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International Relations TheoriesDiscipline and Diversity

International Relations Theories: Discipline and Diversity (4th edn)

Tim Dunne, Milja Kurki, and Steve Smith
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p. 885. Neoliberalismlocked

p. 885. Neoliberalismlocked

  • Jennifer Sterling-Folker


This chapter examines the neoliberalist argument that international institutions promote international cooperation. While neoliberalism acknowledges that cooperation can be difficult to achieve in anarchic conditions, it insists that institutions allow states to overcome a variety of collective action impediments. The central concern of neoliberal analysis is how institutions do so, and how they might be redesigned to more efficiently obtain cooperative outcomes. This chapter considers three questions that are relevant for understanding neoliberal contributions: How did neoliberalism emerge? What are the barriers to international cooperation? How does neoliberalism study international institutions. The chapter uses the World Trade Organization as a case study to illustrate the importance of institutional design for international free trade cooperation. Along the way, various concepts such as interdependence, hegemonic stability, hegemon, bargaining, defection, compliance, autonomy, and principal–agent theory are discussed, along with the game known as Prisoner's Dilemma.

Reader’s Guide

Neoliberalism argues that international institutions facilitate international cooperation. It acknowledges that cooperation can be difficult to achieve in anarchic conditions, but it argues that institutions allow states to overcome a variety of collective action impediments. How institutions do so, and how they might be redesigned to more efficiently obtain cooperative outcomes, is the primary focus of neoliberal analysis. This chapter revolves around a series of questions that are relevant for understanding neoliberal contributions. How did neoliberalism emerge? What are the barriers to international cooperation? How does neoliberalism study international institutions? The World Trade Organization is used as a case study to illustrate the importance of institutional design for international free trade cooperation.


The central concern of neoliberalism involves how to achieve cooperation among states and other actors in the international system. International cooperation occurs when states ‘adjust their behaviour to the actual or anticipated preferences of others’ so that ‘the policies actually followed by one government are regarded by its partners as facilitating realization of their own objectives’ (Keohane 1984: 51). To most observers, the desirability of achieving beneficial collective outcomes in International Relations (IR) would seem obvious. Yet the ability to do so in an anarchic international system has been relatively difficult historically. In fact, neoliberalism concurs with structural (or neo-) realism that international cooperation can be difficult to obtain in an anarchic international environment that fosters fear and uncertainty (see Chapter 3).

Yet in stark contrast to structural realism, neoliberalism argues that particular historical developments in the twentieth century have made international cooperation relatively easier to achieve now than was the case historically. These developments ensured the growth of international institutions, in both a formal and informal sense, which play a fundamental role in the daily activity of contemporary global politics. Formal institutions are multilateral organizations with physical locations, buildings, staffs, budgets, and other resources at their p. 89disposal (see also Chapter 4). States voluntarily create intergovernmental institutions such as the United Nations (UN) or the International Monetary Fund (IMF) in order to obtain particular collective interests. States have also created informal institutional arrangements, or international regimes, which consist of ‘sets of implicit or explicit principles, norms, rules, and decision-making procedures around which actors’ expectations converge in a given area of international relations’ (Krasner 1983: 2). The concept of international regimes was developed to capture, describe, and analyse the totality of cooperative efforts, assumptions, and behaviours in a given international issue area.

Neoliberalism is a variant of liberal IR theory that focuses on the role international institutions play in obtaining international collective outcomes, and for this reason it is often called ‘neoliberal institutionalism’. In order to examine international cooperation, neoliberalism subscribes to a state-centric perspective, which, like structural realism, considers states to be unitary, rational, utility-maximizing actors who dominate global affairs. That is, states are treated as unified entities with particular, specifiable goals, rather than composites of many different domestic actors and competing interests. States are also assumed to make decisions based on a set of self-interested priorities and according to a strategic cost-to-benefit analysis of possible choices, reactions, and outcomes. In making these assumptions, neoliberalism not only mirrors structural realism, but is also heavily indebted to the study of rationality and utility-maximization in economics.

However, unlike realism, neoliberalism is a variant of IR liberalism, and it is premised on basic liberal assumptions about the possibility of cumulative progress in human affairs. Liberalism assumes that collective benefits may be obtained through the greater application of human reasoning. Increased interaction and informational exchange among self-interested individuals and actors are also important. And all variants of liberal theory assume, to some degree, that benefits may be obtained from devising more effective institutional arrangements. Thus, in comparison to realism, neoliberalism has relatively greater faith in the ability of human beings to obtain progressively better collective outcomes that promote freedom, peace, prosperity, and justice on a global scale.

This does not mean that neoliberal scholars are idealists (see Chapter 1) in the traditional IR theoretical sense of the word. Neoliberalism acknowledges that impediments to collective action can be difficult to overcome in an anarchic environment. But neoliberalism argues that the structure or design of international institutions plays an important role in determining the extent to which collective goals can be realized. Policy-makers and other relevant actors can create and reshape institutional structures in order to more effectively obtain collective interests. In other words, it is possible for human beings to design international institutions that substantially mitigate the negative impact of anarchy on international collective actions. Whether or not they have done so, and how those institutions might be improved upon to do even better, is the primary subject of neoliberal institutional analysis.

How did neoliberalism emerge?

One of the early influences on neoliberalism was the pluralism literature in the 1960s and early 1970s. Pluralism challenged realist assumptions that states could be analytically treated as unitary, rational actors. Pluralists argued instead that a variety of nonstate actors and p. 90processes were breaking down barriers between domestic and international affairs. Because, as Richard Little (1996: 66) explains, ‘state boundaries were becoming increasingly permeable’, pluralists argued that it ‘was no longer possible to understand international relations simply by studying the interactions among governments’. According to the early work of Robert Keohane and Joseph Nye (1971), the term ‘transnational relations’ better characterized the increasingly extensive cross-national interaction occurring between states. This interaction was seen as a challenge to the authority and autonomy of national governments, which were no longer able to control outcomes or obtain interests by pursuing unilateral policies.

While this pluralist foundation informed many aspects of neoliberalism, what differed was the latter’s adoption of state-centric, unitary actor assumptions. The early neoliberal literature of the 1980s constituted a renewed analytical confrontation with the structural realist arguments of Kenneth Waltz (1979) in particular. In a series of neoliberal foundational texts, beginning with Robert Keohane and Joseph Nye’s Power and Interdependence (1977), liberal scholars sought to challenge realist pessimism on its own terms by utilizing realist assumptions. In a relatively bold analytical move, neoliberalism argued that an anarchic environment of self-interested, egocentric actors did not necessarily impose debilitating realist constraints on cooperation.

These arguments were further developed in the edited volume by Stephen Krasner, International Regimes (1983), which outlined the concept of regimes and applied it to a variety of issue areas. The tenets of neoliberalism were given fullest expression in Robert Keohane’s After Hegemony (1984), in which the author characterized his arguments as a variant of realism. This characterization spurred considerable debate within the scholarly literature of the 1980s and early 1990s between Robert Keohane (as a neoliberal) and Joseph Grieco (as a neorealist) over whether realist assumptions had been correctly adopted and applied (Grieco 1990, 1993; Keohane 1993). This so-called neo–neo debate (discussed more extensively in Ole Wæver’s Chapter 16) explains why neorealism and neoliberalism are sometimes categorized together as rationalist approaches.

The analytical convergence between structural realism and neoliberalism did not please everyone. A number of critics argued that adopting the same state-centric assumptions meant that important dynamics in world politics would continue to be missed by both theories (Rochester 1986; Little 1996). The unitary actor assumption remained problematic for both approaches, which faced challenges over the role that domestic politics plays in determining interests and foreign policies (Rose 1998; Sterling-Folker 2002). Critics also noted that the rational actor assumption made it impossible to separate the independent causal effects of regimes from what states did or wanted (Strange 1983; Haggard and Simmons 1987). Friedrich Kratochwil and John Ruggie (1986) argued that this problem was due to an analytical inconsistency between neoliberalism’s chosen epistemology and its ontology. Such criticisms served as an important theoretical foundation for the development of constructivism, with its emphasis on process, identity, and social interaction (see Chapter 9).

Yet despite these challenges, and the analytical convergence to which they were responding, there were still important substantive differences between structural realism and neoliberalism that have kept them on parallel but clearly separate theoretical tracks. One of the central differences involves how they define and analyse the concept of anarchy (Grieco 1990). Structural realists see anarchy as an all-encompassing, unchanging condition, or environment to which humans beings are subject. The inability to control outcomes and ensure p. 91survival generates the paranoia, fear, and drive for power that are basic to a realist analysis. Alternatively, neoliberals see anarchy as a vacuum that is gradually being filled with human-created processes and institutions (Sterling-Folker 2001). These have begun to counteract the inability to control outcomes and ensure survival, which means that the paranoia, fear, and drive for power induced by anarchy have also been mitigated over time.

The result is that the two perspectives read the Westphalian historical record very differently. Structural realists point to the ongoing warfare and military/trade competition between states as confirmation for the unchanging quality of anarchy. Neoliberal scholars concede that much of IR prior to the twentieth century seems to conform to realist expectations. But they highlight two historical developments in the twentieth century that have made realism an increasingly inaccurate description of contemporary global politics.

The first historical development was increasing interdependence in a variety of global issue areas due to modern technological and industrial advances. Interdependence involves a relationship of mutual dependence in which actions and interests are entwined. This relationship may produce unintended, undesirable, and reciprocal consequences, but participating actors also obtain important interests and benefits through their interconnection. It is therefore costly to one’s own interests to threaten or end the relationship. The concept of interdependence as a potentially pacifying process in an anarchic environment has a long pedigree in liberal IR thought. In neoliberal analysis, it sets the stage for the historical development of common interests that can only be obtained if states successfully cooperate with one another.

For example, states have a common interest in preventing the depletion of environmental resources, which is occurring at a rapid rate owing to the pace and scope of global industrialization. The problem is not confined within particular national borders, nor can it be resolved with traditional power politics, violence, or unilateral action. All states have a common interest in finding a solution to the problem, which their collective but overlapping activity has created. It is also a problem which can only be resolved through cooperative efforts among them. The same dynamics can be found in other issue areas sometimes disparagingly referred to as ‘low’ politics (vs the ‘high’ politics of national security), such as global economics, health, refugees, or immigration. These issue areas have become increasingly important to states and, because they are characterized by interdependence, are also the areas in which there is the greatest potential for international cooperation.

The second historical development that has made realism an inaccurate description of contemporary IR is the period of hegemonic stability that the USA provided after the Second World War. American and British foreign policy-makers began to plan for the post-Second-World-War era before the outcome of the conflict had even been determined. Influenced by the Great Depression, the rise of fascism in Europe, and the global war in which they were then engaged, the Americans and British mapped out a post-war vision meant to stabilize world affairs according to their own preferences. This vision included the UN system, which was to serve as an umbrella for cooperative relations across many different issue areas.

Particular attention was paid to the capitalist economic and free trade system, which was supported by a series of formal institutions, such as the IMF and the International Bank for Reconstruction and Development, which came to be known as the Bretton Woods system. These institutions were backed by American economic resources, and in so doing the USA was behaving as a hegemon, or a very powerful state that provides self-interested global p. 92or regional stability. Many international political economy scholars argue that a hegemon is necessary for states to have confidence in and engage with free trade in an anarchic environment. By supporting the economic system in this way, the USA provided a period of hegemonic stability in the latter half of the twentieth century during which an extensive international regime evolved for capitalist economics.

While the underlying motivation for this period of hegemonic stability was economic self-interest (along with ability), the period also served as an important foundation for the growth of interdependence in economics and other issue areas. More significantly, neoliberalism posits that even if US relative power has declined, interdependence provides a rational, strategic incentive for states to continue cooperating with one another (Keohane 1984). This is because high degrees of their own economic wealth now depend on access to one another’s markets and consumers. In addition, the institutions established by the hegemon serve as the physical and normative platforms for maintaining and even expanding cooperative efforts among self-interested actors. Hence, cooperation, and particularly economic cooperation, could theoretically be obtained in anarchy in the absence or decline of a hegemon.

Taken together these historical developments—interdependence and hegemonic stability—have created the necessary window of opportunity for the development of common collective interests that can only be obtained through international cooperation. Not surprisingly, neoliberal claims about these developments have been subjected to intense scrutiny. Important questions have been raised about how to measure interdependence, whether interdependence is just as likely to produce violence, and how to isolate the effects of interdependence from other potential causes (Jones and Willetts 1984; Mansfield and Pollins 2003). Similarly, critics have questioned the normative bias of hegemonic stability theory, whether the USA has actually declined as a hegemon, and whether a hegemon is even necessary in the first place (Snidal 1985; Strange 1987; Lake 1993). These criticisms suggest that the assumed relationship between historical processes, international institutions, and international cooperation, which serves as the foundation for neoliberalism, is not unproblematic.

What are the barriers to international cooperation?

It would be wrong, however, to characterize neoliberalism as arguing that cooperation will be easy to achieve just because interdependence has increased. States may now share a common interest in controlling the spread of deadly viruses, nuclear weapons, trade protectionism, and environmental pollution. But simply having common interests in an effective resolution does not lead easily or automatically to that resolution. States may fail to cooperate because they lack information about one another’s true preferences. They may fear that others will take advantage of a cooperative arrangement by cheating. They may be concerned that others will free-ride on the back of their cooperative efforts. They may believe, in short, that the transaction costs, or the unknown consequences and penalties, of even a potentially beneficial agreement are simply too great to risk the effort. Thus, even when all actors share a common interest and would gain from a cooperative effort, there are still significant barriers to the ability of self-interested actors to cooperate.

According to structural realists, these barriers are intractable because, even when both parties have common interests and would gain from cooperation, they fear that any relatively p. 93greater gains will be employed for competitive purposes. Since they cannot trust the future intentions of their cooperative partners, actors will avoid potential agreements if they involve different pay-off levels. Alternatively, neoliberal scholars argue that the fear of these relatively greater gains do not necessarily inhibit cooperation. States can be motivated to cooperate in order to achieve absolute gains (or the total gains made regardless of the relatively greater gains of others) if their concerns over future intentions can be mitigated. It is true that in anarchy any agreement must be self-enforcing, but this does not make states incapable of recognizing when it is in their interest to curtail cheating or to trust in the future actions of others. The barriers to cooperation are inhibiting and worthy of examination, but they are not as insurmountable as structural realists would have us believe.

Neoliberal scholars have often employed game theory to analyse these cooperative difficulties.1 The most famous illustrative game is the Prisoner’s Dilemma, in which two prisoners

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Although game theory is not used by all neoliberal scholars, the concepts and language of game theory permeate neoliberal analysis. Game theory utilizes a combination of mathematics and logic to analyse strategic interaction among decision-makers. One early text that encouraged the use of game theory in neoliberalism was the collection of essays, Cooperation Under Anarchy, edited by Kenneth Oye (1986).

Games were categorized according to whether they were noncooperative or cooperative. Noncooperative games were constant-sum or zero-sum, in which a gain by one opponent automatically meant the equivalent loss by the other. Chess is a typical example, and military–security issues were characterized as zero-sum. Cooperative games were called variable-sum, positive-sum, or increasing-sum games. In these games, both opponents gain or lose unequally from their interaction. Such games also tended to be ‘mixed-motive’, because player preferences (or utilities) were not clearly ranked and contained both cooperative and non-cooperative motivations. The Prisoner’s Dilemma is a typical example, and trade issues were characterized as variable-sum. There was disagreement among the volume’s authors over whether military–security issues were actually zero-sum. Yet, ultimately, Robert Axelrod and Robert Keohane argued in the concluding chapter that ‘economic issues usually seem to exhibit less conflictual pay-off structures than do those of military security’ (Oye 1986: 231).

In issue areas characterized as mixed-motive and variable-sum, player pay-offs are determined by strategic bargaining. Thus, game theory allowed neoliberal scholars to highlight the difficulties of negotiating a mutually satisfactory solution. Such solutions are referred to as ‘pareto-optimal’, because they are outcomes in which no one could gain additional benefits without making someone comparatively worse off. If there are no player defections, these solutions could also develop into ‘equilibrium outcomes’, in that players were prevented from unilaterally improving the outcome for their own benefit.

The condition of interdependence was argued to be important because, while it could not change interests associated with zero-sum games, it could encourage a shift in mixed-motive games to increasing-sum games. Interdependence encouraged iteration (or repeated plays), thereby allowing players to employ strategies such as ‘Tit-For-Tat’ and issue-linkage to reward cooperation and punish defection. Once increasing-sum games became established, none of the players could obtain their interests in the absence of agreement from the others. As the authors argued, bargaining difficulties over the pareto-optimal solution remained, but the preference for cooperation over unilateralism became embedded.

Kenneth Oye (1986), Cooperation Under Anarchy (Princeton, NJ: Princeton University Press).

p. 94are held incommunicado by police and told that if they provide evidence against the other they will receive a reduced sentence. Both would be better off if they remained silent and thereby cooperated, yet the pay-off structure encourages each to turn against the other or defect, which means they will both receive longer sentences. One of the obvious barriers to effective cooperation in this instance is the lack of information or transparency about the potential pay-offs and hence the real value of cooperation or defection. Another barrier is the incentive to ‘cheat’ on one’s partner or, alternatively, the fear of being cheated, which involves a basic mistrust about the actual intentions of others.

The examination of the Prisoner’s Dilemma and other games have allowed neoliberal scholars to more effectively isolate and analyse these sorts of barriers to international collective action in interdependent conditions (Axelrod 1981; Oye 1986). For example, neoliberal scholars discovered that iteration, or the expectation of future interaction, makes actors less likely to defect from cooperative arrangements than actors engaged in one-shot relationships. The recurrent ability to exchange information, as well as monitor one another’s behaviour, reduces concerns over actual intentions and the consequences of being cheated.

At their most basic level, international institutions foster iteration by ensuring that constant and regular meetings occur between national leaders and policy-makers. This allows states to learn one other’s preferences, discover they have common interests and constraints, and consider a variety of solutions to collective problems. International institutions also foster the exchange of information about one another’s intentions, and they can reveal common concerns over cheating, free-riding, and other transaction costs which can then be addressed directly by negotiators and decision-makers. Transparency is enhanced, thereby reducing the apprehension that can inhibit a mutually beneficial agreement.

Because institutions play such a fundamental role in reducing these sorts of barriers to international cooperation, how they are designed, and who uses them for what purpose is central to neoliberal research agendas. After all, a failure to cooperate can be due, at least in part, to the inefficient design of cooperative institutions. Since ‘there are many mutually beneficial arrangements that states forgo because of the fear that others will cheat or take advantage of them’, Robert Jervis has correctly observed that neoliberal scholars ‘see important gains to be made through the more artful arrangement of policies’ (1999: 48). This interest, in what has been called the ‘rational design of institutions’ (Koremenos et al. 2003), serves as the foundational context for neoliberal analysis and shapes its research agendas.

How does neoliberalism study international institutions?

Neoliberalism begins its analysis by identifying the shared self-interests that a particular cooperative effort is meant to obtain in an international institutional setting. That is, for what common purpose or goal was the institution designed? Neoliberal analysis next turns to the question of how, or whether, that particular institutional design ensures those interests are sufficiently obtained. In doing so, neoliberalism derives generalizable lessons about what aspects of the institution are more or less successful in obtaining a cooperative result. In studying cooperation and institutions in this manner, neoliberal scholars have identified three broad difficulties in international institutional design. These difficulties affect the extent to which international cooperation can be achieved.

p. 95Bargaining

The first broad theme involves the extent to which institutional design plays a role in international negotiations and bargaining. In order to reach a collectively agreed decision, states need a degree of regularity in the rules and procedures for their collective decision-making. By normalizing rules and procedures, institutions reflect mutually accepted boundaries for behaviour and for the achievement of collective goals. Yet any cooperative international effort will still involve a great number of negotiations, often among a large number of state actors with comparatively different resources and interests. The specificity and regularity of bargaining procedures also varies according to particular issue areas and its institutions, so there is variation in how well particular institutions achieve their specified goals.

Clearly, great powers can have more influence over international negotiations and their outcome, as neoliberalism’s critics have charged (Mearsheimer 1994–5). It may also be the case, as Gulio Gallarotti (1991) has argued, that although international institutions do serve as important forums for negotiations, they have not been particularly good managers of some collective problems because they cannot resolve serious conflict between countries. These criticisms suggest that institutional redesign will miss its mark because it does not address problems inherent to the negotiations process itself. The difficulties inhibiting cooperation lie elsewhere, with the issue area or the states involved.

In light of these criticisms, neoliberal scholars have been more careful to differentiate causal variables and take the role of power into account when examining bargaining outcomes (Milner and Moravcsik 2009). And dismissing the role of institutions, and the entire analytical enterprise of neoliberalism, on these grounds misses the extent to which sovereign states (both powerful and weak) rely on institutions as essential forums for bargaining in the first place. Nor does it negate the role that different institutional designs might play in achieving more efficacious negotiations in particular situations. Dysfunctions may certainly result from relative power, yet these do not account for every instance in which cooperation could have been more effectively achieved. In other words, there are times when the bargaining dysfunctions are within the grasp of institutional designers.

Barbara Koremenos, Charles Lipson, and Duncan Snidal (2003) have found that a number of key design features have an impact on bargaining outcomes. These features include the scope of an issue covered by the negotiations, the extent to which issues are linked, and the rules for controlling how decisions are made (including rules on voting). Issue linkage, for example, has been particularly prevalent in bargaining among European countries, where a high degree of international institutionalization developed after the Second World War. Thomas Oatley (2003) points out that the hundreds of European bilateral trade agreements following the Second World War initially constrained the significant gains that could be realized through intra-European trade. Yet these agreements also served as important stepping stones for the eventual multilateralization of European trade via regional institutions. By developing institutions such as the European Union, multilateral negotiations obtained greater collective gains and made it possible to link negotiations across common issue areas. Thus issue linkage became particularly important in the European context, where the nesting of regional and global institutions lead to complex cross-cutting institutional bargaining games (Aggarwal 1998; Pahre 2003). This nesting or clustering of negotiations could not have occurred in the absence of international institutionalization.

p. 96There is debate among neoliberal scholars over whether regional or global institutional arrangements are relatively more efficacious at facilitating negotiations (Acharya and Johnston 2007; Mansfield and Reinhardt 2003). The trend toward regionalism since the 1990s has also been accompanied by a growing legalization of negotiations that has become an important subject of neoliberal analysis in its own right (Goldstein et al. 2000; Smith 2001). The legalization of international negotiations has meant that decision-making rules and dispute-resolution mechanisms are clearly defined and proceed along highly specified lines. And although the legalization of an issue area does not ensure state compliance, the process and degree of legalization in an issue area appears to influence bargaining outcomes in important ways.

For example, states now increasingly rely on international legal processes to resolve trade disputes by filing complaints over treaty violations with neutral third parties which then issue legally binding rulings. This is puzzling because, given an anarchic system of sovereign states, it is not immediately clear why states would seek to avoid an unfavourable ruling in the first place. After all, why not simply ignore a ruling one does not like? While there are a number of potential causes for this avoidance behaviour, at least some part of the explanation might lie with the normative value that sovereign states, as legally institutionalized entities themselves, place on any legal process (Schwartz and Sykes 2001). This suggests that the greater the extent to which an international institution can legalize a process (thereby making it transparent and clear), the greater the chances that negotiations will be successfully concluded.

Such legal clarity may also assist national decision-makers when faced with domestic pressures to enact trade barriers (Martin and Simmons 1998). Alternatively, Thomas Oatley and Robert Nabors (1998) have noted that decision-makers sometimes propose redistributive international institutions in order to defuse domestic political pressures. In doing so, decision-makers simultaneously obtain their domestic interests while contributing to the institutionalization and regulation of an international issue area. Decision-maker leadership may, in fact, be an essential element in the ability to remove bargaining obstacles at both the domestic and international levels (Young 1991). In all of these instances, neoliberal scholars have discovered that institutional design plays a role in promoting or discouraging some aspect of international bargaining, thus underscoring the relevance of its study to the achievement of collective ends.


The second broad category of institutional design problems of interest to neoliberal scholars involves the issue of defection. Because states fear that their cooperative partners may fail to live up to mutual agreements, states may be discouraged from engaging in cooperative projects in the first place. They may also be concerned with the ability of other states to free-ride or indirectly (and without incurring costs) benefit from their cooperative efforts. These concerns lead to an obvious question: how can international institutions be designed to alleviate concerns over defection?

The existence of international institutions already indicates that, to some extent, the problem of defection is not as inhibiting as it might first appear. After all, states create these institutions under the assumption that it is possible to lock one another into the institutional arrangements and the agreements that have been signed. In so doing, states acquire increased information about the actions and preferences of others, combined with greater knowledge about the consequences of cheating and being cheated, which reduces the temptation to p. 97cheat generally. The same has been true for concerns over free-riding, since institutions have been the forums through which states have expanded multilateral participation in the provision of collective goods. This has led some scholars to argue that since states generally follow through on their international agreements, the subject of defection is not particularly important (Chayes and Chayes, 1993).

Yet it is still the case that in an anarchic environment, in which cooperative agreement is necessarily decentralized and self-enforcing, states do not always uphold, follow through with, or fully implement the agreements they have initially reached. As George Downs, David Rocke, and Peter Barsoom have observed, ‘cooperation … may begin with agreements that require little enforcement, but continued progress seems likely to depend on coping with an environment where defection presents significant benefits’ (2001: 297). Thus, the issue is not so much whether defection will occur, since obviously it can and will, but rather how to deal with it when it does. As with bargaining, relative power between states can play an important role in who defects and free-rides, as well as who has both an interest in and the capacity to challenge and pressure defectors. While international institutions generally do not have the ability or resources to punish defectors directly, neoliberal analyses demonstrate that different institutional arrangements make defection more or less likely.

Institutions can play a role in alleviating two important aspects of defection—compliance and enforcement. Compliance involves the extent to which states can be induced or encouraged to abide by the international agreements to which they are parties. Enforcement involves the extent to which states can be forced into compliance and possibly punished for their failure to do so. Institutional mechanisms for monitoring state behaviour are particularly important for compliance, because such monitoring makes all states aware of one another’s behaviour. By providing for the systematic review of each member’s practices, institutions highlight areas of potential defection and, because states are aware that their behaviour is being regularly monitored, it encourages compliance. This has been the case in issue areas such as trade, human rights, and the environment, in which countries face domestic and international pressure or institutional censure for a failure to comply with agreements. Thus, a basic element in the design of international institutions has been responsibility for collecting and disseminating information about member state behaviour.

Transparency by itself, however, is usually not enough to ensure compliance. In a comparative study of institutional compliance systems, Ronald Mitchell (1994) found that increased transparency needed to be combined with reduced implementation costs, the threat of sanctions, and an emphasis on actively preventing violations rather than merely deterring them. Such integrated compliance systems made defection less likely, thus indicating that a combination of mechanisms (some of which are specific to the issue area in question) is likely to be most effective at eliciting compliance. Other mechanisms include the ability of international institutions to provide financial incentives, act as moral persuaders, serve as neutral third parties, and actively manage member state disagreements. Such management might include either the arbitration of a dispute directly or the provision of legal guidance for its resolution (Mitchell and Hensel 2007; Simmons 2002; Roben 2008).

As with bargaining, issue linkage can become an important aspect of compliance. Institutions may serve as the forums through which issues become linked, as either a reward or punishment for behaviour, although this also varies according to the problem at hand, the relative impact of defection, and the relative power of the states involved (Mitchell and Keilbach 2003). p. 98This is particularly clear in the case of economic sanctions, or the threat of them, which may be used as an institutional means of enforcement and punishment of defectors. Yet, as Lisa Martin (1992) points out, sanctions can only be successful when all relevant parties comply with the decision to sanction. The process of getting states to go along with proposed sanctions involves what she calls ‘coercive cooperation’. It depends on the relative power of interested states to persuade or threaten other states to comply with the sanctions. In order to do this effectively, interested states rely on international institutions to obtain cooperation, as well as implement and monitor imposed sanctions against the defecting parties.

Another important aspect of institutional design for compliance and enforcement is the inclusion of dispute resolution mechanisms. Neoliberal analysts have discovered that flexibility in institutional compliance mechanisms is an essential design element if defection is going to be effectively discouraged. Barbara Koremenos (2001) has observed that renegotiation provisions alleviate concerns about the distributional effects of an agreement. This encourages states to both cooperate and comply, since they know that renegotiations will address subsequent distributional effects and concerns. Similarly, Peter Rosendorff and Helen Milner (2003) argue that the inclusion of escape clauses and loopholes encourages compliance, because states may refuse to sign onto an agreement if it is too rigid in the first place. In the face of increasing domestic pressures, decision-makers may feel they have no other choice but to abandon an agreement. Escape clauses, however, allow states to temporarily back out of agreements, although they must be carefully designed so that a state’s reliance on them is neither too frequent nor too unusual.


The third, broad area of institutional design of interest to neoliberal scholars involves the issue of autonomy. While neoliberalism assumes that international institutions facilitate self-interested cooperation, it is not always clear that outcomes are due to the presence of institutions specifically. The problem lies with the neoliberal assumption that international institutions are created by states to serve their self-interests. How is it then possible to disentangle the effects of state interests from the attributes of international institutions? If institutions are implementing what states want, then why not just study the states involved? Do international institutions even have an autonomous status that can be analysed separately from the analysis of state interests?

Scholars have responded to this analytical problem in a number of ways. One approach has been to examine how international institutions act as norm entrepreneurs and agenda setters in global politics (Finnemore and Sikkink 1998). Because international institutions are generally viewed as neutral parties that represent commonly shared values, they are accorded a certain degree of legitimacy in world affairs. This allows them to promote particular values and goals on a global scale. They derive additional authority from their control and coordination of technical expertise and information. How effectively a given institution can shape the global agenda will depend on a variety of aspects. Yet as Martha Finnemore (1996) has argued, a major element in the process involves the institution’s ability to socialize states, and particular domestic constituents within those states, into global norms. In this way, the domestic political agendas and hence foreign policies of even relatively powerful states can be affected by international institutions.

p. 99Another response to the analytical problem of autonomy has been to examine how international institutions implement the tasks assigned to them by states (Joachim et al. 2008). It is important to underscore here just how numerous these tasks are in global politics. As Helen Milner (2009: 6) points out, ‘almost every area of global cooperation has been formalized into an international institution’, and while controversies and the institutions associated with them are more likely to appear in newspaper headlines (e.g. World Trade Organization (WTO) protests, the IMF structural adjustment programmes, or International Criminal Court indictments), the activities of daily global life are inevitably overseen by an international institution. People, goods, services, and ideas are being exchanged across national borders and around the globe every moment of the day. International institutions have been assigned the task of overseeing and implementing this daily activity and the legal agreements that accompany them.

Yet institutions ‘do not simply pursue the mandates handed to them’, as Michael Barnett and Martha Finnemore (2004: 5) point out, and instead institutional ‘staff must transform these broad mandates into workable doctrines, procedures, and ways of acting in the world’. International institutions have an independent causal impact precisely because they oversee daily global tasks that states do not. How they do so may not always be very effective; yet this is also one of the ways in which scholars have been able to identify the independent causal impact of international institutions. That is, international institutions exhibit a variety of standard bureaucratic pathologies when implementing their missions and these cannot be traced to state intentions or interests. Such pathologies may be avoided, Barnett and Finnemore (2004) suggest, by making organizational decision-making processes more transparent and inclusive.

Finally, the question of autonomous action and implementation has led to the development of a neoliberal research programme known as principal–agent theory. This research examines how states (as the principals) delegate tasks and authority to international institutions which serve as their independent representatives (as agents) within particular issue areas (Hawkins et al. 2006). Delegation serves the interests of most countries, yet it also allows international institutions to independently pursue and shape multilateral agendas. Because differences arise between what states want as principals and what institutions do as agents, states simultaneously develop mechanisms for controlling organizational influence and autonomy (Pollack 1997; Nielson and Tierney 2003). Such mechanisms serve as an important source of institutional redesign. Thus, the process of delegation, and the rules governing it, has evolved over time in order to more effectively promote the interests of states, even as the process paradoxically promotes institutional autonomy.

Case study:

the World Trade Organization

The purpose of the World Trade Organization (WTO) is to serve as a forum for states to negotiate free trade agreements and settle trade disputes. It came into formal existence in 1995 and is part of a well-established international regime in the area of global capitalist free trade. This regime consists of numerous free trade organizations and agreements, and it depends on a variety of ideational and p. 100legal foundations. These rest, in turn, on the presumption that it is normatively valuable and beneficial to participate in the global activity of capitalist free trade (in contrast, e.g., to the Marxist perspective explained in Chapter 7). An exclusive focus on the formal procedures and structure of the WTO would miss these important foundational elements, which is one of the reasons why the broader concept of international regimes was developed by neoliberal scholars.

Yet the institutional evolution of the WTO serves as an excellent case study for illustrating the importance of institutional design to collective goals in an anarchic environment. States developed the WTO from a prior and less formal institutional arrangement, known as the General Agreement on Tariffs and Trade (GATT), in order to better obtain their collective economic interests. The WTO’s institutional design developed out of the collective experience with GATT. Some of the WTO’s key institutional aspects have already been modified in response to new situations and institutional shortcomings. And the WTO has been the subject of considerable neoliberal analysis.

Origins of the World Trade Organization

Given the nature of international trade, the impetus for developing a formal institution such as the WTO had existed since the Second World War. Despite the collective benefits that can be obtained by removing trade barriers, coordinating trade liberalization can be relatively difficult to achieve and maintain. Domestic producers often pressure governments for protectionism, particularly in times of economic crisis, and these pressures are difficult for decision-makers to ignore. A particularly appropriate game for illustrating the difficulties involved is Stag Hunt (Gates and Humes 1997: 85–90). In the game, hunters must cooperate to bring down a stag that will provide all of them with considerable gain. However, any individual hunter may be tempted to defect by unilaterally pursuing a rabbit, which will cause the stag hunt to fail. The defection will provide the hunter with more immediate and unilateral but ultimately short-lived and comparatively smaller gains.

Trade liberalization operates according to a similar logic, because comparatively greater aggregate wealth can be obtained by all participants if they reduce barriers to trade. Yet, in the face of immediate domestic pressures, a state will be tempted to resort to protectionism, causing other states inevitably to follow suit. The end result is that by pursuing their individual short-term interests, all states end up being economically worse off in the long run as the effects of protectionism multiply through the economic system. This pattern of behaviour could be seen during the Great Depression, in policies such as the 1930 Smoot–Hawley Tariff, which effectively closed US markets to imported goods and caused other states to follow suit. The hegemonic vision of a new global economic order proposed by the Americans and British during the Second World War included a forum that would facilitate trade liberalization bargaining.

Unlike the International Monetary Fund (IMF) and International Bank for Reconstruction and Development, however, specific aspects of the proposed International Trade Organization (ITO) proved to be controversial, and the organization failed to materialize after the US withdrew its support.2 The need for a trade negotiations framework and forum remained, however, and in the ITO’s place, the US and other trading states turned to the GATT which, in anticipation of the ITO’s creation, had gone into effect in 1948. GATT represented the first round of trade negotiations and tariff reductions after the Second World War. Although it was not in itself a formal IGO, GATT established a set of provisional trade rules and it created mechanisms for resolving trade-related disputes.

This trade agreement subsequently served as the institutional backbone for successive rounds of trade negotiations, which dealt with new trade difficulties as technology, economic practices, and political events evolved during the Cold War period (Spero and Hart 2003; Cohn 2005). Each round would last several years, as delegates hammered out the details of reducing particular trade barriers (often product by product particular to each member state) and address new types of barriers and practices. The Kennedy Round in the mid-1960s focused on antidumping practices, when states subsidize domestic industries which then export their products at below production p. 101cost. The Tokyo Round in the 1970s focused on nontariff trade barriers, such as government subsidies for infant industries and import quotas. The Uruguay Round in the late 1980s was one of the most comprehensive, as it included negotiations on everything from agriculture to intellectual property rights.

In this way, GATT was the institutional and legal basis for the maintenance and expansion of free trade. Its membership grew steadily from roughly twenty in the late 1940s to over a hundred by the early 1980s. The goals of GATT were supported by a variety of other international and regional institutions, such as the IMF, which oversaw the fixed exchange rate system, or the European Union, which promoted regional economic integration. Informal institutions, such as the Group of 7, also developed so that leaders from the major industrialized democracies could meet on an annual basis to discuss areas of mutual concern. In all of these endeavours, international institutions served as the forums for iterated interaction, thereby confirming collective intentions and behaviours. They allowed states to exchange information, to address new problems as they arose, and to reduce transaction costs that would have been associated with bilateral trade arrangements. Not surprisingly, the markets of GATT members became increasingly interdependent as the Cold War progressed.

At same time, the relative ability of the US to unilaterally control economic outcomes had begun to wane. The US announced in 1971 that it would no longer support the fixed exchange rate system. During the economic difficulties of the 1970s, including a series of oil crises, the USA found it increasingly difficult to offer and maintain an open market for its partner’s products. Although this relative decline should not be overstated, since by most estimates the American economy remained one of the most influential and wealthiest, the perception of hegemonic decline relative to its trading partners impacted policy. The USA began to put pressure on its trading partners to shoulder more of the burden for maintaining a free trade system, and it became increasingly dissatisfied with GATT and the absence of stronger compliance mechanisms.

The institutional structure of GATT was becoming a problem in other ways as well. As long as GATT’s membership had been limited to advanced industrial economies and a handful of other states, the informal setting was conducive to negotiations. The flexibility of GATT’s institutional design and mandate allowed member states to address new trade issues as they arose. And many newly independent states did not join GATT because they pursued isolationist development policies. This began to change by the early 1980s as the growing economies of Asia and South America became GATT members. The trend toward ever larger membership numbers, which expanded again after the Cold War, put considerable strain on the GATT’s institutional structure and its negotiating procedures. With more members and a diverse set of problems at the table, each round of negotiations, and the membership committees that oversaw them, became increasingly more complex. Thus, while GATT had served as an appropriate institutional framework for free trade negotiations during much of the Cold War period, its institutional design became unwieldy by the 1980s. These problems, combined with growing dissatisfaction with GATT compliance and enforcement, led to institutional reform and the development of the WTO as GATT’s replacement.

World Trade Organization: its structure and operation

The WTO differed from GATT in its legal foundations, structural parameters, and substantive mandates. It was a formal intergovernmental organization with a full Secretariat and an extensive institutional structure designed to cover all aspects of trade (not simply traded goods). Negotiating procedures and schedules (of substantive committees, working groups or parties, and ministerial conferences) were delineated. Organizational requirements and procedures for the accession of new members and observers were established. And the WTO contained one of the most highly developed dispute resolution mechanisms to be found in an international institution (Busch and Pelc 2015).

p. 102Since its creation, the WTO has served as the primary international institution through which the normative and behavioural expectations of global capitalist free trade have been extended and affirmed. Yet despite the collective will to create the WTO, the new institutional design was not without its problems. A series of initial WTO trade dispute decisions labelled nationally legislated measures to protect the environment and labour standards as unfair trade practices. An unlikely coalition of environmental activists and labour unions protested the Seattle Ministerial Conference in 1999, charging that the WTO was an undemocratic institution that represented corporate interests. As a decentralized compliance and enforcement mechanism, the WTO’s procedures for dispute resolution came under increasing scrutiny and criticism as being too effective (in the case of labour or environment) or not effective enough (because initially states could veto an undesirable decision). North–South divisions also began to emerge among members over ongoing agricultural subsidies, which stalled progress on the Doha round of negotiations that had begun in 2001.

Many of these problems, and the way in which the WTO’s structure influences outcomes in general, have been the subject of neoliberal analysis. In a comprehensive neoliberal treatment of GATT to WTO institutional design and reforms, Kyle Bagwell and Robert Staiger (2004) argue that institutional modifications have not always been the most efficient from an economic perspective. Yet many of the institutional revisions that have occurred make sense, they argue, within the context of particular bargaining and defection issues which were confronting GATT and WTO negotiators at the time. Similarly, Robert Pahre (2003) has argued that simply by clustering or centralizing trade negotiations within its structure, important distributional advantages have been created for WTO members. In addition, the WTO has not remained institutionally stagnant in the face of criticisms and some redesign has already occurred, for example to address the conflict between trade and environmental standards (Schoenbaum 1997).

In examining how to enhance the WTO’s institutional design, neoliberal scholars have noted that issue linkage has been important to particular types of trade negotiations. Christina Davis (2003) has found, for example, that multilateral bargaining in the GATT/WTO led to greater liberalization in agricultural trade because it allowed for issue linkage and because the rules and procedures for trade negotiations were highly specified. These aspects provided decision-makers with leverage against recalcitrant domestic groups. It also allowed them to demonstrate that larger economic collective interests are at stake in the negotiations Similarly, Vinod Aggarwal (2009) argues that it is the nature of the issue area combined with pre-existing institutional arrangements that accounts for success in trade negotiations.

The greater application of legal procedures in the WTO’s institutional design has also been significant. Eric Reinhardt (2000) has discovered, for example, that trade disputes tend to be settled earlier, and with greater concessions, if there is the potential for future legal proceedings involving trade treaty violations. That is, when trade bargaining has involved the option of adjudication, members attempt to settle the dispute via negotiations prior to such rulings. Cecilia Albin and Daniel Druckman (2014) also demonstrate that procedural justice plays an important role in effective trade negotiations, because trade negotiators who took these principles into account were more likely to reach an effective trade agreement than those who did not.

In the area of defection, the WTO Secretariat provides for the systematic review of each member’s practices. This is particularly important for an issue area such as world trade, where there is an incentive among exporters to examine data on trade treaty compliance since defection directly affects anticipated profits (McCubbins and Schwartz 1984; Pahre 2003). Yet there is considerable debate within the neoliberal literature over the efficacy of the WTO’s dispute resolution mechanism and exactly how it works, both in obtaining early compliance and in how states respond to its rulings. Marc Busch (2000) has argued that an important intervening variable in whether trade cases are adjudicated is whether or not the states involved are democracies. Keisuke Iida (2004) has argued that whether or not WTO dispute settlements are effective may have as much to do with domestic political and legislative p. 103processes as does the institutional and legal parameters of the WTO itself. And Krzysztof Pelc (2009) has noted that while WTO ‘escape clauses’ may be flexible mechanisms allowing for defection under particular circumstances, potential abuse by member states has required ongoing monitoring and verification reforms.

There is, finally, the issue of institutional access, delegation, and transparency within the WTO itself. The WTO’s greater dispute settlement capacity was supported by developing and smaller countries, which have increasingly availed themselves of this mechanism. Yet neoliberal scholars have found that the capacity to even litigate WTO cases, and to involve expert testimony and legal experts in one’s defence, may be directly correlated with relative power and resources (Busch and Reinhardt 2006). However, Bown and Hoekman (2008) argue that WTO rules are rarely enforced on smaller, poorer members, and that greater institutional transparency would resolve this problem.

Institutional access is also important in Manfred Elsig’s (2011) application of principal–agent theory to the WTO. According to Elsig, there is a link between emerging pathologies in the WTO’s negotiations process and the WTO Secretariat’s declining role in that process. This suggests that increasing the Secretariat’s role would produce more efficacious trade negotiations outcomes, a proposition further supported by Sikina Jinnah’s (2010) research on the important role played by the WTO Secretariat in managing negotiations in overlapping issue areas such as trade and the environment. In this way, the WTO amply demonstrates how institutional design is continually adjusted by states as they seek to better obtain their collective interests.

Case study questions


The WTO’s mandate is to ensure that international trade rules allow for the efficient conduct of business, yet this often conflicts with national environmental and labour standards. Is it possible to redesign the WTO so that it successfully balances these goals and, if so, how?


Using the WTO case study as a template, how would neoliberalism analyse cooperation in an issue area such as environmental protection or human rights?


As we have seen throughout this chapter, neoliberalism is the umbrella term for liberal research programmes that focus on the role played by international institutions in achieving collective outcomes in an anarchic environment. Neoliberalism argues that international cooperation is possible, and most readily achievable, with the creation and maintenance of international institutions. In contrast to structural realism’s pessimistic understanding of global politics, neoliberalism argues that states now have more interests in common and a greater ability to recognize that commonality. Far from representing a ‘false promise’, as structural realists such as John Mearsheimer (1994–5) have claimed, states have developed international institutions in order to overcome barriers to international collective action. International cooperation is now an embedded, enduring feature of global politics. Neoliberalism’s goal is to understand how international institutions foster, maintain, and deepen this cooperation.

Yet it is also important not to overstate the case for international institutions within the context of neoliberal analysis. Neoliberal scholars are aware that institutions do not always p. 104matter. They understand that institutions can break down or fail to achieve a desired collective outcome. They know that institutions cannot guarantee an effective solution. They understand that institutions serve the interests of states and that these interests do not always accord with the greater good. Yet even in these contexts, there may be an important role for institutional redesign in achieving a more desirable outcome. We must be careful not to assume a priori that the absence or failure of a cooperative solution is due to interest conflicts among powerful states. Doing so imposes an explanation on outcome before analysis has even begun. Upon closer inspection, even powerful states often want cooperation; the problem is more typically how to obtain equilibrium solutions that are also pareto-optimal. Institutional redesign may or may not more effectively obtain such solutions, but we cannot know this before analysis has even begun.

It is, however, also important to draw attention to neoliberalism’s normative assumptions about institutions and global politics. Implicit in neoliberal analysis is a faith that the growth of international institutions has been, on balance, a positive development, particularly in global capitalist affairs. This faith has been challenged on a number of grounds, most notably by Marxist and critical theorists (Chapters 7 and 8), who argue that international institutions perpetuate economic inequities. In addressing this concern, Robert Keohane (1984: 257) argued that ‘improvements (as judged by cosmopolitan moral standards) are more likely to be incremental than sudden, building on the knowledge of one another created by successful cooperation’. In other words, ethical improvements are more likely if existing institutional arrangements are modified rather than simply abandoned and replaced with entirely new arrangements.

Whether this effectively addresses the concerns raised by neoliberalism’s critics is an open question. By starting with realist assumptions about anarchy and state interests, both realism and neoliberalism treat the Westphalian system as a given. In so doing, both tend to reify the social structures, identities, and interests of that system (as constructivism argues, see Chapter 9), and reaffirm that the main criteria for evaluating Westphalia’s ethical dimensions are consistent with the aggregate interests of states. International institutions are then evaluated according to whether they obtain state interests, without actually addressing the ethical dimensions of the interests in the first place. In this, neoliberalism shares some of the same dilemmas as English school pluralists (Chapter 6) in that it limits its ethical and analytical horizons by presuming that the current international system can best be studied as if it were a tolerable co-existence among like-minded sovereign states.

Unfortunately few neoliberal scholars directly address the ethical criticisms that have been levelled against their approach. Nor have they sought to engage other analytical perspectives in larger discussions about the trajectory of global affairs. Doing so would seem important, if only to avoid being relegated to a disciplinary niche in which only one type of phenomenon—intergovernmental organizations—is being studied. Ultimately, however, neoliberalism’s strength lies in its ability to highlight the sheer ubiquity of institutions and cooperative efforts in the current system. In doing so it underscores how the ability to achieve collective action solutions has significantly increased in global affairs. The extent to which this has produced a more equitable international system can certainly be debated. But it is undoubtedly the case that contemporary global affairs exhibit more cooperative dynamics than at any other time in the Westphalian system. For this reason, international institutions, and the disciplinary perspective that puts them front and centre in analysis, are essential to the study of international relations.

p. 105Questions


What role does information exchange and iteration play in overcoming barriers to collective action? Does this mean cooperation can be achieved in all international situations? Why or why not?


How does neoliberalism’s view on the role of relative power and outcomes compare and contrast to that of structural realism and other theoretical perspectives in this book?


Some IR scholars and policy-makers believe that as states like China, India, and Brazil gain greater relative power, they will become more belligerent. What do neoliberal assumptions about interdependence and hegemonic stability suggest about this concern?


Why would international law and legal procedures make cooperation among nation-states more likely? Does law play a similar role in the national or domestic sphere?


Critics of the UN have claimed that, among other issues, it is a tool of the major powers, financially wasteful, and bureaucratically inept. How would a neoliberal perspective respond to such criticisms?


In what way are neoliberalism’s theoretical assumptions about achieving international cooperation problematic from an ethical perspective?

Further reading

Hawkins, D. G., Lake, D. A., Nielson, D. L., and Tierney, M. J. (2006), Delegation and Agency in International Organizations (Cambridge: Cambridge University Press).Find it in your libraryGoogle PreviewWorldCat

This edited volume maps out the principal–agent approach in a variety of applied examples.

Keohane, R. (1984), After Hegemony: Cooperation and Discord in the World Political Autonomy (Princeton, NJ: Princeton University Press).Find it in your libraryGoogle PreviewWorldCat

One of the foundational texts in neoliberal analysis that establishes the link between interdependence, regimes, and hegemonic stability theory.

Keohane, R. O. and Nye, J. S. (1977), Power and Interdependence (New York, NY: Longman).Find it in your libraryGoogle PreviewWorldCat

One of the foundational texts in neoliberal analysis, which explores ‘complex’ interdependence and its ramifications for global politics.

Koremenos, B., Lipson, C., and Snidal, D. (eds) (2003), The Rational Design of International Institutions (Cambridge: Cambridge University Press).Find it in your libraryGoogle PreviewWorldCat

An edited volume that maps out core components in the study of international institutional design.

Krasner, S. (eds) (1983), International Regimes (Ithaca, NY: Cornell University Press).Find it in your libraryGoogle PreviewWorldCat

The influential edited volume on international regimes, with chapters written on a variety of regimes in particular issue areas.

Martin, L. and Simmons, B. (eds) (2001), International Institutions: An International Organization Reader (Boston, MA: MIT Press).Find it in your libraryGoogle PreviewWorldCat

An edited volume that reprints seminal neoliberal articles, as well as critiques.

Milner, H. and Moravcsik, A. (eds) (2009), Power, Interests, and Nonstate Actors in World Politics. (Princeton, NJ: Princeton University Press).Find it in your libraryGoogle PreviewWorldCat

An edited volume that examines developments in the neoliberal institutional research programme in response to methodological criticisms.

Oye, K. (ed.) (1986), Cooperation Under Anarchy (Princeton, NJ: Princeton University Press).Find it in your libraryGoogle PreviewWorldCat

This edited collection explores how game theory can be employed to examine barriers to self-interested cooperation.

p. 106Important websites

World Trade Organization website.

International documents on intergovernmental organization collection, with links to organization websites, maintained by Northwestern University Library.

The Library of Congress’s Newspaper and Current Periodicals Reading Room website on international organizations.

The Foreign Affairs archival collection on international economic, legal, and security institutions.

Visit the Online Resource Centre that accompanies this book for lots of interesting additional material.


  • 1. Alternatively, realist scholars have used non-cooperative game theory to illustrate military–security dynamics involving deterrence, crises, and arms races. For examples, see Steven J. Brams and D. Marc Kilgour (1991), Barry O’Neill (1994), and Frank C. Zagare and D. Marc Kilgour (2000).

  • 2. While the ITO’s charter was successfully negotiated by 1948, the US Congress refused to ratify it over concerns that it would interfere in domestic economic affairs. By 1950, and after repeated attempts to obtain ratification, President Truman also withdrew his support for the ITO.