Thursday, December 28, 2017

Summary: The Demand for International Regimes / Robert Keohane


The article ‘The Demand for International Regimes’ by Robert Heohane  tries to improve our understanding of international order trough interpretation of international regime- formation that relies on rational-choice analysis in the utilitarian social contract tradition. 5 parts: 1. systemic constraint-choice analysis; 2. context + functions of international regimes; 3. theory of the demand for international regimes; 4. issues of closure and communication; 5. control-oriented regimes will be supplemented by insurance regimes
à why should self-interested actors in world politics seek to establish international regimes through mutual agreement? 
Theory of hegemonic stability: concentration of power in one dominant state makes the development of strong regimes easier
BUT: - this theory fails to explain lags between changes in power structures + international regimes
          - fails to explain why international regimes are much more extensive than earlier

1. Systematic constraint-choice analysis: virtues + limitations
- systemic theory: changes in outcomes are explained on basis of changes in the system itself, not on the actor: the actor is not a variable, but is seen to respond rationally to constraints + incentives.
à thus, decisions about creating/joining an international regime are affected by system-level changes. 
-use of rational choice theory (constraint-choice theory) implies that we must view decisions involving international regimes as ‘voluntarily’
HOWEVER: we know that world politics is something in which power is often exercised, and often with great inequality à how do international regimes come into being voluntary? 
 1. Imposition of constraints: dictated by environmental factors + powerful actors. 
‘imposed regime’ = regime agreed upon within constraints that are mandated by powerful actors. 
à actor choices will be constrained in a way that allows preferences of more powerful actors having greater weight. 
- constraint-choice analysis captures non-hierarchical nature of world politics without ignoring the role played by power + ineguality
We must, when looking at international regimes, that states are utility-maximizers, and rational. 
à in general: states join those regimes where benefits outweigh the costs
- the most important function of a regime (= contract/quasi-agreement) is to establish mutual expectations about other’s behaviour.
- changes in extent + strength of international regimes can be explained by reference to changes in characteristic of the international system (where actors make choices) or of regimes themselves (about which choices are made)
QUESTION: why should disadvantaged actors join regimes?

2. Context and functions of international regimes
- function of an international regime is to facilitate the making of mutually beneficial agreements.
- the actors in this model operate within a self-help system (Waltz), which mean that the actors cannot call higher authority to solve their problems or provide protection. 
Keohane: the theory of hegemonic stability focuses on the supply-side of international regimes: hegemonic international systems should be characterised by levels of public goods production higher than in fragmented systemà this ignores the demand side of international regimes: why should governments desire to institute international regimes? How much are they willing to contribute to keep them?
- Context: agreements in regime context are stronger than ad hoc agreements (formed for one specific purpose) 
                à Keohane compares again to economy: market failure occurs when the outcomes of the market are sub-optional:  agreements that would be beneficial to all parties are not made. 
                à International regimes help to reduce the barriers for optimal agreements (market failure).
Public goods give rise to the demand for international regimes which can improve problems of transactions costs and information imperfections that obstruct effective decentralized responses to problems of providing public goods.

3. Elements of a theory of the demand for international regimes
There is an important distinction between the demand regimes and demand for ad hoc agreements: 
- regimes facilitate the making of substantive agreements by providing a framework of rules, norms, priniciples, and procedures of for negotiation. 
à the demand for AGREEMENTS is exogenous: may be influenced by many factors (especially by the perceptions that leaders have about their interests in agreement or non-agreements. 
à international regimes are demanded when they make possible agreements yielding net benefits that would not be possible on ad hoc basis agreements. 
Ronald Coase expresses in his theory: Coase Theorem, three ways in which international regimes can help the agreements made:
a) legal framework establishing liability for actions
b) perfect information
c) zero transaction costs.
à demand for international regimes is high when costs are lower than benefits, and if costs of ad hoc agreements are higher than the regime agreements. When the isse-density is low, ad hoc agreements are more attractive, since they are about a specific area. But when the issue-density is high, and thus the interdependence higher, the demand for international regimes will grow. 
There are three specific problems that give rise to the demand for international regimes:
1) asymmetric information: expecting that the resulting bargains will be unfair. ‘outsiders’ (states who have less information about the situation than others), will not want to make agreements
2) moral hazard: agreements may sometimes alter incentives with result that cooperative behaviour is discouraged. (Insurance companies have this all the time, property insurance makes people less careful with their propert à increase the risk of loss)
3) deception and irresponsibility: some actors may enter an agreement without intention of fulfilling, or others can be irresponsible and make commitments they are not able to fulfill.

4. Information, openness, and communication in international regimes
International regimes can help to increase quantity and quality of communication and to encourage openness: regimes do this by:
- linking issuesà important way of dealing with deception: deception is less profitable in an agreement involving many issues (state who is carrying out deception, or ‘cheating’ will be closely monitored by other states)  
- increase quantity + quality of communication: lighten the information problems.

5. Coping with uncertainties: insurance regimes
- participating in international cooperation is always risky: if others fail to cooperate, the cooperating states may suffer.
- governments are always comparing the risks they would run from lack of regulation of issue-areas, with the risks of entering an international regime 
- Most international regimes are control-oriented regimes: 
àmembers maintain some degree of control over each other’s behaviour: necessary condition for this type of regime is that the benefits of membership outweigh the costs. 
à they are based on the theory of hegemonic stability
à seek to ensure 2 kinds of regularity: 
1. internal: refers to orderly patterns of behaviour among members in the regime.
2. environmental: refers to behaviour between member-states and outsiders. (e.g. military alliances is extreme case of attempting environmental control) 
HOWEVER: this is not the only type of regime that exists:
Insurance Regime: is established voluntarily by common benefit, but weaker because no one enforces it.

6. Conclusion
- INTERNATIONAL REGIMES CAN BE INTERPRETED AS DEVICES TO FACILITATE AGREEMENTS, BY PROVIDING RULES, NORMS, PRINCIPLES, AND PROCEDURES THAT HELP ACTORS TO OVERCOME BARRIERS TO AGREEMENT IDENTIFIED BY ECONOMIC THEORY OF MARKET FAILURE
- DEMAND-SIDE OF INTERNATIONAL REGIMES: 
a) INCREASED ISSUE DENSITY WILL LEAD TO INCREASED DEMAND FOR INTERNATIONAL REGIMES
b) DEMAND FOR INTERNATIONAL REGIMES WILL BE PART OF A FUNCTION OF THE EFFECTIVENESS OF THE REGIMES THEMSELVES IN DEVELOPING NORMS OF GENERALIZED COMMINMENT AND IN PROVIDING HIGH-QUALITY INFORMATION TO POLICY-MAKERS. 
- CONSTRAINT-CHOICE THEORY HELPS US HOW TRANS-GOVERNMENTAL RELATIONS WORK + CHANGE. 
- HEGEMONY IS NOT A NECESSARY CONDITION FOR STABLE INTERNATIONAL REGIMES. 


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