Costly Signals?

Developed states increasingly turned to democracy assistance strategies as the Cold War came to an end. A number of recent studies conclude that such aid positively affected democratization in recipients. But, like foreign aid, democracy assistance allocations are subject to change, sometimes dramatically. In foreign aid, sudden, sizable reductions – or aid shocks (e.g., Nielsen et al. 2011) – can have severe consequences, precipitating conflict in the recipient state. How do democracy aid shocks affect recipient states? This analysis examines the effects of sudden withdrawals of democracy aid – or democracy aid shocks – by the U.S. on recipient regime behavior, specifically, their treatment of citizens and civil society groups. We argue that democracy aid shocks trigger repressive action by recipients resulting in harmful human rights practices by the regime. Examining U.S. democracy aid to the developing world from 1982-2013, we find that, after controlling for other relevant factors likely to affect the human rights practices of a regime, democracy aid shocks are associated with subsequent repression of human rights in the recipient state. Our analysis thus sheds light on an external factor affecting human rights practices within states, as well as an important element of the consequences of democracy aid decisions. We conclude by assessing the implications for democracy promotion strategies and human rights behavior.

When does reputation lie? Dynamic feedbacks between costly signals, social capital and social prominence

Performing a dramatic act of religious devotion, creating an art exhibit, or releasing a new product are all examples of public acts that signal quality and contribute to building a reputation. Signalling theory predicts that these public displays can reliably reveal quality. However, data from ethnographic work in South India suggests that more prominent individuals gain more from reputation-building religious acts than more marginalized individuals. To understand this phenomenon, we extend signalling theory to include variation in people’s social prominence or social capital, first with an analytical model and then with an agent-based model. We consider two ways in which social prominence/capital may alter signalling: (i) it impacts observers’ priors, and (ii) it alters the signallers’ pay-offs. These two mechanisms can result in both a ‘reputational shield,’ where low quality individuals are able to ‘pass’ as high quality thanks to their greater social prominence/capital, and a ‘reputational poverty trap,’ where high quality individuals are unable to improve their standing owing to a lack of social prominence/capital. These findings bridge the signalling theory tradition prominent in behavioural ecology, anthropology and economics with the work on status hierarchies in sociology, and shed light on the complex ways in which individuals make inferences about others. This article is part of the theme issue ‘The language of cooperation: reputation and honest signalling’.

Quick on the Draw: American Negativity Bias and Costly Signals in International Relations

States signal their intentions to domestic and foreign audiences but are not always believed. Why do people believe some state signals but not others? Using a survey experiment on a representative sample of the US public, this study finds that individuals have a negativity bias when assessing the credibility of state signals. They take other states’ aggressive actions as evidence of deep hostility but are skeptical of the credibility of conciliatory gestures. The experimental result shows that the mobilization of a small proportion of an army is perceived credible enough as an aggressive action, while the removal of even a large proportion is not perceived as conciliatory. The psychological mechanism found here is a strong foundation for theorizing about how individuals process information embedded in state signals and can improve our understanding of signaling.

Non-state order and strategic communication via symbolic dress in Yemen

How do people keep order in weak states? Formal institutions provide law and order in rich societies, but are feeble and capricious in much of the developing world. Instead, people turn to informal, group-based order that operates through reputation and contingent cooperation. Such order requires people to police social boundaries and contributions, looking for costly signals of membership and commitment to weed out mimics and shirkers. Data from Yemen show that people rely on tribes for security and dispute resolution under customary law. Yemenis use a prominent symbol of tribalism, the iconic tribal dagger, to communicate their affiliations and commitments to their customary responsibilities. Yet people vary in how well they understand the semiotic system, and the accuracy of the link between dagger-wearing and tribalism improves with sophistication. While the most knowledgeable Yemenis reveal their tribal types with the dagger, the least knowledgeable communicate nothing at all.

The Popular Army of the Republic, Fall 1936–39

This chapter investigates the militia summer of 1936, which had been a summer of both chaos and valor in the defense of the Republic. It describes the militias that arose to fight the rebels, which varied widely in their insistence that combatants send costly signals of commitment to fight. It also clarifies how the Republic transformed its armed forces to regularize them and put power back in the hands of the state by imposing military discipline and a single command structure on its militia forces. The chapter argues that the new discipline rules imposed costly signals of commitment on volunteers, requiring that they sign on to more demanding forms of warfare. It discusses the Republic's recruitment of less-committed troops by imposing conscription at the same time.

Joint Military Exercises and Crisis Dynamics on the Korean Peninsula

A number of proposals for reducing tensions with North Korea have discussed alterations to the program of joint military exercises (JMEs) that South Korea holds. North Korea has also repeatedly called for a reduction or secession of JMEs. Would limiting or halting JMEs be a useful concession for securing a reduction of tensions on the peninsula? We argue that JMEs do not deter North Korea but, instead, provoke provocative rhetoric and actions, demonstrating that North Korea views JMEs as a serious threat to its security. In this paper, we establish a relationship between JMEs and North Korea’s actions. In response to a JME, North Korea can issue warnings or threats as well as take costly signals such as conducting missile or nuclear tests. Using new data on JMEs and North Korean behavior, we find that North Korea systematically responds with aggression to South Korean JMEs. Moreover, we find that the intensity of North Korea’s responses to JMEs is driven by the severity of the threat particular exercises pose, indicating that North Korea responds to JMEs as serious security threats.

A Theory of Sequential-Stage Signaling: Evidence from Equity-Crowdfunding

We develop a theory of sequential-stage signaling that addresses how issuers’ signals are perceived by the receivers when there is an intermediary that facilitates the transaction and the intermediary’s incentives may not be aligned with those of signal receivers. We propose that boundedly-rational receivers may misinterpret costly signals indicating issuers’ underlying quality and consider signals revealing intermediary’s private information on issuers’ quality to be more informative. We apply the theory to the context of equity crowdfunding offerings in the U.S. While the signal from ventures’ backing by professional investors is associated with more positive outcomes of the crowdfunding campaigns, our findings show that this effect is mediated by the equity stake requested by the crowdfunding platforms as compensation for their services. The platforms’ "skin in the game" sends an additional easily-interpretable signal to crowd investors on venture quality.

Signals, strongholds, and support: Political party protests in South Africa

South African politics are in a period of transition: the dominant African National Congress (ANC) is in decline, support for opposition parties has been rising, and voters have been disengaging rapidly from the electoral process. As protest movements have become more common and more powerful, established political parties have increasingly led their own protests, often addressing the same issues that citizens rise up about. This phenomenon has been understudied but has important ramifications for the future of South African politics. This article addresses this gap in the literature, arguing that party-led protests can be interpreted as costly signals of credible commitments to address the very issues that citizens are upset about. In a time when established parties are losing support, they may turn to these costly protests to demonstrate their commitment to addressing the needs of the people. Using counts of party-led protests and riots as well as election outcomes in the 2004, 2009, 2014, and 2019 national elections, this article demonstrates that party-led protests primarily target stronghold municipalities. In doing so, they positively correlate with vote-shares during elections. This boon accrues primarily to the opposition parties, but not the incumbent ANC.