1. Liberalism and neoliberalism
Zhongqi Pan/Gustaaf Geeraerts

2. Zhongqi Pan/Gustaaf Geeraerts
Assumptions
Positive view of human nature
Great faith in human reason and rationality
Conviction that international relations can be cooperative rather than conflictive
Belief in modernization and progress
Zhongqi Pan/Gustaaf Geeraerts

3. (Utopianism/Idealism)
Pedigree of the Liberal Paradigm
Classical Liberalism
Locke – Bentham – Kant
LIBERALISM (1920s)
(Utopianism/Idealism)
Neoliberalism (1970s)
Neoliberal Institutionalism (1980s-90s)
Zhongqi Pan/Gustaaf Geeraerts

4. Zhongqi Pan/Gustaaf Geeraerts
Classical liberalism
John Locke ( )
Rule of law (constitutional state)
Rechtsstaat vs Machtstaat
Jeremy Bentham ( )
Constitutional states have a rational interest to adhere to international law
Immanuel Kant ( )
Republics will establish perpetual peace
Zhongqi Pan/Gustaaf Geeraerts

5. Major Strands of Neoliberal Theory
Variant
Level of Analysis
Departure from Realism
Institutional liberalism
System. Anarchy is a source of distrust between states. Outcomes in the international system are generated by three main systemic variables: distribution of power among states, level of interdependence and level of institutionalization
Anarchy does not necessarily lead to conflict and can be mitigated through institutions. Sustainable cooperation is possible.
Interdependence Liberalism and Complex
Interdependence
Theory
Sub-state, governmental, transnational, and transgovernmental levels also important. Attention for individuals, firms, NGOs, and organizations within governments as actors, and their interactions across national borders.
States are not the only important actors. Actors have diverse interests in international politics. Much of IR has little to do with military security.
Democratic
Peace
Theory/Liberal internationalism
State. Focuses on what kind of government the state has.
States are not all essentially the same. Liberal (democratic) states can solve disputes without war.
Zhongqi Pan/Gustaaf Geeraerts

6. Democratic Peace Theory (aka Republican liberalism)
Three conditions for peace among liberal democracies: Michael Doyle (1983, 1986)
Democratic norms of peaceful resolution of conflict
Peaceful relations between democratic states based on a common moral foundation
Economic cooperation between democracies: ties of interdependence
Zhongqi Pan/Gustaaf Geeraerts

7. Interdependence liberalism and complex interdependence theory
Richard Rosecrance (1986), The Rise of the Trading State: trading state
Higher levels of transnationlism  higher level of interdependence
David Mitrany (1943), A Working Peace System: functional integration theory
Ernst Haas (1958), The Uniting of Europe: neo-functional integration theory
Spill-over
Robert Keohane and Joseph Nye (1977), Power and Interdependence: complex interdependence vs. realism
Zhongqi Pan/Gustaaf Geeraerts

8. Realism vs. complex interdependence (Keohane & Nye)
States dominant and unitary actors
Force usable and effective
Military security dominates the agenda
Transnational actors increasingly important. States not unitary actors
Military force less useful. Economic and institutional instruments more useful
Military security less important. Welfare issues matter more and more
Zhongqi Pan/Gustaaf Geeraerts

9. Institutional liberalism
Picks up on earlier liberal thought about the cooperation promoting effects of international institutions
Less optimistic than their idealist predecessors
International institutions can make cooperation easier but they are no guarantee for a qualitative transformation of international relations
Aims at systematic analysis of the conditions under which institutions can promote effective international cooperation
Zhongqi Pan/Gustaaf Geeraerts

10. Institutional liberalism: assumptions
Powerful states are not easily restrained
However international institutions are more than ‘scraps of paper’ (realists)
International institutions are more than mere instruments in the hands of strong states
They are of independent importance and they can promote cooperation between states
Institutional liberalism: assumptions
Zhongqi Pan/Gustaaf Geeraerts

11. What is an international institution?
An international organization such as NATO or the EU
A set of rules that govern state action in particular areas, such as aviation or shipping. These sets of rules are called ‘regimes’
Often the two are combined: the trade regime, for example, is shaped mainly by the WTO
Zhongqi Pan/Gustaaf Geeraerts

12. International institutions
There may also be regimes without formal organizations (e.g. UNCLOS)
Institutions can be universal, with global membership (e.g. UN), or they can be regional (e.g. EU or ASEAN)
There are also institutions of a a more fundamental type, such as state sovereignty or balance of power
These are not the focus of institutional liberals; they figure centre stage in the International Society tradition
International institutions
Zhongqi Pan/Gustaaf Geeraerts

13. Social scientific (behaviouristic) approach
Institutional liberals claim that international institutions help promote international cooperation
In order to evaluate that claim they try to measure the extent of institutionalization among states and its effect on the level of cooperation among them
Strong focus on operationalization of central concepts
Social scientific (behaviouristic) approach
Zhongqi Pan/Gustaaf Geeraerts

14. Degree of institutionalization
Are they only in a few crucial economic areas, such as trade and investment, or are they in many other economic areas, as well as in security and socio-political areas?
Scope: the number of issue areas in which there are institutions
Commonality: level of sharing of expectations about appropriate behaviour
Specificity: the degree to which these expectations are specified in rules
Autonomy: the extent to which the institution can alter its own rules
Depth
Degree of institutionalization
Zhongqi Pan/Gustaaf Geeraerts

15. How do institutions promote cooperation?
They reduce lack of trust between states
Provide flow of information and opportunities to negotiate
Enhance the ability of governments to monitor other’s compliance and to implement their own commitments – hence their ability to make credible commitments
Strengthen expectation about the sustainability of international agreements
Institutions
How do institutions promote cooperation?
Zhongqi Pan/Gustaaf Geeraerts

16. Neorealist critique of liberalism
Kenneth Waltz
Robert Keohane’s reaction: neoliberal institutionalism (aka weak liberalism)
Neorealist critique of liberalism
Zhongqi Pan/Gustaaf Geeraerts

17. Neoliberal institutionalism (weak liberalism)
Main puzzle: cooperation under anarchy (i.e. absence of government)
While the realists think cooperation is difficult because of anarchy and self-help, the neoliberals believe cooperation is possible and can be sustainable.
Neoliberals see the major problems working against the prospects for international cooperation differently.
The main problem is cheating because of the absence of a central authority or government.
This aspect of liberal theory has been elaborated by Keohane in his so-called neoliberal institutionalism.
Keohane (1984), Beyond Hegemony
Neoliberal institutionalism (weak liberalism)
Zhongqi Pan/Gustaaf Geeraerts

18. Neoliberal institutionalism (aka weak liberalism)
Anarchy is a source of distrust between states
States are the most important actors
States are unitary actors
States are rational and self-interested actors
The power of states is an important factor: strong powers are less easily constrained
However, institutions are an independent force and can stimulate cooperation between states
Zhongqi Pan/Gustaaf Geeraerts

19. The Prisoner’s Dilemma (General case)
Actor 1 C
Cooperate D
Defect
Actor 2
3, 3 (P)
1, 4
4, 1
2, 2 (N)
Zhongqi Pan/Gustaaf Geeraerts

20. Zhongqi Pan/Gustaaf Geeraerts
Suboptimal outcome
Pareto Frontier: where all possible gains from exchange between parties are achieved, and it is impossible to make one party better off without the orher worse off.
State “A”
State “B”
Zhongqi Pan/Gustaaf Geeraerts

21. Cheating Concerns and Their Solutions
How do states overcome cheating problems?
The liberal answer is international institutions.
Three strategies:
Iteration
Linkage
Side-payments
Zhongqi Pan/Gustaaf Geeraerts

22. Cheating Concerns and Their Solutions: Iteration
Iteration: repeated interaction between states
Lengthens the “shadow of the future”
Introduces “reputation costs”, which discourages defection
Allows explicit strategies of conditional reciprocity
Allows issue decomposition
Cheating Concerns and Their Solutions: Iteration
Zhongqi Pan/Gustaaf Geeraerts

23. Cheating Concerns and Their Solutions: Linkage
Linkage: linking cooperation in one area to other issues.
Changes the cost-benefit calculation by increasing the costs of defection.
If two players have cooperation in many issues, not just one issue, they will think before they defect.
Cheating Concerns and Their Solutions: Linkage
Zhongqi Pan/Gustaaf Geeraerts

24. Cheating Concerns and Their Solutions: Side-payments
This strategy is similar to issue-linkage. They are two sides of the same coin.
Changes the cost-benefit calculation by increasing the benefits of cooperation
Side-payments: offering additional inducements if your opponent cooperates.
Cheating Concerns and Their Solutions: Side-payments
Zhongqi Pan/Gustaaf Geeraerts

25. Cheating Concerns and Their Solutions
These “solutions” to the cheating problem can occur in the absence of international institutions.
But without international institutions, cooperation continues to be plagued by two types of “costs”.
Transaction costs
Information costs
Cheating Concerns and Their Solutions
Zhongqi Pan/Gustaaf Geeraerts

26. Cheating Concerns and Their Solutions
International institutions make cooperation more likely
Reduce transaction costs by creating a set of procedures for negotiations
Reduce information costs by providing forums for discussion and dissemination of information
Decrease uncertainty
Coordinate enforcement efforts
Facilitate issue-linkage
Cheating Concerns and Their Solutions
Zhongqi Pan/Gustaaf Geeraerts

27. Neoliberal institutionalism (weak liberalism) vs neorealism
Absolute vs. relative gains
Zhongqi Pan/Gustaaf Geeraerts

28. Absolute vs. Relative Gains
Liberals believe that states are mainly concerned with absolute gains.
States are motivated by the search for opportunities to cooperate that will produce absolute gains for all parties to the cooperative exchange.
Thus, the major problem is cheating.
Neorealists disagree: neoliberal institutionalists overlook the problem of security under anarchy
That is why concerns about relative gains are dominant
Zhongqi Pan/Gustaaf Geeraerts

29. Zhongqi Pan/Gustaaf Geeraerts
Cheating
(Uncertainty of intentions, incredibility of commitments, the fear and reality of free-riding. The prospects for cheating increase as the number of players increases)
Conflict over the relative distribution of benefits and its effects on the relative power/security position)
Neorealism
Cheating (idem)
Neoliberal institutionalism
Zhongqi Pan/Gustaaf Geeraerts

30. Absolute vs. Relative Gains
What type of gains matter?
Probably both. It depends on the issue and the stakes involved.
Security or economy?
Relative gains with respect to threatening enemies or to unthreatening allies?
Concerns for relative and absolute gains are variables, not constants.
Absolute vs. Relative Gains
Zhongqi Pan/Gustaaf Geeraerts

31. Absolute vs. relative gains
Neoliberals stress absolute gains
Neoliberal utility function: U1 = V1
Gain state 1
Realists stress relative gains
Realist utility function U1 = V1 – k(V2 – V1)
Gain state 1
Sensitivity to relative gains
k > 0
K small in case of security community, ally
K big in case of conflict of interest, enemy
Gain state 2
Zhongqi Pan/Gustaaf Geeraerts

32. Anarchy
States are rational and self-interested actors
Distribution of power
Interdependence
Common interests
Yes No
Absolute gains
Relative gains
Institutions
Neorealism
Cooperation
Zero-sum games
Positive-sum-gains (‘win-win’)

33. Zhongqi Pan/Gustaaf Geeraerts
Where do international institutions come from?
Supply: the neorealists see institutions as the creation of powerful states.
Demand: the neoliberal institutionalists see institutions as arising out of the “functional” needs of overcoming suboptimal outcomes.
Institution Debate
Zhongqi Pan/Gustaaf Geeraerts

34. Zhongqi Pan/Gustaaf Geeraerts
Suboptimal outcome
Pareto Frontier: where all possible gains from exchange between parties are achieved, and it is impossible to make one party better off without the other worse off.
State “A”
State “B”
Zhongqi Pan/Gustaaf Geeraerts

35. Zhongqi Pan/Gustaaf Geeraerts
Do international institutions matter?
Cooperation emerges from common interests not institutions.
Institutions are merely instruments of states
Neorealism: Not really
Institutions facilitate cooperation. They also shape future behavior by changing the cost-benefit calculations.
Neoliberal institutionalism: Yes.
Institution Debate
Zhongqi Pan/Gustaaf Geeraerts

36. Zhongqi Pan/Gustaaf Geeraerts
When do institutions change?
Neorealists: when the underlying distribution of power changes. (institutions=dependent variable)
Neoliberal institutionalists: institutions are “sticky”, they may persist even when the distribution of power changes. (institutions=independent variable)
Institution Debate
Zhongqi Pan/Gustaaf Geeraerts

37. The counter-attack of strong liberalism
Weak liberalism gives in too much to neorealism
The hard core of liberalism in danger of being lost
Need for a revival of strong liberalism
The counter-attack of strong liberalism
Zhongqi Pan/Gustaaf Geeraerts

38. Strong liberalism and anarchy
Anarchy only means the absence of a central authority
It does not imply the total absence of governance
International politics is not necessarily a raw anarchy
Important elements of legitimate and effective authority are often and increasingly present
The EU is the most telling example
Also the security community between OECD countries
Relationships between Europe, US and Japan
Strong liberalism and anarchy
Zhongqi Pan/Gustaaf Geeraerts

39. Strong liberalism: war & peace
Peace is more than absence of war
Destructive power (WMD)
Modern war is no longer useable as a political instrument
War has become obsolescent
Balance of power among heavily armed powers (MAD) – precarious form of peace
Security communities (OECD, EU) among consolidated democracies – more solid form of peace
Different forms of peace are possible
Strong liberalism: war & peace
Zhongqi Pan/Gustaaf Geeraerts

40. Liberal intergovernmentalism
Andrew Moravcsik
Zhongqi Pan/Gustaaf Geeraerts

41. Strong positive liberal theory
Andrew Moravcsik
Need for a more scientific (strong) liberal theory
Non-ideological
Non-utopian
Liberalism thinks too much in terms of a linear progression
Modernizationinterdependence cooperation
Globalization and End of Cold War seen as moving the world in a more liberal direction (“end of history”)
Strong positive liberal theory
Zhongqi Pan/Gustaaf Geeraerts

42. Moravcsik’s liberal intergovernmentalism
Domestic component: state preferences (reflecting the preferences of different combinations of groups and individuals in domestic society)
International ‘systemic’ component: state preferences constrained by other states (each state seeks to realize its preferences under the constraints imposed by the preferences of other states)
The core element in the theory is the set of preferences pursued by states
To the extent that these are influenced by liberal factors peace and cooperation may prevail. To the extend that they are not, conflict may prevail
Zhongqi Pan/Gustaaf Geeraerts

43. Zhongqi Pan/Gustaaf Geeraerts
Domestic level
State A
Domestic level
State B
Preferences
State A
Preferences
State B
and/or
Moravcsik’s two level model
Zhongqi Pan/Gustaaf Geeraerts

44. Liberal intergovernmentalism
Moravcsik (1998), The Choice for Europe
Offers a rationalist framework of international cooperation, which is more in line with strong liberalism
Set of assumptions allowing to disaggregate successive rounds of international bargaining into elements that can be analyzed separately
Each element is then explained by more focused middle-range theories
These separate explanations are then aggregated into a multi-causal explanation of major multilateral agreements
Liberal intergovernmentalism
Zhongqi Pan/Gustaaf Geeraerts

45. Liberal intergovernmentalism
Nests 3 complementary middle-range theories in his encompassing rationalist framework
A liberal theory of national preference formation
National chiefs of government aggregate the interests of their domestic constituencies, as well as their own interests, and articulate national preferences toward international cooperation
An intergovernmental theory of bargaining
In the international system, each state seeks to realize its preferences under the constraints imposed by the preferences of other states
A new theory of institutional choice stressing the importance of credible commitments
Liberal intergovernmentalism
Zhongqi Pan/Gustaaf Geeraerts

46. Zhongqi Pan/Gustaaf Geeraerts
Neorealism?
Two-fold departure from neorealism
National preferences are domestically generated and not derived from a state’s security concerns in the international system
Bargaining power is determined by the relative intensity of preferences (national economic interest) and not by military or other material capabilities
Zhongqi Pan/Gustaaf Geeraerts

47. Neoliberal institutionalism?
Two-fold departure from neoliberal institutionalism
Weak liberalism gives in too much to neorealism
Rejects the methodological assumption of the state as a unitary, rational actor
Zhongqi Pan/Gustaaf Geeraerts

48. Zhongqi Pan/Gustaaf Geeraerts
Major liberal ideas
Zhongqi Pan/Gustaaf Geeraerts

49. Zhongqi Pan/Gustaaf Geeraerts
Stability and Peace
Politics is not seen as zero-sum.
Holds that reason and ethics can overcome international anarchy to create a more orderly and cooperative world.
Emphasizes establishing stable democracies as a way to reduce conflict (liberal internationalism).
Emphasizes free trade because it helps prevent disputes from escalating into war.
Zhongqi Pan/Gustaaf Geeraerts

50. Stability and Peace Five drivers for a mote peaceful world:
Collective security
Pluralistic security community
Democratic peace
Complex interdependence
International institutions and regimes
Zhongqi Pan/Gustaaf Geeraerts

51. Importance of non-state factors
IGOs, NGOs, and International Law
Intergovernmental organizations (IGOs) are international agencies or bodies established by states that deal with areas of common interests.
Nongovernmental Organizations (NGOs) are private associations of individuals or groups.
International law is law that regulates interactions between states.
Importance of non-state factors
Zhongqi Pan/Gustaaf Geeraerts

52. Importance of non-state factors
Roles of IGOs
In international system, IGOs contribute to habits of cooperation; via IGOs, states become socialized in regular interactions.
For states, IGOs enlarge the possibilities for foreign-policy making and add to the constraints under which states operate.
IGOs also affect individuals by providing opportunities for leadership.
Importance of non-state factors
Zhongqi Pan/Gustaaf Geeraerts

53. Importance of non-state factors
Roles of NGOs
They advocate specific policies and offer alternative channels of political participation.
They mobilize mass publics.
They distribute critical assistance in disaster relief and to refugees.
They are the principal monitors of human rights norms and environmental regulations and provide warnings of violations.
Importance of non-state factors
Zhongqi Pan/Gustaaf Geeraerts

54. Importance of non-state factors
Roles of international law
It sets expectations, provides order, protects the status quo, and legitimates the use of force by a government to maintain order.
It provides a mechanism for settling disputes and protecting states.
It serves ethical and moral functions.
Importance of non-state factors
Zhongqi Pan/Gustaaf Geeraerts

55. Zhongqi Pan/Gustaaf Geeraerts
PARADIGM IN BRIEF
The Liberal Paradigm
Key actors
States, IGOs, NGOs, MNCs
View of the
individual
Basically good; capable of cooperation
View of
the state
Not an autonomous actor; not always a rational actor; having many interests
international
system
Interdependence; international society; anarchy but possible to mitigate; change is probable and a desirable process
Core
concerns
Economic prosperity; cooperation and absolute gains; international stability and peace
Zhongqi Pan/Gustaaf Geeraerts

56. Zhongqi Pan/Gustaaf Geeraerts
PARADIGM IN BRIEF
The Liberal Paradigm
Major
approaches
Collective security; pluralistic security community; democratization; complex interdependence; int’l institutions
Policy
prescriptions
Develop regimes and promote democracy and int’l institutions to coordinate cooperation and secure int’l stability
Central
concepts
Int’l institution; int’l regime; economic interdependence; cooperation
Major theorists
Wilson, Keohane, Nye, Ikenberry
Zhongqi Pan/Gustaaf Geeraerts

57. In Sum: Contributions and Limitations of Liberalism
It presents a fresh explanation for contemporary international politics.
It focuses on the issue of international cooperation and develops an alternative theory to realism.
It also provides very useful guidelines for decision makers.
Limitations
Its subject of study is too narrow and concentrates mainly on what realism fails to explain, i.e. coordinative cooperation.
It is too optimistic toward the role of international institutions and regimes.
It fails to take conflictual aspects of state interests, nationalism and security concerns of states into consideration.
Zhongqi Pan/Gustaaf Geeraerts