Posts Tagged ‘John D. Steinbruner’

Lessons for Iran from the Greek debt negotiations

Saturday, June 27th, 2015

Two deadlines loom on June 30:

1) Agreement between Greece and the EU, the European Central Bank (ECB), and the International Monetary Fund (IMF) on an extension of the program of continuing loans in exchange for structural reforms; and

2) Agreement between the P5+1 countries (the permanent members of the U.N. Security Council plus Germany) with Iran on restrictions on its nuclear program and their verification in exchange for a lifting of bilateral and multilateral sanctions.

We have just witnessed the collapse of the Greek debt negotiations. There are important lessons to be learned from the breakdown of the talks which Iranian Supreme Leader Ali Khamenei should take directly to heart, and act upon, if a deal between the P5+1 and Iran is still to be achieved.

In the Greek debt negotiations, the positions of the two sides were very close, and indeed a deal might have been reached on the basis of the major concessions Alexis Tsipras made in a counter proposal earlier this week. But the European and IMF creditors overplayed their hand, insisting on still further concessions in a dynamic in which the future of Greece and even the Euro zone fell hostage to personal anger, wounded feelings, a sense of national and personal humiliation, and ultimately something bordering on psychological collapse on the part of Tsipras.

The sticking points were ridiculous in the broader scheme of things:

Should the VAT at restaurants be raised to 23% as the creditors wanted, or held to 13% as Greece proposed? Should the 30% discount on the VAT granted to the Greek islands be abolished as the creditors demanded? Should the corporate income tax rate be raised to 29% as Greece proposed, or be held to 28%? In what year should the proposed pension reforms, raising the retirement age from 60 to 67, be implemented, 2018 or 2022?

These are issues which could have been resolved with good faith negotiations, trust and goodwill in the room. Unfortunately, both sides came to feel that the other side was not bargaining in good faith. Trust had broken down as a result of the negotiating tactics including personal attacks of Tsipras and his government over months of negotiations, and what the Greeks perceived to be the unyielding position of the creditors to demand further austerity without embarking on a path that might lead to growth and an eventual way out of the crisis, and hope for the future.

Facing rebellion among his ranks, and apparently smarting from a highly emotional confrontation in the corridors with EU Council President Donald Trusk on Friday, Tsipras appears to have felt humiliated and to have suffered some kind of emotional or psychological collapse, calling an emergency meeting of his cabinet Friday night, and then announcing in a 1:00 a.m. TV broadcast to the nation that he was calling a snap referendum on the creditors’ last proposal.

For the creditors, calling the snap referendum was the ultimate act of bad faith. They declared the negotiations were over, the deadline of Tuesday, June 30 would not be extended, and they were now working on a “Plan B”  to protect the Eurozone and its financial institutions from the fallout of a Greek default by Wednesday. The ECB, for its part called a meeting for Sunday to decide, among other matters, whether it would extend its support of Greek banks past Tuesday. Without such support, the Greek banking system is expected to collapse beginning next week.

In the last days, Tsipras and Finance Minister Yanus Varoufakis made several grave miscalculations, assuming that the creditors would extend the June 30 deadline to after the July 5 referendum, and that the IMF would not declare them in default, triggering default provisions in a number of debt instruments and even making continued ECB support of Greek banks problematical.

Varoufakis is reported to be an expert on game theory, and recent actions by the Greek government appear to be consistent with the classical game of “chicken” — memorably portrayed in the drag race in the movie “Rebel Without a Cause” with James Dean.

Yet there are two fundamental problems with approaching multiparty negotiations as if they can be represented by the game-theory model of “chicken”.

The first is that the “chicken” model is a two-party game, based on the assumption that each of the parties will act with perfect rationality. In other words, “chicken” is a two-party game based on a rational choice model. Here, however, we are looking at multi-party negotiations.

The second problem is that the actions of the governments that constitute the creditors are the product of complex governmental decision processes and electoral and bureaucratic politics, both at the national and at the international institutional level. Similarly, the actions of the Greek government are the product of governmental processes and electoral and bureaucratic politics, and not the actions of a unitary rational mind.

See the classic studies on the rational actor fallacy:

(1) Graham Allison and Philip Zelikov, Essence of Decision: Explaining the Cuban Missile Crisis (2d ed. 1999); and

(2) John D. Steinbruner, The Cybernetic Theory of Decision: New Dimensions of Political Analysis (1974, 2nd paperback ed. with a new preface 2002)

Consequently, using game-theory approaches to guide decisions is fatally flawed. The negotiations are not a one-time occurrence. Rather, pushing matters to the brink, as one might do in a one-time two person game to “win”, can have disastrous effects on the trust that may be necessary to maintain relationships and successfully conclude future negotiations.

There are lessons here to be drawn by Iran. Supreme Leader Ali Khamenei’s recent and repeated statements that Iranian military facilities are not to be subject to inspection for verification of compliance with the terms of any nuclear deal with the P5+1 are tantamount to statements that there will be no nuclear deal. The Iranian parliament’s recent passage of a law prohibiting such inspections offers a similar sign.

However clever these moves may seem as putting pressure on the P5+1, or managing disparate interest groups and political forces inside Iran, their net effect may be to undermine the essential trust upon which any nuclear deal must be based.

Already, senior U.S. officials who have been involved developing and implementing policy towards Iran have spoken out, loudy, about what is required to secure an adequate deal with Iran, and the importance of being able to walk away from a bad deal.

In recent weeks U.S. government reports have revealed that Iran continues to support terrorist activities, and that its observance of fundamental human rights remains abysmal.

In these circumstances, Iran as well as the United States would do well to bear in mind the Greek tragedy that is now playing out in the Greek debt negotiations.

Negotiations are not a two-party rational choice game of “chicken”, or a two party negotiation in an Iranian bazar. Governmental processes, such as action by Congress, can block implementation of any deal. Politics in the 2016 presidential election could produce a shift in the U.S. position.

As in the Greek debt negotiations, if Iran or even the P5+1 overplay their hand, if they negotiate in a manner that undermines the trust required to reach and implement any agreement, forces may be unleashed that kill the deal or its implementation.

The failure of the Iran negotiations, like the failure of the Greek debt negotiations, would be particularly unfortunate given the fact that, in both cases, a deal has seemed within reach.

Human beings, not rational-actor machines, will determine whether a nuclear deal is reached with Iran. Iran would be well advised to act in a manner that builds confidence and trust on the part of the P5+1 countries.

Otherwise they could find that when trust and confidence are needed to bridge final differences, they are nowhere to be found.

The Trenchant Observer

The Daily Star: “We procrastinate”—Obama’s Debacle in Syria — Update #9 (March 9)

Friday, March 9th, 2012

The Daily Star (Beirut) has been one of the absolute best sources for reliable and up-to-date information on what is going on in Syria, and on the broader significance of events.

Today’s Editorial (March 9) is particularly honest and perceptive, and cuts to the essence of the factors at play now in Syria and in the international community. Extensive excerpts follow:

(T)he death toll is now reaching 8,000, according to estimates, and the Syrian government’s cleansing of towns continues.

Figures of more than 60 a day dead are now becoming commonplace. Yet in a year of massacres, attacks, bombardments and destructions of villages, towns and cities that dare to protest we have seen the international community become mere witnesses, recording events. They simply count the numbers of dead, highlighting the devastation that has been caused.

Their action is painfully limited. Kofi Annan is to travel to Damascus Saturday to confront the violence, but what he can bring to the table is a continuation of what the regime has listened to, and ignored, all year. The United States’, the West’s and the United Nations’ semantic exercises continue unabated, and so does the bloodshed enacted by the Syrian government.

We already know that the ultimate result of Annan’s visit will be further procrastination…

As long as independent foreign media and observers are not allowed in to witness the true scale of the chaos in Syria, it can be assumed that we will continue to face a fiasco, with an international reaction that not only does not help, but actually provides a respite for the regime to continue its campaign of destruction.

The scene around Syria overflows with talk. The world’s big players proffer big words, which amount to zero in their impact on the Syrian regime – if anything they are utilized in their propaganda campaign.

The international community is attempting to save face, and by doing so is exhibiting its hypocrisy in every step and every word. This is hypocrisy of the worst kind, not only uncovering the ulterior motives of the world powers, but also serving as an eye-opener as to the intentions of the small, medium and super powers. God help any downtrodden party who takes the words of those powers at their face value. In this, the international community’s reaction to the crisis in Syria should be a lesson for many nations that look to it for support.

In the meantime, help for Syria is still at square one and none of the steps currently being taken are going to eradicate the shame of the international community.

–Editorial, The Daily Star (Beirut), March 9, 2012

As the sad spectacle of Kofi Annan’s “mediation” of the conflict proceeds, and the world’s attention is turned to what Russia, or Annan, or the U.S. or other countries are saying in their interminable diplomatic dance, it is of utter importance that we all follow the example of The Daily Star and keep our attention riveted on what is happening on the ground.

Let us all, together, focus primarily on that, on events on the ground. As Kofi Annan prepares to travel to Damascus on Saturday, March 10, tanks are surrounding Idlib, soldiers have been bussed to the area, and the new onslaught has already begun as tanks overrun villages in outlying areas. In the meantime, tanks and artillery continue to attack civilian neighborhoods in Homs. Undoubtedly, they are also on the move in other parts of Syria.

For the latest reports, see

Lauren Williams, “Deaths mount in Syria on eve of Annan talks,” The Daily Star (Beirut), March 10, 2012 (02:04 AM local time).

Not only is Kofi Annan’s mission the wrong mission, but he has shown by essentially advancing the Russian position that he is not the right man for the job. Nor is it wise to place in a single individual the job of representing both the Arab League and the United Nations.

If Annan does not produce a complete ceasefire and withdrawal of tanks from cities within seven days, then his mission should be terminated by Secretary General Ban Ki-Moon. This goes against the usual diplomatic inertia and courtesies and niceties, but it constitutes what is required if the killing in Syria is to be stopped.

The Trenchant Observer

observer@trenchantobserver.com
www.twitter/trenchantobserv

–For earlier articles by The Trenchant Observer, see the Articles on Syria page.
–To use the Search function, click on “The Trenchant Observer” at the top of this page to go to the home page, and then enter your search term in the box at the upper right.
–A list of the most recent 15 articles (on all subjects) is also found on the home page, on the right.

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How to find news reports from around the world
–Google and other major search engines use a series of filters amounting to what has been termed a “filter bubble” to limit search results to those keyed to the location, language, and previous search results of the user. See Eli Pariser, The Filter Bubble (2011).
–To find the latest news from around the world on Syria (or any other subject), you can bypass the “filter bubble” of Google and other search engines by going to and beginning your search at www.startpage.com

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The “Rational Actor” Fallacy and Stopping Syria’s Atrocities—Obama’s Debacle in Syria — Update #8 (March 9)

Friday, March 9th, 2012

“There are times, such as when a man or a group of men are in the act of firing weapons to kill innocent civilians, when it is necessary to halt the killing through means other than rational persuasion.”

A central flaw in the approach of the U.S., the U.N., and many other countries to the conflict in Syria is the assumption that by exercising “pressures” on Bashar al-Assad, we can change his calculus as to whether to continue his brutal repression of the opposition by committing atrocities and widespread and grave violations of fundamental human rights. The corrolary of this assumption is another: that if we change the calculus of the “rational” decision-maker, the behavior of the Syrian troops and state security personnel will automicatically change, in this case to halt the killing. Together, these assumptions amount to what is known as “the rational actor fallacy”, the belief that the decisions and actions of a large and complicated organization–such as the government of a country–are taken by a unitary “mind” that perceives reality, makes decisions, and implements those decisions as if it were a single “rational actor”.

See the classic studies on the rational actor fallacy:

(1) Graham Allison and Philip Zelikov, Essence of Decision: Explaining the Cuban Missile Crisis (2d ed. 1999); and

(2) John D. Steinbruner, The Cybernetic Theory of Decision: New Dimensions of Political Analysis (1974, 2nd paperback ed. with a new preface 2002)

It is worth noting, in passing, that the rational actor fallacy is prominently at work in current discussions about whether or not to attack Iran to halt or set back its nuclear weapons program.

There are various assumptions here.  The first assumption is that al-Assad controls and directs the military and security forces which are committing the atrocities.

The second and related assumption is that he can stop the atrocities if he is persuaded, according to his own rational calculus, that it is more in his interest to halt the commission of these crimes than it is to allow them to proceed. 

Acting on this assumption, United Nations Secretary General Ban Ki-Moon has sent Kofi Annan to try to “mediate” the conflict, the assumption being that if he can persuade al-Assad, the killing will stop. 

There are several flaws in this reasoning.  First, on the basis of public information, we don’t really know if Bashar al-Assad is in control of decision-making processes in Syria, or if rather others are in effect controlling him. 

It is far from clear that Bashar al-Assad can stop the barbaric acts being committed under the leadership of military leaders, including his brother, who may view their mission as a struggle for survival and to preserve their own lives and families and, more broadly, the privileges of the Alawite minority that rules the country.  They may feel that they have reached a point of no return.

Could an emissary from the United Nations, or even China and the Soviet Union, have persuaded Pol Pot and through him the Kmer Rouge to stop the genocide in Cambodia in 1975-1979?

Could an emissary from the Allied Powers have persuaded Adolph Hitler to halt his exterminations at Auschwitz and other camps in 1943 (before adoption of the goal of “unconditional surrender” at the Casablanca Conference in January, 1943), or to have surrendered in January, 1945?

We are faced with a situation of war, of civil war, in which artillery and tanks are firing at civilian neighborhoods, and smaller weapons and even knives are being used to kill those caught in dragnets in cities like Homs, and in neighborhoods like Baba Amr.

Under these circumstances, it is unlikely that persuasion alone will stop the killing.  Even persuasion accompanied by robust military action, we may recall, did not stop Qadaffi and his military from fighting, long after any “rational” calculus would have determined it was time to stop.

Al-Assad may indeed have the leeway, under whatever constraints he may be operating, to negotiate with foreign diplomatic interlocutors as long as it gains him–and his military and state security apparatus–more time to pursue their efforts to annihilate the opposition.

In that context, he could in theory end up making some concessions, e.g., not to totally destroy Idlib like he did Baba Amr (in Homs), in order to forestall military action by the international community, or groups of states within that community.  But given the pattern of the last 11 months, even this seems unlikely. Perhaps he could agree not to destroy the next city after Idlib.

The Fourth Armored Division of the Republican Guard, under the command of Bashar al-Assad’s brother, Maher al-Assad, is currently on the march toward Idlib, according to reports.

See Khalen Yacoub Oweis (Reuters), “Forças sírias matam 54 antes da chegada de Annan,” Estadão.com.br (O Estado de São Paulo), 9 de marzo de 2012.

Lourival Sant’Anna (O Estado de S.Paulo/Antakya, Turquia), “Tanques de Assad cercam Idlib e rebeldes sírios temem novo massacre,” Estadão.com.br, 9 de marzo de 2012.

Khaled Yacoub Oweis, “Syrian forces kill 54 ahead of Annan peace mission,” The Daily Star (Beirut), March 09, 2012.

There are times, such as when a man or a group of men are in the act of firing weapons to kill innocent civilians, when it is necessary to halt the killing through means other than rational persuasion.

We have come to such a moment in Syria.

Kofi Annan has announced his intention to initiate a political process which would involve participation by the opposition in negotiations over how to settle the conflict.  The main opposition group has already declared its firm opposition to any such proposal. Annan’s proposals sound very similar to those of Russia. (China, to its credit, is now pushing for an immediate ceasefire and halt to the killing, at least according to public reports.)

Annan, whose greatest failure as Secretary General was to not stop the U.S. invasion of Iraq, appears determined to prevent the United States from taking any military action against al-Assad’s armed forces. He doesn’t seem to grasp the difference in circumstances between Iraq in 2003 and Syria today.

It would be a mistake to further militarize the conflict, Annan has asserted, ignoring the fact that one side in the conflict is highly militarized with all the weapons of the modern state, and is at this moment using those weapons against the Syrian opposition, including innocent civilians who have not joined the armed resistance.

Further militarization?  By providing people with arms and other assistance so that they can defend themselves against the wanton commission of war crimes and crimes against humanity?

Sadly, Annan’s mission will only serve to give al-Assad further time to eliminate his opposition, and to offer multiple opportunities for him to play the various nations of the civilized world off against each other.  This he did brilliantly with the Arab League in delaying its imposition of sanctions, with his immensely cynical “acceptance” of the Arab League monitors, when he had no intention of complying with the conditions for their deployment. And never did.

In short, the Annan mission, and further delay such as that being pushed by the United States, will under the best of circumstances, only serve to help al-Assad consolidate his regime, and his reign of terror. 

After the “mediation”, after the negotiations, any solution that leaves al-Assad and his regime in place will also be a solution that allows his military and state security forces to hunt down and torture and execute opponents to the regime. That is the best-case scenario.

The worst-case scenario is a long and drawn-out civil war, which over time is likely to drag in other powers from the region, and beyond.

Another part of the worst-case scenario is that the civilized world will have to live with the “day after”–the “day after” it has looked the other way in the face of the ongoing commission of war crimes and crimes against humanity. The day after the international community, with full awareness–in real time–of the details of these acts of barbarism, has done nothing to effectively stop them.

It will be a different world, in which dictators everywhere can take heart in knowing that the international “responsibility to protect” is empty verbiage.

It will be a world in which such dictators will be emboldened to use all the instruments of terror, if necessary when faced by civil opposition, to retain their hold on power.

The Trenchant Observer

observer@trenchantobserver.com
www.twitter/trenchantobserv

–For earlier articles by The Trenchant Observer, see the Articles on Syria page.
–To use the Search function, click on “The Trenchant Observer” at the top of this page to go to the home page, and then enter your search term in the box at the upper right.
–A list of the most recent 15 articles (on all subjects) is also found on the home page, on the right.

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How to find news reports from around the world

–Google and other major search engines use a series of filters amounting to what has been termed a “filter bubble” to limit search results to those keyed to the location, language, and previous search results of the user. See Eli Pariser, The Filter Bubble (2011).
–To find the latest news from around the world on Syria (or any other subject), you can bypass the “filter bubble” of Google and other search engines by going to and beginning your search at www.startpage.com