POLI 244 Lecture Notes - Lecture 4: Moral Hazard, Legal Liability, Factor 5
11 Dec 2012
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Document Summary
Realist theories regard international relations as a state of anarchy, in which states judge its own causes and carry out its own judgements: problem: system-wide patterns of cooperation (such as those observed in finance, health, telecommunications) cannot be. Hegemony typically only results after a large-scale conflict; during peace times weaker countries tend to gain on the hegemon. In the nuclear age, it is difficult to presume that a country will emerge prosperous and with hegemonic power. As the american hegemony erodes, it is therefore necessary to deal with preserving world peace in the absence of a hegemon. Absent a central authority, which would facilitate exchanges, actors can still achieve mutually-benefiting agreements on their own via bargaining. However, the coase theorem depends on three conditions: legal framework establishing liability for actions, perfect information, zero transaction costs. None of these three exist in international politics -> opposite conclusion would appear to be true.
