Anarchy and the limits of cooperation: a realist critique of the newest liberal institutionalism Joseph M. Grieco

Anarchy and the limits of cooperation: a realist critique of the newest liberal institutionalism Joseph M. Grieco

Realism has dominated international relations theory at least since World War Two. For realists, international anarchy fosters competition and conflict among states and inhibits their willingness to cooperate even when they share common interests. Realist theory also argues that international institutions are unable to mitigate anarchy's constraining effects on inter-state cooperation. Realism, then, presents a pessimistic analysis of the prospects for international cooperation and of the capabilities of international institutions.

The major challenger to realism has been what I shall call liberal institutionalism. Prior to the current decade, it appeared in three successive presentations-functionalist integration theory in the nineteen forties and early nineteen fifties, neofunctionalist regional integration theory in the nineteen fifties and nineteen sixties, and interdependence theory in the nineteen seventies. All three versions rejected realism's propositions about states and its gloomy understanding of world politics. Most significantly, they argued that international institutions can help states cooperate. Thus, compared to realism, these earlier versions of liberal institutionalism offered a more hopeful prognosis for international cooperation and a more optimistic assessment of the capacity of institutions to help states achieve it.

International tensions and conflicts during the nineteen seventies undermined liberal institutionalism and reconfirmed realism in large measure. Yet, that difficult decade did not witness a collapse of the international system, and, in the light of continuing modest levels of inter-state cooperation, a new liberal institutionalist challenge to realism came forward during the early nineteen eighties. What is distinctive about this newest liberal institutionalism is its claim that it accepts a number of core realist propositions, including, apparently, the realist argument that anarchy impedes the achievement of international cooperation. However, the core liberal arguments-that realism overemphasizes conflict and underestimates the capacities of international institutions to promote cooperation-remain firmly intact. The new liberal institutionalists basically argue that even if the realists are correct in believing that anarchy constrains the willingness of states to cooperate, states nevertheless can work together and can do so especially with the assistance of international institutions.

This point is crucial for students of international relations. If neoliberal institutionalists are correct, then they have dealt realism a major blow while providing the intellectual justification for treating their own approach, and the tradition from which it emerges, as the most effective for understanding world politics.

This essay's principal argument is that, in fact, neoliberal institutionalism misconstrues the realist analysis of international anarchy and therefore it misunderstands the realist analysis of the impact of anarchy on the preferences and actions of states. Indeed, the new liberal institutionalism fails to address a major constraint on the willingness of states to cooperate which is generated by international anarchy and which is identified by realism. As a result, the new theory's optimism about international cooperation is likely to be proven wrong.

Neoliberalism's claims about cooperation are based on its belief that states are atomistic actors. It argues that states seek to maximize their individual absolute gains and are indifferent to the gains achieved by others. Cheating, the new theory suggests, is the greatest impediment to cooperation among rationally egoistic states, but international institutions, the new theory also suggests, can help states overcome this barrier to joint action. Realists understand that states seek absolute gains and worry about compliance. However, realists find that states are positional, not atomistic, in character, and therefore realists argue that, in addition to concerns about cheating, states in cooperative arrangements also worry that their partners might gain more from cooperation than they do. For realists, a state will focus both on its absolute and relative gains from cooperation, and a state that is satisfied with a partner's compliance in a joint arrangement might nevertheless exit from it because the partner is achieving relatively greater gains. Realism, then, finds that there are at least two major barriers to international cooperation: state concerns about cheating and state concerns about relative achievements of gains. Neoliberal institutionalism pays attention exclusively to the former, and is unable to identify, analyze, or account for the latter.

Realism's identification of the relative gains problem for cooperation is based on its insight that states in anarchy fear for their survival as independent actors. According to realists, states worry that today's friend may be tomorrow's enemy in war, and fear that achievements of joint gains that advantage a friend in the present might produce a more dangerous potential foe in the future. As a result, states must give serious attention to the gains of partners. Neoliberals fail to consider the threat of war arising from international anarchy, and this allows them to ignore the matter of relative gains and to assume that states only desire absolute gains. Yet, in doing so, they fail to identify a major source of state inhibitions about international cooperation.

In sum, I suggest that realism, its emphasis on conflict and competition notwithstanding, offers a more complete understanding of the problem of international cooperation than does its latest liberal challenger. If that is true, then realism is still the most powerful theory of international politics.

One. Realism and liberal institutionalism

Realism encompasses five propositions. First, states are the major actors in world affairs. Second, the international environment severely penalizes states if they fail to protect their vital interests or if they pursue objectives beyond their means; hence, states are "sensitive to costs" and behave as unitary-rational agents. Third, international anarchy is the principal force shaping the motives and actions of states. Fourth, states in anarchy are preoccupied with power and security, are predisposed towards conflict and competition, and often fail to cooperate even in the face of common interests. Fifth, international institutions affect the prospects for cooperation only marginally.

Liberal institutionalists sought to refute this realist understanding of world politics. First, they rejected realism's proposition about the centrality of states. For functionalists, the key new actors in world politics appeared to be specialized international agencies and their technical experts; for neofunctionalists, they were labor unions, political parties, trade associations, and supranational bureaucracies; and for the interdependence school, they were multinational corporations and transnational and transgovernmental coalitions. Second, liberal institutionalists attacked the realist view that states are unitary or rational agents. Authority was already decentralized within modern states, functionalists argued, and it was undergoing a similar process internationally. Modern states, according to interdependence theorists, were increasingly characterized by "multiple channels of access," which, in turn, progressively enfeebled the grip on foreign policy previously held by central decision makers.

Third, liberals argued that states were becoming less concerned about power and security. Internationally, nuclear weapons and mobilized national populations were rendering war prohibitively costly. Moreover, increases in inter-nation economic contacts left states increasingly dependent upon one another for the attainment of such national goals as growth, full employment, and price stability. Domestically, industrialization had created the present "social century": the advanced democracies (and, more slowly, socialist and developing countries) were becoming welfare states less oriented towards power and prestige and more towards economic growth and social security. Thus, liberals rejected realism's fourth proposition that states are fundamentally disinclined to cooperate, finding instead that states increasingly viewed one another not as enemies, but instead as partners needed to secure greater comfort and well-being for their home publics.

Finally, liberal institutionalists rejected realism's pessimism about international institutions. For functionalist theory, specialized agencies like the International Labor Organization could promote cooperation because they performed valuable tasks without frontally challenging state sovereignty. For neofunctionalist theory, supranational bodies like the European Economic Community were "the appropriate regional counterpart to the national state which no longer feels capable of realizing welfare goals within its own narrow borders." Finally, interdependence theory suggested that "in a world of multiple issues imperfectly linked, in which coalitions are formed transnationally and transgovernmentally, the potential role of international institutions in political bargaining is greatly increased."

Postwar events, and especially those of the nineteen seventies, appeared to support realist theory and to invalidate liberal institutionalism. States remained autonomous in setting foreign policy goals; they retained the loyalty of government officials active in "transgovernmental networks"; and they recast the terms of their relationships with such seemingly powerful transnational actors as high-technology multinational corporations. Industrialized states varied in their economic performance during the nineteen seventies in the face of similar challenges (oil shortages, recession, and inflation). Scholars linked these differences in performance to divergences, and not convergence, in their domestic political-economic structures. A number of events during the nineteen seventies and early nineteen eighties also demonstrated that the use of force continued to be a pervasive feature of world politics: increases in East-West tensions and the continuation of the Soviet-American arms competition; direct and indirect military intervention and counter-intervention by the superpowers in Africa, Central America, and Southwest Asia; and the Yom Kippur and Iran-Iraq wars. International institutions appeared to be unable to reshape state interests; instead, they were often embroiled in and paralyzed by East-West and North-South disputes. Finally, supranationalism in West Europe was replaced by old-fashioned intergovernmental bargaining, and the advanced democracies frequently experienced serious trade and monetary conflicts and sharp discord over economic relations with the Soviet Union.

And yet, international cooperation did not collapse during the nineteen seventies as it had during the nineteen thirties. In finance, private banks and governments in developed countries worked with the International Monetary Fund to contain the international debt crisis. In trade, the advanced states completed the Tokyo Round negotiations under the General Agreement on Tariffs and

Trade. In energy, the advanced states failed to coordinate responses to the oil crises of nineteen seventy-three to nineteen seventy-four and nineteen seventy-nine, but cooperated effectively-through the International Energy Agency-following the outbreak of the Iran-Iraq war in nineteen eighty. Finally, in high technology, the European states initiated and pursued during the nineteen seventies a host of joint projects in high technology such as Airbus Industrie, the ARIANE rocket program, and the ESPRIT information technology effort. Governments had not transformed their foreign policies, and world politics were not in transition, but states achieved cooperation through international institutions even in the harsh nineteen seventies. This set the stage for a renewed, albeit truncated, liberal challenge to realism in the nineteen eighties.