Neoliberal Institutionalism & International Politics

The neorealist-neoliberal institutionalism debate develops along a number of criticisms, primary among which is the realist or neorealist assertion that international institutions play a minimal role in shaping international politics and that the prospects for cooperation in anarchy are bleak. Neoliberal institutionalism questions these claims, challenging the logical coherence of the neorealist argument and arguing that the explanatory power of neorealism is weak because it fails to move beyond an emphasis on the primacy of states as key actors in international relations.

In this general background, the purpose of the present report is to consider the strengths and weaknesses of neoliberal institutionalism. The prisoner's dilemma is significant in this discussion in that it holds that each player gains when both cooperate, but if only one cooperates, the player who defects gains more. Robert O. Keohane argues instead that a mutually cooperative outcome can occur in equilibrium in an infinitely repeated prisoner's dilemma if the actors do not discount the future too much.

The fundamental difference between realists and neoliberal institutionalists is that neoliberal institutionalists see cooperation as essential in a world of economic interdependence and the belief that shared economic interests create a demand for international institutions and rules. Realists, in contrast, emphasize the role played by states as the dominant actors in international relations. Rea

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lems, including coincidence, coercion, and co-adjustment. Lisa Martin argues that institutions play a vital role in furthering the cooperative agenda and that institutions play a role that states cannot play alone. Institutions, for example, provide a mechanism whereby economic sanctions against a country can be applied by a broad coalition of nations rather than a unilateral hegemon or a hegemon acting with somewhat limited support. Weaknesses Any number of weaknesses can also be identified in neoliberal institutionalism. Joseph Grieco, for example, notes that neoliberal institutionalism fails to give adequate attention to the fact that states have incentives to protect the autonomy of their own country: "states will not want their economy to be too dependent on others: being dependent puts the country's security at riska Too much exposure to the world market can crater dangerous dependencies." Despite what institutions may do, nation-states pursue both relative and absolute gains with relatively limited concern for other actors. What realism dislikes about neoliberal institutionalism is the latter's failure to recognize that states are the major actors in world affairs. Neoliberal institutionalism fails to recog

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