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International Cooperation in Economic and Security Affairs

Published online by Cambridge University Press:  13 June 2011

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The study of international political economy is distinguished not only by its substantive focus but also by its continuing attention to cooperative, or at least rule-guided, arrangements. These cooperative arrangements are defined variously: as an open world economy by Robert Gilpin and Stephen Krasner, and as strong international regimes by Robert Keohane and Joseph Nye. But in either case, the problems of cooperation and order are not approached simply as tactical alliances or as limiting cases of international anarchy. Instead, close attention is paid to the possibilities for rule making and institution building, however fragile and circumscribed they may be. By this view, the absence of a Hobbesian “common power to keep them all in awe” does not preclude the establishment of some effective joint controls over the international environment. Elaborating on this perspective, Brian Barry argues that “international affairs are not a pure anarchy in which nobody has any reason for expecting reciprocal relations to hold up. In economic matters, particularly, there is a good deal of room for stable expectations.”

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Copyright © Trustees of Princeton University 1984

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1 Gilpin, Robert, U.S. Power and the Multinational Corporation (New York: Basic Books, 1975)CrossRefGoogle Scholar; Krasner, Stephen D., “State Power and the Structure of International Trade,” World Politics 28 (April 1976), 317–47CrossRefGoogle Scholar; Keohane, Robert and Nye, Joseph, Power and Interdependence (Boston: Little, Brown, 1977)Google Scholar.

2 Barry, Brian, “Do Countries Have Moral Obligations? The Case of World Poverty,” in McMurrin, Sterling, ed., The Tanner Lectures on Human Values, Vol. II (Salt Lake City: University of Utah Press, 1981), 30Google Scholar. Barry's use of the term “anarchy” obviously differs from its more typically circumscribed meaning in international relations: “the absence of an international sovereign.”

3 Fuller, Lon L., “Law and Human Interaction,” in Johnson, Harry M., ed., Social System and Legal Process: Theory, Comparative Perspectives, and Special Studies (San Francisco: Jossey Bass, 1978), 61, 76Google Scholar.

4 See the definition of regimes given by Krasner in his introductory essay and used by most contributors to International Regimes (Ithaca, NY: Cornell University Press, 1983), 1Google Scholar.

5 The Prisoner's Dilemma is the only two-player game with such a deficient equilibrium in which both players have dominant strategies.

6 In Jon Elster's terms, a cooperative solution is not “individually accessible” or “individually stable.” Elster, , Ulysses and the Sirens (Cambridge, England, and Paris: Cambridge University Press and Editions de la maison des sciences de l'homme, 1979), 21Google Scholar. The problems of the “nice” egoist, who takes the first step toward cooperation, are explored in Axelrod, Robert, “The Emergence of Cooperation among Egoists,” American Political Science Review 75 (June 1981), 306–18CrossRefGoogle Scholar.

7 Elster, , “Some Conceptual Problems in Political Theory,” in Barry, Brian, ed., Power and Political Theory (London: John Wiley, 1976), 249Google Scholar.

8 Hardin, Russell, Collective Action (Baltimore: Johns Hopkins University Press, for Resources for the Future, 1982), 215Google Scholar.

9 Thus, any promises (such as “I will cooperate if you will cooperate") cannot be relied upon. If, however, a player feels ethically obliged to keep such promises, then his payoff structure must be modified accordingly and the game is no longer a Prisoner's Dilemma.

10 Such metastrategies permit synchronic reciprocity and leave no room for being a “sucker” unless only one side can play a metastrategy. Metagames and their strategies are treated in depth in Howard, Nigel, Paradoxes of Rationality: Theory of Metagames and Political Behavior (Cambridge: M.I.T. Press, 1971)Google Scholar.

11 “Axelrod (fn. 6), 308; see also Axelrod's innovative treatment of changes in players' utilities in Conflict of Interest (Chicago: Markham, 1970)Google Scholar.

12 Shubik, Martin, Games for Society, Business and War: Towards a Theory of Gaming (New York: Elsevier, 1975), 34Google Scholar.

13 Repeated moves within a single game can have similar effects. As R. Harrison Wagner has shown, cooperation can arise in single-play games resembling the Prisoner's Dilemma (that is, where conditional cooperation is Pareto optimal) when the players must make an indefinite sequence of moves. Wagner, , “The Theory of Games and the Problem of International Cooperation,” American Political Science Review 77 (June 1983), 330–46CrossRefGoogle Scholar.

14 Shubik, , “Game Theory, Behavior, and the Paradox of the Prisoner's Dilemma: Three Solutions,” Journal of Conflict Resolution 14 (June 1970), 191CrossRefGoogle Scholar.

15 Axelrod (fn. 6), 308.

16 Ibid., 309. As we already know, if the game is played only once, then w = 0 (since all future payoffs are worth zero) and defection is always the best individual strategy.

17 These arguments are summarized in Axelrod, Robert, The Evolution of Cooperation (New York: Basic Books, 1984)Google Scholar.

18 Axelrod (fn. 6), 317; also see Axelrod, Robert and Hamilton, William D., “The Evolution of Cooperation, “Science 211 (March 27, 1981), 1390–96Google Scholar. The stability of this strategy depends on prompt retaliation: the TIT-FOR-TAT player is “nice,” but he is not a patsy. It is also important to recognize that Axelrod's treatment is limited to players who can discriminate, not to the provision of public goods as such.

19 Hardin (fn. 8), 145.

20 Such conventions and tacit contracts can even embrace large groups if they are built up from the overlapping interactions of smaller groups. These smaller groups are critical because they permit low-cost sanctions, such as exclusion, against defectors and because they help disseminate the knowledge required for conventional behavior. Hardin (fn. 8), 174, 191–93.

21 Thomas C. Schelling offers a perceptive discussion of these surveillance issues and their significance for U.S.-Soviet relations. When facing a potentially hostile enemy, says Schelling, “what one wants is not to be confident, but to be as confident as the true state of affairs justifies. What one wants is grounds for confidence, evidence that confidence is justified.” Schelling, , “Confidence in Crisis,” International Security 8 (Spring 1984), 56CrossRefGoogle Scholar.

22 Rapoport, Anatol and Chammah, Albert M. (with the collaboration of Carol J. Orwant), Prisoner's Dilemma: A Study in Conflict and Cooperation (Ann Arbor: University of Michigan Press, 1965), 3339CrossRefGoogle Scholar.

23 The problem of creating and sustaining a viable group of cooperators is treated imaginatively (as a multiperson Prisoner's Dilemma) in Thomas Schelling's “Hockey Helmets, Daylight Saving, and Other Binary Choices,” in Micromotives and Macrobehavior (New York: W. W. Norton, 1978)Google Scholar.

24 The strategically rational actor makes a much more complex calculation. Unlike the parametric actor, he assumes that his environment is made up of other calculating actors, that he is part of their strategic environment, that they know this, and so on. Elster (fn. 6), 18.

25 America's protectionist Smoot-Hawley tariff, passed in 1930, is an equally good example.

26 Shiv Raj Patil's private statement to U.S. Trade Representative William Brock at the 1982 GATT ministerial conference, quoted in the Wall Street Journal, January 17, 1983, p.31Google Scholar.

27 To threaten trade protection as a strategic act amounts to blackmail. The reason is straightforward: blackmail involves a threat to do something that one does not really want to do for its own sake, but will refrain from doing only if compensated. See Oye, Kenneth, “The Domain of Choice,” in Donald Rothchild, Oye, and Lieber, Robert, eds., Eagle Entangled: U.S. Foreign Policy in a Complex World (New York: Longman, 1979), 14Google Scholar.

28 Theil, Henri, Principles of Econometrics (New York: John Wiley, 1971)Google Scholar, vi. I am indebted to Adam Przeworski for this quotation.

29 Snyder, Glenn H. and Diesing, Paul, Conflict among Nations (Princeton: Princeton University Press, 1977), 83Google Scholar (their emphasis).

30 Stein, Arthur, “When Misperception Matters,” World Politics 34 (July 1982), 505–26CrossRefGoogle Scholar.

31 Schelling, for example, finds three distinct motivational structures associated with the game of Chicken. Chicken can be a “pure test case” in which the only stakes are the players' reputations; it can be a “conventional case” in which the nominal stakes take on special importance by virtue of the actors' own commitments to winning them; and finally the "real case” in which the ostensible stakes are intrinsically valuable to the players. Schelling, Thomas C., Arms and Influence (New Haven: Yale University Press, 1966), 118–19Google Scholar.

32 Jervis, Robert, “Security Regimes,” International Organization 36 (Spring 1982), 357–78CrossRefGoogle Scholar.

33 Brams, Steven J., for instance, treats the Cuban Missile Crisis as a game of Chicken in Game Theory and Politics (New York: Free Press, 1975), 39ffGoogle Scholar.

34 Quoted in Russett, Bruce, The Prisoners of Insecurity (San Francisco: W. H. Freeman, 1983), 99Google Scholar.

36 Anarchy is a necessary condition for the security dilemma, but it is misleading to stress it exclusively, since anarchy and extensive cooperation coexist in international economics.

37 Snyder and Diesing (fn. 29), 4.

38 Rousseau, J. J., A Lasting Peace through the Federation of Europe, trans, by Vaughan, C. E. (London: Constable, 1917) 7879Google Scholar, as quoted in Jervis, Robert, Perception and Misperception in International Politics (Princeton: Princeton University Press, 1976), 63Google Scholar.

39 It will be especially difficult to allay these suspicions when the offense is considered dominant.

40 Shubik, Martin, “Games of Status,” Behavioral Science 16 (March 1971), 117–29CrossRefGoogle Scholar; Stein, Arthur, “Coordination and Collaboration: Regimes in an Anarchic World,” International Organization 36 (Spring 1982), 319CrossRefGoogle Scholar.

41 Note that as both sides' fear of a preemptive strike has increased, cooperation on strategic issues has become more difficult—precisely when it is most needed.

42 Opponents of SALT II also emphasized the difficulties of monitoring compliance—a recurrent obstacle to security cooperation, as we have already noted. In this case, the difficulties are related to the characteristics of specific weapons systems, the nature of treaty provisions, and the limits of technical surveillance (in the absence of on-site inspection).

43 Schelling (fn. 21), 56.

44 The best situation, as Jervis notes, is one in which “a state will not suffer greatly if others exploit it, for example, by cheating on an arms-control agreement … but it will pay a high long-run price if cooperation with others breaks down.” Such situations are more common, I think, in economic issues. See Jervis, , “Cooperation under the Security Dilemma,” World Politics 30 (January 1978), 173CrossRefGoogle Scholar.

45 The idea of surplus security is developed in Bruce Andrews, “Surplus Security and National Security: State Policy as Domestic Social Action,” mimeo. (Washington, D.C.: International Studies Association Convention, 1978).

46 Jervis (fn. 44), 173, 189,211. Therein lies much of the current debate over the deployment of new land-based ICBMs, which the Reagan administration portrays as a catch-up deterrent force but which others view as a potential first-strike weapon. Scoville, Herbert Jr., MX: Prescription for Disaster (Cambridge: M.I.T. Press, 1981)Google Scholar.

47 These issues are not germane in formal game theory since strategies are viewed as absolute commitments and all strategies are considered equally plausible. According to Shubik, “the concept of plausibility is at the crux of the relationship between a strict gametheoretic formulation … and the treatment of conflict by a mixture of ‘gamesmanship,’ bargaining and strategic theories, and behavioral models of man.” Shubik (fn. 14), 188 (his emphasis).

48 Jervis (fn. 38), chap. 3.

49 There are exceptions, of course, mainly in monetary affairs. The most notable was the United States' suspension of gold convertibility on August 15, 1971.

50 Making nontariff barriers more visible to foreign producers was a major accomplishment of the Tokyo round of trade negotiations.

51 Russett (fn. 34), 109. These experimental results suggest a significant gap in game theory: the treatment of speech acts and symbolic interaction. “Much of the confusion and misapplication of game theory,” according to Shubik, “has been caused by the failure to perceive that the formal theory of games makes no claims to having solved the critical problem of how to represent verbal acts as moves. Many aspects of negotiation depend upon trust, interpretation, and evaluation. These factors and precommitments are implicitly assumed in game theoretic analysis.” Shubik (fn. 12), 15.

52 Ibid., 4.

53 Japan's entry into the GATT, for instance, was “bought” by U.S. trade concessions to several European states. Lipson, Charles, “The Transformation of Trade: The Sources and Effects of Regime Change,” International Organization 36 (Spring 1982), 250–51CrossRefGoogle Scholar.

54 Kock, Karin, International Trade Policy and the Gatt, 1947–1967 (Stockholm: Almqvist and Wiksell, 1969)Google Scholar, chap. 7; Curzon, Gerard, Multilateral Commercial Diplomacy (London: Michael Joseph, 1965)Google Scholar, chap. 7.

55 The best example is the postwar distribution of Marshall Plan aid to a unitary Western European institution, which then had to distribute the funds.

56 The fact that specific bureaucracies, with their particular interests, control national participation in different regimes tends to strengthen issue-specific interdependence over time but attenuates the connections across issues. The fragmentation of national decision making thus systematically favors longitudinal (diachronic) interdependence, issue by issue, over simultaneous interdependence across many issues, which requires more centralized national control.

57 Hudec, Robert, The GATT Legal System and World Trade Diplomacy (New York: Praeger, 1975)Google Scholar, esp. chap. 17.

58 This suggests that there may well be an optimal level of weakness in collective arrangements—a level that, by making the strategies of others appear contingent and the outcome uncertain, diminishes the likelihood of parametric rationality and encourages strategically based cooperation.

59 The reason is that the hegemon alone may find it worthwhile to supply the collective good, bypassing the difficulties of forming and sustaining a group of joint providers. Remember, however, that such collective goods are rare internationally and certainly do not include all cases of cooperation for joint benefit (since, in many cases, noncooperators can be excluded).

60 See, for example, Victor Turner's analysis of rites of passage in “Liminality and Communitas,” in The Ritual Process: Structure and Ann-Structure (Ithaca, NY: Cornell University Press, 1969)Google Scholar, chap. 3.

61 Ibid., 94–95.

62 Waltz, Kenneth N., Man, the Slate and War (New York: Columbia University Press, 1959)Google Scholar. chaps. 4, 6.

63 Waltz, Kenneth N., Theory of International Politics (Reading, MA: Addison-Wesley, 1979). 8998Google Scholar.

64 Hartz, Louis, The Liberal Tradition in America (New York: Harcourt, Brace & World, 1955), 20Google Scholar.