The Politics of International Economic Relations: Session 4 14 November 2006

1
The Politics of International Economic
Relations Session 414 November 2006
2
Overview

• International Organizations and Institutions
• Simmons and Martin 2001
• The Rational Design of International Institutions
• Koremenos, Lipson and Snidal 2001

3
International Organizations and Institutions

• Term International Institution
• Post-war years formal IOs
• Voting patterns and office seeking in the UN
  General Assembly (imported from US studies on
  legislative behavior, bureaucratic politics (e.g.
  Cox and Jacobson 1973))
• 1970s all about international regimes
• (irrelevance of formal organizations, e.g. formal
  declarations of UN during Vietnam War, IMF after
  US decision to abandon the gold standard and
  fixed exchange rates)
• Definitional criticism on regimes

4
International Organizations and Institutions

• Regimes Theory supplemented the technical aspects
  of formal IOs with norms and rules governing
  behavior
• Today Organizations have agency! Agenda-Setting,
  Socializing effects
• Organization Theory, Autonomy and Pathological
  Behavior (Barnett and Finnemore)

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Theoretical Approaches to International
Institutions

• Prelude to Institutionalism Realism
• Power behind the façade of international
  institutions
• Use international law for the promotion of
  national interests (Morgenthau 1948)
• International institutions are epiphenomenal to
  state power and interest (Carr 1964)
• Basic-force model of international regimes
  (Krasner 1983)/ realist version of HST

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Prelude to Institutionalism Realism

• Neorealism (Grieco 1988, Mearsheimer 1994)
  relative gains
• Institutions are arenas for acting our power
  relations (Evans and Wilson 1992)
• Downs, Rocke and Barsoom (1996) Deep cooperation
  requires enforcement
• International Institutions leading to
  pareto-inefficient outcomes (Gruber 2000)

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Rational Functionalism (Neo-Liberal
Institutionalism)

• If countries are not constrained by the rules to
  which they agree, why do they spend time and
  resources negotiating them in the first place?
• Institutions help overcome collective action
  problems, high transaction costs and information
  asymmetries (Keohane 1984)
• PD, problem-structural and situation-structural
  approach
• Difficult to determine what games are being
  played (w/o observing the outcome of state
  interactions
• Rational explanations of institutional design
  (Koremenos et al. 2001)
• Strong in explaining creation and maintenance of
  institutions, weaker on effects on state behavior

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From the English School to Social Constructivism

• International society is the legal and political
  idea on which the concept of international
  institutions rests (Buzan 1993)
• Definition for institutions very broad a
  cluster of social rules, conventions, usages, and
  practices (), a set of conventional assumptions
  held prevalently among society-members ()
  (Suganami 1983)
• De-emphasizing formal organizations
• John Ruggie and Friedrich Kratochwil build on the
  English School (making it more accessible for the
  US research agenda)
• Institutions are embedded in larger systems of
  norms and principles (Ruggie 1983)

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From the English School to Social Constructivism

• International Institutions define who the players
  are in a particular situation and how they define
  their roles (Onuf 1989)
• Analysis of international institutions that takes
  nothing for granted
• Examples
• Life cycle of norms (contribute to norm cascade)
  (Finnemore and Sikkink 1998)
• Criticism Admitting numerous feed-back effects
  and complex, iterative interactions makes the
  design of positivist research nearly impossible

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Institutional impact

• Institutional design and institutional impact
• (as dependent or independent variable)
• Enhancing cooperation (through various
  mechanisms)
• Facilitate learning
• Path dependency and unintended consequences (e.g.
  ECJ)
• Constraining effects
• Compliance
• Legalization (effects on post-agreement
  negotiations vs. lock-in mechanism)

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Rational Design of International Institutions

• Institutional design and Institutional impact
• (as dependent or independent variable)
• Assumptions
• Institutions are organized differently
• States use international institutions to further
  their own goals, and they design institutions
  accordingly

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Rational Design of International Institutions

• Dependent variable
• Membership rules
• (e.g. who belongs to the group)
• Scope of issues covered
• Centralization of tasks
• (e.g. IMF collects, evaluates and publishes
  statistics on its members payments, WB
  specialists negotiate loans for economic or major
  infrastructure investments, GATT has no
  centralized power to punish/reward, yet
  centralized arrangements for judging trade
  disputes)
• Rules for controlling the institution
• (e.g. rules for electing officials, financing,
  voting arrangements)
• Flexibility of arrangements
• (e.g. escape clauses, GATT rounds of negotiation)

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Rational Design of International Institutions

• Independent variable
• 1) Distribution problem (battle of sexes)
• 2) Enforcement problem (incentives to cheat)
• 3) Large number of actors
• 4) Uncertainty
• about behavior
• about the state of the world
• about preferences

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Rational Design of International Institutions

• Conjectures
• M1Restrictive Membership Increases with the
  Severity of the Enforcement Problem
• M2Restrictive Membership Increases with
  Uncertainty about Preferences
• M3 Inclusive Membership Increases with the
  Severity of the Distribution Problem
• S1 Issue Scope Increases with Greater
  Heterogeneity Among Larger Numbers of Actors
• S2 Issue Scope Increases with the Severity of
  the Distribution Problem
• S3 Issue Scope Increases with the Severity of
  the Enforcement Problem
• C1 Centralization Increases with Uncertainty
  about Behavior
• C2 Centralization Increases with Uncertainty
  about the State of the World
• C3 Centralization Increases with Number
• C4 Centralization Increases with the Severity of
  the Enforcement Problem

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Rational Design of International Institutions

• V1 Individual Control Decreases as Number
  Increases
• V2 Asymmetry of Control Increases with Asymmetry
  Among Contributors (Number)
• V3 Individual Control (To Block Undesirable
  Outcomes) Increases with Uncertainty about the
  State of the World
• F1 Flexibility Increases with Uncertainty about
  the State of the World
• F2 Flexibility Increases with the Severity of
  the Distribution Problem
• F3 Flexibility Decreases with Number

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Rational design reconsidered

• Design or Change?
• Do negotiations matter? (Narlikar and Odell 2006)
• Unintended consequences
• Satisficing behavior (bounded rationality)
• Rational Choice that takes into account the
  cognitive limitations of the decision-makers
  (Simon 1997) this goes beyond uncertainty
• What explains variance in scope over time?