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NEGOTIATION
Diplomacy and Domestic Politics: The
Logic of Two-Leve} Games
ROBERT D. PUTNAM
Perhaps the most perplexing consequence of growing global interde-
pendence is the increasing entanglement of diplomat y and domestic politics.
account for success and failure in international cooperation, neither a
purely domestic nor a purely international analysis will suffice. In partic-
ular, theories that treat the nation-state as a unitary actor are seriously
misleading. As Ambassador Robert Strauss said of the Also Round trade
negotiations: "During my tenure as Special Made Representative, I spent
as much time negotiating with domestic constituents (both industry and
labor) and members of the U.S. Congress as I did negotiating with our
foreign trading partners."
The politics of many international negotiations can be conceived of
usefully as a t~vo-level game.) At the national level, domestic groups pursue
their interests by pressuring the government to adopt favorable policies, and
politicians seek power by constructing coalitions among those groups. At
the international level, national governments seek to maximize their abilitr
to satisfy domestic pressures, while minimizing the adverse consequences
of foreign developments. Neither of the two games can be ignored by
central decision makers so long as their countries remain interdependent,
yet sovereign.
Each national political leader appears at both game boards. Across
the international table sit his foreign counterparts, while around the do-
mestic table behind him sit his major political allies and competitors and
The complete version of this paper was published in Intemational Organization, Summer 1988,
2:427-460.
Lee seminal theoretical work in this domain remains Walton and McKersie (1965~.
60
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NEGOTIATION
61
representatives of key domestic interest groups. The unusual complexity of
this game Is that moves that are rational for a player at one board (such as
liberalizing imports or conceding territory) may be impolitic for that same
player at the other board. Nevertheless, there are powerful incentives for
consistency between the two games.
The political complexities for the players in this two-level game are
staggering. Any key player at the international table who is dissatisfied with
the outcome may upset the game board; conversely, any leader who fails to
satisfy his fellow players at the domestic table risks being evicted from his
seat. On occasion, however, clever players will spot a move on one board
that will trigger realignments on other boards, enabling them to achieve
otherwise unattainable objectives. This "two-table" metaphor captures the
dynamics of many international negotiations better than any model based
on unitary national actors.
Consider the following stylized scenario that might apply to any two-
level game.2 Negotiators representing two organizations meet to reach agree-
ment between them, subject to the constraint that any tentative agreement must
be ratified by their respective organizations. For simplicity, assume that each
side is represented by a single chief negotiator who has no independent
policy preferences.
It is convenient for exposition (but inaccurate descriptively) to decom-
pose the process into two stages:
1. bargaining between the negotiators, leading to a tentative agree-
ment (call that Level D;
separate discussions within each group of constituents about
whether to ratify the agreement (Level II).
The requirement that any Level I agreement must, in the end, be
ratified at Level II imposes a crucial theoretical link between the two
levels. "Ratification" is used here to refer to any decision process at Level
II that is required to implement a Level I agreement. The actors at Level
II may represent legislators, bureaucratic agencies, interest groups, social
classes, or even "public opinion." For purposes of counting "votes" in the
ratification process, different forms of political power must be reducible to
some common denominator, but the "voting" need not be formalized or
democratic. The only formal constraint on the ratification process is that,
since the identical agreement must be ratified by both sides, a preliminary
level I agreement cannot be amended at Level II without reopening the
Level I negotiations. In other words, final ratification must simply be
2 Investigators in other fields have recently proposed models of linked games, analogous in some
respects to this model (I)enzau, Riker and Shepsle, 1985; Rogoff, 1985; Tsebelis, 1988; Scharpf,
1988; All and Eichengreen, forthcoming).
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SOVIET-AMERICAN DIALOGUE IN THE SOCIAL SCIENCES
'~voted" up or down. Given these arrangements, we may define the '~in-
set" for a given Level II as the set of all possible Level I agreements that
would "win"—that is, gain the necessary majority among the constituents-
when simply voted up or downy
For two reasons, the contours of Level II win-sets are very important
for understanding Level I agreements. First, larger win-sets generally make
Level I agreement more like). By definition, agreement is possible only if
the win-sets of the organizations overlap, and the larger each win-set, the
more likely they are to overlap. Second, the relative size of the Level II
win-sets will affect the distribution of the gains from the Level I bargain. The
larger the perceived win-set of the negotiator, the more he-can be "pushed
around" by the other Level I negotiators. Conversely, a small domestic
win-set can be a bargaining advantage: "I'd like to accept your proposal,
but they would never accept it back home."4
Three sets of factors are especially important in determining the size
of each side's win-set:
1. The win-set depends on the distribution of power, preferences, and
possible coalitions among Level II constituents.
In some cases, evaluation of no-agreement may be the only significant
disagreement among the Level II constituents, because their interests are
relatively homogeneous. An arms negotiator is unlikely to face criticism
at home because a proposed agreement reduces the opponents' weaponry
too much. In other cases, by contrast, constituents' preferences are more
heterogeneous. In 1919, some Americans opposed the Versailles Treaty
because it was too harsh on the defeated powers, others because it was
too lenient. The strategic problems facing Level I negotiators dealing with
a homogeneous conflict are quite different from those facing negotiators
dealing with a heterogeneous conflict. In some cases, lines of cleavage within
the Level II constituencies will cut across the Level I division, and the Level
I negotiator may find silent allies at his opponent's domestic table.
When the negotiation involves more than one issue, various groups at
Level II are likely to have different preferences on the several issues, and
the chief negotiator is faced with trade-offs across different issues: how
much to yield on citrus exports to get a better deal on microchips, and
so on. In certain cases, synergistic linkage in the international negotiations
facilitates policy choices that would otherwise be unacceptable domestically.
Economic interdependence multiplies the opportunities for altering domes-
tic coalitions (and thus policy outcomes) by creating political entanglements
across national boundaries.
3For the original conception of win-set, see Shepsle and Weingast (1987~.
4This strategy was first noted by Thomas C. Schelling (1960~.
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63
2. The win-set depends on Level II political institutions.
Ratification procedures affect the size of the win-set. For example,
the U.S. separation of powers or the Japanese propensity for seeking the
broadest possible domestic consensus constrains their respective win-sets
more tightly than those of many other countries. This increases the bargain-
ing power of American and Japanese negotiators, but it also reduces the
scope for international cooperation. Cetens parties, the more autonomous
a state is from domestic pressures, the weaker its negotiating position
internationally but the greater its scope for international cooperation.
3. The win-set depends on the strategies of the Level I negotiators.
Each negotiator has an unequivocal interest in maximizing the other
side's win-set, but his motives are mixed with respect to his own win-set.
Thus, a utility-maximizing negotiator must seek to convince his opposite
number that his own win-set is "kinly," that is, that the deal he proposes
is certain to be ratified, but that any deal even slightly more favorable to
the opponent is unlikely to be ratified. If a negotiator wishes to expand his
win-set in order to facilitate ratification, he may exploit both domestic and
international side payments. An experienced negotiator familiar with the
respective domestic tables should be able to maximize the cost-effectiveness
of the concessions that he must make to ensure ratification abroad, as well
as the cost-effectiveness of his own demands and threats, by targeting his
initiatives with an eye to their Level II incidence, both at home and abroad.
A rational Soviet arms negotiator should target his threats and his offers
neither at the hawks nor at the doves in Congress, but at the "persuadable
skeptics" in the middle, while paying special attention to the views of the
"swing voters" back home in the Kremlin.
Other factors must be considered in a more comprehensive account of
two-level games:
· The role of uncertain~. Level I negotiators are often misinformed
about Level II politics, particularly on the opposing side. Uncertainty about
the win-set can be both a bargaining device and a stumbling block in two-
level negotiation. In purely distributive terms, negotiators have an incentive
to understate their own win-sets, but uncertainty about the opponent's win-
set increases one's concern about the risk of failed ratification.
· The impact of Level I negotiations on Level II preferences. Much of
what happens in any bargaining situation involves attempts by the players
to alter one another's perceptions of the costs of no-agreement and the
benefits of proposed agreements. In two-level games, governments gener-
ally seek to expand one another's win-sets. In some instances, international
pressures "reverberate" within domestic politics, tipping the domestic bal-
ance and thus influencing the international negotiations.
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SOVIEI:AMERICAN DIALOGUE IN THE SOCIAL SCIENCES
· The role of the chief negotiator. As principal-agent theory reminds
us, the interests of the negotiator may diverge from those of his con-
stituents. International negotiations sometimes enable leaders to do what
they privately wish to do but are powerless to do domestically. Conversely,
if a proposed international deal threatens the cohesion of the negotia-
tor's domestic coalition, he will be reluctant to endorse it, even if Judged
abstractly) it could be ratified.
The most portentous development in comparative politics and interna-
tional relations in recent years is the growing recognition among scholars
in each field of the need to understand entanglements between the two.
Analysis in terms of two-level games offers a promising response to this
challenge.
REFERENCES
Alt, J.E., and B. Eichengreen
In press Parallel and overlapping games: Theory and an application to the European
gas trade. Economics and Politics.
Denzau, A, ~ Riker, and K. Shepsle
1985 Farquharson and Fenno: Sophisticated voting and home style. American
Political Science Review 75:1117-1134.
Rogoff, K.
1985 Can international monetary policy cooperation be counter-productive? Jour-
nal of Intemational Economics 18:199-217.
Scharpf, F.
1988 A game-theoretical interpretation of inflation and unemployment in Western
Europe. Journal of Public Policy 7:227-257.
Schelling, T.C.
1960 The Strategy of Conflict. Cambridge, MA: Harvard University Press.
Shepsle, K.A., and B.R. Weingast
1987 The institutional foundations of committee power. American Political Science
Review 81:85-104.
Tsebelis, G.
1988 Nested games: The cohesion of French coalitions. British Journal of Political
Science 18:145-70.
Walton, R.E., and R.B. McKersie
1965 A Behavioral Theory of Labor Negotiations: An Analysis of a Social Interaction
System. New York: McGraw-Hill.
Representative terms from entire chapter:
domestic table
