Neoliberal View of Institutions – The most compatible Framework

We have briefly mentioned Andrew Moravcsik‘s vague attempt to place Robert Keohane outside of liberal theoretical mainstream. Understanding his strong internal drive for crafting the theoretical distinctiveness of the liberal concept, we are much less convinced by his arguments dismissing the institutionalist theory as not - compatible with core messages of the liberal theory. Instead we regard Robert Keohane as one of the key contributors to the liberal theory of international relations by enriching it with fascinating insights generated from international regime and institutional studies. Labeling him as ―sympathetic to liberalism‖

does not make Robert Keohane less liberal¹. In contrary, both authors assertion of the importance of international institutions as well as of the purposive mode of state behavior in pursuit of its interests (preferences) constitute the major unifying framework of liberal thought when applied to international politics. Institutions in Keohane‘s view generally play positive role of supporting cooperation incentives in a given policy area and reduce initial uncertainty via increased distribution of information.² However, they are not always successful and the degree of successfulness of an institution as a measurement for general plausibility of institutionalists‘ claim is being openly rejected by neoliberal authors themselves.³ Since bargaining and preference configurations somehow can be regarded as conceptual outlets for realists‘ argument of power and dominance relationship, the neo - liberal concept of international institutionalism seem to be well suited to respond both to claims of rival theories, as well as to the dynamics of real - world events. As Robert Keohane

1 Moravcsik, ―Taking Preferences Seriously,‖ 515.

2 Katzenstein, ―Analyzing Change in International Politics,‖ 15.

3 Robert O. Keohane, ―International Institutions: Can Interdependence Work?,‖ Foreign Policy, Special Edition:

Frontiers of Knowledge, no. 110 (Spring 1998): 83.

40 and Martin Lisa argue, it does not deny the validity of realist approach to issues of power, security and interest, and by mitigating fears of cheating (positive distributional effect) it directly supports the logic of utility maximization of actors.¹ At this point, the immense significance of information to security considerations is clearly recognized, and creates additional incentive of cooperation, once information - sharing mechanisms (e.g. on defence costs or force planning) are on place. Defining his arguments as functional response to the hegemonic stability concept, Keohane argues that the existence of a hegemon is not a necessary precondition for the emergence of cooperation, and if present, the hegemons would even benefit from the cooperation to enforce the rules.²

Known for his propensity to focus predominantly on internal institutional structures, he also illustrates the institutional capacity to initiate domestic changes. In this sense, multinational institutions are given the ability to enhance the quality of ―national democratic processes‖ and to guide institutional changes domestically.³ He is joined by other liberal scholars, who highlight the broad variety of mechanisms of multilateral institutions that enhance national deliberation processes and decision - making, and range from platforms of negotiations and debate to the effective tools of expertise provision and professional networking. Illustrative are the words of James Madison in Federalist Papers that refer to the importance of objective assessment of third party for national political decision - making:

An attention to the judgment of other nations is important to every government (…) that in doubtful cases, particularly where the national councils may be warped by some strong passion or momentary interest, the presumed or known opinion of the impartial world may be the best guide that can be followed.⁴

Keohane, Macedo and Moravcsik apply this logic when reviewing the impact international institutions can cause in new democracies. They particularly stress the multiplying effect of such influence once national political leadership agrees to reinforce domestic efforts via international commitments that imply sanctions in case of policy revision.⁵ International institutions perform a function of political assistance, when supporting states in advancing certain objectives domestically that initially originated somewhere else. This process of

1 Keohane and Martin, ―The Promise of Institutionalist Theory,‖ 44–46.

2 Robert O. Keohane, After Hegemony: Cooperation and Discord in the World Political Economy (Princeton, N.J.: Princeton University Press, 1984), 35–37.

3 Robert O. Keohane, Stephen Macedo, and Andrew Moravcsik, ―Democracy-Enhancing Multilateralism,‖

International Organization 63, no. 01 (2009): 1–31.

4 Madison, The Federalist Papers, Federalist. No.63 (A Penn State Electronic Classics Series Publication, 2001), 280, available at http://www2.hn.psu.edu/faculty/jmanis/poldocs/fed-papers.pdf.

5 Keohane, Macedo, and Moravcsik, ―Democracy-Enhancing Multilateralism,‖ 17.

41 interdependence can be run in two - way direction. In one case national systemic flaws can be corrected by serious involvement of an internation organization (IO); conversely national institutions usually impose tight control over IO by various mechanisms of accountability (information, financial) and the modes of decision - making procedures.¹

The liberal view of the role states play in international institutions implies a high degree of governmental accountability towards its domestic constituents that can either support officials or punish them for their decisions made internationally. Allen Buchannan terms the said effect of the state - IO interdependence as reciprocal legitimation, which implies the mutual reinforcement of the ―right to rule‖, i.e. the justification to act in response of the requirements of moral duties.² Though mostly applied in the context of democratic nature of international institution (II), legitimacy enhancing mechanisms are crucial elements of II‘s domestic influence and the general concept of the compliance. The prospects of diminishing legitimacy can produce a great deal of concern and prevent a state from actions that undermine its objectives publicly declared. Domestic policies can be shaped by a wide application of international standards, or IIs can be allowed to operate in domestic affairs in order to increase policy effectiveness.³ The inherent openness of the said concept to multidimensional approach of the analysis resulted in a logical interest of scholars for the democratic effects of IIs influence. Whether picking on the topics of improved democratic governance, or the accountability of state officials (agents), the debate on the impact of international institutions encompassed various aspects of democratic theories and promised to improve the information asymmetry as well as the quality of monitoring state behavior.⁴

Two aspects here should be given attention to review the multidimensional effects of institutions in their conceptual totality. The role of national elites and interest groups in conjunction with the linkages established towards the bureaucracies of international institutions should not be underestimated. Though the general principle of coherent state preferences remains valid, the coordinating effects of bureaucracies on the final political outcome as a result of policy readjustment between different interest groups have to be

1 Andrew Moravcsik, ―Affirming Democracy in International Organizations,‖ Global Challenges in 2030, 2010, 14. Available at http://www.princeton.edu/~amoravcs/library/goldstein.pdf

2 Buchanan, ―Reciprocal Legitimation,‖ 7–8.

3 Wesley Carrington, Jim DeBuse, and Heejin Lee, ―The Theory of Governance and Accountability‖ (Iowa:

University of Iowa Center for International Finance and Development, May 2008), 4–5, available at http://blogs.law.uiowa.edu/ebook/sites/default/files/Governance_%26_Accountability-Theory.pdf.

4 Keohane, Macedo, and Moravcsik, ―Democracy-Enhancing Multilateralism‖; Buchanan, ―Reciprocal Legitimation.‖

42 thoroughly scrutinized.¹ Another challenge is to bring to the fore the risk of the policies being

―hijacked‖ by certain groups or even by political elitist circles. Hence, the historical play - back of political socialization processes between the representatives of national authorities and the officials of international organizations becomes indispensible tool to capture the moments, in which complex, costly but ultimately balanced institutional environment decisively contributed to the formation of likeminded political elites.²

Neo - liberal approach to the issue of institutions‘ relevance in international relations is marked by its ability to encompass various aspects of power and interest - relations, structural dynamics and organizational influence that are shared by scholars of opposing theoretical mainstreams. The common epistemological foundation of neo - liberals and realists, that is the rational model of actor‘s behavior which is assumed to have fixed set of preferences, allows to speak about a high degree of theoretical convergence.³ Once the relevance of institution has been recognized, the neoliberal view can essentially subsume the realist claims and promise to provide more nuanced explanation of political processes. Despite the growing tendency of state disaggregation as a meaningful tool for understanding preference - formation, states still remain the main object of analysis, and as Mark Pollack argues, the creation of institutions

―did not cause the transfer of authority from state to new center‖.⁴ The centrality of states in international relations is largely acknowledged by realist and neo - liberal institutionalist scholars, although the tendency ―…to multinationalize, transgovernmentalize, bureaucratize and transnationalize the state led to its literal extinction as analytical construct.‖⁵

While highlighting the growing importance of inter-sectoral, functional and horizontal interdependence in world politics, we might sometimes use definitions such as Intergovernmentalism, International/Multilateral Institutionalims and Neoliberal Institutionalism interchangeably. We also share Robert Keohane and others‘ claim that states still represent the major link connecting individuals with outer world.⁶ Mark Pollack carefully puts together all major postulates of neo - liberal institutionalists in a very coherent way.

Referring to state as the unit of analysis he concludes, that though consisting of various

1 McFaul, Magen, and Stoner-Weiss, ―Evaluating International Influences on Democratic Transitions,‖ 659.

2 Paul Pierson, ―Increasing Returns, Path Dependence, and the Study of Politics,‖ The American Political Science Review 94, no. 2 (June 2000): 259, doi:10.2307/2586011.

3 Pollack, ―International Relations Theory and European Integration,‖ 1.

4 Ibid., 5.

5 Peter J. Katzenstein, Robert O. Keohane, and Stephen D. Krasner, ―International Organization and the Study of World Politics,‖ International Organization, International Organization at Fifty: Exploration and Contestation in the Study of World Politics, 52, no. 4 (Autumn 1998): 657.

6 Keohane, Macedo, and Moravcsik, ―Democracy-Enhancing Multilateralism,‖ 12.

43 interest groups, states ultimately aggregate the preferences and advance them in a strategic way by rationally choosing the institution that are designed best to maximize their utility.¹ Therefore, current institutional scholarship may simply vary depending on the empirical emphasis chosen (intergovernmental vs. very functional bureaucratic institution). Preferences play also key role in determining the autonomy of the organization. The principal - agent model becomes herewith a function of the state preferences that reveal themselves in the variety and relevance of issues. Principals (states) basically, very much define the level of autonomy of the agent (institution).²

Theoretical debates are of critical importance, yet they should not lead to a blind dismissal of opposing arguments as unacceptable, rejecting the benefits the successful ―borrowings‖ can provide. No doubt, common standards of scientific research must be maintained. However, since the establishing of a causal relationship between the international action, the form of government and the domestic effects (politics) is our major goal and requires an analytical lens capable of providing the multidimensional (political, functional and ideational) picture, we adopt neo - liberal institutionalist approach as best framework for verifying the empirical evidence still to be gathered. We also admit that our theoretical choice does not preclude us from identifying other approaches as most applicable to certain issues, in overall, contributing to the better elucidation of causal linkages. Neo - liberal institutionalists‘ interpretation of international institution, though rationalist, is very helpful in illustrating the domestic -international linkages, and in particular, is powerful in providing explanations in a

―disaggregated manner‖. The concepts it applies are multifunctional and increasingly able to incorporate other dimensions such as time, space and social (cultural) context. Consequently, we are able to pinpoint the key elements that will further determine the design of our analysis and the structure of our study. These are:

 Policy making and preference compatibility on two levels of game

 Factor of mutually enhanced legitimation

 Institutions as effective forums of communication and impartial management

 Domestic constituents of the state

Knowing the limits of comparative case - study approach, we restrain ourselves from the ambition of strong generalization of the findings. Yet the elements listed above, if carefully

1 Pollack, ―International Relations Theory and European Integration,‖ 13.

2 Ibid., 9.

44 applied, would immensely contribute to the illustration of existing political landscape and deepen the understanding of state - institution interdependence mechanisms, by providing powerful explanations of particular national policies adopted towards NATO and affected by NATO. This has not been done so far.