It is rare for a book to set out a goal as ambitious as establishing a new research program. In Global Shell Games, authors Michael Findley, Daniel Nielson, and J. C. Sharman aim to do just that. The book is based on the first field experiment conducted on a global scale, and it launches a program that the authors label Experimental TR: the experimental science of transnational relations.
This program has a dual premise. First, contemporary international relations scholarship focuses largely on formal relations among governments that, the authors claim, represent only a small proportion of the actual international dealings that take place in global society. Therefore, they call for an empirical refocusing of IR scholarship on the private actors that carry out most international activity. More specifically, Experimental TR seeks to identify the causes of the international behavior of individuals and private organizations and the effects that private actors—alongside state influence—have on international politics. In this approach, states may play a leading role, but such role is not assumed; state influence is treated as a variable (p. 17). As the authors readily acknowledge, they are hardly the first to call for a greater examination of transnational relations. Robert Keohane and Joseph Nye did so more than four decades ago. But it is the second pillar of the authors' approach that contains the real innovation: employing field experiments as a tool for studying transnational relations. Contrary to what many scholars believe, they argue, field experiments in IR are feasible—logistically, financially, and ethically—and can be fruitfully employed for identifying causal effects.
The book is largely an exercise aimed at demonstrating this second point: the promise of field experiments in IR and their potential as a solution to scholarly and policy problems. On this front, it clearly succeeds. The authors focus on corporate service providers (CSPs): firms whose business it is to establish, sell, and maintain shell companies. While shell companies may have legitimate uses, they might also be abused in order to disguise criminal schemes. Global corporate transparency standards aim to curb such abuse by requiring CSPs to demand notarized identification documents from their clients. But do CSPs actually comply with this requirement? In the experimental design probing this question, 7,456 emails—under alias identities—were sent to 3,771 firms in 181 countries. All emails asked for confidential incorporation, but the authors randomly assigned treatments to learn if targets' behavior changes in response to different conditions, such as being informed about international legal requirements, being told about possible legal penalties, being prompted to behave appropriately, or receiving a request from a citizen of a country associated with corruption or terrorism. The various experimental conditions were compared to a “Placebo” condition whereby the requester purports to come from a minor-power, low-corruption wealthy country.
The authors deserve praise for meticulously crafting and executing a research design that is innovative, creative, and ambitious—even audacious. Posing as individuals who seek to establish a shell company under a cloak of secrecy does require guts. The careful attention to detail—from minimizing detection risks to the coding of outcomes—is evident throughout the book, including a lengthy appendix that explains the experiment. And this great effort paid off, yielding a range of interesting findings that often defy conventional wisdom. Importantly, these findings clearly demonstrate the gap between rules on the books and actual behavior on the ground. The Financial Action Task Force (FATF)—an international body that combats money laundering, including through the regulation of shell companies—is widely considered to be influential and effective; yet the experiment reveals a significant degree of noncompliance with the prohibition on untraceable shell companies, which is a key tenet of the anti-money-laundering (AML) regime. This is a cautionary note for IR scholars who typically focus on the formal aspects of international agreements—such as their ratification—and neglect their on-the-ground operation and impact. Another surprising finding is that tax havens—typically seen as lawless jurisdictions—demonstrated the highest levels of compliance, followed by poor countries, with rich countries at the bottom. Some of the treatments also produced counterintuitive results. For example, a reference to the FATF's international standards did not elicit greater compliance; referencing appropriate behavior also failed to increase compliance and may even have lowered it.
While the empirical findings are valuable, their interpretation is sometimes wanting. This is especially the case with the heterogeneous effects that many treatments produced. For example, the Corruption treatment raised the nonresponse rate (suggesting that some subjects may seek to avoid shady dealings by ignoring the inquiries altogether), while at the same time reducing compliance rates (p. 106). The IR literature on compliance typically seeks to explain why compliance varies across states; that is, it aims to identify attributes of states that account for their tendency to violate or comply with international norms. Global Shell Games, however, does not attempt to explain variation in compliance among CSPs, postponing such an analysis to future work (p. 172). Explaining the variance in behavior is not possible partly because CSPs—the book's central actors—are left untheorized. The book could have benefited from a theoretical discussion of these actors, their motivations and concerns, as well as distinctions among types of CSPs. Such a theory could have strengthened the empirical analysis; it would also have helped the reader to assess whether the findings are generalizable.
While the book teaches us much about CSPs, it is not clear whether this knowledge applies to other participants in the AML regime—notably, banks—and to other actors in the global economy. Furthermore, the book tests observable implications from various IR theories that are introduced piecemeal, and the logic for selecting them is unspecified. A more coherent, focused discussion up front would have given the book a stronger theoretical backbone.
Notwithstanding these concerns, this book is an empirical feat that demonstrates the value of field experiments for IR research, sets a model for such experiments, and provides much helpful practical guidance. It also calls into question some widely held views about international law and reminds us to look beyond the intergovernmental domain into the realm of transnational relations. These are all important contributions.
