Session 15: Can There Be 'Perfect' Information?

Prior to the collapse of the Soviet Union, there existed a belief amongst notable Realist theorists, such as John Mearsheimer, that with an attenuation of the security threat, the need for international institutions and peace-keeping forces would also decline, along with their strength and efficacy.  However, this idea was subjected to great scrutiny as international institutions persisted after the end of the Cold War. Although they recognize the importance of Mearsheimer’s work regarding institutions and security in the international system, Keohane and Martin challenge the generalizations and contradictions made by the former, in an attempt to shift focus away from ‘ad hoc’ and ‘post hoc’ theorizing in order to provide an ‘a priori’ approach to theorizing. In “The Promise of Institutionalist Theory” the authors examine the divide between security and economic issues and the question of “relative gains” in an international system so as to highlight the significance of international institutions. 

The realist assumption that international politics can be divided into two distinct categories – security and the political economy – is one that is rejected by Keohane and Martin, who claim that the international political economy cannot be separated from security issues using a “neat dividing line”. Rather, the authors propose, that both military-security issues and those pertaining to the political economy can be observed under a “single framework” of institutionalism. International institutions allow for states to coordinate their actions in order to reach a “cooperative outcome” by bridging the information gap between them. Assuming a state of competition and anarchy in the international system, states are unaware of the intentions of others and therefore their actions are aimed at maximizing utility, in terms of economy and security. Access to greater information regarding the intentions of other states and possible courses of action would therefore allow states to pursue policies that would “more nearly maximize utility”.

Furthermore, Keohane and Martin also maintain that international organizations help mitigate “distributional conflicts” that would otherwise prevent states from achieving preferred cooperative outcomes. In an international system, there exists a need for a system of coordination in order for states to fully benefit from the potential gains of cooperation. The Realist school of thought propagates that states are likely to renege on their deals or refuse to even cooperate if relative gains of cooperation are lesser than those accruing to other states. Thus, by providing information about “the distribution of gains from cooperation”, and assuring states that gains are evenly dispersed between them, international institutions allow for greater cooperation in the international system. Hence, by facilitating symmetry of information available to the states, international organizations are able to regulate not only economic activity, thus ensuring cooperation, but may also be able to preempt and resolve security issues that may arise.  

Another interesting aspect of the Institutionalist theory, as presented by the authors, is its conception of institutions as both “dependent” and “independent” variables in the international system. Waltz had suggested earlier that interactions between different players within a system leads to the creation of institutions, which in turn are able to mold and constrain the activities of the players that gave rise to them. Similarly, Keohane and Martin argue that all international institutions arise as a response to state interests, change because of human action and the “changes in expectations and process that result can exert profound effects on state behavior”. In addition, the authors believe that in order to fully understand the impact of international institutions on state behavior there is a need to isolate their impact from that of “underlying forces” within the international system. However, Keohane and Martin acknowledge that the task may be extremely challenging as it would not only require a search and  analysis of instances where institutions have remained constant despite rapid changes in the underlying conditions, but an examination of changes within the institutions as well. 

Keohane and Martin have highlighted some key features of the Institutionalist theory of International Relations. By stressing upon the role of institutions in providing information, the authors have attempted to subsume aspects of realism into the broader framework of institutions, in order to allow for cooperation within the international system. However, there are still several aspects of institutions that could have been included in their argument. Keohane and Martin do no stress upon the fact that although states create institutions, these institutions are controlled by the interests of ‘great nations’. Therefore, gains in the international system will always be skewed in the favor of states that possess greater military and economic power and not be “evenly divided” as proposed by the authors. Furthermore, international institutions might not have as easy access to information as suggested by Keohane and Martin. Despite agreeing to cooperate, as states are ultimately geared towards increasing relative gains, states might not be willing to reveal all their assets, therefore leading to a situation of information asymmetry and imperfect information within the institutions. All in all, Keohane and Martin have done a fairly reasonable job in trying to propagate institutionalism as a normative approach to theorizing in the realm of international relations.