IS405 Lecture: Neo-Liberalism §

Class: IS405 Created Time: October 18, 2021 2:10 PM Database: Class Notes Database Last Edited Time: December 29, 2021 7:57 PM Provided Materials: IFL_IS405_Neoliberalism.pdf Type: Lecture

• Why is it a branch of liberalism instead of Realism?
  • It takes from Neo-Liberal economic order
  • Neo-Liberalism is the middle ground between Liberalism and Realism that focuses on economic aspect
• Neo-Liberalism focuses on change in the world in the 3 revolutions
  • Revolution in Information Technology: the way we store, process, and use information has changed
  • Revolution of Transportation: quickness of travel around the world
  • Revolution of Communication: internet, networks makes the world contact each other easier
• These revolution makes anarchy harsher: if one state is affected, it can be felt everywhere ⇒ new world order
  • States/human are in nature good, but the international system is what corrupts them

Major Concepts §

1. Cumilative Progress: the progress of humanity is ever accumilating and will only get better
2. Prisoner’s Dilemma: talks about the barriers to cooperation (Game Theory)
   • The optimal solution for mutual benefits is cooperating and remaining silent in the interrogation room
   • Uncertainty: Mistrust & Fear of being cheated are barriers of cooperation
   • Prisoner’s Dilemma game theory is outdated
     • Its harder to cheat: Now states have ways to monitor each other’s compliance with agreement using technology (satellite imagery)
     • Prisoner’s Dilemma only see cooperation happening once
       • If you cheat, your reputation of cooperation and trustworthyness drops for future cooperation and interactions
3. Collective Action Problem: its hard for a group of actors to get together to solve collective problem
   • Free ride: as the problem if solved benefits everyone and doesn’t matter who contributed, states have incentive to wait for others to solve it for them instead of helping (global warming)
     • If everyone free rides the objective will fail because it does need contributions
4. Hegemonic Stability: if a hegemon achieved preponderance of power and brings stability, they discipline those who don’t comply with the system (Hegemonic Stability Theory)
   • US established public goods for its own benefits, but It benefited everyone in the system (international institutions)
   • Hegemon will solve barriers to cooperation

💡 The West’s world bank or international financial institution aren’t criticized because

• The west controls the world media
• US came first and is in power
• China’s Belt and Road Initiative is the same thing but is hated because its not from the west

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• International Regimes are created by states to deal with challenges Anrachy brings to cooperation
  • not as bad as Realism says

Major Assumptions of Neo-Liberalism §

Similar Assumptions to Realism §

1. State is an important actor in international politics.
   • States can overrule actions of IOs.
   • States can affect the design of IOs.
   • States create IOs to serve their own interests.
   • States are rational cost benefit actors that try to gain maximum interest before everyone else’s interest
2. Consideration of relative power could play a major role in international relations.
   • States care about relative power more than anything else.
   • Relative power affects states’ bargaining power.
3. Anarchical International System: No overarching authority.
   • There is nothing to punish cheaters.
   • States look out for their own security.
   • IOs are instruments of the states, not world government

Still Progress in Cooperation is Possible §

• Neo-Liberalism argues that even if these major realist assumptions are accepted, that does not necessarily lead to the grim scenario that realism predicts.

1. State is an important actor in international politics.
   • States create IOs, but IOs will persist long after its goal has been achieved. 💡 NATO still exist when the Cold War is over, It’s still useful for other purposes
   • Due to the technical expertise provided by IOs or sometimes by virtues of the sheer activities that have to be managed, states must delegate authority to IOs and grant them some autonomy.
2. Consideration of relative power could play a major role in international relations.
   • But some issues are not security-related and do not directly affect relative power.
   • IOs can “link issues” together for states to bargain, thus avoiding any single issue that significantly affect then relative power balance.
3. Anarchical International System: No overarching authority.
   • There is nothing to punish cheaters, but only if the cooperation is a one-off event. If there is iteration, cheating actually has a cost because no one will work with the cheater. Cheaters stand to lose.

• There are several barriers to cooperation:
  • Possibility of Cheating
  • Free-riding
  • Self-interested states
  • Competition for relative power
• Neoliberals offer several solutions to these problems:
  • Iteration of interactions and transparency: offered by institutions
  • Advance in communication technology allows states to monitor each other, detect and punish cheaters.
  • IOs provide forum for frequent and regular meetings, allowing states to negotiate to find common ground and work for beneficial gains.

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• Neoliberals study how international organization are created, for what purpose, and how they are designed to mitigate the adverse effects of anarchy. They identify three issues:
• Bargaining:
  • Create common rules and procedures.
  • Issue-linkage.
  • Regional vs. global institutions.
  • State’s leaders can sometimes prefer apparently legally binding rules to deflect the difficulties involving domestic opinion.
    • States would rather listen to unbiased IO instead of other states because public criticism
• Defection:
  • States want to lock one another into the institutional arrangements and the agreements that have been signed.
  • IOs deal more with how to manage cheating then how to prevent it altogether.
  • IOs create an incentive structure to increase compliance and strengthen enforcement: rewards, sanction, issue-linkage…
• Autonomy:
  • Technical expertise and information: more trust worthy than ideologically biased opinions of states
  • Agenda-setting.
  • Management of global daily affairs