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Anarchy in international relations theory: The neorealist-neoliberal debate Powell, Robert . International Organization ; Cambridge  Vol. 48, Iss. 2,  (Spring 1994): 313.

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ABSTRACT  

Two of the most influential contemporary approaches to international relations theory are neorealism and

neoliberalism. The debate between these 2 approaches has dominated much of international relations theory for

the last decade. Two books, Neorealism and Its Critics and Neorealism and Neoliberalism: The Contemporary

debate, make significant contributions to this debate. The former offered a wide-ranging critique of neorealism

when it was published in 1986. The latter, published in 1993, is more narrowly focused. It takes up where some of

the critiques in Neorealism and Its Critics left off. A review of these 2 complementary volumes affords an excellent

opportunity to begin to identify some of the weaknesses and limitations that the neorealist-neoliberal debate has

frequently obscured. FULL TEXT  

Two of the most influential contemporary approaches to international relations theory are neorealism and

neoliberalism. The debate between these two approaches has dominated much of international relations theoRy

for the last decade. It is now commonplace for an article about some aspect of international relations theory to

begin by locating itself in terms of this debate. These two approaches and the debate between them have failed to

contribute as much as they might have to international relations theory. These approaches suffer from serious

internal weaknesses and limitations that the neorealist-neoliberal debate often has tended to obscure rather than

to clarify. Once we have exposed and clarified these weaknesses and limitations, we will be able to see several

important directions for future theoretical work.

Two books, Neorealism and Its Critics and Neorealism and Neoliberalism: The Contemporary Debate, make

significant contributions to this debate. The former offered a wide-ranging critique of neorealism when it was

published in 1986. The latter, which has just been published, is more narrowly focused. It takes up where some of

the critiques in Neorealism and Its Critics left off. A review of these two complementary volumes affords an

excellent opportunity to begin to identify some of the weaknesses and limitations that the neorealist-neoliberal

debate frequently has obscured.

In this review, I discuss four broad avenues of criticism that these volumes take in evaluating neorealism and

specifically Kenneth Waltz's formulation of it.(1) The first three avenues are the origins of states' preferences, the

agent-structure problem, and Waltz's specific definition of political structure. These criticisms generally do not

challenge the logical coherence of neorealism. They focus instead on the limitations of the theory. The first two

center on what neorealism takes for granted, e.g., preferences and intersubjective meanings and understandings.

The third criticism finds Waltz's definition of structure too confining. The fourth avenue of criticism challenges the

internal logic of neorealism directly. It argues that conclusions claimed to follow from the assumptions of

neorealism actually do not. The neorealist-neoliberal debate lies along this fourth avenue.

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Three issues lie at the center of the neorealist-neoliberal debate. In reviewing these issues, I try to bring important

implicit assumptions to the fore and show that those assumptions account for many of the important differences

between the two theories. Moreover, many of the differences that have been thought to be significant, such as the

difference between relative and absolute gains, are not. The first issue at the heart of the debate is the meaning

and implications of anarchy. Although the notion of anarchy has served as a central organizing concept for much

of international relations theory, the emphasis on anarchy is misplaced. What have often been taken to be the

implications of anarchy do not really follow from the assumption of anarchy. Rather, these implications result from

other implicit and unarticulated assumptions about the states' strategic environment.

The second central issue is the problem of absolute and relative gains. I argue that the controversy surrounding

this problem generally has mistaken effects for causes and that this mistake has handicapped analysis of the

problem of international cooperation. More specifically, I try to demonstrate that the international relations

literature generally holds, if at times only implicitly so, that the extent to which a state is concerned about relative

gains depends on its strategic environment, for example, the offense-defense balance and the intensity of the

security dilemma. But if this is the case, then the degree to which a state is concerned about relative gains is part

of the outcome to be explained: it is an effect and not a cause. The extent to which a state is concerned about

relative gains, therefore, does not explain the level of international cooperation. This realization should refocus our

attention on what determines the degree of a state's concern about relative gains.

The third issue is the tension between coordination and distribution. There are often many ways to realize the joint

gains from cooperation, and these alternatives often lead to different distributions of those gains. Thus, the

potential for joint gains usually creates distributional disputes that tend to impede cooperation. Although these

distributional concerns only recently have begun to receive attention in the debate between neorealism and

neoliberalism, they hold the promise of clarifying some of the questions that actually do divide these two

approaches.

NEOREALISM AND THE STRUCTURAL APPROACH

Much of the neorealist-neoliberal debate can be seen as a reaction to Waltz's Theory of International Politics and a

response to those reactions. A brief discussion of two of that book's primary objectives is essential to

understanding the debate.(2) One objective was to reiterate, reinforce, and refine a line of argument Waltz began in

Man, the State, and War.(3) There, he had underscored the importance of third-image explanations. First-image

explanations locate the causes of international outcomes, say the cause of war, "in the nature and behavior of

men. Wars result from selfishness, from misdirected aggressive impulses, from stupidity."(4) Second-image

explanations locate causes in the internal structure of the state. Imperialism, for example, results from a particular

internal economic structure like capitalism; similarly, international peace results from a particular form of

government like democracy.(5) Appealing to Rousseau's stag hunt and alluding to the then recent development of

game theory, Waltz argued that first- and second-image explanations were insufficient.(6) In a situation entailing

strategic interdependence, such as that of the great powers, an actor's optimal strategy depends on the other

actors' strategies. If, therefore, we want to explain what the actors will do, then, in addition to looking at the

attributes of the actors, we must also look to the constraints that define the strategic setting in which the actors

interact. The third image locates causes "within the state system."(7)

A simple example from microeconomic theory illustrates the potential importance of third-image explanations. The

price is higher and the output is lower in a monopolized market than in a competitive one. But first- and second-

image accounts, which Waltz collectively calls reductive explanations in Theory of International Politics, do not

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explain these differences. In both markets, the attributes of the actors, which are firms in this case, are identical:

every firm tries to maximize its profits and consequently produces the level of output at which marginal cost

equals marginal revenue. What accounts for the variation in price and output between these markets is not

variation in the attributes of the units but variation in the environments or market structures in which they act. This

is the essence of the third image.

It is important to emphasize two points about the division of explanations into reductive and systemic accounts.

The first is an assumption inherent in this division: namely, that we can usefully conceive of the actors or units in a

system as separate and distinct from the constraints that define the strategic setting in which the units interact.

The second important point is the kind of conceptual experiment and explanation that naturally follows from this

division. Once a system has been decomposed into units and constraints, it is natural to ask one of two questions;

or, to put it differently, it is natural to consider two types of thought experiment. First, how would some aspect of

the units' behavior, say the probability of starting a war, vary if we conceptually change some attributes of the

units while holding the constraints constant? What, for example, would happen to the probability of war if a state's

form of government were democratic rather than authoritarian? Fixing constraints and varying units' attributes

comprise the essential conceptual experiment underlying reductive explanations. Second, how would behavior

change if the attributes of the units remained constant and the constraints were changed? What, for example,

would happen to the probability of war if the attributes of the units were unchanged but the distribution of power

changed from bipolarity to multipolarity? Fixing the units' attributes and varying the constraints facing the units

comprise the fundamental conceptual experiment underlying systemic explanations.

After emphasizing the general importance of third-image or systemic explanations, Waltz turns to a second

objective in Theory of International Politics. He sees structure as a "set of constraining conditions."(8) But states

may be constrained by many things--like the distribution of power, the nature of military technology, or the state's

comparative economic advantage. A second goal for Waltz is to specify a restricted set of constraints that provide

a way of conceiving of a political system and then to demonstrate the power of this formulation by showing that it

tells "us a small number of big and important things."(9) He restricts this set to three elements, defining a political

structure in terms of its ordering principle, the distribution of the units' capabilities, and the functional

differentiation or nondifferentiation of the units.(10)

Two criteria seem to have guided the selection of these elements and this definition of political structure. The first

is pragmatic. This definition appeared to lead to interesting insights, which, of course, is the goal of all positive

theories. The second criterion is less general and reflected a trade-off. Waltz tried to define political structure so

that "it would show us a purely positional picture."(11) The advantage of a positional picture is that many systems

can be seen as similar regardless of the particular substantive context in which the units interact. "Structure,

properly defined, is transposable."(12) Thus, firms facing a high risk of bankruptcy in an oligopolistic market may

be seen to be in an anarchical, self-help system in much the same way that states facing a high risk of war in the

international system are in an anarchical, self-help system.(13) If, therefore, anarchy implies certain behavior, such

as the tendency for balances of power to form, then we would expect to see this behavior obtain "whether the

system is composed of tribes, nations, oligopolistic firms, or street gangs."(14) The potential advantage of a spare

definition of a political structure is that it may help us see similarities in what initially appeared to be very different

domains. The potential disadvantage of this spare definition is that if the three dimensions Waltz uses to

characterize systems do not sufficiently constrain the units' interaction, then units in similar systems may not

interact in similar ways. If this is the case, then we shall have to look elsewhere for explanations of these

variations. Recognizing this trade-off, Waltz opts for a spare definition.

FOUR AVENUES OF CRITICISM

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Structural theories decompose a system into units and constraints. This decomposition makes these theories

vulnerable to two broad avenues of criticism. The first criticism accepts this decomposition but stresses the need

for a theory of preference formation to supplement the structural theory. Because the units' preferences are

exogenously specified in a structural theory, we need a theory that explains their origins. The second avenue

rejects this decomposition. It emphasizes the agent-structure problem, arguing that agents and structure are

inseparable. In addition to these first two broad avenues of criticism, any particular structural theory, like Waltz's

formulation of neorealism, is also subject to a third and fourth avenue of criticism. The third focuses on and

questions the specific definition of structure employed in the theory. The fourth questions whether the

conclusions claimed to follow from the theory do indeed follow.

PREFERENCES ARE GIVEN EXOGENOUSLY

The first avenue of criticism centers on preferences. Structural approaches take the units' preferences as given.

That is, these preferences are exogenously specified. They become inputs into the analysis rather than the subject

of analysis. This may be an important weakness of the structural approach. As Robert Jervis cautions, "By taking

preferences as given, we beg what may be the most important question on how they were formed.... Economic

theory treats tastes and preferences as exogenous. Analysis is therefore facilitated, but at the cost of drawing

attention away from areas that may contain much of the explanatory 'action' in which we are interested."(15)

The first step in assessing the force of the criticism that structural approaches lack a theoRy of preferences is to

clarify the criticism by distinguishing two types of preferences. The first type is preferences over outcomes; the

second is preferences over actions or policies. To differentiate these two types, consider a game in payoff-matrix

form. The cells in the matrix correspond to potential outcomes. The utilities that appear in each cell in the matrix

represent the players' preferences over these potential outcomes. That is, a player's utilities reflect its preference

ranking of the possible outcomes. Given its preferences over outcomes and its beliefs about what the other

players are doing, a player can rank its potential actions from most to least preferred. In a two-person game, for

example, the row player can rank its actions from best to worst given its payoffs and its beliefs about what the

column player is doing. This induced ranking defines a player's preferences over actions.(16)

Structural theories do not try to explain preferences of one type but do try to explain preferences of the other type.

Structural theories take the units' preferences over possible outcomes as given and, consequently, lack a theory of

preferences over outcomes. But structural theories try to make predictions about the units' preferred actions by

combining assumptions about the units' preferences over outcomes with other assumptions about the structural

constraints facing the units. In this sense, structural theories claim to be a theory of preferences over actions.

Game theory, for example, is a theory of preferences over actions. It attempts to predict the units' optimal actions

based on their preferences over outcomes and the strategic setting in which they interact. Similarly, Waltz's

formulation of neorealism takes the units' preferences as given. "In a microtheory, whether of international politics

or of economics, the motivation of the actors is assumed rather than realistically described."(17) In particular,

Waltz assumes "that states seek to ensure their survival" and then attempts to predict the units' actions, albeit in a

very general way, on the basis of this assumption about the units' preferences and other assumptions about the

political structure in which the units interact.(18)

The two types of preferences are frequently conflated. For example, after noting that "economic theory takes

tastes and preferences as exogenous" and warning that we may be begging the most important questions by

doing so, Jervis discusses some of the sources of these tastes and preferences over outcomes. These sources

include transnational forces, ideologies, beliefs, experience, and knowledge.(19) He also sees realism as a source

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or theoRy of preferences over outcomes, saying, "Sometimes we can deduce preferences from the structure of the

system, as Realism suggests. But even a structural theory of international politics as powerful as Waltz's has

trouble producing precise deductions."(20) Jervis confounds the two types of preferences here. He correctly

observes that economic theory takes preferences over outcomes as given but then treats neorealism, which is a

theory of preferences over actions, as a theory of preferences over outcomes. Robert Keohane similarly conflates

the two types of preferences when he intends to criticize neorealism as a weak theoRy of behavior (that is, a weak

theory of preferences over actions) but describes neorealism as a weak theory of preferences over outcomes.(21)

Conflating the two types of preferences has at least two negative effects. The first is to suggest that we cannot

use structural or game-theoretic approaches, which take preferences as given, to study the effects on preferences

of changes in beliefs, experience, or knowledge.(22) This suggestion is simply wrong if what we want to study is

how changes in these factors affect preferences over actions or policies. Indeed, one of the primary uses of

incomplete-information games is to study how interaction affects players' beliefs and, through these beliefs, their

preferred actions. Andrew Kydd, for example, develops an interesting incomplete-information model of arms races

that he uses to study Jervis's spiral model of escalation.(23) The basic issue in Kydd's game is whether a state will

change from preferring not to arm to preferring to arm because it interprets another state's arms increase as a sign

of hostility rather than of insecurity. Kydd uses this model to study the circumstances in which two states that

have no hostile intent might arm and eventually go to war because they fear that the other is hostile. The formal

study of dynamic interactions and the learning and signaling inherent in them is at an early stage in international

relations theory. Many legitimate criticisms can be made of this work.(24) But the claim that this work has nothing

to say about learning and changes in preferences (over actions) because it takes preferences (over outcomes) as

given is not one of these criticisms.

The second negative effect of conflating the two types of preferences is that doing so confounds two objections to

structural approaches that need to be evaluated separately. The first objection is that these approaches take the

units' preferences as given. The second is that these approaches offer at best very weak theories of preferences

over actions and at worst misleading theories. As will be seen, the first objection is not very important to the

neorealist-neoliberal debate, while the second objection lies at the heart of it.

The significance of taking the units' preferences as given in a theory or model depends very much on the theory or

model and the purposes for which it has been constructed. In some models of nuclear crisis bargaining, for

example, there are only three outcomes: a state prevails in the crisis, it backs down but avoids a nuclear exchange,

or the crisis ends in nuclear war.(25) Preferences over these outcomes are exogenously given in these models, but

it would seem bizarre not to assume that a state prefers the first outcome to the second and the second to the

third. Many situations, however, are much more complicated and what to assume about preferences over

outcomes is not obvious. It is not clear, for example, what to assume about a state's preferences over possible

trade arrangements. Here the work of Jeffry Frieden, Peter Gourevitch, Peter Katzenstein, David Lake, Helen Milner,

Ronald Rogowski, and others in developing an understanding of the origins of preferences is very important.(25)

Similarly, a state's preferences over potential national security arrangements, for example, possible arms control

agreements, may not be obvious, and theories may be needed to explain these preferences.(27)

That neorealism takes the units' preferences as given is of little consequence for the neorealist-neoliberal debate.

As will be developed more fully below, this debate largely focuses on the likelihood of cooperation in anarchy and

on the role of institutions in facilitating cooperation. Neorealism maintains that cooperation will be difficult in an

anarchic system composed of units that prefer survival over extinction. Neoliberalism questions this conclusion

but not the assumption that units are minimally motivated to survive. Indeed, it would seem bizarre not to assume

that units prefer survival over extinction. Thus, the criticism that these preferences are specified exogenously is

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unimportant to the debate about the likelihood of cooperation in anarchy. The potentially important criticism is

that the conclusions claimed to follow from neorealism's spare assumption about units' preferences and about the

political structure in which these units interact actually do not follow. This is the fourth avenue of criticism, which

will be discussed below.

THE INSEPARABILITY OF AGENTS AND STRUCTURE

The structural approach decomposes a system into units and the constraints facing them. The second avenue of

criticism denies the separability of agents and structure. Drawing on structurationist theories in sociology,

Alexander Wendt argues that agents and structure are "mutually constitutive yet ontologically distinct entities.

Each is in some sense an effect of the other; they are 'co-determined.'"(28)

If agents and structure were conceptually inseparable, two consequences would follow. First, the two conceptual

experiments underlying the structural approach from which this approach derives its explanatory power would

become problematic. We would no longer be able to study the constraining effects of structure by theoretically

holding the units and their preferences constant while varying the structure in which they interact. If units and

structure are inseparable so that each is at least partly the effect of the other, then variation in the structure will

also change the units.

Second, challenging the separability of units and structure makes the units an object of inquiry and directs our

attention to systemic change and transformation. If units and structure are mutually constitutive, then it is natural

to ask, How do they evolve, and How do they interact over time? Thinking of the units as being endogenous shifts

our attention away from a positional model to what David Dessler calls a transformational model. In a positional

model like Waltz's formulation of neorealism, "structure is an environment in which action takes place. Structure

means the 'setting' or 'context' in which action unfolds."(29) Structure is, in other words, a set of constraints. In a

transformational theory, "structure is a medium of activity that in principle can be altered through activity."(30)

Structure shapes action and is shaped by action. The goal, therefore, of a transformational theory is to explain how

structure and agent interact. To do this, Robert Cox, Dessler, John Ruggie, Wendt, and others have emphasized

identities, interests, rules, roles, and intersubjective understandings and meanings.(31)

As with the first avenue of criticism, the force of the second avenue depends very much on the particular theory or

model being criticized. Cox's distinction between problem-solving theories and critical theories is helpful here.(32)

The former uses the ceteris paribus assumption to restrict the statement of a specific problem "to a limited

number of variables which are amenable to a relatively close and precise examination."(33) Among the many

things that problem-solving theories may exclude by taking them as given and unproblematic are intersubjective

understandings and expectations. The ceteris paribus assumption effectively freezes and thereby assumes away

the interaction of units and structure.

It seems entirely appropriate to assume away this interaction in a problem-solving theory as long as the

applicability or domain of the theory is understood to be bounded by the ceteris paribus assumption.

Structurationists rightly argue that intersubjective understandings are part of what is being taken as given or

unproblematic in this assumption. If these understandings and meanings differ significantly from those presumed

in the ceteris paribus assumption, then theories predicated on that assumption may be of little use. Of course, the

ceteris paribus conditions--be they about interests and identities or about the many other factors left out of a

specific theory--are never strictly satisfied. We do not know a priori whether differences in interests and identities

or in the other excluded factors are important. The best we can do is try to determine the domain of applicability of

problem-solving theories by using them in different settings. Powerful theories will work in a large domain because

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the excluded factors subsumed in the ceteris paribus assumption generally are insignificant. Weak theories will

have a very limited domain. The sociological approach makes a serious and important criticism and contribution in

stressing the importance of intersubjective meanings and understandings and the interaction between agents and

structure.

The sociological approach stresses the inseparability of units and structure. But it is important not to identify this

criticism with this particular approach. A second line of research is also predicated on the interaction of units and

structure or, more precisely, the interaction of states and the international structure. The essence of Gourevitch's

second-image-reversed argument is that the international structure shapes domestic institutions and states'

preferences: states and structure interact.

This second form of the criticism that agents and structure are inseparable is important for two reasons. First, it

shows that the agent-structure problem may arise even in rationalist approaches that take interests and identities

as given and assume that the units act in their own narrow self-interest. Second, the existing literature illustrates a

way of trying to deal with this form of the agent-structure problem. The potential solution is to redefine the units in

the system. Rather than treating states as unitary actors, states are decomposed into more basic units. The hope

here is that we will be able to separate these more basic units from the constraints facing them.

To illustrate this approach to dealing with the interaction of states and the international structure, consider

Rogowski's work on the effects of international trade on domestic political alignments and states' preferences.(34)

At the risk of doing the subtlety of his analysis grave injustice, Rogowski decomposes a country into three groups

or units: landowners, capitalists, and labor. A state's preferences emerge through competition among these units.

Moreover, anything that significantly affects the terms of international trade shifts the distribution of domestic

political power among the units. For example, technological or political changes, like the advent of railroads and

steamships or the rise of British hegemony, reduce the cost or risk of international trade. These changes favor and

enrich domestic groups that benefit from greater trade. By assumption, benefited groups become more powerful

and the state's preferences generally become more reflective of the preferences of these favored groups.(35)

Rogowski's analysis illustrates a rationalist version of the agent-structure problem or, more accurately, the state-

structure problem. Capital, land, and labor in Rogowski's argument are acting in their own material self-interest.

Changing intersubjective meanings and understandings are not at issue here. Nevertheless, we cannot decompose

the international system into units and structure if we treat states as the units. For example, a change in the

international system, like the rise of British hegemony, that reduces the risk and therefore increases the expected

return to international trade will also tend to change states' preferences. States and structure are interdependent;

each is in part an effect of the other.

This brief illustration also suggests a way of trying to deal with this version of the agent-structure problem:

namely, to decompose the system into different units that hopefully can be separated from the structure

constraining them. In effect, we enlarge the game by trying to break what we previously took to be a unitary actor,

namely the state, into more basic units.(36) Of course, enlarging the game to include the interaction between

domestic and international politics makes any analysis much more difficult. Needless to say, an approach to

dealing with the inseparability of states and structure is not a theory of their interaction. Much important work

remains to be done on the interaction of states and structure.(37)

In sum, theories that take intersubjective meanings and understandings as given assume away one form of agent-

structure interaction. Structural theories that take the state to be a unitary actor also assume away a rationalist

form of agent-structure interaction. These theoretical simplifications may be appropriate for some questions and

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not for others. We need to do more to identify those domains in which this interaction can be disregarded and

those in which it cannot.

WALTZ'S DEFINITION OF STRUCTURE

The first and second avenues of criticism are directed at the structural approach in general. The third and fourth

avenues of criticism apply more specifically to neorealism and to Waltz's particular formulation of it. The third

criticism focuses on Waltz's spare definition of structure and generally argues that other elements be included in

the description of a system's structure.

Waltz defined a political structure by its ordering principle, the distribution of capabilities, and the functional

differentiation or nondifferentiation of the units. This definition thus implies that the nuclear revolution in military

technology is a unit-level change and not a structural change.(38) Joseph Nye finds it "particularly odd to see

nuclear technology described as a unit characteristic."(39) He and Keohane argue that such factors as "the

intensity of international interdependence or the degree of institutionalization of international rules do not vary

from one state to another on the basis of their internal characteristics... and are therefore not unit-level

factors."(40) They conclude that "making the unit level the dumping ground for all unexplained variance is an

impediment to the development of theory."(41)

It is clear why Waltz would not want to include military technology in his definition of structure. Recall that one of

his goals in fashioning his definition was to give a purely positional picture of a system so the notion of structure

would be transposable from one substantive context to another. One can readily transpose the idea of the

distribution of capabilities from the international system where states are the units to, for example, an oligopolistic

market where firms are the actors. But what is the analogue to having a secure, second-strike force for a firm in an

oligopoly? Including military technology in the definition of structure would seem to make the concept less

transposable. Of course, greater transposability comes at a cost. Waltz's theory cannot account for variations in

outcomes like the probability of war that may be due to the nuclear revolution. To understand those effects, we

have to look to other theories.

Although it is evident why Waltz would not want to include dimensions like military technology in his notion of

structure given his goal of transposability, why should the distribution of capabilities across states "be included in

the definition and not other characteristics of states that could be cast in distributional terms?"(42) The answer

seems to be a pragmatic one. Waltz believes that state "behavior varies more with differences of power than with

differences in ideology, in internal structure of property relations, or in governmental form."(43) That is, Waltz

believes that a definition of structure based on the distribution of capabilities rather than on the distribution of

something else seems more likely to have greater explanatory power.(44) In evaluating the theory based on this

definition, part of what is being evaluated is the usefulness of focusing on the distribution of capabilities.

Notwithstanding the prevalence of criticisms of Waltz's spare definition of structure, there is often a certain

hollowness to debates about the proper definition of structure. Surely the effects of, say, the nuclear revolution on

international politics do not depend on whether we attach the appellation "structural" or "unit-level" to this change.

Putting a high value on transposability, Waltz opted for a definition that made the concept of structure more

readily transposable. Other theorists working on other questions may value transposability less and may define

structure differently. The important issue, however, is not whether the consequences of the nuclear revolution,

different forms of property relations, varying degrees of institutionalization , or changes in other sets of constraints

are called "structural" or something else. The issue is to develop theories that explain these consequences.(45)

When we debate what to call these changes rather than develop and test theories about the consequences of

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these changes, we appear to believe that the name implies the consequences.

NEOREALISM AND ITS IMPLICATIONS

The neorealist-neoliberal debate develops primarily along the fourth avenue of criticism. This criticism questions

the conclusions claimed to follow from Waltz's assumptions and those of neorealism more generally. Neorealism,

for example, claims that international institutions play a minimal role in shaping international politics and that the

prospects for cooperation in anarchy are bleak.(46) Neoliberalism questions these claims in two ways. First, it

challenges the logical coherence of the neorealist argument by trying to show that there is a mistake in the logic.

Second, neoliberalism argues that the explanatory power of neorealism is weak when compared to neoliberalism. I

trace the development of this criticism and the neorealist-neoliberal debate in the remainder of this section. I

examine three major disputes in the debate in the next section.

In his contribution to Neorealism and Its Critics, Keohane surveys the neorealist research program and questions

its predictive power.(47) He then describes what a "modified structural research program" would look like. It would

"pay much more attention to the roles of institutions and rules than does Structural Realism. Indeed, a structural

interpretation of the emergence of international rules and procedures, and of obedience to them by states, is one

of the rewards that could be expected from this modified structural research program."(48)

Keohane challenges neorealism more directly and develops an institutional approach more fully in his work, After

Hegemony.(49) The central question is, "Under what conditions can independent countries cooperate in the world

political economy?"(50) Can, for example, states cooperate in the absence of a hegemon? Keohane begins his

analysis of this question "with Realist insights about the role of power.... [Keohane's] central arguments draw more

on the Institutionalist tradition, arguing that cooperation can under some conditions develop on the basis of

complementary interests and that institutions, broadly defined, affect the patterns of cooperation that

emerge."(51) In short, institutions may be a significant factor in promoting international cooperation in ways that

neorealism has failed to appreciate.

Keohane challenged both the logical coherence and the explanatory power of neorealism. Attacking the logic,

Keohane writes, "I propose to show, on the basis of their own assumptions, that the characteristic pessimism of

Realism does not follow. I seek to demonstrate that Realist assumptions about world politics are consistent with

the formation of institutionalized arrangements, containing rules and principles, which promote cooperation."(52)

In sum, Keohane intends to start with the same set of core assumptions that neorealism does and then show that

cooperation is compatible with these assumptions.

Keohane attempts this demonstration in the context of the repeated prisoners' dilemma. There are two steps to

the demonstration. The first is to argue that the repeated prisoners' dilemma is a reasonable model for the

international system envisioned in neorealism, that is, that this model is compatible with realism's central

assumptions about the international system. Although he does not develop this point at length, Keohane claims,

"Not all situations in world politics or international political economy take the form of Prisoner's Dilemma, but

many do."(53) As further support for the claim that the repeated prisoners' dilemma is generally seen to be

compatible with realism's basic assumptions, he might also have referred to Jervis's belief that this game is an

appropriate model for studying the security dilemma.(54) The second step in Keohane's argument is to appeal to

the Folk theorem, which shows that the mutually cooperative outcome can occur in equilibrium in an infinitely

repeated prisoners' dilemma if the actors do not discount the future too much.(55) These two steps taken together

imply that cooperation is compatible with realism.

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Writing in 1983, Keohane believed his neoliberal institutional approach would prove to have greater explanatory

power than neorealism. But, a definitive test of his institutional approach was not yet possible because the world

was "only just entering the posthegemonic era."(56) It was too soon to test the explanatory power of an argument

that predicted that international institutions and cooperation would persist despite the absence of a hegemon.

Instead of a test, Keohane offered a "plausibility probe" of his institutional approach in the cases of international

trade, finance, and petroleum.(57)

One can envision two general types of response to Keohane's neoliberal challenge to neorealism. The first

addresses Keohane's challenge to the logic of neorealism's analysis of the problem of international cooperation.

This response would show that Keohane had really not based his argument on the same set of core assumptions

that neorealism does. If this were the case, then Keohane's argument that neorealism's conclusions about the

prospects of international cooperation do not follow from its assumptions would be invalid. If, more specifically,

the repeated prisoners' dilemma is incompatible with neorealism's core assumptions about the international

system, then showing that cooperation in this game is possible would say nothing about what follows from

neorealism's assumptions.

The second type of response is more empirical. It would say that neorealism never claimed that international

cooperation was logically incompatible with neorealism's assumptions. So, showing that cooperation is possible

given these assumptions does not contradict neorealism. The real question is how much international cooperation

exists and whether neorealism or neoliberalism does a better job of accounting for the observed pattern of

international cooperation. This response would then go on to compare the relative explanatory power of these two

approaches.

Joseph Grieco developed both types of response to the institutionalist challenge.(58) He argued that Keohane had

not started with the same assumptions neorealism does. In using the repeated prisoners' dilemma, Keohane

implicitly had assumed that states try to maximize their absolute gains. According to Grieco, however, neorealism

requires a state's utility function to reflect a concern for relative gains.(59) Consequently, Keohane does not "show,

on the basis of their [realists'] own assumptions, that the characteristic pessimism of Realism does not follow," as

he claimed.(60) In Cooperation Among Nations, Grieco tried to assess the relative explanatory power of neorealism

and institutionalism. He considers the case of negotiations over nontariff barriers during the Tokyo Round of the

General Agreement on Tariffs and Trade, a case that he believes poses a hard test for realism, and concludes that

realism explains this case better than does institutionalism. The latest round of the debate between realism and

liberalism was now fully engaged.(61)

David Baldwin brings a number of previously published contributions to this debate together in Neorealism and

Neoliberalism.(62) Baldwin provides an overview of the debate, and Grieco and Keohane offer their reflections and

appraisals of the debate in new essays. This volume complements and extends some of the lines of analysis

developed in Neorealism and Its Critics. Neorealism and Its Critics includes both internal and external critiques of

neorealism. The former share neorealism's problem-solving approach, while the latter adopt a critical

approach.(63) The scope of Neorealism and Neoliberalism is narrower, more focused, and wholly internal. All of the

contributions exemplify the problem-solving approach and address various facets of the neorealist-neoliberal

debate. Three issues have dominated this debate, and an assessment of it requires an examination of each.

AT ISSUE

The three issues at the center of neorealist-neoliberal debate are the meaning and implications of anarchy, the

problem of absolute and relative gains, and the tension between cooperation and distribution. In what follows, I

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make three points about these issues. First, although anarchy is often taken to be a fundamental organizing

concept in international relations theory, the emphasis on anarchy is misplaced. What have often been taken to be

the implications of anarchy do not really follow from that assumption. Rather, these implications result from other

implicit and unarticulated assumptions about states' strategic environment. Second, the controversy over the

problem of absolute and relative gains generally has mistaken effects for causes in its analysis of the prospects

for international cooperation. Finally, although the debate only recently has begun to consider distributional

concerns, the analysis of these concerns may help to clarify the differences that do divide neorealism and

institutionalism.

THE MEANING AND IMPLICATIONS OF ANARCHY

The meaning and implications of anarchy Much of the neorealist-neoliberal debate centers on the meaning and

implications of anarchy. According to Grieco, neorealism entails five propositions. He defines the last three of

these as "Third, international anarchy is the principle 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. Finally, international institutions affect the prospects

for cooperation only marginally."(64) The point of departure for Keohane's analysis in After Hegemony was to use

the prisoners' dilemma to show that anarchy did not imply a lack of cooperation. Grieco responded by arguing that

Keohane's model was misspecified because he neglected states' concerns for relative gains. Duncan Snidal then

tried to show that anarchy does not imply a lack of cooperation even if states are concerned with relative

gains.(65)

A review of the neorealist-neoliberal debate about the meaning and implications of anarchy shows that our

continuing emphasis on anarchy is misplaced. Many of the purported implications of anarchy may be more

usefully traced to other assumptions about the constraints facing the units. This suggests that we should focus

less attention on anarchy and much more attention on characterizing the strategic settings in which the units

interact.

In reviewing the debate about anarchy, it is necessary to begin by distinguishing between two formulations of

anarchy. The first is that anarchy means the "lack of a common government" that can enforce agreements among

the states or more generally among the units.(66) Robert Art and Jervis together explain that "international politics

takes place in an arena that has no central governing body. No agency exists above individual states with authority

and power to make laws and settle disputes. States can make commitments and treaties, but no sovereign power

ensures compliance and punishes deviations. This--the absence of a supreme power--is what is meant by the

anarchic environment of international politics."(67)

It is important to emphasize that this formulation of anarchy says nothing about the means the units have at their

disposal as they try to further their ends. It says only that no higher authority exists that can prevent them from

using the means they have. Thus, for Waltz, firms facing a high risk of bankruptcy may be in an anarchic self-help

system even though the means available to them to further their interests, like cutting prices or forming alliances

to distribute the costs of research and development, have nothing to do with the use of military force, which is one

of the means available to states in the international system.(68)

One advantage of defining anarchy without reference to the means available to the units is that it makes the

concept of anarchy readily transposable to different substantive domains. As discussed above, Waltz weighed this

advantage heavily in constructing his formulation of structure, so it is hardly surprising that he would adopt this

first definition of anarchy. But he certainly is not alone, as Milner's survey of different concepts of anarchy

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shows.(69)

The second notion of anarchy refers to the means available to the units. In "Coordination and Collaboration," Arthur

Stein begins by observing that many international relations scholars use anarchy to describe "the classic

characterization of international politics as relations between sovereign entities dedicated to their own self-

preservation, ultimately able to depend only on themselves, and prepared to use force."(70) In effect, this second

formulation adds another dimension to the lack of a central authority: namely, that one of the means available to

the units is the use of force.

The addition of this second dimension has two consequences. First, it makes the transposability of the concept of

anarchy more problematic. What, for example, is the analogue to using force for a firm facing a high risk of

bankruptcy? If there is no analogue, then a group of firms facing a high risk of bankruptcy would not form an

anarchic system according to this definition. If we want to argue that there is an analogue, what are the criteria for

establishing that one of the means open to a firm is analogous to a state's ability to resort to force? Of course, a

definition of anarchy that reduces its transposability may have compensating advantages. Whether these potential

advantages outweigh the disadvantage of a less transposable definition will be discussed below.

Second, adding another dimension raises important questions for international relations theory. Do the patterns of

behavior generally associated with anarchic systems, such as the tendencies for balances of power to form and--at

least for neorealists--the limited prospects for international cooperation, result from the lack of a central authority?

Or, are these patterns more heavily influenced by implicit and unarticulated assumptions about, say, the nature of

military force that are subsumed in the second definition of anarchy?

Two arguments suggest that our emphasis on anarchy has been misplaced if by anarchy we mean the lack of a

central authority. These arguments suggest that conclusions often claimed to follow from the absence of a central

authority do not. These conclusions require other supporting assumptions. The first argument is really an

empirical observation. Keohane notes in his assessment of the debate between neorealism and neoliberalism that

the modern state system, conventionally dated from 1648, has always been anarchic in the sense that it lacked a

common government.(71) Thus, anarchy, while perhaps a necessary condition, is certainly not sufficient to explain

any of the variation in international politics during the modern era. In particular, anarchy cannot account for

whatever variation in the level of international cooperation and institutionalization there has been.

The second argument is more theoretical and begins with a recent attempt to formalize the classic guns-versus-

butter problem.(72) To summarize the model, there are two states. In each period a state must decide how much

of its output to consume, how much to allocate to its MilitaRy sector, and whether or not to attack the other state.

Each state's utility is the discounted sum of its consumption in each period. As long as neither state attacks, the

game continues. If a state attacks at some time, the game effectively ends in one of two ways. Either one state or

the other will prevail by conquering the other. The odds that a state will prevail are simply the ratio of its military

allocation to the other state's military allocation. The fact that a state's probability of victory depends on its

military allocation creates a trade-off between current and expected future consumption. The more a state

consumes today, the smaller its military allocation, and the higher the probability of defeat. Because defeat means

a loss of future consumption, consuming more today reduces expected future consumption. The formal analysis

of the game determines each state's equilibrium level of consumption and military spending that balances this

trade-off.

The guns-versus-butter model shows that our emphasis on anarchy is misplaced. Neorealism expects balance-of-

power politics to prevail whenever the system is anarchic and the units want to survive.(73) The guns-versus-

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butter model indicates that this expectation is too broad. Whether or not the states balance in the model depends

on an assumption about military technology. Generalizing beyond this model, whether units balance or not

depends as much on other features defining the strategic situation in which they interact as it does on the

presence of anarchy.

To see that balancing depends on underlying assumptions about military technology, note that the guns-versus-

butter game presumes a conventional military technology in which the probability of victory or defeat depends on

the relative sizes of the opposing military forces. Given this stylized assumption about military technology, the

states balance against each other in the way we would expect the units to do in an anarchic system.(74) Now

suppose that the states' strategic setting is different. Formalizing and stylizing the nuclear revolution in military

technology, assume that there is, to use Bernard Brodie's term, an absolute weapon.(75) The probability of victory

no longer depends on the relative size of the states' military forces. Rather, once both states have attained secure

second-strike forces, war is certain to take a toll far higher than any potential gain. If we solve the model based on

this assumption about military technology, the states will spend enough to acquire second-strike forces. But they

will not spend more even if the other state does. There is no balancing here even though the system remains

anarchic and the units still seek to survive.(76) The first notion of anarchy, albeit very transposable, does not imply

balancing.

The guns-versus-butter model, like many models, makes many stark simplifications and, accordingly, must be used

cautiously. On the plus side, models, in part because of these simplifications, let us vary one factor while holding

everything else constant. Models thereby permit us to isolate the effects of different factors in ways that historical

cases rarely do. When we use the guns-versus-butter model to isolate the effects of anarchy, we find that

conclusions claimed to follow from the assumption of anarchy depend at least as much on other unarticulated

assumptions about the units' strategic environment.

The first definition of anarchy is in some sense too transposable, while the second definition is not transposable

enough. As we have seen, if defined as the absence of a central authority, anarchy encompasses systems in which

states do and do not balance. Conversely, if we define anarchy by adding the notion of the potential use of force to

the lack of a central authority, we find the transposability of the concept to be greatly limited, even if units

generally will balance in such a system. The disadvantages of this very limited notion of anarchy are quite high. In

particular, this notion does not apply to systems in which the use of force is for all intents and purposes not at

issue. Even if neorealism's expectations about anarchic systems in which the use of force is a serious potential

concern are correct, the arguments underlying these expectations cannot be transposed to systems in which the

use of force among units is not at issue. Neorealist expectations about these systems may of course still prove to

be correct, but they lack theoretical foundations.

The absence of a definition that is less transposable than the first and more transposable than the second poses

an important problem for international relations theory after the cold war. The problem is evident in some recent

efforts to use neorealism's analysis of anarchy and the problem of absolute and relative gains to outline the post-

cold war contours of international politics. The neorealist analysis argues that states will start competing and

balancing over economic issues after the cold war much as they competed and balanced over security issues

during the cold war. Samuel Huntington, for example, bases his assessment of the continued importance of U.S.

primacy on a neorealist analysis.(77) Yet, he and others also believe that the prospects of "military conflict

between major states is unlikely."(78) The discussion of transposability shows that neither definition of anarchy

provides adequate theoretical support for the neorealist analysis of international politics if the use of force is not a

relevant concern. The first notion of anarchy can be transposed readily to a system in which the use of force is not

at issue. But as we have seen, this definition does not support the neorealist claims that anarchy implies balance-

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of-power politics.(79) The second notion of anarchy, while it may imply balancing when force is at issue, cannot be

transposed to a domain in which force is presumed not to be at issue.

Huntington, believing that the politics of international economics is more like a system with conventional military

technology, argues for the importance of international primacy. Jervis, believing that the politics of international

economics is more like a system with an absolute weapon, questions the importance of international primacy.(80)

In either case, the neorealist-neoliberal debate's emphasis on the lack of a central authority is misplaced. As

Charles Lipson puts it in his contribution to the Baldwin volume, "The idea of anarchy is, in a sense, the Rosetta

stone of international relations.... But what was once a blinding insight--profound and evocative--has ossified and

become blinding in the other sense of the word--limiting and obscuring."(81) We need to develop a more careful

specification of the strategic settings in which units interact if we are to be able to explain the pattern of their

interactions. Characterizing this structure is an important open question for international relations theory.

THE PROBLEM OF ABSOLUTE AND RELATIVE GAINS

The problem of absolute and relative gains The second major issue at the center of the debate between neorealism

and institutionalism is the problem of absolute and relative gains. In what follows, I first briefly summarize some

aspects of the debate about this problem. Then I argue that in a narrower methodological sense this debate

reflects a basic misunderstanding of the role of models. More broadly, the debate surrounding absolute and

relative gains generally has mistaken effects for causes and, therefore, contributed little to the analysis of the

problem of international cooperation. Once we separate causes from effects, we again see the need to focus our

attention on a more elaborate characterization of the strategic settings confronting states.

To review the debate, neorealism assumes that states are concerned with relative gains. For Waltz, "states that

feel insecure must ask how the gain will be divided. They are compelled to ask not 'Will both of us gain?' but 'Who

will gain more?'"(82) In mounting his institutional challenge in After Hegemony, Keohane assumes that states are

trying to maximize their absolute gains, that is, the states' preferences "are based on their assessments of their

own welfare, not that of others."(83) He then analyzes the problem of cooperation in terms of the repeated

prisoners' dilemma. Grieco in turn criticizes Keohane's assumption that states attempt to maximize their absolute

gains. Grieco asserts that "realism expects a state's utility function to incorporate two distinct terms. It needs to

include the state's individual payoff... reflecting the realist view that states are motivated by absolute gains. Yet it

must also include a term integrating both the states' individual payoff... and the partner's payoff... in such a way

that gaps favoring the state add to its utility while, more importantly, gaps favoring the partner detract from it."(84)

In sum, the debate about absolute and relative gains became a debate about what to assume about states' utility

functions.

The key to understanding this debate is to distinguish between two possibilities. The first is that a state's concern

or, more precisely, the degree of its concern for relative gains is the product of the strategic environment in which

the state finds itself. If so, then the degree of concern is likely to vary as the environment, say the intensity of the

security dilemma, varies. In this case, the strategic setting facing the state induces a concern for relative gains.

The second possibility is that a state's degree of concern does not vary and is the same regardless of its

environment.

Both neorealism and neoliberalism appear to agree that this concern is induced. Grieco, for example, believes that

a state's sensitivity to relative gains "will be a function of, and will vary in response to, at least six factors."(85)

These include the fungibility of power across issues, the length of the shadow of the future, and whether the

relative gains or losses occur over military or economic matters.(86) Neoliberalism also assumes that the degree

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of concern varies. Indeed, Keohane emphasizes that both neorealism and neoliberalism presume that the concern

for relative gains is conditional in his appraisal of the neorealist-neoliberal debate.(87)

Two important implications follow from the conclusion that the degree of a state's concern for relative gains is

conditional and varies from situation to situation. The first is that the debate about what to assume about a state's

preferences or utility function is largely irrelevant and reflects a basic misunderstanding of the role of models. We

can formally induce a concern for relative gains in two ways. First, we can explicitly represent the constraints that

lead to this concern in the model. This is the approach I followed in analyzing the absolute and relative gains

problem.(88) I assumed that states were trying to maximize their absolute gains. But the strategic setting in which

they were attempting to do so induced a concern for relative gains. The second way to induce a concern for

relative gains is to represent this concern in the state's utility function. When done in this way, the model is in

effect a reduced form for some more complicated and unspecified model in which the strategic constraints would

induce this concern. Grieco's analysis may be seen as an attempt to work with a reduced form. Rather than

specifying a model that explicitly represents the six factors he believes induce a concern for relative gains, he

abbreviates the influences of these factors through his specification of the states' utility functions.(89)

Which approach to modeling a state's concern is better? I do not believe there is an a priori answer to this

question. Models are tools and asking which approach is better is akin to asking whether a hammer or a saw is

better. The answer depends on whether the task at hand is driving nails or cutting wood.

One advantage of a reduced form is that it is likely to be simpler and easier to use analytically. A disadvantage is

that as long as the more complicated underlying model remains unspecified, we cannot analyze the purported link

between the constraints that are believed to induce a concern and the realization of this concern. The link thus

remains problematic. Whether the balance of advantages and disadvantages favors an approach based on a

reduced form or on a more explicit structural form depends on the model as a whole and on the substantive

problem. Thus, debates about what to assume about preferences cannot be resolved without reference to an

overall evaluation of the entire model and the substantive problem being modeled. By focusing solely on what to

assume about preferences and not evaluating this assumption in the overall context of the entire model, the

neorealist-neoliberal debate about states' preferences seems largely irrelevant. It reflects a basic

misunderstanding of the role of models.

A second important implication follows from the conclusion that the degree of a state's concern for relative gains

depends on, or is a function of, its strategic environment. This dependency means that the concern for relative

gains is part of the outcome and not part of the explanation. A concern for relative gains is an effect and not a

cause. We cannot explain the presence or absence of international cooperation because of the presence or

absence of significant concerns for relative gains. Cooperation and concern for relative gains may co-vary, but one

does not cause the other. The causes for both are the underlying features of the states' strategic environment that

jointly induce a concern for relative gains and thereby make cooperation difficult.

Existing work in international relations theory has to varying degrees recognized first that relative gains concerns

do not explain the level of cooperation and second the need to look to the underlying strategic environment.

Lipson, for example, tries to relate differences in the strategic environments inherent in military and economic

issues to differences in states' discount factors and, through the differences in those discount factors, to the

likelihood of international cooperation in military and economic affairs.(90) Jervis explicitly recognizes this need:

"The conditions under which states seek to maximize their relative as opposed to their absolute gains need more

exploration."(91)

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A possible explanation of the concern for relative gains might at first seem to be anarchy: a lack of a central

authority leads to balancing and a concern for relative gains. This answer, however, fails for at least two reasons.

Anarchy has been a constant feature of the modern international system. It cannot therefore account for variation

in the degree of a state's concern for absolute gains. And, as we have seen above, anarchy does not imply

balancing.

As emphasized above, models often must be judged in light of the problem they are designed to address. If we

want to study the problem of international cooperation and its relation to concerns for relative gains, modeling that

concern in terms of state preferences seems likely to prove a poor approach. The reduced form would be leaving

implicit and unspecified precisely what we want to know more about, i.e., the link from the states' strategic

environment to their concern for relative gains and the prospects for cooperation. Trying to make this link more

explicit by elaborating a state's strategic setting and the connection between this setting and the induced concern

for relative gains seems likely to prove a more fruitful approach. As in our discussion of anarchy, we are led to the

need to focus our attention on a more sophisticated characterization of the strategic situations confronting the

units.

In sum, the debate surrounding the problem of absolute and relative gains has betrayed a fundamental

methodological misunderstanding of the role of models. The debate has also mistaken effects for causes.

Unfortunately, the methodological misunderstanding has reinforced the substantive mistake. By focusing on what

to assume about states' preferences, the debate has made it more difficult to correct the mistake of seeing effects

as causes. In a reduced form in which the concern for relative gains is represented in the states' utility functions,

the degree of this concern is formally an independent variable. Thus, it is easy to imagine holding everything else

constant and asking how changes in the degree of this concern would affect cooperation. The difficulty is, of

course, that if the degree of concern is really an effect, then one cannot hold everything else constant while varying

this concern. Although formally independent in the reduced form, the degree of this concern is substantively

dependent. The reduced form thus masks this dependence and makes it more difficult to correct the mistake of

seeing effects as causes. Once we separate effects from causes, we also appreciate the need for a more careful

specification of the units' strategic setting.

COORDINATION AND DISTRIBUTION

The debate between neorealism and neoliberalism recently has focused on a third issue. A central contention of

the neoliberal approach is that institutions matter. In particular, they can help states cooperate: "institutions,

broadly defined, affect the patterns of cooperation that emerge."(92) In analyzing how institutions matter, Keohane

emphasizes market failures and explains that institutions can help independent actors overcome these failures by

providing information and reducing transactions costs.(93) In short, institutions may make it possible to realize

joint gains and move out toward the Pareto frontier. But there are often many ways to realize these gains, with

some ways giving a larger share to one state and other ways giving a larger share to another state. "There are," as

Stephen Krasner observes in his contribution to the Baldwin volume, "many points along the Pareto frontier."(94)

These multiple ways of achieving the joint gains from cooperation can create conflicts over how those gains will

be distributed. As Geoffrey Garrett observes of the Single European Act, "the EC [European Community] members

shared the common goal of increasing the competitiveness of European goods and services in global markets. It is

apparent, however, that there were also substantial differences in national preferences within this broad

rubric."(95) Reflecting on the debate, Keohane now believes that he underemphasized "distributive issues and the

complexities they create for international cooperation" in After Hegemony.(96) I will suggest that a careful analysis

of the tension between cooperation and distribution can illuminate the debate between neorealism and

neoliberalism by clarifying some of the differences that actually do divide these two approaches.

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The distributive problem arises because there are many ways to divide the cooperative gains. Figure 1 illustrates

this problem when two states, S sub 1 '

and S sub 2 , are trying to cooperate. S sub 1 's utility is measured along the horizontal axis, and S sub 2 's utility is

measured along the vertical axis. Q is the status quo. A sub 1 through A sub 4 are possible agreements that lie

along the Pareto frontier. Both A sub 2 and A sub 3 lie on the Pareto frontier and are Pareto-superior to Q; i.e., both

S sub q and S sub 2 prefer A sub 2 to Q and A sub 3 to Q. A sub 2 and A sub 3 are different ways of realizing the

joint gains from cooperation. But, S sub 1 prefers A sub 2 to A sub 3 because A sub 2 yields a higher utility.

Similarly, S sub 2 prefers A sub 3 . Thus, there is a distributive conflict over A sub 2 and A sub 3 . More generally, S

sub 1 prefers agreements closer to A sub 1 and S sub 2 prefers agreements closer to A sub 4 .

Krasner recently has used these distributional issues to challenge the neoliberal approach.(97) The thrust of

Krasner's criticism is that "the nature of institutional arrangements is better explained by the distribution of

national power capabilities than by efforts to solve problems of market failure."(98) In terms of Figure 1, the more

powerful S sub 1 , the greater will be its share of the joint gain and the closer the agreement will be to A sub 1 .

Viewing the question of whether institutions matter in terms of distributional issues helps refine and clarify that

question. If cooperation can take many different forms and these alternative forms have distributional

consequences, then the arrangements themselves can become the object of negotiation. Indeed, given the

absence of a supranational authority, the states cannot bind themselves to any particular initial institutional

arrangement and corresponding allocation of cooperative benefits. The institutional structure is always subject to

renegotiation if a state believes it worthwhile.

The perpetual possibility of renegotiation raises an important dynamic question that must be separated from a

more static issue. That is, institutions might matter in either or both a static and a dynamic way. The static way

that institutions might matter is that they might be a means of overcoming market failures or, more generally, of

realizing joint gains from cooperation. As a means to an end, the structure of the institution becomes something to

be explained. In his explanation of institutional structure, Keohane emphasizes monitoring and reducing

uncertainty. In emphasizing these factors, he is trying to explain how institutions can serve as a means to

achieving the joint gains from cooperation. Krasner focuses on another aspect of the explanation of institutional

structure. He argues that the actual institutional arrangement that will emerge from the set of potential

institutional arrangements that fulfill the functions Keohane describes will tend to reflect the desires of the more

powerful actors. Thus, Keohane's and Krasner's analyses of the static issue complement each other.

There is also a second, more dynamic way that institutions may matter. If institutions do matter in this second

sense, then they would be part of an explanation and not part of the outcome to be explained. Figure 1 can be used

to illustrate this second way. Suppose that at some time t sub 0 two states are at Q. Both states want to move out

to the Pareto frontier. To this end, they create an institution that reduces transaction costs and uncertainty in the

way Keohane describes. In this way the institution is a means to the end of realizing the joint gains of cooperation.

But there are also distributional conflicts, so both states also use their political power to shape the institutional

arrangements in order to obtain a larger share of the joint gains. Assume that S sub 1 is more powerful and, as

Krasner argues, the institution through which the states realize the joint gains will give S sub 1 a larger share of the

benefits. In particular, suppose the arrangement moves them from Q to A sub 2 . At A sub 2 , S sub 1 receives a

larger share of the joint gains, which reflects its greater power. A sub 2 thus reflects Keohane's and Krasner's

complementary analyses of the static dimension of the way that institutions may matter.

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To examine the dynamic aspect, suppose further that at some later time, say t sub 1 , the balance of power has

shifted in favor of S sub 2 . Indeed, assume that if the institution created at time t sub 0 did not exist and that the

states were trying to create an institution de novo at t sub 1 then S sub 2 's greater power would mean that the

institution that would be created would move the states from Q to A sub 3 . At A sub 3 , S sub 2 obtains more of

the gains, presumably reflecting its greater power.

But the states are not creating a new institution at t sub 1 , for they created an institution at t sub 0 that moved

them from Q to A sub 2 . How does the fact that an institution already exists at t sub 1 , when the states must deal

with a new distribution of power, affect the institutional arrangements and distribution of benefits that will be

devised at that time? There are two possibilities.

First, the institutional arrangements existing at t sub 0 are irrelevant. Institutions adjust smoothly so that the

distribution of benefits always reflects the underlying distribution of power. In terms of Figure 1, the states will be

at A sub 3 at t sub 1 regardless of the existence of an institution at t sub 0 . In brief, history does not matter.

The second possibility is that the institutional arrangements that exist at t sub 0 affect those that prevail at t sub 1

. To illustrate this possibility, let A in Figure 1 denote the arrangements and associated distribution of benefits that

exist at t sub 1 given the arrangements existing at t sub 0 . Then A will in general differ from A sub 3 , which is

what would have prevailed had there been no preexisting institution or if institutions adjusted smoothly. Intuitively,

the farther A is from A sub 3 , the more current arrangements are shaped by past arrangements.(99) A more

concise way of describing this second way that institutions may matter is that history matters.(100) In terms of

Figure 1, the neoliberal claim that institutional history matters in international relations means that A will often be

very different from A sub 3 . Moreover, the fact that the states originally cooperated means that cooperation is less

likely to collapse and A is more likely to lie on the Pareto frontier. Cooperation will often continue in the face of a

change in the underlying distribution of power.

The possibility that institutions may not adjust smoothly and that the existing institutional arrangements and

distribution of benefits may not reflect the underlying distribution of power is a recurrent theme in international

politics. Robert Gilpin, for example, sees this as the cause of hegemonic war. A hegemon establishes an

international order and associated distribution of benefits that favors the hegemon. Over time, the hegemon's

relative power declines because of uneven economic growth, and the existing order and distribution of benefits no

longer reflect the distribution of power. This sets the scene for another hegemonic conflict.(101) Similarly, a

disparity between the distributions of benefits and power is inherent in Krasner's metaphor of tectonic plates.(102)

When regimes are first created, they generally reflect the underlying distribution of power. But the pressure to

change the regime builds over time as the distribution of power changes. In the tectonic plate metaphor, this

pressure does not lead to a smooth adjustment. Rather, the pressure grows until it is suddenly relieved in an

earthquake in which the regime alters in a way that realigns it with the distribution of power.

In the neorealist-neoliberal debate, Keohane generally emphasizes market failures, transaction costs, uncertainty,

information, and institutions as important means of cooperation. But he also argues that international institutional

history matters. Once institutions or regimes are established, actors behave in ways that, whether deliberately or

not, make it costly to change the regime or build a new one. Thus, even if the original distribution of power

underlying the regime shifts, the now more powerful states will not change the regime unless the distribution of

power has shifted to such an extent that the benefits of a new regime, which would reflect the new distribution of

power, outweigh the cost of changing the existing regime. The cost of changing or constructing new regimes thus

gives existing regimes some resilience to shifts in the balance of power. "The high costs of regime-building help

existing regimes persist."(103)

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In contrast, Krasner argues that regimes and institutions do not matter at least in the case of global

communications:

In recent years distributional questions have precipitated conflict over the allocation of the radio spectrum and

over international telecommunications. The outcome of these disputes has been determined primarily by the

relative bargaining power of the states involved. Whereas previous institutional choices had not imposed much

constraint, new interests and power capabilities conferred by new technologies have led to new institutional

arrangements.

This is not to say that institutional arrangements were ever irrelevant: indeed, they were necessary to resolve

coordination problems and to establish stability. Without regimes all parties would have been worse off. There are,

however, many points along the Pareto frontier: the nature of institutional arrangements is better explained by the

distribution of national power capabilities than by efforts to solve problems of market failure.(104)

In brief, institutions may see as a means of achieving the joint gains of cooperation. But institutional history does

not matter. Previous institutional choices do not constrain or significantly affect the future institutional

arrangements and the future distribution of benefits.

The neorealist-neoliberal debate leaves us with contrasting claims about the importance of institutional history.

These claims in turn pose two questions for future research. First, do institutions or regimes actually adjust

smoothly to changes in the distribution of power. Does institutional history matter? Second, what factors affect

the stability or rigidity of a regime or institution and the rates at which it adjusts? In particular, are there factors in

the international environment that make international regimes and institutions less stable than, for example, the

institution of the medieval law merchant, the Declaration of Rights and associated institutional changes following

the Glorious Revolution in England, or the current efforts to establish constitutional governments in Russia and

Eastern Europe?(105) Douglass North and others offer many examples in which institutional history seems to be

profoundly important.(106) We need a better understanding of the conditions under which institutional history

matters and the extent to which the international system satisfies these conditions. Work on these questions

holds the promise of a more unified understanding of institutions and cooperation.

Before this work can be done, however, two obstacles must be overcome. First, we need a way of measuring or

assessing the constraining effects of institutions. Figure 1 helps us visualize the issue, but much more than a

visualization is required. Second, we need more powerful theories that make more specific claims about the extent

to which institutions shape future decisions and actions than neorealism or neoliberalism presently does.

CONCLUSION

Although the neorealist-neoliberal debate sometimes has obscured as much as it has clarified, this debate has

forced us to examine the foundations of some of our most influential theories of international politics more

carefully. This is an important contribution. Such examinations deepen our understanding of these theories by

clarifying their strengths and weaknesses. These clarifications in turn may suggest important directions for future

work and ultimately lead to better theories with greater explanatory power.

As we have seen, both neorealism and neoliberalism see the effects of anarchy and the degree of concern about

relative gains to be conditional. The task ahead is to specify these conditions more precisely. We must also explain

more satisfactorily how these conditions lead to particular outcomes like balancing behavior and a concern for

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relative gains. Grieco makes a useful start in this direction by identifying six factors that may affect the degree of a

state's concern for relative gains.(107) The next step is to develop a more explicit characterization of the strategic

settings that yield outcomes like balancing and relative-gains concerns.

When we look beyond the narrowness of the neorealist-neoliberal debate about anarchy and the relative-gains

problem, we see that this debate has focused our attention on a very broad and important set of issues. These are

the absence of central authority, the potential for joint or cooperative gains, the distributional conflict these

potential gains engender, and the roles of coercion and institutions in realizing and allocating these joint gains.

This nexus of issues also lies at the heart of the expanding literatures on constitutional design, governing the

commons, and state formation.(108) That a core of common issues underlies these seemingly disparate

substantive concerns makes it possible to imagine moving beyond what has become a rather sterile debate

between neorealism and neoliberalism in a way that draws on and contributes to these other literatures.

1. Kenneth Waltz, Theory of International Politics (Reading, Mass.: Addison-Wesley, 1979).

2. For a summary of Waltz's goals, see p. 323 of Kenneth Waltz, "Reflections on Theory of International Politics," in

Keohane, Neorealism and Its Critics, pp. 322-45.

3. Kenneth Waltz, Man, the State and War (New York: Columbia University Press, 1959).

4. Ibid., p. 16.

5. Ibid., pp. 80-164.

6. Ibid., pp. 172-86 and 201-5.

7. Ibid., p. 12.

8. Waltz. Theory of International Politics, p. 73.

9. Waltz. "Reflections on Theory of International Politics, " p. 329.

10. Ibid.. pp. 79-101.

11. Kenneth Waltz. "A Response to My Critics," in Keohane, Neorealism and Its Critics, p. 330.

12. Ibid.

13. Waltz, Theory of International Politics, pp. 105 and 111.

14. The quotation is from p. 37 of Kenneth Waltz. "Realist Thought and Neorealist Theory," Journal of International

Affairs 44 (Spring/Summer 1990), pp. 21-37.

15. Robert Jervis, "Realism, Game Theory, and Cooperation," World Polities 40 (April 1988), pp. 324-25. For similar

warnings, see Joseph Nye, "Neorealism and Neoliberalism," World Politics 50 (January 1988), p. 238.

16. The distinction between preferences over outcomes and over actions is useful, but it should not be pushed too

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hard. An outcome in one game may be seen as a policy choice in a larger game.

17. Waltz, Theory of International Politics, p. 91.

18. The quotation is drawn from ibid.

19. Jervis, "Realism, Game Theory, and Cooperation," pp. 324-29.

20. Ibid., p. 325.

21. Robert Keohane, "Theory of World Politic" in Keohane, Neorealism and Its Critics, pp. 175-76. One factor

contributing to this conflation may be that both Jervis and Keohane focus primarily on the prisoners' dilemma.

There is no strategic interdependence in a one-shot prisoners' dilemma: a player always does strictly better by

playing D rather than C regardless of what the other player does. In cases in which a player's optimal action is

independent of what others do, a theory of preferences over outcomes also serves as a theory of preferences over

actions. The distinction between the two types of preferences is meaningful only if the game entails a situation of

strategic interdependence in which a player's optimal strategy depends on what it believes others will do.

22. Jervis, "Realism, Game Theory, and Cooperation," p. 327.

23. Andrew Kydd, "The Security Dilemma, Game Theory, and World War I," paper presented at the annual meeting of

the American Political Science Association, Washington, D.C., 2-5 September 1993. For Jervis's insightful

discussion of the spiral model, see his Perception and Misperception in International Politics (Princeton, N.J.:

Princeton University Press, 1977).

24. For an excellent review of some of the limitations of this approach, see David Kreps, Game Theory and

Economic Modelling (New York: Oxford University Press, 1990).

25. See, for instance, the models of nuclear brinkmanship in Robert Powell, Nuclear Deterrence Theory (Cambridge:

Cambridge University Press, 1990).

26. See Jeffry Frieden, "Invested Interests," International Organization 45 (Autumn 1991), pp. 425-51; Peter

Gourevitch, Politics in Hard Times (Ithaca, N.Y.: Cornell University Press, 1986); Peter Katzenstein, ed., Between

Power and Plenty (Madison: University of Wisconsin Press, 1978); David Lake, Power, Protection, and Free Trade

(Ithaca, N.Y.: Cornell University Press, 1988); Helen Milner, Resisting Protectionism (Princeton, N.J.: Princeton

University Press, 1988); and Ronald Rogowski, Commerce and Coalitions (Princeton, N.J.: Princeton University

Press, 1989).

27. For example, Adler uses the concept of epistemic communities to explain American preferences about arms

control agreements. See Emanual Adler, "The Emergence of Cooperation," International Organization 46 (Winter

1992), pp. 101-46. For attempts to explain a state's preferences over military doctrines and the importance of civil-

military relations in determining those preferences, see Barry Posen, The Origins of Military Doctrine (Ithaca, N.Y.:

Cornell University Press, 1984); Jack Snyder, The Ideology of the Offensive (Ithaca, N.Y.: Cornell University Press,

1984); and Stephen Van Evera, "The Cult of the Offensive and the Origins of the First World War." International

Security 9 (Summer 1984), pp. 58-107.

28. See p. 360 of Alexander Wendt, "The Agent-Structure Problem in International Relations Theory," International

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Organization 41(Summer 1987), pp. 335-70.

29. The quotation is from p. 426 of David Dessler, "What's at Stake in the Agent-Structure Debate," International

Organization 43 (Summer 1989), pp. 441-70, emphasis original.

30. Ibid., p. 461.

31. See Robert Cox, "Social Forces, States, and World Orders," in Keohane, Neorealism and Its Critics, pp. 204-54;

Dessler, "What's at Stake in the Agent-Structure Debate?"; John Ruggie, "Continuity and Transformation in World

Polity," in Keohane, Neorealism and Its Critics; John Gerard Ruggie, "Territoriality and Beyond," International

Organization 47 (Winter 1993), pp. 139-74; Wendt, "The Agent-Structure Problem in International Relations Theory";

and Alexander Wendt, "Anarchy is What States Make of It," International Organization 46 (Spring 1992), pp. 391-

425.

32. Cox, "Social Forces, States, and World Orders." p. 208.

33. Ibid., p. 208.

34. Rogowski, Commerce and Coalitions.

35. Rogowski readily acknowledges that he is making assumptions about the domestic political process and does

not have a theory of the state. He also emphasizes that although changes in the terms of trade may make some

domestic groups more powerful, they still may lose in the domestic political struggle (ibid., pp. 4-5). The power of

Rogowski's analysis, of course, lies in its ability to identify the groups that will benefit from greater trade and the

domestic cleavages that greater trade will tend to create. Appealing to the Stolper-Samuelson theorem, Rogowski

argues that greater trade favors the domestic group that controls the relatively abundant factor. So, for example,

land was abundant and capital and labor were scarce in the United States in the latter part of the nineteenth

century, while labor was abundant and capital and land were relatively scarce in Germany. Accordingly, agriculture

in the United States and labor in Germany should have supported greater openness, while capital and labor in the

United States and capital and land in Germany should have united in support of protectionism (pp. 3-20).

36. Clearly this approach does nothing to address the important concerns raised in the sociological approach to

the agent-structure problem.

37. For suggestive discussions of the interaction between states and structure in different substantive contexts,

see Brian Downing, The Military Revolution and Political Change (Princeton, N.J.: Princeton University Press, 1993);

Katzenstein, Between Power and Plenty; and Charles Tilly, Capital and Coercion (New York: Blackwell, 1990).

38. Waltz, "Reflections on Theory of International Politics, " p. 327.

39. Nye, "Neorealism and Neoliberalism," p. 243.

40. Joseph Nye and Robert Keohane, "Power and Interdependence Revisited," International Organization 41

(Autumn 1987), pp. 725-53, and especially p. 746, from which the quotation is drawn.

41. Ibid.

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42. Waltz, "Reflections on Theory of International Politics, " p. 329.

43. Ibid.

44. Buzan, Jones, and Little make a similar point in Barry Buzan, Charles Jones, and Richard Little, The Logic of

Anarchy (New York: Columbia University Press, 1993), pp. 54-56.

45. For a recent effort to do this, see ibid.

46. Joseph Grieco, "Anarchy and the Limits of Cooperation," in Baldwin, Neorealism and Neoliberalism, pp. 116-42

and pp. 118-19 in particular.

47. Keohane, "Theory of World Politics."

48. Ibid., p. 194.

49. Robert Keohane, After Hegemony (Princeton: Princeton University Press, 1984).

50. Ibid., p. 9.

51. Ibid., p. 9.

52. Ibid., p. 67.

53. Ibid., p. 68.

54. Robert Jervis, "Cooperation Under the Security Dilemma," World Politics 30 (January 1978), pp. 167-214 and p.

170 in particular.

55. Drew Fudenberg and Eric Maskin, "The Folk Theorem in Repeated Games with Discounting or with Incomplete

Information," Econometrica 54 (October 1986), pp. 533-54.

56. Keohane, After Hegemony, p. 218.

57. See Robert Keohane, "Institutionalist Theory and the Realist Challenge After the Cold War," in Baldwin,

Neorealism and Neoliberalism, pp. 269-301, and particularly p. 292; and Keohane, After Hegemony.

58. See the following works of Joseph Grieco: "Anarchy and the Limits of Cooperation"; "Realist Theory and the

Problem of International Cooperation," Journal of Politics 50 (Summer 1988), pp. 600-624; and Cooperation Among

Nations (Ithaca, N.Y.: Cornell University Press, 1990).

59. Grieco, "Anarchy and the Limits of Cooperation," p. 129. Gowa made the same criticism of Axelrod's use of the

repeated prisoners' dilemma [Robert Axelrod, The Evolution of Cooperation (New York: Basic Books, 1984)] when

he used this game to model international politics. See Joanne Gowa, "Anarchy, Egoism, and Third Images,"

International Organization 40 (1986), pp. 167-86 and particularly pp. 172-79.

60. Keohane, After Hegemony, p. 67.

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61. See Nye, "Neorealism and Neoliberalism," and the references cited therein for an introduction to earlier rounds

of this debate.

62. These contributions are: Robert Axelrod and Robert Keohane, "Achieving Cooperation Under Anarchy," World

Politics 38 (October 1988), pp. 226-54; Grieco, "Anarchy and the Limits of Cooperation"; Stephen Krasner, "Global

Communications and National Power," World Politics 43 (April 1991), pp. 336-66; Charles Lipson, "International

Cooperation in Economic and Security Affairs." World Politics 37 (October 1984), pp. 1-23; Michael Mastanduno,

"Do Relative Gains Matter?" International Security 16 (Summer 1991), pp. 73-113; Helen Milner, "The Assumption of

Anarchy in International Relations Theory," Review of International Studies 17 (January 1991), pp. 67-85; Robert

Powell, "Absolute and Relative Gains in International Relations Theory, "American Political Science Review 85

(December 1991), pp. 1303-20; Duncan Snidal, "Relative Gains and the Pattern of International Cooperation,

"American Political Science Review 85 (September 1991), pp. 701-26; and Arthur Stein, "Coordination and

Collaboration," International Organization 36 (Spring 1982), pp. 294-324.

63. For an example of the former, see Keohane, "Theory of World Politics"; for one of the latter, see Richard Ashley,

"The Poverty of Neorealism," in Keohane, Neorealism and Its Critics, pp. 255-300; and Cox, "Social Forces, States,

and World Orders."

64. Grieco, "Anarchy and the Limits of Cooperation," pp. 118-19.

65. Snidal, "Relative Gains and the Pattern of Cooperation." For Grieco's critique of Snidal's analysis and Snidal's

response, see Joseph Grieco, Robert Powell, and Duncan Snidal, "The Relative Gains Problem for International

Cooperation," American Political Science Review 87 (September 1993), pp. 729-43.

66. The quotation is from p. 226 of Axelrod and Keohane, "Achieving Cooperation Under Anarchy." Also see

Kenneth Oye, "Explaining Cooperation Under Anarchy," in Kenneth Oye, ed., Cooperation Under Anarchy (Princeton,

N.J.: Princeton University Press, 1986), particularly pp. 1-2.

67. Robert Art and Robert Jervis, International Polities, 3d ed. (Boston: Harper Collins), p. 1.

68. Waltz, Theory of International Politics, pp. 105 and 111.

69. Milner, "The Assumption of Anarchy in International Relations Theory."

70. Stein, "Coordination and Collaboration," p. 30.

71. Keohane, "Institutionalist Theory and the Realist Challenge After the Cold War."

72. Robert Powell, "Guns, Butter, and Anarchy," American Political Science Review 87 (March 1993), pp. 115-32.

The present discussion extends some of the observations made in that essay (see pp. 126-27).

73. Waltz, Theory of International Politics, p. 121.

74. External balancing through alliances is impossible when there are only two states. Rather, the states engage in

internal balancing. For a discussion of internal and external balancing, see Waltz, Theory of International Politics,

p. 168.

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75. Bernard Brodie, Strategy in the Missile Age (Princeton, N.J.: Princeton University Press, 1959). For other

discussions of the effect of the nuclear revolution, see Robert Jervis, The Meaning of the Nuclear Revolution

(Ithaca, N.Y.: Cornell University Press, 1989); Robert Powell, Nuclear Deterrence Theory (Cambridge: Cambridge

University Press, 1990); Thomas Schelling, Arms and Influence (New Haven, Conn.: Yale University Press, 1966);

and Glenn Snyder, Deterrence and Defense (Princeton, N.J.: Princeton University Press, 1961).

76. Buzan, Jones and Little reach the same conclusion in The Logic of Anarchy. They and Morrow offer the

expansion of the Roman empire as an important example of the failure of balances to form. See James Morrow,

"Social Choice and System Structure." World Politics 41 (October 1988), pp. 75-97.

77. Samuel Huntington, "Why international Primacy Matters," International Security 17 (Spring 1993), pp. 68-83.

See also Robert Jervis, "International Primacy," International Security 17 (Spring 1993), pp. 52-67; and Kenneth

Waltz, "The Emerging Structure of International Politics," International Security 18 (Fall 1993), pp. 44-79. Jervis

uses a neorealist perspective to frame his discussion, but his conclusions differ from Huntington's.

78. Huntington, "Why International Primacy Matters," p. 93.

79. For a different view, see Waltz, "The Emerging Structure of International Politics," especially p. 74.

80. Jervis, "International Primacy," pp. 57-59.

81. Lipson. "International Cooperation in Economic and Security Affairs," p. 80.

82. Waltz, Theory of International Politics, p. 105. See also Waltz, Man, State, and War, p. 198.

83. Keohane, After Hegemony, p. 66.

84. Grieco, "Anarchy and the Limits of Cooperation," p. 129, emphasis original.

85. Grieco, "Realist Theory and the Problem of International Cooperation," p. 610.

86. Ibid., pp. 610-11.

87. Keohane, "Institutionalist Theory and the Realist Challenge After the Cold War," pp. 418-25.

88. Powell, "Absolute and Relative Gains in International Relations Theory."

89. See Grieco, "Anarchy and the Limits of Cooperation," as well as his "Realist Theory and the Problem of

International Cooperation," and Cooperation Among Nations. Although Grieco's model may be seen as a reduced

form, it is not clear that he sees it as such. His assertion that a state's utility function must incorporate a term

reflecting its concern for absolute gains and one reflecting its concern for relative gains may be true of a particular

model, but it does not hold or all models. His apparent claim that it is true for all models suggests that he does not

interpret his model as a reduced form.

90. Lipson, "International Cooperation in Economic and Security Affairs." See also Joanne Gowa and Edward

Mansfield, "Power Politics and International Trade, "American Political Science Review 87 (June 1993), pp. 408-20.

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91. Jervis, "Realism, Game Theory, and Cooperation."

92. Keohane, After Hegemony, p. 9.

93. Ibid., p. 246.

94. Krasner, "Global Communications and National Power," p. 235.

95. The quotation is from p. 535 of Geoffrey Garret, "International Cooperation and Institutional Choice,"

International Organization 46 (Spring 1992), pp. 533-60. For another discussion of conflicting interests, see Andrew

Moravcsik, "Negotiating the Single European Act," International Organization 45 (Winter 1991), pp. 19-56.

96. Keohane, "Institutionalist Theory and the Realist Challenge After the Cold War," pp. 446-47.

97. Krasner, "Global Communications and National Power." See also James Morrow, "Modeling International

Regimes," International Organization, forthcoming.

98. Krasner, "Global Communications and National Power," p. 235.

99. To simplify matters, I have assumed that institutions are efficient in that they move the states out to the Pareto

frontier. Of course, institutions need not be efficient. For a discussion of institutions and efficiency, see Douglass

North, Institutions, Institutional Change, and Economic Performance (New York: Cambridge University Press,

1990).

100. North analyzes the problem of institutional change and stability in ibid.

101. Robert Gilpin, War and Change in World Politics (Cambridge: Cambridge University Press, 1981).

102. Stephen Krasner, "Regimes and the Limits of Realism," in Stephen Krasner, ed., International Regimes (Ithaca,

N.Y.: Cornell University Press, 1983), pp. 355-68.

103. Keohane, After Hegemony, p. 103.

104. Krasner, "Global Communications and National Power," p. 235, emphasis added.

105. See Paul Milgrom, Douglass North, and Barry Weingast, "The Role of Institutions in the Revival of Trade: The

Law Merchants, Private Judges, and the Champagne Fairs," Economics and Politics 2 (March 1990), pp. 1-23;

Douglass North and Barry Weingast, "Constitutions and Commitment," Journal of Economic History 49 (December

1989), pp. 803-32; and Barry Weingast, "The Political Foundations of Democracy and the Rule of Law," manuscript,

Hoover Institution, February 1993.

106. North, Institutions, Institutional Change, and Economic Performance.

107. Grieco, "Realist Theory and the Problem of International Cooperation," pp. 611-13. See also Gowa and

Mansfield, "Power Politics and International Trade."

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108. See, for example, Barry Weingast, "Constitutions as Governance Structures," Journal of Institutional and

Theoretical Economics 149 (March 1993), pp. 286-311; Elinor Ostrom, Governing the Commons (New York:

Cambridge University Press, 1990); and Tilly, Capital and Coercion.

I am grateful to Carol Evans, Jeffry Frieden, Joanne Gowa, Joseph Grieco, Ernst Haas, Peter Katzenstein, Robert

Keohane, David Lake, James Morrow, John Odell, Janice Gross Stein, and Kenneth Waltz for their thoughtful

comments and criticisms of an earlier draft. I also thank Greg Louden and Michael Sinatra for invaluable research

assistance. I gratefully acknowledge the support of a grant from the National Science Foundation, no. SES-921959.

DETAILS

Subject: Studies; Political theory; Models; International relations; Comparative analysis;

Books

Classification: 9550: Public sector organizations; 9180: International; 9130:

Experimental/theoretical treatment

Publication title: International Organization; Cambridge

Volume: 48

Issue: 2

Pages: 313

Number of pages: 32

Publication year: 1994

Publication date: Spring 1994

Publisher: Cambridge University Press

Place of publication: Cambridge

Country of publication: United Kingdom, Cambridge

Publication subject: Political Science--International Relations, Law

ISSN: 00208183

Source type: Scholarly Journals

Language of publication: English

Document type: Journal Article

Accession number: 00859247

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