Webb, MC. 1991. International economic structures, government interests, and international coordination of macroeconomic adjustment policies. International Organization: 309-342.
How does increased capital mobility effect domestic macroeconomic policy coordination measures? "When different countries pursue different macroeconomic policies, it is likely that external payments imbalances, exchange rate movements, or both will result. A number of different types of policy could be used to reconcile national macroeconomic objectives with international constraints imposed by the resulting payments imbalances or exchange rate movements...Three categories of policies are relevant" (314).
External Policies: manipulation of trade and capital controls; Symptom Management: intervention in markets to control them through reserve spending, etc; Internal Policies: adjustment of domestic imbalances between savings and consumption through fiscal and monetary intervention.
See Table 4 (338) for an overview of how different policy coordination measures changed from the 60s to the 80s.
"This article demonstrates that international coordination of macroeconomic adjustment policies was at least as extensive in the 1980s as it had been in the 1960s. Because of changes in the structure o the international economy, however, there were shifts in the pattern of policy coordination: in the 1980s, payments financing coordination was less extensive, capital controls coordination was more extensive, exchange rate coordination was as extensively pursued...and, most important, monetary and fiscal policies became the focus of coordination efforts. The pattern of the 1980s reflects the fact that when international capital mobility is high, the plight of a country facing serious external imbalances can be resolved only by adjustments to monetary and fiscal policies-either those of its own government or those of the governments of other leading countries" (340).
Showing posts with label Cooperation. Show all posts
Showing posts with label Cooperation. Show all posts
Wednesday, March 25, 2009
Friday, September 26, 2008
Grieco: Anarchy and the Limits of Cooperation
Grieco, J., 1988. Anarchy and the Limits of Cooperation: A Realist Critique of the Newest Liberal Institutionalism. International Organization, 42(3), 485-507.
“For realists, international anarchy fosters competition and conflict among states and inhibits their willingness to cooperate even when they share common interests. Realist theory also argues that international institutions are unable to mitigate anarchy’s constraining effects on inter-state cooperation. Realism, then, presents a pessimistic analysis of the prospects for international cooperation and of the capabilities of international institutions” (485).
The main response to realism has come from liberals and Grieco divides this into three types: early functionalist integration theory, later neofunctionalist regional integration theory and even later interdependence theory. These theories were then followed by liberal institutionalism, which argues that, while anarchy is an structuring variable, states are still able to find ways to cooperate at times.
“This essay’s principal argument is that, in fact, neoliberal institutionalism misconstrues the realist analysis of international anarchy and therefore it misunderstands the realist analysis of the impact of anarchy on the preferences of actions of states. Indeed, the new liberal institutionalism fails to address a major constraint on the willingness of states to cooperate which is generated by international anarchy and which is identified by realism. As a result, the new theory’s optimism about international cooperation is likely to be proven wrong” (487).
Much of this debate centers around conceptions of cooperation and the limits to cooperation. Institutionalists argue that states will be most concerned that the state that they are cooperating with will “cheat”, as there is no enforcement mechanism. Grieco argues that, yes, while cheating is crucial, one aspect of the formula is missing in the neoliberal institutionalist account: that states will seek both relative and absolute gains. The liberal focuses on the absolute gains to be taken by states in cooperation. The realist emphasizes the fear that states may have in cooperation: they do not want their counterpart to gain more than they gain. This logic is rooted in the assumption of state survival and rationality.
Five properties of realism: states are the actors, international structure penalizes states who are not exclusively looking out for their interest, anarchy is an organizing principle, states in such a situation are worried about security and power, and institutions only roughly affect the above equation.
Liberals have argued against the above assumptions for a variety of reasons. Earlier funcationalism argued against, for example, centering theories on the state. However, the later neoliberal institutionalism began to take on many of the assumptions of realism, though with clearly different consequences. Thus, you have scholars positing theories that begin with basically the same premise, rational states in anarchy, but finding ways for cooperation to emerge.
Grieco does not see this as being legitimate, as the kind of state the two schools of thought envisage are quite different. The liberal state is an atomistic, anthropormorphised actor who is, “only concerned with their self interest”. For the liberal, this equation eventually becomes cooperation, as states can find ways to work together in anarchy. For the liberal, the biggest problem is cheating. Realists reject this focus on cheating as missing the main point about anarchy as an organizing principle. Anarchy does not simply mean that there is no one to enforce treaties, etc. Anarchy means that there is no guarantee that another state will not try to kill you. This leads states to directly worry about relative gains in place of absolute gains.
“For realists, international anarchy fosters competition and conflict among states and inhibits their willingness to cooperate even when they share common interests. Realist theory also argues that international institutions are unable to mitigate anarchy’s constraining effects on inter-state cooperation. Realism, then, presents a pessimistic analysis of the prospects for international cooperation and of the capabilities of international institutions” (485).
The main response to realism has come from liberals and Grieco divides this into three types: early functionalist integration theory, later neofunctionalist regional integration theory and even later interdependence theory. These theories were then followed by liberal institutionalism, which argues that, while anarchy is an structuring variable, states are still able to find ways to cooperate at times.
“This essay’s principal argument is that, in fact, neoliberal institutionalism misconstrues the realist analysis of international anarchy and therefore it misunderstands the realist analysis of the impact of anarchy on the preferences of actions of states. Indeed, the new liberal institutionalism fails to address a major constraint on the willingness of states to cooperate which is generated by international anarchy and which is identified by realism. As a result, the new theory’s optimism about international cooperation is likely to be proven wrong” (487).
Much of this debate centers around conceptions of cooperation and the limits to cooperation. Institutionalists argue that states will be most concerned that the state that they are cooperating with will “cheat”, as there is no enforcement mechanism. Grieco argues that, yes, while cheating is crucial, one aspect of the formula is missing in the neoliberal institutionalist account: that states will seek both relative and absolute gains. The liberal focuses on the absolute gains to be taken by states in cooperation. The realist emphasizes the fear that states may have in cooperation: they do not want their counterpart to gain more than they gain. This logic is rooted in the assumption of state survival and rationality.
Five properties of realism: states are the actors, international structure penalizes states who are not exclusively looking out for their interest, anarchy is an organizing principle, states in such a situation are worried about security and power, and institutions only roughly affect the above equation.
Liberals have argued against the above assumptions for a variety of reasons. Earlier funcationalism argued against, for example, centering theories on the state. However, the later neoliberal institutionalism began to take on many of the assumptions of realism, though with clearly different consequences. Thus, you have scholars positing theories that begin with basically the same premise, rational states in anarchy, but finding ways for cooperation to emerge.
Grieco does not see this as being legitimate, as the kind of state the two schools of thought envisage are quite different. The liberal state is an atomistic, anthropormorphised actor who is, “only concerned with their self interest”. For the liberal, this equation eventually becomes cooperation, as states can find ways to work together in anarchy. For the liberal, the biggest problem is cheating. Realists reject this focus on cheating as missing the main point about anarchy as an organizing principle. Anarchy does not simply mean that there is no one to enforce treaties, etc. Anarchy means that there is no guarantee that another state will not try to kill you. This leads states to directly worry about relative gains in place of absolute gains.
Friday, September 5, 2008
Keohane: International Institutions: Two Approaches
Keohane, R., 1988. International Institutions: Two Approaches. International Studies Quarterly, 32(4), 379-396.
“To understand international cooperation and discord, it is necessary to develop a knowledge of how international institutions work, and how they change” (380).
Starts out with the claim that general theories of IR are not plausible or probably possible.
“’Cooperation’ is a contested term. As I use it, it is sharply distinguished from both harmony and discord. When harmony prevails, actors’ policies automatically facilitate the attainment of others’ goals. When there is discord, actors’ policies hinder the realization of others’ goals and are not adjusted to make them more compatible. IN both harmony and discord, neither actor has an incentive to change his or her behavior. Cooperation, however, ‘requires that the actions of separate individuals or organizations’…be brought into conformity with one another through a process of policy coordination’” (380). Cooperation and discord stand in a dialectical relationship; to see one you have to see the other. Cooperation doesn’t necessarily have to happen because of altruism, etc. Also, while order is a value, it is not the only value in international relations (see Bull and order/justice discussions).
Institutions are overdetermined. There is an odd dialogue between rationalism and post-rationalism discourses. He’s committed to the former, but also keen on the later (calls them interpretive scholars).
“My chief argument in this essay is that students of international institutions should direct their attention to the relative merits of two approaches, the rationalistic and the reflective. Until we understand the strengths and weaknesses of each, we will be unable to design research strategies that are sufficiently multifaceted to encompass our subject-matter, and our empirical work will suffer accordingly” (383).
There is then a discussion of the diverse kind of usages for the term institution. It can be seen as a kind of pattern, ala sovereignty. It can be more specific, like the UN.
Rationalist approaches are good for doing certain things, but they do not endogenously treat interest: preferences are exogenous and fixed. “Reflective” theory can be used to explore preferences. We need a theory that can at least partially help us understand how interests change.
“…the greatest weakness of the reflective school lies not in deficiencies in their critical arguments but in the lack of a clear reflective research program that could be employed by students of world politics” (393).
“To understand international cooperation and discord, it is necessary to develop a knowledge of how international institutions work, and how they change” (380).
Starts out with the claim that general theories of IR are not plausible or probably possible.
“’Cooperation’ is a contested term. As I use it, it is sharply distinguished from both harmony and discord. When harmony prevails, actors’ policies automatically facilitate the attainment of others’ goals. When there is discord, actors’ policies hinder the realization of others’ goals and are not adjusted to make them more compatible. IN both harmony and discord, neither actor has an incentive to change his or her behavior. Cooperation, however, ‘requires that the actions of separate individuals or organizations’…be brought into conformity with one another through a process of policy coordination’” (380). Cooperation and discord stand in a dialectical relationship; to see one you have to see the other. Cooperation doesn’t necessarily have to happen because of altruism, etc. Also, while order is a value, it is not the only value in international relations (see Bull and order/justice discussions).
Institutions are overdetermined. There is an odd dialogue between rationalism and post-rationalism discourses. He’s committed to the former, but also keen on the later (calls them interpretive scholars).
“My chief argument in this essay is that students of international institutions should direct their attention to the relative merits of two approaches, the rationalistic and the reflective. Until we understand the strengths and weaknesses of each, we will be unable to design research strategies that are sufficiently multifaceted to encompass our subject-matter, and our empirical work will suffer accordingly” (383).
There is then a discussion of the diverse kind of usages for the term institution. It can be seen as a kind of pattern, ala sovereignty. It can be more specific, like the UN.
Rationalist approaches are good for doing certain things, but they do not endogenously treat interest: preferences are exogenous and fixed. “Reflective” theory can be used to explore preferences. We need a theory that can at least partially help us understand how interests change.
“…the greatest weakness of the reflective school lies not in deficiencies in their critical arguments but in the lack of a clear reflective research program that could be employed by students of world politics” (393).
Keohane: The Demand for International Regimes
Keohane, R., 1982. The Demand for International Regimes. International Organization, 36(2), 332-355.
“We study international regimes because we are interested in understanding order in world politics. Conflict may be the rule; if so, institutionalized patterns of cooperation are particularly in need of explanation” (325).
“I explore why self-interested actors in world politics should seek, under certain circumstances, to establish international regimes through mutual agreement; and how we can account for fluctuations over time in the number, extent, and strength of international regimes, on the basis of rational calculations under varying circumstances” (325-6).
This article explores cooperation from the perspective of correcting standard hegemonic stability theory. Hegemonic stability theory posits that if there is a large power creating stability in the system, then this will allow for the rise of more stable international institutions. This article takes a more microeconomic approach to answering these questions, and sees hegemonic stability theory as being more supply-side in its orientation: “The theory of hegemonic stability can be viewed as focusing only on the supply of international regimes: according to the theory, the more concentrated power is in an international system, the greater the supply of international regimes at any level of demand” (327).
“The argument developed here is deliberately limited to the systemic level of analysis. In a systemic theory, the actors’ characteristics are given by assumption, rather than treated as variables; changes in outcomes are explained not on the basis of variations in these actors characteristics, but on the basis of changes in the attributes of the system itself” (327).
“This insight is the basis of the major ‘supply-side’ argument about international regimes, epitomized by the theory of hegemonic stability. According to this line of argument, hegemonic international systems should be characterized by levels of public goods production higher than in fragmented systems; and, if international regimes provide public goods, by stronger and more extensive international regimes” (333).
“This argument…ignores what I have called the ‘demand’ side of the problem of international regimes: why should governments desire to institute international regimes in the first place, and who much will they be willing to contribute to maintain them?” (333).
“Regimes are developed in part because actors in world politics believe that with such arrangements they will be able to make mutually beneficial agreements that would otherwise be difficult or impossible to attain. In other words, regimes are valuable to governments where, in their absence, certain mutually beneficial agreements would be impossible to consummate” (334).
But, why would states go to the trouble of making regimes if they could just agree with other states on an ad hoc basis? There must be some added value to regimes. Keohane points to market failures as an analogy: when markets do not “work”, ie., when they do not incentivize people to make decisions that would be mutually beneficial, other mechanisms are needed to move these inefficient processes forward.
Why is their demand for international regimes?
Asymmetric Information
Moral Hazard
Deception and Irresponsibility (344-5)
Regimes are not simply agreements.
There may be demand if the situation can be improved, and if the situation is sufficiently crappy: is there lack of clear legal frameworks? Lack of good information? Lack of beneficial transaction costs?
We expect to see regimes where “issue density” is sufficiently thick to warrant them.
“…the optimal size of a regime will increase if there are increasing rather than diminishing returns to regime-scale…or if the marginal costs of organization decline as regime size grows” (341).
Final Argument: (354)
1. Int’l regimes are devices to facilitate agreement in IR
2. Public goods problems, “…affect the supply of international regimes, as the ‘theory of hegemonic stability’ suggests” (354).
3. Increased issue density and regime effectiveness will affect adoption
4. The “constraint-choice” approach is novel and helps explore previously underemphasized behavior
5. Several parts of structural theory are now problematic. Hegemony is not necessarily required for regime promotion.
6. Distinction between control regimes and insurance regimes presents IR in a more nuanced way
“We study international regimes because we are interested in understanding order in world politics. Conflict may be the rule; if so, institutionalized patterns of cooperation are particularly in need of explanation” (325).
“I explore why self-interested actors in world politics should seek, under certain circumstances, to establish international regimes through mutual agreement; and how we can account for fluctuations over time in the number, extent, and strength of international regimes, on the basis of rational calculations under varying circumstances” (325-6).
This article explores cooperation from the perspective of correcting standard hegemonic stability theory. Hegemonic stability theory posits that if there is a large power creating stability in the system, then this will allow for the rise of more stable international institutions. This article takes a more microeconomic approach to answering these questions, and sees hegemonic stability theory as being more supply-side in its orientation: “The theory of hegemonic stability can be viewed as focusing only on the supply of international regimes: according to the theory, the more concentrated power is in an international system, the greater the supply of international regimes at any level of demand” (327).
“The argument developed here is deliberately limited to the systemic level of analysis. In a systemic theory, the actors’ characteristics are given by assumption, rather than treated as variables; changes in outcomes are explained not on the basis of variations in these actors characteristics, but on the basis of changes in the attributes of the system itself” (327).
“This insight is the basis of the major ‘supply-side’ argument about international regimes, epitomized by the theory of hegemonic stability. According to this line of argument, hegemonic international systems should be characterized by levels of public goods production higher than in fragmented systems; and, if international regimes provide public goods, by stronger and more extensive international regimes” (333).
“This argument…ignores what I have called the ‘demand’ side of the problem of international regimes: why should governments desire to institute international regimes in the first place, and who much will they be willing to contribute to maintain them?” (333).
“Regimes are developed in part because actors in world politics believe that with such arrangements they will be able to make mutually beneficial agreements that would otherwise be difficult or impossible to attain. In other words, regimes are valuable to governments where, in their absence, certain mutually beneficial agreements would be impossible to consummate” (334).
But, why would states go to the trouble of making regimes if they could just agree with other states on an ad hoc basis? There must be some added value to regimes. Keohane points to market failures as an analogy: when markets do not “work”, ie., when they do not incentivize people to make decisions that would be mutually beneficial, other mechanisms are needed to move these inefficient processes forward.
Why is their demand for international regimes?
Asymmetric Information
Moral Hazard
Deception and Irresponsibility (344-5)
Regimes are not simply agreements.
There may be demand if the situation can be improved, and if the situation is sufficiently crappy: is there lack of clear legal frameworks? Lack of good information? Lack of beneficial transaction costs?
We expect to see regimes where “issue density” is sufficiently thick to warrant them.
“…the optimal size of a regime will increase if there are increasing rather than diminishing returns to regime-scale…or if the marginal costs of organization decline as regime size grows” (341).
Final Argument: (354)
1. Int’l regimes are devices to facilitate agreement in IR
2. Public goods problems, “…affect the supply of international regimes, as the ‘theory of hegemonic stability’ suggests” (354).
3. Increased issue density and regime effectiveness will affect adoption
4. The “constraint-choice” approach is novel and helps explore previously underemphasized behavior
5. Several parts of structural theory are now problematic. Hegemony is not necessarily required for regime promotion.
6. Distinction between control regimes and insurance regimes presents IR in a more nuanced way
Axelrod and Keohane: Achieving Cooperation under Anarchy
Axelrod, R. & Keohane, R., 1985. Achieving Cooperation under Anarchy: Strategies and Institutions. World Politics, 38(1), 226-254.
“Achieving cooperation is difficult in world politics” (226).
Cooperation is not the same as harmony. Harmony means that interests align. For Axelrod and Keohane, anarchy means the absence of a common government in international relations. “To say that world politics is anarchic does not imply that it entirely lacks organization” (226).
It is often noted that security relationships seems to conform more closely to the standard predictions of what will happen in anarchy than do political or economic relations. Specifically, Lipson noted that the later relationships are clearly more internationally institutionalized.
The Effects of Structure on Cooperation: Three factors can lead to cooperation in the international system. These are mutuality of interests (issue linkage), the shadow of the future, and the number of players (in a game theory situation).
Points to Jervis’ work on cooperation and game theory, which shows that cooperation is differently possible with different kinds of interactions among actors.
Stag hunt is less conflictual than prisoner’s dilemma. The difference in the two is the relative actor perception of interests. These game theory presentations are done using a metric of payoff structure, which is a way of determining or describing the results of the cost/benefit analysis. The payoff structure can be used to analyze both political/economic and military/security situations and international relations.
Oye talks about blackmailing and backscratching as being techniques to increase cooperation.
Axelrod and Keohane conclude this piece by focusing on the importance of actor perception. Also, the importance of institutions and reciprocity: institutions do not substitute for reciprocity, but they institutionalize it.
“Achieving cooperation is difficult in world politics” (226).
Cooperation is not the same as harmony. Harmony means that interests align. For Axelrod and Keohane, anarchy means the absence of a common government in international relations. “To say that world politics is anarchic does not imply that it entirely lacks organization” (226).
It is often noted that security relationships seems to conform more closely to the standard predictions of what will happen in anarchy than do political or economic relations. Specifically, Lipson noted that the later relationships are clearly more internationally institutionalized.
The Effects of Structure on Cooperation: Three factors can lead to cooperation in the international system. These are mutuality of interests (issue linkage), the shadow of the future, and the number of players (in a game theory situation).
Points to Jervis’ work on cooperation and game theory, which shows that cooperation is differently possible with different kinds of interactions among actors.
Stag hunt is less conflictual than prisoner’s dilemma. The difference in the two is the relative actor perception of interests. These game theory presentations are done using a metric of payoff structure, which is a way of determining or describing the results of the cost/benefit analysis. The payoff structure can be used to analyze both political/economic and military/security situations and international relations.
Oye talks about blackmailing and backscratching as being techniques to increase cooperation.
Axelrod and Keohane conclude this piece by focusing on the importance of actor perception. Also, the importance of institutions and reciprocity: institutions do not substitute for reciprocity, but they institutionalize it.
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