Three perspectives on international politics IR theories: Institutionalism

Three perspectives on international politics

IR theories: Institutionalism

Weaknesses of realism

Neorealism can’t account for cooperation among states. European integration

Military power can’t solve many of today’s problems (climate change, refugee flows, etc.).

Non-state actors become increasingly relevant in global affairs.

Monday, January 28, 2008 Hans Peter Schmitz

The core assumptions

What realists and institutionalists share:

States are the main actors in global affairs. States are rational and unitary actors. States seek security and material gains. Anarchy is the main obstacle to

cooperation.


Arms race: A Prisoner’s Dilemma

States are rational actors with clear preference orderings: Preference Ordering: (4,1) > (3,3) > (2,2) > (1,4) (4,1): the other cooperates, you don’t (more

security/power for you, less for the other party) (3,3): both cooperate (security for both, along with lower

costs) (2,2): both defect (security for both, but higher costs) (1,4): you cooperate, the other defects (less

security/power for you, more for the other).Monday, January 28, 2008 Hans Peter Schmitz

Solving the Prisoners’ Dilemma: Liberal institutionalism

Cooperation under anarchy (Nau, p. 17):

Communication Common problems/goals Technological change

Strategies: ‘tit-for-tat’ and reciprocity/creation of international institutions


Challenging realism (modestly..)

Neorealism: Anarchy among states Institutionalism: The harmful effects of anarchy

are slowly replaced by interdependence among states

While anarchy means the absence of a (world) government, it does not necessarily mean the absence of (self-regulated) governance.


A liberal perspective: interdependence

Shared problems > interdependence > cooperation > institutions > peace and security

Define interdependence: “a reciprocal relationship between independent entities”


Security strategies: trade and democracy, not deterrence

Create international institutions Build trust among states

Use trade to spread democracy and wealth Trade creates more interdependence and makes war

less likely


Cooperation under anarchy

Institutionalism shares many core assumptions about international politics with neorealism: Structural theory of IR (system level; third image) States as the dominant actors (units) States as unitary and rational actors

But institutionalists come to different, more optimistic conclusions: Interdependence among states creates incentives to cooperate

and create forms of governance (not world government), such as

intergovernmental organizations.


Rational cooperation

States cooperate, because it is in their best interest. They rationally maximize gains by working with other states.

Cooperation is always the result of a state’s desire to do so.

Neoliberal institutionalism: states cooperate because it is in their best interest.

Sociological institutionalism: states cooperate because their identity has been shaped by NGOs and IGOs.


Explaining cooperation

Can states learn to cooperate under anarchy? Yes, when they use institutions to promote their

interests:

Reciprocity (cooperation learned) Public goods (cooperation required)


The institutionalist argument

Interdependence creates incentives to build institutions. Institutions reinforce and facilitate cooperation and increase interdependence.

Interdependence creates incentives to build institutions. Institutions reinforce and facilitate cooperation and increase interdependence.

Repeated interactions among states create trust.States learn in interactions that cooperation pays off.

Repeated interactions among states create trust.States learn in interactions that cooperation pays off. Despite prevailing anarchy,

states are capable of rationally taming the security dilemma. How?

Despite prevailing anarchy, states are capable of rationally taming the security dilemma. How?

InterdependenceInterdependence

CooperationCooperation

InstitutionsInstitutions


Positive feedback

Interdependence and Cooperation: Institutionalism Interdependence and Cooperation: Institutionalism

Economic well-being

InterdependenceStates

Power

International Institutions

From cooperation to securityFrom cooperation to security

The International System

Cooperation

Security and peace


What institutions doWhat institutions do

Provide an arena for negotiations

Spread the costs of cooperation evenly across all participants

Deter free riding/defection.

Result: Creation of greater trust among states

Monitor the compliance with agreements

Provide information and increase transparency

>>> Lower transaction costsMonday, January 28, 2008 Hans Peter Schmitz

Role of institutions

International institutions are instrumental in facilitating cooperation by: Lowering transaction costs/providing an arena

for cooperation. Providing information and transparency. distributing the costs of cooperation evenly. monitoring compliance with agreements. providing impartial adjudication.


Why do states cooperate?

1. Because they are part of a social system creating repeated interactions with others (Reciprocity).

2. Because they find themselves in situations, where desired goods can only be created and maintained collectively (Public Goods).


1. Reciprocity

Prisoner’s Dilemma: Non-cooperation can pay in the short-term, but reciprocity and iteration create incentives for rational actors to cooperate.

Cooperate Defect

Cooperate 3,3 1,4

Defect 4,1 2,2Monday, January 28, 2008 Hans Peter Schmitz

Reciprocity under anarchy

Cooperation is difficult, but not impossible to achieve under anarchy.

Reciprocity helps to create order in the absence of a central authority.

PD games are prevalent in IR and states can use a tit for tat strategy to entice cooperation in repeated interactions.

International institutions can facilitate the emergence of cooperation among states.


2. Collective/Public Goods

Reciprocity teaches actors to cooperate. Public Goods are generally desirable, but

their maintenance requires cooperation. Tragedy of the Commons

Economic Theory: Market Failures Collective or Public Goods (1) Externalities (2)Monday, January 28, 2008 Hans Peter Schmitz

What are public goods?

Collective goods require cooperation for their implementation and maintenance. Examples: Ozone layer, the oceans, the

rainforests, clean water and rivers, collective security, free trade, etc.

Access to public goods is not restricted, they are not traded in a market: Increased use does not always lead to increased prices.


Tragedy of the Commons

Public goodPublic good

Individual choiceIndividual choice

Collective lossCollective loss

Consumption can not be restricted. Good is not traded in the market place.

Consumption can not be restricted. Good is not traded in the market place.

Individuals are in the short run better off exploiting the resource (before someone else does)

Individuals are in the short run better off exploiting the resource (before someone else does)

Rational action leads to irrational outcome:

the group as a whole is worse off: short-term individual gain vs. long-term collective loss

Rational action leads to irrational outcome:

the group as a whole is worse off: short-term individual gain vs. long-term collective loss


Individual vs. collective rationality

Problem: Everyone has individually the incentive to exploit (beyond the carrying capacity), which creates collectively a sub-optimal outcome (destruction).

Free-riding aggravates the problem by increasing the likelihood of defections.

Domestically, public goods are secured by state authority (punish free riders).


Absent enforcement….

Domestically, public goods are secured by state authority (provide it, level taxes, punish free riders, privatization, etc.).

Internationally, a hegemonic power like the United States can play a similar role.

But in the absence of central authority, states have to cooperate on an equal basis to create desirable public goods and protect them.

From Public Goods to Cooperation

If actors realize that maintaining the public good is preferable to destroying it, they will have an incentive to cooperate.

International institutions are instrumental in facilitating cooperation by: providing an arena for cooperation. distributing the costs of cooperation evenly. “teaching” about public good problems. monitoring subsequent agreements.

Extending institutionalism to the domestic: liberalism

Institutionalism can explain, why cooperation is possible, even under anarchy. However, it can not by itself identify the sources of interdependence.

The more ties exist among societies, the more instances of interdependence and collective action.

From institutionalism to liberalism


From institutionalism to liberalism

What are some of the sources of interdependence? Interactions between societies across state borders

Economic liberalism (market-driven): Trade and economic growth, market-driven

Social liberalism (not-for-profit): Interactions between societies (student exchanges, travel, remittances)

Democratic liberalism (principled): Recognition of the other as similar.

. Monday, January 28, 2008 Hans Peter Schmitz

Example: Economic liberalism

In contrast to the (neo-)realist claim that states are functionally similar, economic liberalism focuses on differences in geography, natural resources, and economic production.

David Ricardo’s (1772-1823) theory of “comparative advantage”

Specialization and production and subsequent trade allows countries to increase domestic wealth.


What is “comparative advantage”?

If country A is relatively better at making wine, then it makes sense to put more resources into wine production, and to export some of the wine to pay for imports. Country A does not have to be the best in producing wine (absolute advantage), but only relatively better than others in order to gain from trade.

The gains follow from specializing in those activities which, at world prices, the country is relatively better at.


Defining neoliberal instiutionalism

Institutionalism:: An approach to international relations, which highlights interdependence and the role of institutions in facilitating cooperation among states (third image).

Liberalism:: An approach to international politics, which highlights the role of domestic actors shaping state preferences (second image).

Neoliberal institutionalism: A theory bringing together institutionalism and liberalism. The “neo” indicates a newer version, which goes beyond the idealistic/liberal roots of the 18th and 19th century. Monday, January 28, 2008 Hans Peter Schmitz

IR theories and institutions

Realism Instruments of powerful states

Liberal Institutionalism Arenas for inter-state cooperation

Idealism/Constructivism Actors independent of states


Summary

Anarchy does not necessarily create violent conflict.

States can learn to cooperate, despite incentives against it.

Institutions help states to realize cooperation benefits.

Domestic interests (liberalism) explain, why states look for cooperation in the first place.

Weakness: explain power politics and the role of norms. Monday, January 28, 2008 Hans Peter Schmitz

Documents

Three perspectives on international politics IR theories: Institutionalism