The Democratic Advantage: Institutional Foundations of Financial Power in International Competition Kenneth A.Schultz and Barry R.Weingast Skepticism about the quality of democratic foreign policy has a long lineage in international relations scholarship.It goes at least as far back as Thucydides's concerns about the"inconstant commons."2 It reappears in Alexis de Tocqueville's famous assertion that democratic governments are "decidedly inferior"when it comes to foreign affairs.3 It is evident in A.J.P.Taylor's indictment of the West's response to Nazi Germany in the 1930s,as well as more recent analyses of this period.And it was particularly influential during the Cold War,when many ana- lysts saw the United States'political institutions as a source of weakness in its rivalry with the Soviet Union.Democracies were thought to be indecisive,slow to act,weak of purpose,squeamish about using force,and subject to the changing whims of public opinion.Democracies risked the politicization of the "national interest"by ill-informed publics and short-sighted legislatures.>Because these writ- ers took as given that leaders of democratic states lack the freedom of action en- joyed by their nondemocratic counterparts,they anticipated that democracy would face an uphill battle in its struggle against authoritarianism. The outcome of the Cold War has led to a reassessment of this conventional wisdom.Despite the supposed defects of democracy,the historical record sug- gests that democratic states have,in fact,done quite well in international compe- We gratefully acknowledge thoughtful comments from Bruce Bueno de Mesquita,James Conklin, Shinju Fujihira,Peter Gourevtich,David Lake,Jean-Laurent Rosenthal,Francois Velde,and the anony- mous referees. 1.Nincic 1992,chap.1. 2.Thucydides 1950,70. 3.de Tocqueville 1969,226-27. 4.Taylor 1962;see also Groth 1999. 5.See,for example,Kennan 1977;Morgenthau 1973,146-48;Lowi 1967;Lippmann 1955,chap.2; Friedrich 1938.One notable exception to this view among realist scholars is Waltz 1979.In his study of American and British foreign policy,Waltz concludes,"Coherent policy,executed with a nice com- bination of caution and verve,is difficult to achieve in any political system,but no more so for dem- ocratic states than for others"(311). International Organization 57,Winter 2003,pp.3-42 2003 by The IO Foundation. D0L:10.1017/S0020818303571065The Democratic Advantage: Institutional Foundations of Financial Power in International Competition Kenneth A. Schultz and Barry R. Weingast Skepticism about the quality of democratic foreign policy has a long lineage in international relations scholarship.' It goes at least as far back as Thucydides's concerns about the "inconstant comrnon~."~ It reappears in Alexis de Tocqueville's famous assertion that democratic governments are "decidedly inferior" when it comes to foreign affair^.^ It is evident in A. J. P. Taylor's indictment of the West's response to Nazi Germany in the 1930s, as well as more recent analyses of this period? And it was particularly influential during the Cold War, when many ana￾lysts saw the United States' political institutions as a source of weakness in its rivalry with the Soviet Union. Democracies were thought to be indecisive, slow to act, weak of purpose, squeamish about using force, and subject to the changing whims of public opinion. Democracies risked the politicization of the "national interest" by ill-informed publics and short-sighted legislature^.^ Because these writ￾ers took as given that leaders of democratic states lack the freedom of action en￾joyed by their nondemocratic counterparts, they anticipated that democracy would face an uphill battle in its struggle against authoritarianism. The outcome of the Cold War has led to a reassessment of this conventional wisdom. Despite the supposed defects of democracy, the historical record sug￾gests that democratic states have, in fact, done quite well in international compe￾We gratefully acknowledge thoughtful comments from Bruce Bueno de Mesquita, James Conklin, Shinju Fujihira, Peter Gourevtich, David Lake, Jean-Laurent Rosenthal, Fran~ois Velde, and the anony￾mous referees. 1. Nincic 1992, chap. 1. 2. Thucydides 1950, 70. 3. de Tocqueville 1969, 226-27. 4. Taylor 1962; see also Groth 1999. 5. See, for example, Kennan 1977; Morgenthau 1973, 146-48; Lowi 1967; Lippmann 1955, chap. 2; Friedrich 1938. One notable exception to this view among realist scholars is Waltz 1979. In his study of American and British foreign policy, Waltz concludes, "Coherent policy, executed with a nice com￾bination of caution and verve, is difficult to achieve in any political system, but no more so for dem￾ocratic states than for others" (31 1). Inter~zarional Organization 57, Winter 2003, pp. 342 O 2003 by The I0 Foundation. DOI: 10.1017/S0020818303571065