This chapter lays out the core elements of a new “power-politics” theory of institutional design. The theory shares the neoliberal premise that (some) international institutions really do matter, in the sense of playing a more-than-trivial role in sustaining long-term cooperation among self-interested states. It also recognizes the importance of grounding the study of institutions, even epiphenomenal ones, in rational-choice foundations. Yet whereas many of our existing institutionalist models view the institution-building process as a collective endeavor, the reality – and the starting point for the broader power-politics model sketched out here – is that some participants in this process wield disproportionate influence over the final outcome. While everyone in the collectivity may be taken into account to some degree, there is no reason to suppose everyone will be taken into account to the same degree. The preferences expressed by those participants who are the least unhappy with the non-institutionalized status quo – or who, like the architects of the European monetary regime that forms the centerpiece of this chapter's empirical discussion, have the capacity to remove that status quo from the set of feasible alternatives – will almost certainly carry greater weight. That being the case, institutionalist scholars would do well to focus their analytical attention on the distinctive problems and dilemmas confronting these pivotal actors.

And, indeed, logic suggests that the kinds of problems and dilemmas confronting these more powerful actors would be distinctive.