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Pols 426 Lecture 1

R. Keohane, After Hegemony

Keohane claims that while there is considerable cooperation in the international system – as the global economy develops – out of this growing interdependence comes increased potential discord via governmental intervention and policy conflict

The central question for Keohane is – How can cooperation be organized in the world political economy when common interests exist?

Keohane takes mutual interests of states as given – does not ask where they arise or how created –

But wants to examine the conditions under which they (mutual interests) lead to cooperation

Keohane begins with the premise that even when common interests exist cooperation often fails

Keohane makes an empirical point – He begins by noting that there is far more cooperation in the international system (trade, financial relations, health, environmental protection …) then can be accounted for by the Realist perspective but he also suggests that those who take an Institutionalist perspective and argue that shared state interests create a demand for international institutions and rules and cooperation run the risk of being naïve about power and conflict and can overestimate the ease with which cooperation can be achieved and maintained in the international system

Institutions for Keohane are recognized patterns of practice around which expectations converge --- and these practice affect state behavior allowing for cooperation – further international regimes are arrangements for policy coordination created by the fact of interdependence – they are made up of rules, norms, principles, and decision-making procedures

Now – Keohane argues that realist and institutionalist predictions about the state of the international system during the twenty years after WW II are similar and "correct" – Both predict cooperation – Realists because of the presence of a political hegemon (The U.S.) and because of the demand for coordination due to interdependence – But as after the mid 1960’s and the decline in U.S. hegemony, their predictions should diverge – institutionalist predict more cooperation and realists predict less cooperation.

While Keohane suggests that the Realist approach provides a better fit for the 70s and early 80s, he argues that there is still more cooperation than would be predicted without a hegemon

So the key questions are

1. Under what conditions can independent nations cooperate in the world political economy?
2. Can cooperation take place without a hegemon and if so how?
3. Specifically how do patterns of rule-guided policy coordination emerge, maintain themselves, and decay in world politics

Cooperation and International Regimes

Keohane begins with the assumption that international cooperation is valuable but difficult to ogranize --- in international economic and political relations we cannot rely on the market to work

Keohane argues that "cooperation occurs when actors adjust their behavior to the actual or anticipated preferences of others, through a process of policy coordination

Now what is cooperation -- it is not harmony – a situation where actors would pursue policies without regard for the interests of others had facilitate the attainment of others goals – harmony is a situation where actor interests happen to be in alignment

Cooperation – is a situation where actor policies would hinder the attainment of the goals of others but through a coordination process policies are adjusted so as to obtain cooperation rather than discord if polices were not adjusted -- behavior patterns are altered via coordination to achieve cooperation

International Regimes and Cooperation

Keohane argues that regimes exist and they can affect the likelihood of even "egoistic" nations to cooperate

An international regime is "sets of implicit and explicit principles, norms, rules, and decision-making procedures around which actors’ expectations converge in a given area of international relations."

Principles are beliefs of fact causation and rectitude.

Norms are standards of behavior defined in terms of rights and obligations

Rules are specific prescriptions or proscriptions for action.

Decision-making procedures are prevailing practices for making and implementing collective choice.

An example – the international balance of payments regime

Principle - liberalization of trade and payments

Norm – the injunction to states not to manipulate their exchange rates unilaterally for national advantage

Rules – pegged exchange rates and procedures for consultation in the event of change – and later floating exchange rates

The various aspects of regimes – contain injunctions about behavior and they imply obligations though they are not enforceable

Keohane claims that regimes should not be viewed as new elements beyond the state centered international system, but rather as arrangements motivated by self interest – the key

Regimes help coordinate behavior but even so, rational individuals (nations too) who would benefit from cooperation often are unable to do so – they fail to coordinate their actions

To get at this problem Keohane starts by assuming that states are rational egoists and argues that most relations of interest in international politics can be characterized by a combination of mutual dependence and conflict, of partnership and competition --- or in the terms of game theory "mixed-motive games" -- situations where nations can mutually gain from cooperation but also have incentives to not cooperate (unilaterally) and gain more

The Prisoners Dilemma Game

		Player B
		Cooperate	Defect
Player A	Cooperate	R,R (3,3)	S,T (1,4)
	Defect	T,S (4,1)	P,P (2,2)
Payoff ordering	T>R>P>S

Public goods and collective action situations

PD Game is a problem because trust to cooperate even if communicated is difficult to establish because commitments are not binding – talk is "cheap" so if individuals or nations were to play the PD game once it is "rational" to defect – and players end up in a mutually undesirable situation (P,P).

Why – Defection is a "dominant" strategy and mutual defection is an "equilibrium solution"

But Keohane offers two "ways" that actors – here nation-states" might avoid the defection outcome of the dilemma

1. He notes that while actor are egoistic (self-interested), they nonetheless are not asocial. They exist within some social situation and in that they have shared experiences, ethical precepts, and expectations of future actions with identifiable individuals – "culture" even in anarchic but regime ridden international relations

   The mafia example

2. Repeated Play --- the shadow of the future and Iterated Prisoners Dilemma - can be rational to cooperate – why not individually maximizing to forego long sequences of mutual cooperation (strings of 3,3 payoffs for one or a few temptation payoffs by unilateral defection (4,1) – because these are followed by long strings of mutual defection

When can the collective action problem be solved so as to have cooperation without a hegemon (one that can enforce all others to behave) –

1. when the number of agents is relatively small so all can monitor the behavior of others
2. when agents expect to interact for a long time
3. when agents can identify those that they are playing with
4. when agents can (and will) punish defectors

R. Keohane, After Hegemony – continued

Hegemonic Cooperation in the Post Cold War Era

Recall – he argues that rational self-interested actors in situations of interdependence will value International Regimes as a way of increasing their ability to make mutually beneficial agreements

The question Keohane asks is how does hegemonic leadership operate -- or how does the hegemon construct international regimes that facilitate the right kind of cooperation from the standpoint of the hegemon itself

1. a necessary condition – sufficient military power to protect the Int pol economy from incursions by hostile powers
2. the hegemon then seeks to persuade others to conform to its vision of world order and to defer to its leadership

vision – international capitalism –free trade, property rights, and democracy (sort of) -- to get support for this vision and U.S. leadership, followers had to see that they received sufficient benefits from accepting or buying into this order and leadership

three key benefits followers received from partnering in the U.S. lead regime

1. a stable international monetary system – to facilitate international trade and payments -- U.S. role was to manage the monetary system
2. Provision of open markets for good – U.S. worked to reduce tariffs and remove discriminatory restrictions
3. Access to oil at stable prices – U.S. and U.S oil companies provided oil to Europe and Japan from the Middle East and from the U.S. itself

Hegemonic leadership by U.S not based simply on dictating terms but based upon providing a set of incentives to participants via formal trade and monetary regimes and a narrow company-based oil regime with occasional independent action

Keohane argues that the strategy worked in the short term – helped European and Japanese economy recovery and growth and global growth and the cohesion of the U.S. military alliance against the Soviet Union but

failed eventually because it did not institutionalize an oil regime that could have warded off rising threats to access at stable (cheap) prices and the regime did not maintain a strong resource base for the exercise of U.S. power

Keohane more generally argues that hegemons and the powerful can postpone adjustment to change and often do so and sometimes refuse to adjust to change until it is forced upon them – Keohane blames success and domestic interests gaining special privileges for not allowing adjustments to change and thus decline

Cooperation without Hegemony – Cooperation without a hegemon is more difficult but does happen so HOW

Material power matters but

Keohane argues that cooperation in mixed motive setting rests on 1. Expectations 2. Transactions costs 3. Uncertainty

Multilateral institutions and regimes must furnish the certainty and confidence that hegemons provided

As hegemony erodes the demand for regimes persists as the supply declines

Keohane argues that the international regimes in trade and money were sufficiently developed to provide for cooperation whereas oil collapsed

Some preliminaries for the iterated prisoners dilemma game simulation (SimSociety)

Recall the PD game

		Player B
Player A		Coop	Defect
	Coop	c,c	c,d
	Defect	d,c	d,d

Where 1. c,c is mutual cooperation

2. c,d A cooperates and B defects

3. d,c A defects and B cooperates

4. d,d both defect – mutual defection

Now we can characterize a set of IPD game strategies by indicating the probabilities that a player will cooperate given each of the 4 outcomes (noted above) of the game from the last or prior iteration and denoting for the very first iteration whether the player will choose to cooperate or defect so lets denote

1. P(1) as the probability of cooperating on the current iteration given that c,c was the outcome from the last or prior iteration
2. P(2) as the probability of cooperating on the current iteration given that c,d was the outcome from the last or prior iteration
3. P(3) as the probability of cooperating on the current iteration given that d,c was the outcome from the last or prior iteration
4. P(4) as the probability of cooperating on the current iteration given that d,d was the outcome from the last or prior iteration

Thus as strategy can be defined as

[ P(1), P(2), P(3), P(4)]

with the addition of a cooperate or defect choice stipulation on the first iteration

So a strategy that always cooperates (All-c) can be represented as – cooperate on the first round and

[1,1,1,1]

A strategy that always defects (All-D) can be represented as – defect on the first round and

[0,0,0,0]

Some classic strategies

Tit-for-Tat (TFT) cooperate on the first round and then choose whatever the opponent chose in the previous round

[1,0,1,0]

Pavlov – win stay – lose change – if you like the result from the last round continue doing what you are doing – if you do not then change

Cooperate on the first round and then

[1,0,0,1]

Grim – cooperate on the first round and then cooperate as long as the opponent cooperates – If the opponent defects then defect from that point forward

Generous TFT cooperate the first time and with 100% prob reward prior cooperation by the opponent – either c,c or d,c and with some probability cooperate after you instigated defection c,d and if there is mutual defection d,d

[1, r,1,r] where r is between 0.0 and 1.0

Mean TFT – defect on the first round – always punish prior defection and sometimes but not always reward prior cooperation

[q,0,q,0] where q is between 0.0 and 1.0

Some important characteristics of strategies

We can characterize strategies as

What kinds of strategies must agents use to survive and succeed in a world of anarchic self interested agents

How does cooperation develop in such a world – Why? What strategies seems to make this work and why?

What kinds of strategies seem to be able to maintain cooperation?

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