Power and Interdependence Tuirp Eoition fi Robert O. Keohane ok f] Duke University th Joseph S. Nye Harvard University New York London Toronto Sydney Mexico ity Munich Paris Cps, with gratitude, ren, with hope. nor Exe Sto sec agate ea rs ont ace a ‘Naney Danaly {1804 -1865), “The ‘Constitation’ in Boston Habu.” oi on cava 549, Huater Muscun of American Art, Chattanooga, Tennesse, lication Data Library of Congress Cataloging:in- Keohane, Robert ©. (Robert Owen), 194L ‘Pome al inteepervdence / Rabert O. Keohane, Joseph S. Nye anded Inches bibliographical references and inde. 2. Intemational economic relations 1 Nyefauphs I Tk ao Jxiomkias 2! const bara Coppi © 201 hy ober 0, Keane ad fre oe Al is serv No pat a is pton maybe erode tora ether vt the pr ten permis per Prin the Unit tat Please vist our website at htpsinnal com ISBN 0321.04857-1 345678910 Da 0605 0403, Contents Preface to First Edition viii Preface to Second Edition xi Preface to Third Edition xv Part! Understanding Interdependence 1 CharteR 1 INTERDEPENDENCE IN WorLD Pouitics 3 ‘The New Rhetoric of Interdependenc Interdependence as an Analytic Concept 7 Power and Interdependence 9 International Regime Change 17 Cnapter 2 REALISM AND COMPLEX INTERDEPENDENCE 20 The Characteristics of Complex Interdependence 21 Multiple Channels 22 / Absence of Hierarchy among Issues 22 / Minor Role of Military Force 23 The Political Processes of Complex Interdependence 25 Linkage Strategies 26 / Agenda Setting 27 / Transnational and Transgovernmental Relations 29 / Role of International Organizations 30 Chapter 3. EXPLAINING INTERNATIONAL REGIME CHANGE 33 An Economic Process Explanation 33 Overall Power Structure Explanation 36 Eroding Hegemony 36 / Limitations of an Overall Structure Explanation 40 Issue Structure 43 Limitations of Structural Explanations 45- ization Model 47 ‘An International Orgar Combining Explanations Parti Regime Change in Oceans and Money 5 Cuarren 4 THE PoLrrics OF OCEANS AND MONEY: HisTorIcar, OVERVIEW 55 ‘The International Monetary Issue Area 57 ‘The International Gold Standard before 1914 58 / International Monetary Regimes, 1920-76 63, ‘The Oceans Issue Area 75 Defining the Issue Area 76 / The Classical Free Seas Regime 78 / Regime Periods, 1920-75 80 / The Changing ‘Agenda of Oceans Polities 83 Conclusion 85 OcEANs AND Cuapter5 COMPLEX INTERDEPENDENCE Money 86 “The Conditions of Complex Interdependence 86 Role of Force 86 / Absence of Hierarchy among Issues 91 / Multiple Channels of Contact 95 / Money, Oceans, andl Complex Interdependence 97 ‘The Political Process in Money and Oceans 97 Goals of Actors 99 / Instruments of State Policy 103 / Agenda Formation 104 / Linkage of Issues 106 / Roles of jons 107 International Organ Conclusion 109 Cuarter 6 THe POLITICS OF RULE-MAKING IN OCEANS AND Money 112 Economic Processes and Regime Change 112 Overall Structure and Regime Change 114 Frosion of the Oceans Regime 115 / International Monetary Regimes 117 Issue Structure and Regime Change 120 International Monetary Issue Area 121 / Oceans Politics 124 Intemational Organization and Oceans Politics 128 / The Regine ( Internation Limits of Systemic Exy planat i Lenka rae Explanations: Domai Conclusion 137 Regimes and Two Bil, late Relationships 1430! UniTED Stars RELATIO: AUSTRALIA 145 Canadian-American Relatio Interdependence 146 NS WITH Canapy aNd ons andl Compl Australian-American Relati Interdependence ‘ons and Compl Identifying Issues and Outcomes; Canada-United States 156. Identifying Issues and Outcomes: Australia-United States 169 Comparing the Poltis of Agenda Format It mation I Accounting for Differences in Outcomes 35 teomes 17 Regime Change: Alternative Explanations 152 The United States and Interdependence 191 Complex Covine Witt INTERDEPENDENCE 193 Explanatory Models and Condi World Polities 199 "Mons of Power in Complex Interdependence 195 Trends Toward Complex Interdependence 1 Leadership in Complex Interd Mode t ct taependence 200vi Contents PartV Chapter 9 Cuapten 10 Building the Legitimacy of International Regimes 204 International and Domestic Organization 205 Conclusion 211 Globalism and the Information Age 213 Power, INTERDEPENDENCE, AND THE INFORMATION AGE 215 ‘The Information Revolution and Complex Interdependence 217 Information and Power 220 ‘The Paradox of Plenty and the Politics of Credibility 223 Power, INTERDEPENDENCE, AND GLOBALISM 228 Globalization and Interdependence 229 ‘The Dimensions of Globalism 230 / Thick Globalism: Made in America? 233 / Connectivity, Sensitivity, Vulnerability 235 / Mlustrating Interdependence and Globalism 238 Contemporary Globalism: What's New? 240 Density of Networks 240 / Rechuced Communications Costs and Institutional Velocity 243 / Transnational Participation and Complex Interdependence 245 / Is Distance Becoming Irrelevant? 247 Globalization and the End of the Cold War 249 The End of the Cold War and the Dimensions of Globalism 249 / Conjunctural Politics and the Americanization of Globalisin 251 Polities, Equity, Power, and Governance 252 Globalism and Domestic Polities 252 / Equity and the Political Effects of Increasing Inequality 254 / Pow Networks 257 / Governanee of Globalism 258 Part VI Nores 301 INDEX 326 Contents vi Second Thoughts on Theory and Policy (1989) 265 AFTERWORD 267 1. Principal Themes of Power and Interdependence 267 2. The Research Program of Power and Interdependence A Critique 272 Interdependence and Bargaining 273 / Complex Interdependence 275 / International Regime Change 278 3, Limitations of Structural Theory: Systemic Political Processes 281 4. erceptions and Learning 284 Conclusion 287 ‘TWo CHEERS FOR MULTILATERALISM 288 ‘The Need for Regimes 290 Unrealistie Visions 292, Do Not Try to Recapture the Past 292 / Ask Whether the World Really Needs It 293 / Build on Shared Interests 294 / Use Regimes to Insure against Catastrophe 295 / The Best Enforcement Is Self-Enforcement 295 / Look for the Right Moment 296 / Use Regimes to Focus U.S. Attention on the Future Regime Maintenance 298 United Nations Peacekeeping 299 / International Debt 299 / Fxchange Rates 200)Ee Preface to First Edition [As students in the late 1950s and early 1960s, we were taught to look a interma- tional politics through “realist” glasses, which emphasized the ever-present possi= bility of war among sovereign states. As our earlier work indicates, we soon became uneasy about this one-sided view of reality, particularly about its inade- quate analysis of economic integration and of the roles played by formal and informal international institutions. Our collaboration began in 1968 when, as new members ofthe board of editors of International Organtzation, we decided to edit a special issue of that journal to criticize traditional views of world polities and to demonstrate the relewance of international organization broadly conceived. Wee decided to write the present book, after Transnational Relations andl World Politics was published in the summer of 1971, for two main reasons. Although in that volume we had pointed out significant problems with realist theory, partien- larly in the area of international political economy, we had not provided an alter- native theory. We still nceded to fit transnational relations into a Tanger framework ‘of world politics if we were to complete the analytical task we had begun. From a policy standpoint, we thought that significant improvements in American policy On issues involving transnational relations and international orga tnbkely unless the premises of policy were changed. We believed that many ofthe failures of American foreign policy in these areas had their roots in the limitations of realist assumptions. For both analytical and policy reasons, therefore, we sought to write a book that would put into a broader context the classic realist analysis, that Hans Morgenthau's Politics Among Nations, among other works, had bequeathed to the current generation? ‘Our analytical and policy concerns help to explain the orientation of this book ‘Our central policy concern had to do with American foreign policy, but the book's focus is completely different from that of most books and artieles on this subject Reese we are concerned with the premises of policy, our major emphasis is on the changing. nature of the international system and how to understand it- Only in the last chapter do we draw lessons for foreign policy. Our two country-oriented cease studies, however, are focused on the United States. Yet throughout the book, ations were TFrnernaional Orgenzation 25.10, 9 (Sumer 1971}; ater published as Transnational Relations end World Politics (Cambridge, Mast: Harvard University Press, 1972), Sonne of our thoughts onthe subject of thi ook have appeared in earlier atc, Int they have been so greatly alta in form an content that only few fragments remain in the present vohime. For these we acknowledge pernission fom the University of Wisconsin Press to dav fom the following atcles C. Fred Bergten, R. Kenan, and J. Nye, “Intemational Economies and International Polis: A Framework for Analysis” Interitinal Organization 29, 0, 1 (Winter 1975}; H, Keohane and J Nye, “Introduction; The Complex Poities of Canadian-American Interdependence,” Tnteruational Organization 28, vo. 2 (Autunin 1978); J Nye, “Transnational Relations and Hnterstate Conflicts An Empirical Analysis,” buernational Orgonézatton 28, vo. 4 (Anta 1974) cour emphasis is on theory. The esses were selected for their potential significanes Ma yy nln rei tte poy importance Snes the United States isthe mst important actor inthe system, ou focus on American actions tan he justified on theoretical aswell as policy grounds. In ation, ea 8 ous major cases is examined over at last fifty-year period to help ue understand aierving forces af stability and change, Our method is wot simply histone ve have anaved the eases according to a theoretical ad comparative StCine sve elaborate in chapters 1-3. This approach bears some resem 10 a teacher Stanley Hoffmann called “historical sociology” over a decade age to quantify what we can, but we stress theory over ca understanding the premises of policy over charting a detailed course of action eecndie book we try to understand world polis by developing explanations at the heel of the international system, This does not meas that we regard the dlomesti politics of Foreign poliey as unimportant, Quite the contre SAN poliey and domestic policy, as we repeatedly emphasize, ave berowing Oe Jnl dificult to disentangle, Nevertheless, the complex relations Pew NT fund domestic poly make it essential to Know fist much one can expl PE nthe bass of information about the intemational system. In this sense, We 1 to discover what cannot be explained on the basis of international factors, 25 0 so what can be 50 explained. Thus, although comparative foreign poey is not Subject ofthis hook, we hope that students of eomparative foreign DO Nt uranalysisuseful—if only asa starting point for thle attempts to explain Puers of national action, We do not claim that our exph ations of change and stability sa world polities are the only ones that could be developed for this purpose, even al the inka pene i ipeerereie ere ele Many Marist adopt what we cal an overall structure approach, although wulke als they accept a clas theory ofthe foreign policy process. Some Marssts, owe focus on direct relations among, capitalists: im these formulations, wultination® corporations are important in their own right as politcal actors." Yeh 05 18 MO Soul etermine: there ts not « generally accepted and clearly articulated Mars 4 Hotatons (Eaydewood hie, Stanley Holfinann, ex, Contemporary ‘Theory im futernationa i Prato Hal 1960) Ts tenn erin apples oc of he era focus on lations between seve and ene} eee aaeeee Nae nate carat Ape rom his depen erature, eplontons of Faaa ear hice canbe nd ny Stein yee. “The Baeratnaizaion ofS Jena yp Poe nes Sans 1D: an Eres adel Here omer Contre) aor ae et pty Rese Press 1970 expec chapters 6-6 TAT Ua corer tant ella rent Steph Hee. "The Muna Port eae ee ae inh gost) Frond end Word Ot fo the 1970 ta te 19805 (New York. The Free Press, (972), PP. HO) Johwn el Travsational Fei eee HPoeh Resear UTR) 8-117 Ondo Senke,“Tranaey Rae et ei ain Areien Scand xn Studies Une aan ee garb and Robret K, Kaan ct al"A retinas Te the Theory f Dependency.” Compararice Politics pal 1875 son “international dependency” whieh ped eounties (ht hic by’ 0 snc a‘Preface to First Edition theory of international regime change. We are neither sympathetic enough with the Marxist perspective, nor learned enough in ite subtleties, to develop a Marxist fred! of our own, Itis tobe hoped that Mansy wil velop models of interna- “ave change to compete with or complement once Fairs have offen asked us how wt have manag «to collaborate o intensively over such a long period of time, The sont answer is by swallowing our pride while Fastin cach other's chapters, Althouzh collabora ee ‘okes occasional frustration t produces the keen intlleets) Dleasure of rapid response and expo. tors hoe ts. By and lange, ee have enjoyed the proven we theoretical chap {ers have gone through so many drafts that it isvire le Impossible to identify the source of particular ideas. Keohane took primary esponsibility for the case stud. inital dhe it Australia: Nye for oceans and Canad, Fran here, however, the initial division of labor does not accurately reflect the equality of our contributions to the final version, Our transcontinental collaboration would not have heen possible without the repeat a Ford Foundation grant In adition over the et ae years, financial UGB! provided to Nye by the Rockefellor Fecha, and to Keohane by the Gniversty Consortiuan for Workd Order Studies the Johnson Foundation, and the prattord University Center for Research in Intendaman } Studies. Nye is also Fraleful to Carleton University in Ottawa and ta ae Royal Institute of (iterational Afftirs in London and its stall. We ane hak stateful to the Harvard Ranier for International Affairs and its two dircenns Robert R. Bowie and ir etpotl Vernon, tieless and enormously supportive nities, without whose help its hard to imagine this hook. tis also hard've he gine this hook without the not month eceted from so many critics and fiends the tee categories are Arena ally exclusive!), We particularly wish to thank Grate Allison, Jonathan penton, Robert Art, Fruneis Bator. Dan Caldwelk, Stephen Cohen, Jorge Dominguez, Linda Cahn, Dan Fine Alexander George, Robert Gilpin, Cranford ianvin, Ernst Haas, Roger Hansen, Jeff Hurt, Backee Haskell, Fred Hirsch, Stanley Hoffmann, Cavan Hogue, Ann Hollick Ray Hopkins, Peter Jacobsohn pobert Jervis, John Q. Johnson, Peter Katzensters James Keeley, Janet Kelly Peter Kenen, Nannerl Keohane, Charles Kindllogs *xer, Stephen Krasner, james Kurth, David Laitin, Peter Lange, Charles Lipson, Peyton Lyon, Rachel McCulloch, Michael Mandelhaum, Edward Miles Theodore Moran, John Odell Van Door Ooms. Rob Paurlberg. Wonne Plumptre, Richard Rosecrance, John sulssle. Robert Russell, Philippe Schmitter, he 6c Louis Sohn, Susan Me atsson Wagner, and Dan Yensin, Ava Pemee Robert Pastor, Debra Miller, Alison Young, Kenneth Oye, and Constance Smith greatly helped our (earch on the ewse studies. Numerous oficials of the American, Australian, and Ganssian governments gave generously oftheir time x, interviews, Emily Hallin Supervised the reproduction and transmission of innumerable drafts at the Sunlord ond ofthis transcontinental relationship. Bex ‘ly Davenport, Amy Gavin, and Amy Contrada ably managed the typing of the manuscript and administrative chores at Harvard, The contributions of Nannerl Keehn and Molly Nye would Teqire another book, not a mere preface, to recone Noauthor isan island, We gladly toll our bell ot thank _——___ Preface to Second Edition ‘Theorists of intemational relations suffer from being to Hose to the events they Gheuss, When we wrote Power and Interdependence toi ‘wid-1970s, dramatic changes were taking place in world politics. By the beginning of the decade. the Vietnam War had become highly unpopular in the Ueno States, and detent seeaned to have reduced the importance ofthe US. en nuclear competition Al the same tine, international trade was grog nage rapidly than world prod LOFT ceattionl corporations were playing dramatic poke | roles; and from ITH on the international monetary s)stem was in fine ane anwhile, the relative economic predominance of the United States wae declining as the Buropean andl Japanese economies grew at more rap rates. President tae and Secretary of Sate Kissinger spoke of the developmien of fvespower wenn and faturologists such as Herman Kahn predicted the imminent anicarohs ‘multipolar intemational system! On top ofthis came the ol esis of 1973 in which some very weak states extracted enormous resources rom the strong. Hay Morgenthau wrote of what he called an unprecedented divorce between tility ea ‘conomie power based on ti control of raw raterials° The vlnentily of Wesson societies at a period of high commodity priees encouraged many les dere loped countries to believe that a greater transformation of power had occured ee was actually the case Many theorists rellected on these concerns. A represen View among the modemist writers of the 1970s wis that he forces now ascendant appewe to be easing tod a global Society without a dome feo ur of conperation an cont—-apigersy aay eee $s, subnational oes ad eansntiona special interes acount ft ‘ying for the sip ort and loyalty of tadiduals, and conlits would have resolved primarily on the Sass of ad loc hargaining in shilting context of pone + relationships? By the late 1870s the mood bea to change, both nthe United States and in the United Nations, The United States ecmment became more concemed sbout Soviet policy and less sessitve to the ples at complaints of govern- iments of less developed countries. The experience of fe Carter administration illustrates this point. While campaigning in 1956 Jimny Carter promised to Face the defense budget, but by 1980 hewas caer ta wld Reagan's position than (his own previons view: Reagan's vlecton soe ntuated these trends _ Herman Kalin nd. Brice-Prige, Things to Cone (New Yr Macnilan, 1 $Haas J. Morgen, “The New Diplomacyet Mooney Encounter Angus *Sevom Brown, Nee Fores in Wd Polite Washing et (AAmerican poliey focused on East-West confrontation and sealed down North- South issues and the role of multilateral institutions. The defense budget increased in real terms for five straight years, and the United States was more vill, ing 0 use military force (albeit against extremely weak states such as Grenada and Libya). Arns control was downgraded and the modemuization of nuclear ong 3s intended to restore an “edge” for additional utility of military force, This shifting agencla was accompanied by a resurgence of realist analysis, for history seemed to have vindicated the realist model, Just as some analysts in the 1970s overstated the obsolescence of the nation state, the decline of force, and the irrelevance of security concerns, others in the early 1980s unduly neglected the role of transnational actors and eeonomierinter, dependence. Contrary tothe tone of much political rhetoric and some poltea analysis, however, the 1980s did not represent a return to the world ofthe 1950. Just as the decline of American power was exaggerated in the 1970s, so was the restoration of American power exaggerated in the 1980s. Looking carefully at inilitary and econoinic indices of power resources, one notes that there was far snore change in psychology and mood than in true indicators of power resources, The diffusion of power continued as measured by shares in world trade or worl brodiet, Economie interdependence as measured by vulnerability to supply qliocks cased in a period of slack commodity markets (hut it could change oor, Kets tighten again and growth of economic transactions contimies). Sensitty to ‘xchunge-rate Ouctuations remained high. The costs ofthe great powers’ wre of force remained higher than in the 1950s. Moreover, despite rhetoric the relotions between superposters did not show a return to the Cold War period, Not only were alliances looser, but transactions were higher and the relations between rPetpowers reflected a fair degree of eaming in the nuclear area! In our view, therefore the analysis that we put forward in Power and Interdependence hos not been rendered imrelovant by events. The real questions ae not about obeghe cence, but about analytical cogency aisgnse the 1970s and 1980s were merely the atest instance of a recurring dialectic between the two main strands in what has been called the “classical ing dition” of international relations theory. Realism has been the dovninant strand? The second strand isthe: “iberal” or “Grotian tradition,” which tends to stress the impuet of domestic and international society, interdependence, and internation, al institutions. tn theie simplest forms, kheral theories have been easily disered ed. The proposition that gains from commercial transactions would overconse the problems inherent in the sceurity dilemma ancl make war too expensive wes belied in 1914. Hopes that a system of international law and orgunizetion contd provide collective security to replace the need for self-help inherent in the see {ty dilemma were disappointed by 1999. Nonetheless, the sharp opposition between realist and liberal theories is overstated. Infact, the two approsches con (dans Noe Jr“ Nuckeae Leamingand U.S Save Soumty eines eratonal Orntation (Summer 1987), a) Molt De Dicating Dacipline Hegemony and Diversity in iteration Thevry Bexto: Alen Unwin, 1985), Preface Second Eilon il be complementary: Sophisticated versions of Hberl theory addres the way inte actions among states and the development of intemational norma con varact with domestic polities of states in an intemational system to traneforns hove host states define their interests, Transnational as well as interstate itenatoeye atl nonns lead to new definitions of interests as well as now coalition, possibilities for ferent interests within states. Power and Interdependence sought to explain the patterns of change that We observed during the early to mid-1970s by integrating aspects of the realist and liberal traditions. Thus our core argument in Chapter 1, that asymmetrical act dependence can be a source of power, links the liberal steess on interdependent? with the realist focus on power. Yet as we noted in our Preface to the Het ative, ‘we were taught as students to see the world through “realist” glasses, and our book reflected our struggle to see a more complex vision, Thus, realism bore the brent of our critique, and our quarrels with aspects of liberalism were subyhuedl, Ae @ result of our rhetorical barbs at realism, or approach is sometimes labeled simp as “hberal” Yet this characterization of Power and Interdependence s highly nis leading, since we stressed the importance of governments’ wielding of power in Pursuit oftheir conceptions of self-interest, and we declared in Chapter 1 that “military power doxninates economic power in the sense that economic means alone are likely tobe inefctve agninst the serious use of military force” (p16) We have quite a bit to say, after more than a decade, hoth about host con mentators construed oF misconstrued our work, and about our own shift in pet spective. We could have changed the text of our hook, but this would not keve enabled us to respond to our critics, and it would have concealed aur own amend iments, shifts in point of view, and second thoughts. We could have written a long Preface—indeed, we drafted one—but our astute editor pointed ont that this would encumber the reader unacquainted with our book with commentary before he or she had read the origina ex. In this edition we have therefore lel the ong inal text as it was written and have added only a brief new Preface. We have, how ever, added an Afterword, which provides a filler discussion of how we see oat work, as contrasted with the perspective of commentators In Chaptes §uf Power and Interdependence we drew some implications from our analysis for policy. In our view, many of our judgments remain vale for ipstance, we argued that reducing the United States’ vulnerability to external shocks could be part of a strategy of policy coordination and intemational leader ship. Building an American oil stockpile and taking the lead in the Intemational Energy Agency have indeed been the two key components of the suecessfal inte Titiona energy policy which has helped transform international energy plies Sipe the 1970s. Furthermore, they have been, as we suggested, complernentary Father than alternative, policies. We also argued for effective international policy Sportination on ecological isues—as loves of wild lands we could not ignore Aimension of global poltcs—but suggested that cooperation om such issen vod Ee fhe Aero pear tan aie ntiled "Pn and tterdepence Rested pb lished in International Organization 42, no. 4 (Autumn 198%) 295-so5xxiv Preface to Second Editon be difficult. In general, we called for “intemational surveillance and collective leadership” (p. 252), which we stil believe to be crucial if urgent world problems are to be addressed. These prescriptions, however valid, were mostly quite general. In 1985 we sought to make more specific recommendations, using not only the analysis of Power and Interdependence but also that of subsequent work on international regimes. The article that we produced, “Two Cheers for Multilateralism,” is reprinted from Foreign Policy at the end of this volume, following the Afterword. In the eleven years since we completed Power and Interdependence. our pro- fessional paths have diverged and then converged again. Robert O. Keohane has concentrated on interpreting pattems of international cooperation and diseord in, light of social science theory; Joseph S. Nye has served in government and pub: lished works on nuclear deterrence, ethies and international relations, and U.S.-Soviet relations. Since 1985 we have been colleagues at Harvard University giving us the opportunity to disenss analytical and policy issues intensively again, Doth in seminars and in personal conversations. We have gained enormously from our intellectual companionship and deeply satislying personal friendship, which now extend over twenty years. If our readers also benefit, we will be doubly Preface to Third Edition ideas in this book. gether on the wef been tight Nearly three decades ago, we began working t et We did not seck to refute all of the “eealis” arguments as graduate students or to formulate awholly new “Mber although carcless readers and commentators have MN, and Interdependence in this way. Instead, we sought € ¢ at world politics that helps us understand the retin cooperation on and polities, and patterns of insttutionalized iMt€™ 1 eerests play retaining key realist insights about the roles that pe" ats th aa malternat nate Poe a Ln te z ation, wile Je 1980s, we politics ye end of the 1050 0 In the preface to the second edition, written th “es on internatio” “te S emphasized our synthesis of liberal and realist perspe el re se a a tions. We also observed how theories of international © 8 aethe the influence of eurrent events, We noted the revel 61 Nas from that CUTE “tle Cold War,” and how efferent the political HE argued Het OP decade during which this hook was written, Neverthe Cgnming eI spectves om interdependence were sil relevant, THE qt everthing ot our arguments reflected the fact that we ‘eal not tions se er an changing at once, nor did we propose universal genet ote thle everywhere und at all Gres, Tystend, the 98 at we called Jer condition est cont Interdeperelence was expicily conditional Unit re an wn pleased, ms ot hi verelit i, alist conditions complex interdependence,” polities would epence HOF realist OT tions (Chapter 9). Since neither complex interdePenneT ye onde asta ie are universal, understanding world pokties reqs HP 2yhar time. The BN of te traditions jes at a pa ; the propes etheoret jitions © ical i inder which be valid Ao talking abe ditions applicable among particular countr! theme of our work has heen to combine the grea anc liberalism in such a way'as to clarify the condition’ ” tions of one tradition or the other are more oF Hess URES Today, at the beginning of a new millennium &¢ alization” rather than “interdependence,” As we *"&" this edition, globalization refers to an intensification interdependence in 1977_ Indeed, many aspects 2 ag liberal portrayal of the 1970s more than the realist Ty we identified three characteristis of “coraples interdeP nels of contact among society, lack of clear RCT To jn vance of military force. We argued that although ©° ” oat “goby for dey and irre of issu terdepent rence didWi Pretace to Mid Editon wel charueterize wost of world polities, it was coming to deserihe relations mons the advanced industrial democracies, allied with the United States. Nee democracy and open markets spread more extensively over the globe, sea the United States is more powerful military, relative to its rivals, than exer bet Complex interdependence isnot universal, but it seems to extend move nileh than it did in 1977 or 1989, sand anonymous referees polled by our publisher have told ns thatthe 8 nent of our book remains relevant to the analysis of eontemporiny orld pois, even ifsome ofthe factual examples must he read in histoneelgee Cape, ite therefore produced this third edition, with two new chapters Chupter 9 on how the information revolution has alected power and inbacke pendence, anda long new Chapter 10 on globalization, wnttey expressly for this ‘edition, However, we have left the core of our book and our 4999 adele lumouched, except for ditoral changes to eliminate anachronism suehaw role ences tothe Soviet Union in the present tense, To have changed these chapters in substantive ways would have cutbled us to “cover our trace” hercond cen rents tight now seem to lack prescience. We prefer to retain whut we wets, jitacts and all* More important, changing the substance uf our argument vehi Tae ahseured one ofthe key reasons to bring outa thin eons eareomtonanee thatthe analytical framework of Power and Interdependence reman highty rele crant for the understanding of globalization atthe begiaming of the toc: fe century. WiC Ssh in 1977 to understand how work politics was being alfeted by Tapid technological change, then manifested by the telephone, telecon vat jet aneralt. We stil seek to understand this interplay between technologial change and polities. although now itis the “information revolution” and the feterser fee Sremplfy the mos fundamental transformations in technology. The effects af tha information revolution are already significant, as we diseasy i Chapter 9, Nongevermmental actors ean organize transnationally at very low trancectong costs, blurring the distinetion between domestic und inteenattonal polities [nelicuals ave unparalled access to information. formerly confined ai bureaucratic Organizations. As discussed in Chapter 10, globalization hes ee tod a number of complex networks ofrlationships, which increase the posible ne Strategie interaction, as well as generating greut uncertainty. The informating elation isnot the sole cause of the current changes in international reatnn but it has generate significant effets as well as providing acatalt fon ne tons between other causes, ranging from the collapse of the Soviet Umer wy thickening networks of international trade and investinent The relevance of our analytical framework is, we believe, enhanced by the continuing significance ofthe two min sets of forces that we tried to undertorn! in 1977 rapid technological change and the continuing importance of state neon, Gi and power in shaping the global political economy. In the first editing ilccried the oversimplified views of both “modernists” and "realises sel ne believe we were right to do so. For instance, we showed the significance of eco ome interdependence, but also that asymmetries in such interdependence pone vided a form of power that aoe a ————— Preface tothe Thins Eation xvid apters inthis edition bogin from the ame anata perspective as guy gor Se tht technol ching, ecenoms snd Palisa Closely connected but we of these Fre is dominant over the eters. Our new Chane ae ooh sizes the multidimensionality of global economic cone esnmental, military, and social. The analysis of Chapter 10 departs signify From much contemporary work on gloalizationwhich exagany Meecanene ic component, overstate is newmess, and sees i as ‘ecological deere But the argument of Chapter 10s broadly consistent with Chapter egermne Interdependence, written wosthy in 1974-75 and published in 1ye on The consistency of our argument coud bea fault as well st vrs Perhaps we have filed to eam how wrong we were, or how much new has oxen pee wll ted th po tons Here ou consent ey to den: We bj nthe 17 doje ty to for tons hats shag shi from geopoliies eae to graeononries now —shether the pa To 1909. A rete occu thin» pled rework nd on in itary sect an era pea ad econmic goths he a aa a of oxygen to our breathing, It would be as much a mister cate fa itwasin the 197050 argue that fundamental change from one overly another has occurred What we see fan interweaving of economies earn? ta, military, and socal relationships, rather than the rephcement fgg a another. mnauldtion tothe muitidinensional perspective just identified We hay cy, sary cee Polites as ciferentated both by se ae andy sg resisted bro generalizations about interdependence inthe 197 yet tN tlobalization now, beease we see so much variation amnong exons ayy et issues. Instead, we see the world as highly differentiated; hence gyy pS strvture model” of regine change, developed in Chapter 3, has pve my isfactory than an “overall power structuze™ explanation, Our collaboration over tity years has bec a source of intellect sin ign to ath of us, which is ficult to express and work be impossible ty i We have aiferent ways of looking a world politics different deyeeygf Honan det. ving cretion shes Et ern dere sspectives deriving, from experiences ws “insider” or “outsider” Haye Fought preceses do nt dplcnte one aether Hower, we ae eto ton, rect? When one of us says something, the other often says—sometinns oy Stan argument—“Ahhal Now 1 see that problem diferent gg eae cleat” We work and rework each eters texts so thorough that ts gfe Scult for us to identify, altervard, which of us had which ideas. Wiebiye ee bect—that the result s better thas either of ws could accomplish ina fomerestmmesin the rsacons of or readers Beyond intellectual sinulation, one collaboration has heen sre of gay aes ws and between our fails, The key ideas forthe ited ere discussed and laborated in conversations between usin Joe Nes gga Lexington, Massachusetts; and our arguments for the new Chapten 9 ni were worked ont amidst the pristine hills of Sanchwich, News Hanaexviii Preface tothe Third Edition together has been combined with the pleasure of tramping through the White Mountains, talking most of the waythrough all but the “teepest uphill and ‘most treacherous descents, We find that appreciation of the beauty of the natue al environment, physical exercise, and the pleasure of friendship all enhance the guulity of thought Aswith the first edition, we have some debts to acknowledge. Neal Rosendorf ‘was an indispensable research specials, keeping a busy dean from getting bogged down in searches for the right citation, Sarah Brooks, William Clark, Gary Gereffi, Stephen D. Krasher, Enrique Mendoza, and Justin Pearlinan provided valuable written comments on an earlier draft, as did many members of the Visions of Governance Study Group at the Kennedy School. We acknowledge with thanks those individuals who reviewed the entire manuscript: Vinod K. Aggarwal, University of California—Berkeley; R. Kurt Burch, University of Delaware William ©, Chittick, University of Georgia; Joseph Lepgold, Georgetown University: and Kendall Stiles, Loyola University of Chicago, Many other friends, students, and colleagues offered suggestions, some of them in seminars that the authors gave at both Duke and Harvard. Most of all, we give thanks to, and for, Nannerl Overholser Keohane and Molly Harding Nye. In 1977 we wrote that their contributions “would require another book, not a mere preface, to recount. How much more is that true, twenty-three happy and productive years later! Robert 0. Keohane Joseph S. Nye PART | Understanding Interdependence Chapter 2 Chapter 3 Interdependence in World Poiitics The New Rhetoric of Interdependence Interdependence as an Analytic Concept Power and Interdependence International Regime Change Realism and Complex Interdependence ‘The Characteristics of Complex Interdependence The Poltcal Processes of Complex Interdependence Explaining International Regime Change ‘An Economic Process Explanation Overall Power Structure Explanation Issue Structure An International Organization Model Combining ExplanationsCHAPTER 1 Interdependence in World Politics clive in an era of interdependence. This vague phrase expresses a poorly TW Sinterstood tnt widespread fecling thatthe very nature of world polities i changing, The power of nations—that age-old touchstone of analysts and states fnem—has become more elusive: “calculations of power are even more delicate tind deceptive than in previous ages."! Henry Kissinger, though deeply rooted in the classical tradition, has stated that “the traditional agenda of international affuirs—the balance among major powers, the security of nations—no longer defines our perils or our possibilities. .. . Now we are entering a new era, Old international patterns are crumbling; old slogans are uninstructive; old solutions are unavailing, The world has become interdependent in economies, in commu nications, in human aspirations.”> How profound are the changes? A modernist school sees telecommunieations and jt travel as exeating a “global village” and believes that burgeoning social and ‘economic transactions are creating a “world without borders.” To a greater or lesser extent, a number of scholars see our era as one in which the territorial actors such as multinational corporations, transnational social movernents, and interna tional organizations. As one economist put it, “the state is about through as an eco- ‘Traditionalists call these assertions unfounded “globaloney.” They point to the continuity in world politics. Military interdependence has always existed, and military power is still important in world polities —witness nuclear deterrence; the Vietnam, Middle East, and India-Pakistan wars; and China's military threats toward Taiwan or American intervention in the Caribbean, Moreover, as the Soviet Union has showed, authoritarian states could, at least until recently, control {elecommunications and social transactions that they considered disruptive, Even poor and weak countries have been able to nationalize multinational corpora tions, and the prevalence of nationalism casts doubt on the proposition that the nation-state is fading away Neither the modemists nor the traditionalists have an adequate framework for understanding the politics of global interdependence. Modernists point correct- Iyto the fundamental changes now taking place, but they often assume without4 Chapter Interdependence in Word Pots sufficient analysis that advances in technology and increases in social and eco. nomic transactions will lead to a new world in which states, and their control of force, will no longer be important! Traditionalists are adept at showing Mass in the modernist vision hy pointing out how military interdepenclence continues, but find it very difficult to interpret accurately today’s multidimensional economic, social, and ecological interdependence. ‘Our task in this book is not to argue either the modernist or traditionalist post tion, Because our era is marked by both continuity and change, this would be fimitless. Rather, our task is to provide a means of dis nd blending the ‘wisconsin both positions by developing coherent theoretical framework for the political analysis of interdependence. We shall develop several different but potentially complementary models, or intellectual tools, for grasping the reality of interdependen iporary world polities. Equally important, we shall attempt to explore the conditions under whieh cach model will be most likely to produce accurate predictions and satisfactory explanations. Contemporary world politics is not a seamless web; it isa tapestry of diverse relationships. In such a ‘world, one model cannot explain all situations. The seerct of understancling Kes in knowing which approach or combination of approaches to use in analyzing a st uation, There will never be a substitute for careful analysis of actual situations Yet theory is inescapable; all empirical or practical analysis rests on it Pragmatic policymakers might think they need pay no more heed to theoretical disputes over the nature of the world than they pay to medieval scholastie disputes ‘over how many angels ean dance on the head of a pin. Academie pens, however, Teave marks in the minds of statesmen with profound results for policy. Not only are “practical men who believe themselves to be quite exempt from any intellec- tual in * unconscious captives of conceptions created by "some academic scribbler of a few years back,” but increasingly the seribblers have heen playing a direct rote in forming foreign policy.? Inappropriate images and ill-conceived perceptions of world polities can lead directly to inappropriate or even disastrous national policies. Rationale and rationalization, systemic presentation and symbolism, become so intertwined that it is dificult, cven for polieyrmakers thernselves, to disentangle realty from rhetoric. Traditionally, classical theories of world polities have por- trayed a potential “state of war” in which states’ behavior was dominated by the constant danger of military conflict. During the Cold War, especially the frst decade after World War IL, this eonception, labeled “political realism” by its pro- ponents, became widely accepted by students and practitioners of intemnatio relations in Europe and the United States.® During the 1960s, wany otherwise keen observers who accepted realist approaches were slow to perceive the devel- ‘opment of new issues that did not center on military-security concerns.* The same dominant image in the late 1970s or 1980s would be likely to Tead to even more unrealistie expectations, Yet to exchange it for an equally simple view—for conte Tn The Troubled Partnership (New York: MeGraw-til or the Come of Foreign Relation ony A. Kissinger discnssd lance problens wit hardy a ferent econumnic snes, ‘economic issues were beginning seriously to divide the NATO alles 1965) ugh ‘TheNew Rhetoric of Inerdependence 5 instance, that military force is obsolete and economic interdependence benign — would condemn one to equally grave, though different, errors, ‘What are the major features of world politics when interdependence, part tarly economic interdependence, is extensive?? This s one of the two major ques- tons we address in this book. In Chapter 2 we explore this question in general tens; in Chapter 5 and part of Chapter 7 we investigate it further in forr case studies; and Chapter 8 examines the implications for American foreign policy. To ay the groundwork for these analyses, ithe rest of tis chapter we define what swe mean by interdependence, differentiate its major types, and relate them to the oncept of power, which remains fundamental to the analysis of world polities Interdependence affects world polities and the behavior of states; but gove mental actions also influence patterns of interdepenclence. By creating or accept- ing proceshires, rules, or institutions for certs kinds of activity, governments regulate and control transnational and interstate relations. We refer to these gov ming arrangements as international regimes. The second major question of this ook is, How and why do international regimes change? Chapter 3 develops a set fexplanations for the development of international regimes, and their eventual decline. In Chapter 6 we apply these explanations to ismes of oceans and money, and in Chapter 7 we use them to understand some Features of Canaclian-Ameriean and Australian-American relationships, But interdependence is not simply an analytical concept. Ttis also a rhetorical device employed by publicists and statesmen. For the statesman, eager to inerease the number of people marching beneath his banner, vague words with broad appeal are useful. For the analyst, such vagueness is the path to a swamp of con- fasion. Before we can construct usable concepts, much less increase our under- standing of interdependence and regime change, we must clear a way through the ‘hetorical jungle. Our task is to analyze the polities of interdependence, not to eel- ebrate it The New Rhetoric of Interdependence During the Cold War, “national security” was a slogan American political leaders used to generate support for their policies. The thetoric of national security jus tified strategies designed, at considerable cost, to bolster the economic, military, and political structure of the “free world.” It also provided a rationale for inter national cooperation and suppoxt for the United Nations, as well a justific for alliances, foreign aid, and extensive military involvements National security became the favorite symbol of the internationalists who favored increased American involvement in world affairs. The key foreign policy coordinating unit in the White House was named the National Seeurity Conch The Truman administration used the alleged Soviet threat to American seenrity 0 posh the loan to the British and then the Marshall Plan through Congress. The Kennedy administration employed the security argument to promote the 1962 ‘Trade Expansion Act. Presidents invoked national security to control certain sec- toral economic interests in Congress. particularly those favoring protectionis6 Chapter Interdependence in World Paltics trade policies. Congressmen who protested adverse economic effects on their districts or increased taxes were assured-—and in turn explained to constituents — that the “national security interest” required their sacrifice. At the same time, spe. cial interests frequently manipulated the symbolism of national security for their ‘own purposes, asin the ease of petroleum import quotes, promoted particularly by domestic oil producers and their political allies.” National security symbolism was largely a product of the Cold War and the severe threat Americans then felt, Its persmasiveness was inereased by realist analysis, which insisted that national security isthe primary national goal and that in international politics seeurity threats are permanent. National security sym- bolisin, and the realist mode of analysis that supported it, not only epitomized certain way of reacting to events, but helped to codify a perspective in which some changes. particularly those toward radical regimes in Third World countries, seemed inimical to national security, while fundamental cha ic relations among advanced industrialized comtries seemed insignificant, ‘As the Cold War sense of security threat slackened, foreign economic compe: tition and domestie distributional conflict increased. The intellectual ambiguity of ‘national security” became more pronounced as varied and often contradictory forms of involvement took shelter under a single rhetorical umbrella!" In his imagery of a world balance of power among five major centers (the United States, the Soviet Union, China, Europe, Japan), President Nixon tried unsuccessfully to extend traditional realist concepts to apply to the economie challenge posed by America’s postwar allies, as well as the political and military actions of the Soviet Union and China, ‘As the descriptive accuracy ofa view of national security dominated by military concerns declined, so did the term's symbolic power. This decline reflected not only the increased ambiguity of the concept, but also American reaction to the Vietnam imbroglio, o the less hostile relationship with Russia and China summed up by the word detente, and to the misuse of national security rhetorie by President Nixon in the Watergate affair. National security had to share its position as tho prime symbol in the internationslists'lesican with interdependence Political leaders often use interdependence rhetoric to portray interdepen- dence as a natural necessity, as a fact to which policy (and domestic interest groups) must adjust, rather than as a situation partially created by poliey itself. They usually argue that conflicts of interest are reduced by interdependence, tnd that cooperation alone holds the answer to world problems, ‘We are all engaged in a common enterprise. No nation or group of nations ean gain by pushing bevond the limits that sustain world economic growth. No one benefits from basing progress on tests of strength.” These words clearly belong, to a statesman intending to limit demands from the Third World and influence public atitudes at home, rather than to analyze contemporary reality. For those who wish the United States to retain world leadership, interdependence has become part of the new rhetoric, to be used against both economic nationalism at hhome and assertive challenges abroad, Although the connotations of interdepen= dence rhetoric may seem quite different from those of national sceurty symbolism each has es in the eeonom. Interdependence as an Analytic Concept. 7 Yet interdependence chetoric and national security symbolism coexist only ancaily, Inits extreme formulation, the former suggests that conflicts of interes sre passé, whereas the latter argues thit they are and wil remain, fundamental and potentially violent The confusion in knowing what analytical models to apply to world poitcs (as we noted earlier) is thus paralleled by confusion about the polices that shod be employed by the United States, Nether interdependence Fletorc nor national security symbolism provides reliable guidelines for probleme of extensive interdependence. Rhetoricians of interdependence often claim that since the survival of the human race is threatened by environmental as well as military dangers, conflicts of interest among states and peoples no longer exist. This conclusion woul] ly follow if three conditions were met: an international economic system on sthich everyone depended on our basi lif-supporting ecological systom were in danger: all countries were significantly vulnerable to such a catastrophe: and there were only one solution to the problem (leaving no room for conflict about how to solve it and who should bear the costs), Obviously these conditions are rarely all present. Yet bulance of power theories and national security imagery are also poorly adapted to analyzing problems of economic or ecological interdependence Security, in traditional terms, snot likely to be the principal issue facing govern ments. Insofar as military force is ineflective on certain issues, the conventional notion of power lacks precision, In particular, different power resourees nay be needed to deal with different issues. Finally, in the polities of interdependence domestic and transnational as well as governmental interests are involved. Domestic and foreign policy become closely linked, The notion of national inte. est—the traditionalist’ lodestar—becomes increasingly dificult to use effective: }y. Traditional masims of international polities—that states will actin their national interests or that they will attempt to maximize their power—become ambiguovs We are not suggesting that international conflict disappears when interde pendence pew On the contrac wl take new forms, and nay even increase, But the traditional approaches to understanding confic in world pol ites will not explain interdependence conflict particulary well. Applying p P pplving the ‘wrong image and the wrong rhetoric to prablems wil lead to erroneous analysis and bad policy a Interdependence as an Analytic Concept Jn common parlance, dependence me © of bei parlance, dependence means a state of being determined or sight cantly affected by external forces. Intendepenenee, most simply defined, ear titel dependence, Interdpendncs in world otis eer ston che crized by reciprocal effects among countries or among actors in differe sea by ep 3g count Ws actors tn diferent se effects often result from international transactions—flows of money ‘goods, people, and messages across international homndanes Such tegen8 Chapter Interdependence in World Pots have increased draunaticaly since World War HT; “Recent decades reveal a gener- al tendency for many forms of human intercomiectedness across national bound fries to he doubling every ten years Yet this intetcannectedness isnot the same fas interdependence. The effects of transactions on interdependence will depend dn the constraints, oF casts, associated with them. A country that imports all ofits oil is likely to be more dependent on a continual ow of petroleum than a coun try importing furs, jewelry, and perfume (even of equivalent monetary vale) will be on uninterrupted aevess to these hnxury goods. Where there are reciprocal {although not necessarily symmetrical) costly effects of transactions, there is inter dependence, Where interactions do not have significant costly effects, there is simply interconnectedness. The distinction i vital f we are to understand the pol. ities of interdependence Coxtly effects may be imposed directly and intentionally by another aector—as in Sovict-American strategic interdependence, which derived from the mutual threat of nuclear destruction. But some costly effects co not come directly oF intentionally from other sectors. For example, collective aetion may be necessary to prevent disaster foran alliance (the members of which are interdependent), for aan international economie system (which may face chaos because of the absence ‘oF coordination, rather than through the malevolence of uny actor), oF for an eco- Togical system threatened by a gradual increase of industrial effluents ‘We do not limit the term interdependence to situations of mutual benefit. Such a definition would assume that the concept is only useful analytically where the modernist view of the world prevails: where threats of military foree are few and levels of conflict low. It would exclude from interdependence cases of muttal dependence, such as the former strategic interdependence between the United Slates and the Sovict Union. Furthermore, it would make it very ambiguous whether relations between industrialized countries and less developed countries Should be considered interdependent or not. Their inclusion would depend on an inherently subjective judgment about whether the relationships were “mutually Deneficial.” Because we wish to avoid sterile arguments about whether a given set of rela- tionships is characterized by interdependence or not, and becanse we seek to use the concept of interdependence to integrate rather than further to divide mod- cemist and traditional approaches, we choose a broader definition. Our perspective implies that interdependent relationships will always involve costs, sitee interde- pendence restricts autonorns but itis impossible to specify a prioné wheter the benefits of a relationship will exceed the costs. This will depend on the values of the actors as well as on the nature of the relationship. Nothing guarantees that relationships that we designate as “interdependent” will be characterized by ‘mutual benefit "Tw different perspectives can be adopted for analyzing the costs and benefits of an interdependent relationship. The first focuses on the joint gains oF jo losses to the parties involved. The other stresses relative gains and distributional issues. Classical economists adopted the first approach in formulating their pow erful insight about comparative advantage: that undistorted international trade will Powerand Interdependence 9 provide overall net benefits. Unfortunately an exclusive focus on joint tbseure the second Rey isue: how those gains ae divided, Many of the creat political issues of interdependence revolve around the old question of polities sho gets what? a Ttis important to guard against the assumption that measures ee fs ee Govemmens and nage onions wl st 0 era hi < of gains from transactions, even when they both profit enormously fran the rltinsp. Oi esporing agneients nd mlintonal compari for instance, share an interest in high prices for petroleum; but they have alo fonfiet over shares ofthe peolits mvolved. eee ‘We rmist therefore he eautious about the prospect that rising interdependence is ereating a brave new world of cooperation to replace the bad old worl of international conflict. Asevery parent of small children knows, baking larger does not stop disputes over the size of the slices. An optimistie approach wort overlook the uses of economie and even ecological interdependenee in cory tive international polities, le “The difference between tracitionalintemational po mal intemational polities and the polities of eco- nomi and ecologel interdependence snot the diferencehetwen ‘end a zero-sum” (where one side’s gain isthe other side's loss) and “non-zero sun” games. Miltary interdependence need not be zero-sum. Indeed, military alles actively seek interdependence to provide enhanced security for all Even balance of power situations need not be zero-stim. If one side secks to upset the statne «quo, then ts gain isat the expense ofthe other. But if most or all partiipants want & ale stats quo, they can joint gain by presersing the Balance of power among them. Comverel, he polis of econonie ad ecole! nerdy ce ime competition even he lage net ents can be ‘expected from cooperation. There are important continuities, as well as marked dif between the traditional politics of military secur and ecological interdependence. “ We must also he earefill not to define interdepend wat lefine interdependence entirely torms af sit. vations of evenly balanced mutual dependence It isasymmetres in dependence at are most likely to provide sources of influence for actors in their dealings with one anther. Less dependent tors anton we te iterdependent elatnip ar mre of power in bas goer a io ond phase ter :ne from pure symmetry is pure dependence (sometims ahi y cling he tuaton iericremicoes) via ese eters en these two extremes. And that is where the heart of the polit! bar, gaining process of interdependence lies. ca rence, y and the polities of economie Power and Interdependence Power has ah Iways been an elusive concept for statesmen and analysts of and analysts of interna. tional politics; now it s even more slippery. The traditional view was that mil power dominated other forme. nilitary ees10 Chapter’ Interdependence in World Politics controlled world affairs. But the resources that produce power capabilities have become more complex. In the eyes of one astute observer, “the postwar era his witnessed radical transformations in the elements, the uses, and the achieve ments of power.” And Hans Morgenthau, author of the leading realist text on international polities, went so far in his reaction to the events of the early 1970s as to announce an historically unprecedented severing of the functional relationship between politial, military, and economic power shown in the possession by mil. itarily weak countries of “monopolistic or quasi-monopolistic control of raw mate- Hials essential to the operation of advanced economies."!> Power ean be thought of asthe ability ofan actor to get athers to do something they otherwise would not do (and at an acceptable cost to the actor). Power can be conceived in terms of control over outcomes. In either ease, measurement is not simple." We can look at the intial power resources that give an actor a potential ability; oF we can Took at that actor's actual influence over patterns of outcomes, When we say that asymmetrical interdependence ean be a source of power we are thinking of power as control over resources, or the potential to affect outcomes, A less dependent actor in a relationship often has a significant political resource because changes in the relationship (which the actor may be able to initiate oF threaten) will be less costly to that actor than to its partners. This advantage does not guarantee, however, that the political resources provided by favorable asym zmetries in interdependence will lead to similar pattems of control over outcomes. ‘There is rarely a one-to-one relationship between power measured by any type of resources and power measured by effects on outcomes, Political bargaining is usu: ally a means of translating potential into effects, and a lot is often lost in the translation, To understand the role of power in interdependence, we must distinguish between two dimensions, sensitivity and vulnerability. Sensitivity involves degrees of responsiveness within a policy framework—how quickly do changes in one country bring costly changes in another, and how great are the costly effects? It is measured not merely by the volume of flows across borders but also by the costly effects of changes in transactions on the societies or governments. Sensitivity interdependence is created by interactions within « framework of policies Sensitivity assumes that the framework remains unchanged, The fact that a set of policies remains constant may reflect the difficulty in formulating new policies ‘within a short time, or it may reflect a commitment to a certain patter of domes tic and international rules An example of sensitivity interdependence is the way the United States, Japan, and Western Europe were affected by increased oil prices in 1971 and again in 1973-1974 and 1975. In the absence of new policies, which could take many years ‘or decades to implement, the sensitivity of these economies was a function of the greater costs of foreign oil and proportion of petroleum they imported. The United States was less sensitive than Japan to petroleum price rises, because a smaller pro- portion of ts petroleum requirements was accounted for by imports, but as rapid price inercases and long lines at gasoline stations showed, the United States was indeed sensitive to the outside change. Another example of sensitivity interdepen- dence is provided by the international monetary situation prior to August 15, 1971 Power and Iterdpendence 11 Given the constraints on policy exeated by the rules ofthe International Monetary Fund (IMF), European governments were sensitive to changes in American mon etary policy, and the United States was sensitive to European decisions regurding whether or not to demand the conversion of dollars into gold. Sensitivity interdependence can be social or political as well as economie.* For ‘example, there are social “contagion effects,” stich as the trivial but rapid spread. ofthe fad of “streaking” from Ameriean to Europeans society in 1974, or more sige nificant, the way in which the development of radical student movements during the late 19605 was reinforced by knowledge of each other's activities, The rapid wth of transnational communications has enbanced such sensitivity, Television, by vividly presenting starvation in South Asia to Europeans and Americans about tositdown to their dinners, s almost certain to inerease attention to and concern about the iste in European and American societies. Sensitivity to such an issue may be reilected in demonstrations oF other political action, even if no action is taken to alleviate the distress (and no economic sensitivity thereby results). Using the word interdependence, however, to refer only to sensitivity obscures some of the most important political aspects of mutual dependence.” We must also consider what the situation would he if the framework of policies could be changed. If mote alternatives were available, and new and very different policies ‘were possible, what would be the costs of adjusting to the outside change? In petroleum, for instance, what matters is not only the proportion of one’s needs that isimported, but the alternatives to imported energy and the costs of pursu- ing those alternatives, Two countries, each importing 35 percent of their petrole- uum needs, may seem equally sensitive to price rises; but if one could shift to domestic sources at moderate cost, and the other had no such alternative, the second state would be more bulnerable than the frst, The vulnerability dimension of interdependence rests on the relative availability and costliness ofthe alterna- tives that various aetors face. Under the Bretton Woods monetary regime during the late 1960s, both the United States and Great Britain were sensitive to decisions by foreign speculators or central banks to shift assets out of dollars or sterling, respectively. But the United States was less vulnerable than Britain because it had the option (which it ‘exercised in August 1971) of changing the rules of the system at what t considered tolerable costs. The underlying capabilities of the United States reduced its vil nerability, and therefore made its sensitivity less serious politically In terms of the cost of dependence, sensitivity means lability to costly effects imposed from outside before policies are altered to try to change the situation, Valherability can be defined asan actor siabilityto suffer costsimposed by external events even after policies have beenaltered. Sinceitis usually difficult tochange polt- cles quickly, immediate effects of external changes generally reflect sensitivity {Since we are refering to the sensitivity of economies and polities to one smother, not merely to price ‘nstiis or interest mite sensitivities as used by economists, our definition builds on, but ifr ‘from, that of Richard Cooper. The Economics of loterdencadencs (Mew York, Mera dit tase,V2 Chapter! Interdependence in World Politics ee Figure 1.1. Sensitivity of three Countries (assume policies unchanged) ween | Figure 1.2 Vulnerability of tree Countries (assume policies unchanged) iT gee eee ee Tine dependence. Vulnerability dependence can be measured only by the costliness of making effective adjustments toa changed environmentover a period of time. Let us illustrate this distinction graphically by imagining three countries faced simultaneously with an external event that imposes costs on them—for example, the situation that oil-consuming countries face when producers raise prices Figure 1.1 indicates the sensitivity of the three countries to costs imposed by such an outside change. Initially, country A has somewhat higher sensitivity to the change than B and much higher sensitivity than C, Over time, furthermore, C's sensitivity falls even without any policy changes. This change might be caused by price rises in country C, which gradually reduce oil consumption, and therefore reduce imports, The total sensitivity of each country over the time covered by the ‘graph is represented by the area under its respective line.* Suppose we now alter this picture by assuming that each country tries to change its policies in order to reduce the costs imposed by outside actions. In our oil example, this attempt might involve deciding to incur the high domestic costs of rationing or developing expensive internal energy sources. The extent of these ‘costs and the political willingness to bear them would be the measure of vulner- ability. The vulnerability of « country such as Japan is imposed primarily by that country’s physical endowients and is virtually inescapable without drastic costs. For other countries, such as the United States, physical vulnerability is not so reat. For instance, American efforts to formulate a new energy policy after 1973 were slowed by the lick of domestic consensus on the issue. In Figure 1.2, depicting vulnerability, we can sce that country A's vulnerabili- ty is much less than its sensitivity. A policy change at the beginning of the second time period allows that country, by the third period, to reduce costs imposed by external change almost to the vanishing point. Country A's diminished vulnera- bility would reflect an effective policy, to reduce costs imposed by extemal change "Our caample Weleiberatoly simplified. Among other things, the costs ofthe situation alter pits would of couse, have ta be reduced by an appropriate discount rate Power and Inerdependonce 13 almost to the vanishing point. Country 4's diminished vulnerability would reflect an effective policy to become actually or potentially self-sufficient in petroleum For instance, it might possess new sources of energy that could be developed by the government, B and C are less able to alter their situations hy eluanging policy thus remaining vulnerable to costs imposed by outside events. The sensitivity dependence of the three countries a the time ofthe first exter- nal event is not, therefore, the same as their vulnerability dependence at that time Measures ofthe immediate effects of changes will not precisely indicate long-term sensitivities (note that C's sensitivity declines naturally over time), but they are likely to he even less accurate in measuring long-term vulnerabilities, which will depend on political will, governmental ability, and resource capabilities, In our example, although country A is more sensitive than country B, it is much Tess vule nerable Vulnerability is particularly important for understanding the political structure af interdependence relationships. Ina sense, it focuses on which actors are “the definers of the ceteris paribus clause,” or can set the rules of the game." Vulnerability is clearly more relevant than sensitivity, for example, in analyzing the politics of raw materials such as the supposed transformation of power after 1973. All100 often, a high percentage of imports of a material i taken as an index of vul nerabilty, when by itself it merely suggests that sensitivity may be high. The key question for determining vulnerability is how effectively altered policies could bring into being sufficient quantities ofthis, or a comparable, raw material, and at what cost. The fact thatthe United States imports approximately 85 percent ofits bausite supply does not indicate American vulnerability to actions by bauxite exporters, until we know what it would cost (in time as well as anoney) to obtain substitutes. Vulnerability applies to sociopolitical as well as politico-economie relation ships. The vulnerability of societies to transnational radical movements in the late 1960s depended on their abilities to adjust national policies to deal with the change and reduce the costs of disruption. When Sweden criticized American Policy in Vietnam, its vulnerability to a possible American suspension of cultural station contacts wonld have depended on hun i could adjust policy tothe ne Gould exchange professors and tourists be attracted from elsewhere?” Let us look again atthe effects on the United States ofa famine in South Asia, The vulnerability of an American administration to domestic protests over its lack of a food aid policy would depend on the ease with which it could adjust policy (for instance, by shipping more grain to India) without incurring other high polit- ical or economic costs. How does this distinction help us understand the relationship between inter: dependence anc power? Clearly, it indicates that sensitivity interdependence val be less important than vulnerability interdependence in providing power resources to actors. Ifone actor can reduce its costs by altering its policy, either domestically or internationally, the sensitivity patterns will not be a good guide to power resources, Consider trade in agricultural products between the United States and the Soviet Union from 1972 to 1975. Initially, the American economy was highlyOE ISS IIE ONS sensitive to Soviet grain purchases: prices of grain rose dramatically in the United States. The Soviet Union was also sensitive to the availabilty of surphis American stocks, since its absence could have internal political as well as economic impli- cations. The vulnerability asymmetries, however, ran strongly in favor of the United States, since its alternatives to selling grain to the USSR (Such as govern. ‘ment storage, lower domestic prices, and more food aid abroad) were more attrac tive than the basic Soviet alternative to buying grain from the United States (slaughtering livestock and reducing meat consumption). Thus, as long as the United States government could retain coherent control of the policy-—that is, as Jong as interest groups witha stake in expanded trade did not control it—agrieul. tural trade could be used as a tool in political bargaining with the Soviet Union, Vulnerability interdependence includes the strategic dimension that sensitiv 'y interdependence omits, but this does not mean that sensitivity is politically Uunimportant, Rapidly rising sensitivity often leads to complaints about interde- Pendenee and political effort to alter it, particularly in countries with pharalistic political systems. Textile and steel workers and manufacturers, oil consumers, and conservatives suspicious of radical movements originating abroad areal kely to demand government policies to protect their interests, Policymakers and policy analysts, however, must examine underlying patterns of vulnerability intordepen dence when they decide on strategies, What ean they do, at what cost? And what can other actors do, at what cost, in response? Although patterns of sen interdependence may explain where the shoe pinches or the wheel squeaks, coherent poliey must be based on an analysis of actual and potential vulnerabilf, ties. An attempt to manipulate asymmetrical sensitivity interdependence without regard for underlying patterns of vulnerability is likely to fa Manipulating economie or sociopolitical vulnerabilities, however, also bears risk: Strategies of manipulating interdependence are likely to lead to counter, strategies. It must always be kept in mind, furthermore, that military power dom= nates economic power in the sense that economic means alone are likely to be inclfoetive against the serious use of military force. Thos, even effective manip lation of asymmetrical interdependence within a nonmilitary area can create risks ‘of military counteraction. When the United States exploited Japanese vulnerabil. ity to economic embargo in 1940-41, Japan countered by attacking Pearl Harbor and the Philippines. Yet military actions are usally very cost and for many types ‘of uctions, these costs have risen steeply during the last thirty years. Table 1.1 shows the three types of asymmetrical interdependence that we have been discussing, The dominance ranking column indicates that the power sources provided by military interdependence dominate those provided by onmilitary vulnerability, which in turn dominate those provided by asymnme tries in sensitivity Yet exercising more dominant forms of power brings higher costs. Thus, relative to cost, there is no guarantee that military means will be nore effective than economie ones to achieve a given purpose. We ean expect however, that s the interests at stake become more important, actors will tend to use power resources that rank higher in both dominance and cost. Power and interdependence 15 ee Table 1.1 Asymmetrical Interdependence ands Uses Source of Dominance Cost independence ranking ranking _—_Sontemporary use Miltary (costs 1 v Usedinexrame situations or of sing itary against weak foes wnen costs force) may be shat. Nontary 2 2 Used when nomative constrains winerabilty (costs are low, end international les of pursuing atora are nat considered binging ‘ive lies) (including nonritary relations between adversaries, and Situations of exremely high conf betwoon close partners and ales) Nwittary 3 3 A power esource inthe shortran sensitivity (costs or when normative constrains of change under ‘re high and internationales ‘iting polices) are binding Limite, since high casts are imposed, disadvantaged actors may formuiato new poles, A movement from one power resource to a more effective, but more costly resource, will be most likely where there isa substantia incongruity betwen the distribution of power resources on one dimension and those on another. In such a situation, the disadvantaged actor's power position would he improved by rais- ing the level at which the controversy is conducted, For instance, in a concession agreement, « multinational oil company may seem to have a better bargaining position than the host government, The agreement may allow the company to set {he level of output, und the price, of the petroleum produced, thus making gov emment revenues to company decisions. Yet such a situation is inherently unst ble, since the government may be stronger on the vulnerability dimension. Once the country has determined that it can afford to alter the agreement unilaterally femay have the upper hand. Any attempt by the company to take advantage of ts superior position on the sensitivity dimension, without recognizing its weakmess at the vulnerability level (much less at the level of military force), i then likely to end in disaster We conclude that a useful beginning in the political unalysis of international interdependence can be made by thinking of asymmetrical interdependencies as sources of power among actors. Such a framework can be applied to relations between transnational actors (such as multinational comporations) and govern ‘ments as well as interstate relations, Different types of interdependence lead to46 Choptr1 Interdependence in Word Poltes potential political influence, but under different constraints, Sensitivity interde- nsdenice can proxide the bass for significant polities influence only whe the eo and mons in effect can be taken for granted, or when it would be prohibi- thely costly for disatisied states to change their policies quickly. Hone set of rules pts an actor ina disadvantageous position, that actor will probably ty 10 it can do so at a reasonable cost. Thus influence deriving tries in sensitivity is very limited when the underlying syimnetries in vulnerability are unfavorable, Likewise, Hf state chafes at its 660 vhamie vulnerabilities it may use military force to attempt to redress that situation we yapan clin 1941, or it ama subtly threaten to use foree as did the United States in 19TS, when Facing the possibility of finture oil boycotts, But in many cone teanporary situations, the use of force sso cst, ands threat so feu to ‘make credible, that a military strategy isan act of desperation. Yet this is not the whole story of power and interdependence. Just as important asinderstanding the way that manipulation of interdependence can be an instru, vmont of poswer i an understanding of that instruments Hints. Asymmetrical Jnerdepencenee by itself cannot explain bargaining outcomes, even in tradition- dU elations among states, As we said earlier, power measured in terms of resourees Gr potential may look different from power measured in terms of influence over vaeeomes, We must also look at the “translation” in the political bargaining process. One ofthe most important reasons for this s thatthe comituent ofa ersaker state may be much greater than that ofits stronger partner, The more ‘ctor may be (or appear to be) more willing to suffer. At the politico dependent a tnitay level, the United States’ attempt to coerce North Vietnam proves an ‘obvious example ‘Yet the point holds even in more cooperative interstate relations. In the ‘Canadian. Amnerican relationship, for example, the use or threat of force is virte Ae exchled from consideration by either side, The fact that Canada has less mil itary strength than the United States is therefore not a major factor in the banning process. The Canadians can take advantage of their superior postion caeach economic issues as oil ane natural gas exports without fearing military on alation or threat by the United States. Morcover, other conditions of conte porary international interdependence tend to Tit the abilities of statesmen (0 Manipulate asymmetrical interdepenclence. In particular, the smaller state may have geeator internal potical unity than the larger one. Even though the more powerful state may be Tess dependent sn agaregate terns t muy Be tats frage reer internally and its eoherence reduced by conflicts of interest and diffieut- ties of coordination within its own government ‘We will explore this question further in Chapter 7 when discussing ont findings fon Canadian’ American and Australian-American relations between 1920 and 2970. What we have sad is sufficient to indicate that we do not expect a measure bf potential power, such as asymmetrical interdependence, to predict petfecthy ore aucceses oF fullures at influencing outcomes. It merely provides a first fpproximation of intial bargining advantages availble to either side, Where predictions based on patterns of asymmetrical interdependence are incorrect change those rules from favorable asym Intemational Regime Change 17 ‘one must look closely for the reasons. They will of proves Ua ratslats pover resources inf power over tenes ee International Regime Change —_— eee Understanding the concept of interdependence a sre to the wn of pers necessary toanwerngtie it rajor question of this bok whut ve the carers of wo pls under contin of exteaive ited we have indicated, relationships of interdepend : within, and may be affected by, networks of rules, Mt pacares that oe sae behead ntl fats, Ween eee tvents that alfect relationships of interdependence as atermational regs, Although nso obvious asthe poles Tanning process equally prt anderstanding power and inemependence i ous cecond major guectons Hone saeraig per and intrepen Second major question: How In world politics rules and os ules and procedures are neither so complete nor so wel enfrsed as in wel. ordered domeste oli ystems, the natin oe either 30 powerflnor so autonomons. “The rules ofthe ge inde eam tational rules some intrntiona rls, some priate ruls—and age a re esata The wees of tetonalegnizatos al e problems oF enforcing international lw sometimes msiead observers into thinkin that ter eral lb integration fs weak, specific international regimes often have impo tnt lets on interdependent relationships that iva alee cantata involve many countries ona speci isse. Since World War I. for instance, spe ents of ies an procedures ve ben deseo oid ee fom actors ina wide variety fares, ling to Tess developed coutres, enstionnental protection fisheries consewatin, inertia Toad poly. inter nal tora conan, ntratoal manetary poles ro lation of ‘multinational corporations international inlemationa elem mere ns international shipping policies, intemational tele en for split a nerationa ae In some was thew ees and comprehensive; in others informal and partial. Their . ses sare fostered Rete Ore lective or regional level, specific groups of countries such as tose ‘i he aan Community or the Organization for Economie seman ne : velopment. (OECD) have developed regimes that affect several So their countries’ relationships with each other. mee sntematonl eines aye icorporte nto ntertateareements tates, a ere the international monetary arrangements developed at Bretton Woods in 1915; or they may evolve fom proposed formal arranges tht er neve pltmented was the General Agreement on Tari and Tea Wordd War HO they may be mer impli ss te porteer Canadase smerican relationship, They vary not onl ntensiveness bt nthe degree S : ¥y vary not only in their extensiveness hut in the de adherence they receive from major actors, When there. are ny agreed noras‘18 Chapter 1 interdependence in World Poltics ‘and procedures or when the exceptions to the rules ar instances of adherence, there is a nonregime situation." To understand the international regimes that affect patterns of interdepen dence, one must look, as we will in Chapter 3, at structure and process in inte national systems, as well as at how they affect each other. The structure of a system refers to the distribution of capabilities among similar units. In interna tional political systems the most important units are states, and the relevant capa bilities have been regarded as their power resources. There is « long tradition of categorizing the distribution of power in interstate systems according to the number and importance of major aetors for instance, as unipolar, bipolar, multi- polar, and dispersed) just as economists deseribe the structure of market systems as monopolistic, duopolistic, oligopolistic, and competitive.” Structure is therefore distinguished from process, which refers to allocative or bargaining behavior «within a power structure. To use the analogy of a poker game, atthe process level analysts are interested in how the players play the hands they have been dealt. At the structural level they are interested in how the cards and chips were distributed as the game started, Intemational regimes are intermediate factors between the power structure of an international system and the political and economie bargaining that takes place with it. The structure of the system (the distribution of power resources among states) profoundly affects the nature of the regime (the more or less loose set of formal and informal norms, rules, and procedures relevant to the system). The rogime, in turn, affeets and to some extent governs the political bargaining and daily decision-making that occurs within the system, Changes in international regimes are very important. In intemnational trade, for example, an international regime including nondiseriminatory trade practices was laid down by the General Agreement on Tariffs and Trade (GATT) in 1947. For over five decades, the GATT arrangements have constituted a relatively effective international regime. But the 1970s were marked by the partly successful efforts of less developed countries to change this regime, More broadly, by the mid- 1970s, the demands of less developed countries for a New International Economic Order involved struggles over what international regimes should gover trade in raw materials and manafactures as well as direct foreign inves ment. Yet in the 1990s developed and less developed countries agreed on a new World Trade Organization (WTO), which extended and strengthened GATT. In the two issue areas that we will investigate in Part [I—money and oveans- some regime changes have been rapid and dramatic whereas others have been gradual. Dramatic changes took place in international monetary policy in 1914 (suspension ofthe gold standard); 1931 (abandonment of the gold-exchange stan- dard); 1944 (agreement on the “Bretton Woods System}; and 1971 (abandon- more important than the "We are concerned in this book with the general question of wherenc to specified basi norms of| the regimes we examine. Rogimes ean also be eatoorized in tens ofthe degree and typeof politcal futcgration among the states adhering to them. See J. Nye, Peace in Parts (Boston: Lite, Brown, 1971), Chapter 2, for discussion of measurement ofthe integrative and institutional dimensions of regimes Intemational Regine Change 19 ment of the convertibility of dollars as world’s oceans changed more slowly, bx and ater 1967. Yet We hane we thee adequately explains such cha : this question at all In Chapter 3, we shall look cl cnapter 3 look closely atthe problem of explain Berne the pater of vs ni nips agen issues. There we will} Snes nena ee lay out four models. or intel reaknoses eho 9 esplan egime change, and cramin oe Of world politi tll rst on different assumptions uhont the hang en thence Politics. Since world polities vary, overtime and fe coetions tere appl ee Delve that a single set of conditions will ake at oe 7 apply or that any one model is likely to be universally ant eves wy can be expected to apply. As we indicate in the nest hae ne he next chapter, in peri ods of rapid change suc rent out the change th ° pt cimpit change sah font one, assumptions about the condi gold). Rules gover overing the uses of the th ea amie an n the field of internationa that sod onal relations that es Indeed, most of our theorce dove etCHAPTER 2 Realism and Complex Interdependence e sees and : jout world politics profoundly affect what one howone cats heres tocsplaevens Webeheve that the ssomp settee ed the postwar period, are often tions of political realists, whose theories domin sean an imadequate bass for analyzing the pbs of interdependence, The elt coum shoot werd pals abe noo defining an exe st of con ditions or ideal type. One could also imagine very di rent conn ni haps. we sal const another eal pe, the oppose of ean. We eli complex interdependence, After esubishing the iferences cer els complex inter e shall argue that complex interdependence so tations of change in ntemaonal exes become questionable sm the seach for os more urgent, desis erage eer rete or paid eal tran es, hel epi a str i wor bet, walke domeriepoltxa,rstmgge Stated bonged ence In the words ofthe most influential postwar textbook, “AN history sho At faba ae aceon iets prepa ate olved in. or recovering fom organized valene inthe form o sae Thee Gonna actors in werk pebts. this sa dole sumption: es ar te dominant: a they at as coherent nits Second realists sue hat ree tsable and effective instrument of policy. Other inst nents maya be employed, but using or threatening force the mest efetive means of wllng over Tin pal ce of hese amption rei aster ‘low politics” of economic and headed by qu archy of issues in world polities, h high politics” of military security dominates th Thee 1d polities. They allow us se relist assumptions define an dea ype of world polities, a State attempts to defend ts tertory and interests froin rea ar perefed thes, Political integration arnong states is slight and lasts only as Tong n The Characteristics of Complex Interdependence 21 Dayna interests ofthe most powerful states. Transnational ator either do not OF foe meee cls unimportant, Only the adept exerise of force or theshen offrce permits states to survive, and only while statesmen ened adjusting thet interests asin a well-nctioning balance of power ie tha ge stable. Each of the realist assumptions can be challenged! eve challenge them all simultaneously, we can imagine a world in which ators other ava partic pate directly in world polities, in which a clear hie and in which force is an ineffective instrument fions—vhich we call the characteristic of compen ing rdependence—one would eaE Watt politics to be very different than under reals contngoas We wil explore these differences in the next section of thet apter, We do not araie, however, dhat comple interdependence faithful tears cert political reality. Quite the contrary: both it and the realist porta are ideal types, Most sit- uations will fall somewhere between these two extremes Sometimes, realist depen Wil be accurate, oF largely accurate, but frequent complex inter- dependence will provide a hetter portrayal of reality. Bonne decides what qurliutory model to apply toa station or problem, once acnd understand the degree to which reulit or complex interdependence assumptions correspond to the situation, rarchy of issues does not exist of policy. Under these condi. The Characteristics of Complex Interdependence Come Complex interdependence has three main charactorsticn 1. Multiple channels connect societies, inchudin eminental elites as well us formal foreign office among nongovernmental elites (face-to-five and transnational organizations (such These channels ean be summarized tional relations. Interstate relations i: informal ties between gov- arrangements; informal ties and through telecommunications) 5 multinational banks or corporations). 48 interstate, transgovermmental, and transna are the normal channels assumed by realists, Transgovermental applies when we relax the realist assimption that states act coherently as units; fransnational apples when we sche the assumption that states are the only mits, I agends of nterstate relationships casts of mip sss that are not arranged in a clear or consistent hierarchy. This aver of hierarchy among dominate tee aang other things, that military security des not cores dominate the agenda: Many issues arise from what aca be considered domes. Blac atte the distinction between domestic and foreign nance hee pluned ‘These issues are considered in several gevermn departments (not [a orci offices), and at several evel. inadequate polesevont are ae fe both witha Sufi costs, Different istes generate different eet fot within governments and across them and mmc ages degrees of com. ict. Polities does not stop at the waters edge. : i ttt Foree Is not used by govermentstowtrd other governments mais teen. oF on the isues. when complerintenlopercene prevails, It may, however, be important in thie 2 ee inte2 Chapter? Realism and Complex interdependence ute that region, on other issues. Miltary force could, for instance, be ire: sag resolving disagreements on economic issues among members of ay eee reat the sane time be very important for that alliance’s political and anna sclations with arval bloc. For the former relationships this condition of Complex interdependence woutd be met; forthe latter, it would not “Traditional theories of international polities implicitly or explicitly deny the sccnmaey of these three assumptions. Traditionalsts are therefore tempted also te arcUTaty OT leranee of eatcizms based on the complex interdependence ideal type. We believe, however, that our three conditions are faely well appresion ed ee ne dlobal issues of economic and ecological interdependence and that they ae asovjowe to characteriing the entre relationship between some countries. One Stour pinposes here is to prove that contention. In subsequent chapters we shall nie complex interdependence in oceans poly and! monetary policy and in the celationships of the United States to Canada and Australia. In tis chapter: pee tver we ghall try to convince you to take these criticisms of traditional assumptions seriously ‘Multiple Channels {A ist to any major airport isa dramatic way to confirm the existence of multiple Atl Mot contact amongadkvanced industrial countries; there isa volunninous its crature to prene it? Bureaucrats from different countries deal directly with one siher at meetings and on the telephone as well as in writing, Similarly, none tgovernmental elites frequently get together inthe normal conse of busines aoe rations such as the Telateral Commission, and in conferences sponsored by private foundations Tre adaition, multinational firms and banks affect both domestic and interstate relations. The limits on private firms, or the closeness of ties between government weed business, vary considerably from one society to anothers but the participation Gt large and dynamic organizations, nt controlled entirely by governments has recone a normal part of foreign as well as domestic relations “Those actors are important not only because of their activities m pursuit of their own interests, but also because they act as transmission belts, making gov- tenment policies in various countries more sensitive to one another. As the seope © domestic activities has kroadened, and xs corporations, banks; transcend national of gover find (toa lesser extent) trade unions have made decisions that taney ce the domesti polices of different countries impinge on one another rind more, Transnational communications reinforce these effects. Thus, foreign economic policies touch more domestic economic activity than in the pst blurring the lies between domestic and foreign policy and increasing the aaa of asues relevant to foreign polity. Parallel developments in issues of siipomental regulation and control ever technolory reinforce this tend. Absence of Hierarchy among Issues Foreign affairs agendas—that is, sets of issues relevant to foreign policy with ° ~ eee To dares No. The Characterisis of Complex Iterdependen, ence 2 longer can all issues be subordinated to military security. As S: Kissinger deseribed the situation in 1975 CCHELAY OF Stat progres in dealing wih He tational agen sno sete fe as need The pln feng Tess, ong PE nthe uses of space andthe scan rk wit questi of tary secu and territorial rival ape pte aie aly which have taditonally nade up the diplomatic agenda ogy oir st which cond ep states how goer : te prviosy considered merely domestic, impinge on one ange ties, extensive consultative h “swe tensive ¢0 1 arrangements developed by the OECD, as welt © GATT Mt onthe Fanconi. ee what pf dos ad oe pi ang ap conn organization within nine major departments of the U tte riculture; Commerce; Defense; Health Justice; Labor; State; and Treasury) and ted States ane ee Is ny other agencies reflects then 7% teratoal commitment, The maple, overages hat wey a nightmare of governmental onganizations: tale When there are snultph at ‘are multiple issues on the agenda, many’ of which th inert of onto ons but do teu threaten the nations rae oblems of formulating a coherent and consistent foreign policy ineren’ 1975 enengy was verde sak eT a energy wa foreign ply problem but speci vemeds, sich by fesoline and antomobies vod domestic legisation opposed ya ae ane companies alike. As one commentator Observed. “virtually ene ors Congres has seta national pole tha changed the way peopl ie fa came ates consensus had develope it by Bit oe the years that existed and that there was ne es wy to soe iO portunities for de Poca prtetin, for inconsistency and nclerence ‘abound when wore polities requires aligning the domestic poiies of pluralist democratic ey the lay, tional tries, Minor Role of Military Force Polit sents have tionally emphasized the role of mao atonal polis. As we sa in he ist ptr fore dominates other ym, power if ther ze no constraints om es choi of stent hy pork of Staton that has only been approinated in the tvo world war) thes tea superior military force wil rew the sect dilemma forall fate with extromaly acute, military force, supported by economic aul other Tea were ‘woeld leat be de dana source of power. Survival the primary canes sates. a the worst stations, foe imately neces seal of al al, Thus military force savas a central component of national power et ot arta ‘mong industriized, phralit countis the percetven safety has widened: fears of attack in general ave declined, and ea onetgin by one another are vitally nonexistent. France ns abandoned the tone tacks (efense nll ection) state that President de Canlle abocted wit tas taken entirely seriously even at he time). Canadas ist war plans for fight’ ted Staton were abordoned hela centursaso Britain amt Corte tthe24 Chapter? Realism and Complex Interdependence feet threatened by each other. Intense relationships of mutual influence exist Dotween these countries, but in most of them force is irrelevant or unimportant as rument of policy Moreover, foree is often not as economic and ecological welfare , an appropriate way of achieving other goals (such ) that are becoming more important, Ttis not impossible to imagine dramatie conflict or revcutionary change tn which the ws arirreat of military foree over an economni ssie or ainong advanced industrial crantries might become plaustble. Then realistassurptions would again be are in most situations, the effects of military force are both able guide to events. But in most costly and uncertain.” xen when the direct use of fore ever, military power can still be used political. power used the threat of force to deter attacks by other superpowers on pevilow its deterrence ability thus served an indirect, protective role, which it ‘ould se in bargaining on other issues with itsalies, This bargaining tool was par teularly important forthe United States, whose alles were concerned bot potential Soviet threats and which had Fewer other means of influence eves is eae lhan did the Soviet Union over its Fastern European partners, The United States had, accordingly, taken advantage of the Europeans’ (particularly the Germans’) desire [or its protection and linked the issue of troop Tevels in Kxtrope te trade and monetary negotiations, Thus, although the first-order effeet of deter vent foree was essentially negative—to deny effective offensive power to super power opponent-—states Contd nse that force positively to gain polit al influenee. ‘Thus, even for countries whose relations approximate complex interdepen- dence, two serious qualifications remain: (1) drastic social and political change enld eanse force again to become an important direct instrument of policy: and {2} even when elites interests are complementary, a country that uses military force to protect another may have sigalficant poltial influence over the other country. In North-South relations, or relations among Third World countries in Enst-Weet relations, force is often important. Military power helped the Soviet Union to dominate Eastern Europe econom cally as well as politically. The threat of open or covert American military intervention helped to Bini revolutionary “Changes in the Caribbean, especially in Guatemala in 1954 und inthe Dominican Republic 1965, Secretary of State Kissinger, in Jannary 1975 issued a veiled vamning to members of the Organization of Petroleum Exporting Countries TOPEC) that the United States might use force against them “where there is ‘some actual strangulation of the industrialized world." Even in these rather conflicted situations, however, the recourse to force secine leas Hkely now than at most times during the century before 1945, The destructiveness of nuclear weapons makes any’ attack against a nuclear power Clangerous. Nuclear seapons are mostly used as a deterrent, Threats of nuclear sation aginst much weaker countries nay acastnaly be effeacions, but they are equally or more Hkely to solidify relations between ones versus, The hi ited 1 is barred among a group of countries, how- ‘During the Cold War each super- elf or aswell as The Politica Processes of Complex interdependence 25 usefulness of conventional force t fone force to control socially mobilize Pas aie United States failure in Vietnam as well as by the rapid dech of eben Alc, Futhemore, upline om oe en intially presen aera natherword ett oes basco Yee i nna pals. And finally Western demonic, on m to prolonged military conflicts is very high. med Tei lear that these constraints bear v all a same countries indifferent si sol

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