COURSE MATERIAL REVIEW 2

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Realism and Complex Interdependence

Robert 0. Keohane and Joseph S. Nye

In this classic work, Robert Keohane and Jos eph Nye offer a neoliberal cri- tique of the realist worldview. They assert that in the post-W orld War II era cou ntries have become more and more intertwined economically. The explosive growth in the size and number of transnational corporations has blurred state boundaries, rendering traditional realist assumptions about the centrality of the state questionable . Realists contend that the state is the dominant actor in world politics and that military force and violence are the primary means by which states achieve their goals. Keohane and Nye propose an alternative ideal type--complex interdependence-that empha- sizes cooperation rather than conflict. While the authors caution that vio- lence and conflict have not disappeared, they point to the growing impor- ta nce of non-security-related issues such as international monetary relations and global environmental concerns. To them the day-to-day affairs of states have more to do with promoting cooperative economic interactions than with military and security matters.

One's assumptions about world politics profoundly affect what one sees and how one constructs theories to explain events. We believe that the ass umptions of political realists, whose theories dominated the postwar period, are often an inadequate basis for analyzing the politics of interde- pendence. The realist assumptions about world politics can be seen as defining an extreme set of conditions or ideal type. One could also imagine very different conditions. In this chapter, we shall construct another ideal

Reprinted with permission of the publisher from Pow er and Interdep endence: World Politi cs in Transition , 2d edition, by Robert 0. Keohane and Joseph S. Nye <Glenview, IL: Pearson Education , Inc.). Copyright© 1989 by Robert 0. Keohane and Joseph S. Nye , pp. 23-25; 29-37.

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type, the opposite of realism. We call it comple x interdependence . After establishing the differences between realism and complex interdependence, we shall argue that complex interdependence sometimes comes closer to reality than does realism. When it does, traditional explanations of change in international regimes become questionable and the search for new explanatory models becomes more urgent.

For political realists , international politics, like all other politics, is a struggle for power but, unlike domestic politics , a struggle dominated by organized violence . ... Three assumptions are integral to the realist vision. First, states as coherent units are the dominant actors in world politics. This is a double assumption: states are predominant; and they act as coherent units. Second, realists assume that force is a usable and effective instrument of policy. Other instruments may also be employed, but using or threaten- ing force is the most effective means of wielding power. Third, partly because of their second assumption, realists assume a hierarchy of issues in world politics, headed by questions of military security: the " high politics" of military security dominates the " low politics " of economic and social affairs.

These realist assumptions define an ideal type of world politics. They allow us to imagine a world in which politics is continually characterized by active or potential conflict among states, with the use of force possible at any time. Each state attempts to defend its territory and interests from real or perceived threats. Political integration among states is slight and lasts only as long as it serves the national interests of the most powerful states. Transnational actors either do not exist or are politically unimpor- tant. Only the adept exercise of force or the threat of force permits states to survive, and only while statesmen succeed in adjusting their interests, as in a well-functioning balance of power, is the system stable.

Each of the realist assumptions can be challenged. If we challenge them all simultaneously, we can imagine a world in which actors other than states participate directly in world politics, in which a clear hierarchy of issues does not exist, and in which force is an ineffective instrument of pol- icy. Under these conditions-which we call the characteristics of complex interdependence-one would expect world politics to be very different than under realist conditions.

The Characteristics of Complex Interdependence

Complex interdepend~ce has three main characteristics:

I. Multiple c hann els connect societies, including : informal ties between governmental elites as well as formal foreign office arrangements; informal ties among nongovernmental elites (face-to-face and through telecommunications); and transnational organizations (such as multination-

Robert 0 . Keohane & Joseph S. Nye 5 I

al banks or corporations). These channels can be summarized as interstate, rransgo vernmental , and transnational relations. Int erstate relations are the normal channels assumed by realists. Transgovernmental applies when we relax the realist assumption that states act coherently as unit s; transnational applies when we relax the assumption that states are the only units .

2. The agenda of interstate relationships consists of multiple issues that are not arranged in a clear or consistent hierarchy. This absence of hierar- ~hy among issues means , among other things , that military security does not consistently dominate the agenda. Many issues arise from what used to

considered domestic policy, and the distinction between domestic and ;-oreign issues becomes blurred. These issues are considered in severa l gov- ernment departments (not just foreign offices) , and at several leve ls. Inadequate policy coordination on these issues involves significant costs. Different issues generate different coalitions , both within gove rnment s and

ross them , and involve different degree s of conflict. Politics does not stop t the waters' edge.

3. Military force is not used by governments toward other governments ·ithin the region, or on the issues , when complex interdependence prevail s. • may, however, be important in these governments' relations with govern-

:nents outside that region , or on other issues. Military force could, for n ta nce , be irrelevant to resolving disagreements on economic issues

J.mong members of an alliance , yet at the same time be very important for · at alliance's political and military relations with a rival bloc. For the for-

er relationships this condition of complex interdependence would be met; - r the latter , it would not.

Traditional theories of international politics implicitly or explicitly ·~ny the accuracy of these three assumptions . Traditionalists are therefore empted also to deny the relevance of criticisms based on the complex r erdependence ideal type. We believe , however, that our three conditions -e fairly well approximated on some global issues of economic and eco- gica l interdependence and that they come close to characterizing the

• ire relationship between some countries. One of our purposes here is to ve that contention. In [Power and Interdependence: World Politi cs in

- ans ition we] examine complex interdependence in oceans policy and netary policy and in the relationships of the United States to Canada and

- J tra lia. In this chapter, however , we shall try to convince you to take -e ·e crit icisms of traditional assumptions seriously . .. .

e Political Processes of Complex Interdependence

·e three main characteristics of complex interdependence give rise to dis- ~tive political processes, which translate power resources into power as tro l of outcomes. As we argued earlier, something is usually lost or

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added in the translation. Under conditions of complex interdependence the translation will be different than under realist conditions , and our predic- tions about outcomes will need to be adjusted accordingly.

In the realist world, military security will be the dominant goal of states . It will even affect issues that are not directly involved with military power or territorial defense . Nonmilitary problems will not only be subor- dinated to military ones ; they will be studied for their politico-military implications . Balance of payments issues, for instance, will be considered at least as much in the light of their implications for world power generally as for their purely financial ramifications . ...

In a world of complex interdependence, however , one expects some officials , particularly at lower levels, to emphasize the variety of state goals that must be pursued. In the absence of a clear hierarchy of issues, goals will vary by issue , and may not be closely related. Each bureaucracy will pursue its own concerns ; and although several agencies may reach compro- mises on issues that affect them all , they will find that a consistent pattern of policy is difficult to maintain. Moreover, transnational actors will intro- duce different goals into various groups of issues.

Linkage Strategies

Goals will therefore vary by issue area under complex interdependence , but so will the distribution of power and the typical political processes. Traditional analysis focuses on the intern~tional system , and leads us to anticipate similar political processes on a variety of issues. Militarily and economically strong states will dominate a variety of organizations and a variety of issues, by linking their own policies on some issues to other states' policies on other issues. By using their overall dominance to prevail on their weak issues, the strongest states will , in the traditional model , ensure a congruence between the overall structure of military and economic power and the pattern of outcomes on any one issue area. Thus world poli- tics can be treated as a seamless web.

Under complex interdependence, such congruence is less likely to occur. As military force is devalued, militarily strong states will find it more difficult to use their overall dominance to control outcomes on issues in which they are weak. And since the distribution of power resources in trade , shipping, or oil, for example , may be quite different , patterns of out- comes and distinctive political processes are likely to vary from one set of issues to another. If force were readily applicable , and military security were the highest foreign policy goal, these variations in the issue structures of power wo·uld not matter very much. The linkages drawn from them to military issues would ensure consistent dominance by the overall strongest

Robert 0. Keohane &Joseph S. Nye 53

ates. But when military force is largely immobilized, strong states will .md that linkage is less effective. They may still attempt such links, but in · e absence of a hierarchy of issues, their success will be problematic·.

Dominant states may try to secure much the same result by using over- II eco nomic power to affect results on other issues. If only economic ~ectives are at stake, they may succeed: money , after all, is fungible. But

_ onomic objectives have political implications, and economic linkage by e strong is limited by domestic, transnational , and transgovernmental -wrs who resist having their interests traded off. Furthermore , the interna-

na l actors may be different on different issues , and the international -ganizations in which negotiations take place are often quite separate.

1us it is difficult, for example, to imagine a militarily or economically ·~ong state linking concessions on monetary policy to reciprocal conces-

ns in oceans policy. On the other hand , poor weak states are not similar- inhibited from linking unrelated issues, partly because their domestic

-·eres ts are less complex. Linkage of unrelated issues is often a means of ua cting concessions or side payments from rich and powerful states. And

- ike powerful states whose instrument for linkage (military force) is ·en too costly to use, the linkage instrument used by poor , weak states- em ational organization-is available and inexpensive.

Th us as the utility of force declines , and as issues become more equal mportance, the distribution of power within each issue will become .e important. If linkages become less effective on the whole, outcomes

- pol itica l bargaining will increasingly vary by issue area. T he differentiation among issue areas in complex interdependence

.lI1 that linkages among issues will become more problematic and will to reduce rather than reinforce international hierarchy. Linkage strate-

::: . and defense against them, will pose critical strategic choices for ! - . Should issues be considered separately or as a package? If linkages

• ·o be drawn, which issues should be linked , and on which of the linked ~- should concessions be made? How far can one push a linkage before

- -o mes counterproductive? For instance, should one seek formal agree- • or informal, but less politically sensitive, understandings? The fact

·a rid politics under complex interdependence is not a seamless web u to expect that efforts to stitch seams together advantageously, as

!- ed in linkage strategies, will , very often, determine the shape of the

da Setting

-e ond assumption of complex interdependence, the lack of clear hier- . :unong multiple issues, leads us to expect that the politics of agenda

54 Contending Views of I PE

format ion and control will become more important. Traditional analyses lead states men to focus on politico-military issues and to pay little attention to the broader politics of agenda formation. Statesmen assume that the agenda will be set by shifts in the balance of power, actual or anticipated, and by perceived threats to the security of states. Other issues will only be very important when they seem to affect security and military power. In these cases, agendas will be influenced strongly by considerations of the overall balance of power.

Yet, today, some nonmilitary issues are emphasized in interstate rela- tions at one time, whereas others of seemingly equal importance are neg- lected or quietly handled at a technical level. International monetary poli- tics, problems of commodity terms of trade, oil , food, and multinational corporations have all been important during the last decade; but not all have been high on interstate agendas throughout that period.

Traditional analysts of international politics have paid little attention to agenda formation: to how issues come to receive sustained attention by high officials. The traditional orientation toward military and security affairs implies that the crucial problems of foreign policy are imposed on states by the actions or threats of other states. These are high politics as opposed to the low politics of economic affairs. Yet, as the complexity of actors and issues in world politics increases, the utility of force declines and the line between domestic policy and foreign policy becomes blurred: as the conditions of complex interdependence are more closely approxi- mated , the politics of agenda formation becomes more subtle and differen- tiated.

Under complex interdependence we can expect the agenda to be affected by the international and domestic problems created by economic growth and increasing sensitivity interdependence .... Discontented domestic groups will politicize issues and force more issues once consid- ered domestic onto the interstate agenda. Shifts in the distribution of power resources within sets of issues will also affect agendas. During the early 1970s the increased power of oil-producing governments over the transnational corporations and the consumer countries dramatically altered the policy agenda. Moreover , agendas for one group of issues may change as a result of linkages from other groups in which power resources are changing; for example, the broader agenda of North-South trade issues changed after the OPEC price rises and the oil embargo of 1973-74. Even if capabilities among states do not change, agendas may be affected by shifts in the importance of transnational actors. The pub- licity surrounding multinational corporations in the early 1970s, coupled with their rapid growth over the past twenty years, put the regulation of such corporations higher on both the United Nations agenda and national agendas.

Robert 0. Keohane·& Joseph S. Nye 55

-ransnatio nal and Transgovernmental Relations

- lhird condition of complex interdependence, multiple channels of con- am ong societies, further blurs the distinction between domestic and

~a tional politics. The availability of partners in political coalitions is nec essarily limited by national boundaries as traditional analysis mes. The nearer a situation is to complex interdependence, the more we

t the outcomes of political bargaining to be affected by transnational ons. Multinational corporations may be significant both as independent

and as instruments manipulated by governments. The attitudes and y stands of domestic groups are likely to be affected by communica-

-. organized or not, between them and their counterparts abroad . Th us the existence of multiple channels of contact leads us to expect

. beyond those normally found in domestic politics , on the ability of -men to calculate the manipulation of interdependence or follow a con-

~m strategy of linkage. Statesmen must consider differential as well as _;::-egate effects of interdependence strategies and their likely implications

poli ticization and agenda control. Transactions among societies---eco- li and social transactions more than security ones-affect groups differ- .. Opportunities and costs from increased transnational ties may be er for certain groups-for instance, American workers in the textile or industries-than for others. Some organizations or groups may interact

- dy with actors in other societies or with other governments to increase - benefits from a network of interaction. Some actors may therefore be

-ulnerable as well as less sensitive to changes elsewhere in the network - :ire others, and this will affect patterns of political action.

The multiple channels of contact found in complex interdependence _ '10t limited to nongovernmental actors. Contacts between governmental -~aucracies charged with similar tasks may not only alter their perspec- ~= but lead to transgovernmental coalitions on particular policy ques- - -_ To improve their chances of success, government agencies attempt to - = actors from other governments into their own decision-making

e ses as allies. Agencies of powerful states such as the United States c- used such coalitions to penetrate weaker governments in such coun-

- - a Turkey and Chile. They have also been used to help agencies of ~r governments penetrate the United States bureaucracy. 1 ••• The existence of transgovernmental policy networks leads to a differ- mte rpretation of one of the standard propositions about international ti -that states act in their own interest. Under complex interdepend- ~- this conventiona l wisdom begs two important questions: which self

.,·h ich interest? A government agency may pursue its own interests er the guise of the national interest; and recurrent interactions can ~ge official perceptions of their interests ....

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The ambiguity of the national interest raises serious problems for the top political leaders of governments. As bureaucracies contact each other directly across national borders (without going through foreign offices), centralized control becomes more difficult. There is les s assurance that the state will be united when dealing with foreign governments or that its com- ponents will interpret national interests similarly when negotiating with foreigners. The state may prove to be multifaceted, even schizophrenic . National interests will be defined differently on different issues, at different times, and by different governmental units. States that are better placed to maintain their coherence (because of a centralized political tradition such as France's) will be better able to manipulate uneven interdependence than fragmented states that at first glance seem to have more resources in an issue area.

Role of International Organizations

Finally, the existence of multiple channels leads one to predict a different and significant role for international organizations in world politics. Realists in the tradition of Hans J. Morgenthau have portrayed a world in which states, acting from self-interest, struggle for "power and peace." Security issues are dominant; war threatens. In such a world, one may assume that international institutions will have a minor role, limited by the rare congruence of such interests. International organizations are then clearly peripheral to world politics. But in a world of multiple issues imper- fectly linked, in which coalitions are formed transnationally and transgov- ernmentally, the potential role of international institutions in political bar- gaining is greatly increased. In particular, they help set the international agenda, and act as catalysts for coalition-formation and as arenas for politi- cal initiatives and linkage by weak states.

Governments must organize themselves to cope with the flow of busi- ness generated by international organizations. By defining the salient issues, and deciding which issues can be grouped together, organizations may help to determine governme ntal priorities and the nature of interdepartmental committees and other arrangements within governments. The 1972 Stockholm Environment Conference strengthe ned the position of environ- mental agencies in various governments. The 1974 World Food Conference focused the attention of important parts of the United States government on prevention of food shortages. The September 1975 United Nations special session on proposaJs for a New International Economic Order generated an intragovernmental debate about policies toward the Third World in general. The International Monetary Fund and the General Agreement on Tariffs and Trade have focused governmental activity on money and trade instead of on

Robert 0. Keohane & Joseph S. Nye 5 7

Table 4.1 Political Processes Under Conditions of Realism and Complex Interdependence

Goals of actors

Instruments of state policy

Agenda formation

Linkages of issues

Roles of international organizations

Realism

Military security will be the dominant goal.

Military force will be most effective , although economic and other instruments will also be used.

Potential shifts in the balance of power and security threats will set the agenda in high politics and will strongly influence other agendas.

Linkages will reduce differences in outcomes among issue areas and reinforce international hierarchy.

Roles are minor , limited by state power and the importance of military force.

Complex Interdepe ndence

Goals of states will vary by issue area. Transgovernmental politics wi ll make goals difficult to define . Transnational actors will pur sue their own goals.

Power resources specific to iss ue areas will be most relevant . Manipulation of interdep endence. international organizations. and transnational actors will be major instruments.

Agenda will be affected by chan ges in the distribution of power resources within issue areas; the status of international regimes ; changes in the importance of transnational actors; linka ges from other issues and politi cizatio n as a result of rising sensitivity interdependence.

Linkage s by strong states w ill be more difficult to make since force will be ineffective. Linkage s by weak state s through international organizations will erode rather than reinforce hierarchy.

Organization s will set agenda s, induce coalition-formation, and act as arenas for political action by weak states . Ability to choose the organizational forum for an issue and to mobiliz e votes will be an important political reso urce.

private direct investment , which has no comparable international organiza- tion.

By bringing officials together, international organizations help to acti- vate potential coalitions in world politics. It is quite obvious that interna- tional organizations have been very important in bringing together repre- sentatives of less developed countries, most of which do not maintain

58 Contending Views of /PE

embassies in one another's capitals. Third World strategies of solidarity among poor countries have been developed in and for a series of interna- tional conferences, mostly under the auspices of the United Nations. 2

International organizations also allow agencies of governments, which might not otherwise come into contact, to turn potential or tacit coalitions into explicit transgovernmental coalitions characterized by direct commu- nications. In some cases, international secretariats deliberately promote this process by forming coalitions with groups of governments, or with units of governments, as well as with nongovernmental organizations having simi- lar interests. 3

International organizations are frequently congenial institutions for weak states. The one-state-one-vote norm of the United Nations system favors coalitions of the small and powerless. Secretariats are often respon- sive to Third World demands. Furthermore, the substantive norms of most international organizations, as they have developed over the years, stress social and economic equity as well as the equality of states. Past resolu- tions expressing Third World positions, sometimes agreed to with reserva- tions by industrialized countries, are used to legitimize other demands. These agreements are rarely binding, but up to a point the norms of the institution make opposition look more harshly self-interested and less defensible ....

Complex interdependence therefore yields different political patterns than does the realist conception of the world. (Table 4.1 summarizes these differences.) Thus, one would expect traditional theories to fail to explain international regime change in situations of complex interdependence. But, for a situation that approximates realist conditions, traditional theories should be appropriate ....

Notes

I. For a more detailed discussion, see Robert 0. Keohane and Joseph S. Nye, Jr., "Transgovernmental Relations and International Organizations," World Politics 27, no. I (October 1974): 39-62.

2. Branislav Gosovic and John Gerard Ruggie, "On the Creation of a New International Economic Order: Issue Linkage and the Seventh Special Session of the UN General Assembly," International Organization 30, no. 2 (Spring 1976): 309-46.

3. Robert W. Cox, "The Executive Head," International Organization 23, no. 2 (Spring 1969): 205-30.