In Box

Law & Order: Rogue States Unit

What a peek inside America's prisons can tell us about U.S.-Iran relations.

Despite its recent efforts at negotiation, the United States traditionally has been more confrontational in its approach to Iran than European countries, which have urged closer ties with Tehran. What explains the difference? In 2002, scholar Robert Kagan argued that the dove-hawk divide was a function of a disparity in military might: Because the United States remained a great power even as European defense budgets shrank, it was more likely to flex its muscles. Kagan wrote, "Americans are from Mars and Europeans are from Venus."

However, new research indicates that a better predictor lies in an unlikely place: domestic courts and prisons.

A study by Amsterdam-based political scientists Wolfgang Wagner and Michal Onderco found that how countries treat criminals at home helps predict how they will deal with "deviance" on the global stage -- particularly by so-called rogue states. Wagner and Onderco looked at the behavior of 34 democracies toward Iran from 2002, when the country's nuclear program became public, through 2009. The researchers compared that behavior with various factors, from military strength to economic interdependence, that might influence how one state treats another. They found that martial power only played a slight role in making a state more confrontational and that increased trade did not, for the most part, make countries put on kid gloves.

Rather, they found a relationship between a country's level of aggression toward Iran -- how hostile it might be in public statements, for instance, or how intently it might advocate for sanctions -- and the percentage of that state's population in prison. The more people behind bars, the more confrontational a state was likely to be. The same relationship held when the researchers looked at states' approaches to North Korea.

Why should strict pursuit of law and order at home translate into foreign policy? Wagner and Onderco argue that it is a matter of cultural norms transferring across arenas. Countries with a culture of "retributive" justice -- focused on punishing wrongdoing and protecting the public -- will pursue more belligerent policies toward states like Iran and North Korea. Meanwhile, countries that believe in "restorative" justice -- avoiding punishment that doesn't help reincorporate the convicted into society or address the underlying factors behind crimes -- will be more accommodating toward the world's scofflaws.

Wagner and Onderco say their research shows that how countries behave toward states like Iran is part and parcel of the same cultural differences that have produced Germany's strong social safety net and America's strict drug laws. "Realizing that, for other states, there's a different mindset -- this could contribute to some better understanding among the Western states" of how each approaches international bad guys, Wagner notes.

So Americans may indeed be from Mars and Europeans from Venus -- just not for the reason you thought.

Illustration by Sébastien Thibault

In Box

Epiphanies from Hank Paulson

The former U.S. Treasury secretary on China's economy, bitcoin, and the problem with new ideas.

What is happening to the Chinese economy? After averaging roughly 10 percent annually for three decades, the pace of GDP growth began to slow in 2012 -- and may drop into the low single digits in a few years. Pessimists say the country could face a hard landing or even long-term stagnation. But Hank Paulson, who as U.S. treasury secretary stewarded the American economy through the darkest days of the financial crisis and now runs the Paulson Institute, a think tank that promotes cooperation between the United States and China, remains cautiously optimistic about China's long-term prospects -- so long as it implements important reforms. After all, ebbs and flows are all part of the game. "As long as you have financial markets and banks, there will be financial crises," Paulson says. Interviewed in his Chicago office in February, Paulson talked about what Beijing needs to do to avoid its own Great Recession -- and more.

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Like so much of the rest of the world, the Chinese watched in horror as the financial crisis began because they had been working hard at best practices and they thought that the United States had the right model. I've worked extensively with the Chinese leadership and with Wang Qishan [China's top anti-corruption official], and we have a good working relationship. When I was pressing them very hard on their financial-market reform, Wang very nicely said to me, "You used to be our teacher, but right now, our teacher doesn't look quite as wise."

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The Chinese economy is too big and too complex to be run by this jerry-rigged structure of a combination of state-planning and markets. I have no doubt the Chinese leadership knows what the big economic issues are. They know they need a different economic model -- one that's less dependent on investment and exports -- and to move to normalize the labor market, reform the capital markets and the municipal finance system. The 100 percent issue on my mind is, are they going to be able to solve these problems? Because reforms haven't been done for so long. The scale of their challenges is truly awesome.

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When you step back and look at this in a bigger context, one of the huge problems China faces is that they need to modernize their government. They don't have the institutions they need to govern. China is a country ruled by men more than laws.

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The reform debate in China is mostly a conflict between those who want to reform domestically and those who want to open up to foreign competition. In my judgment, the true reformers are those who want to open up to competition, because that's the only way China is going to realize its economic potential -- and it's also only fair to the rest of the world.

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China invests in our Treasurys because it is in their interest to do so. As important as that is, I would much rather see investable dollars going into something that's more permanent: investment in greenfield plants that create jobs or acquiring failed or failing companies.

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I think people have to be very careful with new ideas. If something is a bad idea, you never really need to worry about it too much. It will come and go and maybe do a little bit of damage -- some people will lose some money -- but it's not a big thing. What you need to worry about is when you have something that's a really good idea, but you get too much of it too fast, like over-the-counter derivatives. Complexity and innovation are not always good things. I haven't studied Bitcoin in detail, but even if I had, I'd be very careful with anything that volatile.

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For those who say, "Well, Washington is just more poisonous than it's ever been," they just don't know their history. I went to work in the Nixon White House six weeks before the Watergate break-in, so I saw a little bit of poison. It's not unusual for there to be periods like this, and I'm more optimistic than some that we will get our political act together.

Illustration by Robert Ball