Powell 1994 PDF

Anarchy in International Relations Theory: The Neorealist-Neoliberal Debate
Neorealism and its Critics. by Robert O. Keohane; Neorealism and Neoliberalism: The
Contemporary Debate. by David A. Baldwin
Review by: Robert Powell
International Organization, Vol. 48, No. 2 (Spring, 1994), pp. 313-344
Published by: The MIT Press
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Anarchyin international
relationstheory:the
debate
neorealist-neoliberal
RobertPowell
Robert0. Keohane, editor.Neorealismand Its Critics.New York: Columbia

Press,1986.
University
The Contemporary
David A. Baldwin,editor.Neorealismand Neoliberalism:
Debate. New York: ColumbiaUniversityPress,1993.
Two ofthemostinfluential contemporary approachesto internationalrelations

theoryare neorealism and neoliberalism.The debate between these two
approacheshas dominatedmuchof internationalrelationstheoryforthe last
decade. It is now commonplaceforan articleabout some aspect of interna-
tionalrelationstheoryto beginbylocatingitselfin termsof thisdebate. These
two approaches and the debate between them have failed to contributeas
muchas theymighthave to internationalrelationstheory.These approaches
sufferfromserious internalweaknesses and limitationsthat the neorealist-
neoliberaldebate oftenhas tendedto obscureratherthanto clarify.Once we
have exposedand clarifiedtheseweaknessesand limitations, we willbe able to
see severalimportantdirectionsforfuturetheoreticalwork.
Two books,Neorealismand Its Criticsand Neorealismand Neoliberalism: The
Contemporary Debate,makesignificant to thisdebate.The former
contributions
offereda wide-ranging critiqueof neorealismwhen it was publishedin 1986.
The latter,whichhas justbeen published,is morenarrowly focused.It takesup
where some of the critiquesin Neorealismand Its Criticsleftoff.A reviewof
thesetwocomplementary volumesaffordsan excellentopportunity to beginto
identifysome of the weaknesses and limitations
that the neorealist-neoliberal
debate frequently has obscured.
Frieden,JoanneGowa, JosephGrieco, ErnstHaas, Peter

I am gratefulto Carol Evans, Jeffry
Katzenstein,Robert Keohane, David Lake, JamesMorrow,JohnOdell, JaniceGross Stein,and
KennethWaltz fortheirthoughtful commentsand criticisms of an earlierdraft.I also thankGreg
Louden and Michael Sinatra for invaluable research assistance. I gratefullyacknowledgethe
supportof a grantfromtheNationalScience Foundation,no. SES-921959.
48, 2, Spring1994,pp. 313-44

IntemationalOrganization
?3 1994 byThe 10 Foundationand the MassachusettsInstituteofTechnology
314 InternationalOrganization
In thisreview,I discussfourbroad avenues of criticismthatthese volumes

take in evaluatingneorealismand specifically KennethWaltz's formulation of
it.' The firstthree avenues are the originsof states' preferences,the agent-
structureproblem,and Waltz's specificdefinition of politicalstructure.These
criticisms generallydo notchallengethe logicalcoherenceofneorealism.They
focus instead on the limitationsof the theory.The firsttwo centeron what
neorealismtakes forgranted,e.g., preferencesand intersubjective meanings
and understandings. The thirdcriticismfindsWaltz'sdefinition ofstructuretoo
confining.The fourthavenue of criticismchallenges the internallogic of
neorealismdirectly.It argues that conclusionsclaimed to followfromthe
assumptionsof neorealismactuallydo not. The neorealist-neoliberaldebate
lies alongthisfourthavenue.
Three issues lie at the center of the neorealist-neoliberaldebate. In
reviewing theseissues,I tryto bringimportantimplicitassumptionsto thefore
and showthatthoseassumptionsaccountformanyoftheimportant differences
betweenthe two theories.Moreover,manyof the differences thathave been
thoughtto be significant, such as the difference betweenrelativeand absolute
gains,are not. The firstissue at the heartof the debate is the meaningand
implicationsof anarchy.Althoughthenotionof anarchyhas servedas a central
organizingconceptformuchof international relationstheory,the emphasison
anarchyis misplaced.What have oftenbeen taken to be the implicationsof
anarchydo not reallyfollowfromthe assumptionof anarchy.Rather,these
implicationsresultfromother implicitand unarticulatedassumptionsabout
the states'strategicenvironment.
The second centralissue is the problemof absolute and relativegains. I
argue that the controversy surroundingthis problemgenerallyhas mistaken
effects for causes and that this mistake has handicapped analysis of the
problemof internationalcooperation.More specifically, I tryto demonstrate
that the internationalrelationsliteraturegenerallyholds, if at times only
implicitly so, thatthe extentto whicha stateis concernedabout relativegains
depends on its strategicenvironment,for example, the offense-defense
balance and the intensity of the securitydilemma.But ifthisis the case, then
the degree to whicha state is concernedabout relativegains is part of the
outcometo be explained:it is an effectand not a cause. The extentto whicha
stateis concernedabout relativegains,therefore, does not explainthe levelof
internationalcooperation.This realizationshould refocusour attentionon
whatdeterminesthedegreeof a state'sconcernabout relativegains.
The thirdissue is the tensionbetweencoordinationand distribution. There
are oftenmanyways to realize the joint gains fromcooperation,and these
alternativesoften lead to differentdistributionsof those gains. Thus, the
potentialforjoint gains usuallycreates distributionaldisputes that tend to
impedecooperation.Althoughthesedistributional concernsonlyrecentlyhave
1. KennethWaltz,Theory Politics(Reading, Mass.: Addison-Wesley,1979).

ofIntemational
Neorealismand neoliberalism 315
begun to receiveattentionin the debate betweenneorealismand neoliberal-

ism,theyhold the promiseof clarifyingsome of the questionsthatactuallydo
dividethesetwoapproaches.
Neorealismand thestructuralapproach
Much of the neorealist-neoliberaldebate can be seen as a reactionto Waltz's

Theoryof International Politics and a response to those reactions.A brief
discussionoftwoofthatbook's primary objectivesis essentialto understanding
the debate.2 One objectivewas to reiterate,reinforce,and refinea line of
argumentWaltzbegan inMan, theState,and War.3There,he had underscored
the importanceof third-imageexplanations.First-imageexplanationslocate
the causes of internationaloutcomes,say the cause ofwar,"in the natureand
behaviorof men. Wars resultfromselfishness,frommisdirectedaggressive
impulses,fromstupidity."4 Second-imageexplanationslocate causes in the
internal structureof the state. Imperialism,for example, results from a
particularinternaleconomicstructurelike capitalism;similarly, international
peace resultsfroma particularformofgovernment likedemocracy.5 Appealing
to Rousseau's staghuntand alludingto the thenrecentdevelopmentof game
theory,Waltz argued that first-and second-imageexplanationswere insuffi-
cient.6In a situationentailingstrategicinterdependence,such as thatof the
great powers, an actor's optimal strategydepends on the other actors'
strategies.If, therefore,we want to explainwhat the actorswill do, then,in
additionto lookingat the attributesof the actors,we must also look to the
constraintsthat definethe strategicsettingin whichthe actorsinteract.The
thirdimagelocates causes "withinthestatesystem."7
A simple example from microeconomictheoryillustratesthe potential
importanceof third-image explanations.The price is higherand the outputis
lower in a monopolized marketthan in a competitiveone. But first-and
second-imageaccounts,whichWaltzcollectively calls reductiveexplanationsin
Theoryof IntemationalPolitics,do not explain these differences.In both
markets,the attributes of the actors,whichare firmsin thiscase, are identical:
everyfirmtriesto maximizeits profitsand consequentlyproducesthe level of
outputat whichmarginalcost equals marginalrevenue.What accountsforthe
variationin price and outputbetween these marketsis not variationin the
attributesoftheunitsbutvariationin theenvironments or marketstructures in
whichtheyact. This is theessence ofthethirdimage.
2. For a summaryof Waltz's goals, see p. 323 of Kenneth Waltz, "Reflectionson Theoryof
Intemational " in Keohane,Neorealismand Its Critics,
Politics, pp. 322-45.
3. KennethWaltz,Man, theStateand War(New York: ColumbiaUniversity Press,1959).
4. Ibid.,p. 16.
5. Ibid.,pp. 80-164.
6. Ibid.,pp. 172-86 and 201-5.
7. Ibid.,p. 12.
It is importantto emphasize two pointsabout the divisionof explanations

intoreductiveand systemicaccounts.The firstis an assumptioninherentin this
division:namely,thatwe can usefullyconceiveoftheactorsor unitsin a system
as separateand distinctfromthe constraints thatdefinethe strategicsettingin
whichthe unitsinteract.The second importantpointis the kindof conceptual
experimentand explanationthatnaturallyfollowsfromthisdivision.Once a
systemhas been decomposedintounitsand constraints, itis naturalto ask one
of twoquestions;or, to put it differently, it is naturalto considertwotypesof
thoughtexperiment.First,how would some aspect of the units'behavior,say
theprobability ofstartinga war,varyifwe conceptuallychangesome attributes
of the unitswhileholdingthe constraintsconstant?What,forexample,would
happen to the probabilityof war if a state's form of governmentwere
democraticratherthan authoritarian?Fixingconstraintsand varyingunits'
attributescomprisethe essentialconceptualexperimentunderlying reductive
explanations.Second, howwould behaviorchangeifthe attributesof the units
remained constantand the constraintswere changed? What, for example,
would happen to the probabilityof war if the attributesof the units were
unchangedbutthedistribution ofpowerchangedfrombipolarity to multipolar-
ity?Fixingtheunits'attributes andvarying theconstraints facingtheunitscomprise
thefundamental conceptualexperiment underlying systemicexplanations.
After emphasizingthe general importanceof third-imageor systemic
explanations,Waltz turnsto a second objective in Theoryof Intemational
Politics.He sees structure as a "set ofconstraining conditions."8But statesmay
be constrainedby manythings-like the distribution of power,the natureof
military technology, or the state'scomparativeeconomicadvantage.A second
goal forWaltz is to specifya restrictedset of constraints thatprovidea wayof
conceivingof a political systemand then to demonstratethe power of this
formulation by showingthatit tells "us a small numberof big and important
things."9He restricts thisset to threeelements,defininga politicalstructure in
termsof its orderingprinciple,the distribution of the units'capabilities,and
thefunctionaldifferentiation or nondifferentiation oftheunits.10
Two criteriaseem to have guided the selectionof these elementsand this
definition ofpoliticalstructure. The firstis pragmatic.This definition appeared
to lead to interestinginsights,which,of course, is the goal of all positive
theories.The second criterionis less generaland reflecteda trade-off. Waltz
triedto definepoliticalstructureso that"it would showus a purelypositional
picture.""1The advantageof a positionalpictureis thatmanysystemscan be
seen as similarregardlessof the particularsubstantivecontextin whichthe
units interact."Structure,properlydefined,is transposable."12Thus, firms
8. Waltz,Theory Politics,p. 73.

ofIntemational
9. Waltz,"Reflectionson TheoryofIntemational Politics,"p. 329.
10. Ibid.,pp. 79-101.
11. KennethWaltz,"A Response to My Critics,"in Keohane, Neorealismand Its Critics,p. 330.
12. Ibid.
facinga highriskofbankruptcy in an oligopolisticmarketmaybe seen to be in

an anarchical,self-helpsystemin muchthe same waythatstatesfacinga high
riskofwar in the internationalsystemare in an anarchical,self-helpsystem.13
If, therefore,anarchyimplies certain behavior, such as the tendencyfor
balances of powerto form,thenwe would expectto see thisbehaviorobtain
"whetherthesystemis composedoftribes,nations,oligopolisticfirms, or street
gangs."'14The potentialadvantageofa spare definition ofa politicalstructureis
thatitmayhelpus see similarities inwhatinitiallyappeared to be verydifferent
domains.The potentialdisadvantageofthisspare definition is thatifthethree
dimensionsWaltz uses to characterizesystemsdo notsufficiently constrainthe
units'interaction, thenunitsin similarsystemsmaynotinteractin similarways.
Ifthisis thecase, thenwe shallhaveto look elsewhereforexplanationsofthese
variations.Recognizingthistrade-off, Waltzoptsfora spare definition.
Four avenuesofcriticism
Structuraltheories decompose a systeminto units and constraints.This

decompositionmakes these theories vulnerable to two broad avenues of
criticism.The firstcriticismaccepts thisdecompositionbut stressesthe need
for a theoryof preferenceformationto supplementthe structuraltheory.
Because theunits'preferencesare exogenouslyspecifiedin a structural theory,
we need a theorythat explainstheirorigins.The second avenue rejectsthis
decomposition.It emphasizestheagent-structure problem,arguingthatagents
and structureare inseparable.In additionto these firsttwobroad avenues of
criticism,anyparticularstructural of neoreal-
theory,like Waltz's formulation
The thirdfocuses
ism,is also subjectto a thirdand fourthavenue of criticism.
on and questionsthe specificdefinitionof structureemployedin the theory.
The fourthquestions whetherthe conclusionsclaimed to follow fromthe
theorydo indeed follow.
Preferencesare given exogenously

The firstavenue of criticismcenterson preferences.Structuralapproaches
taketheunits'preferencesas given.That is, thesepreferencesare exogenously
specified.They become inputs into the analysisratherthan the subject of
analysis.This maybe an importantweakness of the structuralapproach. As
RobertJerviscautions,"By takingpreferencesas given,we beg whatmaybe
the mostimportantquestionon how theywere formed.... Economic theory
but
treatstastesand preferencesas exogenous.Analysisis thereforefacilitated,
13. Waltz,TheoryofIntemational Politics,pp. 105 and 111.

14. The quotationis fromp. 37 of KennethWaltz, "Realist Thoughtand NeorealistTheory,"
44 (Spring/Summer
JoumalofIntemationalAffairs 1990),pp. 21-37.
at the cost of drawingattentionawayfromareas thatmaycontainmuchof the

explanatory 'action' in whichwe are interested."'15
The firststepin assessingtheforceofthecriticism thatstructuralapproaches
lack a theoryofpreferencesis to clarify thecriticismbydistinguishing twotypes
of preferences.The firsttype is preferencesover outcomes; the second is
preferencesoveractionsor policies.To differentiate thesetwotypes,considera
game in payoff-matrix form.The cells in the matrixcorrespondto potential
outcomes.The utilitiesthat appear in each cell in the matrixrepresentthe
players'preferencesoverthesepotentialoutcomes.That is, a player'sutilities
reflectits preferencerankingof the possible outcomes.Given its preferences
overoutcomesand itsbeliefsabout whatthe otherplayersare doing,a player
can rank its potentialactionsfrommost to least preferred.In a two-person
game,forexample,the rowplayercan rankitsactionsfrombest to worstgiven
itspayoffsand itsbeliefsabout whatthe columnplayeris doing.This induced
rankingdefinesa player'spreferencesoveractions.'6
Structuraltheoriesdo nottryto explainpreferencesof one typebutdo tryto
explain preferencesof the other type. Structuraltheories take the units'
preferencesoverpossibleoutcomesas givenand,consequently, lack a theoryof
preferencesover outcomes. But structuraltheoriestryto make predictions
about the units'preferredactionsby combiningassumptionsabout the units'
preferencesover outcomes with other assumptionsabout the structural
constraintsfacingthe units. In this sense, structuraltheoriesclaim to be a
theoryof preferencesover actions.Game theory,forexample,is a theoryof
preferencesoveractions.It attemptsto predicttheunits'optimalactionsbased
on theirpreferencesover outcomes and the strategicsettingin whichthey
interact.Similarly,Waltz's formulation of neorealismtakes the units'prefer-
ences as given. "In a microtheory, whetherof internationalpolitics or of
economics,the motivationof the actors is assumed ratherthan realistically
described."'17 In particular,Waltz assumes "that states seek to ensure their
survival"and thenattemptsto predicttheunits'actions,albeitin a verygeneral
way,on the basis of this assumptionabout the units' preferencesand other
assumptionsabout thepoliticalstructure in whichtheunitsinteract.18
The two typesof preferencesare frequently conflated.For example,after
notingthat"economictheorytakes tastesand preferencesas exogenous"and
warningthatwe may be beggingthe most importantquestionsby doing so,
Jervisdiscusses some of the sources of these tastes and preferencesover
outcomes. These sources include transnationalforces, ideologies, beliefs,
15. RobertJervis,"Realism, Game Theory,and Cooperation,"WorldPolitics40 (April 1988),

pp. 324-25. For similarwarnings,see JosephNye,"Neorealismand Neoliberalism,"WorldPolitics
50 (January1988),p. 238.
16. The distinctionbetweenpreferencesoveroutcomesand overactionsis useful,but it should
notbe pushed too hard.An outcomein one game maybe seen as a policychoice in a largergame.
17. Waltz,Theory ofIntemational Politics,p. 91.
18. The quotationis drawnfromibid.
experience,and knowledge.19 He also sees realismas a source or theoryof

preferencesover outcomes,saying,"Sometimeswe can deduce preferences
fromthe structureof the system,as Realism suggests.But even a structural
theoryof internationalpoliticsas powerfulas Waltz's has troubleproducing
precisedeductions."20 Jervisconfoundsthe twotypesof preferenceshere. He
correctlyobservesthat economictheorytakes preferencesover outcomesas
givenbut thentreatsneorealism,whichis a theoryof preferencesoveractions,
as a theoryof preferencesoveroutcomes.RobertKeohane similarly conflates
the twotypesof preferenceswhenhe intendsto criticizeneorealismas a weak
theoryof behavior (that is, a weak theoryof preferencesover actions) but
describesneorealismas a weak theoryofpreferencesoveroutcomes.2'
Conflating thetwotypesofpreferenceshas at least twonegativeeffects. The
firstis to suggestthatwe cannotuse structural or game-theoretic approaches,
whichtake preferencesas given,to studythe effectson preferencesof changes
in beliefs,experience,or knowledge.22 This suggestionis simplywrongifwhat
we wantto studyis howchangesin thesefactorsaffectpreferencesoveractions
or policies.Indeed,one oftheprimary uses ofincomplete-information gamesis
to studyhowinteractionaffectsplayers'beliefsand,throughthesebeliefs,their
preferredactions.AndrewKydd,forexample,develops an interesting incom-
plete-information model of arms races that he uses to studyJervis'sspiral
model of escalation.23The basic issue in Kydd's game is whethera state will
change frompreferring not to arm to preferringto armbecause it interprets
anotherstate's arms increase as a sign of hostilityratherthan of insecurity.
Kydduses thismodel to studythe circumstances in whichtwostatesthathave
no hostileintentmightarmand eventuallygo to warbecause theyfearthatthe
otheris hostile.The formalstudyof dynamicinteractions and thelearningand
signalinginherentin themis at an earlystagein international relationstheory.
Manylegitimatecriticismscan be made of thiswork.24 But the claim thatthis
work has nothingto say about learningand changes in preferences(over
19. Jervis,"Realism,Game Theory,and Cooperation,"pp. 324-29.

20. Ibid.,p. 325.
21. Robert Keohane, "Theoryof World Politics,"in Keohane, Neorealismand Its Critics,pp.
175-76. One factorcontributing to thisconflationmay be thatboth Jervisand Keohane focus
primarilyon theprisoners'dilemma.There is no strategicinterdependencein a one-shotprisoners'
dilemma:a playeralwaysdoes strictly betterby playingD ratherthan C regardlessof what the
otherplayerdoes. In cases in whicha player'soptimalactionis independentof whatothersdo, a
theoryof preferencesover outcomes also serves as a theoryof preferencesover actions. The
distinctionbetweenthe twotypesof preferencesis meaningfulonlyifthe game entailsa situation
ofstrategicinterdependence in whicha player'soptimalstrategy dependson whatitbelievesothers
willdo.
22. Jervis,"Realism,Game Theory,and Cooperation,"p. 327.
23. AndrewKydd,"The SecurityDilemma,Game Theory,and WorldWar I," paper presented
at the annual meetingof the American Political Science Association,Washington,D.C., 2-5
September 1993. For Jervis'sinsightfuldiscussionof the spiral model, see his Perceptionand
MisperceptioninInternationalPolitics(Princeton,N.J.:PrincetonUniversityPress,1977).
24. For an excellentreviewof some of the limitationsof thisapproach,see David Kreps,Game
Theory and EconomicModelling(New York: OxfordUniversity Press,1990).
actions) because it takes preferences(over outcomes) as givenis not one of

thesecriticisms.
The second negativeeffectof conflating the twotypesof preferencesis that
doing so confoundstwo objectionsto structuralapproaches that need to be
evaluatedseparately.The firstobjectionis thattheseapproachestaketheunits'
preferencesas given.The second is thatthese approaches offerat best very
weak theoriesof preferencesoveractionsand at worstmisleadingtheories.As
will be seen, the firstobjection is not very importantto the neorealist-
neoliberaldebate,whilethesecond objectionlies at the heartof it.
The significance oftakingtheunits'preferencesas givenin a theoryor model
dependsverymuchon the theoryor model and the purposesforwhichit has
been constructed.In some models of nuclear crisisbargaining,forexample,
thereare onlythreeoutcomes:a stateprevailsin the crisis,it backs downbut
avoidsa nuclearexchange,or the crisisends in nuclearwar.25Preferencesover
these outcomes are exogenouslygiven in these models, but it would seem
bizarrenot to assume thata stateprefersthe firstoutcometo the second and
thesecondto thethird.Manysituations,however,are muchmorecomplicated
and whatto assume about preferencesover outcomesis not obvious.It is not
clear, forexample,what to assume about a state's preferencesover possible
tradearrangements. Here theworkof Jeffry Frieden,Peter Gourevitch,Peter
Katzenstein,David Lake, Helen Milner, Ronald Rogowski,and others in
developingan understanding of the originsof preferencesis veryimportant.26
Similarly,a state'spreferencesover potentialnationalsecurityarrangements,
for example, possible arms control agreements,may not be obvious, and
theoriesmaybe needed to explainthesepreferences.27
That neorealismtakestheunits'preferencesas givenis of littleconsequence
forthe neorealist-neoliberaldebate. As will be developed more fullybelow,
thisdebate largelyfocuseson the likelihoodof cooperationin anarchyand on
cooperation.Neorealismmaintainsthat
in facilitating
the role of institutions
cooperationwillbe difficultin an anarchicsystemcomposedofunitsthatprefer
survivalover extinction.Neoliberalismquestionsthis conclusionbut not the
25. See, forinstance,the modelsof nuclearbrinkmanship in RobertPowell,NuclearDeterrence

Theory(Cambridge:CambridgeUniversity Press,1990).
26. See JeffryFrieden,"InvestedInterests,"IntemationalOrganization 45 (Autumn1991), pp.
425-51; Peter Gourevitch,Politicsin Hard Times(Ithaca, N.Y.: Cornell UniversityPress, 1986);
Peter Katzenstein,ed., BetweenPowerand Plenty(Madison: University of WisconsinPress,1978);
and FreeTrade(Ithaca, N.Y.: CornellUniversity
David Lake, Power,Protection, Press,1988); Helen
Milner,ResistingProtectionism (Princeton,N.J.: PrincetonUniversityPress, 1988); and Ronald
Rogowski,Commerceand Coalitions(Princeton,N.J.:PrincetonUniversity Press,1989).
27. For example, Adler uses the concept of epistemiccommunitiesto explain American
preferences aboutarmscontrolagreements.See EmanualAdler,"The EmergenceofCooperation,"
InternationalOrganization46 (Winter 1992), pp. 101-46. For attemptsto explain a state's
preferencesover militarydoctrinesand the importanceof civil-military relationsin determining
those preferences,see Barry Posen, The Originsof MilitaryDoctrine (Ithaca, N.Y.: Cornell
UniversityPress,1984); JackSnyder,TheIdeologyoftheOffensive (Ithaca, N.Y.: CornellUniversity
Press, 1984); and Stephen Van Evera, "The Cult of the Offensiveand the Originsof the First
WorldWar,"International Security9 (Summer1984),pp. 58-107.
assumptionthat units are minimallymotivatedto survive.Indeed, it would

seem bizarrenotto assumethatunitsprefersurvivaloverextinction. Thus,the
criticismthatthesepreferencesare specifiedexogenouslyis unimportantto the
debate about the likelihood of cooperation in anarchy. The potentially
importantcriticismis thatthe conclusionsclaimedto followfromneorealism's
spare assumptionabout units'preferencesand about the politicalstructurein
whichthese unitsinteractactuallydo not follow.This is the fourthavenue of
whichwillbe discussedbelow.
criticism,
The inseparabilityof agents and structure

The structural approachdecomposesa systemintounitsand theconstraints
facingthem.The second avenue of criticismdenies the separabilityof agents
and structure.Drawing on structurationist theoriesin sociology,Alexander
Wendt argues that agents and structureare "mutually constitutiveyet
ontologically distinctentities.Each is in some sense an effectoftheother;they
are 'co-determined.'"28
If agents and structurewere conceptuallyinseparable,two consequences
would follow.First,the twoconceptualexperimentsunderlying the structural
approach fromwhich this approach derives its explanatorypower would
become problematic.We would no longerbe able to studythe constraining
effectsof structureby theoreticallyholdingthe units and theirpreferences
constantwhile varyingthe structurein which they interact.If units and
structureare inseparableso thateach is at least partlythe effectof the other,
thenvariationin the structure willalso changetheunits.
Second, challengingthe separabilityof unitsand structuremakes the units
an object of inquiry and directs our attentionto systemicchange and
transformation. If units and structureare mutuallyconstitutive,then it is
natural to ask, How do theyevolve, and How do theyinteractover time?
Thinkingof the unitsas being endogenousshiftsour attentionaway froma
positionalmodel to what David Dessler calls a transformational model. In a
positional model like Waltz's formulationof neorealism,"structureis an
environment in which action takes place. Structuremeans the 'setting'or
'context'in which action unfolds."29Structureis, in other words, a set of
constraints.In a transformational theory,"structureis a mediumofactivity that
in principlecan be alteredthroughactivity."30 Structureshapes action and is
shapedbyaction.The goal,therefore, of a transformationaltheoryis to explain
how structureand agent interact.To do this, Robert Cox, Dessler, John
28. See p. 360 of AlexanderWendt,"The Agent-Structure Problemin InternationalRelations

Theory,"International 41 (Summer1987),pp. 335-70.
Organization
29. The quotationis fromp. 426 of David Dessler, "What's at Stake in the Agent-Structure
Debate," IntemationalOrganization43 (Summer1989),pp. 441-70,emphasisoriginal.
30. Ibid.,p. 461.
Ruggie,Wendt,and othershave emphasizedidentities,interests,rules,roles,

and intersubjective understandings and meanings.3'
As withthefirstavenue ofcriticism, theforceof the second avenue depends
verymuchon the particulartheoryor model beingcriticized.Cox's distinction
betweenproblem-solving theoriesand criticaltheoriesis helpfulhere.32The
formeruses the ceteris paribus assumptionto restrictthe statementof a
specificproblem"to a limitednumberof variableswhichare amenable to a
relativelyclose and precise examination."33Among the many thingsthat
problem-solving theoriesmayexcludebytakingthemas givenand unproblem-
atic are intersubjective understandings and expectations.The ceterisparibus
assumptioneffectively freezes and therebyassumes away the interactionof
unitsand structure.
It seems entirelyappropriateto assume awaythisinteractionin a problem-
solvingtheoryas longas the applicability or domainofthetheoryis understood
to be boundedbytheceterisparibusassumption.Structurationists rightly argue
thatintersubjective understandings are partofwhatis beingtakenas givenor
unproblematic in thisassumption.If theseunderstandings and meaningsdiffer
significantlyfromthose presumed in the ceteris paribus assumption,then
theoriespredicatedon that assumptionmay be of littleuse. Of course, the
ceterisparibusconditions-be theyabout interestsand identitiesor about the
manyotherfactorsleftout of a specifictheory-are neverstrictly satisfied.We
do not knowa prioriwhetherdifferences in interestsand identitiesor in the
otherexcludedfactorsare important. The bestwe can do is tryto determinethe
domainof applicabilityof problem-solving theoriesby usingthemin different
settings.Powerfultheorieswillworkin a large domain because the excluded
factorssubsumedin the ceterisparibusassumptiongenerallyare insignificant.
Weak theorieswill have a verylimiteddomain. The sociological approach
makes a serious and importantcriticismand contributionin stressingthe
importanceof intersubjective meaningsand understandings and the interac-
tionbetweenagentsand structure.
The sociologicalapproachstressesthe inseparability of unitsand structure.
But it is important notto identifythiscriticism withthisparticularapproach.A
second line of research is also predicated on the interactionof units and
structureor, more precisely,the interactionof states and the international
structure. The essence ofGourevitch'ssecond-image-reversed argumentis that
31. See RobertCox, "Social Forces,States,and WorldOrders,"in Keohane,Neorealismand Its

Critics,pp. 204-54; Dessler, "What's at Stake in the Agent-Structure
Debate?"; JohnRuggie,
"Continuityand Transformation in World Polity,"in Keohane, Neorealismand Its Critics;John
Gerard Ruggie, "Territoriality and Beyond," InternationalOrganization47 (Winter 1993), pp.
139-74; Wendt,"The Agent-Structure Problemin InternationalRelations Theory"; and Alex-
ander Wendt,"Anarchyis What States Make of It," International Organization46 (Spring1992),
pp. 391-425.
32. Cox, "Social Forces,States,and WorldOrders,"p. 208.
33. Ibid.,p. 208.
the internationalstructureshapes domestic institutionsand states' prefer-

ences: statesand structure interact.
This secondformofthecriticism thatagentsand structure are inseparableis
important fortwo reasons. First,it shows thatthe agent-structure problemmay
arise even in rationalistapproaches that take interestsand identities as given
and assume that the unitsact in their own narrow self-interest.Second, the
existing literatureillustratesa way of trying to deal with this form of the
agent-structure problem.The potentialsolutionis to redefinethe unitsin the
system.Rather than treatingstates as unitaryactors,states are decomposed
intomorebasic units.The hope here is thatwe willbe able to separate these
morebasic unitsfromtheconstraints facingthem.
To illustratethisapproach to dealingwiththe interactionof statesand the
internationalstructure,considerRogowski'sworkon the effectsof interna-
tionaltradeon domesticpoliticalalignmentsand states'preferences.34 At the
riskofdoingthesubtlety ofhisanalysisgraveinjustice,Rogowskidecomposesa
countryintothreegroupsor units:landowners,capitalists,and labor.A state's
preferencesemergethroughcompetitionamong these units.Moreover,any-
thing that significantly affectsthe terms of internationaltrade shiftsthe
distributionof domestic political power among the units. For example,
technologicalor politicalchanges,like the adventof railroadsand steamships
or the riseof Britishhegemony,reduce the cost or riskof internationaltrade.
These changes favorand enrichdomesticgroups that benefitfromgreater
trade.By assumption,benefitedgroupsbecome morepowerfuland the state's
preferencesgenerallybecome more reflectiveof the preferencesof these
favoredgroups.35
Rogowski'sanalysisillustratesa rationalistversionof the agent-structure
problemor, more accurately,the state-structure problem.Capital, land, and
labor in Rogowski'sargumentare actingin theirown materialself-interest.
Changingintersubjective meaningsand understandings are not at issue here.
Nevertheless,we cannot decompose the internationalsysteminto units and
structureif we treat states as the units. For example, a change in the
internationalsystem,like the rise of Britishhegemony,thatreduces the risk
and thereforeincreases the expected returnto internationaltrade will also
34. Rogowski,Commerceand Coalitions.

35. Rogowskireadilyacknowledgesthathe is makingassumptionsabout the domesticpolitical
processand does not have a theoryof the state.He also emphasizesthatalthoughchangesin the
termsof trademaymake some domesticgroupsmorepowerful,theystillmaylose in the domestic
politicalstruggle(ibid.,pp. 4-5). The powerof Rogowski'sanalysis,of course,lies in its abilityto
identifythe groupsthatwill benefitfromgreatertrade and the domesticcleavages thatgreater
trade will tend to create. Appealing to the Stolper-Samuelsontheorem,Rogowskiargues that
greatertrade favorsthe domesticgroup that controlsthe relativelyabundant factor.So, for
example,land was abundantand capital and labor were scarce in the United States in the latter
part of the nineteenthcentury,while labor was abundantand capital and land were relatively
scarce in Germany.Accordingly, agriculturein the United States and labor in Germanyshould
have supportedgreateropenness,whilecapitaland laborin theUnitedStates and capitaland land
in Germanyshouldhave unitedin supportofprotectionism (pp. 3-20).
tend to change states' preferences.States and structureare interdependent;

each is in partan effectoftheother.
This briefillustrationalso suggestsa wayoftrying to deal withthisversionof
the agent-structure problem:namely,to decompose the systemintodifferent
unitsthathopefullycan be separatedfromthe structureconstraining them.In
effect,we enlargethe game bytrying to breakwhatwe previouslytookto be a
unitaryactor,namelythestate,intomorebasic units.36 Of course,enlargingthe
game to include the interactionbetweendomesticand internationalpolitics
makesanyanalysismuchmoredifficult. Needless to say,an approachto dealing
with the inseparabilityof states and structureis not a theoryof their
interaction.Much importantworkremainsto be done on the interactionof
statesand structure.37
In sum,theoriesthattake intersubjective meaningsand understandings as
givenassumeawayone formofagent-structure interaction.Structuraltheories
thattake the stateto be a unitaryactoralso assume awaya rationalistformof
agent-structure interaction.These theoreticalsimplifications maybe appropri-
ate forsomequestionsand notforothers.We need to do moreto identify those
domains in whichthis interactioncan be disregardedand those in whichit
cannot.
Waltz's definitionof structure

The firstand second avenues of criticismare directed at the structural
approach in general. The thirdand fourthavenues of criticismapply more
to neorealismand to Waltz'sparticularformulation
specifically of it.The third
criticismfocuseson Waltz's spare definition
of structureand generallyargues
thatotherelementsbe includedin thedescriptionof a system'sstructure.
Waltz defineda politicalstructure byitsorderingprinciple,the distribution
of capabilities,and the functionaldifferentiation
or nondifferentiation of the
units. This definitionthus implies that the nuclear revolutionin military
technologyis a unit-levelchange and not a structuralchange.38JosephNye
finds it "particularlyodd to see nuclear technologydescribed as a unit
characteristic."39He and Keohane argue thatsuch factorsas "the intensity of
internationalinterdependenceor the degreeof institutionalizationof interna-
tionalrulesdo notvaryfromone stateto anotheron thebasis of theirinternal
characteristics... and are thereforenot unit-levelfactors."40
They conclude
36. Clearly this approach does nothingto address the importantconcerns raised in the
sociologicalapproachto the agent-structureproblem.
37. For suggestivediscussionsof the interactionbetween states and structurein different
substantivecontexts,see Brian Downing,TheMilitary Revolutionand PoliticalChange(Princeton,
N.J.:PrincetonUniversity Press,1993); Katzenstein,BetweenPowerand Plenty;and CharlesTilly,
Capitaland Coercion(New York: Blackwell,1990).
38. Waltz,"Reflectionson Theory ofInternational " p. 327.
Politics,
39. Nye,"Neorealismand Neoliberalism,"p. 243.
40. Joseph Nye and Robert Keohane, "Power and Interdependence Revisited,"Intemational
that"makingtheunitlevel the dumpinggroundforall unexplainedvarianceis

an impedimentto thedevelopmentoftheory."41
It is clear whyWaltz would not want to include militarytechnologyin his
definition of structure.Recall thatone of his goals in fashioninghis definition
was to give a purelypositionalpictureof a systemso the notionof structure
would be transposablefromone substantivecontextto another. One can
readilytransposethe idea of the distribution of capabilitiesfromthe interna-
tionalsystemwherestatesare theunitsto,forexample,an oligopolisticmarket
where firmsare the actors. But what is the analogue to havinga secure,
second-strike forcefora firmin an oligopoly?Includingmilitary technologyin
the definition of structurewould seem to make the conceptless transposable.
Of course, greater transposability comes at a cost. Waltz's theorycannot
accountforvariationsin outcomeslike the probability ofwar thatmaybe due
to thenuclearrevolution.To understandthoseeffects, we have to look to other
theories.
Althoughit is evidentwhyWaltz would notwantto includedimensionslike
military technologyin his notionof structuregivenhis goal of transposability,
whyshould the distribution of capabilitiesacross states "be included in the
definitionand not other characteristicsof states that could be cast in
distributionalterms?"42The answer seems to be a pragmaticone. Waltz
believesthatstate "behaviorvariesmorewithdifferences of powerthanwith
differencesin ideology,in internal structureof propertyrelations,or in
governmentalform."43 That is, Waltz believes that a definitionof structure
based on the distributionof capabilitiesratherthan on the distributionof
somethingelse seems more likelyto have greater explanatorypower.44In
evaluatingthetheorybased on thisdefinition, partofwhatis beingevaluatedis
theusefulnessoffocusingon thedistribution ofcapabilities.
Notwithstanding the prevalenceof criticismsof Waltz's spare definitionof
structure,there is often a certain hollownessto debates about the proper
definitionof structure.Surelythe effectsof, say, the nuclear revolutionon
internationalpolitics do not depend on whetherwe attach the appellation
"4structural"or "unit-level"to thischange.Puttinga highvalue on transposabil-
ity,Waltz opted for a definitionthat made the concept of structuremore
readilytransposable.Other theoristsworkingon other questionsmay value
transposability less and maydefinestructuredifferently. The importantissue,
however,is not whetherthe consequencesof the nuclearrevolution,different
formsof propertyrelations,varyingdegreesof institutionalization, or changes
Organization41 (Autumn 1987), pp. 725-53, and especiallyp. 746, fromwhichthe quotationis
drawn.
41. Ibid.
ofInternational
42. Waltz,"Reflectionson Theory " p. 329.
Politics,
43. Ibid.
44. Buzan, Jones,and Littlemake a similarpointin BarryBuzan, CharlesJones,and Richard
Little,TheLogic ofAnarchy(New York: ColumbiaUniversity Press,1993),pp. 54-56.
in othersetsof constraintsare called "structural"or somethingelse. The issue

is to developtheoriesthatexplaintheseconsequences.45 Whenwe debatewhat
to call these changes rather than develop and test theories about the
consequencesofthesechanges,we appear to believethatthename impliesthe
consequences.
Neorealism and its implications

The neorealist-neoliberal debate developsprimarilyalongthefourthavenue
of criticism.This criticismquestionsthe conclusionsclaimed to followfrom
Waltz's assumptionsand those of neorealismmoregenerally.Neorealism,for
example,claimsthatinternationalinstitutions play a minimalrole in shaping
internationalpoliticsand that the prospectsforcooperationin anarchyare
bleak.46Neoliberalismquestionsthese claimsin twoways.First,it challenges
thelogicalcoherenceof theneorealistargumentbytrying to showthatthereis
a mistakein thelogic.Second,neoliberalismarguesthattheexplanatory power
of neorealismis weak when comparedto neoliberalism.I trace the develop-
mentof thiscriticismand theneorealist-neoliberal debate in theremainderof
thissection.I examinethreemajordisputesin thedebate in thenextsection.
In his contributionto Neorealismand Its Critics,Keohane surveysthe
neorealistresearch programand questions its predictivepower.47He then
describeswhat a "modifiedstructuralresearchprogram"would look like. It
would"pay muchmoreattentionto therolesofinstitutions and rulesthandoes
StructuralRealism. Indeed, a structuralinterpretation of the emergenceof
internationalrulesand procedures,and of obedience to thembystates,is one
of the rewardsthatcould be expectedfromthismodifiedstructuralresearch
program.1148
Keohane challengesneorealismmore directlyand developsan institutional
approach more fullyin his work,AfterHegemony.49 The centralquestion is,
"Under what conditionscan independentcountriescooperate in the world
politicaleconomy?"50Can, forexample,statescooperate in the absence of a
hegemon?Keohane beginshis analysisof thisquestion"withRealist insights
about the role of power.... [Keohane's] centralargumentsdrawmoreon the
tradition,arguingthatcooperationcan undersome conditions
Institutionalist
develop on the basis of complementary interestsand thatinstitutions,
broadly
defined,affectthepatternsofcooperationthatemerge."'51 In short,institutions
todo this,see ibid.

45. Fora recenteffort
46. JosephGrieco,"Anarchy and the Limitsof Cooperation,"in Baldwin,Neorealism
and
pp.116-42andpp.118-19inparticular.
Neoliberalism,
47. Keohane,"Theory ofWorldPolitics."
48. Ibid.,p. 194.
49. RobertKeohane, AfterHegemony Princeton
(Princeton: Press,1984).
University
50. Ibid.,p. 9.
51. Ibid.,p. 9.
maybe a significant factorin promotinginternationalcooperationin waysthat

neorealismhas failedto appreciate.
Keohane challengedboth the logicalcoherenceand the explanatorypower
ofneorealism.Attackingthelogic,Keohane writes,"I propose to show,on the
basis of theirown assumptions,thatthe characteristic pessimismof Realism
does not follow.I seek to demonstratethatRealist assumptionsabout world
politicsare consistentwiththe formationof institutionalized arrangements,
containingrules and principles,which promote cooperation."52In sum,
Keohane intendsto startwiththesame set ofcore assumptionsthatneorealism
does and thenshowthatcooperationis compatiblewiththeseassumptions.
Keohane attemptsthis demonstrationin the context of the repeated
prisoners'dilemma.There are two steps to the demonstration. The firstis to
argue that the repeated prisoners'dilemma is a reasonable model for the
internationalsystemenvisioned in neorealism,that is, that this model is
compatiblewithrealism'scentralassumptionsabout the internationalsystem.
Althoughhe does not develop thispoint at length,Keohane claims,"Not all
situationsin worldpoliticsor internationalpoliticaleconomytake the formof
Prisoner'sDilemma,but manydo."53As further supportforthe claimthatthe
repeatedprisoners'dilemmais generallyseen to be compatiblewithrealism's
basic assumptions,he mightalso have referredto Jervis'sbeliefthatthisgame
is an appropriatemodelforstudying thesecuritydilemma.54The secondstepin
Keohane's argumentis to appeal to the Folk theorem,whichshowsthatthe
mutuallycooperative outcome can occur in equilibriumin an infinitely
repeated prisoners'dilemma if the actors do not discount the futuretoo
much.55These two steps takentogetherimplythatcooperationis compatible
withrealism.
Writingin 1983, Keohane believed his neoliberal institutionalapproach
would prove to have greater explanatorypower than neorealism. But, a
definitivetest of his institutional
approach was not yet possible because the
worldwas "onlyjust enteringtheposthegemonicera."56It was too soon to test
the explanatorypower of an argumentthat predicted that international
institutionsand cooperationwould persistdespitethe absence of a hegemon.
Instead of a test,Keohane offereda "plausibilityprobe" of his institutional
approachin thecases of international trade,finance,and petroleum.57
One can envisiontwo general typesof response to Keohane's neoliberal
challengeto neorealism.The firstaddressesKeohane's challengeto thelogicof
52. Ibid.,p. 67.
53. Ibid.,p. 68.
54. Robert Jervis,"Cooperation Under the SecurityDilemma," WorldPolitics30 (January
1978),pp. 167-214and p. 170 in particular.
55. Drew Fudenberg and Eric Maskin, "The Folk Theorem in Repeated Games with
Discountingor withIncompleteInformation," Econometrica54 (October 1986),pp. 533-54.
56. Keohane,AfterHegemony, p. 218.
57. See Robert Keohane, "InstitutionalistTheoryand the Realist Challenge Afterthe Cold
War," in Baldwin, Neorealismand Neoliberalism,pp. 269-301, and particularlyp. 292; and
Keohane,After Hegemony.
neorealism's analysis of the problem of internationalcooperation. This

responsewould showthatKeohane had reallynot based his argumenton the
same set of core assumptionsthatneorealismdoes. If thiswere the case, then
Keohane's argumentthat neorealism'sconclusions about the prospectsof
internationalcooperationdo notfollowfromitsassumptionswouldbe invalid.
the repeated prisoners'dilemma is incompatiblewith
If, more specifically,
neorealism'score assumptionsabout the internationalsystem,then showing
thatcooperationin thisgame is possiblewould saynothingaboutwhatfollows
fromneorealism'sassumptions.
The secondtypeof responseis moreempirical.It would saythatneorealism
neverclaimed thatinternationalcooperationwas logicallyincompatiblewith
neorealism'sassumptions.So, showingthatcooperationis possiblegiventhese
assumptionsdoes not contradictneorealism.The real question is how much
internationalcooperationexistsand whetherneorealismor neoliberalismdoes
a betterjob of accountingforthe observedpatternof internationalcoopera-
tion. This response would then go on to compare the relativeexplanatory
powerofthesetwoapproaches.
Joseph Grieco developed both types of response to the institutionalist
challenge.58He arguedthatKeohane had not startedwiththe same assump-
tions neorealismdoes. In using the repeated prisoners'dilemma,Keohane
implicitlyhad assumed that states try to maximize their absolute gains.
Accordingto Grieco,however,neorealismrequiresa state'sutilityfunctionto
reflecta concernforrelativegains.59Consequently,Keohane does not "show,
on the basis of their [realists'] own assumptions,that the characteristic
pessimismof Realism does not follow," as he claimed.60In Cooperation
Among Nations, Grieco tried to assess the relative explanatorypower of
neorealismand institutionalism. He considersthe case of negotiationsover
nontariff barriersduringthe Tokyo Round of the General Agreementon
Tariffsand Trade, a case thathe believes poses a hard testforrealism,and
concludesthatrealismexplainsthiscase betterthandoes institutionalism. The
latest round of the debate between realism and liberalismwas now fully
engaged.6'
to this
David Baldwinbringsa numberofpreviouslypublishedcontributions
62 Baldwin provides an
debate togetherin Neorealismand Neoliberalism.
58. See the followingworks of Joseph Grieco: "Anarchyand the Limits of Cooperation";
"Realist Theoryand the Problemof InternationalCooperation,"JournalofPolitics50 (Summer
1988),pp. 600-624; and Cooperation AmongNations(Ithaca, N.Y.: CornellUniversity
Press,1990).
59. Grieco,"Anarchyand theLimitsof Cooperation,"p. 129. Gowa made the same criticism of
Axelrod'suse of the repeatedprisoners'dilemma[RobertAxelrod,The Evolutionof Cooperation
(New York: Basic Books, 1984)] when he used this game to model internationalpolitics.See
Joanne Gowa, "Anarchy,Egoism, and Third Images," International Organization40 (1986), pp.
167-86 and particularlypp. 172-79.
60. Keohane,After Hegemony, p. 67.
61. See Nye, "Neorealism and Neoliberalism," and the referencescited therein for an
introductionto earlierroundsofthisdebate.
62. These contributionsare: Robert Axelrod and Robert Keohane, "AchievingCooperation
overviewof the debate, and Grieco and Keohane offertheirreflectionsand

appraisalsof the debate in new essays.This volumecomplementsand extends
some ofthelinesofanalysisdevelopedinNeorealismand Its Critics.Neorealism
and Its Criticsincludesbothinternaland externalcritiquesof neorealism.The
formershare neorealism'sproblem-solving approach,whilethe latteradopt a
criticalapproach.63The scope of Neorealismand Neoliberalismis narrower,
more focused, and whollyinternal.Ali of the contributionsexemplifythe
problem-solvingapproach and address various facets of the neorealist-
neoliberaldebate.Three issueshave dominatedthisdebate,and an assessment
ofitrequiresan examinationofeach.
At issue
debate are themeaning

The threeissues at the centerof neorealist-neoliberal
and implicationsofanarchy,theproblemofabsoluteand relativegains,and the
tensionbetweencooperationand distribution. In what follows,I make three
points about these issues. First, although anarchyis often taken to be a
fundamental organizingconceptin international relationstheory,theemphasis
on anarchyis misplaced.What have oftenbeen takento be theimplicationsof
anarchydo not reallyfollowfromthatassumption.Rather,theseimplications
resultfromotherimplicitand unarticulatedassumptionsabout states'strategic
environment.Second, the controversyover the problem of absolute and
relativegains generallyhas mistakeneffectsfor causes in its analysisof the
prospectsfor internationalcooperation. Finally,althoughthe debate only
recentlyhas begun to considerdistributional concerns,the analysisof these
concernsmay help to clarifythe differencesthat do divide neorealismand
institutionalism.
The meaning and implications of anarchy

Much of the neorealist-neoliberaldebate centers on the meaning and
implicationsof anarchy.Accordingto Grieco,neorealismentailsfiveproposi-
UnderAnarchy,"WorldPolitics38 (October 1988),pp. 226-54; Grieco,"Anarchyand theLimitsof

Cooperation";StephenKrasner,"Global Communications and NationalPower,"WorldPolitics43
(April 1991), pp. 336-66; Charles Lipson, "InternationalCooperationin Economic and Security
Affairs,"WorldPolitics37 (October 1984), pp. 1-23; Michael Mastanduno,"Do Relative Gains
Matter?"International Security16 (Summer1991),pp. 73-113; Helen Milner,"The Assumptionof
Anarchyin InternationalRelationsTheory,"ReviewofInternational Studies17 (January1991),pp.
67-85; RobertPowell,"Absoluteand RelativeGains in InternationalRelationsTheory,"American
PoliticalScienceReview85 (December 1991),pp. 1303-20;Duncan Snidal,"RelativeGains and the
Patternof InternationalCooperation,"AmericanPoliticalScienceReview85 (September1991),pp.
701-26; and ArthurStein,"Coordinationand Collaboration,"International 36 (Spring
Organization
1982),pp. 294-324.
63. For an example of the former,see Keohane, "Theoryof World Politics"; forone of the
latter,see RichardAshley,"The Povertyof Neorealism,"in Keohane, Neorealismand Its Critics,
pp. 255-300; and Cox, "Social Forces,States,and WorldOrders."
tions.He definesthe last threeof these as "Third,international anarchyis the

principleforce shapingthe motivesand actions of states. Fourth,states in
anarchyare preoccupiedwithpower and security,are predisposedtowards
conflictand competition,and often fail to cooperate even in the face of
commoninterests.Finally,internationalinstitutions affectthe prospectsfor
cooperationonlymarginally."64 The pointof departureforKeohane's analysis
inAfterHegemonywas to use the prisoners'dilemmato showthatanarchydid
not implya lack of cooperation.Grieco respondedby arguingthatKeohane's
modelwas misspecified because he neglectedstates'concernsforrelativegains.
Duncan Snidal then tried to show that anarchydoes not implya lack of
cooperationevenifstatesare concernedwithrelativegains.65
A review of the neorealist-neoliberaldebate about the meaning and
implicationsof anarchyshows that our continuingemphasis on anarchyis
misplaced. Many of the purportedimplicationsof anarchymay be more
usefullytracedto otherassumptionsabouttheconstraints facingtheunits.This
suggeststhat we should focus less attentionon anarchyand much more
attentionon characterizing thestrategicsettingsin whichtheunitsinteract.
In reviewing thedebate about anarchy,itis necessaryto beginbydistinguish-
ingbetweentwoformulations of anarchy.The firstis thatanarchymeans the
"lack ofa commongovernment" thatcan enforceagreementsamongthestates
or more generallyamongthe units.66Robert Art and Jervistogetherexplain
that "internationalpolitics takes place in an arena that has no central
governingbody. No agencyexistsabove individualstateswithauthorityand
power to make laws and settledisputes.States can make commitments and
treaties,but no sovereignpowerensurescomplianceand punishesdeviations.
This-the absence of a supreme power-is what is meant by the anarchic
environment ofinternational politics."67
It is importantto emphasizethatthisformulation of anarchysays nothing
aboutthemeanstheunitshave at theirdisposalas theytryto further theirends.
It saysonlythatno higherauthority existsthatcan preventthemfromusingthe
meanstheyhave.Thus,forWaltz,firmsfacinga highriskofbankruptcy maybe
in an anarchicself-helpsystemeven thoughthe means available to themto
further theirinterests,like cuttingpricesor formingalliancesto distributethe
64. Grieco,"Anarchyand theLimitsof Cooperation,"pp. 118-19.

65. Snidal, "Relative Gains and the Patternof Cooperation."For Grieco's critiqueof Snidal's
analysisand Snidal's response,see Joseph Grieco, Robert Powell, and Duncan Snidal, "The
Relative Gains Problem for InternationalCooperation,"AmericanPoliticalScience Review87
(September1993),pp. 729-43.
66. The quotation is fromp. 226 of Axelrod and Keohane, "AchievingCooperation Under
Anarchy."Also see KennethOye,"ExplainingCooperationUnderAnarchy,"in KennethOye,ed.,
CooperationUnderAnarchy(Princeton,N.J.: PrincetonUniversityPress, 1986), particularlypp.
1-2.
67. RobertArtand RobertJervis, Politics,3d ed. (Boston: Harper Collins),p. 1.
International
costsof researchand development,have nothingto do withthe use of military

force,whichis one ofthemeansavailableto statesin theinternational system.68
One advantageof defininganarchywithoutreferenceto themeans available
to the unitsis that it makes the concept of anarchyreadilytransposableto
different substantivedomains.As discussedabove, Waltz weighedthisadvan-
tage heavily in constructinghis formulationof structure,so it is hardly
surprising thathe would adopt thisfirstdefinition of anarchy.But he certainly
is notalone, as Milner'ssurveyof different conceptsofanarchyshows.69
The second notionof anarchyrefersto the means available to the units.In
"Coordinationand Collaboration,"ArthurSteinbeginsbyobservingthatmany
international relationsscholarsuse anarchyto describe"the classiccharacter-
ization of internationalpoliticsas relationsbetween sovereignentitiesdedi-
cated to their own self-preservation, ultimatelyable to depend only on
themselves,and prepared to use force."70In effect,this second formulation
adds anotherdimensionto the lack of a centralauthority: namely,thatone of
themeansavailableto theunitsis theuse offorce.
The additionof thissecond dimensionhas twoconsequences.First,itmakes
the transposability of the concept of anarchymore problematic.What, for
example, is the analogue to using force for a firmfacing a high risk of
bankruptcy? If thereis no analogue,thena groupof firmsfacinga highriskof
bankruptcy would not forman anarchicsystemaccordingto thisdefinition. If
we want to argue that there is an analogue,what are the for
criteria establishing
thatone ofthemeansopen to a firmis analogousto a state'sabilityto resortto
force?Of course,a definitionof anarchythatreduces its transposability may
have compensatingadvantages.Whetherthesepotentialadvantagesoutweigh
thedisadvantageof a less transposabledefinition willbe discussedbelow.
Second, adding anotherdimensionraises importantquestionsforinterna-
tionalrelationstheory.Do the patternsof behaviorgenerallyassociatedwith
anarchicsystems, suchas thetendenciesforbalances ofpowerto formand-at
least for neorealists-the limited prospects for internationalcooperation,
resultfromthelack of a centralauthority? Or, are thesepatternsmoreheavily
influencedbyimplicitand unarticulatedassumptionsabout,say,the natureof
militaryforcethatare subsumedin thesecond definition of anarchy?
Two argumentssuggestthatour emphasison anarchyhas been misplacedif
by anarchywe mean the lack of a centralauthority. These argumentssuggest
thatconclusionsoftenclaimedto followfromtheabsence ofa centralauthority
do not. These conclusionsrequire other supportingassumptions.The first
argumentis reallyan empiricalobservation.Keohane notes in his assessment
of the debate between neorealismand neoliberalismthat the modernstate
68. Waltz,Theory Politics,pp. 105 and 111.

ofInternational
69. Milner,"The AssumptionofAnarchyin InternationalRelationsTheory."
70. Stein,"Coordinationand Collaboration,"p. 30.
system,conventionally dated from1648,has alwaysbeen anarchicin the sense

that it lacked a common government.71 Thus, anarchy,while perhaps a
necessarycondition,is certainlynot sufficient to explainanyof thevariationin
internationalpolitics duringthe modern era. In particular,anarchycannot
account forwhatevervariationin the level of internationalcooperationand
institutionalization
therehas been.
The secondargumentis moretheoreticaland beginswitha recentattemptto
formalizethe classic guns-versus-butter problem.72 To summarizethe model,
thereare twostates.In each perioda statemustdecide howmuchof itsoutput
to consume,how muchto allocate to itsmilitary sector,and whetheror not to
attack the other state. Each state's utilityis the discounted sum of its
consumptionin each period. As long as neither state attacks,the game
continues.If a state attacksat some time,the game effectively ends in one of
two ways.Eitherone state or the otherwill prevailby conqueringthe other.
The odds thata statewillprevailare simplytheratioofitsmilitary allocationto
theotherstate'smilitary allocation.The factthata state'sprobabilityofvictory
depends on its militaryallocation creates a trade-offbetween currentand
expectedfutureconsumption.The morea stateconsumestoday,thesmallerits
militaryallocation,and the higherthe probabilityof defeat. Because defeat
means a loss of futureconsumption,consumingmore todayreducesexpected
futureconsumption.The formalanalysisof the game determineseach state's
equilibriumlevel of consumptionand militaryspendingthat balances this
trade-off.
The guns-versus-butter model shows that our emphasis on anarchy is
misplaced.Neorealismexpectsbalance-of-power politicsto prevailwhenever
the systemis anarchicand the unitswant to survive.73 The guns-versus-butter
model indicatesthatthisexpectationis too broad. Whetheror not the states
balance in the model depends on an assumptionabout militarytechnology.
Generalizingbeyondthismodel,whetherunitsbalance or notdependsas much
on otherfeaturesdefiningthe strategicsituationin whichtheyinteractas it
does on thepresenceof anarchy.
To see that balancingdepends on underlyingassumptionsabout military
technology,note that the guns-versus-butter game presumesa conventional
militarytechnology inwhichtheprobability ofvictoryor defeatdependson the
relativesizes of the opposingmilitaryforces.Given this stylizedassumption
about military technology, the statesbalance againsteach otherin thewaywe
would expect the units to do in an anarchic system.74 Now suppose that
Theoryand theRealist ChallengeAftertheCold War."

71. Keohane, "Institutionalist
72. RobertPowell,"Guns, Butter,and Anarchy,"AmericanPoliticalScienceReview87 (March
1993),pp. 115-32.The presentdiscussionextendssome oftheobservationsmade in thatessay(see
pp. 126-27).
73. Waltz,Theory Politics,p. 121.
ofInternational
74. Externalbalancingthroughalliances is impossiblewhen thereare onlytwostates.Rather,
the statesengage in internalbalancing.For a discussionof internaland externalbalancing,see
Waltz,Theory ofInternational
Politics,p. 168.
the states' strategicsettingis different.Formalizingand stylizingthe nuclear

revolutionin military technology, assumethatthereis, to use BernardBrodie's
term,an absoluteweapon.75The probabilityof victoryno longerdepends on
the relativesize of the states' militaryforces.Rather,once both states have
attainedsecuresecond-strike forces,waris certainto takea tollfarhigherthan
any potentialgain. If we solve the model based on this assumptionabout
militarytechnology,the states will spend enough to acquire second-strike
forces.But theywill not spend more even ifthe otherstate does. There is no
balancinghereeventhoughthesystemremainsanarchicand theunitsstillseek
to survive.76The firstnotionofanarchy,albeitverytransposable,does notimply
balancing.
The guns-versus-butter model,likemanymodels,makesmanystarksimplifi-
cationsand, accordingly, mustbe used cautiously.On the plus side,models,in
part because of these simplifications, let us vary one factorwhile holding
everything else constant.Models therebypermitus to isolate the effectsof
different factorsin ways that historicalcases rarelydo. When we use the
guns-versus-butter model to isolate the effectsof anarchy,we find that
conclusionsclaimedto followfromthe assumptionof anarchydepend at least
as muchon otherunarticulatedassumptionsabout theunits'strategicenviron-
ment.
The firstdefinitionof anarchyis in some sense too transposable,whilethe
seconddefinition is nottransposableenough.As we have seen,ifdefinedas the
absence ofa centralauthority, anarchyencompassessystemsinwhichstatesdo
and do not balance. Conversely,ifwe defineanarchyby addingthe notionof
the potential use of force to the lack of a central authority,we findthe
transposability of the conceptto be greatlylimited,even ifunitsgenerallywill
balance in such a system.The disadvantagesof thisverylimitednotion of
anarchyare quite high.In particular,thisnotiondoes not applyto systemsin
whichthe use of force is for all intentsand purposes not at issue. Even if
neorealism'sexpectationsabout anarchicsystemsin whichthe use offorceis a
seriouspotentialconcernare correct,the argumentsunderlying theseexpecta-
tionscannotbe transposedto systemsin whichthe use of forceamongunitsis
not at issue. Neorealistexpectationsabout these systemsmay of course still
proveto be correct,buttheylack theoreticalfoundations.
75. Bernard Brodie, Strategy in the MissileAge (Princeton,N.J.: PrincetonUniversityPress,

1959). For otherdiscussionsof theeffectof thenuclearrevolution,see RobertJervis,TheMeaning
of theNuclearRevolution(Ithaca, N.Y.: Cornell UniversityPress, 1989); Robert Powell,Nuclear
DeterrenceTheory(Cambridge:CambridgeUniversity Press, 1990); Thomas Schelling,Armsand
Influence(New Haven, Conn.: Yale UniversityPress, 1966); and Glenn Snyder,Deterrenceand
Defense(Princeton,N.J.:PrincetonUniversity Press,1961).
76. Buzan, Jones and Little reach the same conclusionin The Logic of Anarchy.They and
Morrowofferthe expansionof the Roman empire as an importantexample of the failureof
balances to form.See James Morrow,"Social Choice and SystemStructure,"WorldPolitics41
(October 1988),pp. 75-97.
The absence of a definition thatis less transposablethanthe firstand more

transposablethan the second poses an importantproblemfor international
relationstheoryafterthe cold war. The problemis evidentin some recent
efforts to use neorealism'sanalysisofanarchyand theproblemof absoluteand
relativegains to outlinethe post-cold war contoursof internationalpolitics.
The neorealistanalysisargues that stateswill startcompetingand balancing
overeconomicissues afterthe cold war muchas theycompetedand balanced
over securityissues duringthe cold war. Samuel Huntington,for example,
bases his assessmentof the continued importanceof U.S. primacyon a
neorealistanalysis.77Yet, he and others also believe that the prospectsof
"militaryconflictbetween major states is unlikely."78The discussion of
transposability shows that neitherdefinitionof anarchyprovides adequate
theoreticalsupportfortheneorealistanalysisofinternational politicsiftheuse
offorceis nota relevantconcern.The firstnotionof anarchycan be transposed
readilyto a systeminwhichtheuse offorceis notat issue. But as we have seen,
this definitiondoes not supportthe neorealistclaims that anarchyimplies
balance-of-power The second notionof anarchy,whileit mayimply
politics.79
balancingwhen forceis at issue, cannotbe transposedto a domain in which
forceis presumednotto be at issue.
Huntington,believingthat the politicsof internationaleconomicsis more
like a systemwithconventionalmilitary technology, arguesforthe importance
of internationalprimacy.Jervis,believingthat the politics of international
economics is more like a systemwith an absolute weapon, questions the
importanceofinternational primacy.80In eithercase, theneorealist-neoliberal
debate's emphasison the lack of a centralauthority is misplaced.As Charles
Lipson putsit in his contributionto theBaldwinvolume,"The idea of anarchy
is,in a sense,theRosettastoneofinternational relations.... Butwhatwasonce
a blindinginsight-profoundand evocative-has ossifiedand become blinding
in theothersense of theword-limitingand obscuring."8'We need to develop
a morecarefulspecification ofthestrategicsettingsinwhichunitsinteractifwe
are to be able to explainthe patternof theirinteractions.Characterizingthis
structure is an important open questionforinternational relationstheory.
The problem of absolute and relativegains

The second majorissue at the centerof the debate betweenneorealismand
is theproblemof absoluteand relativegains.In whatfollows,I
institutionalism
77. Samuel Huntington, "WhyInternationalPrimacyMatters,"Intemational Security17 (Spring

1993),pp. 68-83. See also RobertJervis,"InternationalPrimacy,"Intemational Security17 (Spring
1993), pp. 52-67; and Kenneth Waltz, "The EmergingStructureof InternationalPolitics,"
IntemationalSecurity18 (Fall 1993), pp. 44-79. Jervisuses a neorealistperspectiveto framehis
discussion,buthisconclusionsdifferfromHuntington's.
78. Huntington, "WhyInternationalPrimacyMatters,"p. 93.
79. For a differentview, see Waltz, "The EmergingStructureof InternationalPolitics,"
especiallyp. 74.
80. Jervis,"InternationalPrimacy,"pp. 57-59.
81. Lipson,"InternationalCooperationin Economicand SecurityAffairs,"p. 80.
firstbrieflysummarizesome aspectsof the debate about thisproblem.Then I

argue that in a narrowermethodologicalsense this debate reflectsa basic
misunderstanding oftherole ofmodels.More broadly,thedebate surrounding
absolute and relativegains generallyhas mistakeneffectsfor causes and,
therefore,contributedlittleto the analysisof the problemof international
cooperation.Once we separate causes fromeffects, we again see the need to
focus our attentionon a more elaborate characterizationof the strategic
settingsconfronting states.
To reviewthe debate, neorealismassumes that states are concernedwith
relativegains.For Waltz,"statesthatfeel insecuremustask how the gainwill
be divided.Theyare compelledto ask not 'Will bothof us gain?' but 'Who will
gain more?' 182 In mountinghis institutionalchallenge in AfterHegemony,
Keohane assumesthatstatesare trying to maximizetheirabsolutegains,thatis,
the states' preferences"are based on theirassessmentsof theirown welfare,
notthatof others."83 He thenanalyzesthe problemof cooperationin termsof
the repeatedprisoners'dilemma.Grieco in turncriticizesKeohane's assump-
tionthatstatesattemptto maximizetheirabsolute gains. Grieco assertsthat
"realismexpectsa state's utilityfunctionto incorporatetwodistinctterms.It
needs to includethe state'sindividualpayoff... reflecting the realistviewthat
states are motivatedby absolute gains. Yet it must also include a term
integrating boththe states'individualpayoff... and thepartner'spayoff... in
sucha waythatgaps favoring thestateadd to itsutilitywhile,moreimportantly,
gaps favoringthepartnerdetractfromit."84 In sum,the debate about absolute
and relativegainsbecame a debate about whatto assume about states'utility
functions.
The key to understandingthis debate is to distinguishbetween two
possibilities.The firstis thata state'sconcernor,moreprecisely,the degreeof
its concernfor relativegains is the productof the strategicenvironment in
whichthe statefindsitself.If so, thenthe degreeof concernis likelyto varyas
the environment, saythe intensity of the securitydilemma,varies.In thiscase,
the strategicsettingfacingthe stateinduces a concernforrelativegains.The
second possibilityis thata state's degree of concerndoes not varyand is the
same regardlessofitsenvironment.
Both neorealismand neoliberalismappear to agree that this concern is
induced.Grieco,forexample,believesthata state'ssensitivity to relativegains
"willbe a functionof,and willvaryin responseto, at least sixfactors."85 These
includethe fungibility of poweracross issues,the lengthof the shadowof the
future,and whethertherelativegainsor losses occurovermilitary or economic
matters.86Neoliberalism also assumes that the degree of concern varies.
Indeed, Keohane emphasizesthatbothneorealismand neoliberalismpresume
82. Waltz,TheoryofInternationalPolitics,p. 105. See also Waltz,Man, State,and War,p. 198.

84. Grieco,"Anarchyand theLimitsof Cooperation,"p. 129,emphasisoriginal.
85. Grieco,"Realist Theoryand theProblemof InternationalCooperation,"p. 610.
86. Ibid.,pp. 610-11.
that the concern for relative gains is conditionalin his appraisal of the
neorealist-neoliberal debate.87
Two importantimplicationsfollowfromthe conclusionthatthe degreeof a
state's concernfor relativegains is conditionaland varies fromsituationto
situation.The firstis that the debate about what to assume about a state's
preferencesor utilityfunctionis largely irrelevantand reflectsa basic
misunderstanding of the role of models.We can formallyinduce a concernfor
relativegainsin twoways.First,we can explicitly representtheconstraintsthat
lead to thisconcernin the model. This is the approachI followedin analyzing
the absoluteand relativegainsproblem.88 I assumedthatstateswere trying to
maximizetheirabsolute gains. But the strategicsettingin whichtheywere
attempting to do so induced a concernforrelativegains. The second way to
induce a concernforrelativegains is to representthisconcernin the state's
utilityfunction.When done in thisway,the model is in effecta reducedform
for some more complicatedand unspecifiedmodel in which the strategic
constraintswould induce this concern.Grieco's analysismay be seen as an
attemptto workwitha reduced form.Rather than specifyinga model that
explicitlyrepresentsthe six factorshe believes induce a concernforrelative
gains,he abbreviatestheinfluencesofthesefactorsthroughhisspecification of
thestates'utilityfunctions.89
Which approach to modelinga state's concernis better?I do not believe
thereis an a priorianswerto thisquestion.Models are tools and askingwhich
approachis betteris akin to askingwhethera hammeror a saw is better.The
answerdepends on whetherthe task at hand is drivingnails or cuttingwood.
One advantageof a reducedformis thatit is likelyto be simplerand easier to
use analytically.A disadvantageis that as long as the more complicated
underlying model remainsunspecified,we cannot analyze the purportedlink
between the constraintsthat are believed to induce a concern and the
realizationof thisconcern.The linkthus remainsproblematic.Whetherthe
balance of advantages and disadvantagesfavorsan approach based on a
reducedformor on a moreexplicitstructural formdepends on the model as a
whole and on the substantiveproblem.Thus, debates about what to assume
about preferencescannotbe resolvedwithoutreferenceto an overallevalua-
tion of the entire model and the substantiveproblem being modeled. By
focusingsolelyon what to assume about preferencesand not evaluatingthis
Theory and the Realist Challenge Afterthe Cold War," pp.

418-25.
88. Powell,"Absoluteand RelativeGains in InternationalRelationsTheory."
89. See Grieco,"Anarchyand theLimitsofCooperation,"as wellas his"Realist Theoryand the
ProblemofInternationalCooperation,"and CooperationAmongNations. AlthoughGrieco'smodel
maybe seen as a reduced form,it is not clear thathe sees it as such. His assertionthata state's
utilityfunctionmustincorporatea termreflecting itsconcernforabsolutegainsand one reflecting
itsconcernforrelativegainsmaybe trueof a particularmodel,but it does nothold forall models.
His apparentclaimthatit is trueforall models suggeststhathe does not interprethis model as a
reducedform.
assumptionin theoverallcontextoftheentiremodel,theneorealist-neoliberal
debate about states' preferencesseems largelyirrelevant.It reflectsa basic
misunderstanding ofthe role ofmodels.
A second importantimplicationfollowsfromthe conclusionthatthe degree
ofa state'sconcernforrelativegainsdependson,or is a functionof,itsstrategic
environment. This dependencymeansthattheconcernforrelativegainsis part
of the outcomeand notpartof the explanation.A concernforrelativegainsis
an effectand not a cause. We cannot explain the presence or absence of
internationalcooperationbecause of the presence or absence of significant
concernsfor relativegains. Cooperation and concernfor relativegains may
co-vary,but one does not cause the other. The causes for both are the
underlying featuresof the states' strategicenvironment thatjointlyinduce a
concernforrelativegainsand therebymake cooperationdifficult.
Existingwork in internationalrelations theoryhas to varyingdegrees
recognized firstthat relative gains concerns do not explain the level of
cooperationand second the need to look to the underlying strategicenviron-
ment.Lipson,forexample, triesto relate differencesin the strategicenviron-
mentsinherentin military and economicissuesto differences in states'discount
factorsand,throughthe differences in thosediscountfactors,to thelikelihood
of internationalcooperation in militaryand economicaffairs.90 Jervisexplicitly
recognizes this need: "The conditions under which states seek to maximize
theirrelativeas opposed to theirabsolutegainsneed moreexploration."91
A possibleexplanationoftheconcernforrelativegainsmightat firstseem to
be anarchy:a lack of a centralauthority leads to balancingand a concernfor
relativegains.This answer,however,failsforat least tworeasons.Anarchyhas
been a constantfeatureofthemoderninternational system.It cannottherefore
accountforvariationin thedegreeof a state'sconcernforabsolutegains.And,
as we have seen above,anarchydoes notimplybalancing.
As emphasizedabove, modelsoftenmustbe judged in lightof the problem
theyare designedto address.If we wantto studythe problemof international
cooperation and its relation to concerns for relative gains, modelingthat
concernin termsof state preferencesseems likelyto prove a poor approach.
The reducedformwouldbe leavingimplicitand unspecifiedpreciselywhatwe
wantto knowmoreabout,i.e., thelinkfromthestates'strategicenvironment to
theirconcernforrelativegains and the prospectsforcooperation.Tryingto
make thislinkmore explicitby elaboratinga state's strategicsettingand the
connectionbetween this settingand the induced concernfor relativegains
seems likelyto provea morefruitful approach.As in our discussionof anarchy,
we are led to the need to focus our attentionon a more sophisticated
characterization ofthe strategicsituationsconfronting theunits.
90. Lipson,"International in Economicand Security

Cooperation See also Joanne
Affairs."
GowaandEdwardMansfield, andInternational
"PowerPolitics Political
Trade,"American Science
Review87 (June1993),pp.408-20.
91. Jervis,
"Realism,GameTheory, andCooperation."
In sum,the debate surrounding the problemof absolute and relativegains

has betrayeda fundamentalmethodologicalmisunderstanding of the role of
models. The debate has also mistakeneffectsforcauses. Unfortunately, the
methodologicalmisunderstanding has reinforcedthe substantivemistake.By
focusingon whatto assume about states'preferences,the debate has made it
more difficultto correctthe mistakeof seeing effectsas causes. In a reduced
formin whichthe concernforrelativegainsis representedin the states'utility
functions,thedegreeofthisconcernis formally an independentvariable.Thus,
itis easyto imagineholdingeverythingelse constantand askinghowchangesin
thedegreeofthisconcernwouldaffectcooperation.The difficulty is,of course,
thatifthedegreeofconcernis reallyan effect, thenone cannothold everything
else constantwhilevaryingthisconcern.Althoughformally independentin the
reduced form,the degree of this concern is substantively dependent. The
reducedformthusmasksthisdependenceand makesitmoredifficult to correct
the mistakeof seeingeffectsas causes. Once we separate effectsfromcauses,
we also appreciate the need for a more careful specificationof the units'
strategicsetting.
Coordination and distribution

The debate betweenneorealismand neoliberalismrecentlyhas focusedon a
thirdissue. A centralcontentionof theneoliberalapproachis thatinstitutions
matter.In particular,theycan help states cooperate: "institutions, broadly
defined,affectthe patternsof cooperationthat emerge."92In analyzinghow
institutionsmatter,Keohane emphasizes marketfailuresand explains that
institutions can help independentactorsovercomethese failuresbyproviding
information and reducingtransactions costs.93
In short,institutions
maymakeit
possible to realize joint gains and move out towardthe Pareto frontier.But
thereare oftenmanywaysto realizethesegains,withsomewaysgivinga larger
shareto one stateand otherwaysgivinga largershareto anotherstate."There
are," as StephenKrasnerobservesin his contribution to the Baldwinvolume,
"manypointsalongtheParetofrontier."94 These multiplewaysofachievingthe
joint gains fromcooperationcan create conflictsover how thosegainswillbe
distributed. As Geoffrey GarrettobservesoftheSingleEuropean Act,"the EC
[European Community]membersshared the commongoal of increasingthe
competitivenessof European goods and services in global markets.It is
apparent,however,that there were also substantialdifferencesin national
preferenceswithinthisbroad rubric."95Reflectingon the debate, Keohane
92. Keohane,After Hegemony, p. 9.

93. Ibid.,p. 246.
94. Krasner, "GlobalCommunications andNationalPower,"p. 235.
95. The quotationis fromp. 535 of Geoffrey Garret,"InternationalCooperationand
InstitutionalChoice,"Intemational 46 (Spring1992),pp. 533-60.For another
Organization
discussionofconflicting seeAndrew
interests, Moravcsik,"NegotiatingtheSingleEuropeanAct,"
Intemational 45 (Winter1991),pp. 19-56.
Organization
U2
A4
3
A
A2
XA I
FIGURE 1. Distributional conflicts: ofstate1 (SI); U2 = the

U1 = theutility
ofstate2 (S2); Q = statusquo; Al through
utility A4 = possibleagreements
alongtheParetofrontier
now believesthathe underemphasized"distributive issues and the complexi-

ties they create for internationalcooperation" in AfterHegemony.96 I will
suggest that a careful analysis of the tension between cooperation and
distribution can illuminatethe debate betweenneorealismand neoliberalism
by clarifyingsome of the differencesthat actually do divide these two
approaches.
The distributive problemarises because thereare manywaysto dividethe
cooperativegains.Figure1 illustratesthisproblemwhentwostates,SI and S2,
are tryingto cooperate.SI's utilityis measuredalong the horizontalaxis,and
S2's utilityis measuredalongtheverticalaxis.Q is thestatusquo.Al throughA4
are possibleagreementsthatlie alongtheParetofrontier. BothA2andA3lie on
the Pareto frontier to Q; i.e., bothS, and S2 preferA2
and are Pareto-superior
to Q andA3 to Q. A2 andA3 are different waysof realizingthejointgainsfrom
cooperation. But, S, prefersA2 to A3 because A2 yields a higher utility.
Similarly,S2 prefersA3. Thus, thereis a distributive conflictoverA2 and A3.
More generally,S, prefersagreementscloser toAl and S2 prefersagreements
closertoA4.
Krasner recentlyhas used these distributionalissues to challenge the
neoliberalapproach.97The thrustof Krasner'scriticismis that"the natureof
institutionalarrangementsis betterexplainedby the distribution of national
Theory and the Realist Challenge Afterthe Cold War," pp.

446-47.
97. Krasner,"Global Communicationsand NationalPower." See also JamesMorrow,"Model-
ingInternationalRegimes,"International forthcoming.
Organization,
power capabilitiesthan by effortsto solve problemsof marketfailure."98In

termsofFigure1,themorepowerfulSl, thegreaterwillbe itsshareofthejoint
gainand thecloserthe agreementwillbe toA1.
Viewingthequestionofwhetherinstitutions matterin termsofdistributional
issues helps refineand clarifythat question. If cooperationcan take many
differentformsand these alternativeformshave distributional consequences,
then the arrangementsthemselvescan become the object of negotiation.
Indeed, giventhe absence of a supranationalauthority, the statescannotbind
themselvesto anyparticularinitialinstitutional arrangementand correspond-
ing allocation of cooperativebenefits.The institutionalstructureis always
subjectto renegotiation ifa statebelievesitworthwhile.
The perpetual possibilityof renegotiationraises an importantdynamic
questionthatmustbe separatedfroma more staticissue. That is, institutions
mightmatterin eitheror botha staticand a dynamicway.The staticwaythat
institutionsmightmatteris thattheymightbe a means of overcomingmarket
failuresor, more generally,of realizingjoint gains fromcooperation.As a
means to an end, the structureof the institutionbecomes somethingto be
explained.In his explanationof institutional structure,Keohane emphasizes
monitoring and reducinguncertainty. In emphasizingthesefactors,he is trying
to explainhow institutions can serve as a means to achievingthe joint gains
fromcooperation.Krasner focuses on anotheraspect of the explanationof
institutional He arguesthattheactualinstitutional
structure. arrangement that
willemergefromthe set of potentialinstitutional arrangements thatfulfillthe
functionsKeohane describes will tend to reflectthe desires of the more
powerfulactors.Thus, Keohane's and Krasner's analysesof the staticissue
complementeach other.
There is also a second, more dynamicway thatinstitutions may matter.If
institutionsdo matterin this second sense, then theywould be part of an
explanationand notpartofthe outcometo be explained.Figure1 can be used
to illustratethissecond way.Suppose thatat some timetotwostatesare at Q.
Bothstateswantto moveout to theParetofrontier. To thisend,theycreatean
institution thatreducestransactioncosts and uncertainty in the wayKeohane
describes.In thiswaytheinstitution is a meansto theend of realizingthejoint
gainsof cooperation.But thereare also distributional conflicts,so both states
also use theirpoliticalpowerto shape the institutional arrangements in order
to obtaina largershareofthejointgains.AssumethatS1 is morepowerfuland,
as Krasner argues,the institutionthroughwhichthe states realize the joint
gains will give S, a largershare of the benefits.In particular,suppose the
arrangement movesthemfromQ toA2. AtA2,S, receivesa largershareof the
joint gains,whichreflectsits greaterpower.A2 thus reflectsKeohane's and
Krasner's complementaryanalyses of the static dimensionof the way that
institutions maymatter.
and NationalPower,"p. 235.

98. Krasner,"Global Communications
To examinethe dynamicaspect,suppose further

thatat some latertime,say
t1,the balance of power has shiftedin favorof S2. Indeed, assume thatif the
institution
created at timetodid not existand that the stateswere tryingto
createan institution de novo at tl,thenS2's greaterpowerwouldmean thatthe
institutionthatwouldbe createdwouldmovethestatesfromQ toA3. AtA3,S2
obtainsmoreofthegains,presumablyreflecting itsgreaterpower.
But the states are not creatinga new institutionat tl, fortheycreated an
institutionat to that moved them fromQ to A2. How does the fact that an
institutionalreadyexistsat tl,whenthestatesmustdeal witha newdistribution
ofpower,affecttheinstitutional arrangements and distribution ofbenefitsthat
willbe devisedat thattime?There are twopossibilities.
First,the institutionalarrangements existingat toare irrelevant.Institutions
adjust smoothlyso that the distributionof benefits always reflectsthe
underlying distribution ofpower.In termsofFigure1,thestateswillbe atA3 at
t1 regardlessof the existenceof an institution at to.In brief,historydoes not
matter.
The second possibilityis thatthe institutional arrangements thatexistat to
affectthose that prevail at tl. To illustratethis possibility,let A in Figure 1
denotethe arrangements and associateddistribution of benefitsthatexistat t1
giventhe arrangements existingat to. Then A will in general differfromA3,
whichis whatwouldhaveprevailedhad therebeen no preexisting institution
or
ifinstitutions adjustedsmoothly.Intuitively, thefartherAis fromA3,themore
currentarrangements are shaped bypast arrangements.99 A moreconciseway
of describingthis second way that institutionsmay matteris that history
matters.100In termsof Figure 1, the neoliberalclaim thatinstitutional history
mattersin international relationsmeansthatAwilloftenbe verydifferent from
A3. Moreover, the fact that the states originallycooperated means that
cooperationis less likelyto collapse and A is more likelyto lie on the Pareto
frontier.Cooperation will often continue in the face of a change in the
underlying distribution ofpower.
The possibilitythatinstitutionsmaynotadjustsmoothlyand thattheexisting
institutionalarrangementsand distributionof benefitsmay not reflectthe
underlying distribution of poweris a recurrentthemein internationalpolitics.
Robert Gilpin, for example, sees this as the cause of hegemonicwar. A
hegemon establishes an internationalorder and associated distributionof
benefitsthat favorsthe hegemon.Over time,the hegemon'srelativepower
declines because of uneven economic growth,and the existingorder and
distributionofbenefitsno longerreflectthedistribution ofpower.This setsthe
matters,I have assumedthatinstitutions

99. To simplify are efficient
in thattheymovethestates
out to the Pareto frontier.Of course, institutionsneed not be efficient.For a discussionof
institutions
and efficiency,
see Douglass North,Institutions,Institutional Change,and Economic
Performance (New York: CambridgeUniversity Press,1990).
100. Northanalyzestheproblemof institutional changeand stability in ibid.
scene for another hegemonicconflict.'01 Similarly,a disparitybetween the

distributionsof benefitsand power is inherentin Krasner's metaphorof
tectonicplates.102When regimesare firstcreated,theygenerallyreflectthe
underlying ofpower.But thepressureto changetheregimebuilds
distribution
overtimeas thedistribution ofpowerchanges.In the tectonicplate metaphor,
thispressuredoes notlead to a smoothadjustment.Rather,thepressuregrows
untilitis suddenlyrelievedin an earthquakeinwhichtheregimealtersin a way
thatrealignsitwiththedistribution ofpower.
In the neorealist-neoliberaldebate, Keohane generallyemphasizesmarket
failures,transactioncosts,uncertainty, information, and institutions
as impor-
tantmeans of cooperation.But he also argues thatinternationalinstitutional
historymatters.Once institutions or regimesare established,actorsbehave in
waysthat,whetherdeliberatelyor not,make it costlyto changethe regimeor
builda newone. Thus,eveniftheoriginaldistribution ofpowerunderlying the
regimeshifts,the now morepowerfulstateswillnot changethe regimeunless
thedistribution ofpowerhas shiftedto suchan extentthatthebenefitsofa new
regime,whichwouldreflectthenewdistribution ofpower,outweighthecostof
changingtheexistingregime.The costofchangingor constructing newregimes
thusgivesexistingregimessome resilienceto shiftsin the balance of power.
"The highcostsofregime-building help existingregimespersist."1103
In contrast,Krasnerargues thatregimesand institutions do not matterat
least in thecase ofglobalcommunications:
In recentyearsdistributional questionshave precipitatedconflictoverthe
allocationof theradio spectrumand overinternational telecommunica-
tions.The outcomeofthesedisputeshas been determinedprimarily bythe
relativebargainingpowerof the statesinvolved.Whereas previousinstitu-
tionalchoiceshad notimposedmuchconstraint, new interestsand powerca-
pabilitiesconferredbynew technologieshave led to new institutional ar-
rangements.
This is notto saythatinstitutionalarrangementswere everirrelevant:
indeed,theywere necessaryto resolvecoordinationproblemsand to estab-
lishstability.Withoutregimesall partieswould have been worseoff.There
are, however,manypointsalongthe Pareto frontier: the natureof institu-
tionalarrangements is betterexplainedbythedistribution of national
powercapabilitiesthanbyefforts to solveproblemsof marketfailure.104
In brief,institutionsmay serve as a means of achievingthe joint gains of
cooperation.But institutionalhistorydoes not matter.Previousinstitutional
101. RobertGilpin,Warand Changein WorldPolitics(Cambridge:CambridgeUniversity

Press,
1981).
102. Stephen Krasner, "Regimes and the Limits of Realism," in Stephen Krasner, ed.,
Regimes(Ithaca, N.Y.: CornellUniversity
International Press,1983),pp. 355-68.
104. Krasner,"Global Communicationsand NationalPower,"p. 235,emphasisadded.
choicesdo not constrainor significantlyaffectthe futureinstitutionalarrange-

mentsand thefuturedistribution ofbenefits.
The neorealist-neoliberal debate leaves us withcontrastingclaimsabout the
importanceof institutional history.These claimsin turnpose twoquestionsfor
futureresearch.First,do institutions or regimesactuallyadjust smoothlyto
changesin thedistribution ofpower.Does institutional historymatter?Second,
what factorsaffectthe stabilityor rigidityof a regimeor institutionand the
rates at whichit adjusts? In particular,are therefactorsin the international
environment thatmake internationalregimesand institutions less stablethan,
forexample,the institution of the medievallaw merchant,the Declarationof
Rightsand associatedinstitutional changesfollowingthe GloriousRevolution
in England, or the currenteffortsto establishconstitutionalgovernments in
Russia and Eastern Europe?105Douglass North and others offermany
examplesin whichinstitutionalhistoryseems to be profoundlyimportant.106
We need a betterunderstandingof the conditionsunderwhichinstitutional
historymattersand the extentto whichthe internationalsystemsatisfiesthese
conditions.Work on these questions holds the promise of a more unified
understanding ofinstitutionsand cooperation.
Before thisworkcan be done, however,two obstacles mustbe overcome.
First,we need a way of measuringor assessing the constrainingeffectsof
institutions.Figure 1 helps us visualize the issue, but much more than a
visualizationis required.Second, we need more powerfultheoriesthatmake
more specificclaims about the extent to which institutionsshape future
decisionsand actionsthanneorealismor neoliberalismpresentlydoes.
Conclusion
Althoughtheneorealist-neoliberal debate sometimeshas obscuredas muchas

ithas clarified,thisdebate has forcedus to examinethefoundationsof some of
our mostinfluential theoriesof internationalpoliticsmorecarefully.This is an
important contribution.Such examinationsdeepen our understanding of these
theoriesby clarifying theirstrengthsand weaknesses. These clarificationsin
turnmaysuggestimportant directionsfor future work and ultimatelylead to
bettertheorieswithgreaterexplanatory power.
As we have seen, both neorealism and neoliberalismsee the effectsof
anarchyand the degreeof concernabout relativegainsto be conditional.The
105. See Paul Milgrom,Douglass North,and BarryWeingast,"The Role of Institutionsin the

RevivalofTrade: The Law Merchants,PrivateJudges,and theChampagneFairs,"Economicsand
Politics 2 (March 1990), pp. 1-23; Douglass North and Barry Weingast,"Constitutionsand
Commitment," JoumalofEconomicHistory49 (December 1989),pp. 803-32; and BarryWeingast,
"The PoliticalFoundationsof Democracyand the Rule of Law," manuscript,Hoover Institution,
February1993.
Change,and EconomicPerformance.
Institutional
106. North,Institutions,
taskahead is to specifytheseconditionsmoreprecisely.We mustalso explain

more satisfactorily how these conditionslead to particularoutcomes like
balancingbehaviorand a concernforrelativegains.Griecomakesa usefulstart
in thisdirectionbyidentifying sixfactorsthatmayaffectthedegreeof a state's
concern for relativegains.107The next step is to develop a more explicit
characterization ofthestrategicsettingsthatyieldoutcomeslikebalancingand
relative-gainsconcerns.
When we look beyondthe narrownessof the neorealist-neoliberaldebate
about anarchyand the relative-gainsproblem,we see that this debate has
focusedour attentionon a verybroad and important setofissues.These are the
absence of centralauthority, the potentialforjoint or cooperativegains,the
distributionalconflictthese potential gainsengender, and therolesofcoercion
and institutionsin realizingand allocatingthesejointgains.This nexusofissues
also lies at the heart of the expandingliteratureson constitutionaldesign,
governingthe commons,and stateformation. 108That a core of commonissues
underliesthese seeminglydisparatesubstantiveconcernsmakes it possible to
imagine movingbeyond what has become a rathersterile debate between
neorealismand neoliberalismin a waythatdrawson and contributesto these
otherliteratures.
107. Grieco,"Realist Theoryand the Problemof InternationalCooperation,"pp. 611-13. See

also Gowa and Mansfield,"Power Politicsand InternationalTrade."
108. See, forexample,BarryWeingast,"Constitutionsas GovernanceStructures," Journalof
Economics149 (March 1993), pp. 286-311; Elinor Ostrom,Governing
and Theoretical
Institutional
theCommons(New York: CambridgeUniversity Press,1990); and Tilly,Capitaland Coercion.

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Anarchy in International Relations Theory: The Neorealist-Neoliberal Debate

Robert0. Keohane, editor.Neorealismand Its Critics.New York: Columbia

Two ofthemostinfluential contemporary approachesto internationalrelations

Frieden,JoanneGowa, JosephGrieco, ErnstHaas, Peter

48, 2, Spring1994,pp. 313-44

In thisreview,I discussfourbroad avenues of criticismthatthese volumes

1. KennethWaltz,Theory Politics(Reading, Mass.: Addison-Wesley,1979).

begun to receiveattentionin the debate betweenneorealismand neoliberal-

Much of the neorealist-neoliberaldebate can be seen as a reactionto Waltz's

It is importantto emphasize two pointsabout the divisionof explanations

8. Waltz,Theory Politics,p. 73.

facinga highriskofbankruptcy in an oligopolisticmarketmaybe seen to be in

Structuraltheories decompose a systeminto units and constraints.This

Preferencesare given exogenously

13. Waltz,TheoryofIntemational Politics,pp. 105 and 111.

at the cost of drawingattentionawayfromareas thatmaycontainmuchof the

15. RobertJervis,"Realism, Game Theory,and Cooperation,"WorldPolitics40 (April 1988),

experience,and knowledge.19 He also sees realismas a source or theoryof

19. Jervis,"Realism,Game Theory,and Cooperation,"pp. 324-29.

actions) because it takes preferences(over outcomes) as givenis not one of

25. See, forinstance,the modelsof nuclearbrinkmanship in RobertPowell,NuclearDeterrence

assumptionthat units are minimallymotivatedto survive.Indeed, it would

The inseparabilityof agents and structure

28. See p. 360 of AlexanderWendt,"The Agent-Structure Problemin InternationalRelations

Ruggie,Wendt,and othershave emphasizedidentities,interests,rules,roles,

31. See RobertCox, "Social Forces,States,and WorldOrders,"in Keohane,Neorealismand Its

the internationalstructureshapes domestic institutionsand states' prefer-

34. Rogowski,Commerceand Coalitions.

tend to change states' preferences.States and structureare interdependent;

Waltz's definitionof structure

that"makingtheunitlevel the dumpinggroundforall unexplainedvarianceis

in othersetsof constraintsare called "structural"or somethingelse. The issue

Neorealism and its implications

todo this,see ibid.

maybe a significant factorin promotinginternationalcooperationin waysthat

neorealism's analysis of the problem of internationalcooperation. This

overviewof the debate, and Grieco and Keohane offertheirreflectionsand

debate are themeaning

The meaning and implications of anarchy

UnderAnarchy,"WorldPolitics38 (October 1988),pp. 226-54; Grieco,"Anarchyand theLimitsof

tions.He definesthe last threeof these as "Third,international anarchyis the

64. Grieco,"Anarchyand theLimitsof Cooperation,"pp. 118-19.

costsof researchand development,have nothingto do withthe use of military

68. Waltz,Theory Politics,pp. 105 and 111.

system,conventionally dated from1648,has alwaysbeen anarchicin the sense

Theoryand theRealist ChallengeAftertheCold War."

the states' strategicsettingis different.Formalizingand stylizingthe nuclear

75. Bernard Brodie, Strategy in the MissileAge (Princeton,N.J.: PrincetonUniversityPress,

The absence of a definition thatis less transposablethanthe firstand more

The problem of absolute and relativegains

77. Samuel Huntington, "WhyInternationalPrimacyMatters,"Intemational Security17 (Spring

firstbrieflysummarizesome aspectsof the debate about thisproblem.Then I

82. Waltz,TheoryofInternationalPolitics,p. 105. See also Waltz,Man, State,and War,p. 198.

Theory and the Realist Challenge Afterthe Cold War," pp.

90. Lipson,"International in Economicand Security

In sum,the debate surrounding the problemof absolute and relativegains

Coordination and distribution

92. Keohane,After Hegemony, p. 9.

FIGURE 1. Distributional conflicts: ofstate1 (SI); U2 = the

now believesthathe underemphasized"distributive issues and the complexi-

Theory and the Realist Challenge Afterthe Cold War," pp.

power capabilitiesthan by effortsto solve problemsof marketfailure."98In

and NationalPower,"p. 235.