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Anarchic Bargain: Power Politics and the Purchase of International Order
Mariya Grinberg
Abstract
In international hegemonic order, the assumption of a power trajectory for the leading
state leads to certain incentives for this state and determines what type of order is created. Most
hegemonic theories of order assume an eventual declining trajectory creating incentives to build
a constructed, static order. However, a declining trajectory is not the only possible situation and,
empirically, is not even the most likely situation. A more probable scenario is that states
recognize that they cannot predict a power trajectory and focus on building a situational order
which is considerably more flexible as it is based on short term bargains that can be renegotiated
with a change in the strategic environment. The paper uses the post-Cold War period to analyze
the differences between the two possible types of order, focusing specifically on instances of
NATO expansion.
2
Since the end of the Cold War, there has been a surge of interest by international relations
scholars and policy makers in understanding the dynamics of international order – meaning, the
basic rules regulating the behavior of states in the international system. Although realist, liberal
institutionalist, and constructivist theories of international order go back even further, the rise of
the United States as the world’s sole superior stimulated an important new wave of thinking
about the kinds of hegemonic order that were and were not possible in modern international
affairs. At stake in this debate are policy questions, such as how long the US will stay at the top,
what kind of leadership other states can expect, and whether the order can change peacefully or
only via conflict. More fundamentally, however, these policy issues turn on the central
theoretical question of whether the incentives exist for states to construct international order that
would meaningfully bind strong as well as weak states.
Prominent theories of hegemonic order commonly start by assuming a major
international “reordering moment”(ie victory in great power competition) and that the hegemon
will eventually decline, and so has incentives to build a lasting order while it can. Different
hegemonic order theories disagree about when such a decline will set in, but share the common
assumption that decline will certainly occur. For example, Robert Gilpin assumes that following
a great power war, the leading state will redistribute the territorial and economic centers of
power in such a way as to boost its power base, but then eventually declines only to be replaced
by a new hegemon facing similar incentives to lock in the order. In the same vein, John
Ikenberry argues that after victory, the hegemon will immediately decline, creating incentives for
the leading state to adopt a constitutional bargain that locks in the power trajectories of both the
leading and weaker states through binding institutions.
3
This paper challenges the core theoretical assumption underlying the most prominent
explanations of hegemonic order. While others have criticized hegemonic order theories based
on their ability to create a binding, lasting set of rules, this paper focuses on the more
fundamental, prior issue of whether the states, even at so-called “reordering moments,” would
have the incentives to establish such rules in the first place. The main assumption creating the
incentives for binding order is confidence in a future power trajectory, which is why hegemonic
order theories have this assumption. There are, however, strong reasons to doubt whether states
would accept this assumption.
Even at so-called re-ordering moments, the level of uncertainty about the future power
trajectory of leading and weaker states is high. It is impossible to predict what the power
trajectory will be. Because of this, the leading state will not have the incentives to create any sort
of long term order. Instead, it will choose the flexibility of a reiterated short term bargain through
which the rules can change based on the changes in the environment. The leading states will
avoid locking itself into anything, maintaining the international order through a series of short
term mutually beneficial bargain with the rest of the states.
This paper is organized into five sections. The first deals with important definitions for
the concept of order. The second section describes the two possible types of international order,
delineating the differences between a constructed and a situational order. The subsequent section
points out theoretical problems with a constructed conception of order. The fourth section
explains what a situational order would look like and how it would function. The last section
applies these concepts to the cast study of the post-Cold War period.
Structure and Order
Before the possible types of international order are discussed, two important concepts
need to be defined and distinguished from each other – structure and order. The two concepts are
4
intrinsically linked; however, a change in order is possible without a change in the structure. On
the other hand, a change in the structure necessitates a change in the order.
Structure is an arrangement of parts. Waltz writes that there are three aspects of structure:
the ordering principle, differentiation of units and the distribution of capabilities across those
units. 1 The ordering principle for the international system can be either anarchy or hierarchy
depending on the level of control the leading state has over the international system.2 For the
second dimension, there are different units of analysis that can be used in discussing structure –
states, individuals, multinational corporations, etc.3 The distribution of capabilities determines
another important dimension of structure – the number of poles of power in the system.4 This
paper focuses on hegemonic order, therefore the ordering principle is anarchy, the differentiation
of units is focused on states and the distribution of capabilities is assumed to be unipolar. Thus
hegemonic structure is the anarchic arrangement of states in the international system with one
overwhelming pole of power.5
Order is the collection of rules concerning the regulation of how the parts interact. There
are two types of rules that are important to the construction of international order. First, there are
structural constraints. These are limiting conditions imposed by the specific structure within
which the states are interacting. The structural constraints of multipolarity would be different
from those of unipolarity; however, each structure does have specific constraints that any rules of
interstate behavior have to conform to. Structural constraints do not have to be recognized by the
actors of the system; they are a byproduct of the overarching structure. Since this paper focuses
1 Waltz 1979, 79.
2 Lake 2009; Waltz 1979.
3 State centric view - Bull 1977; Keohane 1984; individual centric view – Cox et al 1996; Falk 1975, 211-58; non-
state actors – Stivachtis 2007; Suter 2003. 4 Multipolar view – Mearsheimer 2003; unipolar view – Wohlforth 1999, 5-41; Monteiro 2011, 9-40.
5 Most scholars of international order would agree, at the very least, that these three dimensions make up the
structure of the international system. The disagreement over order stems not from how the structure is described but
from the rules that govern state interaction and turn that structure into an order.
5
specifically on hegemonic order, the structural constraint is assumed to be that the leading state
has the opportunity to create the rules of the international order and has the responsibility to
maintain and enforce them.6 It is important to note that the structure is still assumed to be
anarchic; the structural constraint stems from the one sided distribution of power in the anarchic
system.
The second type of rules is acknowledged rules. These are rules created by the states to
govern their interactions, and as such all state of the system are cognizant of these rules. They
are typically created and enforced by the great powers of the structure; thus, in a hegemonic
order, the specific set of rules for the interaction among states that the hegemon creates are the
acknowledged rules of that international order (but not of that structure). This paper assumes
away the structural constraints of the international order, since structure is held constant. The
focus then becomes the acknowledged rules of the order.7
Each structure has only one set of structural constraints. They stem from the structure
itself and thus are unique to the structure. The structural constraints of an order change only
when the structure within which the states interact changes. Within the specific structure, the
acknowledged rules are variable with the wishes of the leading state. If the structure remains
constant, but different hegemon have control of the international system at different period in
history, they are likely to create different sets of acknowledged rules.
By limiting the structure strictly to anarchic with an asymmetric distribution of power –
ie hegemonic – and focusing on acknowledged rules, it becomes possible to put scope conditions
6 The leading state has this opportunity by virtue of its preponderance of power; it has the responsibility not in any
normative sense, but meaning simply that if it wants to remain in power, it needs to maintain the order it creates. 7 For example, Keohane, in his discussion of hegemony, focuses on the structural rule – a state with a preponderance
of power can overcome collective action problems. On the other hand, when Ikenberry is discussing hegemony, he
focuses on acknowledged rules – the leading state will bind its power and provide voice opportunities to the weaker
states. His notion of hegemony, in itself, presupposes the structural rule that Keohane focused on. Keohane 2001.
6
on the types of order that will be discussed in this paper as well as which theoretical conceptions
of order will be engaged with.
Hegemonic Non-Hegemonic
Structural Constraints Keohane Waltz, Mearsheimer
Acknowledged Rules Ikenberry, Gilpin Wendt, Bull, Dem Peace
Specifically, both Ikenberry’s theory of the constitutional bargain and Gilpin’s theoretical
account of hegemonic change fall into the comparable types of international orders. The theories
obviously assume a hegemonic structure. Both deal with state in a state of anarchy with one
leading state in the system. Gilpin makes this assumption travel through all of time, claiming that
there is always a hegemon in the international system.8 Ikenberry, claims that while great
asymmetry of power has not been a constant condition of the international system, it is a
necessary component to achieve a constitutional bargain.9 Both also focus on acknowledged
rules. Gilpin makes the acknowledged rule that the leading state redistributes the spoils of
victory to gain the greatest portion of territorial and economic conquest. Ikenberry structures the
constitutional bargain on a set of rules that the leading state and the rest of the states in the
system agree on.10
What is Hegemonic Order? There are numerous versions of hegemonic order which are united by the structural
constraints they share but can be differentiated by the acknowledged rules that govern the order.
Hegemonic order is described by the hegemonic stability theory which in its most basic
form posits that the international system is stable only when the economic and political power is
8 Gilpin 1983, 10.
9 Ikenberry 2001, 5.
10 Ikenberry actually defines order in such a way as to focus only on acknowledged rules. “An essential element of
political order … is that the participants within the order must have some acknowledgement or awareness of the
order” (45).
7
concentrated in one state.11
The leader of the order, the hegemon, is defined as “the state with
predominant power in the international system, measured in terms of that state’s share of world
gross domestic product or other material resources.”12
While this state holds on to power, the
international order is maintained; as the dominant state’s power begins to decline, the control of
the system also declines and the created order disintegrates.
How the hegemon chooses to wield its power differs based on the theory. In some
conceptions of the hegemon stability theory, the hegemon provides public goods and creates an
open international economy that benefits all of the members of the system.13
The hegemon does
not extract any ‘taxes’ from the other states in the system. It provides a service that benefits itself
and since that service is a public good and thus nonexclusive, ends up paying for the system that
benefits everyone.
Another version is based on the idea that the hegemon acts as a solution to the collective
action problem, helping states in the system to cooperate.14
The presence of the hegemon allows
for the creation of a system of rules – a process that is difficult to accomplish with a group of
powerful states; however, after this system is created and embedded into institutions it can be
maintained without the hegemon. The hegemon acts as a ‘benevolent leader’ who is responsible
for the creation of a system that benefits most of the states. This version of the theory is often
critiqued for ignoring the issue of free riders.15
The weaker states have a lot of incentives to free
ride and exploit the dominant state, perhaps even driving it to the point where it can no longer
afford to provide the public good any more.
11
Kindleburger 1981:242-254. 12
Pahre 1999, 4. 13
Krasner 1976:317-413; Lake 1983: 517-43. 14
Keohane 1984; Charles P. Kindleberger 1981. 15
Snidal 1985:579-614.
8
As a response to this critique came the ‘coercive’ conception of the leadership by the
hegemon. The dominant state sets up a system that allows it to benefit at the cost of the other
states.16
The rules of the system created suit the needs of the hegemon and it uses coercion to
force other states to participate in the system. Not only are other states expected to participate,
they are also forced to contribute ‘taxes’ for the maintenance of the international order.
For the purposes of this paper, Ikenberry’s theory of the constitutional bargain, presented
in After Victory, will be considered as the model for a benevolent hegemony, while Gilpin’s
theory of hegemonic change, from War and Change in World Politics, will be considered as the
model for a coercive hegemony.
Constructed Order versus Situational Order No matter which theoretical variant of the hegemonic order is considered, the order
created by the leading state is a constructed one. This means that a one time permanent bargain
for international order is struck between the dominant state and the other states of the system.
This bargain contains the rules that regulate state interaction and is meant to last as long as the
dominant state is in power. There is one moment, typically after a great power war, when the old
international order has been broken down, and the new one needs to be made.17
In this moment,
the assumptions about the environment move the leading state to create a permanent bargain for
international order. No matter what changes in the environment after the creation of this bargain,
short of a new reordering moment, it cannot be changed. This is the basis for long term order.
In a constructed order, there is no mechanism for amending the terms of the bargain.18
There is likewise no exit strategy; the states that are part of the order have to remain in the other
16
Ibid. 17
Ikenberry 2001, 21. 18
This does not mean that there cannot be small changes to the specific rules of interaction, but that there can not be
amendments to the structure of the bargain. For example, if the bargain states that the leading state can exercise its
9
– their attempt to leave would bring about a new reordering moment as the existing order is
breaking up due to the desire of state to leave. Both of these characteristics lead to the
implication that the bargain has to be binding as long as the order lasts. A second implication is
that the dominant state has only one strategy for dealing with the weaker states and this strategy
is uniformly applied to all of the states in the order.19
What the hegemonic stability theory does not consider is that there is a possibility for a
different type of order, a situational one, which likewise has a leading state at the helm creating a
bargain for international order. While a constructed order has a one permanent bargain which
lasts as long as the power of the leading state does, a situational order rests on repeated short
term20
bargains for maintaining international order. At the reordering moment, instead of
choosing one strategy through which to engage with all the weaker states, the leading state
chooses to deal with the weaker states in groups (bilaterally or multilaterally) offering each
group a tailored strategy.
Since the bargains of the situational order are not permanent, the leading state can change
which strategy it uses in dealing with which states. The bargains can be reiterated as long as both
sides still benefit from it or the substance of the bargain can change to reflect the changes in the
environment. Since the bargains that maintain international order are short term, it is very much
possible to amend them. The rules of the bargains are binding for the duration of the bargain and
can be renegotiated between the iterations of the bargain.
power and dominate the weaker states, this cannot be amended by the weaker states. On the other hand, if a rule of
engagement stated that the leading state has to give a five day warning before dominating a state, and this is changed
to a ten day warning, this does not constitute an amendment to the bargain. 19
The three strategies of a leading state are borrowed from After Victory, they are abandon, dominate or transform. 20
Short term in this instance does not refer to any specific range of time. It is used to mean a period that is shorter
than the entirety of the order. Long term means that a bargain is struck to last as long as the order does, however
long that happens to be. Anything shorter than that, that is any temporal limit on the bargain in considered to be
short term.
10
While the situational nature of the order is beneficial in that it allows the leading state to
renegotiate the bargain, there is also a potential drawback. The weaker states in the system could
chose to stop the relationship with the leading state since they are likewise not bound by a set of
long term rules. While this is a possibility, it is not a likely one, because the circumstances are
set up to benefit the leading state as much or more than the weaker states. Each time the bargain
is changed, the new arrangement is created to provide the leading state with a greater share of
relative power compared to the weaker state. Thus it would be very difficult for the weaker state
to reach a situation in which the new proposed bargain would no longer be beneficial to the
weaker states. This is only possible if the weaker state experiences an exogenous shock that
increases its power relative to the leading state.
A situational order is a durable order, despite the fact that the bargains between the
leading state and the weaker states can change. As the other versions of the hegemonic stability
theory, it lasts as long as the leading state remains in power. The difference is that the leading
state never locks itself into a specific bargain that ought to be followed throughout the order.
Instead, the leading state retains the right to alter the bargain whenever the situation changes.
However, at each restructuring, the new bargain still benefits the leading state more relative to
the other states. In such a way, the leading state can maintain its level of power doing what is
necessary to overcome the challenges posed by the current environment or taking advantage of
beneficial events.
Constructed Hegemonic Order
Both Ikenberry’s and Gilpin’s models of hegemonic order are examples of constructed
order. In fact, the standard method of thinking about hegemonic order is that it is inherently a
constructed order. Each variant of the hegemonic order is based in part on the assumption that
the leading state will inevitably face its decline. This assumption alone creates the necessary
11
incentives for the leading state to invest in a constructed order to either stay at the height of
power for a longer period of time or to lock-in the distribution of power indefinitely. However,
there is reason to doubt this fundamental logic.
For order to be constructed, that is to give incentives to the leading state to lock-in a
specific set of rules for the interactions between states, there must be confidence at the
restructuring moment in the long term trajectory of power. Theorists of hegemonic order, Gilpin
and Ikenberry included, assume that this is possible, which leads them to make specific
conclusions about the resultant order.
Gilpin assumes that after the hegemonic war, the leading state redistributes territory and
economic centers to increase its power. Thereafter, the dominant state can continue to expand
through territorial conquest or economic expansion. With the advantage that comes from creating
the post-war settlement, the dominant power expands rapidly. But this expansion can only last as
long as the benefits outweigh the costs; thus, the rate of expansion slows and stops. At this point,
“although the hierarchy of prestige, the distribution of territory, the rules of the system, and the
international distribution of labor favor the traditional dominant power,” decline becomes
inevitable.21
Further expansion to increase power becomes cost prohibitive. At the same time the
cost of maintaining the territory already controlled by the leading state increases since the
technology used for war has a tendency to diffuse between states rapidly. The economic centers
that the dominant state controls also start to fragment with the center. All of these changes lead
the dominant state to decrease in relative power, allowing a weaker state to challenge it for
control of the international system. Because leaders are aware of this power trajectory, they are
motivated to create the settlement agreement in a way that is beneficial to them and that
necessarily creates losers – those that lose the territory the leading state expands into. By the
21
Gilpin 1983, 186.
12
very nature of the power trajectory assumed, the leading state in Gilpin’s theory has no choice
but to be a coercive hegemon.
Ikenberry starts with the assumption that the leading state is already at the height of its
power during the restructuring moment and is facing inevitable decline in relative power. Fearful
of this, the leading state would seek to lock in the existing power balance by creating institutions.
To make these institutions into a ‘constitutional order’ and thereby acceptable to the other states,
the leading state will chose to restrain its own power in the short term to reap the rewards in the
long term.22
A constitutional order set up with these characteristics would limit what the leading
state could do with its disproportionate power after a great war thus greatly reducing the return to
power. This would also limit the potential losses of the losers of war. Due to this arrangement,
the weaker states that take part in the order have an incentive to follow the rules and principles
and thus view the international order as legitimate. Because the leaders of the leading state
assume that their state will decline in relative power in the future, they are willing to forgo the
short term returns their heightened position of power could bring them and instead focus on the
long term. In fact, this assumption plays in the calculations of all states, influencing greatly the
motivations for the formation of the constitutional bargain. By making this assumption,
Ikenberry’s leading state, by necessity, has to be a benevolent hegemon.
Problem with a Constructed Hegemonic Order
As can be seen in these two representative cases, what gives states the incentives to create
a constructed order is the assumption of a power trajectory. The specific trajectory of power,
creates incentives for the leading state to create a specific set of rules to guide the interactions
between states. Because the variants of hegemonic order assume eventual decline of power as the
last leg of the trajectory, this gives the incentive to solidify the rules at the restructuring moment.
22
Ikenberry 2001, 4.
13
However, these assumptions do not accurately describe the range of possibilities that exist at the
end of a great war and thus fail to accurately portray the incentives that the leading state and the
weaker states are faced with.
Specifically at the moment of restructuring that comes after a great power war, the
leading state just emerging from war has no idea what its power trajectory will be. It is
impossible to predict when in the long term the leading state’s decline will occur, if indeed it
does occur. There might be intermittent periods of rise and decline, or decline might be staved
off completely. More importantly, the short term distribution at the reordering moment can vary
considerably. And this variation necessarily plays into the decision making of the leading state.
Figure A
There are three potential situations that can arise in the short term, exiting the tumult of a
great war: (1) the leading state’s power will start to decline in relation to the weaker states
(Curve A), (2) the leading state’s power stays relatively unchanged in relation to the weaker
x2 x1 0
R
e
l
a
t
i
v
e
P
o
w
e
r
Time
A
B
C
Situation Incentives Type of Order
14
states (Curve C), or (3) the leading state’s power increases in relation to the weaker states (Curve
B). Immediately at the end of the great war, all three cases are possible and there is considerable
uncertainty about which trend will accurately describe the near future.
While both Gilpin and Ikenberry advocate locking in the rules of the new constructed
order, this is a rational decision in only one of the three possible cases – in Ikenberry’s assumed
case (Curve A). If the leading state is certain that its power will decline, it is rational for it to
seek to lock in a set of rules that might for however brief a period maintain its level of power.
However, in the other two of the three possible cases, it is more rational for the leading
state not to limit its options with a constructed order. If the leading state’s power is relatively
stable or, especially, if is increasing compared to the other states, the leading state would want to
take advantage of this mounting power difference. The time to lock in the rules of the new
international order would be when the leading state has reached the zenith of its power, just prior
to the decline. If the leading state’s power is rising relative to the other states (Curve B), the best
lock in time would be X1. If the leading state’s power is relatively stable compared to the other
states (Curve C), the proper lock in time would be X2. With this third case, it could be argued that
locking in the rules earlier would not gain the leading state anything, since the leading state has
not gained any power in the interim. While true, locking in prior to the beginning of the decline
would force the leading state to give up the time it could have used its power to its advantage
before the rules start functioning. In both of these cases immediate construction of order prevents
the leading state from taking full advantage of its victory in the great war.
With all three curves there exists an ideal time to lock in the international order, whether
it is time 0, time X1 or X2. While theoretically this moment is very clear, empirically it is
impossible to tell when decline has began in real time. It is only possible in hind sight. The
15
uncertainty of predicting the future only increases the further out a prediction is made. Because
of this uncertainty, the leading state will have little incentive to lock-in a specific set of rules for
the new international order. It is impossible to tell when point X1 or X2 is, and the leading state
will always have an incentive to assume that it is still in the future. That incentive is the fact that
it doesn’t need to limit its own power in the short term, and thus does not need to give up the
gains associated with that power. Arguably the same lack of incentive to assume that the leading
state is in decline would prevent Ikenberry’s preferred case (Curve A) from ever occurring
empirically. It would also prevent the leaders in Gilpin’s preferred case (Curve B) from realizing
they are declining until considerably after the decline has begun.
Benefits of Stability versus Opportunity Cost of Stability
The optimum moment to lock-in the bargain for the international order is when the
leading state is at the zenith of its power and is assured of its total decline. On the one hand this
suggests that the leading state should wait for this moment before limiting its power options. The
argument made by proponents of constructed order is the opposite. If there is such uncertainty
about the future, why shouldn’t the leading state lock-in the order immediately, regardless of
optimum moment, to receive the benefits of stability that would guard it against such
uncertainty?
The case for lock-in can best be exemplified with Ikenberry’s assumption of future power
trajectory. (Figure B). All constructed orders are based in some respect on the assumption that
eventually the power trajectory will turn towards decline. In such a case, as well as to guard
against the uncertainty of when decline comes, it is beneficial to lock in the bargain for
international order immediately at the restructuring moment. All of the increased relative power
16
the leading state receives from locking in above their assumed power trajectory is the benefit of
stability.
Figure B
This is a compelling reason for why an order should be based on one permanent bargain;
however, such an explanation looks at only one side of the cost-benefit analysis. When only the
benefit is considered, naturally the situation looks compelling. By making the assumption of a
declining future power trajectory, Ikenberry can conveniently expel the costs of stability from the
equation.
The other side of the equation is the opportunity cost of stability. For the sake of the
example, let’s assume that it is possible to measure a state’s relative power solely by looking at
its GDP share of the world total.23
If the US share of the world GDP, or by assumption its power
trajectory since 1920s, is plotted against the constructed order’s locked-in power line, it is
possible to see that the stability of order has an opportunity cost. All of the relative power the
leading state has to give up for the sake of stability is the opportunity cost of locking in a bargain
at the reordering moment.
Figure C
23
There are considerably more components of relative power, such as military power and latent power. However,
the relative power level of the US would only be greater if these factors are considered, so this momentary
assumption should bias the example towards constructed orders.
Ikenberry’s
assumed power
trajectory
Locked-in power
trajectory Benefits of stability
17
The example of the US is not meant to claim that the opportunity cost of stability is
always going to be as great as it seems to be in this case. However, the opportunity cost will
always be there and it has to be considered as part of the equation to make the decision of
whether to lock-in the order for a measure of stability or to engage in a situational order to reap
the benefits of relative power. If the leading state wants a stable order, it has to give up all of the
potential future costs it could have made. Stability is only “free” when the leading state starts
declining as soon as the order is made.
The benefit of stability requires the leading state to incur certain costs in the present for
uncertain benefits in the future. Due to the uncertainty of the future power trajectory, the
opportunity cost of stability is uncertain but potentially quite great. At the reordering moment
especially, the leading state has good reason to be optimistic about its relative power prospects;
while it cannot make the cost benefit analysis of stability due to the uncertainty of the future, it
does have reason to consider the opportunity cost.
Situational Hegemonic Order – The Anarchic Bargain
Opening up the power trajectories has significant implications for the types of incentives
the leading state faces in creating the international order. Considering the uncertainty that comes
from trying to predict which power trajectory a leading state is on and the significant incentives
Ikenberry’s
assumed power
trajectory
Locked-in power
trajectory
Rather imperfect but
fairly accurate
portrayal of US share
of world GDP since
1920s
Opportunity cost
of stability
Benefit of
Stability
18
to assume that the leading state is actually increasing in power, only a situational order would
seem attractive. The leading state will form a short term agreement with the weaker states that
will be more beneficial to the leading state; there will be the possibility of renewing this bargain
in the future.24
The Anarchic Bargain
Such an agreement – the anarchic bargain – would closely respect the constraints of
relative gains and last only as long as it benefits both the leading and the weaker states. As soon
as either party perceives a shift in their power, they will either chose to renegotiate the bargain to
match the new balance of power or end it completely. Because of this close adherence to the
balance of power, the anarchic bargain would favor the leading state. Negotiating from the
position of strength, the leading state would require foreign policy concessions from the weaker
states, to make them follow policies that are beneficial to the leading state. For this, the weaker
states are guarded from the three sources of threat that they face, most significantly the threat of
continued decline. The asymmetrical exchange of foreign policy concessions for economic or
military security ameliorates marginally the relative gains problem.
Leading State
From the perspective of the leading state, between the options of dominate, abandon, or
anarchic bargain, the anarchic bargain would be the best option. It is the only available choice
which allows the leading state to preserve the power that the leading state already has and
24
The rational design of institutions literature also deals with the idea that in the face of uncertainty, states chose to
design institutions with built in flexibility. However, this literature focuses on the purposeful formation of
institutions to serve a specific function. While the anarchic bargains themselves are very purposeful and designed -
they have less flexibility precisely because they are short term. On the other hand, the whole situational order (the
collection of all the anarchic bargains from the hegemon to the weaker states) is very flexible, but also far from
"purposefully designed." Koremenos et al 2001: 761-799.
19
leaving open the potential to continue increasing its power. For both the option to dominate and
abandon, a full cost benefit analysis is difficult to calculate as it necessarily has to include the
consequences of long term effects. As the future is highly uncertain, whether each strategy will
bring greater costs or greater benefits is also uncertain. The anarchic bargain, being a situational
order, deals only with the short term. Therefore, it is possible to establish what the costs and
benefits of the bargain will be. Since the bargain is always negotiated to be in favor of the
leading state, it will always turn out a positive cost benefit analysis.
Domination is a credible alternative as it does increase the power level of the leading
state. There are two possible strategies that a leading state could pursue. It could either quickly
raid the weaker states of which ever resources it wants and then abandon it, or it could
completely control the domestic and the foreign policy of the state. The first strategy allows for
some quick gains but no chance for long term gain. It also leaves behind a state with a newly
developed grudge against the leading state. The second dominate strategy does allow for greater
gains for the leading state, but it comes at a cost that would have to be greater than the anarchic
bargain. In addition to the costs associated with helping the weaker states arrest their decline, the
leading state would also have to pay the cost of domination. The two costs combined make this
option more expensive than the anarchic bargain.
The option to abandon the weaker states is even worse from the perspective of the
leading state concerned with its power level. Abandoning the weaker states to their own devises
would require the leading state to give up the potential gains available from its great power
position. As history shows this option is a possibility; however, it is usually chosen for domestic
reasons which are outside the scope of this paper. This option also leaves open the possibility
that another state will dominate the weaker states, amassing enough power to challenge the
20
leading state. In the end, the best outcome from this strategy is lack of gain and the worst is a
potential challenger trying to actively decrease the power level of the leading state.
What would be a much better option would be to extract foreign policy concessions from
the weaker states in return for helping them arrest their decline. This option is the best
considering a cost-benefit analysis and it allows the leading state to moderate against the
possibility of a potential shift in the balance of power. Since it is negotiating from strength and
ultimately has the choice of whether the bargain is struck or not, there is little that this bargain
could not provide for the leading state. At the same time, the costs are less than the dominate
option since the leading state does not have to pay the cost of domination, only the cost of
helping the weaker states with their internal problems.
Weaker States
The uncertainty about the future trajectories of power also affects the weaker states.
Assuming that the weaker states will increase in power ignores the situation in which the weaker
states exist. Some systemic reason has caused these states to become weakened in the first place,
and there is no guarantee that this reason simply disappears at the time of a bargain. Whatever
caused the decline in the weaker state will continue to push the state down the same path, unless
the weaker state has the capabilities necessary to prevent this. While it is certainly not inevitable
that the weaker states are on a path of continued decline, they are the most likely to fear this
trajectory. This particular power trajectory adds a new source of fear for the weaker states and an
additional motivation to bargain with the leading state.
The weaker states have to contend with potential threats from three different sources. The
first source of threat is from the leading state. If the leading state were to choose to dominate the
weaker state, the weaker states would not be able to do anything about it, because of the power
21
asymmetry between the two types of states and the weakened condition of the weaker state. The
second potential source of threat is also external and stems from the leading state’s choice of
abandonment. This might leave the weaker states in a situation where they have to face a third
party military threat that they are unable to stop due to their lack of capabilities stemming from
their weak condition. The third source of threat is internal; the weaker states could face the threat
of continued decline. The systemic causes of the decline of the weaker place could still be
operating to continue to decrease the power of the weaker states, or the weakened states could
simply be unable to reverse their course without external aid.
While the weaker states do not have any influence over which option the leading state
chooses among domination, abandonment or anarchic bargain, they do have a hierarchy of
preferences in terms of how each options will affect their power position. The absolute worst
outcome for the weaker states is if the leading state were to pick domination. For the weaker
states this most likely means state death, and as such a loss of all power. The next worst option is
abandonment as this leaves states with their threat of continued decline and the potential to be
conquered by a third party. While surviving as a state, this option definitely represents a decline
in state power.
Under these conditions of multiple threats and few options of how to deal with them, the
weaker states would have little choice but to seek assistance from the leading state to find a way
to diminish the threats they face. The internal threat of continued decline would be of the greatest
influence in the decision to bargain with the leading state. First, it is the most immediate threat as
external threats cannot possibly be dealt with by a state that cannot even control its internal
conditions. Second, it is the most concrete threat, as domination by the leading state or conquest
by a third party state is only a possibility not an eventuality. Thus the trajectory of continued
22
decline is not just a short term fear but also an incentive to bargain because the leading state can
provide the resources necessary to arrest the decline of the weaker states. By striking an anarchic
bargain with the leading state to help the weaker states reverse their internal conditions and arrest
their decline, the weaker states will have to make a highly asymmetrical bargain that does not
favor them. However, the choice to provide the leading state with foreign policy concessions
does not seem like too great of a burden, considering the benefits the weaker states receive from
it.
Such an anarchic bargain would have the additional benefit of ameliorating all possible
sources of threat to the weaker states. The threat of continued decline will obviously be
ameliorated as that is what the weaker states receive from the bargain. Additionally, the fact that
the weaker states are bargaining with the leading state would decrease the threat of domination
by the leading state. Since the leading state would already be receiving what it wants from the
weaker states, there is considerably less reason for it to bother with the costs of dominating the
weaker states. Bargaining with the leading state might also provide the weaker states with a
guarantee against the abandonment threat. As the leading state is helping the weaker states
recover from their internal problems, it is allowing these states to increase their capabilities
perhaps even to the level necessary for their defense. The leading state might also dislike other
states poking into its sphere of influence and chose to protect the weaker states against the third
party threat.
This bargain does not have to continue indefinitely. Once the weaker states have
overcome their major sources of threat, states will no longer have an incentive to allow the
hegemon the political influence it receives as payment. The threats can be considered as
overcome when the economy of the weaker states is stable and can once again support the
23
necessary functions of the state, when the ruling regime is stable in its control of power, when
the external military threat is no longer threatening. In essence, once the weaker states no longer
require the assistance of the hegemon, the hegemon becomes the only major threat to them, thus
they end the bargain by refusing the hegemon political influence over their foreign policy.
Incentives to Join
Two questions need to be answered about the anarchic bargain. First, if the weaker states
get the worse end of the bargain, why would they accept it in the first place? The second
questions deals with the same issue from the perspective of the leading state. If the anarchic
bargain can come to an end, why would the leading state, knowing this, accept the bargain in the
first place? Is it not simply helping other states grow at its own expense?
The weaker states have four reasons to accept the anarchic bargain. First, to a certain
degree the weaker states have very little choice in the decision to accept the bargain. Since the
bargain is offered at “reordering moments” – in situations when the weaker states have been
decimated by war – any offer of aid, would be better then the state disintegrating completely.
The weaker states are in such a dire situation, they might need the bargain to survive or to
ameliorate the continued threat of future decline.
Second, even though the leading state gains more compared to the weaker state, the
weaker state gains more compared to the pre-bargain status quo. For the leading state, the
anarchic bargain is a convenience and a benefit, but it is certainly not a necessity. Without the
bargain, if the leading state needs to accomplish a goal, it can afford to force its will upon the
weaker states – especially in the period right after the end of a major war. The weaker states, on
the other hand, face a situation in which they suffer considerably without the bargain and receive
much needed assistance with it.
24
Third, while the bargain is more beneficial to the leading state, it might be difficult to
determine the extent of the inequality. The anarchic bargain trades foreign policy concessions by
the weaker states for material assistance from the leading state. In such a comparison, it is hard
to judge by how much the leading state benefits over the weaker states. Due to this mismatch
between types of entities being traded, the problem of relative gains is weakened to an extent.
Fourth, and most importantly, the bargain is short term and it can be broken from both
sides. As such, the weaker states are not signing up for a long term deal where they are saddled
with the same terms until the international order changes. Each party to the bargain is quite
aware that the bargain can be renegotiated or even dropped in the next round. Since the bargain
is finite and beneficial to the weaker states, there are considerably less apprehension about
accepting it.
Despite the fact that the weaker states can chose not to renegotiate the bargain at a
subsequent round, the anarchic bargain is still in the interests of the leading state. The bargain
ends when the balance of power shift dramatically enough for the bargain to no longer be
profitable to one side or the other. However, it is difficult to know when this will occur. Since
the future trajectories of power are so uncertain, states have significant incentives to discount the
effects of the long term in their calculations. Thus the leading state would have little reason to
assume that the anarchic bargain would end. It is true that the leading state is paying for the
recovering of the weaker states, thus increasing their capabilities and helping them increase their
power. But the leading state is gaining power from this bargain as well. It is hard to calculate
precisely the advantage or disadvantage of exchanging domestic gains for foreign policy gains.
Since both states are increasing their power, neither has a reason to expect the anarchic bargain
25
to change the balance of power between them sharply. Thus neither state can reasonably expect
the anarchic bargain to end without a systemic change, which neither side could possibly predict.
26
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