Ea darowin, D.h. (1983) , Neoctaisi, Nachle \ Sud 4 Wold Doli\ics in BALDWIN, D.A. (1983) Neoctalion ound Maladie she _wrtonprons, dee, Aatunbion | Iw wisi Yeas 5 Semana Lt et 0 1 _ NEOLIBERALISM, NEOREALISM, AND WORLD POLITICS | wy \ David A. Baldwin In 1986 Robert O. Keohane edited a volume entitled Neorealism and Its Crities, which focused on the reformulation of traditional realist thinking about international politics by Kenneth Waltz (1979) and reactions from a variety of scholars. Waltz had ‘recast the tenets of classical realism in order to delineate more cleatly the effects of the structure of the international system on the behavior of nation-states, In addition, Waltz. viewed his work as different from that of earlier realists in its treatment of power and of states as units of the system (Waltz 1979; 1990). The critics, according to Keohane (1986a:24), sought to move beyond the nation-state by “devising new international institutions or regimes,” by reinterpreting the principles of sover- cignty, or by challenging the “validity of the ‘state as actor’ model on Which neorealism relies.” Whereas some critice called for more alter tion to economic and environmental interdependence as well as changes in governmental functions, information, and international regimes, others attacked the epistemology on which Waltz based his argument. Ina sense, this volume picks up where Neorealism and Its Critics ended. Unlike that volume, however, the contributors to this one share many fundamental assumptions about the nature and purpose of social scientific inquiry. This allows them to engage one another's arguments directly and results in a more focused and productive debate.4 David A. Baldwin In recent years the most powerful challenge to neorealism, some- times labeled structural realism, has been mounted by neoliberal insti- tutionalists, The term distinguishes these scholars from eatlier vati- ties of liberalism, such as commercial liberalism, republican liberal- ism, and sociological liberalism (Nye 1988; Grieco 1988a:4881; Keohane 1990a). Commercial liberalism refers to theories linking free trade and. peace; republican liberalism refers to theories linking democracy with peace; and sociological lieralism refers to theories linking transnational interactions with international integration. The immediate intellec- tual precursors of liberal institutionalism are theories of international regimes (Krasner 1983a). NEOLIBERALISM AND NEOREALISM: TERMS OF THE CONTEMPORARY DEBATE. Six focal points, described below, characterize the current de- bate between neoliberalism and neorealism. ‘The Nature and Consequenc of Anarchy Although no one denies that the international system is anarch- ical in some sense, there is disagreement as to what this means and why it matters. Arthur Stein (1982a:324) distinguishes between the “independent decision making” that characterizes anarchy and the ‘joint decision making” in international regimes and then suggests that itis the self interests of autonomous states in a state of anarchy that leads them to create international regimes. Charles Lipson (198422) notes that the idea of anarchy is the “Rosetta stone of international relations” but suggests that its importance has been exaggerated by the neorealists at the expense of recognizing the importance of inter- national interdependence. Robert Axelrod and Robert O. Keohane (1985) emphasize the importance of anarchy defined as the absence of government but argue that this constant feature of world politics permits a variety of patterns of interaction among states. Joseph M. Grieco (1988a:497~98) contends that neoliberals and neorealists fun- damentally diverge with respect to the nature and consequences of anarchy, He asserts that the neoliberal institutionalists underestimate the importance of worries about survival as motivations for state behavior, which he sees as a necessary consequence of anarchy. Neoliberalism, Neorealism, and World Politics 6 Helen Milner (1991:70, 81-82) identifies the “discovery of orderly features of world politics amidst its seeming chaos” as “pethaps the central achievement of neorealists,” but she agrees with Lipson that the idea of anarchy has been overemphasized while interdependence has been neglected. Duncan Snidal (1991b) views Prisoner's Dilemma (PD) situations as examples of the realist conception of anarchy, while Grieco (1988a) associates PD with neoliberalism. In general, neorealists see anarchy as placing more severe constraints on state behavior than do neoliberals. International Cooperation Although both sides agree that international cooperation is pos- sible, they differ as to the ease and likelihood of its occurrence According to Grieco (this volume), neorealists view international cooperation as “harder to achieve, more difficult to maintain, and more dependent on state power” than do the neoliberals. None of the neoliberals represented in this book disagrees with this assess- ment. Both Keohane and Grieco agree that the futyre of the Euro- pean Community will be an important test of their theories. If the trend toward European integration weakens or suffers reversals, the neorealists will claim vindication. If progress toward integration con- tinues, the neoliberals will presumably view this as support for their views. Rolative Versus Absolute Gains Although it would be misleading to characterize one side as concerned only with relative gaino and the other as concesiwd only with absolute gains, the neoliberals have stressed the absolute gains from international cooperation, while the neorealists have empha- sized relative gains. The basic reference point for many of the authors in this volume is the following passage by a leading neoreali When faced with the possiliyof cooperating f ity of cooperating or mutual gan states that feel insecure must ask how the gain wil be divided They are compelled to ask not "Will both of us gan?” but "Whe wl gain more?” If an expected gl is to be divided, say, inthe rao te to one, one state may use ts disproportionate ain to implementa poi intended to damage or destroy the other. Bren the prospect of ange6 David A. Baldwin absolute gains for both parties does not elicit their cooperation so long, as each fears how the other will use its increased capabilities (Waltz 1979:105), Stein (1982a:318) depicts the liberal view of self interest as one in which actors with common interests try to maximize their absolute gains. Actors trying to maximize relative gains, he asserts, have no common interests. Lipson (1984:15-18) suggests that relative gains ‘considerations are likely to be more important in security matters than in economic affairs. Grieco (1988a:487) contends that neoliberal institutionalism has been preoccupied with actual or potential abso- lute gains from international cooperation and has overlooked the importance of relative gains. He suggests that “the fundamental goal of slates in any relationship is to prevent others from achieving advances in their relative capabilities” (Grieco 1988a:498; italics in original). Snidal (1991b) disputes the neorealist contention that concerns about rela- tive gains inhibit cooperation except in the special case of bipolar relationships between states preoccupied with relative gains. He also suggests that the distinction between relative and absolute gains is not so clear-cut as it might seem. The relative gains problem can be stated in terms of trade-offs between long- and short-term absolute gains. Powell (1991b) uses deductive models to argue that concerns about relative gains will inhibit cooperation when the utility of mili- tary force is high but not when the utility of force is low." Mastan- duno (1991) uses empirical case studies to address the questions of whether and how relative gains matter. His conclusions provide some support for both sides of the debate. While he finds concerns about relative gains present in the policy-making process in all of his three cases, such concerns were not reflected in the policy outcomes for all the cases. In his essay for this valume Keohane acknowledges that neoliberal institutionalists have underestimated the importance of relative gains in world politics under certain conditions. The im- portant thing, according to Keohane, is to specify those conditions. He notes that this may be difficult since the behavior of states pursu- ing relative gains may be very similar to the behavior of states pur- suing absolute gains. Neoliberalism, Neorealism, and World Politics 7 Priority of State Goals Neoliberals and neorealists agree that both national security and economic welfare are important, but they differ in relative em- Phasis on these goals. Lipson (1984) argues that international coop- eration is more likely in economic issue areas than in those concern- ing military security. Since neorealists tend to study security issues and neoliberals tend to study political economy, their differing, esti- mates of the ease of cooperation may be related to the issues they study. Grieco (1988) contends that anarchy requires states to be preoccupied with relative power, security, and survival. Powell (1991b) constructs a model intended to bridge the gap between neoliberal emphasis on economic welfare and neorealist emphasis of security. In his model, states are assumed to be trying to maximize their economic welfare ina world where military force is a possibility. For {he most part, neorealists or neoliberals treat state goals by assump- tion. As Keohane (this volume) points out, neither approach is good at predicting interests. Intentions Versus Capabilities Pcs ‘The classical realist Hans J. Morgenthau depicted concern about the motives of statesmen as a fallacious way to understand foreign Policy. Instead he advocated assuming that statesmen “think and act in terms of interest defined as power’ (1967:5~6), which, he believed, Would enable analysts to understand the actions and thoughts of statesmen better than they themselves do. Although contemporary neorealists are unlikely to take such an extreme position, they are likely to emphasize: capabilittes more than intentions. Grieco (1988a:498, 500) points out that uncertainties about the future intentions and interests of other states lead statesmen to pay close attention to capabilities, “the ultimate basis for their security and independence.” Ina similar vein, Krasner (1991) criticizes the neoliberals for overem- phasizing intentions, interests, and information and underemphas- i2ing the distribution of capabilities. Keohane (this volume) argues that the sensitivity of states to the relative gains of other states is significantly influenced by perceptions of the intentions of such states, ‘Thus states worry more about relative gains of enemies than of allies, Stein (1982a) explains international regimes in terms of the pattern of