Confidence and Crisis: Mania in International Relations Dissertation Presented in Partial Fulfillment of the Requirements for the Degree Doctor of Philosophy in the Graduate School of The Ohio State University By Kyle David Larson, M. A. Graduate Program in Political Science The Ohio State University 2018 Dissertation Committee Jennifer Mitzen, Advisor Christopher Gelpi Alexander Wendt 1 Copyrighted by Kyle David Larson 2018 2 Abstract Why do states sometimes adopt wildly overconfident foreign policy choices – choices that have unreasonable expectations about potential benefits of success and unreasonable expectations about the absence of risks of failure? In this dissertation, I argue that extreme cases of these choices can occur as a consequence of mania: a wave of irrational, excessive optimism. One example of mania in foreign policy was the drive to enlarge NATO to incorporate Georgia and Ukraine in 2007 and 2008, prior to the Russian invasion of Georgia and later invasion of Ukraine. Derived ultimately from the work of John Maynard Keynes in economics, I argue that mania in international relations is both expected and inevitable under certain circumstances. Manias primarily occur as part of a three stage process: a sudden, unexpected shock that changes the nature of the international system (“displacement”), followed by new stories that explain both the causes of the shock and explain their consequences for the future (“New Era Thinking”). The new era opens up possibilities for foreign policy success that had not existed before, leading policy elites to “invest” in foreign policies. If those policies do not fail, skepticism about New Era Thinking diminishes and optimism about future success grows. This process produces a feedback loop where New Era Thinking and policy choices interact with each iteration – and with ii each iteration have higher expectations for gains and lower cognizance of risk. Similar to the psychological dynamics that drive stock market bubbles in economics, the result is a foreign policy process that dismisses both uncertainty and risk, creating the potential for failure. I will show how the end of the Cold War was a displacement that produced New Era Thinking, and that as NATO enlargement – which was predicated on New Era Thinking – progressed eastward it became manic. Mania has its basis in the human need to overcome uncertainty: the inability to know the future. To overcome uncertainty, humans use confidence: a combination of estimating the future based on the weight of the available evidence (generally, the assumption that the future will reflect the present) and animal spirits: a sense of optimism that we can control the future that exists despite the absence of evidence to support it. Confidence can easily become collective overconfidence: a shared feeling of unreasonable assurance about the future. It is from this possibility that the potential for mania derives. As a consequence, we can expect mania to be a recurrent phenomenon in international relations, of which NATO enlargement is but one recent example. iii For Mom and Dad iv Acknowledgments I started down this road in 2008, when on a whim I decided to take John Mearsheimer’s “American Grand Strategy” course. From that moment onwards, I have received critical aid and encouragement from so many people. At the University of Chicago, I was honored to receive encouragement and opportunity from John Mearsheimer, Robert Pape, Michael Reese, Jonathan Obert, and Lindsey O’Rourke, without whom I would never have found my calling. At Ohio State, I made ruthless use of the faculty; this project owes special debt to Professors Alexander Wendt, Christopher Gelpi, Daniel Verdier, Alex Thompson, and Rick Herrmann, each of whom contributed in ways that altered its trajectory. Most important was my advisor, Jennifer Mitzen. She was indispensable, an inspiration to the project and quick to offer needed encouragement and criticism in equal parts – even when I failed to hear what she was saying. Daniel Silverman and Drew Rosenberg gave precious time to help me work through problems with theory and methods. Courtney Sanders, Robb Hagen, and Charles Smith never hesitated to let me ramble when I needed it. And the support of Aisha Bradshaw, Daniel Wollrich, and Caitlin Clary ensured that Columbus became home and provided the ontological security I needed to make it through. All errors are my own. v Vita 2009………………………………………B. A. Philosophy, University of Chicago 2011………………………………………M. A. International Relations, University of Chicago 2013………………………………………M. A. Political Science, Ohio State University 2014 – 2018 ………....…………………...Graduate Teaching Associate, Department of Political Science, Ohio State University Publications Mitzen, Jennifer and Kyle Larson. “Ontological Security and Foreign Policy.” Oxford Research Encyclopedia of Politics (2017). politics.oxfordre.com/view/10.1093/acrefore/9780190228637.001.0001/acrefore- 9780190228637-e-458 Fields of Study Major Field: Political Science vi Table of Contents Abstract ...........................................................................................................................ii Acknowledgments ........................................................................................................... v Vita ................................................................................................................................ vi List of Tables .................................................................................................................. x List of Figures ................................................................................................................ xi Chapter 1. Introduction .................................................................................................... 1 I. Manias and Bubbles .............................................................................................. 7 II. Explaining NATO Enlargement ........................................................................ 9 III. Empirical Strategy ........................................................................................... 11 IV. Chapter Outline ............................................................................................... 13 Chapter 2: A Theory of Confidence and Mania in International Relations...................... 17 I. The Concept of Confidence ................................................................................ 21 Introducing Confidence ......................................................................................... 21 Why Do Individuals Need Confidence ................................................................... 23 Where Does Confidence Come From ..................................................................... 30 Introducing Overconfidence................................................................................... 37 II. Collective Confidence and Overconfidence ..................................................... 40 Introducing Collective Confidence ......................................................................... 40 Why Does Confidence Spread ............................................................................... 42 Collective Overconfidence ..................................................................................... 47 III. Speculative Mania in Economics and International Relations .......................... 49 Introducing Mania ................................................................................................. 49 The Three Stages of Mania .................................................................................... 51 Mania in Foreign Policy......................................................................................... 57 Chapter 3: New Era Thinking After the End of the Cold War ........................................ 66 vii I. Identifying New Era Thinking ............................................................................ 71 New Era Thinking: What to Look For .................................................................... 71 When and Where to Look for New Era Thinking? ................................................. 74 II. The End of the Cold War as Displacement ...................................................... 77 May 25, 1989 – November 9, 1989: Chairman Mikhail Gorbachev ........................ 79 November 9, 1989 – December 26, 1991: The Fall of the Berlin Wall ................... 82 After December 26, 1991 ....................................................................................... 86 III. Democracy will be Characteristic of the New Era ............................................ 91 1988-1989: Before the Fall of the Berlin Wall ....................................................... 93 1990-1993: The Revolutions in Eastern Europe ..................................................... 96 IV. Economic Integration will be Characteristic of the New Era .......................... 101 1988-1989: Demands of Technology ................................................................... 102 1990-1993: Demands of Technology and Moments of Opportunity ..................... 105 V. Instability will be Characteristic of the New Era ............................................ 111 1988-1989: Soviet Uncertainties .......................................................................... 113 1990-1991: (In)stability After the Cold War ........................................................ 116 1992-1993: Aftermath of