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Liberalism and Neoliberal Institutionalism · Diplomacy and International Relations

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  Welcome to the Deep Dive and specifically to Diplomacy and
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  International Relations by Bastian Freiburg.
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  Today we're really getting into a fascinating and I think very
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  practical framework in international relations theory,
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  liberal institutionalism. Yeah, that's right.
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  We're looking at the work of scholars like Robert Keahan,
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  Joseph Nye, trying to understand something quite fundamental,
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  really, How do countries manage to cooperate?
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  I mean complex, sustained cooperation even when there's no
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  big global power, no hegemon making sure everyone plays nice.
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  And that's the key shift, isn't it?
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  The idea that stability can actually stick around after a
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  superpower maybe starts to fade, It makes his theory incredibly
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  relevant for, well, for actual policy today.
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  It sort of translates the abstract theory into something
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  you can use for diplomacy, especially when you look at huge
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  cooperative projects like the EU for example.
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  Absolutely. And we're going to try and
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  unpack exactly how these international regimes, these
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  institutions actually function, what are the the mechanisms they
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  use, how do they nudge self interested states towards
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  cooperation. And we'll bring it right down to
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  earth with a look at institutional capacity building,
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  specifically in the European context.
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  OK, sounds great, but before we dive deep, just a quick reminder
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  for everyone listening. If you find these discussions
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  The links always there in the description.
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  OK, so foundations first liberal institutionalism, Sometimes
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  called institutional liberalism or neoliberalism, though that
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  term gets used differently elsewhere too.
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  It's often framed as the maybe more optimistic view in IR
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  theory. What's its core claim about how
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  the world works? Well, fundamentally, it's saying
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  cooperation isn't just, you know, a temporary thing, a fluke
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  between wars. It argues it's possible and more
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  importantly, sustainable, that it can actually reduce conflict
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  and competition in the long run. Right, which is a stark contrast
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  to narialism. Narialism tends to lookout, see
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  anarchy, everyone scrambling for power, for relative gains.
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  It's pretty skeptical about lasting peace.
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  Liberal institutionalists say, hold on.
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  These institutions, these regimes, they're crucial.
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  They act as intermediaries. They actually change the game,
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  change the incentives for states, making cooperation seem,
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  well, rational. And the big name here, you
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  mentioned him is Robert Keoghan, especially his 1984 book After
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  Hegemony. That book took direct aim at
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  hegemonic stability theory, the idea that you need a dominant
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  power, a boss, to keep order. Kaylene argued.
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  No actually stable international systems can survive even without
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  that single top dog. Exactly.
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  His argument was that institutions, even if they're
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  not perfect, they develop a kind of inertia life of their own.
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  They don't just vanish when the power that set them up declines.
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  And then he and Justice Nye in Power and Interdependence pushed
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  things even further. They argued that, well, the very
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  nature of international politics had fundamentally shifted.
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  Right. This is where we get beyond that
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  sort of traditional view of states as billiard balls, the
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  Westphalian system, Keohin. And I said, look, international
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  politics is woven together through multiple channels, not
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  just formal diplomatic notes between capitals.
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  This is their complex interdependence framework.
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  Precisely. And they identify three key
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  types of channels that really define modern global politics.
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  First, the one everyone knows Interstate relations.
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  That's your classic government to government stuff.
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  Ambassadors, treaties, state visits, formal conflicts, the
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  stuff realists focus on. But then they added two more
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  that really blur the lines. The second, the one is
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  transgovernmental relations. This happens when you drop the
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  assumption that states always act like single unified actors.
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  Yeah, think of central bankers talking to other central bankers
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  directly, or maybe environmental agencies coordinating across
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  borders, or intelligence services.
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  These are parts of governments connecting with their
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  counterparts, often bypassing the traditional foreign
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  ministries. It's more informal, often
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  technical. And the third channel,
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  transnational relations, is even broader.
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  Here we drop the assumption that states are the only actors that
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  matter. So this includes multinational
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  corporations, huge Ng OS like Doctors Without Borders,
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  scientific groups, sharing research, even, you know, global
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  social movements or criminal networks.
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  It means, say, Google negotiating with the EU
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  Commission is just as much a part of international politics
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  as AUN resolution. So if the world is defined by
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  this complex interdependence, especially, they argued, among
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  developed democracies, what does that world look like?
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  They outline 3 main features. First, those multiple channels.
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  We just talked about connecting societies at many levels.
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  Second, the agenda of international politics is
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  constantly shifting. There's no fixed hierarchy where
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  military security is always number one.
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  Suddenly a financial crisis hits, or a pandemic, or climate
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  change, and those issues can dominate everything, completely
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  blurring what's domestic and what's foreign.
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  And the third feature is perhaps the most striking.
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  They argued that among these deeply interconnected states,
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  using military force against each other becomes almost
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  unthinkable, or at least incredibly costly.
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  The economic fallout, the damage to the institutional ties, it
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  just outweighs any potential gain.
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  OK, so complex interdependence is the condition.
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  How do states manage it? That's where international
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  regimes come in. You define those as sets of
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  governing arrangements, Basically rules, norms,
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  procedures that help regulate behavior and control the, well,
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  the effects of being so interdependent.
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  Right. And they can be very formal,
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  like the World Trade Organization with its detailed
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  rule book, or the eurozone's banking union.
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  Or they can be more implicit, almost like unwritten rules.
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  Think about the long standing norms governing maritime
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  navigation, for instance. But that brings up the
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  $1,000,000 question, the one realists always ask Why?
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  Why would states which are fundamentally self interested
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  agree to be constrained by these rules and institutions?
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  What's in it for them? What's the functional logic?
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  It really boils down to solving collective problems that states
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  can't fix on their own. The idea, sometimes called
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  rational anticipation functionalism, is basically that
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  states create institutions because they rationally expect
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  them to deliver benefits. Often it's about fixing what you
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  might call political market failures.
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  Political market failures. OK, simplifying that means
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  there's some flaw in the system. Maybe lack of trust or poor
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  information that stops states from making deals that would
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  actually benefit everyone. And the institution is like the
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  the mechanic fixing that. Exactly.
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  Keohane laid out several specific ways institutions do
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  this, but we can group them. One major function is tackling
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  the information and trust problem.
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  OK, how? How do they build trust?
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  Well, they provide reliable information.
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  They make it easier for states to signal their intentions
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  clearly. This helps overcome issues like
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  asymmetric information where one side knows more than the other,
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  leading to suspicion. Think of the lemons problem in
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  economics. Institutions create
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  transparency. They also make commitments more
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  believable, more credible. Because promises are made
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  publicly, often within a standardized framework, there
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  are reputational costs to breaking rules everyone sees.
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  So they basically shine a spotlight, making it harder to
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  cheat and rewarding honesty. Yeah, OK.
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  What's the other main function? The other big one is solving the
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  time and transaction cost problem.
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  Institutions make it cheaper and easier to make legitimate
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  agreements. They provide ready made forums,
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  rules, procedures. Think about the WTO again.
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  If you want to negotiate a trade deal, the framework is already
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  there. It lowers the cost, but
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  crucially, they also increase the cost of breaking the rules
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  of illegitimate actions. If you're in the WTO and you
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  just slap on a tariff unilaterally, the institution
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  provides a legitimate pathway for other states to retaliate.
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  It raises the cost of cheating. And part of that is extending
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  the shadow of the future, right? That's classic game theory.
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  If you know you're going to be interacting with the same states
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  again and again tomorrow, next year, in 10 years, you're more
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  likely to cooperate today because you want them to
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  cooperate with you later. Precisely, It encourages
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  reciprocity. I follow the rules now,
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  expecting you'll do the same down the line.
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  It shifts the calculation from a one off interaction where
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  cheating might pay to an ongoing relationship where cooperation
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  is usually the better long term strategy.
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  And what's really interesting is how durable these institutions
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  often are. John Ekenberry wrote a lot about
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  this. Even if the power they created
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  them fades, the institutions themselves often stick around.
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  Why is that? Well, think about the sheer
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  effort, the startup costs involved in creating something
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  like the UN or the Bretton Woods system.
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  It takes immense political capital.
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  Once they exist, they immediately start shaving
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  expectations about how states will behave in the future.
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  That predictability itself becomes valuable.
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  And they build up bureaucratic momentum, routines, procedures.
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  Entire careers are built around them.
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  Think of all the people working within The Who or the IMF.
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  Exactly. That creates inertia, plus you
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  get spillovers. Cooperating in one area, say
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  trade, often creates the need to cooperate in related areas like
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  finance or environmental standards, and trying to build a
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  competing institution from scratch faces enormous hurdles.
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  It's usually easier, even for dissatisfied states, to try and
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  reform the existing regime rather than tear it down and
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  start over. The costs are just too high.
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  OK, so if institutions are supposed to make cooperation
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  easier, transfer knowledge, build capacity, can we see this
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  actually working? A concrete example of a regime
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  changing how states operate, especially thinking about our
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  listeners interested in Europe and perhaps Danish politics.
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  Within that, the E US twinning program seems like a perfect
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  case study. Oh absolutely.
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  Twinning is a fantastic real world example of this kind of
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  deep institutional cooperation and capacity building.
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  The EU uses it a lot in its external assistance programs,
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  especially for countries hoping to join the EU under the
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  Instrument for Pre Accession Assistance or IPA.
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  And this isn't just about sending money, is it that it
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  sounds much more hands on? It's like a direct transfer of,
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  well, administrative know how, almost like DNA.
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  What does twinning specifically aim to do?
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  The goal is incredibly specific, very results oriented.
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  It's designed to help the public administrations in these
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  candidate countries actually adopt, implement and enforce the
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  massive body of EU law and standards that Aqui Communo Tear
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  or EU Retin as it's often termed.
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  It's about building their capacity to function like an EU
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  member state before they even join.
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  So you literally have say, Danish civil servants or German
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  or French working side by side with counterparts in maybe
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  Albania or Ukraine, sharing best practices, embedding EU
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  procedures, building long term relationships between
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  administrations. Exactly that it's about sharing
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  good practice to help reform their public administration,
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  yes, but also building those working relationships for the
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  future. It smooths the path to
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  integration. Twinning uses the institutional
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  weight and expertise of the EU system to make the candidates
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  commitment to reform credible while actively shaping their
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  internal structures to a align with the EU regime.
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  It's liberal institutionalism in action, really.
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  Right, let's bring power back into the picture.
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  We've talked about interdependence institutions,
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  but how does power operate in this kind of world, especially
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  now with the information revolution slashing
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  communication costs? Has the nature of power itself
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  changed? Nye argued strongly that it has.
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  The rise of complex interdependence, turbocharged by
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  instantaneous global communication, has definitely
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  increased the importance of what he called soft power.
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  That's the ability to get what you want through attraction
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  rather than coercion, setting the agenda, shaping preferences,
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  establishing norms. That becomes much more important
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  relative to traditional hard power, military might or
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  economic sanctions. And in this world absolutely
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  flooded with information, just constant noise, what becomes
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  really valuable. You mentioned credibility
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  earlier. Credibility becomes a absolutely
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  critical power resource. In an environment where anyone
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  can broadcast anything, being seen as a reliable, truthful
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  source of information is incredibly powerful.
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  Think about organizations that are seen as open, transparent,
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  maybe international in scope, providing coherent, unbiased
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  information. The IPCC on climate change is a
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  classic example. Its influence comes not from
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  armies, but from the perceived credibility of its scientific
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  peer reviewed process. OK, but Kieran and I also drill
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  down into the nuances of power within interdependence.
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  They made this really crucial distinction when the policy
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  maker sometimes miss between sensitivity and vulnerability.
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  Yes, and this is vital for actual strategy.
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  Sensitivity is about how quickly and how much policy changes in
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  one country impact another within the existing set of
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  rules. So if country A raises interest
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  rates, how immediately does that cause pain for country BS
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  economy? That sensitivity.
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  It measures the immediate impact, assuming the basic
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  relationship stays the same. OK.
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  So that's the immediate shock. What's vulnerability then?
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  Vulnerability is the strategic dimension.
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  It's about the cost of actually changing the relationship
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  itself, of finding alternatives. How costly would it be for
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  Country B to decouple its economy, find new markets, or
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  develop alternative policies? If Country A keeps doing things
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  that hurt it? That's vulnerability.
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  It reflects the deeper structural dependence.
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  Let's. Try an example, maybe energy if
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  Germany is highly sensitive to Russian gas price hikes because
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  it relies on it day-to-day. Right.
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  That's sensitivity, immediate impact.
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  But if Germany can, over a year or two, build LNG terminals,
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  switch to renewables, find other suppliers, its vulnerability
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  might actually be much lower than its sensitivity suggests.
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  Exactly. Germany might feel the pain
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  short term sensitivity, but if it has viable options to change
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  the situation long term low vulnerability, then Russia's
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  leverage is limited. This leads to a really important
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  policy insight. Focusing just on manipulating
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  sensitivity like short term trade spats without considering
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  the underlying vulnerability is often a losing strategy.
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  You need to assess the deeper costs of exit for the other
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  side. So the real durable power in an
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  interdependent relationship comes from asymmetries and
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  vulnerability. Who needs the relationship more?
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  Who has fewer outside options? That's the core argument.
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  Asymmetrical vulnerability is where the strategic leverage
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  really lies. Well, this has been a fantastic
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  tour through Liberal institutionalism.
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  It really offers a, well, a robust way to understand how
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  global cooperation actually happens, even in our messy
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  world. It shows that these
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  international regimes, even the imperfect ones we have, are
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  pretty essential. They reduce uncertainty, they
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  help manage all this complexity, and they do actually constrain
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  how states behave. Absolutely.
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  It reminds us that just counting tanks are looking at GDP doesn't
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  give you the full picture anymore.
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  The sheer complexity of global connections means you have to
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  dig deeper to really understand where conflict or cooperation
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  might happen. Next, you need to look beyond
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  just those hard resources and analyze those specific patterns
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  of asymmetrical vulnerability. Who depends on whom for what,
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  and how costly would it be to change that?
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  Which leaves us with a final thought, maybe a bit provocative
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  for you the listener, to chew on.
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  Tying back to institutions and vulnerability, could a state
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  ever intentionally make itself more sensitive in one area, say
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  by deeply integrating into a powerful block like the EU,
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  accepting its rules and dependencies precisely to reduce
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  its vulnerability in another area, like long term security or
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  economic stability? It's an interesting question.
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  It suggests that sometimes giving up some short term
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  freedom of action, tying your own hands within an institution,
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  might actually be the smartest way to secure your deeper long
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  term interest and reduce your exposure to bigger risks.
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  Food for thought indeed. A great deep dive.
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  Thank you for joining us for this look at International
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  Theory. And if you enjoyed this
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  exploration, please do follow the podcast.
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  International affairs and. You know the dynamics of global
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  governance. Thanks for listening.