NEOLIBERALISM IN IRIbrahim Koncak

NEOLIBERALISM• International Institutions facilitate international cooperation.• Cooperation can be difficult to achieve in anarchic conditions but

institutions allow states to overcome a variety of collective action impediments.

• The primary focus of neoliberalism is how institutions might be redesigned to more efficiently obtain cooperative outcomes.

• Neoliberalism concurs with structural realism that international cooperation can be difficult to obtain in an international environment that fosters fear and uncertainty.

NEOLIBERALISM• Stare centric perspective, states are unitary, rational, utility-maximizing

actors.• States 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.

• Neoliberalism not only mirrors neorealism but also highly indebted to the study of rationality and utility-maximization in economics.

• Neoliberalism is a variant of IR liberalism as it is premised on basic liberal assumptions about the possibility of cumulative progress in human affairs.

NEOLIBERALISM• Collective benefits may be obtained through greater application of

human reasoning.• Increased interaction and informational exchange among self-interested

individuals and actors are important.• In comparison to realism, neoliberalism has greater faith in the ability is

human beings to obtain better collective outcomes that promote freedom, peace, prosperity, and justice on global scale.

• The structure or design of international institutions plays an important role in determining the extend to which collective goals can be realized.

Emergence of neoliberalism

• Influenced from pluralist literature of 1960s and 1970s.• Neoliberalism differed form pluralism as former’s adoption

of state-centric, unitary actor assumptions. • Liberal scholars sought to challenge realist pessimism on it

own terms by utilizing realist assumptions.• Neoliberalism argued that an anarchic environment of self-

interested, egocentric actors did not necessarily impose debilitating realist constraints on cooperation.

Neoliberalism vs. Neorealism

Neoliberalism• Anarchy, as a vacuum that is

gradually being filled with human created process and institutions. Anarchy is mitigated overtime.

• Historical developments in twentieth century have made realism inaccurate description of global politics.

Structural Realism• Anarchy, as an all-

encompassing, unchanging condition, or environment to which human beings are subject.

• Ongoing warfare and military-trade competition between states.

HISTORICAL DEVELOPMENTS • First, increasing interdependence due to modern technological and industrial advances.

It is costly to one’s own interests to threaten or end the relationship. Some factors forcing states to cooperate are depletion of resources, environmental issues, health, refuges or immigration.

• Second, the period of hegemonic stability that the US provided after the Second World War era. The UN system, which was to serve as an umbrella for cooperative relations across many different issue areas.

• Capitalist economic and free trade system with formal institutions such as the IMF, and the International Bank of Reconstruction and Development (the Bretton Woods system).

• Even if US relative power has declined, interdependence provides a rational, strategic incentive for states to continue cooperating with one another (Keohane 1984).

• Cooperation, and particularly economic cooperation, could be obtained in anarchy in the absence or decline of a hegemon.

Barriers to international cooperation

• Lack of information or transparency • Incentive to ‘cheat’ on ones partner or fear of being

cheated.• International institution foster iteration and provide

information about the intentions of partners and therefore provide transparency mitigating the fear of being cheated and taken advantage in cooperative actions.

• Neoliberals study on designing of effective institutions to curb the defection.

Difficulties in institutional design

• Bargaining• Relative power, institutional design, issue linkage, normative value

• Defection• Free ride, cheating, compliance and enforcement, monetaring

• Autonomy • Norm entrepreneurs and agenda setters, neutral parties, control

and coordination, bureaucratic pathologies, principle-agent theory