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Decision Modes and International Regime Change: Western Collaboration on East-West Trade

  • Beverly Crawford (a1) and Stefanie Lenway (a2)

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Is consent a sure foundation upon which to build a stable world order? Under what conditions is it achieved? The burgeoning literature on international regimes and regime change is beginning to address the issue E. H. Carr raised over forty years ago. Hegemonic stability theory argues that a preponderance of power provides the basis for international order. Recent observers, however, have noted that order can break down even when the hegemon exercises dominance. Furthermore, stable collaboration can be achieved in the face of declining hegemony. The exercise of power alone cannot lead to a stable international order.

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1 The Twenty Years' Crisis (New York: Harper & Row, 1964), 235–36. First published by Macmillan (London), 1939.

2 Informed by problems of world order and grounded in earlier studies of international law and organization, studies of international regimes are beginning to proliferate. The first important study was Keohane, Robert O. and Nye, Joseph S., Power and Interdependence (Boston: Little, Brown, 1977). See also Haas, Ernst B., “Why Collaborate? Issue-Linkage and International Regimes”, World Politics 32 (April 1980), 357405, and Young, Oran R., “International Regimes: Problems of Concept Formation”, World Politics 32 (April 1980), 331–56. A recent attempt to define and illustrate the regime concept more carefully can be found in Stephen D. Krasner, ed., “International Regimes”, a special issue of International Organization 36 (Spring 1982). Scholars are also beginning to use the regime concept in empirical analyses of specific international issues. See, for example, Hopkins, Raymond F. and Puchala, Donald J., eds., The Global Political Economy of Food (Madison: University of Wisconsin Press, 1979), and George Quester, ed., “Nuclear Proliferation: Breaking the Chain”, a special issue of International Organization 35 (Winter 1981).

3 See Kindleberger, Charles P., The World in Depression, 1929–1939 (Berkeley: University of California Press, 1974); Gilpin, Robert, U.S. Power and the Multinational Corporation (New York: Basic Books, 1975); and Keohane, Robert O., “The Theory of Hegemonic Stability and Change in International Economic Regimes, 1967–1977”, in Holsti, Ole R., Siverson, Randolph M., and George, Alexander L., eds., Change in the International System (Boulder, CO: Westview Press, 1980), 131–62.

4 It has been widely accepted, for example, that the decline of U.S. hegemony in the postwar international economy led to the breakdown of the Bretton Woods system. Charles Lipson, however, has demonstrated that a breakdown in various GATT procedures and norms began while the United States still held a dominant position in the world economy. Certain GATT norms have been strengthened, even in the face of America's decline. See Charles Lipson, “The Transformation of Trade”, in Krasner (fn. 2), 417–55. For the most complete statement of this position, see Keohane, Robert O., After Hegemony (Princeton: Princeton University Press, 1984).

5 For a statement of the structural approach, see Keohane (fn. 3); for the cognitive approach, see Haas (fn. 2).

6 The pioneering works within this tradition in organization theory are Barnard, Chester I., The Functions of the Executive (Cambridge: Harvard University Press, 1938); Simon, Herbert, Administrative Behavior, 3d ed. (New York: Free Press, 1965); and Thompson, James D., Organizations in Action (New York: McGraw-Hill, 1967). In the regime literature, Robert O. Keohane, “The Demand for International Regimes”, in Krasner (fn. 2), 345–54, has emphasized the importance of uncertainty reduction as a function of international collaboration. The problem of achieving collective over individual goals is recognized in all of the regime literature, but the role of exchange between the regime and its participants in order to channel individual behavior into collective purpose has been assumed rather than systematically studied.

7 The concept of the “decision mode “is based on the discussion by Herbert Simon, ibid., 1–19 and 220, and Chester Bernard, ibid., 185–99.

8 Hirshleifer, J. and Riley, John G., “The Analytics of Uncertainty Reduction and Information—An Expository Survey”, Journal of Economic Literature 17 (December 1979), 13751421.

9 This three-fold distinction is based on Follett, Mary Parker, Dynamic Administration: The Collected Papers of Mary Parker Follett, ed. Metcalf, Henry C. and Urwick, Luther (New York: Harper & Row, 1942), and Arrow, Kenneth, The Limits of Organization (New York: W. W. Norton, 1974), 6873. Arrow distinguishes between authority, bargaining, and consensus, although he does not develop the implications of these categories.

10 William Gore has argued that crises within organizations create disequilibrium, perceptions of threat to organizational survival, open conflict, changes in leadership, and the adoption of new modes of behavior; see Gore, , Administrative Decision Maying: A Heuristic Model (New York: John Wiley & Sons, 1964). See also Arrow (fn. 9), 52. On the role of crisis in regime change, see Oran R. Young, “Regime Dynamics: The Rise and Fall of International Regimes”, in Krasner (fn. 2), 292. For general propositions on the role of crises in international relations that may be applied to regimes, see Herman, Charles F., “International Crisis as a Situational Variable“, in Rosenau, James N., ed., International Politics and Foreign Policy (New York: Free Press, 1969), 409–21. Herman argues that threat, time pressure, surprise, and decision making at high levels of government all indicate crises. The pipeline dispute meets most of these criteria. Although military threat was not involved, alliance cohesion was threatened, the embargo took the West Europeans by surprise, the time available for response was short, and decisions during and after the embargo were taken at higher levels of government.

11 Amitai Etzioni has argued that there are three kinds of incentives or compliance mechanisms that assure cooperation in organizations: identitive controls, remunerative controls, and coercive controls. The discussion that follows adapts his framework to compliance with hegemonic states in international regimes. See Etzioni, , “Organizational Control Structures”, in March, James G., ed., Handbook of Organization (Chicago: Rand McNally, 1965), 650–77. Michael Mastanduno uses a similar framework for analyzing U.S. policies toward Europe with regard to East-West trade. See Mastanduno, , “In Pursuit of Closure: American East-West Trade Strategy, 1949–58”, mimeo (Clinton, NY: Hamilton College, 1983).

12 See Hoffmann, Stanley, Duties Beyond Borders (Syracuse, NY: Syracuse University Press, 1981), 113; Barnard (fn. 6), 281–84; Nye, Joseph S., “Maintaining a Non-proliferation Regime”, International Organizations 35 (Winter 1981), 20.

13 For an examination of the role of compensation as a compliance strategy in complex organizations, see Barnard (fn. 6), 150–53.

14 ibid. 150; Arrow (fn. 9), 72.

15 Olson, Mancur, The Logic of Collective Action (Cambridge: Harvard University Press, 1971) 543

16 This point is made in Walton, Richard E. and McKersie, Robert B., A Behavioral Theory of Labor Negotiations: An Analysis of a Social Interaction System (New York: McGraw-Hill, 1965), 60.

17 Interview, July 1983, with a Reagan administration participant in the Versailles summit negotiations. Not for attribution.

18 Walton and McKersie (fn. 16, pp. 184–221), argue that negotiating parties share a relationship pattern that is valued for its own sake. Each bargaining situation sets the tone for future negotiations, and negotiators bargain with an eye to how the outcome will structure the relationship in the future. The more this consideration of maintaining the relationship impinges upon the specific negotiating situation, the more willing the parties will be to cooperate. See also Axelrod, Robert, The Evolution of Cooperation (New York: Basic Books, 1984), 5962.

19 For the argument about the importance of gathering and processing information for organizational survival, see Thompson (fn. 6), 9. For a statement of the importance of information within international regimes, see Keohane in Krasner (fn. 6), 347, 349.

20 Walton and McKersie (fn. 16), 140.

21 Axelrod (fn. 18), 126–32.

22 The concept of tactical issue linkage was developed by Oye, Kenneth A., “The Domain of Choice: International Constraints and the Carter Administration Foreign Policy”, in Oye, , Rothchild, Donald, and Lieber, Robert J., eds., Eagle Entangled: U.S. Foreign Policy in a Complex World (New York: Longman, 1979), 1317. Tactical issue linkage can take place in both the compliance and compromise modes.

23 Power, however, may still be distributed asymmetrically within certain issues. See Keohane and Nye (fn. 2), 49–52.

24 Axelrod (fn. 18), 130–31.

25 On the history of this conflict in the 1950s, see Adler-Karlsson, Gunnar, Western Economic Warfare (Stockholm: Alquest & Wikesell, 1968).

26 Mutual Defense Assistance Control Act, U.S. Code (1951), 65 Stat. 644, chap. 575 (Public Law 213, 820! Congress, 1951).

27 Adler-Karlsson (fn. 25), 45–59, 55. Mastanduno (fn. 11, pp. 22–23), disagrees with this assessment. He argues that the logic behind the policy of economic warfare weakened after the end of the Korean War, and that the European states could not be persuaded of the necessity of a strategic embargo as easily as they could earlier. European economic recovery, however, is perhaps the strongest explanation for the resumption of trade with the East. Exports began as soon as Europe became less dependent on U.S. economic resources.

28 Between 1955 and 1965, the value of West European exports to the East increased from $1 billion to $5 billion. See Adler-Karlsson, (fn. 25), 46, and Stent, Angela E., From Embargo to Ostpoliti\: The Political Economy of West German-Soviet Relations, 1955–1980 (New York: Cambridge University Press, 1981), 110.

29 “Detente with the Soviet Union: The Reality of Competition and the Imperative of Cooperation”, Department of State Bulletin, October 14, 1974, p. 508.

30 The value of machinery and transport equipment exports alone from OECD to CMEA countries jumped from $1,022 million in 1965 to $10,283 million in 1977. During 1974, CMEA machinery and equipment imports from the West increased by 35% from 1973 levels, and in 1975 the increase was 55% over 1974. Zaleski, Eugene and Wienart, Helgard, Technology Transfer Between East and West (Paris: OECD, 1980), 66. The U.S. share of this expanded trade, however, increased only from 0.2% to 2.7% of the total between 1965 and 1977. Office of Technology Assessment, Technology and East-West Trade (Washington, DC: G.P.O., 1979), 39.

31 On the early debates, see Adler–Karlsson (fn. 25), 53. The U.S. negotiating position on strategic technology in CoCom after 1979 was based on the Defense Science Board Task Report on Export of U.S. Technology, An Analysis of Export Control of U.S. Technology (Washington, DC: Office of the Director of Defense Research and Engineering, February 4, 1976).

32 Interviews with CoCom officials, February and March, 1979.

33 The Economist, November 14, 1981, p. 88.

34 Financial Times, January 19, 1982, p. 4.

35 This was the recommendation of the Defense Science Board Task Force on Export of U.S. Technology (fn. 31). The specific negotiations were reported in the Financial Times, October I, 1982, p. 4.

36 For a discussion of the Western banks' role, and the role of East European import strategies in the creation of the East European debt problem, see Portes, Richard, “East Europe's Debt to the West: Interdependence is a Two-Way Street”, Foreign Affairs 55 (July 1977), 751–82. For recent statistics on the growth of the East European debt, see The Economist, May 22, 1982, p. 56; Wall Street Journal, May 14, 1984, p. 20, and June 15, 1984, p. 18.

37 Wall Street Journal, November 3, 1982, p. 3.

38 These events were reported in the Wall Street Journal, January 8, 1980, p. 3, and January 11, 1980, p. 20.

39 This section is taken from interviews with Consensus negotiators, June 14 and 15, 1983, at the EC Commission in Brussels.

40 Instead of interest as low as 7.8%, with a maturity on loans of 8.5 years, the Consensus agreed to charge the Soviet Union between 12.2% and 12.4%, with maturities between 5 and 8.5 years. See OECD, “Consensus: Taux d'intérêt minimum”, mimeo (Brussels, June 7, 1982).

41 For two excellent studies of Soviet energy development, see Office of Technology Assessment, Technology and Soviet Energy Availability (Washington, DC: Office of Technology Assessment, 1983), and Stern, Jonathan, Soviet Natural Gas Development to 1990 (Lexington, MA: D.C. Heath, 1980). On the growth of natural gas exports to Western Europe, see the Financial Times Energy Economist, Issue 17 (March 1983), 7.

42 Jacobsen, Hanns-Dieter: “Sanktionen oder Einbindung? Zur wirtschaftspolitischen Strategie gegenueber Osteuropa und der U.S.S.R.”, Die Neue Gesellschaft 27 (October 1981), 888–93; Johnston, Ernest B. Jr., “Soviet Energy Development and the Western Alliance”, Department of State Bulletin 82 (April 1982), 62–64.

43 Edward A. Hewett, “The Pipeline Connection: Issues for the Alliance”, The Brookings Review (Fall 1982), 22–26.

44 Christian Science Monitor, December 29, 1981, p. 1.

46 Woods, Stan, “Pipeline Politics”, Centerpiece (Aberdeen: Center for Defense Studies, 1983), 14. In interviews conducted for the present study, June 14–21, 1983, EC officials admitted that this action was only intended to convey the appearance of a concession. Claiming injury to domestic producers, various EC members had already petitioned the EC Commission to obtain higher quotas on the import of these luxury goods from the Soviet Union. The embargo offered a convenient occasion to placate these demands for higher import quotas.

46 In discussions with the Europeans, U.S. officials actually offered to expand U.S. port facilities to permit increased coal exports. This was not, however, an offer of direct compensation, but rather a suggestion for meeting Europe's increased energy needs. U.S., Senate, Hearing before the Committee on Banking, Housing, and Urban Affairs, “Proposed TransSiberian Natural Gas Pipeline”, 97th Cong., 1st sess., November 12, 1981, p. 106. See also Haig, Alexander M. Jr., Caveat: Realism, Reagan, and Foreign Policy (New York: Macmillan 1984), 253.

47 Financial Times, June 7, 1982, p. 2.

48 On August 12, 1982, the EC explained its position and issued a note of protest to the U.S. Department of Commerce against the embargo extension, arguing that the United States' attempt to impose extraterritorial jurisdiction over foreign firms conflicted with both international legal norms and United States law. The Community argued that the terms of the contract were a matter of civil or contract law and could not be used to extend U.S. sovereignty outside the United States to abrogate lawfully concluded contracts. Furthermore, the EC maintained that the law as it was used in the embargo extension violated the norms of collaboration embodied in CoCom. See “Gas Pipeline: Comments of the European Community as Regards the Measures taken by the U.S. Government”, mimeo (Brussels, August 12, 1982).

49 Haig (fn. 46), p. 256.

50 Financial Times, November 15, 1982, p. 1.

51 Wall Street Journal, May 9, 1983, p. 37.

52 Interviews (fn. 39).

* Thanks to Ernst B. Haas, Paul Hammond, Tim McKeown, and Michael Mastanduno for helpful criticism on an earlier draft. Research was made possible by financial support from the Exxon Education Foundation, the Institute for European Studies, the University Center for International Studies, University of Pittsburgh, and the Institute for the Study of World Politics.

Decision Modes and International Regime Change: Western Collaboration on East-West Trade

  • Beverly Crawford (a1) and Stefanie Lenway (a2)

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