Anarchy in international relations theory: the neorealist-neoliberal debate.

Two of the most influential contemporary approaches to international relations theory are neorealism and neoliberalism. The debate between these two approaches has dominated much of international relations theory for the last decade. It is now commonplace for an article about some aspect of international relations theory to begin by locating itself in terms of this debate. These two approaches and the debate between them have failed to contribute as much as they might have to international relations theory. These approaches suffer from serious internal weaknesses and limitations that the neorealist-neoliberal debate often has tended to obscure rather than to clarify. Once we have exposed and clarified these weaknesses and limitations, we will be able to see several important directions for future theoretical work.

Two books, Neorealism and Its Critics and Neorealism and Neoliberalism: The Contemporary Debate, make significant contributions to this debate. The former offered a wide-ranging critique of neorealism when it was published in 1986. The latter, which has just been published, is more narrowly focused. It takes up where some of the critiques in Neorealism and Its Critics left off. A review of these two complementary volumes affords an excellent opportunity to begin to identify some of the weaknesses and limitations that the neorealist-neoliberal debate frequently has obscured.

In this review, I discuss four broad avenues of criticism that these volumes take in evaluating neorealism and specifically Kenneth Waltz's formulation of it.(1) The first three avenues are the origins of states' preferences, the agent-structure problem, and Waltz's specific definition of political structure. These criticisms generally do not challenge the logical coherence of neorealism. They focus instead on the limitations of the theory. The first two center on what neorealism takes for granted, e.g., preferences and intersubjective meanings and understandings. The third criticism finds Waltz's definition of structure too confining. The fourth avenue of criticism challenges the internal logic of neorealism directly. It argues that conclusions claimed to follow from the assumptions of neorealism actually do not. The neorealist-neoliberal debate lies along this fourth avenue.

Three issues lie at the center of the neorealist-neoliberal debate. In reviewing these issues, I try to bring important implicit assumptions to the fore and show that those assumptions account for many of the important differences between the two theories. Moreover, many of the differences that have been thought to be significant, such as the difference between relative and absolute gains, are not. The first issue at the heart of the debate is the meaning and implications of anarchy. Although the notion of anarchy has served as a central organizing concept for much of international relations theory, the emphasis on anarchy is misplaced. What have often been taken to be the implications of anarchy do not really follow from the assumption of anarchy. Rather, these implications result from other implicit and unarticulated assumptions about the states' strategic environment.

The second central issue is the problem of absolute and relative gains. I argue that the controversy surrounding this problem generally has mistaken effects for causes and that this mistake has handicapped analysis of the problem of international cooperation. More specifically, I try to demonstrate that the international relations literature generally holds, if at times only implicitly so, that the extent to whcih a state is concerned about relative gains depends on its strategic environment, for example, the offense-defense balance and the intensity of the security dilemma. But if this is the case, then the degree to which a state is concerned about relative gains is part of the outcome to be explained: it is an effect and not a cause. The extent to which a state is concerned about relative gains, therefore, does not explain the level of international cooperation. This realization should refocus our attention on what determines the degree of a state's concern about relative gains.

The third issue is the tension between coordination and distribution. There are often many ways to realize the joint gains from cooperation, and these alternatives often lead to different distributions of those gains. Thus, the potential for joint gains usually creates distributional disputes that tend to impede cooperation. Although these distributional concerns only recently have begun to receive attention in the debate between neorealism and neoliberalism, they hold the promise of clarifying some of the questions that actually do divide these two approaches.

Neorealism and the structural approach

Much of the neorealist-neoliberal debate can be seen as a reaction to Waltz's Theory of International Politics and a response to those reactions. A brief discussion of two of that book's primary objectives is essential to understanding the debate.(2) One objective was to reiterate, reinforce, and refine a line of argument Waltz began in Man, the State, and War.(3) There, he had underscored the importance of third-image explanations. First-image explanations locate the causes of international outcomes, say the cause of war, "in the nature and behavior of men. Wars result from selfishness, from misdirected aggressive impulses, from stupidity."(4) Second-image explanations locate causes in the internal structure of the state. Imperialism, for example, results from a particular internal economic structure like capitalism; similarly, international peace results from a particular form of government like democracy.(5) Appealing to Rousseau's stag hunt and alluding to the then recent development of game theory, Waltz argued that first- and second-image explanations were insufficient.(6) In a situation entailing strategic interdependence, such as that of the great powers, an actor's optimal strategy depends on the other actors' strategies. If, therefore, we want to explain what the actors will do, then, in addition to looking at the attributes of the actors, we must also look to the constraints that define the strategic setting in which the actors interact. The third image locates causes "within the state system."(7)

A simple example from microeconomic theory illustrates the potential importance of third-image explanations. The price is higher and the output is lower in a monopolized market than in a competitive one. But first- and second-image accounts, which Waltz collectively calls reductive explanations in Theory of International Politics, do not explain these differences. In both markets, the attributes of the actors, which are firms in this case, are identical: every firm tries to maximize its profits and consequently produces the level of output at which marginal cost equals marginal revenue. What accounts for the variation in price and output between these markets is not variation in the attributes of the units but variation in the environments or market structures in which they act. This is the essence of the third image.

It is important to emphasize two points about the division of explanations into reductive and systemic accounts. The first is an assumption inherent in this division: namely, that we can usefully conceive of the actors or units in a system as separate and distinct from the constraints that define the strategic setting in which the units interact. The second important point is the kind of conceptual experiment and explanation that naturally follows from this division. Once a system has been decomposed into units and constraints, it is natural to ask one of two questions; or, to put it differently, it is natural to consider two types of thought experiment. First, how would some aspect of the units' behavior, say the probability of starting a war, vary if we conceptually change some attributes of the units while holding the constraints constant? What, for example, would happen to the probability of war if a state's form of government were democratic rather than authoritarian? Fixing constraints and varying units' attributes comprise the essential conceptual experiment underlying reductive explanations. Second, how would behavior change if the attributes of the units remained constant and the constraints were changed? What, for example, would happen to the probability of war if the attributes of the units were unchanged but the distribution of power changed from bipolarity to multipolarity? Fixing the units' attributes and varying the constraints facing the units comprise the fundamental conceptual experiment underlying systemic explanations.

After emphasizing the general importance of third-image or systemic explanations, Waltz turns to a second objective in Theory of International Politics. He sees structure as a "set of constraining conditions."(8) But states may be constrained by many things--like the distribution of power, the nature of military technology, or the state's comparative economic advantage. A second goal for Waltz is to specify a restricted set of constraints that provide a way of conceiving of a political system and then to demonstrate the power of this formulation by showing that it tells "us a small number of big and important things."(9) He restricts this set to three elements, defining a political structure in terms of its ordering principle, the distribution of the units' capabilities, and the functional differentiation or nondifferentiation of the units.(10)

Two criteria seem to have guided the selection of these elements and this definition of political structure. The first is pragmatic. This definition appeared to lead to interesting insights, which, of course, is the goal of all positive theories. The second criterion is less general and reflected a trade-off. Waltz tried to define political structure so that "it would show us a purely positional picture."(11) The advantage of a positional picture is that many systems can be seen as similar regardless of the particular substantive context in which the units interact. "Structure, properly defined, is transposable."(12) Thus, firms facing a high risk of bankruptcy in an oligopolistic market may be seen to be in an anarchical, self-help system in much the same way that states facing a high risk of war in the international system are in an anarchical, self-help system.(13) If, therefore, anarchy implies certain behavior, such as the tendency for balances of power to form, then we would expect to see this behavior obtain "whether the system is composed of tribes, nations, oligopolistic firms, or street gangs."(14) The potential advantage of a spare definition of a political structure is that it may help us see similarities in what initially appeared to be very different domains. The potential disadvantage of this spare definition is that if the three dimensions Waltz uses to characterize systems do not sufficiently constrain the units' interaction, then units in similar systems may not interact in similar ways. If this is the case, then we shall have to look elsewhere for explanations of these variations. Recognizing this trade-off, Waltz opts for a spare definition.

Four avenues of criticism

Structural theories decompose a system into units and constraints. This decomposition makes these theories vulnerable to two broad avenues of criticism. The first criticism accepts this decomposition but stresses the need for a theory of preference formation to supplement the structural theory. Because the units' preferences are exogenously specified in a structural theory, we need a theory that explains their origins. The second avenue rejects this decomposition. It emphasizes the agent-structure problem, arguing that agents and structure are inseparable. In addition to these first two broad avenues of criticism, any particular structural theory, like Waltz's formulation of neorealism, is also subject to a third and fourth avenue of criticism. The third focuses on and questions the specific definition of structure employed in the theory. The fourth questions whether the conclusions claimed to follow from the theory do indeed follow.

Preferences are given exogenously

The first avenue of criticism centers on preferences. Structural approaches take the units' preferences as given. That is, these preferences are exogenously specified. They become inputs into the analysis rather than the subject of analysis. This may be an important weakness of the structural approach. As Robert Jervis cautions, "By taking preferences as given, we beg what may be the most important question on how they were formed.... Economic theory treats tastes and preferences as exogenous. Analysis is therefore facilitated, but at the cost of drawing attention away from areas that may contain much of the explanatory `action' in which we are interested."(15)

The first step in assessing the force of the criticism that structural approaches lack a theory of preferences is to clarify the criticism by distinguishing two types of preferences. The first type is prefernces over outcomes; the second is preferences over actions or policies. To differentiate these two types, consider a game in payoff-matrix form. The cells in the matrix correspond to potential outcomes. The utilities that appear in each cell in the matrix represent the players' preferences over these potential outcomes. That is, a player's utilities reflect its preference ranking of the possible outcomes. Given its preferences over outcomes and its beliefs about what the other players are doing, a player can rank its potential actions from most to least preferred. In a two-person game, for example, the row player can rank its actions from best to worst given its payoffs and its beliefs about what the column player is doing. This induced ranking defines a player's preferences over actions.(16)

Structural theories do not try to explain preferences of one type but do try to explain preferences of the other type. Structural theories take the units' preferences over possible outcomes as given and, consequently, lack a theory of preferences over outcomes. But structural theories try to make predictions about the units' preferred actions by combining assumptions about the units' preferences over outcomes with other assumptions about the structural constraints facing the units. In this sense, structural theories claim to be a theory of preferences over actions. Game theory, for example, is a theory of preferences over actions. It attempts to predict the units' optimal actions based on their preferences over outcomes and the strategic setting in which they interact. Similarly, Waltz's formulation of neorealism takes the units' preferences as given. "In a microtheory, whether of international politics or of economics, the motivation of the actors is assumed rather than realistically described."(17) In particular, Waltz assumes "that states seek to ensure their survival" and then attempts to predict the units' actions, albeit in a very general way, on the …