we can conclude that as the resources available for foreign policy increase,2 states will produce more of both goods. In other words, we expect strong states to engage in more of all types of foreign policy, on average, than do weak states. Similarly, we expect any state experiencing an increase in capabilities to increase its production of both change and maintenance.

Finally, Ω decreases as b increases, which captures our assumption that the ability to produce change increases at an increasing rate as capabilities rise. Since Ω is in the denominator of the ratio determining Qc, we can see that the production of change will increase at a rate faster than that for the production of maintenance as capabilities increase.

These conclusions are captured graphically in figures 5.3a and 5.3b. In figure 5.3a, we have a single PPF with three utility functions. In the first utility function π1 > π2, indicating that maintenance is of higher salience for the state than is change. In the second π1 = π2, indicating that the state cares about maintenance and change equally. In the third π1 <π2, indicating that change is more important than is maintenance. It is easy to see that, holding the resources available for foreign policy constant, these differences in preferences produce very different foreign policy portfolios. Simply put, the more one cares about a particular foreign policy good, the more of that good (and the less of the other good) one will produce. Figure 5.3b depicts three PPFs representing different capability levels for the state, and three corresponding indifference contours, over which π1 and π2 are held constant. Here, we can see that as capabilities increase, the amount of both goods produced also increases but that the production

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