Literature Review 2

R o

B E

R T

o. K

E o H

A N

E

/

From Interdependence and Institutions

161 R

O 8 E

R T

o. K

E o H

A N

E

/ From

Interdependence and Institutions 160

for w ars w

ith nonliberals w ould disappear as nonliberal

regim es disappeared.

. .

5. K

ant's foedus pacificum 1s thus neither a padum

pacis( a single peace treaty) nor a civitas gentiu~ (a "".orld state). H

e appears to have anticipated som eth11:g like a

less form ally institutionalized L

eagu~ of N ~t1ons or

U nited N

ations. O ne could argue that m

practice, th~se tw

o institutions w orked for liberal states and only for lib-

eral states, but no specifically liberal "pacific union'' w as

institutionalized. Instead, liberal states have behaved for the past 180 years as if such a K

antian pacific union and treaty of perpetual peace had been signed.

6. In the M

etaphysicsof M orals (the R

echtsleh~e)Kant seem

s to w rite as if perpetual peace is only an epistem

o- logical device and, w

hile an ethical duty, is em pirically

m erely a "pious hope" (M

1;f, pp. ~64:"75)-~~ough e:7en here he finds that the pacific um

on 1s not rm

practica- ble" (M

M , p. 171). In the U

niversal History (U H

), K ant

w rites as if the brute force of physical nature drives m

en tow

ard inevitable peace .... 7.

For a com parative discussion of the political foun-

dations of K ant's ideas, see Shklar (1984, pp. 232-38).

R eferences

B abst, D

ean V . 1972. A

Force f6r Peace. Industrial R

esearch.14 (A pril): 55-58.

B izezinski, Z

bigniew , and Sam

uel H untin~~n.

1963. P

oliticalPow er: USA

/U SSR

. New Y

ork: Viking Press. C

arnesale, A lbert, Paul D

oty, Stanley H offm

ann, Sam uel

H untington, Joseph N

ye, and Scott Sagan. 1983. Living W

ith N uclear W

eapons. New Y

ork: B antam

. D

oyle, M ichael W

. 1983a. K a1_1t,

L iberal L

egac~es, a~d Foreign A

ffairs: Part 1. P hilosophyand P

ublic Affairs 12: 205-35.

D oyle, M

ichael W . 1983b. K

ant, L iberal L

egac~es, a~d Foreign A

ffairs: Part 2. P hilosophyand P

ublic Affairs 12: 323-53.

H um

e, D avid. 1963. O

f the B alance of Pow

er. E ssay~:

M oral, Political, and Literary. Oxford: O

xford U m

- versity Press.

, . .

. . K

ant, Im m

anuel. 1970. K ants P

olitical W ritings. H

ans R

eiss, ed. H . B

. N isbet, trans. C

am bndge: C

am -

bridge U niversity Press.

K eohane, R

obert, and Joseph N ye. 1977. Pow

er and Inter- dependence.Boston: L

ittl~ B row

n. . . .

N eustadt, R

ichard. 1970. A lliance P

olitics. N ew

Y ork.

C olum

bia U niversity Press.

Polanyi, K arl. 1944. The G

reat Transform ation. Boston:

B eacon Press.

R um

m el, R

udolph J. 1983. L ibertaria1:ism

and I1_1terna- tional V

iolence. Journal of C onflict Resolution, 27:

27-71. Schum

peter, Joseph. 1950. C apitalism

, Socialism , and

D em

ocracy. New Y

ork: H arper T

orchbooks. . .

Schum peter, Joseph. 1955. The Sociology oflm

penahsm .

In Im perialism

and Social Classes. Cleveland: W orld

Publishing C o. (E

ssay originally publishe~ in 1919 .) Shklar, Judith. 1984. O

rdinary V ices. C

am bndge, M

A :

H arvard U

niversity Press. Streit, C

larence. 1938. U nion Now

: A P roposal for a F

ed- eral U

nion of the Leading D em

ocracies. New Y

ork: . H

arpers. T

hucydides. 1954. The P eloponnesia~ War.R

ex W arner,

ed. and trans. B altim

ore: Pengum .

W altz, K

enneth. 1964. T he Stability of a B

ipolar W orld.

D aedalus,93: 881-909.

W alzer, M

ichael. 1983. Spheres of Justice. New Y

ork: B asic

B ooks.

From Interdependence and Institutions

to G lobalization and G

overnance R

O B

E R

T 0.

K E

O H

A N

E

The author provides his understanding of how the w

orld w orks that is "both individua(ist ~nd _instituti~nal-

ist." H e sum

m arizes m

uch of his earlier work on interdependence ~nd subsequ~ntly on m ~tttutions and ideas

rooted in liberalism . W

ith increasing globalization (albeit in a still only partially global~zed world), he sees greater institutionalization as the w

orld becom es more like a polity w

ith governance esse~ttal {°:r~f e, ~na~ce, environm

ent, security, and other m atters of global im

port. D evising better, m

ore effective g o a institutions to serve the needs of hum

ankind is an im perative.

From P

ow er and G

overnance in a P artially G

lobalized World by R obert 0. K

eohane. C opyright ©

2002, R outledge.

R eprinted by perm

ission of T aylor &

Francis B ooks U

K .

T he ...

conception ...

of how the w

orld w orks is

both individualist

and institutionalist,

regarding institutions

both as created by hum

an action

and as structuring

that action.1 T he principal

m otor

of action in this view

is self-interest, guided by rational- ity, w

hich translates structural and institutional condi- tions into

payoffs and probabilities, and

therefore incentives. B

ut m y conceptions of self-interest and

rationality are broad ones. Self-interest is not sim ply

m aterial; on the contrary, it encom

passes one's in- terest in being thought w

ell of, and in thinking w ell

of oneself. O ne's self-interest is not divorced from

one's principled

ideas or identity but closely con-

nected w

ith them

. Furtherm

ore, not

all action

is necessarily self-interested: actions such as those

of firem en

rushing into the burning

W orld T

rade C

enter on Septem ber 11, 2001, reflect com

m itm

ent and courage rather than interest.

T he

resulting conception

of how

the w

orld w

orks is com

plex, seeking

to take

into account

subjectivity as w ell as objectivity, prim

al urges for

pow er as w

ell as institutional constraints,

princi- pled beliefs and

w orldview

s that

cannot be vali-

dated as w

ell as rational calculation.

It therefore lacks parsim

ony. T

he core of m y contribution

to this view

of the w orld has been to explore how

in- ternational

institutions operate,

in the context of

interdependence. B

ut m

y exploration of institu-

tions and interdependence has taken place in the

context of an aw areness of how

they are affected by other, broader factors. H

ence, I do not assum e that

institutions and

interdependence are

the m

ost im

portant aspects of contem

porary w

orld politics, that they som

ehow contain

the unique key to his- tory. Indeed, they only m

al<e sense if they are fit into the larger puzzle ....

From Interdependence

toInstitutional Theory O

ver thirty years ago, astute observers of the w orld

.political econom y began to com

m ent on striking in-

. creases in econom ic

connections am

ong societies

· and the grow ing role of m

ultinational corporations.

· M eanw

hile, the literature on the E uropean C

om m

u- :n.ity, pioneered

by E rnst B

. H aas, focused on how

.~conom

ic interdependence affected arrangem

ents for governance.

N ye

and I picked

up on

these them

es, beginning w

ith our edited special issue of liiternational O

rganization on transnational relations

( 1972 ), a term that w

e did not invent but that w e did

insert into the literature on w orld politics.

A t that

tim e the buzzw

ord for these changes

w as "interdependence."

In the 1970s, N ye and!

built a theory elucidating the notion of"com

plex interde- pendence:'

an ideal type for analyzing situations of m

ultiple transnational issues and contacts in w

hich force is not a useful instrum

ent of policy. W

e defined interdependence

itself m ore broadly, to encom

pass strategic issues involving force as w

ell as econom ic

ones. In our analysis, interdependence is frequently

asym m

etrical and highly political: indeed, asym m

e- tries in interdependence

generate pow er resources

for states, as w ell as for non-state

actors. P ow

er and Interdependence,published first in 1977, elaborated this theory

and applied it to fifty years of history (1920-1970) in tw

o issue-areas ( oceans and m oney)

and tw o country

relationships (U

S-A ustralia

and U

S-C anada).

T here w

ere a num ber

of gaps in our analysis, som

e of w hich w

e acknow ledged a decade

later,2 but the analysis of the relationship betw

een asym

m etrical

interdependence and pow

er contin- ues to be useful. ...

P ow

er and Interdependence contained an incipi- ent theory of institutions, in the form

of w hat N

ye and I

called an

international organization

m odel

of regim

e change (1977). B ut this theory w

as not w ell-

developed. W hat preoccupied m

e for seven years after the publication of P

ow er and Interdependence was the

puzzle of w hy states establish international regim

es- rule-oriented

institutions that lim

it their M em

bers' legal freedom

of action. In A fter H

egem ony: C

oopera- tion and D

iscord in the W orld P

olitical E conom

y (1984), I presented a theory of international

institu- tions based on rationalist theory, in particular

eco- nom

ic theories of the firm and of im

perfect m arkets.

I argued that institutions perform im

portant tasks for states, enabling them

to cooperate. In particular, insti- tutions reduce the costs of m

aking, m onitoring,

and enforcing rules,.--transaction costs-provide

inform a-

tion, and facilitate the m aking of credible com

m it-

m ents.

In this theory, the principal guarantors

of com

pliance w ith com

m itm

ents are reciprocity (in-

cluding both threats of retaliation and prom ises of re-

ciprocal cooperation) and reputation ....

M y form

ulation of institutional

theory has of- ten been referred to as "liberal institutionalism

" or

"neo-liberal institutionalis111." T

hese labels do not appeal to m

e, not just because they are aw kw

ard. M y

theory does have its roots in libetalism ...

, but the

162 R

o B E

R T

o . K

E o H

A N

E

/ From

Interdependence and Institutions

connotations ofliberalism are m

ultiple and m islead-

ing. M y theory has nothing to do w

ith the view that

com m

erce leads necessarily to peace; that-people are basically good; or that progress in hum

an history is inevitable-all

propositions som

etim es associated

w ith liberalism

. N or is it connected w

ith the view

that liberty should have priority over equality and social justice, m

uch less w ith the "neoliberalism

" of the past decade: the so-called "W

ashington C onsen-

sus" that dictated the dism antling of m

uch govern- m

ental regulation of m arkets in developing countries.

M y liberalism

is m ore

pessim istic about

hum an

nature and m ore cautious about causal connections

running from econom

ics to politics than som e ver-

sions of classical liberalism ; and I have never been a

supporter of the "W

ashington C onsensus" in its

strong neo-liberal form . Since attaching a "liberal

label" to m y perspective generates such a need for

explication, it seem s better to leave it off entirely.

"Institutionalist" is descriptive of m

y w ork,

since it em phasizes the significance of institutions

and seeks to explain them . U

sing this term is not

m eant as a claim

to intellectual hegem ony. Indeed,

there are m any other institutionalist theories, often

w ith quite different concepts, and im

plications, than m

y ow n. H

ow ever, I regard m

y ow n form

ulation as having as good a claim

to the adjective "institution- alist" as any of its com

petitors. W hen I refer below

to "institutionalist theory:' I refer to m

y ow n version of

institutionalism .

T he theory in A

fter H egem

ony was rather styl- ized: as in P

ow er and Interdependence, differences in

dom estic politics w

ere deliberately overlooked for purposes of sim

plification. T his is not to say that the

im portance of dom

estic politics w as denied: quite

the contrary. B ut the theory did not encom

pass do- m

estic politics. Indeed, the theoretical gap created by the om

ission from the theory of dom

estic politics w

as sufficiently w ide to drive m

any dissertations through it. Som

e of m y form

er students have been leaders in this effort. T

hey have analyzed the im pact

of dom estic politics on w

orld politics, in the context of a sophisticated understanding of interstate poli- tics and the roles played by international institutions and non-state actors. 3

T he fact that m

y form er students have w

ritten over a dozen books linking dom

estic politics and in- ternational

relations is not only gratifying to m e

personally; it illustrates a broader aspect of A m

erican graduate education that is often overlooked. T

he

resum es of scholars norm

ally include only their ow n

w ork. B

ut the puzzles that they recognize but fail to address m

ay be as im portant to their ow

n students, and to their field as a w

hole, as their ow n contribu-

tions. Paths that lead through open doors m ay beckon

m ore strongly to aspiring scholars than im

posing intellectual edifices, no m

atter how im

pressive. A nd

the explorations of graduate students instruct their professors. G

raduate education is a process of inter- change, not m

erely of transm ission.

T he theory developed in A

fter H egem

ony and closely related w

ritings w as strongly affected by m

y research on trade, m

onetary, and energy issues-all questions of m

aterial self-interest in w hich reciproc-

ity played a substantial role. O n the w

hole, the sam e

fram ew

ork fits environm

ental issues quite

w ell.

Perhaps this congruity should not be surprising, since sim

ilar questions arise of cross-border externalities and econom

ic com petition. O

n both sets of issues, m

onitoring of agreem ents is im

portant and is carried out largely under the auspices of international insti- tutions, w

hile enforcem ent takes place through state

action, legitim ated through such institutions.

E nvironm

ental issues do have a m oral dim

en- sion that is largely m

issing from the econom

ic ques- tions

em phasized in A

fter H egem

ony.Principled ideas, concerned w

ith right and w rong, play a signif-

icant role in m obilizing publics on issues such as

ozone depletion, pollution of the oceans, and global w

arm ing. Such principled ideas play an even m

ore prom

inent role on questions of hum an rights. A

nd causal ideas, specifying connections betw

een cause and effect, are im

portant in policy debates in both issue-areas, as w

ell as in other arenas of w orld politics.

Intrigued by the role of ideas, and their connec- tions to rationalistic fram

ew orks of analysis, Judith

G oldstein and I began to explore the role of ideas on

policy in the early 1990s. The role of ideas, of course, has been a long-standing them

e in the w ork of a

num ber of distinguished students of international

relations, including m y ow

n m entor, Stanley H

off· m

ann, H edley B

ull, and M artin W

ight. G oldstei11

and I, how ever, w

ere particularly interested in rec- onciling theories of rational choice, w

ith w hich w

e w

ere sym pathetic, w

ith our view that ideas are sig

0

nificant in w orld politics. W

e distinguished am ong

three types of beliefs: w orldview

s, principled beliefs, and causal beliefs. W

orldview s are illustrated by re:

ligion, principled beliefs by doctrines of hum

ail rights, and causal beliefs by K

eynesian or m onetarist

R O

B E

R TO

K

E O

H A

N E

/ F

· rom

Interdependence and Institutions 163

theories ~f m acroeconom

ics. A ll three types of belief

by the reciprocity-based

logic of institutionalist

affect policy, but they do so differently. theory: states do not retaliate for hum

an rights vio- G

oldstein and I w ent on to suggest that ideas

lations by others by abridging hum an rights.them

- exert effects along three causal pathw

ays· ( 1) "

d " ( )

. as

selves. O n other issues, such as the use of w

eapons of r~a m

aps,_ . 2. as focal points w here there is no

1'.1ass destruction, principled · ideas and organiza-

um que eqm

hbnum , and (3) as em

bedded el t

f .

. .

em en s

t10nal cultures seem to have played an im

portant a o m

st1tut1ons. O ur essay is not reprinted h

b h

. .

ere ot

b role in accounting

for behavior. "C onstructivist"

ecause 1t 1s w ell-know

n and easi"ly 'bl

d .

access1 e, an w

riting on w orld politics has em

phasized, as did because It form

s an integral part of an edited 1

h' h · vo um

e w

ork draw ing on psychology earlier, the im

portance to w

IC It served as an introduction

B ut

th. k

. .

. m

y m

- of subjectivity: the beliefs by w

hich our im ages of

m g sm

ce t~e ~arly 1 ~90s has been deeply affected by the _w

orld are constructed ·in shaping w orld politics.

m y appreciation, heightened by w

ork on this proj- M

aJor w ork on the role of ideas has also been done

ect, of the role of ideas in w orld politics. A

s noted by such scholars as G

oldstein; M artha Finnem

ore, below

, m y recent w

ork on international law seek t

M argaret K

eck, Friedrich K ratochw

il, H enry R

. N au,

explore how t?e ideas incorporated in legal thin~n;

m y form

er student D aniel Philpott, T

hom as R

isse, affect persuasion and pr~ctice in w

orld politics. John G

erard R uggie, and K

athryn Sikkink. A

s these rem arks im

ply, I disagree w ith th

frequent_ly-heard critic~sm that the role of ideas i:

neces_sanly de-em phasized by a view

of the w orld

Institutional and R ealist Theory

that is on_ an individualist ontology and a

It should be clear from this discussion that I do not

neo-pos1~1v1stepistem ology. It is individuals w

ho claim

that institutional theory is a com

prehensive have beliefs, although of course these beliefs are

theory of w orld politics. I still believe it to be supec

form ed through social processes and a

d ,

re perpetu- rior to a crude

realism that

fails to incorporate ate.

thr?ug~ societies that outlive individuals. A s

international institutions as im

portant entities. B

ut social scientists, w

e can investigate the .

f th

b ·. im

pact o as Peter K

atzenstein, Stephan K rasner and I have

ese _ehefs through theoretical and em pirical w

ork argued, a stylized com

petition betw een realism

and explonng how

variations in ideas-betw een

indivi/ institutionalism

is not

particularly. conducive to

, ~als a~d betw

een groups-help to account for varia-

~ew insights, now

, in our field. Sophisticated ver- tions I~ behavior. O

f course w e have to be alert to the

s10ns of realism -both

of the classical and struc- :· ·operat1?n of social norm

s and practices, and shared tural varieties-share

a great deal w ith m

y version } m

~m ?r~es-s_o w

e should not adopt an unsocialized, ?finstitutionalism

, epistem

ologically and ontolog- i:.,.at~m

1st1cnot~on of hum an beings. M

an, as A ristotle

1cally. They are all concerned w ith issues of pow

er, J\'pom

ted out, is a_ so:i~l anim al. B

ut in m y view

w e

including state pow er. Indeed, it is one of the silliest

kshoul~ focus on m d1v1duals as the principal unit of

criticism s of m

y ow n w

ork that it ignores pow er, as

J!'~nalys~s,as long as w e keep in m

ind their interactions the titles of m

y m ajor w

orks from the

1970s and r,1P.s~c1ety,. and the historical and cultural contexts

1980s m ake clear. 4 R

ealism and institutionalism

, in

~;!W ithmw

hich they live. T his m

eans that the anal st m

y form ulation,

hre actor-oriented, individualist

~oes b~ck and forth betw een individual and soc/ty

theories w hose practitioners

follow neo-positivist

feg~r~m ~ ~oth serious_ly,but alw

ays seeking to ex: standards of evidence. T

hey are by no m eans in-

llam

m d1v1dual b,ehav10r, and aggregate it upw

ard com

m ensurate paradigm

s; rather they are labels for ;:t;a~herthan to theorize about society w

ithout consid: loosely grouped interpretations

that differ along a rm

g :vhether the resulting propositions are consis-

variety of dim ensions.

T hese dim

ensions include

J11.tw ith ~atterns of individual behavior. In this w

ay w

e-can give th

. .

' the intensity of com

petition in w

orld politics, the ; ' .

our eones m

icro-foundations and

av01d the· 'fi

· role of rules and norm

s, the nature of inform

ation ·i,, . .

re1 cat10n of abstract concepts or the available to actors, and the linkages and separations

,c·;os1tm gof a ~ollective consciousness for w

hich there betw

een issue-areas. ~.~,m

s to be little scientific evidence. R

ealism is a useful "first cut" at understanding

,1,,P.·T he m

ost im portant w

ork on the role of ideas w

orld politics, but its vision of the field is too lim -

1i:orl~ ~olitics has bee~ done not by m

e but others. ited to m

ake it a good com prehensive

doctrine. T

oo .:'

politics of hum an nghts are not w

ell-explained m

uch is left out:

not only institutions,

but also

1 i Ro s E

R T o .

K E

o H A

N E

/ From Interdependence and Institutions

R o B

E R

T O .

K E

o H A

N E

/ From Interdependence and Institutions

164 165

transnational relations, dom

estic politics and the role of ideas. R

ealism is long on structure, short on

process. D

ue to its lim itations, realism

is a poor candi- date to correct the flaw

s in m uch institutionalist

w ork that have been noted above: failure to theorize

dom estic politics, and an under-em

phasis on the

role of ideas. R ealists cannot

correct these flaw s

because it shares them , even in a m

ore pronounced w

ay. W altz's Theory of International P

olitics (1979) abstracts aw

ay from dom

estic politics, just as m y

ow n book of the m

id-1980s, A fter H

egem ony(1984)

does. T his is not to say that either Professor W

altz or I w

ere unaw are of its im

portance: W altz, for

instance, w rote a w

hole book on the subject before developing

his system

-oriented theory

(W altz

1967). B ut it is difficult to construct a theory that

sim ultaneously takes into account relations betw

een states and relations w

ithin them , and that rem

ains parsim

onious. 5 C

lassical realism -as

in the hands of C arr and

M orgenthau-has

discussed the role of ideas, but m

ore recent structural realism , as notably developed

by W altz and R

obert G ilpin, has om

itted it. T he lack

of extensive and sophisticated understanding of the role of ideas in w

orld politics-w hich

w ould have to

include N azism

, com m

unism and fundam

entalism

as w ell as hum

an rights thinking and environm ental

aw areness-ham

pers us

particularly now

in

the w

ake of the .Septem ber 11, 2001 attacks on the

U nited States. T

hese attacks illustrate the role of religion-overlooked

by both

of these

secular approaches-in

w orld politics. W

hat N ye labeled

"soft pow er" in the 1990s is not a m

onopoly of secu- lar society, m

uch less of the U nited States ....

T he im

plication of these rem arks is that tw

o m

ajor trends in the study of w orld politics during the

1990s need to be continued and extended: the analy- sis of how

dom estic and w

orld politics interact, and the investigation of the role of ideas in w

orld politics. T

he brand of liberalism represented by the w

ork of A

ndrew M

oravcsik and A nne-M

arie Slaughter is a valuable w

ay to analyze the form er; constructivist

theory offers prom ise in understanding how

ideas m

atter. In breaking into the theoretically com

placent w

orld of realist thinking, it w as expedient to em

pha- size the distinctive value of institutionalist

theory, even w

hile recognizing the contributions of realism .

A nd in the heat of subsequent controversy, it has

been all too easy to overstate differences betw een

institutional and

realist theory, and

perhaps to

over-em phasize the superiority of the form

er. N o

perspective has a m onopoly on w

isdom : realism

, theories focusing on dom

estic politics, and theories em

phasizing subjective beliefs all have a role to play. C

ontestation betw

een different

approaches can

play a positive role in social science scholarship, pushing advocates to sharpen their theories and to test them

in m ore convincing w

ays. B ut if the con-

tending approaches becom e conflicting schools of

w arring scholars, w

ith graduate students signed up as in one cam

p or another, they becom e w

hat A lbert

H irschm

an once called "paradigm s as hindrances to

understanding:' 6

Institutionalismand the P uzzle

of C om

pliance T

he institutionalist theory that I developed in A fter

H egem

onycreated only a prom issory

note on a

m ajor issue: that of com

pliance. In a w orld w

ithout centralized governm

ent, w hy should states com

ply w

ith obligations that

had becom e inconvenient?

O ne set of problem

s m ight arise from

deliberate deception, although prudence on the part of others could lim

it those dangers. A m

ore pervasive set of problem

s could arise as a result of tim e: events m

ay adversely change the cost-benefit calculus of state com

pliance. W hy, one asks, should states guided by

rational self-interest com ply w

ith obligations that have becom

e inconvenient? I sought in the late 1980s and 1990s to explore

these questions in an historically oriented inquiry focused on U

nited States foreign policy. I learned a great deal in the process, but failed to com

e up w ith

either a com prehensive theory or satisfactory sys-

tem atic evidence. O

n the theoretical side, m y initial

hunch w as that concerns about reputation

w ould

ensure fairly regular com pliance. In the record of .

U nited States foreign policy I did indeed find m

uch concern w

ith reputation, but I also found a consis- tent pattern, w

hen com m

itm ents

w ere inconven-

ient, of ingenious attem pts

to design policies to avoid reputational constraints ....

A lthough I am

naturally som ew

hat chagrined by m

y ow n failure to solve the puzzle of com

pliance w

ith com m

itm ents, I gain considerable satisfaction

from the fact that at least for som

e issues it is being analyzed successfully w

ithin the fram ew

ork of a rational-institutionalist

theory. W hat

m atters

for the fruitfulness of a theory is not the w

ork of an in- dividual, but the effort of a research com

m unity that

is sufficiently intrigued or inspired by the theory to develop it creatively and test its im

plications system -

atically. T here em

erges a division of labor w ithin

this com m

unity am ong those w

ho create the origi- nal theoretical intuitions, w

ho specify the theory, w

ho test it system atically, and w

ho explore the w ider

im plications of the findings that em

erge. Since these capabilities are rarely all found in a single person, it is shortsighted to m

ake any one of them the litm

us test for productive scholarship. It is clear from

m y

career that I am better at proposing new

explana- tions, beginning to specify them

as a theory, and exploring their w

ider im plications, than at form

aliz- ing or testing hypotheses system

atically. In a sense, then, m

y contributions can only be validated by oth- ers, w

hich m akes m

e very grateful to them for their

ecreativity,intelligence, and effort. T he fact that m

any of the m

ajor contributors

to the

institutionalist research program

are form er students of m

ine, natu- rally im

bues this gratitude w ith feelings of pride.

If pride in one's ow n accom

plishm ents

and those of one's colleagues increases over tim

e, even m

ore does hum ility. H

um ility is probably not a pos-

itive attribute for a young scholar: one has to believe that one's ow

n ideas are superior to conventional w

isdom in certain areas, w

hich requires, for an untested scholar, a certain arrogance. C

ertainly few

colleagues w ho

encountered m

e during

m y 30s

w ould have listed hum

ility as one of m y virtues.

.· O ver tim

e, how ever, one's personal failure to solve

,. i;ertain problem s or keep up w

ith certain technical .• advances does induce hum

ility. So does the broader .·.recognition that one's ow

n theory-in m

y case, in- ' ~titutional theory-is

only a partial approach to

; w orld politics, w

hich needs to be com bined w

ith ••.other perspectives. •

,.,. i

\pberalism , Sovereignty and S

ecurity ,.·,.-

>'J)new ayof thinking about institutions and interde-

pendence is to view interdependence as the context

W ithin w

hich international

institutions operate.

]nstitutions are, in this view , a response to interde-

P:endehce. The tradition of m odern thought that is

)?

m ost conducive to this fram

ing of the issue is that of liberalism

.... L

iberalism as an approach to interna-

tional relations

em phasizes individuals, seeks to

understand collective decisions, and, in an ethical

sense, prom otes hum

an rights and validates attem pts

to am eliorate the hum

an condition. Sophisticated

liberalism com

bines strands of com m

ercialism , re-

publicanism and regulatory politics. A

ttem pts to reg-

ulate transnational activity occur as a response to

econom ic interdependence, in the context of plural-

istic dem ocracy. L

iberalism reaffirm

s the attem pt of

institutionalists to seek to understand politics for the sake of designing institutions that w

ill prom ote co-

operation, w elfare, and hum

an rights. A

s I indicated above, liberalism

has

m any

variants, not all of w hich are consistent w

ith one another.

H ence as a general perspective, it does

not offer specific norm ative guidance. M

y ow n form

of liberalism

... em

phasizes that interdependence am

ong hum an beings produces discord, w

hich gen - erates a need for institutions. B

ut it also stresses that institutions can be oppressive. M

y brand of liberal- ism

is therefore hardly the naively overoptim istic

doctrine caricatured by V oltaire in C

andide,w hose

hero goes from disaster to disaster proclaim

ing that he is in "the best of all possible w

orlds:' M y liberal-

ism recognizes the argum

ents of Judith

Shklar's "liberalism

of fear," w hile still holding out hope for

progress. M

y intellectual

heroes include

Jam es

M adison, for his recognition that institutions m

ust be designed to check one another, and John R

aw ls,

for his construction of a m

oral theory based on adopting a standpoint of im

partiality. I believe that institutions,

including. international institutions,

should be accountable to those they govern. It is also desirable that they rest insofar. as possible on honest persuasior1 rather than on coercion or bar- gaining based on asym

m etrical resources; and that

they encourage public participation. M y ow

n liber- alism

, w hile resolutely anti-utopian,

nevertheless offers norm

ative as w

ell as positive guidance for public policy.

Sovereignty is im portant from

this perspective because it illum

inates a central tension in contem po-

rary liberalism . C

om m

ercial liberalism em

phasizes the benefits of the division of labor, hence favors greater openness and

the institutions

needed to assure openness. R

epublica:Q . liberalism

, on the con- trary, stresses the im

portance of self-determ ination

l R

O B

E R

TO

. K

E O

H A

N E

/ From

Interdependence and Institutions 167

166 R

o B E

R T

o. K

E o H

A N

E

/ From

lnterdepentj,ence and Institutions

and dem ocracy w

i~in w

ell defined boundaries, so that the public can exercise effective control over self- seeking private actors. From

the standpoint of com -

m ercial liberalism

, sovereignty is a problem ; from

the standpoint of republican liberalism

, it is an essential guarantee. It is therefore not surprising that contem

- porary debates about openness often pit proponents of sovereignty against opponents of it, and divide the traditional right as w

ell as the traditional left. D

uring the 1980s, theories of w

orld politics w

ere rather sharply subdivided into those dealing w

ith security and those concerned w ith issues· of

political econom y. In fact, the field virtually bifur-

cated into tw o specialties, w

hich w ere often seen as

having little relationship to one another. In A fter

H egem

onyI even defended "abstracting from m

ili- tary issues" as a w

ay of focusing m ore clearly on "the

econom ic origins of change:'

E ven during the C

old W ar, this view

w as quite

problem atic,

as the im

pact of

R onald

R eagan's

m ilitary buildup on Soviet pow

er, and indirectly on the w

orld econom y, w

as soon to dem onstrate. T

he end of the C

old W ar m

ade this separation betw een

political-m ilitary issues and political-econom

ic ones even m

ore untenable. In B ound to Lead, N

ye devel- oped a persuasive argum

ent about the centrality of A

m erican pow

er, w hich linked security tightly to po-

litical econom y. Som

e w ork I did w

ith colleagues at H

arvard on international institutions after the C old

W ar reinforced m

y interest in explaining how institu-

tional theory could illum inate security issues ....

T he transaction costs-inform

ational theories of international institutions developed in A

fter H ege-

m onyalso pertain to security issues in w

hich the par- ticipants have com

m on or com

plem entary interests.

States that seek to cooperate on security issues also need to devise institutions that facilitate cooperation by m

aking prom ises credible, providing inform

a- tion, and reducing other :costs of agreem

ent. O nce

successful institutions have been developed, it is eas- ier to adapt them

to respond to change than to create entirely new

ones, particularly if the institutions have a "hybrid" quality, w

ith practices that can be trans- ferred at relatively low

cost to new situations ....

1

From Institutions to Law

In the later i980s and early 1990s a few

innovative legal scholars began to use institutionalist theory. K

enneth A

bbott system atically review

ed and com m

ented on institutionalist theory in a m ajor law

review article.

A nne-M

arie Slaughter, w riting under

her form er

nam e of B

urley, e.ssentially argued that political sci- entists w

ere speaking legal prose w ithout recogniz-

ing it: that w e w

ere theorizing about institutions that

generations of legal scholars had described, though not explained. B

oth in the w orld of ideas

and in the real w orld of international institutions,

the separation betw een institutions and law

seem ed

m ore and m

ore tenuous. M

y ow n aversion to international law

had been forged in graduate school, w

hen the "w orld peace

through w orld law

" w ork of L

ouis Sohn and G renville

C lark had seem

ed utterly divorced from C

old W ar re-

ality. M ore influential in m

y ow n training w

ere the critiques of legalism

by the realists E .H

. C arr and

G eorge F.K

ennan. Perhaps as a reaction to m y ow

n tendency tow

ard personal m oralism

, I have alw ays

been allergic to preaching as a substitute for analysis. B

ut by the early 1990s I had recognized that interna- \

tional law did not have to be textual, form

alistic and separated from

real political problem s and ethnical

dilem m

as .... I think that the analysis of legalization under-

taken by m y colleagues and m

yself is consistent w

ith m

y overall fram ew

ork for the

analysis of w

orld politics. I begin w

ith actors-individuals

and organizations-pursuing their interests as they

see them , and guided by the values they internalize.

T hese actors use resources at their disposal, includ-

ing force,

m aterial

capabilities, and

persuasive ideas, to seek to achieve their objectives. T

he actors are located

in structures of pow

er that provide

.' · ·

incentives for action, by affecting the payoffs of various

strategies; they are also located

w ithiri

organizations, w hich delegate authority to various

. agents.

Individuals respond

to incentives

in a

c broadly rational w

ay; organizations m ay do so also;

depending on how they are structured. R

ationality does not m

ean full inform ation,

or the ability to calculate

perfectly; instead,

it is the

"bounded ;

rationality" of H

erbert Sim

on. In contem porary

, w

orld politics, states are usually the m ost im

porf i' tant actors, although they are by no m

eans alone. ·. T

hey have to contend w ith transnational

actors\ and w

ith structures of transnational as w ell as inter'[

state relationships. B oth sets of actors, state and nori~

state,. also deal w ith institutions in tw

o im portant;

senses: as inherited patterns

of rules

and rehi:)

tionships that can affect beliefs and expectation~;,.

an? as_ potential tools for the pursuit of their ow n

obJectlves. T

o understand politics w ithin this fram

ew ork

one first lo_oks for the key bargains that create policie~ and establish coalitions. O

ne can think of th bar-

. ese

gam s a~. r~flec_ting the equilibria of gam

es, w hich

create_ I?stituti?~s,_ w hich then, in turn,

establish or s~lid1fy equ_il~bna so that these institutions, and particular

policies, persist. T he viability of th

. .

. .

ese m

stitutlona 1iz~d agreem ents, how

ever, depends not m

er~ly on the m terests, capacities, and beliefs of the

pa~tic1pants, and on the nom inal rules of the insti-

tut10ns, b~t also on their consistency w ith broader

sets of beliefs and expectations held by oth . .

er ac tors I

or coa itlons that control political resources .

L egalized institutions, w

ith precise obligations interpreted by thir1 parties, often im

pose particu- larly ~t~ong constram

ts on political actors, as w ell as

prov~dm g opportunities

for innovative strategies t~at i_nvolve legal action. T

he success of these strate- gies. I~ frequently dependent

on w hether im

plicit coalitions can be form

ed ' and barga1'ns mad e,am ong

. actors playm

g w ell-defined legal roles

. 1 d'

· d .

. .

, m cu

m g

J~ ges. Strategic m t~ract10n is central both to poli-

tics a~d to la~. -~eliefs and institutions, as w ell as

~atenal capabilities, are crucial to strategic interac-

tion. Indeed, the outcom es of strategic interactions

m ay depend as m

uch on how rules are interpreted-

a key foc~s of international legal scholarship-as on

. .. the w ordm

g of the ru_les them selves. W

orld politics F and the processes of m

ternational law can only be

:;'..'un1erstood, theref?re, from m

ultiple perspectives, ,:· w

h~ch encom p~ss issues of state pow

er, non-state 1\~ction, do~estic

p~l~tics, institutions, processes of :ym

terpr~tation, coal1t1ons and bargaining, and the :' persuasiveness of com

peting sets of ideas U d

• t d'

h .

· n

er- ,;/an

m g

ov: m ternational

legal scholars w ork

r~elps one see issues of interpretation and persuasion f:llla m

ore subtle w ay.

~;~·, :[-. tr,om

Interdependence to G

lobalism

i'J:' r:·.

a new buzzw

ord com es to our faddish

,& eld,_it is m

ore effective to redefine and reinter- f{et it than to ignore it. Interdependence

w as the

fzzw ord

of the 1970s, but it had been used in }PPPYw

ays that lim ited

thought. In P

ow er and

:lerdepen~ence,N ye and I sought to redefine and

:· nterpret it as an analytically useful concept. W e

:~~paraged "rhetorical" uses of the

phrase and

I?

defined i~terdependence as referring to situations

charactenzed ~Y

. reciprocal costly effects am

on actors. W

e explicitly rejected the view that interde!

pendence. v:as necessarily benign

and declared

?ur skeptm sm

about the nai:ve view

that "rising m

terdep~ndence is creating a brave new

w orld of

cooperat10n to replace the bad old w orld of inte -

?at10nal conflict." W e therefore

sought to m

aie 1~terdepen1ence into a useful analytical tool that did not prejudge conclusions.

W hen globalization becam

e the buzzw ord of

the_ 1~90s, m y ?rst reaction w

as to regard it as jour- nalisti~ hype: m

terdependence in flashier but less

revealing garb. Indeed, H elen M

ilner and I entitled a book that w

e edited in 1996, "internationalization and dom

estic politics;' rather than "globalization an1 dom

estic politics;' since "globalization" seem ed

to im ply an answ

er to the question w e w

ere asking a?out co_nvergence or divergence· of national poli- c!es. B

ut it is_fr~strating to try to row against a strong

tide, or to sail directly into the w ind. T

o be heard, the scholar has to ~peak to the concerns of his era in the language of his era. D

oing so gets people hooked· then one ~an proceed to the analysis that m

ay in~ c:ease their un_derstanding, or at least raise ques- tions about their preconceptions.

A t one level, then, "interdependence" w

as sim -

ply overtaken by "globalization" as the fashionable language_ to des~ribe increases in econom

ic open- ness ~nd m

tegrat10n. B ut at a deeper level, changes in

term inology_ reflect changes in reality. T

he m ost

com prehensive w

ork on globalization of w hich I am

aw

are defin~s it ~s a set of processes that em body "a

tran~form at1on m

the spatial organization of social relat10ns and transactions" generating transconti- n~nta_l flow

s ~nd netw orks, ...

four aspects of glob- ~lizati?n [hem

~] eit.tensity (the stretching of space), m

tens1ty,_veloc1ty,and im pact. G

lobalization m oves

beyond _lm ~ages betw

een separate societies to the reorgam

zat10n of social life on a transnational basis ".'sJo~n R

uggie [once] com m

ented ... : globalizatio~ is to m

terdependence as Federal E xpress is to the

exchange of letters betw een separate national post

offices. W

e should notice, how ever, the sem

antic differ- ences betw

een these tw o term

s. Interdependence refers_ to a state of the w

orld, w hereas globalization

desc~1bes a. trend of increasing transnational flow s

and m creasm

gly thick netw orks of interdependence ..

For the term s to be com

parable, w e need to use a

i I

168

-~ Ro B

E R

T o . K

E o H

A N

E

/ From

Interdependence and Institutions

R O

B E

R T

O .

K E

O H

A N

E

/ From

Interdependence and Institutions 169

different term : "globalism

;' w hich describes a state

of the w orld. B

oth interdependence and globalism

can be view

ed as m atters of degree; both

can in- crease or decline over tim

e. G lobalization, by con-

trast, im plies increases in globalism

. It m akes m

ore sense to speak of a "decline in globalism

" (as, for in- stance, w

ith econom ic globalism

betw een 1914 and

1945) than a "decline in globalization." D

espite the differences, the com plexities of in-

terdependence, as N ye and I and others had w

orked them

out in the 1970s, are crucial to a coherent and realistic understanding

of globalism 'and globaliza-

tion. In particular, interdependence

w as not just

econom ic, but

also strategic, environm ental,

and ideational. G

lobalism , ...

is also m ultidim

ensional. W

e differentiate econom ic,

social, environm ental

and m ilitary globalization, each of w

hich has politi- cal dim

ensions. G lobalism

involves thick netw orks

of interdependence, organized on a transnational

basis. E ach strand of interdependence involves spe-

cific actors, w hereas globalism

refers to the aggre- gate pattern produced by all of these strands, and by their organization on a global scale.

From Institutions to G

overnance Finally, how

does "governance" enter this picture? ... W

hat explains the apparent shift in m y em

pha- sis from

institutions to governance? T

he answ er to

this question parallels m

y answ er to the last one.

A s netw

orks of interdependence intensify, they be-

com e m

ore im portant

to dom estic publics. A

nd as they thicken into globalism

, the connections be-

tw een them

also becom

e m ore intense. It is less

and less feasible to regard issues of trade, finance, environm

ent, and security as separable, each w

ith its ow

n institution devoted to it. T

he w orld system

looks m

ore and m ore like a polity. Successful poli-

ties have governance structures in w

hich the insti- tutions are w

ell-articulated w

ith one another; but the w

orld polity, if one can call it that, has disartic- ulated

and fragm

ented institutions.

H ence

the problem

arises of governance, w hich is defined ...

as "the processes and institutions, both form

al and inform

al, that guide and restrain the, collective ac- tivities of a group." G

lobally, the question of gov-

ernance is one

of how

the various

institutions and processes of global society could be m

eshed m

ore effectively, in a w ay that w

ould be regarded

as legitim ate by attentive publics controlling access

to key resources. In this context, w

hat N ye and I ... call the "club

m odel" of international organizations becom

es less and less tenable. In the half-century

after W orld

W ar II, a practice developed by w

hich a lim ited set

of elites from different

countries cam

e together w

ithin the confines of an international organiza-

tion to bargain over a lim ited set of issues. T

hese clubs w

ere not very transparent and they kept out- siders at arm

s' length, but they often succeeded, as in trade or in the E

uropean U nion, in negotiating

im portant agreem

ents that prom oted openness. Y

et w

ith the grow th in sophistication and activism

of both developing countries and non-governm

ental actors, and in the context of a dem

ocratic political culture in their leading m

em bers, the club m

odel has lost legitim

acy. In particular, dem ands have been

raised for accountability w ithin the organizations-

dem ands that are inconsistent w

ith club practices, as w

ell as w ith the interests of the developing countries

as they

perceive them .

L egitim

acy in term

s of

outputs-liberalized trade, w

idely beneficial to all, including the poor-m

ay be inconsistent w

ith legit- im

acy in term s of inputs, involving transparency

and accountability. It is still unclear w hat form

of governance on issues related to trade could be devel- oped that w

ould be sufficiently transparent and par- ticipatory to be legitim

ate, yet effective enough to solve pressing

problem s

of inefficiency and the

poverty that is accentuated by ineffi.ciency. T

he key issues, in m y view

, involve governance in a partially globalized w

orld .... A partially globalized

w orld is a w

orld of thick netw orks of interdepen-

dence, in w hich boundaries, and states, nevertheless

m atter a great deal .. Even the quite open U

S-C anadian

border has a strong im

pact on econom ic activity.

A nd as m

uch w ork has dem

onstrated, globalization has not produced convergence of national w

elfare- state policies.

T o understand governance in such a w

orld, w e

have to understand institutions, w hich arise in the

first instance from dem

ands by political actors and from

bargaining. T o an extent they are the product of

rational egoism ; but sim

ple functional theories that derive outcom

es from need or purpose over-look

both a variety of perverse incentives that often stand in the w

ay, and the potential for public-spirited

action. Institutions have paradoxical effects: they are

essential for the good life, but they m ay also institu-

tionalize bias in w ays that m

ake the good life im pos-

sible to attain for m any people.

O ne response is to recognize that even if m

ost people behave in self-interested w

ays m ost of the

tim e, self-interest can be defined in m

ore or less enlightened w

ays, and m any people are not purely

egotistical. A nother response is to stress the role of

prevailing expectations and beliefs in structuring even self-interested behavior. If just principles are generally accepted in a society, even self-interested people

m ay

have m ore

incentives to act justly.

N orm

atively, thinking about institutionalized gov-

ernance raises issues of

institutional design:

in particular,

fostering accountability,

participation and persuasion

by providing incentives for those practices to flourish. In the face·of globalization, the essay concludes, our challenge is sim

ilar to that of the founders of the U

nited States: "to design w ork-

ing institutions for a polity of unprecedented

size and diversity."

Such institutions can only operate sm oothly in

a w orld free from

threats of terror, just as threats of terror are only likely to be m

inim ized in a w

orld of w

ell-functioning global institutions. W

hat N ye

. and I referred to as "com plex interdependence" in

1977-a w

orld of m ultiple interactions i'n w

hich re- course to force is excluded-is

a condition for deep cooperation, w

hich creates potential vulnerabilities as societies becom

e intertw ined.

R elationships in

w hich terror is em

ployed involve interdependence, but are obviously not relationships of"com

plex in- terdependence." H

ence, the attacks on the U nited

States of Septem ber 11, 2001, reinforce the caution

that N ye and I have consistently expressed about the

-; .·, spread of com plex interdependence. A

s N ye likes to

} · say, "security is like oxygen:' Y ou are only aw

are of it \:

w hen it is absent. G

lobal governance during the next !(;'decades w

ill have to deal w ith threats of force as w

ell 1f, as w

ith econom ic interdependence ....

T he attacks on the U

nited States of Septem ber 11

[2001] did not focus on the w orld political econ-

om y, nor w

ere international institutions directly in- ,; volved. Perspectives

from

realism

and political

;i philosophy shed light on these events, but so do j.approaches w

ith their origins in the study of inter- ·;. dependence and institutions. I do not claim

that m y

f Perspective~ on these issues are m ore im

portant ifthan

other perspectives, but

I do

believe that

theories linking asym m

etrical interdependence to

pow er, and institutional

analysis, both contribute

productively to the analysis of the globalization of inform

al violence. W

e students of w orld politics did not choose

our subject because it is aesthetically pleasing, nor because clear propositions about it can be developed and

tested easily, using

scientific m

ethods. W

e should aspire to be scientific in the best sense; but neither the experim

ental nor statistical m ethods are

easy to apply to a w orld of strategic interactions, by

a lim ited num

ber of players, that are not subject to our control. W

e choose our subject because it is vi- tally im

portant: a m

atter of life and death, w ealth

and poverty. Surely the events of Septem ber 11 indi-

cate anew its crucial significance. W

e· face a m oral

im perative to understand w

orld politics better. B et-

ter understanding should enable people to design

better policies and institutions, although

it is no guarantee of such im

provem ents. B

etter institutions w

ould enable ordinary hum an beings to live lives of

their ow n choosing, free from

fear. U nder such con-

ditions, people could devise their ow n w

ays to love and respect other people and to value the natural w

orld on w hich w

e all depend.

N otes 1. I am

indebted to N annerl 0. K

eohane, Joseph S. N

ye, and John G erard R

uggie for com m

ents on an ear- lier version of this introduction, and to m

y editor, C raig

Fow lie, both for encouraging m

e to w rite this introduc-

tion and for com m

ents on an earlier draft. 2, See K

eohane and N ye (1,987), reprinted in the sec-

ond and third editions of P ow

er and Interdependence, 1989 and 2001.

3. I have had so m

any able students'that I w ould hes-

itate to create an e~austive list, for fear of om itting som

e im

portant w ork by people I respect very m

uch. 4,

P ow

er and Interdependence (1977), A fter H

egem ony

(1984),International Institutions and State P ow

er (1989). 5.

See K enneth N

. W altz, Foreign Policy and D

em ocra-

tic P olitics (B

oston: Little B row

n, 1967). 6. T

he volum e that I edited in 1986a, Neorealism

and Its C

ritics, has been w idely used and is still in print, but I

have m ixed feelings about it. It helpfully brought to-

gether K enneth W

altz's sem inal statem

ents of neo-realist thinking, together w

ith som e of the m

ajor early critiques of his w

ork B ut it probably contributed to the "us versus

them " tone of the discussion•for m

uch of the follow ing

decade.