Moravcsik / Princeton University / 2010
LIBERAL THEORIES OF INTERNATIONAL RELATIONS: A PRIMER
This memo outlines the liberal approach to theorizing international relations. Like realism, institutionalism, or non-rational approaches, it is a name given to a family of related theories of international relations. Here it will not be used, as many use it in international relations, to designate theories that stress the importance of international institutions. Nor to designate theories that stress the importance of universal, altruistic or utopian values of a liberal sort, such as human rights or democracy. Nor to designate theories favored by left-wing (“liberal”) political parties or policies in the US. Instead, it is a theory that stresses the role of the varied social interests and values of states, and their relevance for world politics.
Liberals argue that the universal condition of world politics is globalization. States are, and always have been, embedded in a domestic and transnational society, which creates incentives for economic, social and cultural interaction across borders. State policy may facilitate or block such interactions. Some domestic groups may benefit from or be harmed by such policies, and they pressure government accordingly for policies that facilitate realization of their goals. These social pressures, transmitted through domestic political institutions, define "state preferences" –that is, the set of substantive social purposes that motivate foreign policy. State preferences give governments an underlying stake in the international issues they face. Since the domestic and transnational social context in which states are embedded varies greatly across space and time, so do state preferences. Without such social concerns that transcend state borders, states would have no rational incentive to engage in world politics at all, but would simply devote their resources to an autarkic and isolated existence. To motivate conflict, cooperation, or any other costly foreign policy action, states must possess sufficiently intense state preferences. The resulting globalization-induced variation in social demands, and thus state preferences, is a fundamental cause of state behavior in world politics. This is the central insight of liberal international relations theory. It can be expressed colloquially in various ways: “What matters most is what states want, not how they get it.” –or- “Ends are more important than means.”
Liberal theory is distinctive in the nature of the variables it privileges. The liberal focus on variation in socially-determined state preferences distinguishes liberal theory from other theoretical traditions: realism (focusing on variation in coercive power resources), institutionalism (focusing on information), and most non-rational approaches (focusing on patterns of beliefs about appropriate means-ends relationships). In explaining patterns of war, for example, liberals do not look to inter-state imbalances of power, bargaining failure due to private information or uncertainty, or particular non-rational beliefs or propensities of individual leaders, societies, or organizations. Liberals look instead to conflicting state preferences derived from hostile nationalist or political ideologies, disputes over appropriable economic resources, or exploitation of unrepresented political constituencies. For liberals, a necessary condition for war is that social pressures lead one or more "aggressor" states to possess "revisionist" preferences so extreme or risk-acceptant that other states are unwilling to submit.
Three specific variants of liberal theory are defined by particular types of preferences, their variation, and their impact on state behavior. Ideational liberal theories link state behavior to varied conceptions of desirable forms of cultural, political, socioeconomic order. Commercial liberal theories stress economic interdependence, including many variants of "endogenous policy theory." Republican liberal theories stress the role of domestic representative institutions, elites and leadership dynamics, and executive-legislative relations. Such theories were first conceived by prescient liberals such as Immanuel Kant, Adam Smith, John Stuart Mill, John Hobson, Woodrow Wilson, and John Maynard Keynes-writing well before the deep causes (independent variables) they stress (e.g. democratization, industrialization, nationalism, and welfare provision) were widespread.
This essay introduces the liberal approach in three steps. It presents two distinctive assumptions underlying and distinguishing liberal theories. Then it further explicates the three variants of liberal theory that follow from these assumptions. Finally, it reviews some distinctive strengths that liberal theories tend to share vis-à-vis other types of international relations theory.
Two Unique Assumptions underlying Liberal Theory
What basic assumptions underlie the liberal approach? Two assumptions liberal theory make are the assumptions of anarchy and rationality. Specifically, states (or other political actors) exist in an anarchic environment and they generally act in a broadly rational way in making decisions.2 The anarchy assumption means that political actors exist in the distinctive environment of international politics, without a world government or any other authority with a monopoly on the legitimate use of force. They must engage in self-help. The rationality assumption means that state leaders and their domestic supporters engage in foreign policy for the instrumental purpose of securing benefits provided by (or avoiding costs imposed by) actors outside of their borders, and in making such calculations, states seek to deploy the most cost-effective means to achieve whatever their ends (preferences) may be. Liberal theory shares the first (anarchy) assumption with almost all international relations theories, and it shares the second (rationality) assumption with realism and institutionalism, but not non-rationalist process theories.
Liberal theories are distinguished from other rationalist theories, such as realism and institutionalism, by two unique assumptions about world politics: (1) States represent social groups, whose views constitute state preferences; and (2) Interdependence among state preferences influences state policy. Let us consider each in turn.
Assumption One: States Represent Societal Preferences
The first assumption shared by liberal theories is that states represent some subset of domestic society, whose views constitute state preferences. For liberals, the state is a representative institution constantly subject to capture and recapture, construction and reconstruction, by domestic social coalitions. These social coalitions define state “preferences” in world politics at any point in time: the “tastes,” “ends,” “basic interests,” or “fundamental social purposes” that underlie foreign policy. Political institutions constitute a critical “transmission belt” by which these interests of individuals and groups in civil society enter the political realm. All individuals and groups do not wield equal influence over state policy. To the contrary, their power varies widely, depending on the context. Variation in the precise nature of representative institutions and practices helps define which groups influence the “national interest.” Some states may represent, ideal-typically, the preferences of a single tyrannical individual, a Pol Pot or Josef Stalin; others afford opportunities for broad democratic participation. Most lie in between. The precise preferences of social groups, weighted by their domestic power, shape the underlying goals (“state preferences”) that states pursue in world politics. Sometimes, non-governmental organizations (NGOs) and other actors may form transnational alliances to assist social forces. “State-society relations”—the relationship between a state and its domestic (and transnational) society in which it is embedded—lies at the center of liberal theory.3
Liberals believe that state preferences cannot be reduced to some simple metric or preference ordering, such as seeking “security” or “wealth”. Most modern states are not Spartan: They compromise security or sovereignty in order to achieve other ends, or, indeed, just to save money. Nor do modern states uniformly seek “wealth.” Instead they strike rather strike complex and varied trade-offs among economic, social and political goals. Nor, finally do they seek “power” in the sense of “domination”: Many countries would clearly rather spend money on “butter” rather than “guns.” To see how consequential the variation in goals can be, one need look no further than the implications for international relations of Germany's evolution from Adolf Hitler's preference for militant nationalism, fascist rule, autarky, and ruthless exploitation of German Lebensraum under Das Dritte Reich to the social compromise underlying the postwar Bundesrepublik Deutschland, which favored capitalist democracy, expanding German exports, and peaceful reunification. Similarly one can look at the striking change in policy between Maoist and post-Maoist China, Soviet and post-Soviet Russia, Imperial and post-Imperial Japan, and so on.
Assumption Two: Interdependence among State Preferences Influences State Behavior
The second core assumption shared by liberal theories is that the interdependence among of state preferences influences state behavior. Rather than treating preferences as a fixed constant, as do realists or institutionalists, liberals seek to explain variation in preferences and its significance for world politics. The precise distribution and nature of the “stakes” explains differences in state policy and behavior. States, liberals argue, orient their behavior to the precise nature of these underlying preferences: compatible or conflictual, intense or weak, and their precise scope. States require a “social purpose” — a perceived underlying stake in the matter at hand — in order to pay any attention to international affairs, let alone to provoke conflict, inaugurate cooperation, or take any other significant foreign policy action. If there is no such interdependence among state objectives, a rational state will conduct no international relations, satisfying itself with an isolated and autarkic existence. Conflictual goals increase the incentive for of political disputes. Convergence of underlying preferences creates the preconditions for peaceful coexistence or cooperation.
The critical theoretical link between state preferences, on the one hand, and state behavior, on the other, is the concept of policy interdependence. Policy interdependence refers to the distribution and interaction of preferences—that is, the extent to which the pursuit of state preferences necessarily imposes costs and benefits (known as policy externalities) upon other states, independent of the "transaction costs" imposed by the specific strategic means chosen to obtain them. Depending on the underlying pattern of interdependence, each of the qualitative categories above, the form, substance, and depth of conflict and cooperation vary according to the precise nature and intensity of preferences.
The existence of some measure of divergent fundamental beliefs, scarcity of material goods, and inequalities in domestic political power among states and social actors renders inevitable some measure of pluralism and competition among and within states. Unlike realists such as Waltz and Morgenthau, liberals do not assume these divergent interests are uniformly zero-sum. At the same time, liberals reject the utopian notion (often attributed to them by realists) of an automatic harmony of interest among individuals and groups in international society. Nor do liberals argue, as realists like Morgenthau charge, believe that each state pursues an ideal goal, oblivious of what other states do. Liberals argue instead that each state seeks to realize distinct preferences or interests under constraints imposed by the different interests of other states.4 This distribution of preferences varies considerably. For liberals, this variation—not realism’s distribution of capabilities or institutionalism’s distribution of information—is of decisive causal importance in explaining state behavior.
A few examples illustrate how liberal theories differ from realist, institutionalist or non-rational ones. We have already encountered the example of war in the introduction, in which liberals stress states with aggressive preferences, rather than imbalances of power, incomplete information, or non-rational beliefs and processes. Another illustration is trade policy. Economists widely agree that free trade is superior welfare-improving policy choice for states, yet trade protection is often practiced. To explain protectionism, liberals look to domestic social preferences. An important factor in almost all countries is the competitive position of affected economic sectors in global markets, which generates domestic and transnational distributional effects: Protectionism is generally backed by producers who are globally uncompetitive; free trade by producers who are globally competitive. Moreover, even if the state is a net beneficiary from free trade, domestic adjustment costs may be too high to tolerate politically, or may endanger other countervailing domestic social objectives, such as domestic social equality or environmental quality. Certain domestic political institutions, such as non-parliamentary legislative systems, which governed US trade policy before 1934, grant disproportionate power to protectionist interests.
This differs from realist explanations of trade protectionism, which tend to stress the role of “hegemonic power” in structuring trade liberalization, or the need to defend self-sufficient national security within the prevailing zero-sum geopolitical competition, perhaps by maintaining self-sufficiency or by aiding allies at the expense of purely economic objectives. Institutionalists might cite the absence of appropriate international institutions, or other means to manage the complex informational tasks and collective action problems—negotiation, dispute resolution, enforcement—required to manage free trade. Those who focus on non-rational theories (psychological, cultural, organizational, epistemic, perceptual or bureaucratic) might stress an ideological disposition to accept “mercantilist” theory, shared historical analogies, and the psychological predisposition to avoid losses.
To further illustrate the importance of patterns of policy interdependence, consider the following three circumstances: zero-sum, harmonious and mixed preferences. In the case of zero-sum preferences, attempts by dominant social groups in one state to realize their preferences through international action may necessarily impose costs on dominant social groups in other countries. This is a case of “zero-sum” preferences, similar to the “realist” world. Governments face a bargaining game with few mutual gains and a high potential for interstate tension and conflict. Many ancient cities and states, including those of Ancient Athens, often imposed imperial tribute on defeated neighbors or, in extremis, killed the male population, cast women and children into slavery, and repopulated the town with their own citizens—a situation approximating zero-sum conflict. Today, it might still be argued that there are certain cases—trade in agricultural goods by industrial democracies, for example—where entrenched national interests are so strong that no government seriously considers embracing free trade. In the case of harmonious preferences, where the externalities of unilateral policies are optimal (or insignificant) for others, there are strong incentives for quiet coexistence with low conflict and (at most) simple forms of interstate coordination. For example, advanced industrial democracies today no longer contemplate waging war on one another, and in some areas governments have agreed to mutual recognition of certain legal standards without controversy. One case of mixed preferences is bargaining, where states can achieve common gains (or avoid common losses, as with a war) if they agree to coordinate their behavior, but may disagree strongly on the distribution of benefits or adjustment costs. Under such circumstances, one of the most important determinants of bargaining power is the intensity of the preferences of each party; the more intense their preference for a beneficial settlement, the more likely they are to make concessions (or employ coercive means) in order to achieve it. Another situation of mixed motives is a situation where interstate coordination can avoid significant risks and costs, as in agreement to avoid naval incidents at sea, or to share information on infectious diseases. In such situations, institutional pre-commitments and the provision of greater information can often improve the welfare of all parties.
Liberals derive several distinctive conceptions of power, very different from that of realism. One form of international influence, for liberals, stems from the interdependence among preferences that Keohane and Nye (Power and Interdependence) call “asymmetrical interdependence.” All other things equal, the more interdependent a state is, the more intense its preference for a given outcome, the more power others potentially have over it; while the less a state wants something, the less a state cares about outcomes, the less intense its preferences, the less power others have over it. Situations of asymmetrical interdependence, where one state has more intense preference for an agreement than another, create bargaining power. In trade negotiations, for example, smaller and poorer countries are often more dependent on trade and thus benefit more from free trade, and thus tend to have a weaker position and make more concessions in the course of negotiations. Enlargement of the European Union is a recent instance. Relative preference intensity can also influence the outcome of war, but in a different way. Nations are in fact rarely prepared to mortgage their entire economy or military in conflict, so their power depends not on their coercive power resources, but on their resolve or will. This is why smaller states often prevail over larger ones. Vietnam, for example, did not prevail over the US in the Vietnam War because it possessed more coercive power resources, but because it had a more intense preference at stake.
From Assumptions to Theories
Taken by themselves, these liberal assumptions—the international system is anarchic, states are rational, social pressures define state preferences, interdependence among preferences dictates state behavior—are thin. They exclude most existing realist, institutionalist, and non-rational theories, but they do not, taken by themselves, define very precisely the positive content of liberal theory. Some might rightly complain that simply pointing to state preferences opens up an unmanageably wide range of hypothetical social influences on policy. Yet, in practice, research has shown that, in practice, the range of viable liberal theories that test out empirically are relatively few, focused, and powerful. Three broad variants or categories of liberal theory exist: ideational, commercial, and republican liberalism. At the core of each lies a distinct conception of the social pressures and representative institutions that define state preferences, and the consequences for state behavior. Some of these have proven, empirically, to be among the most powerful theories in international relations. Let us consider each in turn.
Ideational Liberalism: State Preferences Based on Domestic Social Values and Identities
Ideational liberalism views domestic social identities and values as basic determinants of state preferences. Drawing on a liberal tradition of political philosophy dating back to John Stuart Mill, Giuseppe Mazzini, Woodrow Wilson, and John Maynard Keyes, liberals defines social values as the set of preferences held by various individuals and groups in society concerning the proper scope and nature of legitimate state objectives. In particular, nations and groups within nations differ in their conceptions of what a legitimate domestic order is—that is, their conception of which social actors belong to the polity and what is owed them. Thus for liberals, ends that may appear universal—such as the defense of political sovereignty and national security—are not necessarily ends in themselves, but are justified only insofar as they are means to realize the specific underlying preferences of social actors concerning “legitimate social order.” Some states, such as aggressive states like Hitler’s Germany, willing place security and sovereignty at risk in order to achieve conquest. Other states may place security at risk to maintain peace or prosperity. None of these choices are necessarily “irrational”; they simply involve varying sets of social preferences.
Foreign policy, in the ideational liberal view, is an effort to realize these views domestically. Social actors provide support to the government in exchange for institutions that accord with their identity-based preferences and are therefore deemed “legitimate”. Similarly, actors will sometimes advocate foreign policies that subvert the existing domestic social order. On the liberal view, the effect of conceptions of social legitimacy on state behavior depends on patterns of interdependence among these ideals—in other words, on the transnational externalities created for others by attempts to realize those preferences in one place. Liberal theories predict that where national conceptions of legitimate borders, political institutions, and socioeconomic equality are compatible, generating positive or negligible externalities, peaceful coexistence is likely. Where social identities are incompatible and create significant negative externalities—as when one state views the promotion of its legitimate borders, political institutions, and socioeconomic standards as requiring aggression or demands vis-à-vis another state—tension and zero-sum conflict is more likely. Where national claims can be made more compatible through reciprocal policy adjustment, efforts to cooperate explicitly through international institutions are more likely.
Some social preferences about a legitimate social order are particularly important, such as those pertaining to the proper location of national borders, the nature of political institutions, and the scope of socioeconomic regulation.
National Identity: One basic type of social identity concerns the scope of the “nation”: specifically, the legitimate location of national borders and the allocation of citizenship rights. Where borders coincide with underlying patterns of identity, coexistence and even mutual recognition are more likely, but where there are inconsistencies between borders and underling patterns of identity—as there have been in the Balkans for over 100 years, in central Europe in the mid-19th century, and in many places in the world today—greater potential for interstate conflict exists. Over the last century and a half, from mid-nineteenth century nationalist uprisings to late twentieth-century national liberation struggles, the desire for national autonomy constitutes the most common issue over which wars have been fought and great power intervention has taken place. The Balkan conflicts preceding World War I and in the former Yugoslavia after the end of the Cold War are notorious examples. Not by chance is scenario planning for China/United States conflict focused almost exclusively on Taiwan—the one jurisdiction where borders and national identity (as well as political ideology) are subject to competing claims.
Political Ideology: The second basic type of social identity stems from individuals and group commitments to particular forms of political institutions. Where the realization of legitimate domestic political institutions in one jurisdiction threatens its realization in others (negative externalities), conflict is more likely. From Ancient Greece, where oligarchic and democratic factions in city-states used foreign policy to defend and advance their preferred form of government, to the French Revolution and nineteenth-century Concert of Europe, where monarchies used international cooperation to quash democratic and nationalist revolution, to the Second World War, where democracies and communists fought fascists, to the Cold War, when the United States and the Soviet Union were motivated by divergent political ideologies, disputes over political ideology have fueled international conflict.
Socioeconomic Regulation: The third basic type of social identity relevant for world politics stems from beliefs about legitimate socioeconomic regulation and redistribution. Modern liberal theories (in contrast to the laissez faire libertarianism sometimes labeled as quintessentially “liberal”) have long recognized that societal preferences concerning the appropriate nature and level of regulation impose legitimate limits on transnational markets. Domestic and international markets are embedded in local social compromises concerning the provision of regulatory public goods. The extent to which countries can cooperate to liberalize markets, for example, depends on the level of conflict or convergence of views about immigration, social welfare, taxation, religious freedom, families, health and safety, environmental and consumer protection, cultural promotion, and many other domestic public goods. These issues have increasingly been the subjects of international economic negotiations. We often see odd domestic coalitions made up of idealists and materialists—so-called “Baptist-bootlegger” coalitions where those who favor regulation for public spirited reasons (“Baptists”) ally with those who benefit in a material sense (“bootleggers”)—around international economic issues. For example, we sometimes observe unions, uncompetitive business and environmentalists all supporting trade protection—for quite different reasons.