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Neither skepticism nor romanticism: the ASEAN

Regional Forum as a solution for the Asia-Pacific
Assurance Game

Tsuyoshi Kawasaki

To cite this article: Tsuyoshi Kawasaki (2006) Neither skepticism nor romanticism: the ASEAN
Regional Forum as a solution for the Asia-Pacific Assurance Game, The Pacific Review, 19:2,
219-237, DOI: 10.1080/09512740500473254

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The Pacific Review, Vol. 19 No. 2 June 2006: 219–237

Neither skepticism nor romanticism: the

ASEAN Regional Forum as a solution
for the Asia-Pacific Assurance Game

Tsuyoshi Kawasaki

Abstract This article fills the void left by the existing literature that has failed to
capture the utilities of the ASEAN Regional Forum (ARF) to the member states.
From a rational institutionalist perspective, this article argues that the ARF is an in-
stitutional solution for a particular type of collective-action problem – the Assurance
Game – that emerged in the post-Cold War Asia-Pacific region. In the Assurance
Game, a weak and loose institution is sufficient because cooperation only requires
efficient information transmission among players. This conception of the ARF finds
empirical support in various features as well as the birth process of the multilateral
institution. Thus, neither structural realists’ skepticism nor constructivists’ romanti-
cism toward the ARF is warranted.

Keywords ASEAN Regional Forum; rational institutionalism; Assurance Games.

Strategic tensions arise from conflict of interest, rather than from sim-
ple misunderstanding. . . . Such tensions are not amenable to resolution
in multilateral fora by procedural approaches. ‘Common security’ is
said to underlie the ARF approach to security. That means . . . seeking
security with, rather than against others. But what if the other side will
not play?
(Lim 1998: 128)

The emergence of Asia-Pacific multilateral institutions is not just

interest-driven, but identity-driven. The dialogue and institution-
building processes involving ideas (both indigenous and imported),

Tsuyoshi Kawasaki is an Associate Professor of Political Science and the Director of the Asia–
Canada Program at Simon Fraser University.
Address: Political Science Department, Simon Fraser University, Burnaby, BC V5A 1S6,
Canada. E-mail: kawasaki@sfu.ca

The Pacific Review

ISSN 0951-2748 print/ISSN 1470-1332 online
C 2006 Taylor & Francis

http://www.tandf.co.uk/journals
DOI: 10.1080/09512740500473254
220 The Pacific Review

regional cultural norms, and the quest for a collective regional identity
have played a crucial role in promoting the concept and practice of
multilateralism.
(Acharya 1997: 343)

Introduction
Established in 1994 with the membership of eighteen states, the ASEAN
Regional Forum (ARF) is the sole region-wide multilateral security institu-
tion in the post-Cold War Asia-Pacific. While it is primarily a dialogue fo-
rum without binding decision-making and enforcement mechanisms, it has
gradually institutionalized numerous confidence-building measures (CBMs)
among the member states. As its name strongly suggests, the members of the
Association of Southeast Asian Nations (ASEAN) are in the ‘driver’s seat’.
Furthermore, the ASEAN states, it is often argued, have successfully trans-
planted their principles and practices for mutual interaction to the ARF
setting. These codes of behavior, often called ‘the ASEAN Way’, are char-
acterized by ‘a high degree of discreetness, informality, pragmatism, expedi-
ency, consensus-building, and non-confrontational bargaining style’, in sharp
contrast to ‘adversarial posturing and legalistic styles’ found in the West
(Acharya 1997: 329).
What is the nature of the ARF? In answering this question, specialists
have come to loosely form two competing camps: structural realists on the
one hand, and the advocates of what Amitav Acharya (1999: 25, n. 15) calls
‘institutionalism with a constructivist orientation’ (constructivists hereafter)
on the other. Structural realists regard the ARF essentially as an epiphe-
nomenon and remain highly skeptical about the efficacy of the multilateral
institution in Asia-Pacific power politics.1 Constructivists, on their part, place
significant emphasis on a new regional identity being formed, particularly
around the ASEAN Way. They argue that old state interests are profoundly
transformed to the extent that materialist perspectives like structural realism
are becoming increasingly inadequate in the study of the ARF. Power poli-
tics in the region, according to constructivists, is changing slowly yet steadily.
Each position is epitomized by the two quotations at the beginning of this
article.
These two dominant perspectives on the ARF have serious limitations,
however, because they fail to adequately capture the utilities that the ARF
provides to its member states. The ARF exists because it satisfies some needs
felt by its member states. Its rules and practices signify internationally agreed
solutions for these needs. The member states would have little motivation to
spend their precious resources to sustain ARF activities if the ARF did not
supply what they demand. In short, the ARF exists because of its functions;
its existence serves the member states’ interests. Structural realists focus on
the role of state power, and constructivists on the process of socialization. But
examining these dimensions of the ARF does not directly help us understand
 T. Kawasaki: Neither skepticism nor romanticism 221

the raison d’être of the ARF defined in terms of functions – in other words, the
member states’ interest in supporting the ARF. This is a serious gap in the
study of the ARF.
What, then, are the functions that the ARF provides? This article argues
that the central function of the ARF is to play the role of an information-
clearing house. It presents a systematic conceptual framework to analyze
this key function, while borrowing insights from the rational institutional-
ist literature (e.g. Keohane 1990; Martin 1992; Snidal 1985; Stein 1983).2
From the rational institutionalist perspective, institutions supply solutions
for collective-action problems. Relevant to our interests are two generic
types of collective-action problems: the Collaboration Game (also called
Prisoners’ Dilemma) and the Assurance Game often referred to as the Stag
Hunt or the Coordination Game (Oye 1985; Stein 1983). To achieve cooper-
ation in the Collaboration Game requires a strong and robust institution as a
mechanism to enforce agreements and monitor compliance among players.
In the Assurance Game, in contrast, a weak and loose institution is sufficient
because cooperation only requires efficient information transmission among
players. This article argues that the ARF is an institutional solution for the
Assurance Game that emerged in the post-Cold War Asia-Pacific region.
Conceptualizing the nature of the ARF with the framework of elemen-
tary game theory helps us understand the sources of bias in the existing
literature on the ARF. On the one hand, structural realists assume that the
Collaboration Game (as well as a more pessimistic game called Deadlock)
is the only type of strategic game that exists or is significant enough in world
politics. Since only a strong institution can solve a collective-action problem
in such a game, structural realists see the ARF as powerless and inadequate.
Their skepticism about the ARF derives from their predisposed conception
of the game that states play. On the other hand, constructivists suffer from
romanticism. They view the ASEAN Way as an expression of identity for-
mation among the member states when it is in fact a form of institutional
solution for the Assurance Game. Because of their disposition to empha-
size norms and identity, they misinterpret the ASEAN Way as a cultural
phenomenon and exaggerate the extent to which member states are tran-
scending the rationalist-materialist games that they play. In short, structural
realists’ skepticism and constructivists’ romanticism both stem from the fact
that these two groups, albeit for different reasons, fail to capture the nature
of the Assurance Game.
This article proceeds in the following order. First, it outlines the two
achievements of the ARF, which constitute the focal point of the struc-
tural realist–constructivist debate on the nature of the ARF. Second, it cri-
tiques the structural realist and constructivist assessments of the ARF. Af-
ter laying out its analytical framework from rational institutionalism, the
article then applies that framework to the case of the ARF. The article con-
cludes by suggesting the implications of its analysis and some future research
directions.
222 The Pacific Review

The ARF’s two achievements

As was noted at the outset, while operating primarily as a dialogue forum,
the ARF has successfully institutionalized the ASEAN Way as the code of
behavior. It has also established CBMs as the central action program for
the member states to implement. It follows that these two key achievements
should be analyzed carefully if one wants to understand the ARF.

The ASEAN Way

Although the concept of the ASEAN Way is used widely, there is no agree-
ment about what it exactly means (see, for example, Acharya 1997, 2001:
63–70; Capie and Evans 2003; Evans 2000: 157–9). Nevertheless, two com-
ponents stand out: soft regionalism and flexible consensus (Acharya 1999).
The former concerns the mode of engagement among members in general,
and the latter the mode of decision making and compliance in particular.
Soft regionalism refers to the aversion of formalism and legalism and the
preference of informality and conventions. Although some formal and rule-
based arrangements have emerged in the ARF, the overall preference is said
to avoid excessive institutionalization. For example, soft regionalism mani-
fests itself in the absence of a strong secretariat.3 It also means consultation
and inclusion, as well as incrementalism and evolutionary approaches.
Here, it is instructive if we compare soft regionalism with ‘hard region-
alism’, its allegedly ‘Western’ counterpart. The concept of hard regionalism
would include the elements of exclusion and confrontation, as well as care-
ful planning designed to achieve a series of rigid goals. A centralized and
powerful secretariat symbolizes hard regionalism, along with inter-member
interactions characterized by legalistic approaches, explicit bargaining, and
even fear of being cheated. In hard regionalism, therefore, institutions exist
to regulate or control otherwise disorderly interactions among the mem-
ber states. Within such an institutional framework, furthermore, states can
make each other’s behavior accountable as the framework makes clear what
state behavior constitutes cheating. In contrast, soft regionalism envisions
decentralized and informal institutions as agents facilitating non-adversarial
and non-binding consultative processes as well as implicit bargaining. It also
pictures member states that are not preoccupied with the accountability of
others’ action or with fear of being cheated.
The other key component of the ASEAN Way is flexible consensus. Ac-
cording to the ASEAN Way, a collective decision is made and implemented
purely on a voluntary basis. Imagine, for example, a situation in which only
one state disagrees with the rest of the member states on a particular issue.
The principle of flexible consensus means that a collective decision is said
to be reached within the group concerned in this situation, provided that
the following two conditions are met: (1) the ostensible unity of the group
is maintained vis-à-vis the outside world – i.e. the dissenting state would not
 T. Kawasaki: Neither skepticism nor romanticism 223

openly voice its disagreement – and (2) the dissenting state, however, does
not have to comply with the collective decision in the process of implemen-
tation. In other words, the dissenting state and the rest of the group agree
to disagree, but such a split is discreet, and friendly bonds between the two
sides remain intact.
To clarify the nature of flexible consensus, this principle can be contrasted
with the rules of unanimity and majoritarian decision making. In the one-
dissenter scenario above, the group will not be able to reach a collective
decision if it follows the rule of unanimity. Since achieving a perfect agree-
ment is not easy in international politics, the group would lose flexibility in
reaching its decisions internally, left to be incapacitated and weakened as
a collective entity against the outside world. How about the majoritarian
rule? In the same scenario, the employment of this rule may alienate the op-
posing state and even risk the rupture of intramural relations. The smooth
operation of the majoritarian rule is based on the expectation that even if a
minority player gets defeated this time, it may become a part of the majority
and have its will prevail next time. Such an expectation (or willingness for
short-term sacrifice) in its turn assumes that a strong sense of community
exists among players in the first place, which is not typically the case in in-
ternational politics. In a nutshell, the unanimity rule is impractical, while the
majoritarian rule involves high risk and is potentially divisive. The principle
of flexible consensus is said to avoid these pitfalls in international collective
decision making.

CBMs
The ARF’s second achievement is the introduction of a series of CBMs.4
CBMs are intended to reduce the level of uncertainty and suspicion – to
increase transparency, in other words – among the member states. In the
context of the ARF, they facilitate the exchange of information. In addition
to engaging in security dialogues in various venues, for example, member
states have taken such self-initiated measures as publishing defense White
Papers and outlining their own perspectives on the region’s security envi-
ronment. Furthermore, they have held military-to-military meetings (e.g.
a meeting among the heads of national defense colleges). Moreover, they
have organized seminars on technical issues like disaster relief, transnational
crimes (such as piracy), and peacekeeping operations.
It should be noted here that these CBMs are ‘without teeth’ in two ways.
On the one hand, member states are not obliged to implement them; CBMS
are conducted purely on a voluntary basis, which is a reflection of the
ASEAN Way. On the other hand, these measures, while valuable, do not
go deep enough. They do not include, for example, ARF-wide joint ex-
ercises among the militaries. In other words, the ARF’s CBMs encompass
neither those measures that seriously expose the capabilities of military hard-
ware and software, nor those that necessitate significant policy coordination
224 The Pacific Review

among the militaries of the member states. They are shallow and unilateral
types of CBMs, goodwill gestures of a sort that could be reciprocated among
the member states. They deal with marginal security issues. In short, they
are primarily declaratory CBMs designed to increase transparency, but they
do not constrain actual military operations.
It is instructive here to compare the ARF’s CBMs with European ones
established during the Cold War years, particularly those developed within
the framework of the Conference of Security and Cooperation in Europe
(CSCE). The European CBMs were meant to reduce a chance of miscalcula-
tion, and to prevent an accidental war from happening, between NATO and
the Warsaw Treaty Organization, as the two sides’ massive military forces
were ready to clash with each other at any time. Because of significant likeli-
hood that a great war might be triggered accidentally, CBMs in Europe had
to ‘have teeth’. They had to be deep and binding, far more so than those
erected within the framework of the ARF. They were designed to constrain
actual military operations.
The ARF itself sees the development of CBMs as the first stage of its
three-stage evolution plan that was originally set in 1995. At the second
and third stages, the ARF claims to be developing preventive diplomacy
mechanisms and conflict-resolution mechanisms, respectively, in the future.
It has attempted to introduce what it calls overlapping measures between
the first and second stages – such measures as strengthening the role of the
ARF Chair.

Structural realists and constructivists on the ARF

What should one make of such a decentralized and loose institution like the
ARF, and, more specifically, of the ARF’s two achievements, namely the
ASEAN Way and CBMs? One finds two academic groups debating on this
question.

Structural realists
The first group of scholars comprises structural realists who are rather skep-
tical about the independent contribution that the ARF is making to the
stability of the Asia-Pacific region (Emmers 2001; Leifer 1996; Lim 1998;
Segal 1998). For these analysts, the ASEAN Way is a convenient slogan to
hide the ARF’s inability to tackle hard security issues, and this inability is
symbolized by the fact that the best the ARF can do is to institutionalize
‘toothless’ CBMs.
On closer inspection, structural realists present two lines of arguments.
Some claim that a multilateral institution like the ARF is a reflection (or
superstructure) of the distribution of power among major states; its effects,
if any, are spurious. In this line of argument, they focus their analysis on how
the ARF is a fragile and limited structure whose viability depends on the
 T. Kawasaki: Neither skepticism nor romanticism 225

favorable configuration of power among major states (e.g. Emmers 2001;

Leifer 1996; see also Narine 1997). Michael Leifer’s following statement
reflects this line of thinking: ‘Indeed, the prerequisite for a successful ARF
may well be the prior existence of a stable balance of power. . . . The ARF’s
structural problem is that its viability seems to depend on the prior existence
of a stable balance, but it is not really in a position to create it’ (1996: 57–
8). For these structural realists, the fact that the ASEAN states, all minor
powers, are in the ‘driver’s seat’ is a major problem.
Other structural realists seriously question the efficacy of a procedure-
regulating institution like the ARF in containing and solving regional con-
flicts. Robyn Lim (1998) has presented a clear and forceful view of this kind,
which the quotation at the outset of this paper conveys well. Put another
way, the non-binding ASEAN Way and information-exchange CBMs may
not be a mere reflection of great powers’ will, but they alone are not powerful
enough for conflict resolution. A case in point is the question of Taiwan. In
the 1996 China–Taiwan crisis in which China threatened Taiwan with mis-
siles, for example, the ARF (and ASEAN) remained virtually silent while the
United States sent two aircraft carrier groups to the area. In this type of situ-
ation where naked state power collides, procedural norms like the ASEAN
Way becomes irrelevant, structural realists argue. In sum, whichever of the
two lines of argument structural realists may follow, for them the ARF is
essentially ‘built on sand’ (Lim 1998).
A key problem with structural realists’ assessment of the ARF is that it
does not systematically explicate the rational foundation of the ARF. If the
ARF characterized by the ASEAN Way and information-exchange CBMs
is in fact ephemeral and irrelevant, why does it exist at all? Why do member
states invest their precious resources in such a weak organization? At best,
structural realists offer only ad hoc answers to these questions (e.g. Leifer
1996: 53, 55, 58–9). Implicitly, they assume that information-exchange CBMs
and the ASEAN Way are the results of great powers’ resistance to more
ambitious schemes and therefore the indications of the ARF’s limitedness.
In other words, these key features are construed as residues of a sort, as
opposed to the intentional and optimal outcomes of some rational scheme
advanced commonly by the member states. Structural realists dismiss the
ARF as ‘a category of convenience’ or ‘an imperfect diplomatic instrument’
(Leifer 1996: 53); but they cannot fully articulate the rationales of the ARF’s
existence.

Constructivists
The second group of scholars comprises constructivists (Acharya 1997, 2001;
Johnston 1999, 2003; see also Khong 1997). They do acknowledge the limita-
tion of the ARF pointed out by structural realists – for example, the fact that
the ASEAN Way was adapted to the ARF because other norms would have
been rejected by China (e.g. Johnston 1999: 291–300; Johnston and Evans
226 The Pacific Review

1999: 257). They nevertheless stress the significance of the multilateral forum
as a process through which the member states are building not only behavior-
governing norms but also new common identities. They regard the ARF – the
ASEAN Way in particular – as a mechanism for the fundamental transfor-
mation of realpolitik thought and behavior, possibly leading to the formation
of a security community in the region. In their view, structural realism and
other rationality-based, materialist perspectives cannot capture the trans-
formative dynamics. According to Acharya: ‘To understand the emergence
of multilateral institutions in the [Asia-Pacific] region, one needs to look
beyond the material interests and rationalist utility-maximizing behavior of
the regional actors’ (1997: 343).
Are member states going through significant and fundamental identity
transformation, as constructivists assume, or is the constructivists’ view of the
ARF just ‘the height of intellectual naivety’ (Leifer 1996: 59)? Here, the most
critical case is China. To be sure, Chinese officials seemed to have learned
the modality of multilateral security dialogue and they are more positive in
their attitude toward the ARF than in the past. This clear shift in Chinese
attitude from the early negative one is an important aspect of the history and
dynamics of the ARF. But has China just learned the tactical convenience of
using a new policy instrument called multilateral dialogues while its strategic
goals and its readiness to use other instruments both remain the same? Or has
China come to embrace the ASEAN Way norms and reject the unilateralist
and bilateralist impulse in its own thinking? Some constructivists may want to
see a profound transformation of Chinese national interests – and identity –
but evidence cannot necessarily back up this judgment (see Evans 2003; Foot
1999; Wang 2000).5
Thus, the constructivists’ claim that significant identity transformation is
occurring in the ARF lacks persuasive power. Constructivists may see such a
change when in fact only tactical or instrumental learning about the ASEAN
Way is taking place. This constructivist approach is a romantic, if not intel-
lectually naı̈ve, view of the ARF, which leaves the key question unanswered:
if not for forming new identities, why do the member states support the ARF
generally and the ASEAN Way more specifically? Admittedly, identity for-
mation cannot be measured in years; it may take decades if not centuries, so
that this criticism may be unfair. But even if we accept that identity formation
takes a long time, the same problem still haunts constructivists: they have
serious difficulties in explaining the member states’ instrumental use of the
ASEAN Way as seen in the case of China. States’ rationales for supporting
the ASEAN Way are likely rationalist-materialist in nature, but construc-
tivists, given their analytical orientation, are not well equipped to explore
the rational foundation of the ASEAN Way.
In sum, despite their disagreements, structural realists and constructivists
share a common weakness: neither of them can present a full rationalist-
materialist explanation of the ARF’s key features: information-exchange
CBMs and the ASEAN Way. On the one hand, while structural realists
 T. Kawasaki: Neither skepticism nor romanticism 227

dismiss these features as marginal, they cannot submit a systematic

rationalist-materialist explanation of the features. On the other hand, con-
structivists tend to gloss over rationalist-materialist explanations and have
yet to fully acknowledge that the evidence is strong enough to support their
view that these features signify that new identities are being formed. In ei-
ther case, we are left puzzled as to why the ARF has the two features it has.
To solve this problem we must introduce a third perspective, the rational
institutionalism that explicates the rationalist-materialist logic of the CBMs
and procedural norms that we find in the ARF.

The argument
Rational institutionalism offers a coherent explanation of why the ARF has
the ASEAN Way and ‘toothless’ CBMs. Its general argument is that states
erect and design a particular international institution to facilitate interna-
tional cooperation in the strategic game in which they engage. In the context
of the ARF, ‘toothless’ CBMs are concrete policy measures to achieve and
sustain such international cooperation, and the ASEAN Way, as well as
the ARF framework itself, is the very institution intentionally crafted by
the member states to generate such policy measures. Then, what kind of
strategic game are these states engaged in? The aforementioned literature
on rational institutionalism suggests that it is the Assurance Game, rather
than the Collaboration Game. According to the literature, states in the Col-
laboration Game demand a rule-based, binding, and centralized institution,
whereas those in the Assurance Game are content with a convention-based,
voluntary, and decentralized institution – an institution like the ARF. Thus,
rationalist institutionalism explains the emergence of the ARF in the follow-
ing way: when the member states faced the Assurance Game in the post-Cold
War Asia-Pacific they erected the ARF, characterized by the ASEAN Way,
to induce international cooperation. According to this view, the ASEAN
Way is performing the very function that the member states expect it to per-
form. By the same token, the ARF’s ‘weak’ CBMs are more or less designed
that way by the member states, given the kind of strategic game in which
these states find themselves. In a nutshell, according to rational institution-
alism, both the ASEAN Way and information-exchange CBMs are logical
consequences given the nature of the Assurance Game.

The conceptual apparatus

To explicate this interpretation further, we will first elaborate the gen-
eral causal connection – well established in the rationalist institutionalist
literature – between the two types of strategic games, the Collaboration
Game and the Assurance Game on the one hand, and resulting solutions
and institutions on the other (see Table 1 for the specifications of the two
games).
228 The Pacific Review

Table 1 The Collaboration Game and the Assurance Game

Collaboration Game Assurance Game

Player #2 Player #1

C D C D
Player #1 Player #1
C (2,2) (4,1) C (1,1) (4,2)
D (1,4) (3,3) D (2,4) (3,3)
Preference order
DC > CC > DD > CD CC > DC > DD > CD

Notes: C and D denote cooperate and defect, respectively.

The right and left sides of each bracketed set of numbers indicate the 1st
player’s and 2nd player’s preference priority, respectively. For example, the
best scenario for the 1st player in the Collaboration Game is DC: it defects
and the 2nd player cooperates (the 2nd player becoming a dupe).

In the Collaboration Game, states need a ‘hard’ institution to solve their

collective-action problem. States are fearful of being cheated by others or
becoming dupes (CD), while they themselves are tempted to outflank the
others (DC). As defection is the best course of action for each individual
state, as a group they end up in the situation of mutual defection (DD),
which is actually worse than mutual cooperation (CC). Here, each state
has little information about the intention of others and few means of direct
communication with others. Thus to avoid DD and reach CC collectively
it would be in their interests to institutionalize their interactions to foster
information exchange and reduce the level of uncertainty – that is, to repeat
interactions (to lengthen ‘the shadow of future’ in other words) (Oye 1985).
However, that alone would not be likely to reduce significantly the mutual
fear of being cheated: states would have to erect a formal institution with
contract-like, specific, detailed, and binding provisions for mutual cooper-
ation and commitment, so that the definition of compliance, the monitor-
ing mechanisms of such compliance, punishment mechanisms for violation,
and binding collective decision-making procedures are all clearly specified.
Information-exchange activities alone would leave these issues too vague.
Once such a formal or hard institution had been established, then, states
would feel comfortable enough to make a move of cooperation in hopes of
achieving CC. Such a policy move is likely to be based on the principle of
‘specific reciprocity’ – that is, states make specific policy changes beneficial to
others on a quid pro quo basis. Furthermore, even after states achieve CC in
the form of some international agreement, compliance with that agreement
must be monitored on a regular basis, which may require establishing a costly
secretariat with the power to execute the task of verification. If the number of
players is large, in addition, some players may be tempted to free-ride (that
is, enjoy the service of the secretariat while not paying the costs), so that
 T. Kawasaki: Neither skepticism nor romanticism 229

extra monitoring capability of the institution becomes necessary. All these

needs lead states in the Collaboration Game to seek a formal, legalistic,
and binding – and often centralized – institution to solve their problem of
collective action.
In contrast, the Assurance Game does not require such a hard institution
because states’ fear of being cheated is much weaker (cf. Stein 1983). In
this game, mutual cooperation (CC) is the best course of action for all states
involved, provided these states are rationally seeking their absolute gain. But
there is still some uncertainty that some states may, for whatever reason, try
to defect and the rest may become dupes (CD), which is the worst-case
scenario for any state in the game concerned. Thus, states in the Assurance
Game must reassure each other that they are all committed to pursing their
‘natural course of action’, that is, to reaching and staying in CC. This they
can achieve merely by institutionalizing their communication to each other
about their intention to cooperate – after all, as long as they are rational, they
are all seeking the best possible result for themselves. More specifically, these
states find that it is in their interests to institutionalize those exchanges of
information and dialogue activities designed to enhance the transparency of
mutual intentions and confidence in each other. Such an institution does not
have to be legalistic, detailed, or binding. It does not need binding and clear-
cut decision-making rules among its member states who instead seek the
attainment of some common understanding through consultation processes
on a voluntary basis.
Once this type of institution had been established, then, states would feel
ready to take a concrete policy step to achieve and sustain CC. Such a policy
measure is unilateral in nature, on the expectation that it will be reciprocated
by other states even without quid pro quos, because that is in the interests of
those states. These measures, in other words, are based on the principle of
‘diffused reciprocity’. Once CC emerges through these measures it should be
self-sustaining (even in a large group of states) as it is in the best interests of all
the states involved. Thus a secretariat would only be in charge of collecting
and disseminating information submitted voluntarily by states and would
have no power to monitor compliance or detect free-riding. It should not
require too many state resources to erect such a secretariat. In sum, states
in the Assurance Game seek loose, convention-based, and decentralized
institutions to solve their collective-action problem. The characteristics of
institutions and policy solutions for each game are summarized in Table 2.

Fit with the ARF case

Prima facie, the case of the ARF fits well with the above description of
the Assurance Game. First, the ARF with the ASEAN Way is not a hard
institution as defined above. The ASEAN Way, let us recall, has two key
elements: soft regionalism and flexible consensus. With soft regionalism,
the ASEAN Way is not formal or legalistic. It is based on convention. In
230 The Pacific Review

Table 2 The Collaboration Game and the Assurance Game

Collaboration Game Assurance Game

Fear of being cheated Strong Weak

Solution for Striking an explicit and Information-exchange and
collective action binding agreement for dialogue activities on a
problem mutual cooperation voluntary basis to
otherwise difficult to reassure one another
achieve and maintain about ‘natural’ mutual
cooperation
Underlying principle Specific reciprocity Diffused reciprocity
of policy solution
Type of institution ‘Hard’: rule-based, ‘Soft’: convention-based,
that states demand legalistic, detailed, voluntary, loose,
binding, centralized decentralized
Key functions of Information clearing house Information clearing house
institution (reducing the level of (reducing the level of
uncertainty among uncertainty among
states) and states)
enforcing/monitoring
compliance (and
free-riding)
Resources needed to More demanding Less demanding
establish
institution
Collective Formal: clear-cut, Less formal: vague,
decision-making vote-based, and binding ‘voteless’, and
rules of institution (e.g. unanimity or non-binding (e.g.
majority rule) consensus)
Concerns for Weak Strong
sovereignty
Process leading to Formal procedure and hard Less formal procedure and
the formation of bargaining consultation
institution
Membership of Closed/semi-closed Open
institution

fact, there is no formal charter or treaty of the ARF signed by the member
states. The ASEAN Way’s second key element, namely flexible consensus,
means that the ARF’s principle of collective decision-making is not binding.
Thus, the ASEAN Way as an institution is consistent with the very type of
institution that one expects in the Assurance Game.
Furthermore, the ARF’s main function makes sense if seen from the per-
spective of the Assurance Game: to foster information exchange through
dialogues (i.e. to reduce the level of uncertainty) to induce mutual coopera-
tion, a ‘natural outcome’ for the member states, as opposed to helping states
 T. Kawasaki: Neither skepticism nor romanticism 231

to reach binding agreements for mutual cooperation that would otherwise

be difficult for the member states to obtain. In this respect, the ARF has de-
veloped an elaborate structure of dialogue mechanisms. At the highest level
of the ARF, foreign ministers gather once a year, chaired by an ASEAN
state. This ministerial meeting is supported by an annual top working-level
Senior Officials Meeting (SOM) that deals with more substantive issues. The
SOM, in its turn, is aided by a regularized working-level venue called the
Intersessional Support Group on CBMs. In addition to these meetings, the
ARF has a series of technically oriented and ad hoc working-level sessions
on such issues as military medicine and transnational crime, some of which
are aided by the participation of non-governmental experts as in the case
of sessions regarding the highly controversial concept of preventive diplo-
macy. Finally, these ARF activities are supplemented by meetings organized
by the Council for Security Cooperation in the Asia Pacific (CSCAP), a non-
governmental organization. In each level of these dialogue activities, again,
the ASEAN Way is followed.6 This structure of institutionalized dialogue
activities is an achievement, not an indication of some failure, as it fills the
very kind of functional void that institutions are supposed to fill in the As-
surance Game. In addition, the ARF has no powerful secretariat yet, which
is not surprising – in fact, logical – if we assume that states are engaging in
the Assurance Game.
Third, declaratory CBMs, as agreed on by the ARF member states as
concrete policy measures to advance mutual benefits, also make sense from
the perspective of the Assurance Game. They are unilateral and voluntary
in nature – in other words, they are based on the principle of diffused reci-
procity. For the member states, the logic of the Assurance Game tells us, these
measures are sufficiently effective to demonstrate their commitment to in-
ternational cooperation given the nature of the strategic situation in which
they find themselves. Furthermore, as the logic of the Assurance Game sug-
gests, the emergence of concrete CBMs followed that of the ASEAN Way
as the central norms of the ARF.
Thus, the key features of the ARF as an institution are consistent with what
one expects from the logic of the Assurance Game. But two fundamental
questions remain. First, is it reasonable to assume that Asia-Pacific states
were engaged in the Assurance Game, not in the Collaboration Game, before
the establishment of the ARF? Second, and related to the first question, what
exactly did mutual cooperation (CC) mean in the context of the very early
post-Cold War years in the region? Unless these two questions are answered,
the apparent match between the ARF and the logic of the Assurance Game
may be coincidental.
It is reasonable to characterize as the Assurance Game the strategic envi-
ronment of the Asia-Pacific region immediately after the Cold War ended.
At that time, uncertainty prevailed in the Asia-Pacific region, and this uncer-
tainty was largely about the future policy direction of three major powers:
the United States, China, and Japan. What was each power’s intension? Was
232 The Pacific Review

the United States going to withdraw or weaken its security commitment in

the region now that the Cold War was over? If so, that would generate a
power vacuum and, China (or Japan) would likely try to fill it. That in turn,
then, would generate competitive balancing and counter-balancing dynam-
ics among states in the region, leading to the destabilization of the region.
Was China going to continue its economic-first policy and refrain from ag-
gressive security policy or was the region going to witness a more unruly
and adventurous China now that Chinese power was growing as a result of
economic success? Was Japan going to change its hitherto self-restrained
security policy now that the Cold War was over? Would Japan weaken its
alliance with the United States for a more independent – thus potentially
more threatening – security posture? These questions were seriously raised
in the region (see Leifer 1996: 16–20).
Put another way, the commitments by these three major powers to the sta-
tus quo were uncertain immediately after the Cold War ended. At that time,
the three powers remained potential, not actual, threat to each other – they
were more or less on the same victor’s side against the former Soviet Union,
the sole loser. Few immediate, acute, and direct security problems, excepting
the Taiwan problem, existed among the three. Furthermore, economic ties
among the three powers were growing and deepening, and, more generally,
the region as a whole was enjoying prosperity (despite the early signs of
trouble in the Japanese economy). Thus, enhancing the status quo seemed a
logical step: the United States staying in the region, China refraining from
intimidating others, and Japan continuing self-restraint. At the same time,
all states could enjoy the fruits of the growing and deepening economic in-
terdependence in the region. Yet the end of the Cold War inevitably forced
states in the region to reassess their strategic environment and interests,
which tended to generate a sense of uncertainty.
This uncertainty was amplified by the fact that strategic interdependence
existed among the major powers, particularly between China and the United
States. That is to say, while committing to the maintenance of the status
quo (e.g. cooperative move or C) seemed to be the best course of action
for each state, there was still a chance of becoming exploited by the other
after making that move unilaterally (i.e. becoming trapped in CD). China’s
concern, for example, was that a docile China could allow the United States,
far from withdrawing from the region, to initiate a containment policy against
it, including strengthening anti-China coalitions in the region and taking
a much harder stance on the Taiwan question. For China, the withdrawal
of US forces in the region and aggressive US anti-China campaigns both
constituted the ‘defection’ policy (D) of the United States, as they would
both have had destabilizing effects in the region. The United States, for its
part, was concerned about being outflanked by China – it was feared that
while the United States pursued an engagement policy toward China, an
ambitious and richer China would develop an offensive military capable of
threatening US interests in the region, including the Taiwan Straits. Thus, in
 T. Kawasaki: Neither skepticism nor romanticism 233

this scenario, China, even without taking any intimidating action toward its
neighbors, would be ‘defecting’ and destabilizing the entire region because
of its military ambition. In short, sustaining the status quo (CC), although
ideal, was not automatically acceptable to either China or the United States;
it had to be balanced against the fear of being cheated by the other state
(CD) (see, for example, Shambaugh 1996).
At the same time, however, defecting unilaterally – that is, taking the
aforementioned destabilizing policies – and outflanking the other (DC) was
not attractive either to China or the United States: the costs generated by
such a move would outweigh the potential benefits. In particular, the poten-
tial damage to the region’s economic activities would be substantial, which in
turn would seriously hurt the Chinese and the US economies – particularly
the former. Compared with the status quo, these major powers would be
worse off in such a scenario (i.e. CC > DC). If economic costs were small,
and the potential geostrategic reward of outflanking the other were huge,
then China and the United States would both have preferred defection (DC
> CC) – that would be a situation found in the Collaboration Game. In the
very early post-Cold War period, however, policy statements published by
Beijing and Washington suggest that economic benefits in maintaining the
status quo outweighed the potential geostrategic gain of defection in the
views of these governments. In addition, mutual defection (DD) was, logi-
cally speaking, worse than outflanking the other side (DC); but it was better
than being outflanked by the other (CD) (i.e. DC > DD > CD). Thus, we
can infer the policy preference order of both China and the United States
as follows: CC > DC > DD > CD. This is an Assurance Game.
It was the ASEAN states and Japan that took a leadership role in erecting
the ARF in hopes of inducing CC (sustaining the status quo) among the
major powers in the Assurance Game. Existing evidence strongly suggests
that these two protagonists understood their situation as an Assurance Game
full of strategic uncertainty and that they shared a similar preference order
with China and the United States – CC being the most preferred choice (see
Kawasaki 1997; Leifer 1996: 21–30; Midford 2000). The Japanese language
of reassurance and the oft-heard concept of cooperative security, not to
mention the ASEAN Way, all pointed to the need to sustain the status quo
through dialogue. The political process leading to the birth of the ARF was
not always smooth. But all interested states, including China and the United
States, agreed to start the ARF and the first ministerial meeting was held in
July 1994.
In sum, the key features of the ARF (the ASEAN Way and information-
exchange CBMs), and the process through which such an institution came to
emerge, both support the interpretation that the ARF was an institutional
solution for the Assurance Game in which Asia-Pacific states found them-
selves immediately after the end of the Cold War. The ARF was designed to
be a ‘soft institution’ effective enough to solve the Asia-Pacific Assurance
Game that emerged after the Soviet Union collapsed.
234 The Pacific Review

Additional corroboration
We now have established a rational institutionalist interpretation of the ARF.
If we are correct, then, what else can we expect to find? We can formulate and
test three hypotheses here. All of them support the rational institutionalist
interpretation developed thus far.
First, the logic of the Assurance Game suggests that states do not have
to sacrifice their sovereign autonomy to cooperate with others. A case in
point is declaratory CBMs. Since these measures are conducted on a vol-
untary basis, states can maintain their control over the information to be
disclosed. In contrast, states in the Collaboration Game must coordinate
their policies to achieve and maintain mutual cooperation, which inevitably
requires the compromising of their autonomy. These states must accept such
a compromise in exchange for the benefits they receive from international
cooperation. This discussion leads us to expect that ARF member states
tend to be sensitive to sovereign autonomy and to have strong aversion
to foreign interference in their domestic affairs. We find corroborating ev-
idence: besides the norms of soft regionalism and flexible consensus, the
ASEAN Way includes the norm of non-interference in the domestic affairs
of others (Evans 2000: 158). True, sensitivity to domestic autonomy is not
uniform across ARF member states and it has various sources such as the
nature of domestic political systems and history. Yet these states have ac-
cepted – certainly, no state has directly challenged – the general principle
of non-interference. On this question of sensitivity to domestic autonomy,
therefore, the ARF fits well with the logic of the Assurance Game.
Second, following the logic of the Assurance Game, one would expect that
the process leading to the establishment of the ARF would be characterized
by (1) consultation and voluntarism, (2) the absence of hard bargaining or
quid pro quos, (3) no official government-to-government negotiations, and
(4) states stressing the joint benefits that they could enjoy as a group. In
contrast, the process prior to establishing an institution in a Collaboration
Game should be legalistic and binding in approach because participating
states would want to reduce the level of mutual suspicion at every stage of
negotiation, and the negotiation process is likely to involve tough bargaining.
These negotiations, furthermore, must be official ones as states are likely to
be more concerned that they will be outflanked by others – witness the Six
Party Talks in Northeast Asia.
On this question of prior negotiations, evidence strongly supports the As-
surance Game interpretation. As was noted above, Japan and the ASEAN
states took a leadership role in the process leading to the ARF, persuad-
ing the reluctant Chinese and American governments to participate in the
new multilateral security forum. The process is characterized initially by
Track II consultations (that is, non-government-level consultations) between
ASEAN and Japan. Even government-to-government discussions took the
form of consultation, rather than the exchange of quid pro quos to strike
 T. Kawasaki: Neither skepticism nor romanticism 235

some deals. As was noted above, in fact, no official charter exists for the
ARF. Finally, the ASEAN Way and the Japanese concept of reassurance
focused on the joint benefits that participating states would be able to en-
joy collectively. These points do not imply that there was no bargaining at
all. There was – but it was implicit and conducted in a non-confrontational
manner. Thus, the preparation process of the ARF is largely consistent with
the logic of the Assurance Game.
The final hypothesis concerns the membership of the ARF. The logic of
the Assurance Game suggests that an institution set up in order to solve
collective-action problems in an Assurance Game tends to have a relatively
open membership compared with one in a Collaboration Game. In the lat-
ter type of game, states would prefer more limited – that is, more closed –
membership because larger membership makes it more difficult to reach
mutual cooperation when defection is the dominant strategy of each state
(Oye 1985). Furthermore, even after reaching mutual cooperation, moni-
toring compliance and free-riding would be quite difficult in a large group
of states. Since mutual cooperation is more easily achieved and maintained
in an Assurance Game, membership should be more open. The case of the
ARF is consistent with this hypothesis: it started with eighteen states and
its membership has grown to twenty-five, encompassing almost all the states
in the Asia-Pacific region (excepting Pacific island states). To be sure, there
are limitations for ARF membership: geographical relevance and statehood
(i.e. excluding Taiwan). Nevertheless, the ARF is open in terms of its formal
membership requirements: no treaty for prospective members to ratify and
no other special requirements to obtain membership such as reducing arms.

Conclusion
There is a rational foundation of the ARF, which the existing two dominant
groups of analysts have overlooked or failed to articulate. Such a foundation
becomes clear if one employs the analytical lens of rational institutional-
ism. The ARF, despite its fuzziness and lack of built-in conflict-resolution
mechanisms, is an effective solution, set up intentionally by the states in the
Asia-Pacific region, for a particular type of collective-action problem – the
Assurance Game – that these states encountered immediately after the end
of the Cold War. This conception of the ARF as a solution for the Asia-Pacific
Assurance Game does find empirical support in various features as well as
the birth process of the multilateral institution. This is what this article has
argued while borrowing the conceptual apparatus from the well-established
literature of rational institutionalism.
From a rational institutionalist perspective, it is not surprising to find some
ARF member states firmly resisting the introduction of more ambitious
policy programs beyond CBMs: such programs do not fit with the logic of the
Assurance Game. In fact, we may not want to welcome such programs. The
236 The Pacific Review

logic of rational institutionalism suggests that we would need ‘measures with

more teeth’ only when an Assurance Game is taken over by a Collaboration
Game. And such a shift in the Asia-Pacific game would be bad news: in
the Collaboration Game it is more difficult for players to achieve mutual
cooperation (CC). We are surely better off with the Assurance Game –
although it may have ‘only’ CBMs.
The introduction of rational institutionalism opens up a new area of
rationalist-materialist research comparing the ARF with other security in-
stitutions with a coherent analytical framework. It is about time we had a
greater cross-regional expansion of rational institutionalist research includ-
ing the Asia-Pacific region, which in turn would make invaluable contribu-
tions to the study of international institutions.

Acknowledgements
An earlier version of this article was presented at the annual meeting of the
International Studies Association, Portland, 26 February–1 March 2003. I
thank Brian Job, Shaun Narine, and Richard Stubbs for their comments.

Notes
1 I use the term ‘structural realists’ because other sub-schools of realism like classical
realism do not dismiss institutions.
2 I use the generic term ‘rational institutionalism’ rather than ‘neoliberal institu-
tionalism’ in this article.
3 In June 2004, the ARF Unit was established at the ASEAN Secretariat to support
the ARF Chair.
4 Somewhat dated, but Ball’s (2000: 136–7) list of CBMs gives one a good sense of
various CBMs covered by the ARF’s agenda.
5 Johnston (2003: 132) acknowledges that we have only ‘indirect’ evidence.
6 For example, the chairing foreign minister from an ASEAN state issues a Chair-
man’s Statement – a summary of consensus views among the ministers, not binding
resolutions or agreements – at the end of each ministerial annual meeting.

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