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Power and Interdependence in the Information Age

Author(s): Robert O. Keohane and Joseph S. Nye Jr.


Source: Foreign Affairs, Vol. 77, No. 5 (Sep. - Oct., 1998), pp. 81-94
Published by: Council on Foreign Relations
Stable URL: http://www.jstor.org/stable/20049052
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Power

and

in the

Interdependence
Information

Age

Robert 0. Keohane and Joseph S.Nye, Jr.

THE

the

Throughout

RESILIENCE

twentieth

OF

STATES

century, modernists
would
transform world

have been pro


In 1910
politics.
rendered
interdependence

that technology
claiming
Norman Angel? declared that economic
wars irrational and looked forward to the
day when they would become
in the 1970s saw telecommunications
obsolete. Modernists
and jet
travel as creating a global village, and believed that the territorial state,
which has dominated world politics since the feudal age, was being
actors such as multinational
eclipsed by nonterritorial
corporations,
transnational

social movements,
and international
organizations.
as
such
Peter
Alvin
and
Heidi
Likewise,
Drucker,
Toffler,
prophets
and Esther Dyson
that
information
is
revolution
argue
today's
ending
hierarchical bureaucracies
and leading to a new electronic feudalism
with overlapping communities
and jurisdictions laying claim to multiple
layers of citizens' identities and loyalties.
were
of past generations
The modernists
partly right. Angell's
of the impact of war on interdependence was insightful:
understanding
on the
not
I wrought
World War
destruction,
unprecedented
only
battlefield but also on the social and political systems that had thrived
during the relatively
the 1970s predicted,
Robert

peaceful years
multinational

since 1815.As

the modernists

corporations,

nongovernmental

O. Keohane

is James B. Duke Professor of Political Science


of the Program on Democracy,
and Polit
Institutions,
at Duke
ical Economy
S. Nye,
of the
Joseph
Jr., isDean
University.
at
of
Government
School
Harvard
Kennedy
University.
and Co-Director

[81]

of

Robert 0. Keohane

and Joseph S.NyeyJr.

and global financial markets


have become
(ngos),
organizations
more
more resilient than
immensely
significant. But the state has been
modernists
States continue to command
the loyalties of
anticipated.
the vast majority of the world's people, and their control over material
resources inmost
at a third to half of gdp.
wealthy countries has stayed
The modernists
of 1910 and the 1970s were right about the direction
of change but simplistic about its consequences.
Like pundits on the
too
to
information
revolution,
they moved
directly from technology
the continuity
sufficiently considering
political consequences without
or the
of beliefs,
the persistence
of institutions,
strategic options
available to statesmen. They failed to analyze how holders of power
could wield that power to shape or distort patterns of interdependence
that cut across national boundaries.
we
years ago, in our book Power and Interdependence
(1977),
issues as trade, monetary
analyzed the politics of such transnational
that "modernists point correctly
relations, and oceans policy, writing
now
assume
to the fundamental
changes
taking place, but they often
without
sufficient analysis that advances in technology
and increases
a
new
in social and economic transactions will lead to
world in which
Twenty

states, and their control of force, will no longer be important. Tradition


vision by pointing
alists are adept at showing flaws in the modernist
out how military
but
find
it very difficult
continues,
interdependence
to
economic,
social, and
accurately
interpret today's multidimensional
This is still true for the information age
ecological
interdependence."
inwhich cyberspace is itself a "place," everywhere and nowhere.
of a new cyberworld,
like modernists
before
them,
Prophets
the new world overlaps and rests on the
often overlook how much
inwhich power depends on geographically
based
traditional world
use
Even
Internet.
if
In 1998,100 million
the
institutions.
people
a
in 2005, as some experts predict,
reaches a billion
this number
not
participate. Moreover,
large portion of the world's people will
of the world's
is
universal.
far
from
Three-quarters
globalization
and
much
less a modem
does not own a telephone,
population
to govern
not only
computer. Rules will be necessary
cyberspace,
intellectual
but ensuring
lawful users from criminals
protecting
property
public

Rules
or
government

[82]

rights.

require
private

FOREIGN

in the form of
authority, whether
or
Classic
governance.
community

AFFAIRS-Volume77No.s

Power and Interdependence

in the Information Age

issues of politics?who
governs and on what
as to the real world.
to
cyberspace

terms?are

as relevant

THE EARLY DAYS OF THE REVOLUTION


is not new. What
is new is
over distance as a result
the virtual erasing of costs of communicating
costs have
revolution. The actual transmission
of the information
that can be
hence the amount of information
become
negligible;
infinite. Computing
is effectively
transmitted
power has doubled
every 18months for the last 30 years. It now costs less than one percent
Interdependence

among

societies

ofwhat it did in the early 1970s. Similarly, growth of the Internet and
theWorld Wide Web has been exponential. Internet traffic doubles
are
bandwidths
every 100 days. Communications
expanding rapidly,
to fall. As late as 1980,
costs continue
and communications
phone
calls over copper wire could carry one page of information per second;
can transmit 90,000 volumes
a thin strand of
in
today
optical fiber
a second. As with
steam at the end of the
century and
eighteenth
at the end of the nineteenth,
electricity
productivity
growth has
as
to utilize the new
society learns
technologies.
lagged
Although
firms
industries
and
have
many
undergone
rapid structural changes
since the 1980s, the economic
is far from complete.
transformation
are still in the
We
revolution.
early stages of the information
one feature of what we
That revolution has dramatically
changed
described inPower and Interdependence as "complex interdependence"?
a world
are
in which
less and countries
security and force matter
connected by multiple
social and political relationships. Now anyone
a
a
can
with
be a desktop publisher,
and anyone with
computer
can communicate
modem
with distant parts of the globe at a trivial
cost. Earlier
flows were heavily controlled
transnational
by large
or the Catholic
bureaucracies
like multinational
corporations
remain important,
Church.
Such organizations
but the dramatic
transmission
of information
has opened
the field to
cheapening
and even individuals. These
loosely structured network organizations
ngos and networks are
states with
particularly effective in penetrating
out
to borders and
to force
using domestic constituencies
regard
political
leaders to focus on their preferred agendas. The information revolution
FOREIGN

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1998
September/October

[83]

Robert O. Keohane

and Joseph S.NyeyJr.

has vastly increased the number of channels of contact between societies,


one of our three dimensions of
complex interdependence.
the information
revolution
has not made
dramatic
However,
two other conditions
in
of
the
changes
complex
interdependence.
force still plays a significant role in relations between
states,
Military
and in a crunch, security still outranks other issues in foreign policy.
_ One reason that the information
revolution

We

are still in the earlv

Stages OI tne lniormation

revolution.

^as not transf?rmed world politics to a new


. politics

of complete

complex

interdepence

is

fa^ information does not flow in a vacuum


but in political space that is already occupied.
Another

zone
the democractic
a
of states is not world of

is that outside

of peace, the world


In many areas, realist assumptions
about
complex interdependence.
the dominance
of military force and security issues remain valid. For
structure
the political
the last four centuries states have established
within which information flows across borders. Indeed, the information
the context of the
itself can be understood
revolution
only within
itself was deliberately
of the world
economy, which
globalization
institutions for half a century
fostered by U.S. policy and international

after the end ofWorld War

II. In the late 1940s the United States

to forestall another
to create an open international
economy
international
The
and contain communism.
resulting
depression
on
the basis of multilateral
formed
institutions,
put a
principles,
on markets
and deemphasized
and information
military
premium
states to turn away from
for
has
become
It
costly
increasingly
rivalry.
sought

these patterns of interdependence.


available
The quantity of information

in cyberspace means
between
and distinctions

little

types
by itself. The quality of information
more
not
are
Information
does
of information
important.
probably
one considers the incentives to create
just exist; it is created. When
that are sources of
three different types of information
information,
power become apparent.
to create and
that actors are willing
Free information is information
The sender benefits from
financial compensation.
distribute without
to
and hence has incentives
the information
the receiver believing
is a public good,
information
may vary. Scientific
produce it.Motives
[84]

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AFFAIRS-Volume

77No. s

Power and Interdependence


but persuasive messages,

in the Information Age

such as political ones, are more self-serving.


are all
and propaganda
examples of free

broadcasting,
Marketing,
in the quantity of free information
is
information. The
explosion
most dramatic effect of the information
revolution.
perhaps the
to
that people are willing
Commercial
information is information
create and send at a price. Senders neither gain nor lose
by others
the information,
apart from the compensation
believing
they receive.
_
to be available on the
For such information

Internet, issues of property rights must be


can
so that
producers of information
be compensated by users. Creating commercial information
before one's competitors

Politics will

affect the

miormation

revolution

resolved

as much

as vice

versa.

that intellectual
property
can?assuming
can be
enormous
rights
enforced?generates
as the
demonstrates.
profits, especially for pioneers,
history ofMicrosoft
The rapid growth of electronic commerce and the increase in global
competition will be other important effects of the information revolution.
as old as
confers great advantage
espionage,
Strategic information,
on actors
do not possess it. One enormous
only if their competitors
was that, unbeknown
advantage the United States had inWorld War II
to
the United
States had broken the Japanese codes. The
Tokyo,
is often not particularly
quantity of such information
important. For
the strategic information
available to the United
States
example,
or
about the nuclear weapons
programs of North Korea, Pakistan,
more on
or
on vast
Iraq depends
having reliable satellites
spies than
flows of electronic mail.
The
revolution
information

alters patterns of complex


interde
the number of channels of
increasing

pendence
by exponentially
inworld politics?between
communication
individuals in networks,
not just individuals within bureaucracies.
But it exists in the context
an
of
structure, and its effects on the flows of
existing political
different types of information vary vastly. Free information will flow
as
faster without
information will be protected
regulation. Strategic
as
much
The
possible?for
example, by encryption
technologies.
flow of commercial
information will depend on whether
property
are established in
Politics
will
the
information
rights
cyberspace.
shape
revolution as much as vice versa.
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September/October

1998

[85]

Robert 0. Keohane

THE

NATURE

and

Joseph S.Nye,Jr.

OF

POWER

can be
is power, but what is
power? A basic distinction
to obtain outcomes you
drawn between behavioral power?the
ability
resource
resources that are
want?and
possession of
power?the
usually
associated with
the ability to reach outcomes you want. Behavioral
power, in turn, can be divided into hard and soft power. Hard power
is the ability to get others to do what they otherwise would not do
or rewards. Whether
or
by economic carrots
military
through threats
sticks, the ability to coax or coerce has long been the central element
of power. As we pointed out two decades ago, the ability of the less
or escape the constraints of an
vulnerable tomanipulate
interdependent
at low cost is an important source of power. For
relationship
example,
Knowledge

in 1971 theUnited States halted the convertibility of dollars into gold


and increased its influence over the international monetary
system. In
1973, Arab states temporarily gained power from an oil embargo.
Soft power, on the other hand, is the ability to get desired out
comes because others want what you want. It is the
to achieve
ability
goals through attraction rather than coercion. It works by convincing
others to follow or getting them to agree to norms and institutions
that produce the desired behavior. Soft power can rest on the appeal
of one's ideas or culture or the ability to set the agenda through standards
of others. It depends
that shape the preferences
and institutions
on the
of
the
free
information
that an actor
persuasiveness
largely
in the eyes
seeks to transmit. If a state can make its power legitimate
of others and establish international institutions that encourage others
to define their interests in compatible ways, itmay not need to expend
or
resources.
as many
military
costly traditional economic
are
not the same. The
Hard and soft power are related, but they
is correct when he says that
scientist Samuel P. Huntington
a culture and
success makes
ideology attractive, and that
to
self-doubt and crises of identity.
economic and military failure lead
He iswrong, however, when he argues that soft power rests solely on
a foundation
of hard power. The soft power of the Vatican did not
states diminished. Canada, Sweden,
wane because the size of the
papal
have more influence than some other states with
and the Netherlands
political
material

equivalent
[86]

economic

or

military

FOREIGN

capabilities.

AFFAIRS-

The

Soviet Union

Volume77No.s

had

Power and Interdependence

in the Information Age

afterWorld War II but squandered


even when Soviet economic
it by invading Hungary
and Czechoslovakia
to grow. Soft power varies over time
and military power continued
and different domains. America's
popular culture, with its libertarian
and electronic
and egalitarian
currents, dominates
film, television,
are
to
attractive
of
that
culture
all aspects
communications.
Not
considerable

in Europe

soft power

the spread
Nonetheless,
everyone, for example conservative Muslims.
of information and American
popular culture has generally increased
to American
awareness of and openness
ideas and values. To
global
more often soft power
some extent this reflects deliberate
policies, but
is an inadvertent byproduct.
is also affecting power measured
in
revolution
The
information
terms of resources rather than behavior.
In the eighteenth-century
of power, territory, population,
and agriculture
was a
provided the basis for infantry, and France
principal beneficiary.
resources
In the nineteenth
industrial
century,
capacity provided the
to gain dominance.
that enabled Britain and, later, Germany
By the

European

balance

science and particularly


nuclear
century,
resources
to
the
United
contributed
crucial power
States
In the next century, information
Soviet Union.
technology,
resource.
to
most
is
be
the
defined,
likely
important power

mid-twentieth

THE

SMALL

VERSUS

THE

physics
and the
broadly

LARGE

Th e n ew conventional wisdom
is that the information revolution has
a
of scale, and barriers
leveling effect. As it reduces costs, economies
it should reduce the power of large states and
of entry to markets,
actors. In
enhance the power of small states and nonstate
practice,
however, international relations are more complex than the technolog
ical determinism
this view suggests. Some aspects of the information
revolution help the small, but some help the already large and powerful.
There

are

several

reasons.

First, important barriers to entry and economies of scale remain in


some information-related
aspects of power. For example, soft power
is strongly affected by the cultural content of movies
and television
entertainment
industries often enjoy
programs. Large, established
considerable economies of scale in content production and distribution.
FOREIGN

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1998

[87]

Robert 0. Keohane

and

Joseph S.NyeyJr.

share in films and television programs


inworld markets
is therefore likely to continue.
Second, even where it is now cheap to disseminate
existing informa
tion, the collection and production of new information often requires
In many competitive
the newness of
situations,
costly investments.
counts more than the average cost of all
at the margin
information
is a good example. States like the United
information.
Intelligence
States, Britain, and France have capabilities for collecting
intelligence
that dwarf those of other nations. In some commercial situations, a fast
follower can do better than a first mover, but in terms of power among

The

dominant American

market

it is usually better to be first.


are often the creators of the standards and
first movers
Third,
architecture of information
systems. The use of the English
language
and the pattern of top-level domain names on the Internet is a case
in point. Partly because of the transformation of the American
economy
states,

driven by the
in the 1980s and partly because of large investments
was
often first on
the United
States
Cold War military
competition,
the scene and still enjoys a lead in the application of awide variety of
information
technologies.
Fourth, military power remains important in some critical domains
has some effects
relations. Information
of international
technology
on the use of force that benefit the small and some that favor the pow
erful. The

off-the-shelf

costly military
and increases
add

lucrative

commercial

to be
availability of what used
small states and nonstate actors

benefits
technologies
of large states. Information
the vulnerability
trends,
targets for terrorist groups. Other

systems
however,
refer to a

the already powerful. Many military


analysts
inmilitary affairs" caused by the application of information
sensors, direct broadcasting,
high-speed
Space-based
technology.
to
the
software
and
ability
gather, sort,
computers,
provide
complex
events
about
information
and
disseminate
process, transfer,
complex
area. This dominant
that occur over a wide geographic
battlespace
awareness combined with precision force produces a powerful advantage.
assessments
of
of balances
traditional
As the Gulf War
showed,
irrelevant unless
such as tanks or planes become
weapons
platforms
to integrate information with those weapons.
they include the ability
are available in commercial markets,
of the relevant technologies
Many
strengthen
"revolution

[88]

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AFFAIRS-Volume

77No. s

Power and Interdependence

in the Information Age

states can be expected to


however, will not be possession of fancy
but the ability to integrate a system of
United States is likely to keep its lead.
and weaker

have many of them. The key,


hardware or advanced systems

the
systems. In this dimension,
a
In information warfare,
small
some
to
the
of
expectations
edge makes all the difference. Contrary
or
theorists, the information revolution has not greatly decentralized
states. If anything, it has had the opposite effect.
equalized power among

THE

POLITICS

OF CREDIBILITY

about

and the power of


reducing the role of governments
all states? Here the changes are more likely to be along the lines the
to understand
the effect of free information
modernists
predicted. But
on power, one must first understand the
paradox of plenty. A plenitude
a
to
becomes the
of information leads
poverty of attention. Attention

What

scarce resource, and those who can distinguish valuable signals from
white noise gain power. Editors, filters, interpreters, and cue-givers
become more in demand, and this is a source of power. There will be
an

names

and the ability to


become more important.
those who can withhold
can
information
private
cripple the credibility of those who have it. For instance, economists
out that sellers of used cars know more about their defects than
point
owners of bad cars are more
to sell
likely
potential buyers. Moreover,
owners
ones.
of good
Thus potential buyers discount the price they
than
are
to pay to
the superior
willing
adjust for unknown defects. Hence
information of sellers does not improve the average price they receive,
but instead makes them unable to sell good used cars for their real value.
in trade, where power goes to
Unlike
asymmetrical
interdependence
those who can afford to hold back or break trade ties, information power
flows to those who can edit and credibly validate information to sort out
imperfect market for evaluators. Brand
bestow an international seal of approval will
But power does not necessarily flow to
some circumstances
information.
Under

is both correct and important.


is the crucial
Hence,
among editors and cue-givers,
credibility
a
source
of power. Estab
resource, and asymmetrical
credibility is key
means
a
lishing credibility
developing
reputation for providing correct
even when
it may reflect badly on the information
information,

what

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September/October

1998

[89]

Robert 0. Keohane

and

Joseph S.NyeyJr.

a
own country. The bbc, for
providers
reputation
example, has earned
in Baghdad,
state-controlled
radio stations
for credibility, while
in
and Havana
have not. Reputation
has always mattered
Beijing,
world politics, and it has become even more important because of the
cost of transmitting data means
that the
paradox of plenty. The low
to transmit it ismuch less important than it used to be, but the
ability
to filter information
ismore so. Political struggles focus less on
ability
than over the creation
control over the ability to transmit information
of credibility.
Three types of state action illustrate the value of credibility. Much
of the traditional conduct of foreign policy occurs through the exchange
as
are credible.
can be valuable
of promises, which
only insofar
they
that can credibly assure potential partners that
Hence,
governments
over
not act
competitors
they will
opportunistically will gain advantages
the Cold War, for example,
whose promises are less credible. During
the United
States was a more credible ally for Western
European
the United
countries than the Soviet Union because as a democracy
States could more credibly promise not to seek to exploit or dominate
at
to borrow from
its allies. Second,
capital markets
competitive
about one's financial
interests rates requires credible
information
and destruction

in
situation. Finally,
the exercise of soft power requires credibility
States
For instance, as long as the United
order to be persuasive.
a
it could not be
credible advocate of
racial segregation
condoned
in
could
universal human rights. But
June 1998, President Clinton
a
answer
to
to
in
the
Chinese?and
question at
preach human rights
could frankly
about American
shortcomings,
Beijing University
to
to make further progress
States needed
admit that the United
realize
One

its ideal of equality.


of the abundance
implication

of free

information

sources

and the role of credibility is that soft power is likely to become less
a function
instance,

of material
using

force

resources. Hard power


maybe
to take over a radio station?to
as a form of free information

necessary?for
soft
generate
new.
not
is
Hitler

power. Propaganda
in the 1930s. Slobodan Milosevic's
and Stalin used it effectively
was
crucial to his power in Serbia. InMoscow
control of television
in 1993, a battle for power was fought at a tv station. In Rwanda,
radio stations encouraged
Hutu-controlled
genocide. The power of
[90]

FOREIGN

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Volume77No.5

Power and Interdependence

in the Information Age

by the
supplemented
persists but will be increasingly
broadcasting
controlled
its multiple
channels of communication
Internet, with
actors who cannot control one another by force. The
by multiple
_
issue is not only which actors own television

networks, radio stations, or web


once

who

sites?

sources exist?but
plethora of such
to which
of
fountains
pays attention
a

information and misinformation.

The

shift from broad

Casting

to narrowcast

ing has major

political

.
,.
the case of worldwide
television,
?npucations.
can also lead to soft power. For inwealth
stance, cnn was based inAtlanta rather than
or Cairo because of America's
Amman
leading position in the indus
try and technology. When
Iraq invaded Kuwait in 1990, the fact that
cnn was an American
company helped to frame the issue, worldwide,
an Arab company been the world's
as
dominant
aggression. Had
as
a
TV channel,
justified
perhaps the issue would have been framed
reverse
to
colonial
humiliation.
attempt
In

is a type of free information


that has long had an
Broadcasting
on
on certain conflicts
and
impact
By focusing
public opinion.
to
human
broadcasters
have pressed politicians
rights problems,
some
Somalia
respond to
foreign conflicts rather than others?say
rather than southern Sudan. Not
have
governments
surprisingly,
to
television
and radio stations and have met
manipulate
sought
since a relatively
with
considerable
small number
of
success,
sites have been used to reach many people with
the
broadcasting
same message.
to narrow
the shift from broadcasting
However,
Cable
and the
television
casting has major political
implications.
Internet
enable senders to segment
and target audiences.
Even
more

the Internet not only focuses attention


across borders.
at low cost
Interactivity
allows for the development
of new virtual communities:
people
as part of a
who imagine themselves
of
how
single group regardless
far apart they are physically
from one another.
create new
These
for ngos. Advocacy
opportunities
technologies
networks' potential
impact is vastly expanded by the information
since the fax machine
and the Internet enable them to
revolution,
important politically,
but helps coordinate
action

send messages

from

the rain forests

FOREIGN

AFFAIRS

of Brazil

or the
sweatshops

1998
September/October

[91]

of

Robert O. Keohane
Southeast

and Joseph S.NyeyJr.

recent Landmine
The
a
of
coalition of network

Asia.

the activities

Conference

resulted

from

organizations
working with
like Canada,
individual
politicians

governments
middle-power
like Senator Patrick Leahy
and celebrities
like Princess
(D-Vt.),
on
to capture attention,
set the
Diana
agenda, and put pressure
leaders. The role of ngos was also an important
channel
political
across
in the global warming
of communication
dis
delegations
at
in December
cussions
1997. Environmental
groups and
Kyoto
in Kyoto
for the attention
of the media
from
industry competed
in part on the findings
of
major countries,
basing their arguments
scientists.
nongovernmental
for a flowering of issue advocacy
There are substantial opportunities
but the credibility of these net
networks
and virtual communities,
works

is fragile. Greenpeace,

Royal Dutch
Brentspar

for instance,

Shell by criticizing

imposed

large

costs

on

its planned disposal of its

itself lost
Sea, but Greenpeace
drilling rig in the North
it later had to admit the inaccuracy of some of its
when

credibility
claims. Atmospheric

findings about climate change have


not just from the prestige of science but from the
gained credibility,
in the Intergovernmental
Panel on Climate
developed
procedures
and careful peer review of scientific papers
for extensive
Change
summaries. The ipcc is
and intergovernmental
vetting of executive
an
an
institution whose major
information-legitimating
example of
to masses of scientific
to
and credibility
function
is
give coherence
scientists'

about climate change.


is
of credibility
As the ipcc example
shows, the significance
to transnational
networks
of like
increasing
importance
giving
is important,
issues where knowledge
minded
experts. By framing
actors in form
communities
become
such professional
important
know
and in bargaining
processes.
By creating
ing coalitions
can
But to
the basis for effective cooperation.
ledge, they
provide
is produced
this information
the procedures
be effective,
by which
rec
must appear unbiased.
is increasingly
information
Scientific
information

as in part
the infor
To be credible,
socially constructed.
ognized
a
in
that is
accordance
mation must be produced
process
through
norms
and
and characterized
with
by transparency
professional
fairness.
procedural
[92]

FOREIGN

AFFAIRS-

Volume77No.s

Power and Interdependence


THE

Not

DEMOCRATIC

in the Information Age


ADVANTAGE

are leaders in the information


democracies
revolution,
are. This
societies are familiar with
is no accident. Their

all

many
free exchange

but
the
are

of information,
and their institutions of governance
not threatened by it. They can shape information because they can
also take it. Authoritarian
states, typically among the laggards, have
more trouble. Governments
such as China s can still limit their citizens'
access to the Internet
service providers and monitoring
by controlling
the relatively small number of users. Singapore has thus far been able
to reconcile its political controls with an increasing role for the Inter
net. But as societies like Singapore reach higher levels of development
where more citizens want fewer restrictions on access to the Internet,

runs the risk of


are its
resource for
losing the people who
key
in the information economy. Thus Singapore
iswrestling
competing
with the dilemma of reshaping its educational system to encourage the
individual creativity that the information economy will demand while
social controls over the flow of information.
maintaining
reason that closed systems have become more
Another
costly is
that it is risky for foreigners to invest funds in a country where the key
are made in an opaque fashion.
is becoming
decisions
Transparency
a
asset for countries
key
seeking investments. The ability to hoard
states,
information, which once seemed so valuable to authoritarian
Singapore

to attract
and transparency
the credibility
necessary
on
terms.
investment
communities
globally competitive
Geographical
want
still matter most, but governments
that
will
rapid development
have to give up some of the barriers to information flows that protected
officials from outside scrutiny. No longer will governments
that want
undermines

high levels of development be able to afford the luxury of keeping


their financial and political situations a secret.
From a business standpoint,
the information
revolution has vastly
increased the marketability
and value of commercial
information by
costs
of transmission
and the transaction costs of charging
reducing
users.
information
As Adam Smith would have recognized,
the value
of information
increases when the costs of transmitting
it decline, just
as the value of a
good increases when transportation costs fall, increasing
demand by giving itsmakers a larger market. Politically, however, the
FOREIGN

AFFAIRS

September/October

1998

[93]

Robert 0. Keohane

and Joseph S.NyeyJr

most

important shift has concerned free information. The ability to


free information
in
disseminate
increases the potential for persuasion
world politics. NGOS and states can more readily influence the beliefs
If one actor can persuade others to
of people in other jurisdictions.
it possesses hard power and
adopt similar values and policies, whether
less important.
Soft power and
strategic information may become
of
can, if sufficiently persuasive, change perceptions
self-interest
and thereby alter how hard power and strategic infor
or ngos are to take
mation are used. If governments
advantage of the
free information

information
credibility

to establish reputations
revolution,
they will have
amid the white noise of the information
revolution.

for

Cheap flows of information have enormously expanded the number


and depth of transnational
channels of contact. Nongovernmental
actors have much greater opportunities
to organize
and propagate
their views. States are more easily penetrated and less like black boxes.
a
As a result, political
leaders will find it more difficult to maintain
coherent ordering of foreign policy issues. Yet states are resilient, and
ones with democratic societies, arewell
some countries,
especially large
to benefit from an information
the coherence
society. Although
placed
of government policies may diminish in these pluralistic and penetrated
will
states, their institutions will be attractive and their pronouncements
be credible. They will therefore be able to wield soft power to achieve
many of their objectives. The future lies neither exclusively with the state
nor with
transnational
relations: geographically
based states will
continue to structure politics in an information age, but they will rely
less on material resources and more on their ability to remain credible
sources of information.?
to a
public with increasingly diverse

[94]

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AFFAIRS-Volume77No.s