Currency, Finance, Conflict, and Cooperation
Dissertation
"The Way to a Dominant International Currency: A Political General Theory and the Prospect of the Renminbi’s Rise"
ABSTRACT: This dissertation develops a theory across comparative politics and international relations, called “interstate monetary security theory,” to explain the political economy of global currency competition. While recognizing the role of economic factors, this theory highlights how a number of political factors influence the inter-currency competition for superiority in the world economy. These include domestic political economic systems, defensive military alliances, and the risk of international political disputes. I tested this theory with my interstate monetary connection data and two historical cases. I then applied the theory to China’s renminbi (RMB). This study shows that some institutional mechanisms created for the Chinese Communist Party’s survival are conducive to the RMB’s rise. The RMB’s future hangs on whether China can maintain the economic development and those mechanisms.
Committee chairs: Wenfang Tang & John A.C. Conybeare
Members: Sara McLaughlin Mitchell, Brian Lai, and Nicolas L. Ziebarth (Auburn University)
Members: Sara McLaughlin Mitchell, Brian Lai, and Nicolas L. Ziebarth (Auburn University)
DISSERTATION-BASED Working Papers
''Authoritarian Resilience and International Competition''
''Security Concerns and Currency Competition''
''Security Concerns and Currency Competition''
Publications
Ou-Yang, Ray, and Yingnan Joseph Zhou. 2019. ''Economic Evaluations and Political Support in Authoritarian Countries: A Comparative Viewpoint.'' Asian Survey 59(4): 738-768.
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The economic voting literature argues that economics matters to democratic leaders. We argue that it matters to authoritarian leaders, too, and its influence is stronger there than it is in democratic countries. Using data on four Asian countries from the Asian Barometer Survey, we find substantial support for our theory.
Zhou, Yingnan Joseph, and Ray Ou-Yang. 2017. ''Explaining High External Efficacy in Authoritarian Countries: A Comparison of China and Taiwan.'' Democratization 24(2): 283-304.
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We examine the puzzling phenomenon that authoritarian governments are perceived to be more responsive than democratic governments. By comparing China and Taiwan by both large-N statistical analyses and in-depth case studies, we show that the answer lies in the differences between democratic and authoritarian institutions. First, failing to elect one’s preferred candidate in democracies predisposes voters to critical assessment of government responsiveness. There is no such predisposition in authoritarian countries where elections are nonexistent or nominal. Second, elections incentivize democratic leaders to over-respond to certain groups. There is no such mechanism in authoritarian countries. Third, the solid and clear legitimacy established by electoral victories shield democratic leaders from particularistic demands made through unconventional channels. Without such legitimacy, authoritarian leaders are compelled to cement legitimacy by increasing responsiveness.
Tang, Wenfang, Yingnan Joseph Zhou, and Ray Ou-Yang. 2016. ''Political Trust in China and Taiwan.'' In Populist Authoritarianism: Chinese Political Culture and Regime Sustainability, by Wenfang Tang, 74-99. New York, NY: Oxford University Press.
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This chapter compares political trust in democratic Taiwan and autocratic China. When political trust is defined as confidence in the key political institutions, national identity, trusting political leaders, and trusting the political system, Chinese respondents consistently expressed more trust than Taiwanese respondents in all of the four dimensions. The second half of this chapter evaluates the relative importance of different theories related to political trust, including political mobilization, economic performance, internal efficacy, external efficacy, and cultural values. The subsequent analysis shows that external efficacy, particularly the sense of government responsiveness, was much higher in China than in Taiwan, and it played the strongest role in promoting political trust in China. The reason for autocratic governments to respond to public opinion more quickly is rooted in the institutional deficiency of lacking competitive elections while claiming that they represent the interests of the majority of people.
Ou-Yang, Ray. 2015. ''Political Process and Widespread Protests in China: The 2010 Labor Protest.'' Journal of
Contemporary China 24(91): 21-42.
Contemporary China 24(91): 21-42.
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Existing studies of collective actions in China pay most attention to frequent but localized protests, but such protests are less likely to deeply drive China’s political and social prospect. By contrast, widespread protests are more likely to affect the Chinese Communist Party’s authority and policies once they emerge. The goal of this article is thus to probe the conditions under which a widespread protest can happen in China today. This article proposes four necessary conditions grounded in the political process model and tests them by explaining the successful outbreak of the 2010 labor protest. Identifying these conditions helps us understand and predict the political and social development of China.
Huang, Tsung-Hao, and Ray Ou-Yang. 2012. ''Political Institution and Financial Reform: A Comparison between Taiwan and South Korea.'' Taiwan Democracy Quarterly 9(1): 143-193.
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South Korea initiated several important financial reforms from 1998 to 2000, and Taiwan enacted similar reforms from 2000 to 2006. However, the reforms of South Korea had more comprehensive and effective results, compared with those of Taiwan. We contend that the key to this difference is whether the political leaders of each country received stable majority support from legislators when they endeavored to execute policies, which is conditional on the countries’ political institutions. In Korea, Kim Dae-jung successfully constructed a majority coalition in the congress to support his policies. On the other hand, Chen Shui-bian was forced to form a minority government in Taiwan, making the financial reforms of Taiwan ineffective.
Under Review
''Is Smart Power Really Smart? An Empirical Examination of the Hard-Soft Power Relationship'' (with Yue Hu)
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Although soft power has become a common-used concept in international relations studies and foreign policy analysis, its relationship with the classic national power, viz. hard power, has not been fully explained. Utilizing a novel machine-learning based hard power measurement and a network-based soft power measurement together with overtime cross-national data, this research provides a comprehensive examination of the hard-soft power relationship. We find that while soft power does not complement hard power as conventional wisdom expects, it has mixed interactive effects on two primary hard power resources: a state’s military and economic strength. These findings provide new insight into the construction and internal dynamics of power in international politics. They also improve the integration of soft power theory with the theories of international power relations in general.
''Economic Interdependence and the Militarization of Natural Resource Disputes'' (with Samantha Lange)
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This article examines whether economic interdependence makes natural resource disputes less likely to be militarized than other disputes. Positing that natural resources should be analyzed in the sense of resource units that are tradable, we illuminate several mechanisms of economic interdependence that can make states have little or no need to violently handle natural resource issues. International economic ties are expected to make states less likely to use force in disputes over natural resource issues than in other disputes. Using data from the Issue Correlates of War (ICOW) project, we find that dyadic trade ties produce a lower risk of militarization, whether fatal or not, in natural resource disputes than in others, while trade integration with the world economy causes a lower risk of fatal militarization in natural resource disputes than in others.
Other Working Papers
''Interstate Security Concerns, Geopolitics, and Chinese Outward Foreign Direct Investment'' (with Yooneui Kim)
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This research looks at the destinations of Chinese outward foreign direct investment (FDI). To address the shortages of existing studies, we propose two arguments through the lens of geopolitics. First, Chinese outward FDI is more likely to rise in foreign states that have close political affinities with either China or the US rather than being neutral in between. Second, and more generally, for a state that is a primary source of security concerns, other states will prefer to stay away from its capitals. Employing the Chinese government’s relevant data for 2003-2012, we find support for the first argument only. Further examination points to a polynomial relationship that foreign states can tolerate security concerns about China until reaching a certain threshold. With these empirical findings that question common thoughts, we provide the ground for advanced research on China’s pursuit of major international influence through outward FDI.
''A King Balanced by Vassals: Interstate Security Concerns over China and East Asian Economic Integration''
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This paper examines how interstate security concerns over China shape the course of East Asian economic integration. The author argues that when a major power with the capability to provide a regional economic hub poses big security threats, a smaller state will mainly connect with it via other smaller states to spread the risk of economic coercion. These smaller states will get closer in the regional market to share each other’s direct economic ties with the major power, and each of them can thus develop such risky ties alone to a relatively limited extent. This paper draws on network analysis techniques for empirical research, together with time-series cross-sectional data about East Asian trade, investment, and monetary relations. The findings suggest that security issues do not hinder China from integrating other regional states into a new economic network against the old one centered around Japan, a proxy of the US. Yet, unlike the old network, this Chinese alternative may not have hierarchical features essential for the core state’s geopolitical influence. East Asia is likely to become a more integrated economic bloc based on impetus from China, in which, however, this rising power would look like a king balanced by vassals.
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