A New International Politics?

Diplomacy in Complex Interdependence

Power and Interdependence: World Politics in Transition by Robert O. Keohane; Joseph S.
Nye
Review by: Kal J. Holsti
International Organization, Vol. 32, No. 2 (Spring, 1978), pp. 513-530
Published by: The MIT Press
Stable URL: http://www.jstor.org/stable/2706275 .
Accessed: 18/01/2012 11:38
Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .
http://www.jstor.org/page/info/about/policies/terms.jsp
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of
content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms
of scholarship. For more information about JSTOR, please contact support@jstor.org.
The MIT Press is collaborating with JSTOR to digitize, preserve and extend access to International
Organization.
http://www.jstor.org
A new international politics? Diplomacy
in complex interdependence
Kal J. Holsti
Robert 0. Keohane and Joseph S. Nye, Power and Interdependence: World Politics
in Transition, Boston and Toronto: Little, Brown and Company, 1977, 273 pp.
One of the prominent cliches of contemporary diplomatic rhetoric is that the world
is becoming increasingly interdependent. This view reveals a certain Western
myopia about who affects whom by what means in international relations, but it
does contain enough truth in certain contexts to merit serious analysis. While it is
ludicrous to think that short of massive civil war or external aggression, Paraguay or
Benin can have an important impact on industrial societies, it is obvious that
significant events and technological innovations in some of the most powerful states
do have serious consequences in other areas of the world. Interdependence is a
prominent characteristic of the relations between the industrial countries, and be-
Editor's Note. To avoid
any
conflicts of
interest,
this
essay
was
solicited, reviewed, and edited by the
Chairman of the Board of Editors. The Editor did not read the essay until after it had been set in type.
Kal J. Holsti is a professor of political science at the University of British Columbia in Vancouver.
514 International Organization
tween them and some developing countries (particularly OPEC members). Depen-
dence, however, remains the reality for a majority of the new states, but that fact is
seldom acknowledged in the speeches of Western politicians. The leaders of the
industrial powers generally use the condition of interdependence to lecture to the
rest of the world that only "responsible" foreign policy behavior and "international
cooperation" can resolve global issues. They stoutly maintain-with good rea-
son-that confrontations, cartels, and autarkic policies can only lead to a worsen-
ing of the world's difficulties. Yet, it is hard to see how these forms of behavior by
small, vulnerable states could really have much impact elsewhere. The policies
required for global cooperation are essential for the major powers and many other
states as well, but in some cases they might be a luxury that highly dependent states
cannot afford. If there is growing interdependence, it is neither universal nor sym-
metrical. Until more equitable relations between developed and developing states
are achieved, we cannot expect the latter to jump enthusiastically on the interna-
tional cooperation bandwagon, particularly in those issues-areas (e.g., pollution)
where they are not major contributors to the problem. This essay will explore the
relationship between analyses of dependency and interdependence, and assess the
Keohane-Nye volume as a contribution to these competing views of contemporary
international relations.
Formulators of dependency theory' have an unabashedly economic view of
international politics. The distribution of economic goods in the world is distinctly
inequitable, and doomed to remain in that pattern. The present world economic
order grew out of the world-wide expansion of capitalism, via colonialism; the
centers of production expropriated surplus capital from the peripheries and
constructed the economics of the latter in such a manner as to preclude self-
contained, indigenous development. The present international economic order of
free trade perpetuates basic structures created centuries ago, and results in the
exploitation of the poor by the rich. Dependency theory, at least as developed by its
"grand designers" such as Frank and Galtung2 seeks to explain how exchange
relationships between center and periphery result in inequitable distribution of re-
'There are many versions of dependency theory. Various writers emphasize different facets of the
problem, and use different arenas for investigation. It is not the purpose of this essay to present a
comprehensive review of the vast literature on the subject. For a critical analysis of many of the main
propositions in this body of literature, see Benjamin Cohen, The Question of Imperialism (New York:
Basic Books, 1973). For refinements and attempts to operationalize some of the key concepts in the
dependency literature, see Tom Travis, "Toward a Comparative Study of Imperialism," paper presented
to the 16th Annual Meeting of the International Studies Association, Washington, D.C., February 1975,
and James Kurth and Steven Rosen, eds., Testing Economic Theories of Imperialism (Lexington, Mass.:
Lexington Books, 1974).
2I select these two authors primarily because of the comprehensive character of their analysis. While
Frank's theses apply primarily to the Latin American experience, it is clear that he is writing about all
Third World countries. Galtung's model of center-periphery relations is also universal in its application.
See Andre Gunder Frank, Latin America: Underdevelopment or Revolution (New York: Monthly Review
Press, 1969), esp. Chapter 1. Johan Galtung, "A Structural Theory of Imperialism," Journal of Peace
Research No. 2 (1971): 81-117.
A new international politics? 515
wards and advantages, and hence in perpetual international hierarchy. These depen-
dent variables in their studies are mostly taken for granted, while their analyses
concentrate primarily on explaining how that exchange of commodities for manu-
factured goods is inherently unequal because the production of primary goods results
in few technological or labor spinoffs. The essential mechanism explaining inter-
national inequality is thus operation of the Ricardian law of comparative advantage
and international specialization. Power or capabilities, bargaining skills, and idio-
syncratic variables are basically irrelevant in diplomacy between the weak and the
strong; inequality and hierarchy result from the economic imperatives of the inter-
national capitalist system, and are sustained today by implicit and formal alliances
between manufacturers in the industrial countries and the "comprador bourgeoisie"
in the periphery areas; the latter have a strong interest in maintaining trade and
investment links with the center economies, although they occupy highly dependent
economic roles.
To both Frank and Galtung, genuine development is impossible so long as
these alliances continue. Foreign aid programs, cultural exchanges, and occasional
subversion or intervention by the metropolitan governments-what we call the
international politics of industrial and developing countries-are designed to per-
petuate the essential linkages between dominant and dependent economic actors.
Dependency models of international relations are dynamic in the sense that
they seek to show how economic and international institutional mechanisms per-
petuate inequality over time. But they are static because they fail to measure
changes in the the dependent variables. The descriptions of the international system
are made at t1, but there is no prediction that at t2 inequality might decline or the
distribution of rewards in any bilateral relationship might shift in favor of the poor.
Theorists of dependency generally ignore the evidence, documented for example by
Moran,3 in his study of the copper corporations in Chile, that governments of
developing countries learn how to maximize their bargaining advantages and even-
tually develop the intellectual, technical, and bureaucratic skills to manage their
resources in such a way as to avoid exploitation. The theorists also ignore the
examples provided by some countries which have successfully overcome neo-
colonial economic relationships to promote genuine indigenous development. The
strategies range from isolation (Burma) to export-generated industrialization
(Taiwan and South Korea), to the formation of producer cartels. Nationalism,
regional variations, problems posed by population growth, and lack of resources are
also irrelevant to the theories of dependency. Reacting to the conventional wisdom
of the 1950s and 1960s that most of the "barriers to growth" were internal, depen-
dency theories have gone to the other extreme: only exogenous variables explain the
"development of underdevelopment." Hence, if one wants to overcome perpetual
exploitation and inequality, revolution aimed at destroying the economic links be-
tween the developing countries and the metropolitan centers is the appropriate
3Theodore Moran, Multinational Corporations and the Politics of Dependence (Princeton: Princeton
University Press, 1974).
516 International Organization
strategy. Interdependence with the Western industrial nations is only a fig leaf
covering relationships that are basically exploitative.
If the source of international inequality, exploitation, and hierarchy is located
in the exchange of primary for manufactured goods, it follows that there cannot be
dependency between any pair of states which exchanges both primary commodities
and manufactured items with each other. Yet, any Finn, Swiss, or Canadian would
quickly point out that dependent relationships can exist even where the types of
commodities being exchanged are roughly similar. Dependency can refer to a situa-
tion between any pair of states in which there are asymmetrical vulnerabilities. No
elaborate theory is needed to identify vulnerability and the conditions which give
rise to it. Marshall Singer's4 account of international inequality is a good example of
an analysis which explores dependency conceived as vulnerability rather than ex-
ploitation. Unlike the dependency theorists who predict only perpetual hierarchy
and exploitation, Singer's comparative data demonstrate fairly steady movement
toward lesser vulnerability, if not greater equality, between former colonial areas
and the industrial world.
What are the hallmarks of vulnerability, particularly in the trade and economic
dimensions? The most obvious are: (1) high export product concentration; (2) a high
ratio of exports to GNP; (3) geographic concentration of exports; and (4) geographic
concentration in sources of supply. Under these conditions, price fluctuations, loss
of markets, or shutdown of supplies can bring economic catastrophe to the vulnera-
ble state. Most, but not all, countries in the Third World share these conditions, but
so do several countries which are a part of the "center."
Moreover, if we regard dependency as an empirical question between pairs of
states rather than as a near-universal model, we must examine the actual distribution
of rewards in bargaining relationships and not foreclose this important issue by
arguing that an exchange of primary for manufactured goods is inherently unequal.
Bargaining skills, personalities, knowledge, world demand, and production patterns
are always relevant to outcomes, and should be the object of inquiry. As OPEC
members have shown, it is certainly possible for the rewards in an exchange rela-
tionship to be dramatically reversed. Governments are concerned with these mat-
ters, not with the intellectual adequacy of this or that model. They are also con-
cerned with the degrees of vulnerability they face when they become involved in
bilateral and multilateral relationships. Dependency-as-vulnerability is a pervasive
condition in international relations but it is not distributed equally. Capacities to
harm, to disrupt, and to coerce by economic means, are not distributed equally
either. The diplomats who speak of global interdependence ignore these facts;
dependency theorists wrongly assume that only developing countries are vulnerable;
and academic writers on interdependence do not seem interested in the implications
of dependency, wherever it may be found.
If dependency can be viewed as asymmetrical vulnerability, then presumably
interdependence implies approximate equality of vulnerability, or mutual depen-
4Weak States in a World of Powers (New York: The Free Press, 1972).
A new international politics? 517
dence. But is this how interdependence has been conceived in the literature? The
major preoccupation of scholars has not been to develop a theory of interdepen-
dence, but rather to describe the extent of interdependence. The debate has revolved
around the question whether or not interdependence between the industrial countries
has increased during the twentieth century.5 The argument was launched by Deutsch
and Eckstein,6 and subsequent work by Deutsch purported to demonstrate that the
ratio of intersocietal transactions to internal transactions had actually declined
among EEC countries.7 Waltz8 argued the same point. Cooper,9 Morse,10 and
Rosecrance and Stein,1 have presented data to emphasize the opposite point: inter-
dependence has grown dramatically. Most recently, Rosecrance and his col-
leagues12 have demonstrated that interdependence has actually followed a cyclical
history since the late nineteenth century. This is not the place to discuss the relative
merits of the various bodies of data and the measuring techniques used to establish
degrees of interdependence. The critical issue, after all, is not the rate of transaction
growth or the similarity in economic behavior between nations, but their conse-
quences.
This question has been largely evaded: most authors seem to imply that greater
transaction levels lead to greater impact and sensitivity, and presumably, to an
increased need for policy coordination. Unlike the dependency theorists, who out-
line the consequences of economic exchange in terms of exploitation and hierarchy
in the system, the works on interdependency-as-transaction demonstrate little
concern for the effects of interdependence on the structure of the international
system, on the distribution of capabilities (hierarchy), or on the distribution of
benefits from all the transactions. If the dependency theorists can be faulted for
assuming a fixed outcome from international exchange (exploitation), much of the
literature on interdependence can be criticized for ignoring the question of outcomes
altogether.
5A good review of the debate is in Richard Rosecrance, A. Alexandroff, W. Koehler, J. Kroll, S.
Lacquer, and J. Stocker, "Whither Interdependence?" International Organization Vol. 31 (Summer
1977): 425-72. There are, of course, many other studies of interdependence in the literature that are not
germane to this debate. Many of them offer definitions of interdependence or advice on how to "man-
age" it. The present review does not evaluate these contributions, partly because of space limitations,
and also because most of them do not assess the consequences of interdependence.
6Karl W. Deutsch and Alexander Eckstein, "National Industrialization and the Declining Share of the
International Economic Sector, 1890-1959," World Politics Vol. 13 (January 1961): 267-99.
7Karl W. Deutsch, Lewis Edinger, Roy C. Macridis, and Richard L. Merritt, France, Germany and the
Western Alliance: A Study of Elite Attitudes on European Integration and World Politics (New York:
Charles Scribner's Sons, 1967), Chapter 13.
8Kenneth N. Waltz, "The Myth of National Interdependence," in Charles P. Kindelberger, ed., The
International Corporation: A Symposium (Cambridge, Mass.: The M.I.T. Press, 1970), pp. 205-26.
9Richard N. Cooper, The Economics of Interdependence (New York: McGraw-Hill, 1968).
10Edward L. Morse, "Transnational Economic Processes," International Organization, Vol. 25
(Summer 1971): 373-97.
"1Richard Rosecrance and Arthur Stein, "Interdependence: Myth or Reality?" World Politics Vol. 26
(October 1973): 1-27.
12Rosecrance et al., "Whither Interdependence?"
518 International Organization
Studies by Waltz, Morse, Haas, Scott, and the volume under review have dealt
in different ways with this shortcoming. Waltz' well-known essay, "The Myth of
National Interdependence" is really a foray into the question of vulnerability and
dependency. He argues that large industrial powers are neither dependent nor vul-
nerable and introduces the important notion that a hallmark of dependency is the
high cost of establishing alternative markets and sources of supply ("The low cost
of disentanglement is a measure of low dependence").'3 Dependence-and pre-
sumably interdependence- is more than just sensitivity to transactions; what mat-
ters is when the transaction patterns are seriously disturbed. Outcomes in bargaining
will reflect degrees of vulnerability. Waltz thus implies that an international hierar-
chy of vulnerability perpetuates a hierarchy of diplomatic influence. He also em-
phasizes the rhetorical aspects of the common usage of interdependence and adds
that "the word 'interdependence' subtly obscures the inequalities of national
capabilities, pleasingly points to a reciprocal dependency, and strongly suggests that
all states are playing the same game."'"4 Here Waltz is more realistic than those who
believe that the consequences of increased transactions are more or less equal to all
parties.
Haas is among the first to relate increased interdependence both to conse-
quences in the system and to certain policy options of state actors.'5 Rejecting the
conventional wisdom that increased interdependence creates more stability and a
greater likelihood for peace, he argues that greater interconnectedness can predict
neither conflict nor cooperation. It does predict system change, however. As prob-
lems become more complex, strategies designed to cope with them will appear
increasingly inadequate; yet desires to deal with them will involve increased inter-
vention by states and international organizations in each other's affairs. Haas
suggests that "the kinds of systems change associated with rising interdependence
do imply a tendency toward strengthening weaker actors against strong states as the
web of relationships increases perceived sensitivities, vulnerabilities and opportu-
nity costs for the stronger" (p. 860). The remainder of Haas' analysis focuses on the
conditions under which state actors may be willing to establish regimes and particu-
lar forms of organizational problem-solving. But he is concerned with the conse-
quences of interdependence as well as its origins. And in contrast to dependency
theorists who would predict increased hierarchy from greater interdependence be-
tween center and periphery, Haas forecasts the opposite.
Andrew Scott's recent essay on interdependence also concentrates on conse-
quences rather than quantities.'6 His analysis explicitly employs a systems perspec-
tive; he is concerned primarily with the problem of the unanticipated consequences
3Waltz, "The Myth of National Interdependence," p. 212.
'4Ibid., p. 220.
15Ernst B. Haas, "Is There a Hole in the Whole? Knowledge, Technology, Interdependence,
and the
Construction of International Regimes," International Organization Vol. 29 (Summer 1975):
827-76.
16Andrew M. Scott, "The Logic of International Interaction," International Studies Quarterly Vol. 21
(September 1977): 429-60.
A new international politics? 519
of national (and international) decisions and actions for the system, and the system's
capacity to regulate or control those consequences. Given the vastly increased flow
of transactions, what are some of the problems that arise? Among others, Scott lists
the following as particularly important:
1. Undirected and partially directed processes produce surprises and inadver-
tent consequences;
2. Inadvertent consequences are becoming more common and more impor-
tant;
3. As the international system becomes more elaborate, the number of system
and structural requisites increases;
4. International problems will become broader in scope and more closely
linked;
5. As the number of requisites and problems increases, the international sys-
tem will become increasingly fragile and the costs of keeping the system
operating will escalate sharply.
Scott also suggests that actors in the system will find it increasingly difficult to
control events and pursue their interests effectively. Although he does not elaborate
on the forecast, he suggests that the major powers may be particularly vulnerable to
impotence as they try to deal with a "continuing flow of system-generated crises"
(p. 458). Like Haas, then, Scott also suggests decreasing hierarchy in the interna-
tional system as far as ability to influence other actors or solve international prob-
lems are concerned. While Haas' and Scott's analyses are speculative rather than
data-based, they have taken an important step in directing our attention away from
description of transaction flows. To map transactions is an important descriptive
enterprise, but from the perspective of international relations theory, it is important
to know as well how changes in patterns of interaction, whether linear or cyclical,
affect other processes and structures in the international system.
Morse17 is among the first to focus attention explicitly on the consequences of
interdependence to policy making. If the fact of interdependence has been well-
established, what difference does it make to how governments conduct their mutual
affairs? Does interdependence in one issue-area spill over into bargaining in other
issues-areas? Does the fact of interdependence create any imperatives for specific
types of diplomatic economic policy? Morse does not supply answers to all these
questions, but his analysis clearly shifts attention to a variety of dependent variables
at the national and systems levels. Indeed, to Morse, interdependence is really an
intervening variable betwen basic socio-economic trends and diplomatic bargaining.
Its sources are found in increased sensitivity to industrial societies to external
phenomena, exacerbated by technological changes, and in the efforts on the part of
governments to lower barriers to international exchanges. Taken together, these
17Edward L. Morse, "Crisis Diplomacy, Interdependence, and the Politics of International Economic
Relations," in Raymond Tanter and Richard H. Ullman, eds., Theory and Policy in International
Relations (Princeton: Princeton University Press, 1972), pp. 123-50.
520 International Organization
factors have increased mutually contingent behavior, or interdependence. In turn,
interdependence has increased (1) the incompatibility of governments' foreign pol-
icy objectives, and (2) the frequency of international crises between industrial
states; it has decreased (1) governmental latitude of choice in both domestic and
foreign policies, (2) government control over transnational activities, and (3) the
number of instrumentalities (e.g., tax and fiscal policies) available to cope with
domestic economic problems. Morse does not demonstrate empirically that all these
variables are linked in the ways specified, nor does he explore the question of the
relationship between distribution of capabilities or vulnerabilities to bargaining
outcomes. In two brief case studies, however, he shows how governments in in-
terdependent relationships can manipulate crises to maximize their national advan-
tage. How this diverges from diplomacy in a non-interdependent situation is not
entirely clear, but Morse is on the verge of saying that interdependence creates a
new type of international politics and bargaining.
There is a levels-of-analysis problem in this work, however. Like Scott, Morse
implies that there has been an increase of interdependence in the system which has
given rise to certain systemic consequences such as an increased number of diplo-
matic crises between industrial states. But we do not know how variations in inter-
dependence between specific pairs of states affect bargaining between those particu-
lar states. Like the dependency theorists, attribution of certain characteristics equally
throughout the system precludes statements about particular situations. We may
legitimately make claims for the prevalence of dependency or interdependence as
modal characteristics of the international system, but we must not commit the
ecological fallacy and argue that those characteristics determine the nature of rela-
tions between any given pair of states. Thus, while Morse is aware of distributional
problems, he does not really explore them, and cannot explore them unless he
establishes empirically that interdependence exists in any bargaining group.
Keohane and Nye's Power and Interdependence also concentrates on dependent
variables, that is, on the consequences of interdependence. It is not concerned with
measuring transaction flows, nor does it assume as do dependency theorists,
dependency-as-vulnerability researchers, and many traditional international rela-
tions scholars that disparities in economic capabilities or vulnerability necessarily
lead to inequitable bargaining outcomes, much less to permanent international
hierarchy. Outcomes are an empirical problem: the question is, how does inter-
dependence affect bargaining styles and distribution of rewards?
Following Morse, Keohane and Nye are concerned also with demonstrating
that interdependence is more than a quality or condition that can be measured by
looking at transaction flows. Interdependence involves a new type of international
politics that cannot be understood or described by using the concepts and categories
of traditional international relations analysis.
The realist paradigm, where only nation-states are actors, and where outcomes
of international conflicts are predicted from the relative power position of those
states (or, as dependency theorists would have it, from the economic power of
states), does not help us understand problems as complex as the law of the sea
negotiations, Canadian-American relations, or international monetary affairs.
A new international politics? 521
The authors' earlier work on transnational relations18 had already made this
point-perhaps too strongly, because the transnational relations "approach" pro-
vided no criteria to distinguish the important from the routine in international
politics. As long as any actors use resources to influence the behavior of other
actors, across national boundaries, they become a legitimate subject of inquiry. It
may be interesting to explore how provincial and state bureaucrats in Canada and
the United States influence each other (transgovernmental relations)'9 but it is
difficult to argue that compared to detente, SALT, or the Middle East problem, such
research is of equal theoretical or practical importance. As a guide to research, then,
the authors' previous contribution extended the boundaries of the field almost to
infinity. While the realist paradigm contains many shortcomings, at least it has the
virtue of directing attention to what is truly important in international politics,
namely the actors, policies, trends, and issues that are potentially or actually the
source of war and peace.
The purpose of Power and Interdependence, however, is not to replace the
realist paradigm, but rather to demonstrate that it, along with other models of
international processes, is insufficient for describing and explaining the politics of
relationships characterized by "complex interdependence." The authors present this
concept as an ideal type. Its hallmarks are (1) multiple channels of diplomatic
interaction, by all types of actors, (2) absence of hierarchy on issues (that is,
security issues do not dominate the global or bilateral agenda, and many issues arise
from domestic sources), and (3) irrelevance of military force in determining the
outcomes of bargaining and conflicts. The political processes found in a condition
of complex interdependence also differ significantly from those of traditional di-
plomacy. There is, they suggest, an absence of linkage between issue-areas when
bargaining takes place, agendas are frequently determined by domestic pressure
groups and other non-state actors (e.g., MNCs), and international organizations
often play an important and independent role in bargaining, at least on areas of
global concern.
The realist (and other) models do not help us understand these processes
adequately. A critical question, "why do international regimes persist or change?"
is not even raised in the traditional literature, they contend. (It could be argued,
however, that balance of power theories are eminently concerned with the problem
of change in the international order.) And a standard claim of the realists and
dependency theorists that bargaining outcomes can be predicted from the relative
power position of national actors, is patently false when we look at many contempo-
rary international relationships.
Keohane and Nye consistently outline their methods and develop their findings
18Joseph S. Nye and Robert O. Keohane, eds., Transnational Relations and World Politics (Cambridge,
Mass.: Harvard University Press, 1972).
19Kal J. Holsti and Thomas A. Levy, "Bilateral Institutions and Transgovernmental Relations Between
Canada and the United States," International Organization Vol. 28 (Autumn 1974): 283-309.
522 International Organization
clearly. Their approach is to describe first the various regimes in the oceans and
monetary issue-areas, and in Canadian-American and Australian-American rela-
tions, and subsequently to measure to what extent the relationships in those cases
conform to the three essential characteristics of the complex interdependence ideal
type. Next, they explain regime change or persistence, or the outcomes of conflicts,
using four different models: (1) the economic process model (economic growth and
technological innovation create demands for regime change), (2) the overall power
structure model (changes in relative military strength determine bargaining out-
comes and regime change), (3) the issue-structure model (change and outcomes can
be predicted from the relative strength of the actors within each issue area), and (4)
the international organization model (change and outcomes derive from "organiza-
tionally dependent variables,
"
such as voting power, ability to form coalitions,
control of elite networks, and the like). The authors start with the simplest model
(overall structure), and add complexity from other models until a satisfactory expla-
nation of regime change or bargaining outcomes is achieved. For example, the
overall structure model would have predicted the United States to play a major role
in constructing the international monetary regimes of the 1920s, but it was Great
Britain, a declining military power, which nevertheless set the rules of the monetary
game in that decade. Similarly, because the United States has remained militarily
the most powerful country in the world, the overall structure model could not have
predicted or explained the collapse of the Bretton Woods system in 1971, and the
declining ability of the United States to determine the rules of a new monetary
regime. Satisfactory explanations of regime change can be derived by combining
elements of the other models, however. A major task of the book is to illustrate how
this can be done.
Keohane and Nye are generally very judicious in assessing the utility of the
four models, when applied to the four cases, and in a few instances confess that
regime change or persistence cannot be explained sufficiently using any combina-
tion of the models. And where facts fit only imperfectly with the predictions, no
exaggerated claims of satisfactory explanations of their own international organiza-
tion model are put forward.
The two case studies of bilateral relationships are supported with impressive
evidence. The Australian-American relationship, examined back to 1920, contains
few of the characteristics of complex interdependence; hence, the outcomes of
conflicts are largely dependent upon the relative power position of the two states-
just as the overall power structure model would predict. In the Canadian-American
case, also studied back to the 1920s,
the characteristics of
complex interdependence
become increasingly evident; and as they develop, outcomes of conflict tend to
favor Canada more frequently-a finding obviously at odds with the overall power
structure model, but reasonably consistent with the authors' international organiza-
tion model. Canadian-American relations demonstrate how multiple channels of
access, non-state actors, transgovernmental relations, non-linkage of issues, eco-
nomic vulnerability and other features of complex interdependence combine to
produce a relationship where traditional power factors and military capacity are
almost totally irrelevant.
A new international politics? 523
It is important in evaluating this study to recall what the authors are, and are
not, doing. Keohane and Nye do not claim that this volume presents a general
theory of international politics, or even a formal theory of the politics of complex
interdependence. Since they examine their subject primarily from a systems
perspective, the role of domestic politics and personalities is not covered
thoroughly. These variables, of course, would be essential components of a formal
theory.
Nor is the book intended to replace other views of, or approaches to, interna-
tional politics but rather to demonstrate that in certain types of relationships the
relatively parsimonious overall structure and economic process models (and by
implication the dependency model) fail at the levels of description, explanation, and
prediction. This is not to argue, then, that the more complex and novel models
introduced in the book would be useful for studying, for example, Sino-Soviet
relations. But they are necessary tools for understanding other types of relation-
ships, particularly those which contain the characteristics of complex interdepen-
dence.
The book does not identify all those relationships in the world where complex
interdependence prevails. This is a theoretical book, not a foray into measurement.
Emphasis is on the relationship between complex interdependence and regime
change, not on the causes of interdependence or vulnerability. Although observa-
tions on these matters are offered, they are not developed systematically. Yet, the
authors are convinced that interdependence is increasing. But they do not admit-as
some have-that the "high politics" of security are being replaced by economic,
resource, and ecological problems. What is happening, of course, is that the interna-
tional agenda is becoming increasingly lengthy; the addition of each new item does
not mean that the others are being resolved, nor that welfare-oriented problems are
displacing security problems. There is nothing wrong with looking at the world
through Morgenthau-colored glasses so long as we understand that it is intellectually
fruitful to do so only for certain types of relationships. As long as we have the
rivalries of the great powers, to say nothing of the activities of the Libyas,
Ethiopias, Somalias, and others, we are a long way from achieving complex inter-
dependence universally.
The authors propose, nevertheless, that the conditions for further development
of complex interdependence are propitious. The hierarchic ordering of states in the
system, where hegemons like Great Britain establish and maintain international
regimes unilaterally, is rapidly declining. (The present inability of the United States
to control the outcomes in a variety of global and bilateral relationships is evidence
of this proposition.) This important prediction about the long-range structural con-
sequences of complex interdependence contradicts Scott's analysis of increased
system instability, the forecasts of dependency theorists, and the predictions of
realists who emphasize the mammoth gap in military capabilities between the nu-
clear powers and other states. The latter groups visualize the world in terms of
ever-increasing status and power distances; Keohane and Nye offer a much more
egalitarian assessment.
In a system where power and influence are becoming more equitably distrib-
524 International Organization
uted, new types of leadership (unilateral "example-setting," or collective
problem-solving) have to be employed. These types of leadership not only result
from complex interdependence, but contribute to its development as well. The
authors, in their normative chapter, applaud such developments, though they do not
suggest any inevitability to them. Clearly, attempts to re-institute hegemonic lead-
ership styles, or individual government initiatives that set off conflict spirals, re-
main strong possibilities. Note, for example, the unilateral actions to establish
200-mile economic zones.
Power and Interdependence is a closely reasoned piece of scholarship. It may
well prove to be one of the most significant writings in international relations theory
of the past two decades. It does contain, however, a few difficulties that should be
confronted in future research. The authors correctly emphasize that in a condition of
complex interdependence, intemational conflict does not disappear. It is the irrele-
vance of military force that helps distinguish conflict behavior in complex inter-
dependence relationships from others. This may be correct in the sense that threats
of military action are not made while bargaining, let us say, on monetary issues. But
what if there is a rough equivalent to military force that is used to threaten or inflict
punishments? For example, isn't a unilateral threat drastically to devalue currency
an equivalent to a threat to use military force in a territorial conflict? Are not trade
wars equivalent to certain forms of military coercion? Is it possible to approximate a
condition of complex interdependence when such "wars" are going on, or threaten
to break out at any moment?20 The authors might consider reformulating this one
characteristic of complex interdependence-the minor role of military force-and
substitute for it a broader category, such as the absence of grossly harmful threats.
Such a category would be difficult to operationalize, but its use would at least
indicate that a genuinely new type of international relationship has not been
achieved so long as any extremely harmful actions are threatened or taken by any
members of an interdependent system.
Interdependence might indeed give rise to new types of international politics
and leadership patterns, but Keohane and Nye could have speculated more on the
problem of costs it creates for small states. Increased interdependence between
unequal partners, for example, may lead to the greater loss of domestic policy-
making capacity among the weak, so that incentives for disintegrating from the
system begin to emerge. Witness Canada's recent attempts to reduce American
penetration of the society and economy, and to build counterweights with Japan and
Europe. Complex interdependence might be a desirable condition to achieve for
20Using Keohane and Nye's criteria,
the Iceland-Britain dyad
would not
approximate complex
inter-
dependence because force was threatened and used-albeit carefully-during the "Cod War." Yet,
in
1971, the United States imposed a 10 percent surcharge
on all imports which,
combined with devalua-
tions, harmed the economic interests of America's major trading partners. While such punitive
action
was not technically the same as a display of military power,
it certainly had few of the characteristics of a
"new diplomacy." According to the authors' formulations, the American action would be consistent
with a condition of complex interdependence.
A new international politics? 525
some, but it has not been adequately demonstrated that in such a system joint gains
necessarily increase as compared to more traditional diplomatic relationships. And,
as Haas points out, if one unit "blows up," destructive escalation in interdependent
systems is more probable than in relationships of lower interconnectedness.21
It is debatable whether Keohane and Nye have done full justice to the realist
view of international politics. For example, they argue that this model predicts
outcomes of conflict or regime change solely on the basis of military capacity. But if
there is any one problem that has bedevilled the realists, it is how to combine the
various "sources of power" to come up with a valid world power ranking. The
classical texts emphasize that population, territory, economic level, and technology
are just as important as military strength.
Moreover, Keohane and Nye claim that the realist (overall structure) model is
also inadequate because it fails to explain regime change and bargaining outcomes
in economic and social areas. But, in my opinion, the realists, unlike dependency
theorists, would never claim that military power is directly relevant to issues other
than security. They are interested primarily in the classical issues of war, peace, and
the balance of power, leaving other matters to experts on international organization
or law. And while they might not be interested in regime change in the oceans-
except where such changes impinge on security interests-they are vitally con-
cerned with changes in the international political system, the causes of those
changes, and their predicted results. The subtitle of this volume, World Politics in
Transition, in which the transition is implied to be a result of growing interdepen-
dence, is thus misleading. World politics has always been in transition, which is not
to deny the authors' major point that new types of relationships do exist and that
new models are needed to describe and understand them. But in attempting to apply
old approaches or models to areas for which they were never intended, they are
setting up straw men.
Finally, by defining interdependence in terms of behavioral attributes in bar-
gaining and playing down the question of vulnerabilities, the authors may have
difficulty identifying pairs of states which really are interdependent. Multiple chan-
nels of diplomatic interaction, absence of hierarchy or linkage on issues, and irrele-
vance of military force are probably characteristic of the relations between Japan
and Bhutan, Canada and the Bahamas, and India and Finland. But are these states
really interdependent? Without some specified thresholds of impact or vulnerability,
or at least some minimum flow of transactions, interdependence cannot exist, even
if the other three conditions are met. In short, Keohane and Nye may have outlined
some necessary conditions for interdependence, but they are not sufficient condi-
tions.
None of these comments points to any critical flaw in Power and Interdepen-
dence. On the contrary, the book is a measured, but very important step in pointing
-the way to more satisfactory analyses of a complex world. As with the authors'
previous work, it should stimulate research and provide guidelines for exploration
21"Is There a Hole in the Whole?. . .
"
p. 857.
526 International Organization
of the political aspects of global economic and social issues. While perhaps compli-
cated for the beginning undergraduate, it will command a leading place in the
reading lists of advanced students. Aside from the substantive merits of the book, it
is also a model of the blending of theory with empirical work.
But what of dependency? In their preface, Keohane and Nye dismiss the body
of literature on dependency theory as irrelevant to their concern with regime change.
But their analysis has some implications for the relations between the industrial and
developing countries. For one thing, the dependency theorists, like Keohane and
Nye, emphasize the importance of non-state actors and transnational relations.
Where they could disagree is on the connection between such actors and diplomatic
activity. To Frank and others, for example, diplomats work to preserve and develop
a basic world economic superstructure; Keohane and Nye would reject such a
deterministic stance.
On the question of bargaining outcomes,
their analysis would partially
support-at least by implication-the predictions of dependency theorists. Where
complex interdependence does not exist-as is presumably the case in the relations
between most LDCs and the industrial countries-power and coercion appear more
frequently and outcomes of conflict do reflect capability differentials. If this was the
case between the United States and Australia, then it should be true even more so in
America's relations with Thailand, Great Britain's connection with Sri Lanka, and
France's diplomacy toward Chad or Niger. Keohane and Nye would not agree,
however, that the outcomes necessarily constitute exploitation. Yet, where the three
conditions of complex interdependence are present-and these might very well exist
in the relations between some industrial countries and a few developing nations-
then it follows that bargaining outcomes between them, as in the Canada-United
States case, would be roughly equal-a proposition that dependency theorists would
never accept.
But all of this is by way of speculation. The fact remains that writers on
interdependence and dependency theorists have had very little to say to each other.
Whatever similarities appear in their work is more fortuitous than the result of
academic interchange. The lack of dialogue can be attributed both to the different
intellectual motivations in their work and to fundamental differences on conceptual
problems.
Dependency theory developed initially in Latin America among economists
and sociologists who were frustrated by the lack of international equality and the
continued problems faced in
organizing successful development strategies. Many of
the analyses owe a greater debt to Marxism than to traditional international relations
theory. Their driving force has been moral concern and their approach has em-
phasized theory on a grand scale rather than empirical work.22 In contrast, writers
on interdependence have been motivated by intellectual curiosity, predominately a
22This is not to imply that all of the literature grouped under the dependency category is devoid of
empirical work. Some of the writing takes off from the careful investigations of Latin American
economists who sought to demonstrate that primary commodity producers
were
suffering from worsening
terms of trade. Raul Prebisch's work for ECLA is
particularly thorough. Andre Gunder Frank's theoreti-
A new international politics? 527
desire to describe and measure rather than to explain. Most have played down policy
implications of their analyses. The call for cooperation and policy coordination
appears repeatedly in the literature, but only a few have explored national autonomy
and other strategies as a possible solution to the problems posed by interdepen-
dence.
The subject of inquiry also differs. Writers on dependency-even dependency-
as-vulnerability23-are concerned solely with the relations between the world's
center and its peripheries. Without really asking the question why, writers on
interdependence have confined their studies to the relations between industrial
states. Although Keohane and Nye point to the possibility of coalition-making by
developing states in international organization, as well as the power of the weak in
such issue-areas as the Law of the Sea, the other issue-areas and bilateral relations
they explore lie predominately in the domains of the industrial states. Are these
writers implying, then, that interdependence as a condition exists only between such
states? Or has the easy availability of trade and investment data between the indus-
trial states determined the focus of inquiry?
We can summarize schematically some of the major substantive differences
between five of the approaches to international relations discussed in this essay: (1)
dependency theory, (2) vulnerability analysis, (3) transaction analysis, (4) realism,
and (5) complex interdependence.
This list is by no means exhaustive, but it does help us evaluate the possibilities
of, or barriers to, intellectual consolidation. It appears that on substantive issues
there are few insurmountable impediments to building bridges between the various
approaches. The realist paradigm, for example, does not preclude considerations of
non-state actors in diplomacy, nor is there any particular reason why those in-
terested in measuring changes in international transactions should confine their
investigations to the relations between industrial states. Dependency theorists
should certainly acknowledge that not all issues can be reduced to economics and
that some foreign policy actions are undertaken for military security purposes. And
Keohane and Nye might be urged to explore the advantages of more autonomous
policies for states enmeshed in systems of complex interdependence. Using the list,
readers may wish to speculate on other areas where collaboration might be under-
taken.
The major problems preventing synthesis appear to be epistemological rather
than substantive. While dependency theory may tell us something about the lot of
the average developing country in an international economy that does contain
cal statements have been based on case histories of Chile and Brazil. It is interesting that portions of
dependency theory have been subjected to empirical testing primarily by North American scholars. See in
particular Robert R. Kaufman et al., "A Preliminary Test of the Theory of Dependency," Comparative
Politics Vol. 7 (April 1975): 303-30, and Lawrency R. Alschuler, "Satellization and Stagnation in Latin
America," International Studies Quarterly Vol. 20 (March 1976): 39-82, and the Kurth-Rosen volume
cited in fn. 1.
23Singer's Weak States in a World of Powers concentrates on the relations between the major powers
and their former dependencies.
528 International Organization
Table 1 Similarities and differences on substantive issues in
Dependency Vulnerability
Scope of Inquiry North-South mostly North-
(center-periphery)
South
Focus on indepen- independent independent
dent or dependent
variabks
Types of essential non-state state
actors
Inquiry focused on system pairs of actors
characteristics of
system, actors, or
pairs of
actors?
Major instruments economic coercion, economic coercion
of bargaining backed by threats of
military force or
subversion
What determines bar- economic exchange comparative degree
gaininglconflict relationships of vulnerability in
outcomes? dyads
Results on system of exploitation and probable hierarchy
bargaining and systemic hierarchy
conflicts
Policy implications; isolation/autarchy diversify markets
appropriate re- and sources of supply
sponses to national
or systemic
characteristics
A new international politics?
529
analyses of dependency and interdependence
Complex
Transactionalists Realists Interdependence
Western industrial universal mostly Western in-
nations dustrial nations
independent both both
non-state (so- state state and non-state
cieties
system all all
not analyzed military and diplomacy; trans-
economic coercion; national & trans-
diplomacy governmental al-
liances; exploitation
of vulnerabilities in
issue areas
not analyzed military/economic issue area vulnerabil-
power ity; non-state actor
roles, etc.
not analyzed imbalance/balance of more equitable re-
power wards than in non-
interdependent
systems; less
hierarchy
coordinate policies varied policy coordination
to maximize joint with appropriate
gains
forms of leadership
530 International Organization
inequitable characteristics, its economic determinism, disregard for measuring
changes in dependent variables, and casual treatment of empirical materials cannot
be reconciled easily with the canons of inquiry extant among non-Marxist social
scientists. The transactionalists can be faulted for a generally atheoretical concern
with measurement and for confining their inquiry to an unnecessarily narrow geo-
graphic domain. Dependency theorists no doubt would look with strong disfavor
upon an academic exercise that studies externalities-quantifies transactions-but
avoids examining the nature or consequences of those transactions. And realists
might quarrel with the developers of the complex interdependence viewpoint on the
grounds that the latter have become overly enamored with relatively trivial items on
the international agenda.
However, are there any major payoffs to a synthesis of these approaches? Is
bridge-building a worthwhile exercise? In my opinion, it is, because each of these
approaches or bodies of literature tells us something about the truth of international
relationships, but not all the truth about it. Each should help correct the substantive
and theoretical shortcomings of the other. Those who promote the rhetoric of
interdependence, assuming that it is a quality or characteristic spread equally around
the globe, should be made aware of the vulnerabilities-and frustrations-of the
weak. Those who see interdependence as an inexorable trend bringing benefits to all
should understand that interdependence also has its costs. Policies of disintegration,
autarky, and isolation are often responses to too much dependence or asymmetrical
integration. We should attempt to appreciate the fears and perceptions that give rise to
them. The weak and the vulnerable states, many of which are inundated by foreign
advisors, buffeted by wild fluctuations in commodity prices and currency values,
and the object of vast flows of foreign cultural penetration, should not be expected
to look upon interdependence
in the same light as those who have strong capabilities
and who are the actors in international relations, not merely the objects. Depen-
dency theorists, on the other hand, should recognize that not all international eco-
nomic relations are zero-sum; collaborative enterprises between industrial and
developing countries can bring important advantages to the poor and enhance their
possibilities for indigenous economic and cultural development. And if they would
stop assuming that all countries must develop simultaneously along a single path,
their conclusions might not be so pessimistic.
A debate between the proponents of the various approaches to the study of
types of relationships in international life is long overdue. Analyses of interdepen-
dence and dependence represent different world views; these are shared in large part
by government officials in the industrial and developing nations. If they are to
engage in fruitful dialogue, it would serve all of us well if they could learn, through
the products of scholars, to distinguish the facts and fantasies of each view.