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After Hegemony (Keohane)

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Political Science
POLI 244
Jason Scott Ferrell

After Hegemony: Cooperation and Discord in the World Political Economy (Robert O. Keohane) Realism, Institutionalism, and Cooperation • REALISTS international politics as a state of war: international politics is a competition of units in the kind of state of nature that knows no restraints other than those which the changing necessities of the game and the shallow conveniences of the players impose • however, this can't be correct ◦ system-wide patterns of cooperation that benefit many countries, without being tied to an alliance system against an adversary • INSTITUTIONALISTS shared economic interests create a demand for international institutions and rules ◦ cooperation is essential ◦ a bit naive about power and conflict (overly idealistic) ◦ institutions are recognized patterns of practice around which expectations converge ▪ affect state behaviour ▪ interdependence creates interests in cooperation • both predicted similarly about the world political economy post-WWII • institutionalists: liberal international arrangements for trade and international finance respond to need for policy coordination created by interdependence (international regimes) • realists: international regimes constructed on the basis of principles espoused by the US, with US power essential for their construction and maintenance ◦ postwar regimes rested on the political hegemony of the US • both regard early postwar developments as supporting their theories • 1960s-1970s, Europe starts to recover, institutionalists and realists diverge ◦ institutionalist: increasing need for coordination should lead to more cooperation ◦ realist: diffusion of power should undermine the ability of anyone to create order • realists were seemingly right ◦ BUT it might be possible, after the decline of hegemonic regimes, for more symmetrical patterns of cooperation to evolve after a transitional period of discord • hegemonic leadership is unlikely to be revived in this century for anyone • therefore, how to organize cooperation without hegemony? A FUNCTIONAL THEORY OF INTERNATIONAL REGIMES Political Market Failure and the Coase Theorem • institutional deficiencies that inhibit mutually advantageous cooperation (self- help) • Coase Theorem ◦ the presence of externalities (actors do not bear the full costs or receive the full benefits of the own actions) alone does not necessarily prevent effective coordination among independent actors ◦ EXAMPLE factory emits soot that damages the laundry next door ▪ cheaper to install enclosure for the laundry yard at $20,000 than to keep absorbing the damage ▪ BUT the factory could eliminate all soot emissions at $10,000 ▪ absence of bargaining and governmental enforcement means the egoistic factory died has no incentive to spend towards the result ▪ clean air would be a public good ▪ if only the laundry guy had a legally enforceable right, making the factory guy pay up ▪ Coase says the pollution will be cleaned even without weight of the law ▪ laundry guy can just pay the factory a sum greater than $10,000, but less than the $20,000 ◦ shows the efficacy of bargaining without central authority ◦ three crucial conditions for it to apply ▪ legal framework establishing liability for actions ◦ perfect information ▪ zero transaction cost (including organization costs and the costs of making side-payments) ◦ none of these conditions are met in world politics ▪ inversion of Coase theorem seems more appropriate then ◦ with more than 2 participants, Coase theorem can't work ▪ the core of the game is empty ◦ if transaction costs are too high, no bargains will take place; but if they are too low, under certain conditions an infinite series of unstable coalitions may form • Inverted Coase Theroem ◦ international institutions as largely responses to problems of property rights, uncertainty, and transaction costs ◦ international regimes develop to facilitate cooperation ◦ governments believe that ad hoc attempts to construct particular agreements without a regime framework will yield inferior results compared to negotiations within the framework of regimes • LEGAL LIABILITY ◦ high value on autonomy makes establishing international institutions that exercise authority over states near impossible ▪ BUT does not prevent regimes from developing bits and pieces of law (quasi-agreements that are legally unenforc
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