Neo-Liberalism §

• Neo-Liberalism or Neo-Liberal Institutionalism is a newer take on Liberalism describing the post-world-war world
  • argue that Anarchic world can have cooperation with help from International Organizations
  • Neo-Liberalism is a continuation of using Behaviouralism as a source of knowledge

Assumptions ¹ §

1. State is an important actor in international politics.
   • States are rational cost benefit actors that try to gain maximum self-interest before everyone else’s interest
   • States can
     • creates IO to serve their interests
     • affect the design of IOs.
     • overrule actions of IOs
   • How cooperation happens
     • States create IOs, but IOs will persist long after its goal has been achieved (NATO)
     • States have to give authority to IOs to use its technical expertise to manage activities states cannot all handle
2. Consideration of relative power could play a major role in international relations.
   • Relative Power:
   • States care about relative power more than anything else.
   • Relative power affects states’ bargaining power.
   • How cooperation can happen
     • 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 in one-off relations
   • States look out for their own security.
     • Relations are mostly iterative or repeating ⇒ no one will work with a cheater ⇒ cheating has a cost
   • IOs are instruments of the states, not world government

Characteristics §

• More state-centric view of IR than Liberalism ²
  • States are rational actors
  • States are selfish but mutual benefit is better than self-interest
  • States have Incentive to Cooperate: to maximize absolute gain
• There are several barriers to cooperation: ¹
  • Possibility of Cheating
  • Free-riding
  • Self-interested states
  • Competition for relative power
• Neoliberals offer institutions as solutions to these problems ¹
  • 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.
• 1. The Cumulative Progress of humanity will accumulate and will only get better ¹
• 2. Prisoner’s Dilemma: talks about the barriers to cooperation (Game Theory) ¹
  • Realism: 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 due to free riding ¹
  • 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 Theory: if a hegemon achieved preponderance of power and brings stability, they discipline those who don’t comply with the system ¹
  • US established public goods for its own benefits, but It benefited everyone in the system (international institutions)
  • Hegemon will solve barriers to cooperation (prefer unilateralism?)

Functions of IO In Mitigating Anarchy’s Effects on Cooperation §

• 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

Four Strands of Neo-Liberalism ³ §

• Sociological Liberalism: transnational relations, between people, groups, and organizations between nations.
• Interdependence Liberalism: interdependent countries rarely voluntarily get in conflict with one another.
• Institutional Liberalism: formal and informal institutions can facilitate states’ relations, cooperation, and collective security.
• Republican Liberalism: liberal democratic states don’t go to war with each other

Sub-Topics to Neo-Liberalism §

• What is the cause of the Continued Relevancy of IOs according to Neo-Liberalism
• Theoretical Perspectives on International Institutions
• Theoretical Perspectives on Game Theory

References §

Footnotes §

1. IS405 Lecture Neo-Liberalism ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷

2. Chapter 2 The Theoretical Foundation of Global Governance (main) ↩

3. Chapter 2 Theories of IR ↩