Modeling foreign economic policy in strategic setting: the automotive industry of the U.S. and Japan

Abstract

The purpose of my study is to examine how the United States and Japan interact in a strategic setting on foreign economic issues. Since relations between the two countries have been developing for several decades now, I will look into: I) the historical component of the relationship between Japan and the U.S. through a case study, and 2) the theoretical implications through an experiment. Besides historical significance, the case has important theoretical ramifications for the study of foreign interactions with strategic information. The theoretical aspect would help to explain how the U.S. makes decisions for current issues. 3) I will also introduce an analytical component to model and study foreign economic relations between these countries. Foreign economic policy is one of the top priorities for the U.S. government as it enters the 21st century. As the United States rose as a world power, foreign economic relations with other countries along with security interests became of up-most importance. The U.S. government has taken the role of leader all over the world at the United Nations, in the Middle East, Europe, and in Asia. Even with the U.S. as a world leader in the post cold war era, competition is becoming fiercer and economic strategy must be keen. In order to keep military peace around the world as well as economic prosperity, world leaders must not take foreign affairs lightly. Notably important is the economic aspect of foreign relations. With a globalization of markets, all countries depend on one another to provide goods and services for their people. Investment and trade are so widely abundant that economic relations must be cordial as well as strategic. Countries must be cooperative and knowledgeable of economic factors. For this study, I examined a specific case study in which the U.S. was in a dispute with a foreign country and how the U.S. dealt with the situation. This particular dispute spans a timeline of 15 years and involves the automotive industry of Japan and the U.S. Next, I used an experiment to gather empirical data to further explore decision making in foreign policy. I employed 26 students as subjects for an experiment run on the Program for Foreign Policy Decision Making's computerized decision board developed by Dr. Alex Mintz. The subjects are presented with a scenario modeling the historical dispute between Japan and the U.S. From the data, evidence can be drawn to determine the "why" of each student's decision. This study seeks to show that there is a pattern of decision-making in U.S. foreign policy and can be modeled through decision-making theories.