1. IR theories: Institutionalism
Three perspectives on international politics

2. Weaknesses of realism
Neorealism can’t account for cooperation among states.
European integration
Military power can’t solve many of today’s problems (climate change, refugee flows, etc.).
Non-state actors become increasingly relevant in global affairs.
Monday, January 28, 2008
Hans Peter Schmitz

3. The core assumptions What realists and institutionalists share:
States are the main actors in global affairs.
States are rational and unitary actors.
States seek security and material gains.
Anarchy is the main obstacle to cooperation.
Monday, January 28, 2008
Hans Peter Schmitz

4. Arms race: A Prisoner’s Dilemma
States are rational actors with clear preference orderings:
Preference Ordering: (4,1) > (3,3) > (2,2) > (1,4)
(4,1): the other cooperates, you don’t (more security/power for you, less for the other party)
(3,3): both cooperate (security for both, along with lower costs)
(2,2): both defect (security for both, but higher costs)
(1,4): you cooperate, the other defects (less security/power for you, more for the other).
Monday, January 28, 2008
Hans Peter Schmitz

5. Solving the Prisoners’ Dilemma: Liberal institutionalism
Cooperation under anarchy (Nau, p. 17):
Communication
Common problems/goals
Technological change
Strategies: ‘tit-for-tat’ and reciprocity/creation of international institutions
Monday, January 28, 2008
Hans Peter Schmitz

6. Challenging realism (modestly..)
Neorealism: Anarchy among states
Institutionalism: The harmful effects of anarchy are slowly replaced by interdependence among states
While anarchy means the absence of a (world) government, it does not necessarily mean the absence of (self-regulated) governance.
Monday, January 28, 2008
Hans Peter Schmitz

7. A liberal perspective: interdependence
Shared problems > interdependence > cooperation > institutions > peace and security
Define interdependence: “a reciprocal relationship between independent entities”
Monday, January 28, 2008
Hans Peter Schmitz

8. Security strategies: trade and democracy, not deterrence
Create international institutions
Build trust among states
Use trade to spread democracy and wealth
Trade creates more interdependence and makes war less likely
Monday, January 28, 2008
Hans Peter Schmitz

9. Cooperation under anarchy
Institutionalism shares many core assumptions about international politics with neorealism:
Structural theory of IR (system level; third image)
States as the dominant actors (units)
States as unitary and rational actors
But institutionalists come to different, more optimistic conclusions:
Interdependence among states creates incentives to cooperate and create forms of governance (not world government), such as intergovernmental organizations.
Monday, January 28, 2008
Hans Peter Schmitz

10. Rational cooperation
States cooperate, because it is in their best interest. They rationally maximize gains by working with other states.
Cooperation is always the result of a state’s desire to do so.
Neoliberal institutionalism: states cooperate because it is in their best interest.
Sociological institutionalism: states cooperate because their identity has been shaped by NGOs and IGOs.
Monday, January 28, 2008
Hans Peter Schmitz

11. Explaining cooperation
Can states learn to cooperate under anarchy?
Yes, when they use institutions to promote their interests:
Reciprocity (cooperation learned)
Public goods (cooperation required)
Monday, January 28, 2008
Hans Peter Schmitz

12. The institutionalist argument
Institutions
Cooperation
Interdependence creates incentives to build institutions. Institutions reinforce and facilitate cooperation and increase interdependence.
Interdependence
Repeated interactions among states create trust.
States learn in interactions that cooperation pays off.
Despite prevailing anarchy, states are capable of rationally taming the security dilemma. How?
Positive feedback
Monday, January 28, 2008
Hans Peter Schmitz

13. Interdependence and Cooperation: Institutionalism
The International System
States
Interdependence
From cooperation to security
Security and peace
Power
Cooperation
International Institutions
Economic well-being
Monday, January 28, 2008
Hans Peter Schmitz

14. What institutions do Result: Creation of greater trust among states
Provide an arena for negotiations
Result: Creation of greater trust among states
Provide information and increase transparency
Spread the costs of cooperation evenly across all participants
Deter free riding/defection.
Monitor the compliance with agreements
>>> Lower transaction costs
Hans Peter Schmitz
Monday, January 28, 2008

15. Role of institutions
International institutions are instrumental in facilitating cooperation by:
Lowering transaction costs/providing an arena for cooperation.
Providing information and transparency.
distributing the costs of cooperation evenly.
monitoring compliance with agreements.
providing impartial adjudication.
Monday, January 28, 2008
Hans Peter Schmitz

16. Why do states cooperate?
Because they are part of a social system creating repeated interactions with others (Reciprocity).
Because they find themselves in situations, where desired goods can only be created and maintained collectively (Public Goods).
Monday, January 28, 2008
Hans Peter Schmitz

17. 1. Reciprocity
Prisoner’s Dilemma: Non-cooperation can pay in the short-term, but reciprocity and iteration create incentives for rational actors to cooperate.
Cooperate
Defect
3,3
1,4
4,1
2,2
Monday, January 28, 2008
Hans Peter Schmitz

18. Reciprocity under anarchy
Cooperation is difficult, but not impossible to achieve under anarchy.
Reciprocity helps to create order in the absence of a central authority.
PD games are prevalent in IR and states can use a tit for tat strategy to entice cooperation in repeated interactions.
International institutions can facilitate the emergence of cooperation among states.
Monday, January 28, 2008
Hans Peter Schmitz

19. 2. Collective/Public Goods
Reciprocity teaches actors to cooperate.
Public Goods are generally desirable, but their maintenance requires cooperation.
Tragedy of the Commons
Economic Theory: Market Failures
Collective or Public Goods (1)
Externalities (2)
Monday, January 28, 2008
Hans Peter Schmitz

20. What are public goods?
Collective goods require cooperation for their implementation and maintenance.
Examples: Ozone layer, the oceans, the rainforests, clean water and rivers, collective security, free trade, etc.
Access to public goods is not restricted, they are not traded in a market: Increased use does not always lead to increased prices.
Monday, January 28, 2008
Hans Peter Schmitz

21. Tragedy of the Commons Public good Individual choice Collective loss
Consumption can not be restricted. Good is not traded in the market place.
Individuals are in the short run better off exploiting the resource (before someone else does)
Rational action leads to irrational outcome:
the group as a whole is worse off: short-term individual gain vs. long-term collective loss
Monday, January 28, 2008
Hans Peter Schmitz

22. Individual vs. collective rationality
Problem: Everyone has individually the incentive to exploit (beyond the carrying capacity), which creates collectively a sub-optimal outcome (destruction).
Free-riding aggravates the problem by increasing the likelihood of defections.
Domestically, public goods are secured by state authority (punish free riders).
Monday, January 28, 2008
Hans Peter Schmitz

23. Absent enforcement….
Domestically, public goods are secured by state authority (provide it, level taxes, punish free riders, privatization, etc.).
Internationally, a hegemonic power like the United States can play a similar role.
But in the absence of central authority, states have to cooperate on an equal basis to create desirable public goods and protect them.

24. From Public Goods to Cooperation
If actors realize that maintaining the public good is preferable to destroying it, they will have an incentive to cooperate.
International institutions are instrumental in facilitating cooperation by:
providing an arena for cooperation.
distributing the costs of cooperation evenly.
“teaching” about public good problems.
monitoring subsequent agreements.

25. Extending institutionalism to the domestic: liberalism
Institutionalism can explain, why cooperation is possible, even under anarchy. However, it can not by itself identify the sources of interdependence.
The more ties exist among societies, the more instances of interdependence and collective action.
From institutionalism to liberalism
Monday, January 28, 2008
Hans Peter Schmitz

26. From institutionalism to liberalism
What are some of the sources of interdependence?
Interactions between societies across state borders
Economic liberalism (market-driven): Trade and economic growth, market-driven
Social liberalism (not-for-profit): Interactions between societies (student exchanges, travel, remittances)
Democratic liberalism (principled): Recognition of the other as similar. .
Monday, January 28, 2008
Hans Peter Schmitz

27. Example: Economic liberalism
In contrast to the (neo-)realist claim that states are functionally similar, economic liberalism focuses on differences in geography, natural resources, and economic production.
David Ricardo’s ( ) theory of “comparative advantage”
Specialization and production and subsequent trade allows countries to increase domestic wealth.
Monday, January 28, 2008
Hans Peter Schmitz

28. What is “comparative advantage”?
If country A is relatively better at making wine, then it makes sense to put more resources into wine production, and to export some of the wine to pay for imports. Country A does not have to be the best in producing wine (absolute advantage), but only relatively better than others in order to gain from trade.
The gains follow from specializing in those activities which, at world prices, the country is relatively better at.
Monday, January 28, 2008
Hans Peter Schmitz

29. Defining neoliberal instiutionalism
Institutionalism:: An approach to international relations, which highlights interdependence and the role of institutions in facilitating cooperation among states (third image).
Liberalism:: An approach to international politics, which highlights the role of domestic actors shaping state preferences (second image).
Neoliberal institutionalism: A theory bringing together institutionalism and liberalism. The “neo” indicates a newer version, which goes beyond the idealistic/liberal roots of the 18th and 19th century.
Monday, January 28, 2008
Hans Peter Schmitz

30. IR theories and institutions
Realism
Instruments of powerful states
Liberal Institutionalism
Arenas for inter-state cooperation
Idealism/Constructivism
Actors independent of states
Monday, January 28, 2008
Hans Peter Schmitz

31. Summary Anarchy does not necessarily create violent conflict.
States can learn to cooperate, despite incentives against it.
Institutions help states to realize cooperation benefits.
Domestic interests (liberalism) explain, why states look for cooperation in the first place.
Weakness: explain power politics and the role of norms.
Monday, January 28, 2008
Hans Peter Schmitz