One of the most important recent contributions to the field of comparative political economy is Mancur Olson's The Rise and Decline of Nations. In that work, Olson deduces, from his logic of collective action, a series of implications regarding the impact of social organizations—in particular, “distributional coalitions”—on economic growth that can explain variations in national growth rates across a wide range of time and space. This article considers the assumptions upon which that logic is founded, the plausibility of the several implications drawn from that logic, and the application of the theory to account for differences among five nations in rates of economic growth in the post-World War II era. The analysis suggests that the characteristics of group activity emphasized by Olson represent, at best, only a small— perhaps negligible—part of the explanation of cross-national differences in growth. Instead, it suggests that an important source of the variation among nations in growth rates is the international political and economic system. In particular, the discussion of the German, Japanese, and British cases suggests that stagnation (or growth) is, to a considerable extent, the product of a nation's position in the world economy, the policy responses through which governments seek to perpetuate or improve that position, and the constraints upon (or opportunities for) growth-oriented domestic economic policy posed by that position.

International economic factors increasingly influence American trade and exchange policy, and interdependence also circumscribes the autonomous choice of domestic policies. But the growing concern of Organization for Economic Cooperation and Development (OECD) policymakers over the potential for macroeconomic policy coordination to enhance national as well as world welfare implies that international economic relations present opportunities rather than constraints under some circumstances. This suggests that understanding domestic economic policy choice within its international context involves not only how policy choices are made within the bounds of international constraints, but also when countries might cooperate to modify the constraints themselves. This research looks to four important historical cases for information on these questions: the first three are the series of cumulating crises in the international monetary system during the 1960s and early 1970s, the fourth is the energy supply shock of 1973 and the recession that followed. The article describes the process of policy selection in each of these cases, contrasting domestic versus international premises for policy choice. The economics literature has emphasized the magnitude of domestic welfare gains available from coordinated national economic policies. Although the cases considered here do not contradict the importance of payoffs, they underline the corresponding role of political, economic, and strategic uncertainty in conditioning elites' policy choices.

In trade among the members of the Council for Mutual Economic Assistance (CMEA), prices of raw materials are lower and those of manufactured goods higher than comparable world prices. Because the Soviet Union is a net exporter of raw materials to, and net importer of manufactures from, the other CMEA countries, it benefits less from CMEA trade than it would from trading with the rest of the world, and the other CMEA members benefit more. This redistribution of the gains from trade is generally seen as a form of subsidization. One explanation of these subsidies is that they represent Soviet payments for political and military benefits provided by East European regimes; another is that the subsidies compensate Eastern Europe for the economic burden imposed by central planning and extensive economic ties to the Soviet Union. I argue that neither of these explanations is consistent with the type of economic and political relations that one would expect of the Soviet and East European regimes. In their place I offer an alternative explanation based on the Heckscher-Ohlin model of comparative advantage. The distribution of CMEA subsidies is shown to reflect the distribution of gains from trade that would arise among any group of economies forming a preferential trading scheme. I also argue that the willingness of members to belong to CMEA, even at the expense of paying subsidies, is that CMEA can be viewed as a club that provides benefits to members while imposing costs that may to some extent be unequal and unpredictable.

Many scholars argue that labor is excluded from Japan's political system. However, since the 1970s, labor has become considerably influential in the policymaking process in Japan. The oil crisis of 1973 and the Shuntou wage bargaining of 1975 have made labor, especially private-sector unions, modest in their wage demands, but at the same time these events have made labor participate actively in the policymaking process in order to maintain employment and seek some benefits from the government. This article demonstrates that Japan's increasing export-dependence and tradeoffs between wage increases on the one hand, and inflation and unemployment on the other in the 1970s, have driven labor to this new, more active role in policymaking, while the necessity for the governing Liberal Democratic party to seek a new constituency has enabled labor to achieve some success in this new role. This implies that Japan's political system has changed its nature since the 1970s; its political process has become more pluralistic with labor's participation within the existing political system.

Why have advanced industrial countries responded with different types of protectionist policy to postwar international competition and the resulting societal pressure for state action? In contrast to the across-the-board tariff wars of the 1930s, postwar protectionism is a patchwork of tariffs, unilateral and nonunilateral quotas, administrative restrictions, state subsidies, and production cartels. Arguments based on international economic structure, international regimes, statist approaches, and domestic structure all appear to have difficulty in accounting for divergent trade policy choices. This article introduces a more nuanced identification and integration of the international and domestic sources of the new protectionism. An examination of textile trade policy in the United States and Japan reveals that when state policymakers face conflicting international constraints and domestic pressure over the use of overt types of protectionist policy, the greater the domestic pressure, the more overt the policy response.