POL%20130%20Lectures%208%20%269%20Liberal%20Cooperation%20Theory

POL%20130%20Lectures%208%20%269%20Liberal%20Cooperation%20Theory

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Unformatted text preview: POL 130 POL 130 Lectures 8 & 9 Structural Theories: Liberal Cooperation Theory February 10 & 15, 2011 Structural Theories Structural Theories Neorealism offers little in the way of explaining cooperation between states Liberal cooperation theory/ neo­liberal institutionalism seeks to explain the frequent occurrence of cooperation Assumptions Assumptions International system is hierarchical (depends on specific theory) States seek to maximize wealth Power is not fungible Interdependence Interdependence Theory of Interdependence/Liberalism (Keohane and Nye 1977): Concerned more with international political economy Decisions in one country affect other countries Concerned with the distribution of shared interests Focus on regimes as a possible explanation for cooperation among states Cooperation Cooperation Cooperation possible because of rules and norms that regulate behavior Norms – generally observed patterns of conduct Regimes – sets of international laws, rules, and organizations The International System The International System Norms and regimes combine to provide the behavior basis by which the international system’s hierarchical structure: promotes cooperation. supports the assumed inclination of states to pursue wealth. Barriers to Cooperation Barriers to Cooperation Liberal cooperation theory concerned with the need to overcome collective action problems: Situations in which individual incentives lead to inefficient collective outcomes Collective Action Problems Collective Action Problems Tragedy of the commons/ common pool resource problem Common pool resources are non­excludable and divisible Public goods and non­excludable and indivisible Public goods problem Prisoners’ Dilemma Prisoners’ Dilemma Example: An arms race 4 possible outcomes: 1) Build if the other country does not build 2) Neither country build 3) Both countries build 4) Don’t build, other country does build Each country’s preference ordering is: 1>2>3>4 (payoffs are 10, 5, 1 and 0, respectively) Prisoners’ Dilemma Prisoners’ Dilemma We can depict this situation as a strategic form game: State B Don’t build State A Don’t build Build (5,5) (10,0) Build (0,10) (1,1) Prisoners’ Dilemma Prisoners’ Dilemma We can solve the Prisoners’ Dilemma by finding the Nash Equilibrium: State B Don’t build State A Don’t build Build (5,5) (10,0) Build (0,10) (1,1) Nash Equilibrium Nash Equilibrium Both players, acting in their own interest, cannot achieve their most favorable outcome, or even an outcome preferred by both compared to the equilibrium: State B Don’t build State A Don’t build Build (5,5) (10,0) Build (0,10) (1,1) Prisoners’ Dilemma Prisoners’ Dilemma By choosing rationally, both are worse off than if they had cooperated The equilibrium outcome is pareto inferior, whereas joint cooperation is pareto optimal Pareto optimal – social outcome in which no player can be made better off without making someone worse off Prisoners’ Dilemma Prisoners’ Dilemma We can use the prisoners’ dilemma to describe many international interactions If international politics is frequently like a prisoners’ dilemma, then it seems like conflict rather than cooperation would prevail Necessity of setting up mechanisms for identifying and punishing cheaters How Do States Cooperate? How Do States Cooperate? Figuring out how the international system can reward cooperation and punish cheaters is central to understanding liberal cooperation theory Two solutions to the problem: Hegemony Repeated Interaction Hegemony Hegemony Dominant state is willing to bear the burden of providing public goods Hegemonic state is able and willing to enforce agreements and punish cheaters e.g. United States and the Bretton Woods Problems with Hegemony Problems with Hegemony Problems with hegemony as the solution to collective actions problems: Hegemonic states are rare in the international system Costly for hegemon to provide public goods Cannot depend on hegemon to provide public goods Cooperation through Repeated Interaction Cooperation through Repeated Interaction Self­ interest can create cooperation in the long run, even when short­term interests favor non­cooperation Repeated interaction encourages long term cooperation Repeated Interaction Repeated Interaction Under certain circumstances, outcome of the Prisoners’ Dilemma can be mutual cooperation: Need an implicit threat of punishment Must have some concern for long term payoffs: the shadow of the future Threats of Punishment Threats of Punishment Cooperate until the other side defects, then punish by defecting for x number of periods Tit­for­tat: on each move, do what the other player did on the previous move Grim trigger: if the other player defects, never cooperate again The Shadow of the Future The Shadow of the Future The value a person (or a state) attaches to future benefits as compared to present benefits Captured by a discount rate: δ Discounts the value of something received in the future as compared to now 0 < δ <1 The larger δ is, the larger the shadow of the future Repeated Play & the Prisoners’ Repeated Play & the Prisoners’ Dilemma State A’s payoff from cooperation: = 5 + 5δ + 5δ2 + 5δ3 +… State A’s payoff from defection: = 10 + 1δ + 1δ2 + 1δ3 +… State A Don’t build Build State B Don’t build (5,5) (10,0) Build (0,10) (1,1) Repeated Play Repeated Play For example, if State A’s discount rate (δ) is 0.9: Cooperation (State A) = 5 + 5(.9) + 5(.9)2 = 13.55 Defection (State A) = 10 + 1(.9) + 1(.9)2 = 11.71 Two rounds of punishment yields a higher payoff for cooperation Cooperation through Repeated Cooperation through Repeated Interaction Interaction must be repeated indefinitely Must believe that there is sufficient time to recover from a setback Must believe the other state will retaliate Cooperation possible even without a hegemonic state Critiques of Liberal Theory Critiques of Liberal Theory Neorealists argue that liberal cooperation theory is wrong because it does not take into account relative payoffs: State B Don’t build State A Don’t build Build (5,4) (10,0) Build (0,10) (1,1) Critiques Critiques Liberalism not effective at explaining how to resolve distributional problems Even if international regimes provide information to states about cheating, cooperation won’t be improved State B x State A x y (30, 10) (0, 0) y (0, 0) (10, 30) Summary of Liberal Cooperation Summary of Liberal Cooperation Theory Is the theory logically sound? Empirically supported? Not as parsimonious as neorealism, but provides a better understanding of cooperation ...
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This note was uploaded on 02/17/2011 for the course POL 130 taught by Professor Simonelli during the Spring '08 term at Purdue.

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