LIBERAL INTERNATIONAL RELATIONS:

INTERPRETATIONS OF US FOREIGN POLICY DURING

THE REMAKING OF THE INTERNATIONAL ORDER

GERALDO NAGIB ZAHRAN FILHO

Wolfson College

Department of Politics and International Studies

University of Cambridge

Supervisor: Prof. Chistopher Hill, FBA

Sidney Sussex College

This dissertation is submitted for the degree of Doctor of Philosophy.

March, 2016
 LIBERAL INTERNATIONAL RELATIONS:
INTERPRETATIONS OF US FOREIGN POLICY DURING
THE REMAKING OF THE INTERNATIONAL ORDER

GERALDO NAGIB ZAHRAN FILHO

This thesis presents a critical examination of the academic paradigm known as Liberal
International Relations (IR), and its interpretations of US foreign policy and international
institutions. Liberal IR conceives the contemporary international order as a liberal order
remade by the US at the end of World War II and expanded after the end of the Cold War.
The order would be based on constitutional bargains made by the US and weaker states, in
which the former made commitments to protect the latter against abandonment and
exploitation. These commitments would be embedded in binding institutional arrangements,
which would give the liberal order its main characteristics and design. The leading liberal
author on such topics is G. John Ikenberry, and this thesis directly addresses his work. The
thesis argues that liberal accounts are theoretically and empirically flawed. Firstly, Liberal IR
underestimates the role of power in international politics, particularly in institutional settings.
Secondly, Liberal IR analyses are based on generalised interpretations of the historical record
and US policies. In articulating this critical view, the thesis reproduces the same structure and
case studies used in liberal analyses. Making use of historical and contemporary materials, the
research examines US foreign policy at the creation of the IMF, GATT and NATO in the
post-World War II period, and later in relation to the expansion and changes in these
institutions in the post-Cold War period. The thesis discusses liberal interpretations of US
policies towards these major international institutions, as well as liberal accounts of the
contemporary impacts of such institutions. Lastly, the thesis discusses the relationship
between academia and the policymaking community, the role of liberal authors as public
intellectuals, and the influence and possible implications of Liberal IR ideas outside academic
circles. This research concludes that liberal accounts of US foreign policy and of the
contemporary dilemmas of the international order are insufficient. As an important academic
paradigm, Liberal IR would benefit from a re-examination of its premises and normative
instincts.
Declaration
This dissertation is the result of my own work and includes nothing which is the outcome of
work done in collaboration except as declared in the Preface and specified in the text.

It is not substantially the same as any that I have submitted, or, is being concurrently
submitted for a degree or diploma or other qualification at the University of Cambridge or any
other University or similar institution except as declared in the Preface and specified in the
text. I further state that no substantial part of my dissertation has already been submitted, or,
is being concurrently submitted for any such degree, diploma or other qualification at the
University of Cambridge or any other University of similar institution except as declared in
the Preface and specified in the text

It does not exceed the prescribed word limit for the relevant Degree Committee.
Acknowledgements
This PhD thesis could only come to completion because of the unrelenting support of my
supervisor. Prof. Christopher Hill’s academic excellence is well-known, and I have greatly
benefited from his commentaries, suggestions and criticism. All the errors and mistakes in
what follows are obviously my own. But more importantly, Chris has always found the time
and the right word to advice and encourage me. He never ceased doing that, even while
attending much more pressing matters. There is nothing more inspirational than the power of
example, and I hope to be able to emulate Chris’ wisdom and thoughtfulness inside and
outside academia.

I am also grateful to have made many true friends during my time in Cambridge, which in one
way or another changed my way of seeing the world. I want to thank Mike and Eftychia
Lombardo, Alex Gillies, David Hornsby, Lorraine Macmillan, Marjan Radjavi, Francesco
Anesi, Florian Karreth, Lukasz Magiera, Anna Staniszewska, Carolina Pavese and Renata
Lemos for their friendship. Thanks are also due friends, old and new, who in some way shared
this experience with me: Mariana Paoli and David Karp, Simone and Eduardo Pereira,
Solange Reis, Igor Medina de Souza, Leonardo Ramos, Flavia Peixoto de Azevedo and Paulo
Pereira. And for the lack of a better expression, my special thanks to Elena Lazarou.

Diego and Christiane Bonomo have hosted me for longer than they should have in
Washington DC, as have Max and Claudia Sternberg in London. I am greatly thankful to
them, not only for allowing me priceless periods of research and writing, but for the numerous
insightful and cheerful conversations. My parents and brother, Geraldo, Jamile and André,
deserve my utmost gratitude for supporting me and encouraging me, even at times when they
were not aware of it.

This research was funded by CNPq - Conselho Nacional de Desenvolvimento Científico e

Tecnológico, part of the Ministry of Science, Technology and Innovation of Brazil. Smaller
funds were provided by the former Centre of International Studies at the University of
Cambridge, currently POLIS, and by the Cambridge Political Economy Society Trust. I am
thankful to prof. Susan Sell from The George Washington University, for hosting me as
visiting scholar at The Elliott School of International Affairs. I also want to express gratitude
to the staff at Wolfson College, and at CIS and POLIS: Wendy Cooke, Wendy Slaninka,
Matthew Ham, Emma Collison and Emma Cantu.

Life has a strange way of uniting people, and I am grateful to have been united with Ana
Carolina. I have to thank her, and young Pedro, for providing me motivation, patience and
perspective to carry through the last stages of this project, and I am sure of many others to
come.
Abstract

This thesis presents a critical examination of the academic paradigm known as Liberal
International Relations (IR), and its interpretations of US foreign policy and international
institutions. Liberal IR conceives the contemporary international order as a liberal order
remade by the US at the end of World War II and expanded after the end of the Cold War.
The order would be based on constitutional bargains made by the US and weaker states, in
which the former made commitments to protect the latter against abandonment and
exploitation. These commitments would be embedded in binding institutional arrangements,
which would give the liberal order its main characteristics and design. The leading liberal
author on such topics is G. John Ikenberry, and this thesis directly addresses his work. The
thesis argues that liberal accounts are theoretically and empirically flawed. Firstly, Liberal IR
underestimates the role of power in international politics, particularly in institutional settings.
Secondly, Liberal IR analyses are based on generalised interpretations of the historical record
and US policies. In articulating this critical view, the thesis reproduces the same structure and
case studies used in liberal analyses. Making use of historical and contemporary materials, the
research examines US foreign policy at the creation of the IMF, GATT and NATO in the
post-World War II period, and later in relation to the expansion and changes in these
institutions in the post-Cold War period. The thesis discusses liberal interpretations of US
policies towards these major international institutions, as well as liberal accounts of the
contemporary impacts of such institutions. Lastly, the thesis discusses the relationship
between academia and the policymaking community, the role of liberal authors as public
intellectuals, and the influence and possible implications of Liberal IR ideas outside academic
circles. This research concludes that liberal accounts of US foreign policy and of the
contemporary dilemmas of the international order are insufficient. As an important academic
paradigm, Liberal IR would benefit from a re-examination of its premises and normative
instincts.
Table of contents

List of abbreviations ......................................................................................................... 9

1. Introduction ............................................................................................................ 11
1.1. International order and institutions .................................................................. 13
1.2. Liberal IR ......................................................................................................... 14
1.3. US foreign policy, institutions and liberal order.............................................. 16
1.4. The role of history............................................................................................ 19
1.5. Why Liberal IR? .............................................................................................. 23
1.6. Research design ............................................................................................... 27
1.7. Chapterisation and sources .............................................................................. 29

2. Liberal IR, US foreign policy and international institutions .................................. 34

2.1. IR and Liberal IR in US academia ................................................................... 35
2.2. Andrew Moravcsik and the framework of Liberal IR ..................................... 37
2.2.1. Liberal IR three core premises.................................................................. 38
2.2.2. Three variants of Liberal IR ..................................................................... 40
2.2.3. Unarticulated assumptions........................................................................ 42
2.3. Anne-Marie Slaughter, Liberal IR and International Law ............................... 47
2.3.1. Law among liberal states .......................................................................... 48
2.3.2. Assessing the uniqueness of liberal nations ............................................. 51
2.3.3. The presumed impact of transnational networks ...................................... 55
2.4. G. John Ikenberry, US foreign policy and liberal order .................................. 58
2.4.1. Binding institutions and constitutional bargain ........................................ 60
2.4.2. Criticism of the concept............................................................................ 62
2.4.3. Criticism of the historical narrative .......................................................... 64
2.4.4. Embedded liberalism ................................................................................ 68
2.5. Conclusion ....................................................................................................... 70
3. US foreign policy and financial institutions ........................................................... 74
3.1. IMF: post-war planning, negotiations and implementation ............................. 74
3.1.1. Early differences: Atlantic Charter and Lend-Lease ................................ 76
3.1.2. Post-war economic planning in the US and the UK ................................. 79
3.1.3. Technical discussions and consensus ....................................................... 81
3.1.4. Multilateral negotiations ........................................................................... 84
3.1.5. Domestic reactions ................................................................................... 89
3.1.6. The British Loan, US power and binding institutions .............................. 90
3.2. IMF: post-Cold War expansion and practices ................................................. 93
3.2.1. Expansion of membership in the 1990s.................................................... 94
3.2.2. US responses to expanding membership .................................................. 96
3.2.3. The US-IMF relation .............................................................................. 100
3.2.4. Benefits to weak states ........................................................................... 107
3.3. Conclusion ..................................................................................................... 111

4. US foreign policy and trade institutions ............................................................... 113

4.1. ITO’s failure and GATT’s success ................................................................ 113
4.1.1. Domestic precedents ............................................................................... 114
4.1.2. Bilateral negotiations, 1943-45 .............................................................. 118
4.1.3. Multilateral negotiations, 1946-48 ......................................................... 122
4.1.4. End game and domestic reactions .......................................................... 127
4.2. GATT/WTO: expansion, institutional features and practices........................ 132
4.2.1. Expansion of membership and accession process .................................. 133
4.2.2. Trade negotiations .................................................................................. 137
4.2.3. Dispute settlement under the GATT/WTO ............................................ 141
4.2.4. Trade benefits of the GATT/WTO ......................................................... 145
4.3. Conclusion ..................................................................................................... 150
5. US foreign policy and collective security............................................................. 153
5.1. The North Atlantic Treaty.............................................................................. 153
5.1.1. Precedents ............................................................................................... 156
5.1.2. First round of foreign and domestic talks ............................................... 161
5.1.3. Negotiating the treaty ............................................................................. 163
5.1.4. Isolationism and domestic reactions ....................................................... 166
5.1.5. Creating the organization ....................................................................... 168
5.2. NATO and liberal order after the Cold War .................................................. 174
5.2.1. A resilient transatlantic security community .......................................... 175
5.2.2. NATO after the Cold War ...................................................................... 177
5.2.3. A broader view on NATO’s enlargement............................................... 180
5.2.4. The case of Germany’s reunification...................................................... 182
5.2.5. US, Russia and NATO in the early 1990s .............................................. 184
5.2.6. US, Russia and NATO drift apart........................................................... 189
5.2.7. Liberal contradictions ............................................................................. 194
5.3. Conclusion ..................................................................................................... 197

6. Liberal IR, policy and policymakers .................................................................... 199

6.1. Liberal IR and the theory-practice gap .......................................................... 200
6.1.1. Types of influence .................................................................................. 202
6.1.2. Liberal scholars and the revolving door ................................................. 205
6.2. Liberal influence and new ideas .................................................................... 208
6.2.1. The liberal synthesis ............................................................................... 208
6.2.2. The democratic peace thesis ................................................................... 212
6.2.3. The Princeton Project on National Security ........................................... 216
6.2.4. International institutions, cooperation and liberal order......................... 220
6.3. Conclusion ..................................................................................................... 224

7. Conclusion ............................................................................................................ 225

References .................................................................................................................... 233

List of abbreviations

AEI – American Enterprise Institute

AIIB – Asian Infrastructure Investment Bank
APEC – Asia-Pacific Economic Cooperation
BIT – Bilateral Investment Treaties
BRICS– Brazil, Russia, India, China and South Africa
CFR – Council on Foreign Relations
CRA – Contingent Reserve Agreement
CSCE – Conference on Security and Co-operation in Europe
CSIS – Center for Strategic and International Studies
DSU – Dispute Settlement Understanding
EU – European Union
GATS – General Agreement on Trade in Services
GATT – General Agreement on Tariffs and Trade
GSP – Generalized System of Preferences
IBRD – International Bank for Reconstruction and Development
IMF – International Monetary Fund
ITO – International Trade Organization
LDCs – Least Developed Countries
MAI – Multilateral Agreement on Investment
MFN – Most-Favoured Nation
NAC – North Atlantic Council
NACC – North Atlantic Cooperation Council
NAFTA – North American Free Trade Agreement
NATO – North Atlantic Treaty Organization
NDB – New Development Bank
NPT – Nuclear Non-Proliferation Treaty
NSC – National Security Council
OECD – Organisation for Economic Co-operation and Development
OEEC – Organisation for European Economic Co-operation
PfP – Partnership for Peace
PNAC – Project for the New American Century
PPI – Progressive Policy Institute
PPNS – Princeton Project on National Security
RTAA – Reciprocal Trade Agreement Act
SACEUR – Supreme Allied Commander Europe
SDRs – Special Drawing Rights
TPP – Trans-Pacific Partnership
TRIMs – Trade Related Investment Measures
TRIP – Teaching, Research and International Policy
TRIPS – Trade-Related Aspects of Intellectual Property Rights
TTIP – Transatlantic Trade and Investment Partnership
UK – United Kingdom of Great Britain and Northern Ireland
UN – United Nations
UNPROFOR – United Nations Protection Force
US – United States of America
USSR – Union of Soviet Socialist Republics
WTO – World Trade Organization
1. Introduction

This thesis is a product of years of fascination with United States (US) history, politics and
foreign policy, as well as an almost equivalent frustration with simplistic and naïve liberal
accounts of the US role in the world, its impacts in other countries and institutions, and its
political implications, domestic and foreign. Nonetheless, this thesis is not an attempt to
provide an innovative explanation of US foreign policy, or to reveal its supposedly ‘real’
interests, or even to dispute US actions in various key episodes. What is presented here is a
critical examination of a body of literature known as Liberal International Relations (IR), its
conceptualisations of the international order, and its interpretation of US foreign policy. In
this sense, the thesis aims to contribute to the debates on International Relations and US
foreign policy by critically assessing an important academic paradigm. 1

Liberal IR gained strength as an academic approach in the early 1980s, followed by an

overarching theoretical systematisation by Andrew Moravcsik in the 1990s. Subsequent
sections of this Introduction and Chapter 2 will deal with the substance of Liberal IR, but it
might be useful to identify its leading authors, namely Daniel Deudney, Michael Doyle,
Robert Putnam and Anne-Marie Slaughter. Regarding US foreign policy and the international
order, the main figure from the liberal school is G. John Ikenberry, and this thesis directly
addresses his work. Many characteristics bring these authors together, regarding theory,
method and ideology, and these will be looked at in due course. But what makes their work an
object of study for this research is that most of it makes use of historical accounts of US
foreign policy, particularly related to the creation of international institutions after World War
II, to construct generalisations about the role of institutions in world politics and the
characteristics of a liberal international order. 2

In turn, I argue that liberal accounts are theoretically and empirically flawed. On the
theoretical side, Liberal IR underestimates the role of power in international politics,
particularly in institutional settings. On the empirical side, the use of the historical record is
biased and superficial. Generalisations are made about bargains between strong and weak
1
Following the standard notation in the field, references to International Relations (IR) as an academic discipline
are capitalised and references to international relations as its object of study are not.
2
There are many forms of liberalism in thinking about international politics, not all of them confined to the IR
discipline. Regarding IR theoretical approaches, Institutionalism, some strands of the English School and of
Constructivism are worth mentioning. My research addresses almost exclusively Liberal IR, as described and
explained here. In this sense, unless specifically noted, references to ‘liberal accounts’, ‘liberal authors’, and as
such, indicate Liberal IR accounts, authors, concepts, etc.
 12

states, about restraints on US power by institutions, and about the benefits of institutions to
weaker states that do not have historical grounding. Chapters 3, 4 and 5 discuss liberal
interpretations of the role of US foreign policy in the creation of such major international
institutions as the IMF, GATT/WTO and NATO, as well as liberal accounts of the
contemporary impacts of such institutions.

Lastly, the focus on Liberal IR comes from the fact that its approach is influential in academia
and policy circles. Chapter 6 discusses the relationship between academia and the
policymaking community, the flux of ideas and the so-called revolving door between
government, think tanks and universities in the US. As a cautionary note, this thesis does not
attempt to trace the influence of liberal academics over government and public opinion, and
therefore cannot state if this does not happen the other way around: viz., if it is not the
policymaking community and public opinion that influence liberal academics. Even not
having confirmed the direction of this influence, however, this research presents evidence of
the strength of liberal discourse both inside and outside academia, which in itself makes it a
subject worth studying.

In sum, the thesis presents a critical analysis of Liberal IR and its interpretations of US
foreign policy and international institutions, on both theoretical and empirical grounds, using
historical and contemporary materials. As such, it provides a critical analysis of the role and
impacts of US foreign policy and international institutions, contributing to academic debates
in IR and, possibly, in the public sphere. The remaining sections of this Introduction explore
in detail why such a critical analysis of Liberal IR is needed and how it is structured.
 13

1.1. International order and institutions

Although Liberal IR is a wide theoretical approach, this research is focused on the intersection
of liberal analysis and US foreign policy studies. These topics are particularly intertwined in
how Liberal IR conceives international institutions and the notion of liberal order that follows
from it. The two concepts, liberal institutions and liberal order, derive from generalised
historical accounts of US foreign policy which underestimate power relations in institutional
settings and overestimate liberal institutional dynamics.

The idea of order has always been a fundamental topic in IR. Scholars provide different
definitions of the concept, create typologies of its component parts and institutions, and apply
these frameworks to explain the history of international relations and contemporary world
politics. 3 Although there are differences regarding the meaning of the concept, it is fair to say
that international orders vary depending on two factors: their units and the institutions which
mediate the relations between them. In most mainstream IR approaches, national states are
taken as units. Different types of institutions mean that relations between units (states) will be
conducted in different ways according to specific conditions and historical periods (say under
colonialism or under sovereignty and self-determination). In turn, these interactions create
different types of international orders with their own particular characteristics. It can also be
generally said that great powers play a large role over how international orders and their
institutions are created, and how and under which conditions they might change.

Thus, when addressing the international order and its institutions in the twentieth century, the
role of US foreign policy is paramount. For three times in the past century, the US has been
involved in shaping the contours of the international system: from 1919, after World War I;
from 1945, after World War II; and from 1989, after the end of the Cold War. Scholars of the
Liberal IR paradigm developed influential interpretations for these latter two events in
particular. These accounts promote specific understandings of the role the US played in
setting up international institutions, of its interests and of the impact US foreign policy had on
its allies, other countries and the institutions themselves. Liberal IR also promotes a specific
account of the role of international institutions in the system. Nevertheless, as argued

3
Robert Gilpin, War and Change in World Politics (1981); T. V. Paul and John A. Hall, eds., International
Order and the Future of World Politics (1999); Hedley Bull, The Anarchical Society: A Study of Order in World
Politics, 3rd edition (2002); Barry Buzan, From International to World Society? English School Theory and the
Social Structure of Globalization (2004); Andrew Hurrell, On Global Order: Power, Values, and the
Constitution of International Society (2008).
 14

throughout this thesis, liberal interpretations of US foreign policy and international

institutions are not sound. Due to the significance of its topics and the high-profile of Liberal
IR supporters, its inconsistencies have important implications inside and outside of the
discipline.

1.2. Liberal IR

Studies developed under a Liberal IR approach come in all shapes and sizes. The core
characteristic of Liberal IR, which differentiates it from other theoretical approaches, is the
premise that international politics is made at the most basic level by individuals and private
groups. 4 This ‘bottom-up’ view of politics, according to Moravcsik, is what makes it liberal:
the idea that state-society relations are defined by the interests and demands of individuals
and private actors, which then form state preferences. 5 Differing from other competing
theories, states do not have interests in Liberal IR; they have preferences, which emerge from
the interaction and disputes of domestic groups. In this sense, ‘the state is not an actor but a
representative institution constantly subject to capture and recapture, construction and
reconstruction by coalitions of social actors.’ 6 The state, in turn, interacts with other states in
the world arena, each one with its set of preferences reflecting its societies’ interests.
International politics are the result of these interactions, mediated by the capacity of states to
pursue their preferences and by the rigidity or flexibility of such preferences regarding
domestic societies. Cooperation and conflict in international politics would not be defined by
the distribution of capabilities, as structural realism predicts, or by the distribution of
information, as institutionalism predicts, but by the distribution of preferences. As such,
Liberal IR implies that domestic actors and domestic political structures are highly influential
in international relations.

A large group of IR scholars subscribes to these views, including the aforementioned

Deudney, Doyle, Ikenberry, Putnam and Slaughter. 7 Reviewing the accomplishments of

4
As he sets up the Liberal IR theoretical framework, one of Moravcsik’s goals is to assert its distinctiveness
from other approaches, such as Structural Realism, Institutionalism and Constructivism.
5
Andrew Moravcsik, 'Taking Preferences Seriously: A Liberal Theory of International Politics' (1997), p. 516-
17.
6
Ibid., 518.
7
Michael Doyle, 'Kant, Liberal Legacies, and Foreign Affairs' (1983); Peter B. Evans, Harold K. Jacobson and
Robert D. Putnam, eds., Double-Edged Diplomacy: International Bargaining and Domestic Politics (1983);
Daniel Deudney and G. John Ikenberry, 'The nature and sources of liberal international order' (1999); G. John
Ikenberry, After Victory: Institutions, Strategic Restraint, and the Rebuilding of Order After Major Wars (2001);
 15

Liberal IR in various fields, Moravcsik writes that these include preference-based

explanations of state-society relations as shaped:

by domestic institutions (for example, the "democratic peace"), by economic

interdependence (for example, endogenous tariff theory), and by ideas about national,
political, and socioeconomic public goods provision (for example, theories about the
relationship between nationalism and conflict). 8

Liberal IR theory aims to be ‘a nonideological and nonutopian form appropriate to empirical

social science.’ 9 Nevertheless, as conceived above, Liberal IR is an academic practice largely
specific to the US. Liberal influences are certainly present in works of English School and
constructivist authors, but they differ substantially on theoretical and methodological
grounds. 10 In fact, reflecting on the emergence of Liberal IR, David Long once named it ‘The
Harvard School of Liberal International Theory’. 11 Another applicable name would be
‘Princeton School’, as some of its major exponents like Ikenberry, Moravcsik and Slaughter
have subsequently moved to Princeton University.

Anne-Marie Slaughter, A New World Order (2004); Daniel Deudney, Bounding Power: Republican Security
Theory from the Polis to the Global Village (2007).
8
Moravcsik, 1997, p. 514.
9
Ibid., 513.
10
Differences over methodology have plagued the discipline at least since the so-called Second Great Debate.
See: Hedley Bull, 'International Theory: The Case for a Classical Approach' (1966); Morton A. Kaplan, 'The
New Great Debate: Traditionalism vs. Science in International Relations' (1966). As conceived by Moravcsik,
Liberal IR is a scientific, non-ideological and non-utopian endeavour, adhering to positivist epistemology and
empirical methods, both quantitative and qualitative. Moravcsik, 1997. Being mainly a US-based approach, this
is coherent with findings of recent surveys of the discipline, confirming ‘there is a deep division between
American scholars, the vast majority (65 percent) of whom are self-described positivists, and scholars in the
United Kingdom, Canada, Australia, New Zealand, and South Africa, where majorities report that they are either
not positivist or post-positivist.’ Richard Jordan et al., 'One Discipline or Many? TRIP Survey of International
Relations Faculty in Ten Countries', (2009), p. 7. In addition to addressing empirical evidence, English School,
constructivist and other approaches make use of methods that take into account the role of ideas, discourse, and
other elements of international politics.
11
David Long, 'The Harvard School of Liberal International Theory: A Case for Closure' (1995). For early
articulations of Liberal IR Theory, see: Robert O. Keohane, 'International Liberalism Reconsidered' (1990);
Andrew Moravcsik, 'Liberalism and International Relations Theory', (1992); Daniel Deudney and G. John
Ikenberry, 'Structural Liberalism: The Nature and Sources of Western Political Order', (1995); Michael Doyle,
'Liberalism and World Politics' (1995); Mark Zacher and Richard Matthews, 'Liberal International Theory:
Common Threads, Divergent Strands' (1995).
 16

1.3. US foreign policy, institutions and liberal order

Within Liberal IR, the influential work of Ikenberry is the most complete articulation of the
idea of a liberal international order and how the US created, managed and expanded
international institutions. 12 As will be fully explored in Chapter 2, Ikenberry promotes an
interpretation of the international order that emerged after World War II based on binding
institutional arrangements. Faced with a favourable relative power position, the US chose to
shape the contours of the international system by building institutions based on a
constitutional bargain. The US would accept restraints on the use of its power and, in return,
other states would agree to join multilateral institutions and abide by their rules and norms. As
the leading nation, the US designed most of the rules and norms of the new institutions to
guard and project its power position into the future. Moreover, by restraining the use of power
and gaining the acquiescence of other states, the US promoted a more stable and predictable
international order, which could be less costly managed. Other states would have an incentive
to join the order, since binding institutions would serve as a guarantee against domination or
abandonment. This constitutional bargain, concluded within post-war international
institutions, would benefit all.

Examples of this liberal order could be found in the institutions that regulate the international
monetary and financial regimes (IMF), an open free trade regime during the Cold War
(GATT), and collective security in the North Atlantic area (NATO). Ikenberry also recognises
the geographical limits of the liberal order. On a world scale, between 1945 and 1989, the
international system was characterised by a bipolar balance of power order; it was only
towards North America, Western Europe and Japan that the idea of liberal order would apply.
After the end of the Cold War, the US found itself in an unrestrained power position. It then
set out to apply this successful strategy on a global scale and to expand the institutions of the
liberal order.

The enlargement of multilateral organizations such as the IMF and NATO, as well as the
creation of the WTO, would be instances of the liberal strategy of ruling through institutions.
Not only did these regimes grow in number of member states, but the scope of their activities
also improved. The IMF managed transitions in former Soviet states and the various

12
Ikenberry, 2001; G. John Ikenberry, 'Liberal Internationalism 3.0: America and the Dilemmas of Liberal
World Order' (2009); G. John Ikenberry, Liberal Leviathan: The Origins, Crisis, and Transformation of the
American World Order (2012).
 17

economic crises of the 1990s and 2000s; NATO led efforts of modernisation of the military
forces of its prospective members and started out-of-area operations in Bosnia, Kosovo,
Afghanistan and most recently in Libya; the WTO expanded its membership significantly,
and extended the rules and norms of international commerce to cover trade in textiles,
agriculture, services and intellectual property, crowned with a highly institutionalised and
effective dispute settlement mechanism. The liberal order and its institutions would mutually
benefit parties, creating stability and predictability in international politics.

Ikenberry’s work articulates an ultimately apolitical interpretation of a benign international

order and a self-restrained US foreign policy, which I argue is theoretically and historically
flawed. His concept of a constitutional, liberal bargain established within institutions does not
take into account that states might join international arrangements because of other incentives
and pressures rather than mutual benefits and self-restraint by the hegemonic power. On the
one hand, weak states might be coerced to join in. Power can also be exercised in more subtle
ways. As Lloyd Gruber shows, when powerful states remove the status quo from ongoing
negotiations, weaker states can be forced to join new arrangements even if they will be worse
off than they are in their current situation, which became non-existent, faced with an even
worse situation of being left out of the regime. 13

On the other hand, there is the question of multilateralism in international institutions. 14 John
Ruggie provides the classic differentiation. Nominal or formal multilateralism is ‘the practice
of coordinating policies in groups of three or more states.’ 15 Qualitative, or substantive
multilateralism

is an institutional form that coordinates relations among three or more states on the
basis of generalized principles of conduct: that is, principles which specify appropriate
conduct for a class of actions, without regard to particular interests of the parties or
strategic exigencies that may exist in any specific occurrence. 16

In international trade, qualitative multilateralism refers to a system organized around the

principle of non-discrimination; in security issues, qualitative multilateralism is associated

13
Lloyd Gruber, Ruling the World: Power Politics and the Rise of Supranational Institutions (2000).
14
John Gerard Ruggie, ed., Multilateralism Matters: The Theory and Praxis of an Institutional Form (1993).
15
Robert O. Keohane, 'Multilateralism: An Agenda for Research' (1990), p. 731.
16
John Gerard Ruggie, 'Multilateralism: The Anatomy of an Institution' (1993), p. 11. James Miller provides a
more sophisticated typology of multilateralism differentiated between procedural, principled, instrumental, and
coercive. James N. Miller, 'Origins of the GATT - British Resistance to American Multilateralism', (2000).
 18

with collective security and collective self-defence. 17 Ruggie recognizes the links between
these principles of contemporary multilateralism, US foreign policy, and the establishment of
international institutions after World War II, as does Ikenberry. In this sense, qualitative or
substantive multilateralism is, in its contemporary version, liberal multilateralism.

Nevertheless, the liberal principles embedded into multilateral institutions were not entirely
shared by all of its members. In other words, countries commonly accepted formal
multilateralism without completely agreeing to the liberal version of substantive
multilateralism promoted by the US. The ideas of a liberal bargain and liberal institutions hide
these differences, which are well-documented in the historical record and, in fact, continue to
create disputes in contemporary regimes such as finance, trade and security. These
implications will be fully explored in the later chapters.

Ikenberry’s liberal model assumes that institutional arrangements were created through liberal
bargaining and are mutually beneficial. I argue that this derives from selective use of the
historical evidence from the post-World War II period, which is even more acute in the post-
Cold War period. Liberal generalisations hide power relations, particularly in institutional
settings, turning institutions and order into apolitical and ahistorical concepts. Liberal IR's
supposedly neutral framework hides entrenched political assumptions. As a result, so-called
scientific analyses account only for a limited amount of variances and explanations, those
shared by liberals themselves. In their theoretical parsimony, the importance of historical
contexts is lost, and the many illiberal processes that culminated in the triumph of liberal
ideas are ignored.

17
Ruggie, 1993, p. 7.
 19

1.4. The role of history

Interpretations of the historical record have an important role in the concept of liberal order
and, likewise, have an important role in the critical examination performed here. A
fundamental element in Liberal IR is the positive, almost benign, view of the character of the
international institutions. 18 Liberal narratives do little to explore the possibility that
institutions might have a negative impact, such as reproducing power disparities and
exploitation, strengthening disproportional distributions of gains, or promoting and enforcing
norms that benefit some more than others. This generally positive perception of the role of
institutions pervades the field. With the obvious exception of realism, Andrew Hurrell relates
this problem to the neglect of the role of power within the writings ‘that dominated so much
academic thinking within international relations in the 1990s and that continue to underpin
much of the debate on global governance.’

Within this literature we find sophisticated accounts of how institutions emerge and
how they function; we learn a great deal about processes of norm diffusion,
socialization, and internalization; and we find illuminating accounts of the strategic
choices of liberal hegemons and of how these choices may work to reinforce
institutionalization. However, instead of being all-dominant, as on a neorealist
reading, power recedes so far into the background that we are left with a strikingly
apolitical and far too cosy a view of institutions and of global governance – especially
when viewed from the perspective of weaker states (indeed perhaps from anywhere
outside the United States). 19

Regarding Liberal IR, this overt neglect of the role of power relations is caused by a selective
use of the historical record and theoretical generalisations which claim universal validity, not
taking into account their own bias and historicism. This relates to the role of history in IR
more generally.

Past events and historical analogies are an essential part of how individuals make sense of the
world. 20 Renowned historians like Richard Neustadt and Ernest May spent good parts of their
careers promoting the good use of history in informing decision makers and public policy. 21
But when it comes to International History and IR, the disciplines have differences in how

18
Constructivists as well tend to focus on institutions’ role in the diffusion of international norms within the
system. Martha Finnemore and Kathryn Sikkink, 'International Norm Dynamics and Political Change' (1998). It
is worth noting that for most realists institutions have no independent effect in international politics: John J.
Mearsheimer, 'The False Promise of International Institutions' (1994).
19
Andrew Hurrell, 'Power, institutions, and the production of inequality' (2005), p. 33.
20
Markus Kornprobst, 'Comparing Apples and Oranges? Leading and Misleading Uses of Historical Analogies'
(2007).
21
Richard E. Neustadt and Ernest R. May, Thinking in Time: The Uses of History for Decision-Makers (1988).
 20

they deal with the past. This is not to say that IR scholars do not make use of history or that
historical accounts lack analysis and conceptual models. 22 International history research
‘simply looked and read differently’ than IR. Causal arguments in historical research are more
often than not embedded into narratives and linked to specific contexts; they are ‘far less
likely to float freely to other historical contexts.’ 23 Mainstream IR scholarship, in contrast,
usually boxes historical research into case study chapters preceded and followed by
theoretical introductions and generalisations that, once borne out by history, could be applied
elsewhere.

This instrumental use of history ends up turning the study of international politics into a
highly ahistorical – and inherently apolitical – activity. John Hobson argues that structural
realism assumes ‘that history is repetitive such that nothing ever changes because of the
timeless presence of anarchy’, while hegemonic stability theory sees history as ‘repetitive and
isomorphic “great power/hegemonic” cycles, each phase is essentially identical, with the only
difference being which great power is rising or declining’. 24 Liberal IR suffers from the same
malaise: it practises a form of history without historicism, that is, ignoring facts and events
that have historical origins and have developed through specific concepts, practices, norms
and values. 25

History without historicism is one of the four types of uses of history in IR that Hobson and
George Lawson identify. 26 This approach entails the highest level of macro analysis and
generality. History without historicism attempts to establish ‘general/universalist propositions
that can be applied across time and place’ and construct ‘a grand narrative that has universal
application.’ It potentially provides a ‘rich stream of data’ and ‘test cases for deductively
derived hypotheses’ which should conform to ‘strict social scientific criteria.’ 27 Such is the
historical approach of the Liberal IR scientific project.

Ironically, Liberal IR and other US ahistorical approaches to social sciences draw support
from mainstream interpretations of US history. Stanley Hoffmann relates this faith in science
22
See, as examples from each discipline, Robert Jervis, 'International History and International Politics: Why
Are They Studied Differently?' (2001); Paul W. Schroeder, 'International History: Why Historians Do It
Differently than Political Scientists' (2001).
23
Colin Elman and Miriam Fendius Elman, 'The Role of History in International Relations' (2008), p. 358.
24
John M. Hobson, 'What’s at Stake in “Bringing Historical Sociology back into International Relations”?
Transcending “Chronofetishism” and “Tempocentrism” in International Relations' (2002), p. 9.
25
John M. Hobson and George Lawson, 'What is History in International Relations?' (2008).
26
Ibid., 420-30. The other three models are historicist historical sociology; traditional history; and radical
historicism. The authors favour a historical sociology approach in their own work, as does this thesis.
27
Ibid., 422-23.
 21

and the conviction that all can be resolved through appropriate scientific methods – an ethos
of ‘Applied Enlightenment’ – to the US history of political, economic and social
development. 28 It is remarkable that a society which fought a Civil War mainly over slavery,
and experienced a powerful civil rights movement one-hundred years after that, can conceive
a collective grand narrative that emphasises consensus, progress and development. 29
Nevertheless, that is precisely what the idea of US exceptionalism does, smoothing social
conflict and contradictions in favour of a common narrative. 30 Ole Waever, reflecting on the
same subject, states that

The millennial belief in American exceptionalism exempted the United States from
qualitative change, and the historicist threat to this ideology was kept at bay with the
assistance of a naturalistic social science containing change within the categories of
progress, law, and reason. This historical consciousness adapted and survived dramatic
challenges and thus sustained – very differently from Europe with its historicist
consciousness – a more abstract and “scientific” social science, divorced from
history. 31

Testing hypotheses is a worthy endeavour. Nevertheless, if history is approached simply as an

instrument to test hypothesis and prove generalisable theories, the end result will be a
tendency to reproduce the status-quo. 32 This is the contemporary equivalent of what Herbert
Butterfield called Whig history, a tendency to ‘study the past for the sake of the present’. In
seeing history through contemporary lenses, scholars impose form and purpose on history,
producing ‘a scheme of general history which is bound to converge beautifully upon the
present’. 33 In the process of organizing and abridging, of providing for parsimony – a
common practice in contemporary social sciences – scholars commit this ‘fallacy’, this
‘unexamined habit of mind’, of interpreting the past with the eyes of the present. Over-
simplification serves as a shortcut through reality’s complexity. It selects what is important
from the past and what questions should be asked, that is, what is really relevant for ‘our point
of view.’ It dangerously ‘impute(s) lessons to history which history has never taught and

28
Stanley Hoffmann, 'An American Social Science: International Relations' (1977), p. 45.
29
The history of black people in the US amounts to one of various contradictions in the grand narrative of
exceptionalism: Native Americans, immigrants and women are other clear examples. See: Rogers M. Smith, 'The
"American Creed" and American Identity: The Limits of Liberal Citizenship in the United States' (1988); Rogers
M. Smith, 'Beyond Tocqueville, Myrdal, and Hartz: The Multiple Traditions in America' (1993).
30
Louis Hartz, The Liberal Tradition in America: An Interpretation of American Political Thought since the
Revolution (1955); Seymour Lipset, American Exceptionalism: A Double-Edged Sword (1996). See also
Slaughter’s liberal exceptionalism in: Anne-Marie Slaughter, The Idea That Is America: Keeping Faith With Our
Values in a Dangerous World (2008).
31
Ole Waever, 'The Sociology of a Not So International Discipline: American and European Developments in
International Relations' (1998), p. 712.
32
Christian Reus-Smit, 'Reading History through Constructivist Eyes' (2008), p. 395.
33
Herbert Butterfield, The Whig Interpretation of History (1965), p. 12.
 22

historical research has never discovered – lessons which are really inferences from the
particular organization that we have given to our knowledge.’ 34 As subsequent chapters show,
such generalised interpretations of historical evidence are abundantly present in Liberal IR.

As with Whig history, Liberal IR is a product of its time. It flourished during the 1990s,
establishing itself as one of the central paradigms in IR. 35 With the end of the Cold War and
the predominance of liberal ideas in policy and academic circles, scholars working on
international cooperation and the democratic peace thesis seemed vindicated. 36 The liberal
character of these works is manifested in their topics, but also in the basic causal assumptions
they shared, such as the rationality of actors and their self-interested behaviour. 37 Liberal
approaches presume an ideal set of principles for the organization of international life and
cost-benefit maximizing behaviour from its actors, culminating in a code of international best-
practices. In the post-Cold War world, these ideals were summed up in liberal democratic
regimes and market economies. Deliberately or not, liberal analyses celebrate these values.
Moreover, these particularistic theories claim universal validity and applicability for their
findings. As they fail to capture the full scope of diversity in global politics, they end up
promoting explanations and policy recommendations that, far from being neutral and
scientific, are highly politicised and promote reproduction of the liberal world they describe.

With these points in mind, the role of history in my own research is not to provide a ground-
breaking account of US foreign policy or the creation of international institutions. The use of
the historical record is applied here to provide an alternative and critical reading of the same
events described by Liberal IR. From the plethora of archival records and historical works
devoted to World War II and its aftermath, liberal approaches to US foreign policy and
international institutions developed a rather simplified and biased interpretation. The
establishment of the IMF, GATT and NATO was deeply entrenched within the policies and
processes of World War II settlement and the beginning of the Cold War. Nevertheless, when
addressing the historical record, liberal interpretations often underestimate the influence of
power politics and the bitter disputes among founding members. A careful examination of the
policy planning processes and diplomatic negotiations, in both post-World War II and post-

34
Ibid., 22.
35
I refer here to mainstream International Relations as practised in the US. Still, we should note the existence of
a large and fertile body of post-positivist International Relations literature that challenges liberal concepts and
the definition of the discipline itself.
36
Doyle, 1983; Robert O. Keohane, After Hegemony: Cooperation and Discord in the World Political Economy
(1984).
37
Long, 1995; Moravcsik, 1997.
 23

Cold War settings, reveals the deeply entrenched power relations within the international
order.

At times, it might seem that subsequent chapters are simply summarising a standard,
mainstream historical account of the post-World War II period. The point, however, is that
these well-known narratives are superficially used by Liberal IR to build biased and
generalised theories about the role of institutions, US foreign policy and a liberal international
order. The fact that my research utilises well-known historical works makes the discrepancies
in Liberal IR even more acute. Conversely, this thesis is framed as an internal critique of the
liberal order model. It challenges liberal assumptions on theoretical and empirical grounds,
making use of the same structure and cases which liberals use to support their thesis.

1.5. Why Liberal IR?

As mentioned at the outset, this thesis was born out of a fascination with US history and
foreign policy, and frustration with some of its oversimplified accounts. Yet there are other
factors which make Liberal IR and the concept of liberal order worth engaging with. These
elements relate to the place of Liberal IR in the discipline; the role of liberal authors as public
intellectuals; and how liberalism relates to other influences in US foreign policy debates.

In the same manner that Liberal IR is characteristically a US practice, IR has been

traditionally considered a US-dominated discipline. 38 Even with the growth of the field
outside the US in the past decades, the picture is changing but slowly. The Teaching,
Research and International Policy (TRIP) project, the most comprehensive survey of IR
discipline and scholars, points out that there ‘are signs that the field of IR may fall short of
being a truly global discipline.’ 39 If ‘influence’ means having the most resources, the richest
universities and private foundation, the most authors in top ranked journals, and the top places
in higher education league tables, then the US impact is undeniable. 40 Out of the twelve top
journals in the TRIP’s index, nine are edited by US scholars and institutions. 41 And within US
academia, which produces the majority of IR literature, liberalism thrives. In fact, one of the
surprising findings of the TRIP researchers is that, contrary to conventional wisdom, realism
38
Hoffmann, 1977; Waever, 1998; Steve Smith, 'The discipline of international relations: still an American
social science?' (2000); Steve Smith, 'The United States and the Discipline of International Relations:
“Hegemonic Country, Hegemonic Discipline”' (2002).
39
Jordan et al., 2009, p. 7.
40
Ibid.
41
Daniel Maliniak et al., 'International Relations in the US Academy' (2011), p. 441.
 24

has not been the dominant paradigm in the field for decades. An index of published work in
top journals revealed the ‘prominence of liberalism throughout the time series.’ In the 1980s,
realism was ‘a distant second’ to liberalism; later, realist publications ‘peaked at 15% in the
mid-1990s, still a full nine points behind liberalism.’ 42 Nowadays, about 20% of scholars in
the US describe their approach as liberal, 20% constructivist and 16% realist. 43

Moreover, besides their strength and presence in academia, liberal authors working with US
foreign policy engage extensively with the world of practice. They have published widely,
individually and in collaboration with others, and have been constant voices in public
debates. 44 Outside the universities, liberal interpretations of US foreign policy and
international institutions are strongly present in policymaking and public discourse. 45 US
administrations have often been characterised as a revolving door between the public and
private sectors. The same applies to foreign policymaking circles and the think tank/academic
community. 46 Scholars on US foreign policy are often public intellectuals, publishing in
policy-oriented journals like Foreign Affairs and Foreign Policy. They take part in events,
projects and publications promoted by a large community of foreign policy think tanks
including, but not restricted to, the Council on Foreign Relations; the Brookings Institution;
the Carnegie Endowment for International Peace; the Center for Strategic and International
Studies; and the Woodrow Wilson International Center for Scholars. This foreign policy
community also has strong transatlantic links, as demonstrated by constant collaborations
with European institutions like Chatham House, the International Crisis Group, the Stockholm
International Peace Research Institute, and others. 47

Ikenberry, for instance, has taken part in different projects at the Council on Foreign Relations
and held various fellowships, including passages at the Carnegie Endowment for International
Peace, the Woodrow Wilson International Center for Scholars, and the Brookings Institution.

42
Ibid., 445, 47-48.
43
Daniel Maliniak, Susan Peterson and Michael J. Tierney, 'TRIP around the world: Teaching, research, and
policy views of international relations faculty in 20 countries', (2012), p. 27.
44
G. John Ikenberry and Charles A. Kupchan, 'Socialization and Hegemonic Power' (1990); Robert O. Keohane
and Judith Goldstein, eds., Ideas and Foreign Policy: Beliefs, Institutions, and Political Change (1993);
Deudney and Ikenberry, 1995; Deudney and Ikenberry, 1999; Judith Goldstein et al., eds., Legalization and
World Politics (2001); G. John Ikenberry et al., eds., The Crisis of American Foreign Policy: Wilsonianism in
the Twenty-first Century (2008).
45
Although, as mentioned above, this thesis does not address directly the issue of whether academia influences
policy or the other way around.
46
Hoffmann, 1977; Nicolas Guilhot, ed., The Invention of International Relations Theory: Realism, the
Rockefeller Foundation, and the 1954 Conference on Theory (2011); Inderjeet Parmar, Foundations of the
American Century: The Ford, Carnegie, and Rockefeller Foundations and the Rise of American Power (2012).
47
Inderjeet Parmar, Think tanks and power in foreign policy: a comparative study of the role and influence of the
Council on Foreign Relations and the Royal Institute of International Affairs, 1939-1945 (2004).
 25

He also worked at the State Department on the Policy Planning Staff as a CFR Fellow during
1991-92, and later as part of an Advisory Group from April 2004 to January 2005. Slaughter
is another prominent example. After serving as president of the American Society of
International Law from 2002 to 2004, and as dean of Princeton’s Woodrow Wilson School of
Public and International Affairs from 2002-2009, she became the first woman to be named
Director of Policy Planning for the State Department. Slaughter held the post for the first two
years of the Obama presidency, and after leaving government she became President and CEO
of the New America Foundation, a public policy institute, in September 2013.

During the George W. Bush years of neoconservative predominance, liberal authors were
some of its most outspoken critics. 48 Even before the US invasion of Iraq, Ikenberry had
already warned against the counterproductive effects of unilateralist foreign policy. 49 In 2004,
Slaughter and Ikenberry were co-directors of the Princeton Project on National Security, ‘a
multi-year, bipartisan initiative to develop a sustainable and effective national security
strategy for the United States of America.’ The project brought together more than 400
individuals from government, academia, business and non-profit sectors in a series of
meetings and working groups. Its final report was published in September 2006 and it was
framed as an alternative proposal for the National Security Strategy of the US. 50 The title,
‘Forging a World of Liberty Under Law’, epitomises the key liberal assumptions about US
foreign policy and international institutions.

Liberal interpretations of US foreign policy, and of a benign liberal international order

populated with multilateral institutions under its leadership, are regularly echoed in
diplomatic and policy circles. References to the US as a ‘benign hegemon’ or as the
‘indispensable nation’ have often been heard, especially during the 1990s. 51 There is no doubt
that the regular transit of ideas and people between the government, academic, and think tank
communities enhances the impact of liberal concepts.

48
Ikenberry et al., eds., 2008. It needs to be noted, however, that realist authors provided more constant and
coherent criticisms of neoconservative foreign policy. See, for example: Christopher Layne, 'The Right Peace:
Conservatives against a war with Iraq', LA Weekly, October 23 2002; John J. Mearsheimer and Stephen M. Walt,
'An Unnecessary War' (2003).
49
G. John Ikenberry, 'America's Imperial Ambition: The Lures Of Preemption' (2002).
50
G. John Ikenberry and Anne-Marie Slaughter, 'Forging a World of Liberty Under Law: U.S. National Security
in the 21st Century', (2006).
51
US public opinion also shows a relative sympathy for liberal internationalism. See: Steven Kull and I. M.
Destler, Misreading the Public: The Myth of a New Isolationism (1999).
 26

Nonetheless, the same dynamic applies to other foreign policy approaches, such as the realist
or neoconservative positions. One then has to address the question of why we need to focus
on liberals rather than on other authors and approaches which have recently influenced in US
foreign policy. Once again, this relates to the role of power and institutions in liberal thinking.
The main criticism made of liberal order is that it distorts the historical record and hides
power relations within institutional settings. One might disagree with realist or
neoconservative analysis and with their prescriptions for US foreign policy, but the one thing
they do not do is to hide power relations or their views of international institutions as vehicles
for the advancement of US interests. For realists, power is the main currency in international
politics and international institutions do not have independent effects on states’ behaviours.
For neoconservatives, unipolarity is the main basis of US foreign policy and international
institutions should be ignored whenever they oppose US interests. It is only liberal analysis
which conceives of institutions both as effective restraints on US power and as Pareto
improving mechanisms. Liberals might be right that institutions can have independent and
positive effects in world politics in specific cases. However, the concept of liberal order goes
too far in generalising the view that institutions provide collective benefits and act as
mechanisms of restraint regarding the indiscriminate use of power by the US.

As such, this thesis takes Liberal IR, its conceptualisations of the international order,
institutions, and its interpretation of US foreign policy as its object of study, aiming to
contribute to academic and policy debates by critically addressing the paradigm and its
prescriptions.
 27

1.6. Research design

Many authors have developed sophisticated works about the foundations of the international
order and the fundamental, encompassing characteristics of the relations between states. 52
This research is much more circumscribed; it does not attempt to reveal the essential nature of
the contemporary international order, only to speak to the concept of liberal order promoted
by Liberal IR authors, and its relation to US foreign policy. In order to offer this alternative
reading, it follows a similar structure to the one used to support liberal concepts in the first
place.

The strength of the liberal order concept rests in the idea that an open, stable and mutually
beneficial order was constructed by the US and its allies in the aftermath of World War II.
The historical events used to support this claim usually include attempts to regulate monetary
and financial issues after the war, which led to the creation of the IMF; attempts to promote
free trade, which led to the creation of the GATT; and a security commitment which led to the
creation of NATO. These efforts, liberals say, would come from a US willingness to accept
restraints in its policies, in order to lock in other states in institutions, rules and norms that
made the system more stable and preserved the US power position.

Ikenberry particularly focuses on the post-World War II period because, after major conflicts,
victorious powers find international institutions and the order itself in such a fluid state that
they have greater opportunities to shape its designs. 53 This is true for the settlements of 1815
and 1919, and even more acute for 1945 due to a convergence of factors: the utter destruction
caused by the war, the collapse of the institutions of the previous order, the essential role
played by the US in winning the war, and the enormous gaps in relative power. All these
factors allowed the US great leverage in promoting new institutions. Similarly, the end of the
Cold War precipitated another major realignment. As in 1945, the US enjoyed a preponderant
power position; but different from the previous period, international institutions were not
shattered and delegitimised. In this way, liberals argue, the institutions nurtured within the
Western bloc during the Cold War were able to be expanded in size and scope in the post-
Cold War period.

52
Buzan, 2004; Hurrell, 2008.
53
Ikenberry, 2001.
 28

The current research is organised along similar lines. Following a theoretical discussion of
Liberal IR and the liberal order model, I examine US foreign policy and the creation of the
IMF, GATT and NATO first in the post-World War II period, and second in relation to the
expansion and changes in these institutions in the post-Cold War period.

Besides mimicking the original structure of the liberal argument, there is a further reason to
focus on these two periods. World War II and its aftermath was a key transition point for US
foreign policy and world history in general. The seeds of contemporary international politics
lay fundamentally in this period: the general destruction in Europe and the downfall of its
empires, the decolonisation processes which spread throughout Africa and Asia in the
following decades, and the contours of bipolarity and the Cold War. At the same time, these
fundamental changes prompted a reaction in US politics and foreign policy, abandoning (not
without resistance) previous idealist and isolationist sentiments and forging a new foreign
policy for the coming decades.

Similarly, the end of the Cold War had a significant impact in world history and US foreign
policy. The collapse of the Soviet Union (USSR) not only made it possible for substantial
parts of the world to be integrated or reintegrated in social, political and economic networks,
but also challenged our collective knowledge about great powers and power transitions. The
fact that the USSR could dissolve without direct military confrontation defied previous ideas
about war and change in world politics. At the same time, it ushered in a decade of
globalisation and economic growth, while also reigniting domestic conflicts with social,
economic, ethnical and religious origins in the most diverse regions of the world. In the US,
the four decades of foreign policy consensus around the idea of containment collapsed, and
the country had to redefine its ends and means in this new environment.

The thesis focuses on these two key transition moments, following the structure of the liberal
argument, to provide an alternative reading of the relation between US foreign policy and
international institutions. This choice has the problem of discarding periods which are
relevant to the development and operation of international institutions and its relations to US
foreign policy unaccounted for. In their respective chapters, the development and workings of
IMF, GATT and NATO throughout the Cold War are addressed briefly. Even if not ideal, this
is due to size constraints as a full analysis of these institutions over almost 70 years would go
further than the scope of this research. As the aim is not to provide an alternative explanation
of US foreign policy, but to point out insufficiencies in one of its major interpretations, this
 29

expedient can be employed without damage. After all, the two periods in question – 1945-50
and 1989-2000s – were the moments when the impact of US foreign policy on the institutions
of the international order was most acute.

1.7. Chapterisation and sources

In addition to this Introduction and the Conclusion (i.e. Chapter 1 and 7), the research is
developed in other five main chapters. Chapters 2 and 6 are devoted to broader questions of
the Liberal IR paradigm and the relation between academia and policy issues, while Chapters
3 to 5 focus on historical analysis of US foreign policy and specific institutional
arrangements. In this way, Chapter 2 discusses Liberal IR theory as developed in the US,
making particular reference to the idea of IR as an ‘American social science’. 54 After
accounting for the genesis of Liberal IR, the chapter turns to an analysis of some of its main
authors and concepts. Sections focus specifically on Moravcsik, Slaughter and Ikenberry.

Moravcsik is the main voice in articulating Liberal IR as an academic paradigm. His

preference-based theory of international politics is analysed in detail before considering some
general criticisms, such as its ahistoricism, scientificism, underestimation of power relations
and bias towards Western/liberal concepts. 55 Slaughter is another major voice in Liberal IR,
particularly in studies of IR and International Law. Her vision of an upcoming ‘new world
order’ and of what relations between liberal and non-liberal states should be like is a mixture
of academic research and normative statements. 56 As would be expected, the criticism
applicable to Liberal IR in general is also applicable here, as argued through a review of
Slaughter’s academic work and her preferences in relation to US foreign policy and
international institutions. 57 Finally, Ikenberry is the main reference point for the concept of a
liberal order. His framework is analysed in order to bring forth its conceptual weaknesses and
the tendency towards a superficial use of history. Chapter 2 concludes by showing that Liberal
IR promotes an apolitical and generalised view of mutually benign institutions as efficient
ways to restrain US power. This sets forth the background to the analysis of the historical
record in the following chapters.

54
Hoffmann, 1977. ibid.
55
Long, 1995; Beate Jahn, 'Liberal internationalism: from ideology to empirical theory - and back again' (2009).
Long, 1995; Jahn, 2009.
56
Anne-Marie Slaughter, 'International Law in a World of Liberal States' (1995); Anne-Marie Slaughter, 'The
Real New World Order' (1997).
57
As a side note, Slaughter and Moravcsik have been married since 1993.
 30

Following the arguments and examples set forth by the liberal model itself, the three
subsequent chapters examine the IMF, GATT/WTO and NATO as corollaries of the liberal
model. In each chapter, institutions are first analysed in the context of the founding of these
organisations and the regimes they regulate. This analysis dates back to the 1940s,
encompassing the post-war planning that started during World War II. By studying in detail
the decision-making and negotiation processes of the period, one can have a better idea as to
whether a liberal bargain existed or was fundamental to the creation of post-war institutions.

Secondly, the three chapters survey the evolution of these regimes during the Cold War and
focus specifically on their changes after the end of bipolarity. Liberals suggest that, after the
end of the Cold War, the US was ready to tie itself to rules and norms and renounce the use of
its power, at the same time as other states would willingly join institutions looking for
material gains, stability and predictability. Undoubtedly, the three institutions in question
expanded significantly after the end of the Cold War. One of them, the GATT, was fully
reformed into a new organization, the WTO. Nevertheless, expansion alone does not prove
the liberal model right. In this sense, the chapters analyse the dynamics of these institutions in
the post-Cold War period addressing how and why expansion happened, if there were gains to
the states involved as a liberal bargain would predict, and what the US position was in these
processes.

The research and analysis of these two periods are necessarily based on different sets of
sources. For the 1940s period, there is a multitude of primary sources, archival records, oral
interviews and memoirs, as well as a large body of secondary literature from historians and IR
specialists. This thesis made extensive use of both the secondary literature and some primary
sources, particularly those held in US archives. For the contemporary period, however, the
same method of analysis is not feasible. Most of the archives contemplating the post-Cold
War period are still not available for research. Likewise, scholarly studies on the creation of
the WTO or the expansion of NATO do not compare in quantity and scope with their post-
World War II counterparts. The few good works that exist rely on personal experiences of the
authors, interviews with policymakers, memoirs and public documents or government
documents privately released to researchers. Accordingly, the current work utilises public
documents and statements, and the few memoirs and studies so far published, to articulate a
broader understanding of these institutions in the post-Cold War period. Additionally, it
 31

makes use of a series of academic studies addressing the relation between the US and each
institution and the impacts of the policies promoted by them.

The first historical case study, in Chapter 3, starts with an examination of US initiatives for
international finance and monetary matters, and the negotiations towards the creation of the
IMF and the IBRD. The so-called Bretton Woods institutions were conceived during the war
years, starting from the premise that instability and competition in world markets had been
partly responsible for the rise of nationalism and the disastrous conflict which broke out in
1939. When looked at in detail, the planning and negotiation of these institutions does not,
however, resemble the liberal bargain identified by liberal authors. Consensus between
international experts was achieved on broad principles, but on practical matters both the US
and British blueprints diverged significantly. In the end, the IMF was created clearly
favouring US preferred institutional design and policies. There is considerable evidence that
this outcome was born out of the exercise of US leverage and power, not from liberal
bargaining. The chapter also looks into the relation between the US and the IMF after the end
of the Cold War, as well as the policies of conditional lending practiced by the Fund. IMF
expansion was driven towards former Soviet republics who needed credit and help in
transitioning from state-planned to market economies. The chapter ends with empirical
measurements of the impact of the Fund’s policies in recipient countries, again pointing to the
clear bias of liberal interpretations.

Chapter 4 analyses the international trade regime. Originally, US planners envisioned the ITO
as the trade equivalent to the IMF and the IBRD. Commerce and tariffs, nevertheless, were
more sensitive than financial and monetary issues. US and British interests clashed as US
planners had the dismantling of the British Imperial Preference System as their main goal.
Throughout the negotiations, the British and the Dominions resisted, joined in the later stages
by Latin American and other countries concerned more with development and employment
provisions. Once again, there was no liberal bargain. The second half of Chapter 4 briefly
addresses the evolution of the trade regime in its successive rounds of negotiation, but looks
particularly to its Uruguay Round and the creation of the WTO to question the nature of US
participation and the power disparities embedded within the regime. The Uruguay Round, far
from being a liberal bargain, was a power play by US and EU to the detriment of developing
and least developed nations. This fact is most evident in the negligible concessions made in
sensitive markets such as agriculture and textiles, as opposed to the liberalisation results in
industrial goods, services and intellectual property rights. The chapter explores the accession
 32

processes to the GATT/WTO, its dispute settlement system, and concludes by considering
empirical work on the benefits and efficiency gains created by the GATT/WTO.

Chapter 5 looks at collective security within the Western bloc, regulated by NATO. The
organisation is perhaps the most cited cornerstone of the liberal model. Nevertheless, NATO
is the most singular of post-World War II organizations: its planning was not conceived
during the war years and it is a regional rather than a universal arrangement like the other
institutions. Moreover, NATO was not a hegemonic initiative: the US actually opposed a
formal commitment to European security. Initially, NATO was simply a legal document
giving security guarantees among its partners. It only gradually evolved into an organisation.
Power politics and liberal ideals were not incompatible, though, given historical
circumstances such as the limited size of the NATO arrangement, the cohesiveness of the
Western bloc and its political, economic and social institutions, and the existence of a
common threat.

In the decade or more following the end of the Cold War, NATO expanded to encompass
former Soviet republics. The expansion, however, was not consensual as descriptions of the
liberal model would have one believe. Moreover, differences appeared regarding the goals
and actions of the alliance in the post-Cold War world, particularly in its operations in Bosnia
and Kosovo throughout the 1990s, and later in Afghanistan. NATO’s role in international
politics might be the closest thing to the effects described by the liberal model. Nevertheless,
these effects are not explained by liberal characteristics but by the limited size of the
organization and its regional scope, providing for a more homogenous membership.

As described above, Chapters 2 through 5 establish theoretical and historical flaws regarding
Liberal IR, its concepts of liberal order and institutions, and its interpretation of US foreign
policy. But besides flaws, these concepts and interpretations have been highly influential in
policy circles over the years. As such, Chapter 6 turns its attention to the relationship between
academia and the policymaking community. It addresses the question of how poor historical
analogies and unsound concepts come to dominate the public sphere in spite of their inherent
weaknesses. The hold of elites in US foreign policy, the so-called revolving door between
academia, government and think tanks, and the role of academics in government are briefly
looked at. Although expert knowledge can greatly benefit public policy, if this relationship is
not tuned properly the dangers of proximity can endanger both sides. When too close to
power, scholars can fall into the trap of attempting to be always relevant, to focus only on
 33

current issues and even of ideological bias, which are all to the detriment of intellectual
independence.

Because of its academic and policy relevance, this thesis engages with liberal interpretations
of international institutions and US foreign policy. In the conclusion, I build upon these
interpretations in three different ways. Firstly, I point out the shortcomings of the liberal
approach to international orders and institutions. Secondly, I readdress the historical record of
the role of US foreign policy at the creation of international institutions in the 1940s, and on
their reform and expansion in the 1990s. Finally, based on the first two themes, and my
critical reading of US foreign policy, I draw out a different set of implications for
contemporary international politics from those suggested in most orthodox accounts.
2. Liberal IR, US foreign policy and international
institutions
As mentioned in the Introduction, the focus on liberal interpretations of US foreign policy is
explained by the role of institutions in liberal thinking. In contrast to other approaches,
Liberal IR hides power relations within institutional settings, largely due to its lack of
historicism and the generalised use of the historical record. Such characteristics are not only
present in liberal readings of US foreign policy. They are, in fact, broader elements of Liberal
IR as a theoretical approach. Chapter 2 addresses that, looking at Liberal IR as a whole and
then focusing on liberal order and its related concepts.

The chapter is divided into five sections. It starts with a discussion of the characteristics of the
discipline of IR as it developed in the US after World War II, in order to understand the place
of Liberal IR within the US academy. The three subsequent sections examine the work of
major authors in the Liberal IR paradigm, chosen due to their marked relevance to liberal
thinking on international institutions and US foreign policy, converging on the concept of
liberal order. They are: Andrew Moravcsik, the main articulator of Liberal IR as a theoretical
paradigm; Anne-Marie Slaughter, a main reference relating IR to International Law and the
workings of international institutions; and G. John Ikenberry, the main proponent of the
concept of liberal order and a well-known commentator of US foreign policy. Lastly, the
conclusion sets the framework for the analysis of liberal narratives and concepts in the
remainder of this thesis.
 35

2.1. IR and Liberal IR in US academia

Stanley Hoffmann once named IR a particularly ‘American social science’. 1 Writing in the
late 1970s, Hoffmann suggested three converging elements that made IR in the US different
than in other parts of the world: ‘intellectual predispositions, political circumstances, and
institutional opportunities’. 2 It can be argued that most of these elements still influence
Liberal IR today.

Three intellectual predispositions have shaped the growth of IR in the US. First, there was a
deep and entrenched ‘conviction’ in the promise of science: that all questions could be
answered and all problems could be solved given the appropriate scientific method – value
free and empirically testable. Science would ‘yield practical applications’ and be an
instrument of progress. As Hoffmann noted, this credo creates a ‘sort of national ideology’,
amplified by the absence of ‘any counterideology, on the Right or the Left’. The history of the
US as a nation of ‘economic development, social integration, and external success’ would
corroborate this belief. 3

Secondly, Hoffmann argued that ‘the very prestige and sophistication of the “exact sciences”
were bound to benefit the social ones as well.’ Economics was deemed to have achieved the
standards and rigour of the hard sciences, meeting ‘the expectations of the national ideology’.
Political science, and later IR, felt the need to emulate Economics success, as both – Political
science and Economics – were ‘science[s] of scarcity, competition, and power’. 4 Thirdly,
European scholars who had emigrated to the US further promoted IR, as they ‘tended to ask
much larger questions, about ends rather than means, about choices rather than techniques,
and ask about them more conceptually than their US counterparts.’ 5

Hoffman’s first and second intellectual predispositions speak directly to Liberal IR. As
discussed below, Liberal IR is conceived as ‘a nonideological and nonutopian form
appropriate to empirical social science.’ 6 It feeds on this ‘national ideology’, to the effect that

1
Hoffmann, 1977.
2
Ibid., 43, 45. See also: Smith, 2000, p. 392-93.
3
Hoffmann, 1977, p. 45. Hoffmann, in fact, is reflecting recurring themes in the literature about the US liberal
tradition and exceptionalism. See: Hartz, 1955; Lipset, 1996. For an example of a different narrative,
emphasising illiberal practices towards natives, blacks, immigrants and women, see: Smith, 1988; Smith, 1993.
4
Hoffmann, 1977, p. 45-46.
5
Smith, 2000, p. 392.
6
Moravcsik, 1997, p. 513-14.
 36

good theory can always provide the right answers; in fact, that there are value free answers to
be found in social sciences just as in the natural sciences. In recent decades, IR and Political
Science in the US have gravitated even closer to the ‘prestige’ of Economics, developing
formal models to explain behaviour, applying quantitative methods, and assuming premises of
rational actors, interest-driven and risk-averse. 7 Liberal IR follows suit. Conversely, the
former influence of European émigrés waned. The grand questions which enhanced the
relevance of the discipline in the early Cold War years were set aside for technical matters
about the workings of the international system, not about its constitution.

This fact relates to Hoffmann’s second converging element: the political circumstances which
influenced IR development in the US. On the one hand, for political scientists interested in the
concept and practices of power the US became part of the largest power struggle in the history
of mankind. Scholars were eager to ‘give advice, to offer courses of action, or to criticize the
official one’. On the other hand, ‘what the scholars offered, the policy-makers wanted.’ What
US leaders and policymakers required at the time was an ‘intellectual compass’ that would
supplant isolationist tendencies and explain to public opinion the need to contain the USSR
and keep the US permanently engaged in the international system. 8 Thus,

...two drives merged, for the benefit of the discipline and to its detriment also, in some
ways: the desire to concentrate on what is the most relevant, and the tendency (implicit
or explicit) to want to be useful, not only as a scientist, but as an expert citizen whose
science can help promote intelligently the embattled values of his country... 9

A similar trend can be traced regarding Liberal IR. The approach gained influence at the end
of the Cold War, a period in which US policymakers were searching for ways to define and
adjust to a changing international environment. Liberal research such as the democratic peace
thesis supported US policies like the ‘engagement and enlargement’ doctrine of the Clinton
administration. 10 The same can be said about the virtues of promoting free trade, expanding
NATO and the benefits of monetary stability and financial openness, all themes addressed in

7
Kenneth Waltz’s structural realism and Robert Keohane’s neoliberal institutionalism, probably the two most
influential IR approaches of the 1980s, draw heavily on the theory of the firm and game theory, respectively.
Kenneth N. Waltz, Theory of International Politics (1979); Keohane, 1984.
8
Hoffmann, 1977, p. 47-48.
9
Ibid., 47.
10
Anthony Lake, 'From Containment to Enlargement' (1993).
 37

the following chapters. Liberal scholars promoted a convincing and politically useful world
view at a time when leaders and elites were in need. 11

Finally, institutional factors such as ‘the link between the scholarly community and
government, (…) the existence of wealthy foundations, (…) and the fact that the universities
were flexible and operated in a mass education market’ put IR in the US on a different footing
from the rest of the world. 12 These are the subjects of analysis of Chapter 6, but in the case of
Liberal IR, now just as then, scholars continue to keep close contact with government and
policy issues.

Liberal IR emerged in the 1980s as a scientifically-oriented approach enmeshed into policy

issues. Medium-range liberal studies addressed the democratic peace thesis, theories of
ratification, the benefits of trade regimes; and theories on regionalism, integration and
globalisation. 13 Noting that there was no overarching liberal theory, Moravcsik took upon
himself the task of articulating such a framework. 14

2.2. Andrew Moravcsik and the framework of Liberal IR

Moravcsik argued that a liberal theory was missing from IR because liberal authors had
conceded its ‘theoretical incoherence’ following the characterisation of liberalism as
‘“idealism,” “legalism,” “moralism,” “utopianism”’ in the discipline’s early days. In turn, his
articulation of liberalism would be ‘a nonideological and nonutopian form appropriate to
empirical social science.’ 15 Moravcsik developed Liberal IR claiming paradigmatic
distinctiveness from structural realism and institutionalism. He strongly opposed authors such
as David Long who, in coining the term ‘Harvard School’, equated liberalism and
institutionalism. 16 For Moravcsik, institutionalism would be better named ‘modified structural
realism’ due to their shared assumptions of state-centrism and the anarchical character of the

11
A close relation between academic research and policy advice has characterised the IR discipline since its
early days, See: Laurence Shoup and William Minter, Imperial brain trust: the Council on Foreign Relations
and United States foreign policy (1977); Parmar, 2004; Guilhot, ed., 2011.
12
Smith, 2000, p. 393.
13
Doyle, 1983; Evans, Jacobson and Putnam, eds., 1983; Keohane, 1990; Doyle, 1995; Zacher and Matthews,
1995.
14
Moravcsik, 1992; Moravcsik, 1997.
15
Moravcsik, 1997, p. 513-14.
16
Regarding Moravcsik’s liberalism, Long is commentating on a Harvard working paper from 1992. For this
reason, his critique precedes the publication of Moravcsik’s article on liberal theory. Moravcsik responds to
some of Long’s early criticism in his 1997 article. See: Moravcsik, 1992; Long, 1995; Moravcsik, 1997.
 38

international system. 17 He proposed a liberal theory based on different premises, explaining

how interests emanate from individuals and social groups inside the state, how state
preferences are formed from these domestic pressures, and how state preferences interact in
an interdependent international system. In doing so, Moravcsik provided a unifying
framework for liberal research, spreading across a wide range of subjects and issue areas.

2.2.1. Liberal IR three core premises

The first premise of Moravcsik’s liberalism is ‘the primacy of societal actors’. 18 International
politics would start with individuals and private groups advancing their own interests in
conditions marked by ‘material scarcity, conflicting values, and variations in societal
influence.’ On average, individuals and private groups are ‘rational and risk-averse’. From
their interaction, patterns of cooperation and conflict emerge. Liberal theory attempts to
generalise which social conditions influence behaviour, with three standing out: ‘divergent
fundamental beliefs, conflict over scarce material goods, and inequalities in political power.’
Varying levels of these three factors constrain individuals and social groups into cooperative
or conflictual behaviour. In contrast to structural realism or institutionalism, Liberal IR starts
its analysis inside the state, looking at its domestic actors and societal conditions.

The second premise is ‘representations and states preferences’. 19 In liberal theory, states
amount to representative institutions of societal interests. As individuals and private groups
interact, a resulting subset of domestic interests is transmitted to political institutions, which
will act accordingly. In this way, states do not have interests but preferences. Nevertheless,
individuals and private groups are not equally represented in society: there are power
disparities between actors, material and otherwise; interactions can be peaceful or conflictual,
and not all interests are represented in political institutions in the same way, or at all. Even so,
political institutions and practices would represent a ‘transmission belt’ between societal
demands and state policies. This dynamic applies to both open and closed political systems.
Authoritarian states have fewer individuals and groups with voice opportunities, but even then
the mechanism is the same: bottom-up, from individual or group interests to state preferences.
As Moravcsik states,

17
Moravcsik, 1997, p. 537.
18
Ibid., 516-17.
19
Ibid., 518-20.
 39

Between theoretical extremes of tyranny and democracy, many representative

institutions and practices exist, each of which privileges particular demands; hence the
nature of state institutions, alongside societal interests themselves, is a key
determinant of what states do internationally. 20

Moreover, states are not taken as unitary actors who unquestionably maximise security or
wealth. Liberal theory assumes that, at times, states might be disaggregated, with ‘executives,
courts, central banks, regulatory bureaucracies, and ruling parties, for example – conducting
semiautonomous foreign policies in the service of disparate societal interests.’ 21 In the same
manner, evidence of ‘nonrational’ or ‘nonunitary’ behaviour is interpreted as complying to
different criteria of rationality or, more simply, shifting state preferences. States are
‘functionally differentiated’ and national interests are not given. As Moravcsik concludes,

the nature and intensity of national support for any state purpose – even apparently
fundamental concerns like the defense of political and legal sovereignty, territorial
integrity, national security, or economic welfare – varies decisively with the social
context. 22

The third premise of ‘interdependence and the international system’ means that what
determines state behaviour is the distribution of preferences in an interdependent international
system. 23 A state’s preference gives purpose to its actions in the international arena, but its
behaviour will vary depending on constraints imposed by preferences of other states. This is
not to say that states are equal or that patterns of interaction are given. Liberal theory
presupposes policy interdependence, that is, states will adjust their strategies depending on the
preferences, policies and strategies of other states. Since preferences vary case-by-case,
patterns of interaction also vary with prospective harmonious, cooperative or conflictual
structures. In a scientific and positivist manner, Liberal IR addresses these questions
empirically.

Liberal IR theory, thus, offers a multi-level framework to analyse states’ behaviour.

Moravcsik further claims that liberalism solves the structural realist problem about explaining
systemic outcomes but not a specific state’s foreign policy. 24 Preference-based liberalism
would do both in one single framework. Additionally, its conception of power differs from
mainstream approaches of power as capabilities and looks at it in terms of bargaining and

20
Ibid., 518.
21
Ibid., 519. This liberal assumption is fundamental in the work of Slaughter, discussed below.
22
Ibid., 520.
23
Ibid., 520-21.
24
Colin Elman, 'Horses for Courses: Why Not Neorealist Theories of Foreign Policy?' (1996).
 40

negotiation. As power is relational, the effect of capabilities varies according to a state’s

willingness to expend resources in order to fulfil its preferences. That, in turn, throws back the
concept of power onto societal preferences, the strength of domestic groups supporting it and
the degree of rigidity or flexibility in terms of altering preferences. Even weak states will
make a stand if their preference set is vital and non-negotiable; contrariwise, states with large
capabilities might make concessions in the face of opposition if their initial preferences are
not deeply rooted in society. 25

2.2.2. Three variants of Liberal IR

These three core liberal premises, according to Moravcsik, are ‘thin or content-free’. Liberal
hypotheses can only be derived from variants of liberal theory, which rests on specifications
of ‘social demands, the causal mechanisms whereby they are transformed into state
preferences, and the resulting patterns of national preferences in world politics.’ 26 Moravcsik
identifies three variants of Liberal IR theory, named ideational, commercial and republican.
As he conceives them,

Ideational liberalism focuses on the compatibility of social preferences across

fundamental collective goods like national unity, legitimate political institutions, and
socioeconomic regulation. Commercial liberalism focuses on incentives created by
opportunities for transborder economic transactions. Republican liberalism focuses on
the nature of domestic representation and the resulting possibilities for rent-seeking
behavior. 27

Broadly speaking, ideational commercial and republican liberalism represent strands of

medium-range liberal theories which Moravcsik tried to encompass in an overarching
framework. Ideational liberalism draws on classic liberal authors such as John Stuart Mill,
Giuseppe Mazzini and Woodrow Wilson to analyse domestic social identities and values as
determinants of state preferences and, consequently, of state behaviour. 28 This literature
considers three essential elements which often shape social identities: ‘geographical borders,
political decision-making processes, and socioeconomic regulation.’ Depending on societies’
conceptions of these elements and the distribution of preferences in the international system,
patterns of conflict or cooperation may arise, or even integration. Moravcsik’s own work on

25
Moravcsik, 1997, p. 524.
26
Ibid.
27
Ibid.
28
Ibid., 525-28.
 41

European integration applies this framework. 29 Slaughter’s research on cooperation and

mutual recognition of foreign courts, parliaments and executive agencies can also be cited as a
case of converging social identities. 30

Commercial liberalism bases its analysis on patterns of economic incentives affecting

domestic and transnational actors. 31 Economic dynamics, domestic and global, alter cost and
benefits calculations of individuals and private groups, which in turn pressure governments
towards liberalisation, protectionism, or other kinds of economic and security policies.
Commercial liberalism ‘does not predict that economic incentives automatically generate
universal free trade and peace’. Instead, it considers that interaction between actors given
certain economic incentives and market structures can push for both openness and closure.
According to Moravcsik, ‘domestic distributional conflict’ and ‘distributional consequences
of global market imperfections’ are sources of protectionist policies or, as he puts it,
‘disjuncture between the aggregate benefits of economic interdependence and national
policies.’ 32

Republican liberalism focuses on how domestic political structures and practices aggregate
and transfer social demands into state policy. 33 Institutions of domestic political
representation are thus the main variables in republican liberalism. The most famous
application of republican liberalism in IR is, without doubt, research on the democratic
peace. 34 A correlate formulation, somewhere between ideational and republican variants of
liberalism, is Daniel Deudney’s republican security theory and his concept of negarchy. 35

With its three main premises and three variants from which to derive hypotheses, Moravcsik
argues that Liberal IR is a coherent, parsimonious, multi-causal and multi-level theoretical
framework, distinctive and with analytical precedence over competing paradigms. Moreover,
Liberal IR is a non-utopian, non-ideological, scientific and empirically driven approach to IR.

29
Andrew Moravcsik, The Choice for Europe: Social Purpose and State Power from Messina to Maastricht
(1998).
30
Anne-Marie Burley, 'Law Among Liberal States: Liberal Internationalism and the Act of State Doctrine'
(1992); Slaughter, 1995; Slaughter, 1997.
31
Moravcsik, 1997, p. 528-30.
32
Ibid., 529.
33
Ibid., 530-33.
34
Doyle, 1983; Bruce Russett, Grasping the Democratic Peace: Principles for a Post-Cold War World (1993);
Christopher Layne, 'Kant or Cant: The Myth of the Democratic Peace' (1994); Doyle, 1995; Michael E. Brown,
Sean Lynn-Jones and Steven E. Miller, eds., Debating the Democratic Peace (1996).
35
Daniel Deudney, 'The Philadelphian System: Sovereignty, Arms Control, and Balance of Power in the
American States-Union, Circa 1787-1861' (1995); Deudney, 2007.
 42

As such, Liberal IR is a perfect example of US faith in science and progress, as identified by

Hoffmann above or, recalling Ole Waever, ‘a more abstract and “scientific” social science,
divorced from history.’ 36

2.2.3. Unarticulated assumptions

Criticism started promptly. Reacting to earlier formulations of the approach, Long claims that
Liberal IR is liberalism by analogy. Even though Moravcsik recognises individuals and
domestic groups as the main actors in international politics, arguably a liberal element, their
importance collapses as ‘generators of state preferences’. Liberal IR aggregates private
interests together into the collective agency of the state; this fact renders the theory very
similar to other systemic approaches of IR like structural realism and institutionalism. 37

Long raises profound questions regarding Liberal IR: first, just how liberal is Liberal IR?
Secondly, is it really non-ideological as Moravcsik argues? In fact, the first of Moravcsik’s
liberal premises, individualism and instrumental rationality, is the core behind economic
liberalism, or a minimalist interpretation of liberalism. 38 This is but one formulation of
liberalism, notably a US approach, which Moravcsik ambitiously equates as the grand
formulation of liberal international theory. However, Moravcsik overlooks the perennial
tension between individual interests and the common good in the work of the same classic
authors he quotes in support of his liberal theory. A broader liberal approach would require
‘the complement of the rule of law, equality of opportunity, and freedom of expression and
association’, to name but a few additions to self-interest, individualism, and rationality. As
Long puts it,

There is an assumption in liberalism that, ultimately, the free pursuit of individual

interest constrained by the rule of law will produce the greatest common good.
Without the notion of common good, the defence of individual or group interests is not
recognisably liberal. 39

Moravcsik both accepts and dismisses this criticism. To the protests that he ‘fails to
acknowledge the full richness of the intellectual history and, in particular, the normative
implications of liberalism’, he simply states that this was never his goal, but to provide ‘a

36
Waever, 1998, p. 712.
37
Long, 1995, p. 498-99.
38
Ibid., 497.
39
Ibid.
 43

coherent core of social scientific assumptions for the narrower purpose of explaining
international politics.’ For him, the question would be merely semantic: call it not liberal, but
rather ‘societal’, ‘state-society’, ‘social purpose’, or ‘preference-based’ theory; his main
claims would nevertheless remain intact. 40

This leads to the second question above: Moravcsik does not seem to grasp that removing the
normative elements from liberal theory, attempting to make it non-ideological, is in itself an
ideological move. The analytical and normative elements are intrinsically linked in liberal
thought. Moravcsik cannot escape from this connection, not even when he deliberately
attempts to do so. According to his framework, Liberal IR provides for ‘liberal analysis’, from
which ‘liberal prescriptions’ might or might not follow. But as Long states, the ‘problem with
this defence is that what is distinctively liberal is the prescription rather than Moravcsik’s
analysis.’ 41 For instance, if one takes Liberal IR’s second premise regarding representation
and states’ preferences, there is nothing particularly liberal in the idea that governments
represent sections of society. 42 Rather, what is distinctively liberal about it is the implication
that some forms of political and economic organisation are more legitimate than others and
produce the greatest common good. These elements are deeply normative and are not derived
solely from Liberal IR’s core premises.

This twofold facet of theory and ideology is discussed in detail by Beate Jahn. 43 As shown
above, Moravcsik attempts to deliver a positivist-empiricist method to keep ideological
concerns at bay from Liberal IR. Nevertheless, the methodological route only goes thus far.
What makes ideational liberalism liberal, for instance, is not the assumption that politics starts
with rational and risk-averse individual and private groups. Rather, ‘is the provision of a
rational argument to the effect that legitimacy resides only, or to a greater part, in the
particularly liberal forms of political and economic organization.’ 44 The same is true for
commercial and republican variants. Actors engaging in cost-benefit-analysis of economics or
security policies are not an exclusively liberal feature. What liberal theory claims is that the
liberal calculation of costs and benefits in commerce or war differs from other such

40
Moravcsik, 1997, p. 548.
41
Long, 1995, p. 498.
42
Jahn makes a similar claim. See: Jahn, 2009, p. 418.
43
Ibid. For Moravcsik’s replies, see: Andrew Moravcsik, ''Wahn, Wahn, Überall Wahn': A reply to Jahn's
critique of liberal internationalism' (2010). This conversation continued in: Beate Jahn, 'Universal languages?: A
reply to Moravcsik' (2010); Andrew Moravcsik, 'Tilting at windmills: a final reply to Jahn' (2010).
44
Jahn, 2009, p. 418.
 44

calculations, and these claims cannot be derived from core assumptions. 45 If one focuses
solely on core premises and ignores the liberal label, as Moravcsik suggests, these
microfoundational claims would be ‘shared by most strands of Marxism as well as classical
political theory and traditional realism’, depriving Liberal IR of its distinctiveness. 46 Liberal
IR ends up in a situation in which, inasmuch as its ‘microfoundational assumptions are
generally valid, they are not liberal’, while its ‘specifically liberal claims are not generally
valid.’ 47

Ignoring the fact that one cannot dissociate Liberal IR premises from its variants and
hypotheses – or at least not without making it something other than liberal – Moravcsik turns
to empirical evidence from different historical periods, involving different actors and different
issue areas, in order to validate his framework of analysis. 48 The question then turns to which
historical data and narratives are included and which are excluded. Some examples are
discussed below, as Moravcsik presents only anecdotal evidence of historical cases in support
of Liberal IR in his theoretical work. 49 More significantly, the following chapters look at the
use of the historical record to support the concept of liberal international order and liberal
interpretations of US foreign policy. In both cases, Liberal IR’s use of historical evidence
imposes purpose, continuity and repetition on the historical record, and interprets the past
through the eyes of the present. 50

Moravcsik unconsciously provides three examples of embedded liberal principles in his

theoretical framework, creating biases in findings and narratives. Supporting the precedence
of liberalism in multi-causal explanations, Moravcsik states that his proposed ‘two-stage
approach has characterized liberal theory and practice from Kant's philosophy to the practical
calculations by the American architects of the post-World War II settlement.’ 51 He chooses
President Woodrow Wilson’s attempts to create the League of Nations, an ‘epitome of liberal
“legalism” and “utopianism”’, as an example of implicit liberal theory. ‘Understood as an
implicit social science theory, not ideology, we see that it was neither utopian nor
fundamentally institutionalist.’ 52 Moravcsik argues that Wilson’s view was ultimately based

45
Ibid., 418-19.
46
Moravcsik, 1997, p. 548; Jahn, 2009, p. 419.
47
Jahn, 2009, p. 419.
48
Moravcsik, 1997, p. 515.
49
Moravcsik, 1992; Moravcsik, 1997; Andrew Moravcsik, 'Liberal international relations theory: a scientific
assessment' (2003); Andrew Moravcsik, 'The new liberalism' (2008).
50
Butterfield, 1965; Hobson, 2002.
51
Moravcsik, 1997, p. 544.
52
Ibid., 545.
 45

on liberal theory, as the President disregarded institutions or international law as the basis for
peace and security, and instead placed its hopes in ‘countries enjoying republican government
and national self-determination.’ 53

For Moravcsik, the fact that Wilson saw the League’s future as dependent on state preferences
– republican, democratic and self-determined – proves the qualities of liberal theory.
Completely lost in this discussion is the fact that Wilson was not practising empirical social
science or analysing international society; the President was putting into practice a liberal
political project. At no point does Moravcsik question the premise that republican government
and self-determination bring peace and stability, and neither did nor could Wilson at the time.
One could argue that Moravcsik is not testing Wilson’s theory, just exposing its liberal
structure. The defence is fallible though, because Wilson did not have a liberal theory; he tried
to implement an international liberal project. As such, it is impossible to dissociate liberal
principles from the President’s thought process and analytical framework. 54

Moravcsik puts himself into even murkier territory when he tries to describe how multicausal
liberalism explains realist outcomes such as power balancing and bipolar conflict. 55 He recurs
to Immanuel Kant to state that balancing is a mechanism ‘suitable only to a particular set of
circumstances defined by liberal theory’. A balance of power would work to limit rivalry
between non republican states, ‘permitting the progressive emergence of republican
government and commerce’. As Kant’s reasoning refers to societal preferences of republican
and non republican state forms, it would vindicate liberal theory. Once again, completely lost
on Moravcsik is the fact that Kant never practised social sciences by any contemporary
standards. His thoughts on perpetual peace were philosophical conjectures, hardly based on
any empirical observation since there were no communities of republics to be studied at the
time. Kant’s liberal thoughts are clearly normative; it seems ludicrous that Moravcsik would

53
Ibid.
54
President Wilson’s policies and his liberal internationalism are questioned by some authors, particularly in
regards to his use of US military power in Latin America and elsewhere. See, for instance, Tony Smith’s chapter
in: Ikenberry et al., eds., 2008. Although Wilson is considered a liberal internationalist, his domestic policies
show a disturbing illiberal character. Born in Virginia and raised in Georgia and South Carolina, Wilson was the
first Southerner elected president since 1848 and was an unapologetic racist. His administration dismantled
policies put in place after the Civil War to benefit African-Americans and expelled black citizens from high-
ranking jobs in government. See: Eric S. Yellin, Racism in the Nation's Service: Government Workers and the
Color Line in Woodrow Wilson's America (2013). Wilson's policies were racist even when considered the
standards of his time. The need of reckoning with the President’s past has been brought to attention recently by
student’s movements in the US, and is a reminder of the illiberal practices sometimes hidden under liberal
discourse. Such tensions within liberal thought and practice are discussed in the Conclusion of the thesis. 'The
Case Against Woodrow Wilson at Princeton', The New York Times, November 24, 2015; Dylan Matthews,
Woodrow Wilson was extremely racist - even by the standards of his time (Vox, 2015).
55
Moravcsik, 1997, p. 546.
 46

invoke it to support a scientific framework for Liberal IR. The fact that he does so proves how
normative and analytical elements are intrinsically and unconsciously linked in liberal
thought. 56

Moravcsik’s comments on the doctrine of containment are just as confusing. The fact that ‘it
is often forgotten that nine-tenths of the seminal “X” article was given over to an analysis of
Soviet domestic beliefs’ is taken as proof that George Kennan was in fact a liberal and
provide support for multi-causal liberalism. Containment would be based on transforming
social purposes and state preferences in Western countries, such as Japan and Germany, as
well as patiently waiting until purposes and preferences changed in the USSR, thus defeating
communism from the inside. Once again Moravcsik fails to acknowledge that Kennan’s call
to containment was a political project, based on his knowledge and personal experience with
Soviet affairs. As a political project, it was ideological and normative, aimed at convincing
US policymakers to bear the costs of confronting the USSR. 57 To use such a call to arms, ex
post facto, as evidence of a supposedly scientific theory is inconsistent. Even more baffling is
the statement that the ‘conduct and conclusion of the Cold War proceeded precisely as
Kennan’s two-stage liberal model had predicted.’ 58 Moravcsik seems to forget that Kennan
resigned from the State Department because of the emergence of a militarised approach to the
Cold War within the US government, and remained a harsh critic of militarism in US foreign
policy until his recent death. 59

These three passages exemplify the oversimplification and generalisation used by liberal
authors to support their claims. The common denominator in all of them is that a normative
element is hidden in a supposedly neutral argumentative logic. It could be argued that these
three examples are just idiosyncratic quotations from Moravcsik’s work, and that the criticism
does not apply to Liberal IR in general. The remaining analysis of liberal authors and the case
studies regarding interpretations of US foreign policy and international institutions supports
precisely the opposite claim. These examples are indicative of how Liberal IR purports to be
scientific and non-ideological but in fact is based on generalisations with little empirical

56
One defence of Moravcsik could claim that the recourse to Kant was merely stylistic, when in fact he was
referring to the findings of democratic peace thesis, which was initially based on Kant’s insights but is much
more scientific in form. Even so, the defence does not hold. Democratic peace derives from one of the variations
of Liberal IR, and therefore cannot be coherently used to support the core premises from which it follows. As
above, the prescriptions are inherently liberal, not the premises.
57
Even though containment’s policy prescriptions were pragmatic, and based on a realist view of IR.
58
Moravcsik, 1997, p. 546.
59
See: Nicholas Thompson, The Hawk and the Dove: Paul Nitze, George Kennan, and the History of the Cold
War (2009).
 47

support. Liberal IR cannot be dissociated from the premises and biases which frame its
analysis and prescriptions. 60

In his exchange with Jahn, Moravcsik regrets the theoretical back-and-forth and, in true
positivist fashion, wishes they could turn to empirical research to settle the issue. 61 This is
precisely what this thesis does, not in relation to Liberal IR as a whole, but specifically
focusing on the concept of liberal order and interpretations of US foreign policy. Chapters 3, 4
and 5 demonstrate how generalisations and superficial accounts of the historical record end up
creating an ahistorical and apolitical concept of liberal order. As a branch of Liberal IR, these
studies carry its original sin: they misplace analytical and normative elements while
promoting supposedly neutral interpretations of international politics. Before addressing the
concept of liberal order directly, the next section looks at Liberal IR and International Law in
the influential work of Slaughter. This produces another example of oversimplification,
generalisation and normative liberal principles.

2.3. Anne-Marie Slaughter, Liberal IR and International Law

Liberal IR is a fundamental element in the rapprochement between International Relations

and International Law promoted by Slaughter and other scholars since the 1990s. 62 In fact,
Slaughter’s work can be divided into a series of interconnected projects, all revolving around
liberal themes: a dialogue between IR and International Law; an agenda for International Law
amongst liberal nations; research on transnational networks; and her work on US foreign
policy, which ultimately led her to the post of Director of the Policy Planning Staff at the
State Department and later President and CEO of the think tank New America Foundation. 63

Liberal IR pervades all these research agendas. Addressing the possibilities of dialogue
between IR and International Law, Slaughter singled out liberal theory as the most promising

60
The discussion above focused on the theoretical work of Moravcsik, but similar criticism could be deployed
against his empirical research. Assessing his work on European integration, Diez argues that the way in which
Moravcsik sets his premises and alternative hypotheses creates a bias towards his conclusions that economic
preferences drove the integration process. See: Thomas Diez, 'Riding the AM-track through Europe; or, The
Pitfalls of a Rationalist Journey Through European Integration' (1999).
61
‘…if Jahn feels certain elements deserve more stress, she should conduct empirical research about them. Yet,
there is no need to engage in broad-brush methodological or philosophical criticism of the liberal paradigm, or
dismiss presumptively correct empirical findings just because they are general, in order to study such things.’
Moravcsik, 2010, p. 130.
62
Anne-Marie Slaughter Burley, 'International Law and International Relations Theory: A Dual Agenda' (1993);
Anne-Marie Slaughter, 'International Law and International Relations Theory: Twenty Years Later' (2013).
63
Burley, 1992; Slaughter, 1995; Slaughter, 1997; Slaughter, 2004; Slaughter, 2008.
 48

approach. As Liberal IR looks into individuals and private groups shaping states preferences,
its framework would better account for the importance of individuals, corporations and
nongovernmental organizations, improve ‘the quality of debate within both disciplines and
forge a new interdisciplinary bridge between them.’ 64 A liberal analysis would be particularly
fruitful on topics like: comparative international law; a framework for transnational law; and
the analysis of public international law. 65 Moreover, Slaughter suggests that liberal analysis
provides a normative framework for ‘rethinking the rules of the game’, namely sovereignty
and statehood in international politics. 66

2.3.1. Law among liberal states

Slaughter’s discussion of International Law between liberal states stresses this latter point.
Liberal International Law would revisit the concepts of sovereignty and statehood,
emphasising the ultimate rights of individuals such as in the doctrines of humanitarian
intervention and responsibility to protect. Slaughter starts from the fact that current
International Law is based on the Westphalian model of sovereignty, akin to Realism, which
considers states as unitary actors and does not differentiate in terms of domestic structures. 67
Slaughter hypothesises what International Law would look like if based on Liberal IR, in
which ‘how States behave depends on how they are internally constituted’ and which ‘further
suggests a fundamental difference in the nature of relations among liberal States as compared
to relations between liberal and nonliberal States.’ 68 According to Slaughter, Liberal
International Law would be in order given that, especially in liberal nations, different
bureaucracies of the state conduct their separate foreign policies, a fact not well captured by
traditional International Law and IR. Furthermore, the growing relevance of non-state actors
and transnational networks in international politics would require a new paradigm of
analysis. 69

Slaughter frames her discussion as a ‘thought experiment’, designed to generate a

‘hypothetical model of general law’. Nevertheless, she asserts that the distinctions between
64
Burley, 1993, p. 227.
65
Ibid., 228-35.
66
Ibid., 235.
67
Even though Slaughter does not mention it at this point, the Westphalian model of sovereignty is just as
compatible with the Grotian approach to international relations developed by the English School. See: Hedley
Bull, 'The Grotian Conception of International Society' (1966); Martin Wight, International Theory: The three
traditions (1991).
68
Slaughter, 1995, p. 537.
69
Slaughter, 1997; Slaughter, 2004.
 49

liberal and non-liberal states are ‘empirically supported, rather than normatively
proclaimed’. 70 Following Moravcsik, she denies that her version of liberal theory is
ideological. Rather, it is ‘not a utopian vision but an unsentimental analysis of the domestic
origins of international behavior.’ 71 Nevertheless, the analysis below shows that Slaughter’s
transposition of Liberal IR to International Law suffers from the same malaises identified in
the theory as a whole.

Clearly, liberal and non-liberal states have noteworthy ‘empirically supported’ differences,
such as distinct domestic structures which make them liberal and non-liberal in the first place.
But this kind of empirical support would be equivalent to saying that states have different
sizes or different geographical locations. What is relevant for analysis is the degree to which
such a distinction in political systems affects states behaviour towards international law, i.e.,
the reaching and fulfilment of agreements, the recourse to peaceful settlement of disputes, the
domestic implementation of treaties, etc. Here, Slaughter’s distinction between liberal and
non-liberal states is not strongly empirically supported; it is based on anecdotal evidence and
generalisations, and is more of an ideological claim than scientifically-based.

Slaughter justifies the differentiation between liberal and non-liberal states through the ‘best-
documented empirical distinction between different types of States (…) the frequency of war
among liberal States, as compared to war between liberal and non-liberal States or among
non-liberal States alone.’ 72 However, the recourse to the democratic peace thesis is
misleading. Even if one accepts that liberal states do not go to war against each other, this fact
speaks little about how they behave towards legal commitments. The fact that any dyad of
states does not go to war against each other does not imply that they had reasons to go to war
and chose otherwise, nor say much about how they reach and implement international treaties.

The democratic peace thesis is widely disputed. 73 Arguments range from what counts as a
democratic or liberal state, to how these definitions changed over time, to disputes of time
span and relevance of data sets. But even if one accepts the empirical existence of peace
between liberal states in recent history, there is still no causal link explaining the democratic
peace. Scholars cannot confirm one specific variable or set of variables that generates peace.

70
Slaughter, 1995, p. 505-06.
71
Anne-Marie Burley, 'Toward an Age of Liberal Nations' (1992), p. 393.
72
Slaughter, 1995, p. 509. Following Russett, she defines liberal states widely as having ‘some form of
representative democracy, a market economy based on private property rights, and constitutional protections of
civil and political rights.’ See also: Russett, 1993, p. 11-23.
73
For a collection of essays discussing the theme, see: Brown, Lynn-Jones and Miller, eds., 1996.
 50

Candidates spread from certain types of domestic political structures, to high levels of
economic development, to economic interdependence, to particular cultural traditions, to the
perceptions and images that states make of each other, to the presence of a common threat or
a particular distribution of power in the international system. Recent peace between liberal
states might be an undeniable truth, but it might have been caused by bipolarity and
unipolarity rather than by democracy and market economies. Furthermore, scholars have a
hard time explaining why democracies are more likely to start a war against non-democracies
than non-democracies are to go to war between themselves. Additionally, younger
democracies are also more war prone than established democracies. 74

Slaughter notices these debates and difficulties, but bluntly states that, for her purposes, ‘the
precise mapping of cause and effect does not matter.’ 75 This is a rather difficult statement to
understand: what is the use of discussing International Law between liberal states if the reason
for their distinct behaviour might not be their liberal character but the existence of a common
threat or a particular distribution of power? Ignoring theoretical obstacles, Slaughter states
that:

(…) international lawyers can canvass the available political science literature and
note the presence of a set of attributes that correlate with regard to relations among a
particular subset of States. These attributes provide a basis for a more generalized
distinction between liberal and non-liberal States, a distinction that is positive rather
than normative. 76

Slaughter does not deny that her thought experiment has a normative agenda, but she
considers it to be based on a positive (empirical) distinction between different types of states.
Nevertheless, her lines of demarcation are deeply ideological and normative. From an
inconclusive discussion of the democratic peace, she produces six correlate attributes of
liberal states. In a very brief and uncritical manner, Slaughter enumerates peace, liberal
democracy, market economies, a dense network of transnational transactions,
transgovernmental communication, and the collapse of the foreign/domestic distinction as
singular characteristics of relations between liberal states. 77 Although these are valid points

74
Doyle, 1983; Edward D. Mansfield and Jack Snyder, Electing to Fight: Why Emerging Democracies Go to
War (2005).
75
Slaughter, 1995, p. 509-10. It is worth noting that power relations as a source of peace do not even appear as a
possibility when Slaughter states that it is ‘a job for political scientists’ to ‘determine whether democracy leads
to peace, or economic prosperity leads to democracy and to peace, or peace leads to economic development
which in turn strengthens democracy.’
76
Ibid., 510.
77
Ibid., 511-14.
 51

worth investigation, there is no empirical (scientific) support for their choice in Slaughter’s
discussion or in the literature she quotes. Many other elements could be listed as possible
attributes, such as high levels of economic development or membership in security
communities. Slaughter’s selection is subjective; her generalisation regarding practices of
liberal and non-liberal states are based on arbitrary evidence and carry unarticulated liberal
assumptions. Yet, they are promoted as positive, empirically-based concepts, a fitting
example of Liberal IR.

2.3.2. Assessing the uniqueness of liberal nations

Liberal International Law has been scrutinised by many. 78 Critical legal scholars and post-
colonialists have produced the harsher critiques, as many see the liberal law agenda shifting
‘attention away from the scale, character and sources of deprivation, oppression and conflict
in the contemporary world’. 79 José Alvarez follows a different course and attempts to
examine liberal theory from the inside. 80

He takes seriously Slaughter’s assumptions that liberal states practise international law
differently and puts them to test. Alvarez addresses ‘whether liberal theory accurately
describes the international law-making practices of liberal states, whether in the context of
traditional treaties, transnational networks or “transjudicial communication”’. 81 His
conclusions draw us back to earlier points about Liberal IR; Slaughter’s liberal theory is not
based on scientific evidence, but on anecdotal references and hidden liberal assumptions.
Although Alvarez does not completely discard liberal theory, he states that ‘there is plenty of
reason to be sceptical’ and intends ‘to put the burden of proof on those who would contend
that liberal states are better law-abiding members of the international community.’ 82

Liberal theory predicts that liberal and non-liberal states behave differently regarding
decisions to join treaties and be restrained by their norms, regarding the level of compliance
to such norms, and regarding the resort to peaceful dispute resolution. Liberal states would

78
Harold Hongju Koh, 'Why Do Nations Obey International Law?' (1997). Susan Marks, 'The End of History”
Reflections on Some International Legal Theses' (1997).
79
Marks, 1997, p. 473. See also: Martti Koskenniemi, 'Carl Schmitt, Hans Morgenthau, and the Image of Law in
International Relations' (2000).
80
José E. Alvarez, 'Do Liberal States Behave Better? A Critique of Slaughter’s Liberal Theory' (2001).
81
Ibid., 193.
82
Ibid., 194.
 52

not only comply more and solve disputes by peaceful means, but also be more willing to join
regimes and promote deeper cooperation by vertical forms of implementation and automatic
application of international norms in domestic courts. These characteristics would be more
pronounced when assumed exclusively between liberal nations, like ‘the members of the
European Union and the system of human rights centred at Strasbourg.’ 83 By implication,
non-liberal behaviour would be averse to these trends.

In order to test these predictions, Alvarez starts looking at the most prominent example of a
liberal state: the US. However, he does not find any evidence that the US practises
international law as liberal theory would predict, or that its commitments to liberal states are
necessarily different than its relations with other countries. 84 Alvarez’s empirical test of
liberal claims, summarised below, provides evidence of how liberal theory concepts are
generalised from poor evidence and, as such, carry normative biases in their analysis and
policy prescriptions.

Regarding human rights, a recurrent theme for liberals, the US does not allow direct or
vertical enforcement 85 of international treaties in its local courts, while reservations,
understandings or other conditions attached to the ratification of such treaties generally affirm
the primacy of US laws. Moreover, nothing suggests that this would be any different if such
commitments were signed solely by democracies. 86 For instance, the US has never shown
inclination to ratify ‘the American Convention on Human Rights, of making it self-executing
in US courts, or of submitting itself to the Inter-American Court’s binding jurisdiction’
regardless of the democracies in the hemisphere.

Apart from the historical US aversion to foreign interference, two possible explanations
contradict liberal claims. Those who assert that US law already exceeds the protection of
international covenants, and therefore does not need deeper forms of implementation, imply
that the very success of liberal states impedes the dynamics of vertical enforcement identified
by liberals. On the other hand, US Supreme Court interpretations which affirm the primacy of

83
Ibid., 185.
84
Ibid., 194.
85
In International Law, vertical enforcement is a situation in which the respect for international legal norms is
somehow enforced from above, by international institutions or legal courts for example. The opposite situation is
horizontal enforcement, in which states take it upon themselves to uphold their rights and obligations through
mechanisms as reciprocity, countermeasures and self-help. Liberal IR affirms that liberal states are more prone
to establish vertical enforcement mechanisms between themselves. The following examples dispute such claim.
86
Alvarez, 2001, p. 194-95.
 53

domestic norms over international norms undermine the reasoning that liberal states would be
particularly willing to be bound and comply with international law. 87

Likewise, there is no evidence that the US distinguishes between liberal and non-liberal states
in terms of forms of dispute settlement. Post-World War II Friendship, Commerce and
Navigation treaties, committing the US to settle treaty disputes through the ICJ, were signed
with many non-liberal countries. 88 Recent examples of vertical enforcement come from
bilateral investment treaties (BITs), which the US has signed with non-liberal states precisely
because US investors needed guarantees in such countries. 89

The case of BITs brings up many points. First, a liberal state accepted vertical enforcement in
treaties with non-liberal states, contrary to what liberal theory sees as most probable. Second,
non-liberal countries accepted deep commitments, also contrary to predictions. Moreover,
these same types of commitments have been strongly resisted in negotiations between liberal
states. No such enforceable obligations on investments could be successfully negotiated at the
OECD, ‘the world’s most prominent example of a non-geographically based association of
primarily “liberal” nations.’ 90

Contrary to Slaughter’s rosy picture of the cumulative value of abundant transnational

contacts, common history of mutual tolerance, comparable domestic institutions, and
shared commitments to the judicial settlement of disputes, various attempts to add
teeth to the Code of Capital Movements, to negotiate an OECD draft Convention on
the Protection of Foreign Property, and, most recently, to conclude an OECD
Multilateral Agreement on Investment (MAI), failed in part because the negotiating
states were liberal states responding to the pressure of domestic and supranational
interest groups. 91

This is a puzzling feature of liberal analysis. While the liberal framework recognises that
liberal states have strong state bureaucracies and engaged civil society actors, it silences the
fact that multiple actors might have competing interests and diverge regarding the benefits of
cooperation. As in the case of international institutions discussed below, liberalism hides
conflicts and power disparities. For instance, liberal legal theory does not explore the
possibility that federalist systems might be a source of resistance in liberal states joining and

87
Ibid., 195.
88
China (1946), Ethiopia (1951), Greece (1951), Iran (1955), Nicaragua (1956) and Pakistan (1959). Due to the
Connally Reservation to the ICJ, the US does not recognize compulsory jurisdiction by the court.
89
In 1986, the US signed BITs with Bangladesh, Cameroon, Egypt, Grenada, Morocco, Senegal, Turkey and
Zaire. Haiti, Panama, the Congo and Poland followed soon afterwards. Alvarez, 2001, p. 195-96.
90
Ibid., 199.
91
Ibid., 200.
 54

implementing international norms. Similarly, political needs to answer particular

constituencies might be ‘responsible for negotiating treaty texts so deliberately ambiguous
that they breed subsequent conflict.’ 92 Liberal predictions of deep legal commitments between
liberal states come from assumptions about the behaviour of actors (liberal bureaucracies and
transnational networks) and about the perceived positive value of international law. Empirical
evidence from various regimes does not support these assumptions or the related assumption
that non-liberal states are particularly averse to international commitments. 93

BITs are one such example. Debates over the investor-state clause in recent US-EU
negotiations of the Transatlantic Trade and Investment Partnership (TTIP) are another. 94
Investor-state dispute resolution allows private agents, individuals or companies, to sue
governments in breach of treaty provisions. EU social movements strongly oppose this,
fearing US companies will take European states to court challenging labour and
environmental regulations. Such social movements defy liberal law predictions of deep
commitments between liberal nations, vertical enforcement and the primacy of international
over domestic norms. 95 Even if an investor-state clause comes through in the final TTIP text,
it will probably be the result of power disputes within and between the US and the EU, not of
free-will liberalism. Such is the bias and distortion caused by liberal analysis.

John Jackson and Alan Sykes’s large study of the implementation of the Uruguay Round
treaties in several countries also speaks to the perceptions of societies in liberal nations. While
a perceived threat to sovereignty emanating from the accords was present in most states, it
was more pronounced in larger, developed states, including those within the European
Union. 96 Likewise, Edith Weiss and Harold Jacobson’s study of eight countries and the
European Union regarding the implementation and compliance of five environmental treaties
did not find evidence of regime type being a significant variable. 97 Their study also highlights
the fact that one cannot assume better compliance from liberal states simply from records of
compliance. Liberal states may be better compliers, at least in part, because international

92
Ibid., 202.
93
Alvarez’s main examples of liberal states are the US and EU members, but he also discusses Australia, Canada
and Switzerland coming to similar conclusions. Ibid., 203-05.
94
Tom Fairless, 'EU-U.S. FreeTrade Talks May Drop Controversial Investor Protection Rule', The Wall Street
Journal, September 29, 2014. European, particularly French, demands to exclude the cultural sector from TTIP
negotiations serve as another example.
95
Conversely, BITs between the US and non-liberal states carry similar investor-state clauses. Alvarez, 2001, p.
199.
96
Ibid., 207. John H. Jackson and Alan O. Sykes, Implementing the Uruguay Round (1997).
97
Edith Brown Weiss and Harold K. Jacobson, Engaging Countries: Strengthening Compliance with
International Environmental Accords (1998).
 55

norms reflected more of their own preferences from the beginning, as these states usually go
into international negotiations with more bargaining power than their counterparts. 98 Power
disparities in international negotiations and institutions are a recurrent theme overlooked by
Liberal IR, as discussed below.

Similar reasoning is valid regarding compliance by non-liberal states. Slaughter closely

relates liberal states to the respect for human rights, and non-liberal states to human rights
violations. But the fact that non-liberal states do not comply with human rights norms tells us
little about their records on other international commitments. According to Alvarez, the
evidence that exists with respect to other regimes does not support a liberal/non-liberal
distinction with respect ‘to the decision to be bound, the level of compliance after ratification,
or the likelihood of resort to peaceful dispute resolution when treaty disputes arise.’ 99

2.3.3. The presumed impact of transnational networks

Slaughter’s work on the positive effects of transnational networks also finds weak empirical
support. 100 Her idea that states are disintegrating into distinct parts – courts, regulatory
agencies, executives, legislatures – fits well within the Liberal IR framework. In contact with
their counterparts abroad, these bodies would create a ‘dense web of relations that constitutes
a new, transgovernmental order.’ 101 The same effect could be seen in transnational networks
of NGOs of various stripes. Norms emerging from these transnational networks would be
essential to regulate issues such as ‘terrorism, organized crime, environmental degradation,
money laundering, bank failure, and securities fraud’, and would gradually replace traditional
forms of inter-state international law.

While recognising that institutions in non-liberal states also take part in transnational
networks, Slaughter affirms that the ‘dominant institutions in these networks remain
concentrated in North America and Western Europe’. 102 Unfortunately, Slaughter does not
provide empirical evidence for either statement: that transnational networks are a main feature
of liberal nations; or that the soft law emanating from these networks will supplant hard law,

98
Alvarez, 2001, p. 205-07.
99
Ibid., 209-10.
100
Slaughter, 1997; Slaughter, 2004; Anne-Marie Slaughter, 'America's Edge: Power in the Networked Century'
(2009).
101
Slaughter, 1997.
102
Ibid.
 56

exemplified by inter-state treaties. As for the first statement, liberal theory simply leaves
‘non-Western connections, whether governmentally based or not, in the shadows,
presumptively outside the “zone of law”.’ 103

The latter statement has multiple facets. Alvarez suggests there is a false dichotomy between
the subjects of traditional and transnational international law. Much of the transnational
cooperation in areas like ‘anti-trust policy, securities regulation, environmental policy,
criminal law enforcement and banking and insurance supervision’ happens through
frameworks of treaties and organisations created by states. In this sense, traditional
international law enables transnational networks. 104 Similarly, the idea that traditional
international law is hard law, while transnational networks create soft law, is also misleading.
One of the most common criticisms laid at the door of treaties and organisations is that they
‘lack teeth’. Many times, treaty clauses are purposely ambiguous and enforcement provisions
are absent precisely to appease states concerns and allow signature. 105 Furthermore, the recent
creation of state centred international organisations like the WTO and the ICC does not point
towards Slaughter’s predictions that transnational regulation might supplant traditional
international law.

Slaughter also assumes particular implications for transjudicial communication. According to

her, judges and courts are ‘building a global community of law.’ They are networking,
‘increasingly aware of each other’ and, most importantly, sharing ‘values and interests based
on their belief in the law as distinct but not divorced from politics and their view of
themselves as professionals who must be insulated from direct political influence.’ 106
Nevertheless, ‘despite a number of impressive gatherings of judges from the liberal world’
there is no hard evidence that they are involved ‘in a common enterprise such that it is useful
to generalize about their “distinctive” behaviour.’ 107

Eyal Benvenisti has looked extensively at domestic courts’ use of international law. In the
early 1990s, his findings did not support Slaughter’s predictions. 108 In a comparative study of

103
Alvarez, 2001, p. 211.
104
At the outset of her discussion on transnational networks, Slaughter makes a category mistake by assuming
that empirical facts of bureaucratic politics necessarily change the nature of legal status and personality of the
state and its agencies. See: Christopher Hill, The Changing Politics of Foreign Policy (2003), p. 88.
105
Alvarez, 2001, p. 213.
106
Slaughter, 1997.
107
Alvarez, 2001, p. 220.
108
Eyal Benvenisti, 'Judicial Misgivings Regarding the Application of International Law: An Analysis of
Attitudes of National Courts' (1993).
 57

legal systems in liberal nations, Benvenisti identifies the fact that national courts tend to
narrowly interpret requirements to assent to international law, to read international norms so
as not to contest executive prerogatives, and to use various techniques in order to avoid
judicial review under international law. His most recent study also resulted in interesting
findings. 109 Benvenisti positively verifies liberal predictions of increasing ‘application of
international law and to heed the constitutional jurisprudence of other national courts.’
Nevertheless, the reasons for such phenomena do not confirm liberal theory:

the chief motivation of the national courts is not to promote global justice, for they
continue to regard themselves first and foremost as national agents. Rather, the new
jurisprudence is part of a reaction to the forces of globalization, which are placing
increasing pressure on the different domestic branches of government to conform to
global standards. This reaction seeks to expand the space for domestic deliberation, to
strengthen the ability of national governments to withstand the pressure brought to
bear by interest groups and powerful foreign governments, and to insulate the national
courts from intergovernmental pressures. 110

Benvenisti’s research finds that, instead of ‘building a global community of law’ as Slaughter
suggests, domestic courts continue to act as ‘national agents’ and apply international law to
protect themselves, and government in general, precisely from the kind of transnational
pressure liberals conceive as creating positive dynamics. Once more, liberal theory makes
generalisations based on poor empirical evidence and propagates these concepts as facts.

******

The above discussion exemplifies how liberal legal theory, as Liberal IR in general, takes
assumptions for facts and draws broad implications for the behaviour of liberal states
regarding international law and politics. In its attempt to deliver a scientific approach, Liberal
IR hides its ideological content and normative implications. Along these lines, David
Kennedy addresses legal internationalists who conceal their national biases, ‘overemphasize
the inevitability and desirability of the status quo’ and ‘underestimate the plausibility of
alternatives’. 111 His critique is similar to Long’s comments of minimalist interpretations of
liberalism. Kennedy argues that, in the 1990s, efforts were made to ‘rewrite the new United
States hegemony and the spread of deregulatory free trade as the triumph of political
liberalism’. This would be a flagrant betrayal of ‘the humanist tradition of political
109
Eyal Benvenisti, 'Reclaiming Democracy: The Strategic Uses of Foreign and International Law by National
Courts' (2008).
110
Ibid., 242.
111
David Kennedy, 'The Disciplines of International Law and Policy' (1999), p. 10.
 58

liberalism’s earlier commitments to social, racial, gender, or economic justice’. Legal

internationalists would have uncritically accepted US hegemony ‘as the inevitable structure of
multilateralism today.’ 112 The following section turns to this question in the analysis of the
concept of liberal order.

2.4. G. John Ikenberry, US foreign policy and liberal order

The work of Ikenberry offers a comprehensive and influential articulation of the concept of
liberal order. 113 Moravcsik often cites it as referring to ‘the emergence of a large and
expanding bloc of pacific, interdependent, normatively satisfied states’. 114 Slaughter
corroborates its relevance. After her period at the State Department, she mentions that ‘many
officials had internalized John Ikenberry's arguments about the specifically liberal nature of
the current international order’. 115

Ikenberry’s liberal model builds upon different IR theories and on a typology of international
orders, taking as a starting point what course of action hegemonic states take after the end of
great power conflicts. 116 Victorious states, enjoying a preponderant power position, can opt
between three strategies. 117 The first is that of domination, and it leads to the creation of a
hegemonic order. It involves the imposition of a self-centred order over weaker states
sustained by force and coercion. The second course is that of isolation. The winner turns to its
domestic affairs and returns to normalcy. In doing so, it leaves to others an anarchical,
balance of power, order. Finally, the victorious state can opt for the creation of a
constitutional, liberal order. The winner dictates the principles and values that will guide the
order, but also concedes on mechanisms that protect weaker states from abandonment or

112
Ibid., 25.
113
Ikenberry’s work on international order and US foreign policy has been developed over the past twenty years
in a number of journal articles, book chapters, and policy papers, and in two monographs: After Victory and
Liberal Leviathan. Some of his terminology changes in different parts of his work, but this thesis will largely
follow the structure and arguments of After Victory, since his latest works do not significantly change its
theoretical underpinnings. See: Ikenberry, 2001; Ikenberry, 2009; Ikenberry, 2012.
114
Moravcsik, 2008, p. 247.
115
Slaughter, 2013, p. 615.
116
His works builds mostly upon institutionalism and hegemonic stability theories, but also on constructivism.
See: Charles Kindleberger, The World in Depression, 1929-1939 (1973); Gilpin, 1981; Keohane, 1984.
Hegemony is a disputed concept in IR. As this thesis engages mainly with mainstream IR approaches, the
concept of hegemony adopted here considers it a situation in which ‘one state is powerful enough to maintain the
essential rules governing interstate relations, and willing to do so.’ Robert O. Keohane and Joseph S. Nye Jr.,
Power and Interdependence: World Politics in Transition (1977), p. 44. Following the mainstream literature, this
definition emphasizes material resources to the detriment of ideational aspects of hegemony.
117
Ikenberry, 2001, p. 23-30.
 59

indiscriminate exploitation. The primacy of law is the ordering principle, while institutional
arrangements restrict the use of the power.

In articulating his model, Ikenberry reverts to history and to what he considers the three
attempts of establishing constitutional orders, pursued by the United Kingdom (UK) in 1815
and by the US in 1919 and 1945. A convergence of factors led to 1945 being the most
successful attempt. The tragedies of the war, the total collapse of the previous order, the
essential role played by the US in winning the war, and its enormous power differential
allowed the US to strike a constitutional bargain after World War II. However, Ikenberry is
aware that a constitutional order was not the only order in place after 1945. In fact, the
dominant order was a balance of power opposing the US and the USSR. The two orders
coexisted: the first one delineated by the strategic competition between the two superpowers;
the second, limited to the Western bloc, developed by a series of institutions in security, trade,
and other areas. 118 Ikenberry further argues that, after the end of the Cold War, the balance of
power order was discarded. The US then faced another winning situation but did not need to
rebuild an order from scratch. The liberal order inside the Western bloc was intact and ready
to be expanded. Ikenberry contends that, in the 1990s, the US engaged in the promotion of
such order, expanding its institutions, principles and norms to others.

Because it resonates with many liberal themes and policy issues, Ikenberry’s work became a
compelling articulation of the contemporary international order and of US foreign policy after
World War II. Nevertheless, the concept of liberal order is born out of particular
interpretations of US foreign policy and assumptions about institutional arrangements. Akin
to Liberal IR, these assumptions come from superficial generalisations, carry unarticulated
liberal premises, silence conflict and power disparities, and lead to biased findings.
Accordingly, this section examines liberal order and its concepts, setting the framework of
analysis for the following chapters.

118
The recognition of a balance of power order seems to be Ikenberry’s way of coming to terms with Realism.
Even so, other orders coexisted during the Cold War. Order within the Soviet bloc was also based in institutional
arrangements, although of different characteristics, such as the Warsaw Pact and the COMECON. In Ikenberry’s
terminology, that would probably be a hegemonic order. Moreover, US relations with peripheral countries during
the Cold War, as well as USSR relations, developed through patterns that were not entirely constitutional or
hegemonic. Concerning such regions, Ikenberry talks about a US hub-and-spoke system of security alliances
during the Cold War. See: Ikenberry, 2012.
 60

2.4.1. Binding institutions and constitutional bargain

According to Ikenberry, constitutional orders have three main elements: a shared agreement
over principles and norms; binding institutions that limit the use of power; and an
arrangement of these institutions into a stable system that cannot be easily altered. 119

From the standpoint of the hegemonic state, the option of a constitutional order is rather
instrumental. Constitutional orders incur lower maintenance costs, as the use of force is less
needed and less frequent. Secondly, there is the perception that power preponderance is
transitory: gaps would eventually diminish and new threats emerge. Compelling states to
behave according to principles and norms previously accorded would diminish risks. For
other states, the options are also clear: accept the constitutional bargain or remain outside the
order and support their actions based on their own power – a choice not often favoured at the
end of great conflicts. Furthermore, he states that the ‘greater the power of the leading state,
the more incentives and capacities it will have to build order around binding institutions.’ 120

In creating binding institutions, states inaugurate what Ikenberry calls a constitutional bargain.
While the hegemonic state establishes its preferred principles and norms, it also devises
mechanisms that limit the exercise of its own power in order to attract others. The bargain is
based on reducing the implications of winning. By diminishing the returns to the use of
power, the order becomes palatable to the weaker states and, therefore, more stable.

As Ikenberry states, power restraint strategies are not exclusive of constitutional orders. The
strengthening of sovereignty and state autonomy; the division of territories to disperse power;
and the establishment of counterbalancing alliances are some examples of power restraint
strategies. Constitutional orders would be based on specific types of power restraints, such as
binding institutional arrangements and, on a smaller scale, supranational integration. 121

Examples of binding mechanisms are ‘treaties, interlocking organizations, joint management

responsibilities, agreed-upon standards and principles of relations’. These mechanisms create

119
Ikenberry, 2001, p. 30-32.
120
Ibid., 72. This is highly controversial statement. One would expect that, the greater the power of the leading
state, the greater would be the incentives for isolation or exploitation of others, or at least that hegemons might
take a case-by-case approach, keeping flexibility and policy options open.
121
Ibid., 37-44.
 61

voice opportunities and raise the costs of exit. 122 Binding institutions would be sticky and
function in an independent manner. Security alliances would be the most important form of
institutional binding, as they ‘lock states together in joint decision making, enmeshing states
in deeply rooted forms of institutionalized cooperation.’ 123

Three large scale processes empower binding institutions. First, as institutional agreements
are formalized in legal treaties, they strengthen the expectations about state behaviour. When
institutions take legal form, they embody authority and contractual force, even within
domestic law systems of signatories, therefore raising the costs of breaking agreements.
Second, institutions often lead to increasing intergovernmental and transgovernmental
interactions. Continuous processes would put bureaucracies in close contact and create
‘transgovernmental connections, routines, and coalitions, which in turn give a certain
momentum and continuity to specific state policies and commitments.’ Third, institutional
arrangements have spillover effects into a wider set of political activities, including domestic
state policies and institutions. 124 Path dependency, socialisation, and increasing institutional
returns conclude that, once established, the costs of abandoning institutions rise significantly
over time. 125

Moreover, democracies would be better suited to join and comply with binding institutions
than other states. The main reasons would be higher levels of transparency, reinforcing
confidence in the commitments assumed and reducing surprises; a more open and
decentralized policy-making process, which provides other states with multiple access points
to consultation and direct representation of their own interests; and a greater number of
institutional checks and veto points in the policy-making process, which reduces abrupt
changes in policy. 126

The above discussion clearly shows the overlapping research agendas of liberal order and
liberal international law. Yet, as in Slaughter’s work, the concepts of binding institutions and
constitutional bargain also carry unarticulated assumptions and generalisations about the
behaviour of liberal states and the characteristics of the international order. These are
addressed below.

122
Albert Hirschman, Exit, Voice, and Loyalty (1970).
123
Ikenberry, 2001, p. 41-42. Karl W. Deutsch et al., Political Community and the North Atlantic Area:
International Organization in the Light of Historical Experience (1957).
124
Ikenberry, 2001, p. 65-69.
125
Ibid., 61-72. On socialization, see also: Ikenberry and Kupchan, 1990.
126
Ikenberry, 2001, p. 75-79.
 62

2.4.2. Criticisms of the concept

Ikenberry draws his concept of binding institutions from the works of Deudney and Joseph
Grieco, authors who worked with cases significantly different from the international order.
Grieco looked at the Maastricht Treaty and the politics of European economic and monetary
integration. 127 Deudney analysed the development of the Philadelphian System: the
republican solutions to the security problems in early US history. 128 Both worked on much
more limited geographic scales than Ikenberry. In comparison, the units in their systems share
an almost homogeneous set of political, economic, social and cultural beliefs. Similarly,
although the distribution of relative power in the referred systems is uneven, the power
disparities are nowhere near those encountered in the international system after World War II
or after the Cold War.

Ikenberry makes a bold movement in transposing the concept of binding institutions and its
implications from these cases to the international system. It seems likely that binding
mechanisms can be more effective under the circumstances studied by Grieco and Deudney
than globally. Above all, the European and the US cases possess a common idea of
integration, a social purpose for institutional arrangements that was never present in the
international order. 129 Binding institutional agreements on the international level, like the ones
addressed by Ikenberry, are not established between relatively equal or homogenous parties.
Ikenberry assumes that institutions work in the same manner – restraining the use of power –
in these different environments; neither his theoretical or historical discussion supports this
fact.

The discrepancy is more acute in the US case. 130 Deudney’s republican security theory
explains how US founders developed a framework to address a fundamental problem: how to
create a stronger political community which guarantees that one of its members will not
dominate the others. In a complex system of different political instances (state and federal
levels), separation of powers, checks and balances, and constant elections, the founders

127
Joseph M. Grieco, 'The Maastricht Treaty, Economic and Monetary Union and the neo-realist research
programme' (1995); Joseph M. Grieco, 'State Interests and International Rule Trajectories: A Neorealist
Interpretation of the Maastricht Treaty and European Economic and Monetary Union' (1996).
128
Deudney, 1995.
129
This fact is well-captured by the pluralist-solidarist debate within the English School. See: Bull, 1966.
130
Deudney, 2007.
 63

developed a system in which individual states could come together and form a ‘more perfect
union’. This system expanded across the continent, and later proved capable of reforming and
strengthening itself. Within culturally homogeneous, socially equal and integration-oriented
units, binding institutions could indeed limit the returns on the abuse of power, and provide
for interaction and cooperation which raise the degree of predictability and stability in the
system. But to export this model to an international order in which states are highly unequal
and deeply watchful of their sovereignty is not an appropriate way to explain the development
of international institutions.

The concept of binding institutions further asserts that they function independently and limit
the exercise of power by the hegemonic state. At the same time, the liberal order model
recognises that these institutions were created primarily by the hegemon, according to
principles and norms that lock in its preferences and extend hegemonic power into the future.
It seems contradictory to conceive of institutional arrangements simultaneously as
mechanisms of restraint and mechanisms of the projection of hegemonic power.

As Randall Schweller has pointed out, the coexistence of institutional arrangements and
restrained behaviour by the hegemonic state does not necessarily constitute a causal link. The
reasons for the restrained behaviour can lie elsewhere, particularly in constraints external to
institutions, such as the presence of another great power.

To establish this causal connection, Ikenberry must provide cases in which institutions
were effectively used by secondary and weak states to protect themselves from the
arbitrary exercise of hegemonic power, that is, cases in which the institution prevented
the hegemon from doing something it was determined to do and otherwise would have
done. 131

The liberal order model does not establish such causal links; as with other Liberal IR variants,
like the democratic peace and liberal international law, it relies on assumptions and
unsubstantiated generalisations instead.

Scholars argue that, even if institutions cannot properly bind the exercise of the hegemonic
state’s power, they perform the elusive role of shaping states’ preferences. According to
Robert Jervis, ‘while at the point of decision a major power will not be bound by the
institution, its capabilities, outlook, and even values may have already been affected by how

131
Randall L. Schweller, 'The Problem of International Order Revisited: A Review Essay' (2001), p. 176-77.
 64

the institution operated previously.’ 132 Over time, the ‘fact that habits, expectations,
capabilities, and socialization operate throughout the international system means that
institutions can change the environment in which states act.’ 133 While this might be true, it
does not speak directly to the capacity of institutions to bind hegemonic power, which is the
core of the liberal model.

Additionally, the way in which institutions shape preferences and change the environment is
not a one-way street. It is conceivable that the flow of ideas and socialization might actually
enhance hegemonic power, rather than restrain it. Institutional arrangements are created by
hegemons, based on their principles and norms. As such, institutions are not neutral: power is
exercised in defining institutional designs and continues to be exercised in subtle ways like
agenda setting, budget control and appointments of officials throughout the institution’s
lifetime. 134 It is reasonable to think that the socialization processes would tend to influence
other states towards hegemonic preferences rather than the other way around. Either way, this
is an empirical question. As it does not address it directly, the liberal model is left, once again,
with unarticulated assumptions rather than the scientific and empirical evidence it alludes to.

2.4.3. Criticism of the historical narrative

Demonstrating his liberal model, Ikenberry interprets many of the post-war policies, such as
the Bretton Woods agreement, the Marshall Plan, and the creation of NATO, as examples of
constitutional bargains and binding institutions. In Chapters 3, 4 and 5, I dispute these
propositions and show how they find weak support in the historical record. All negotiations
for the creation of international institutions after World War II had one recurrent
characteristic: the need to protect the US’s freedom of action and sovereignty; and not, as the
liberals assume, to limit US power through strategic restraints.

Examples abound. The veto in the UN Security Council would guarantee that the US was not
obliged to act if it did not wish to, and conversely could prevent others using the UN to act
against its interests. US officials were sure to implement weighted voting systems in the

132
Robert Jervis, Henry R. Nau and Randall L. Schweller, 'Institutionalized Disagreement' (2002), p. 174.
133
Ibid., 176.
134
Michael Barnett and Martha Finnemore, Rules for the World: International Organizations in Global Politics
(2004); Michael Barnett and Martha Finnemore, 'The power of liberal international organizations' (2005);
Randall W. Stone, Controlling Institutions: International Organizations and the Global Economy (2011).
 65

Bretton Woods institutions, which granted veto power in practice. Decisions within the North
Atlantic Treaty needed a consensual basis, and even the language of the collective security
pledge was worked out so as not to imply immediate military action. The ITO was defeated in
great part for being too intrusive to US domestic laws, and the restricted GATT agreement
had consensually based decisions and a dispute settlement mechanism that would only work
with the full agreement of all parties. All these institutions guaranteed the US room for
manoeuvre, freedom of action, and guarded its sovereignty rights.

Moreover, the debates in the US Congress during the negotiation and ratification of these
institutions invariably circled around the amount of sovereignty the US was conceding to the
new arrangements, and how would they impact on US national interests. When looking
specifically at each case, one realises that US policymakers had to devise ingenious
mechanisms to play this two-level game, guaranteeing the establishment of new institutions
and at the same time answering to Congress’s concerns about US sovereignty, malicious
foreign influence and limits on US power. The idea that US policymakers willingly negotiated
restraints to US power, and that Congress consciously ratified them in order to establish a
liberal order is very hard to support. 135

Secondly, the liberal idea that states were attracted to institutions such as the IMF or NATO
because they restrained US power is also hard to support. After World War II, European
concerns centred on the fear of US isolationism, not of the abuse of US power. There was an
actual effort to bind the US to Europe, utilizing institutional arrangements, but this bond did
not mean the limitation of US power. For one thing, Europeans needed demonstrations of US
power to finance reconstruction and serve as a security guarantor. From their previous
experiences, European countries were conscious of the pacifying effects that US engagement

135
US planners at the State and Treasury Departments, as well as close advisors to the President Roosevelt and
Truman, the Presidents themselves, many intellectuals and some congressmen believed in the necessity and
worked for the creation of institutions to regulate relations between nations. This was due particularly to the
interpretation that the US had won the war in World War I, but lost the peace. This is not to say, nevertheless, as
the liberal argument does, that the new institutions put restraints on US power. Planners did not see these
restraints as needed: US power, after all, was the base of peace and stability in their view, as it had rescued
Europe from conflict twice in one generation. There are many good works on these topics, some of which are
referred to in subsequent chapters. See: Richard N. Gardner, Sterling-Dollar Diplomacy: Anglo-American
Collaboration in the Reconstruction of Multilateral Trade (1956); Robert A. Divine, Second Chance: The
Triumph of Internationalism in America during World War II (1967); Robert C. Hilderbrand, Dumbarton Oaks:
the origins of the United Nations and the search for postwar security (1990); Randall Bennett Woods, A
Changing of the Guard: Anglo-America Relations, 1941-1946 (1990); Georg Schild, Bretton Woods and
Dumbarton Oaks: American economic and political postwar planning in the summer of 1944 (1995); Townsend
Hoopes and Douglas Brinkley, FDR and the Creation of the U.N., New Haven (1997); Stephen C. Schlesinger,
Act of Creation: The Founding of the United Nations (2003); Stewart Patrick, The Best Laid Plans: The Origins
of American Multilateralism and the Dawn of the Cold War (2009).
 66

in the continent could bring. They needed a US security commitment against a possible
remerging Germany or against an aggressive USSR, and they also needed US capital to
finance reconstruction. As Ikenberry notes, ‘The most consistent British and French objective
during and after the war was to bind the United States to Europe. The evolution in American
policy (…) was a story of American reluctance and European persistence.’ 136 In the sense that
power restraints were simply not needed, it is hard to conceive them as an integral part of a
constitutional bargain. Even Ikenberry earlier called the US presence in Europe ‘empire by
invitation’. 137

Thirdly, there is a timing problem in the liberal narrative. Ikenberry describes both a US-
USSR balance of power order and a liberal order led by the US, but there are issues in how he
relates the two orders and the processes that created new international institutions. Stewart
Patrick rightly captures this, demonstrating how the institutions of the 1940s were created in
two distinct moments and mind-sets: a multilateral environment up to 1947, and a Cold War
logic after that. 138 Negotiators initially accommodated the USSR instead of balancing against
it. The UN and the Bretton Woods institutions are clear examples of that. But the most
significant case in Ikenberry’s account is NATO. He argues that the creation of NATO was

driven by the demands of postwar economic renewal and the need for some solution to
the German problem, imperatives that existed independently of the worsening of
relations with the Soviet Union – although the Cold War did raise the stakes and sped
the process. 139

This is a difficult interpretation: European concerns with Germany and the need for economic
reconstruction existed, but when one looks at the historical record and the dynamics of the
policymaking and negotiation of the North Atlantic Treaty, all the major breakthroughs came
in reaction to security concerns created by Soviet movements. Besides, what was signed in
1949 was the North Atlantic Treaty, which was simply a legal commitment at that point. The
‘O’ in NATO was developed months later: the command and military structures of the
organization were a reaction to the Korean War and were completely immersed in the Cold
War logic. The emergence of Cold War, i.e. the balance of power order, played a decisive role
in US policies towards international institutions, i.e. the liberal order, after 1947. The liberal
136
Ikenberry, 2001, p. 206.
137
Geir Lundestad, 'Empire by Invitation? The United States and Western Europe, 1945-1952' (1986); G. John
Ikenberry, 'Rethinking the Origins of American Hegemony' (1989), p. 391.
138
Patrick, 2009. This is a simplified typology; the argument is properly explored in the empirical chapters.
Authors usually contrast these tendencies as the ‘one-world’ of the Roosevelt administration and the ‘free-world’
of the Truman and following administrations.
139
Ikenberry, 2001, p. 211.
 67

model completely discounts that, considering institutions and restraints on US power only a
factor of internal liberal dynamics, as if impermeable to the logic of power politics.

Looking at the Cold War period, the historical record also does not seem to favour
Ikenberry’s arguments that binding institutions limit the use of US power. 140 As examples of
that, Schweller cites the Truman administration’s dropping out of the ITO treaty; the
Eisenhower administration’s actions in the Suez crisis against British and French interests; the
Kennedy administration doctrine of nuclear flexible response, again against Western
European wishes; the wars fought in Korea and Vietnam against NATO allies’ better advice;
the reestablishment of relations with China in 1971, shocking Japan; and the unilateral
breakdown of the Bretton Woods gold-dollar parity in the same year. 141 In all these cases and
others, the existence of institutional arrangements did not restrict the use of US power.

Finally, if the US was indeed engaged in a strategy of liberal order building through binding
institutions, the apex of such a strategy should have been the post-Cold War era. The
conditions could not have been more fitting:

(1) America secured total victory over its rival and gained unprecedented hegemonic
power and status; (2) the current post-war structure is the only one, since the birth of
the modern state system in 1648, that is universally recognized as unipolar by all its
members; (3) there is no serious challenger to American supremacy on the horizon; (4)
America's ideals, values, and domestic structures are the embodiment of constitutional
order and democracy; and (5) the world has never been more populated by democratic
states. 142

By all Ikenberry’s criteria, the US was in the most appropriate position to assume self-binding
behaviour, limit the exercise of its own power, and lock in future gains in new institutional
arrangements. Instead, we have seen indecisiveness during the senior Bush administration;
assertive multilateralism and episodes of unilateral action during the Clinton administration;
and a triumphal return to US unilateral power during the George W. Bush years. Institutional
arrangements were reformed, expanded, and new ones created, but continue not to bind US
power, being perceived by many contrariwise as instruments of US power.

140
Schweller, 2001, p. 179.
141
The US started suffering monetary pressures against the gold-dollar parity in the 1960s, and the fact that it
only suspended convertibility in the early 1970s could be argued as a example of self-restraint in its relative
power position. Nevertheless, this reasoning does not save the concept of binding institutions. The US suspended
convertibility unilaterally, without consulting its closest allies which greatly suffered the impacts of the change
and without following the rules and norms of the IMF, the institution which was supposed to regulate the parity
system. Barry Eichengreen, Globalizing capital: a history of the international monetary system (1996).
142
Schweller, 2001.
 68

2.4.4. Embedded liberalism

According to the liberal model, hegemonic states rationally and instrumentally opt for
constitutional orders because they lock in future returns to power, promote stability and have
lower costs. These effects come from assumptions about the positive value of binding
institutions. Nevertheless, the choice for institutions ‘depends on the particular challenge, the
number of actors, and the availability of other policy instruments.’ 143 Institutions could be the
best course of action in some strategic situations, but cooperation problems have multiple
feasible solutions, or alternative equilibrium points. 144

Stretched to its limit, this liberal instrumental approach means that any hegemonic state would
attempt to create a constitutional order centred on binding institutions. Such a conclusion is a
dead end. Institutional arrangements have been used by great powers in different historical
circumstances to support a variety of international orders. The USSR had institutions
established in the Soviet bloc. The balance of power order between the US and USSR had its
own institutions. Even Nazi Germany had institutions regulating its sphere of influence.
Multilateral institutions would have had a very different outlook had Germany or USSR been
the hegemonic power after World War II. 145 As Ruggie points out,

even if Britain had ended up at the top things would have differed in key respects.
Colonialism would have continued longer. And while monetary relations probably
would have been organized similarly, though based on sterling instead of the dollar,
British imperial preferences would have remained a central feature in international
trade, possibly forcing other countries to carve out discriminatory trade blocs for
themselves. 146

As Ruggie demonstrates, the existence of institutions does not tell us much about the
principles and norms of such institutions or the international order. This relates to the
previous discussion of formal multilateralism and substantive multilateralism. 147 Overall, the
liberal model does not provide explanations for the choice of the institutional route, nor for
principles and norms embedded within such institutions. 148 Contrary to the liberal model, the

143
Patrick, 2009, p. xvi.
144
Lisa Martin, 'The Rational State Choice of Multilateralism' (1993); Patrick, 2009, p. xvi.
145
John Gerard Ruggie, Winning the Peace: America and World Order in the New Era (1996), p. 20, 23.
146
Ibid., 23-24.
147
Keohane, 1990; Ruggie, ed., 1993.
148
See also: Dan Lindley, 'Emerging Order' (2001), p. 838.
 69

choice to build an order based on institutional arrangements might not be purely a rational and
instrumental choice. Ruggie states that in ‘the post-World War II situation, for example, it
was less the fact of American hegemony that accounts for the explosion of multilateral
agreements than of American hegemony.’ 149

[The] choice [by the US] of the specific features of the postwar institutional
frameworks – be it the United Nations, indivisible security commitments in NATO, or
nondiscriminatory norms in trade and monetary relations – cannot be rendered
accurately merely in terms of marginal utility but also reflected America's sense of self
as a nation. 150

As such, the post-World War II order was not simply a constitutional order based on the
strength of binding institutions. Institutional arrangements were promoted by the US
according to its preferred principles and norms, and supported by US power. The problem is
that placing binding institutions and a constitutional bargain at the core of the liberal model
leaves unarticulated the liberal political and economic principles and norms embedded in
these institutions, and the fact that they could only be implemented through US power. Once
again, this is a typical case of Liberal IR silencing conflicts and power disputes, and hiding its
ideological content through assumptions and generalisations which purport to rest upon
empirical, scientific evidence.

The fact that Ikenberry does not directly address the implications of liberal principles and
norms in institutional arrangements in After Victory is puzzling. The book conceptualises a
constitutional order without mentioning that it is also, and I will argue more importantly, a
liberal order. The discrepancy is even more puzzling given the fact that Ikenberry and other
authors used the terms liberal order in various previous and later works. 151

The implications of the two terms are, however, markedly different. A constitutional order
emphasises the instrumental characteristics of its institutional arrangements: their supposedly
binding character, the fact that they extend hegemonic power into the future, and that they
provide for stability and cooperation between states. The choice for institutions thus would be
a rational choice. In contrast the emphasis on a liberal order stresses the political and

149
Ruggie, 1993, p. 8.
150
John Gerard Ruggie, 'What Makes the World Hang Together? Neo-Utilitarianism and the Social
Constructivist Challenge' (1998), p. 863. See also: John Gerard Ruggie, 'The Past as Prologue?: Interests,
Identity, and American Foreign Policy' (1997).
151
G. John Ikenberry, 'The Myth of Post-Cold War Chaos' (1996); Deudney and Ikenberry, 1999; Daniel
Deudney and G. John Ikenberry, 'The Myth of the Autocratic Revival: Why Liberal Democracy Will Prevail'
(2009); Ikenberry, 2009.
 70

economic principles embedded within institutional arrangements, such as preferences for

democracy, market economies, free trade or human rights. In conceptualising binding
institutions and a constitutional bargain, its ideological content, i.e., its liberal principles,
remain hidden; its normative implications, unarticulated.

******

Ikenberry provides a sophisticated account of the institutions of the contemporary

international order. Nevertheless, as the discussion above shows, his concepts of binding
institutions and constitutional bargain carry important conceptual flaws and inconsistencies.
His narrative about the creation of such institutions and his interpretations regarding US
foreign policy finds weak support in the historical record, an issue that will be explored in
detail in the following chapters. More importantly, his concept of liberal order is based on
generalisations and unarticulated assumptions. As Liberal IR, despite proposing itself as
empirical social science, it has deep normative implications.

2.5. Conclusion

Chapter 2 looked at Liberal IR as whole and at its promise to be ‘a nonideological and

nonutopian form appropriate to empirical social science.’ Nevertheless, through excessive
generalisation and biased use of the historical record, Liberal IR promotes assumptions as
positive facts, carrying unarticulated ideological content and normative implications. The
above discussions of liberal international law and liberal order are examples of that. The
following chapters examine in detail the historical record of liberal narratives regarding
binding institutions, constitutional bargain and US foreign policy.

In his most extensive formulation of the liberal order, Ikenberry reverts to historical examples
to demonstrate how hegemonic states create constitutional orders. 152 Nevertheless, he mostly
assumes that hegemons were establishing binding institutions, and that other states were
accepting constitutional bargains. Ikenberry never formally states which elements define a
constitutional bargain and, therefore, does not test it against alternative explanations. With the
latter intent, I infer based on his work that, in order to classify the creation of an institution as
due to a constitutional bargain, four elements must be present: (1) the creation process must

152
Chapters 4, 5 and 6 in Ikenberry, 2001.
 71

be purposefully driven by the hegemon; (2) it must be intended to bind hegemonic power; (3)
it must generate benefits for other states; and (4) it must be willingly accepted by other states.

Elements two, three and four seem clear enough from the discussion above. The main
characteristic of institutional arrangements in the liberal model is the binding of hegemonic
power, their capacity to restrain hegemonic behaviour. In this way or others, institutions must
benefit weaker states in order to attract them towards the constitutional bargain and avoid
later defections. Likewise, weaker states must willingly accept the bargain, otherwise they
would have been coerced into joining such institutional arrangements, which defeats the
whole logic of the liberal model.

The first element, however, is less clear. It is conceivable that binding characteristics of
institutional arrangements could be a product of unintended consequences, therefore
discarding the need for the creation of such institutions to have been purposefully driven by
the hegemon. It is plausible, indeed even more likely I would argue, that US policymakers
could have attempted to create institutions in which they would dominate the proceedings and
policies, and that throughout the institutionalization processes unintended consequences
emerged that restricted US power. Nonetheless, this is not what the liberal model suggests.
Ikenberry supports an interpretation in which the US set out to create a liberal order and
institutions through constitutional bargains. In fact, his work on the aftermath of great
conflicts in 1815, 1919 and 1945 suggests a pattern in which ‘the leading state has resorted to
institutional strategies as mechanisms to establish restraints on indiscriminate and arbitrary
state power and “lock in” a favorable and durable postwar order.’ 153 He recurrently makes
statements affirming that the US ‘sought to take advantage of the postwar juncture to lock in a
set of institutions that would serve its interests well into the future…’ 154 The evaluation of US
intentions, therefore, derives from the conceptualisation of the liberal model itself. In fact, US
intentions and purpose are very relevant for this literature, as liberal authors also promote and
support a liberal internationalist orientation of US foreign policy, as discussed in Chapter 6.

These elements allow a better evaluation of the historical record regarding the creation of the
IMF, the GATT/WTO, and NATO. Obviously, such criteria apply only to the processes of the
creation of international institutions, analysed regarding all institutions in the post-World War
II and regarding the WTO in the post-Cold War period. As for the IMF and NATO in the

153
Ibid., 4.
154
Ibid., 164.
 72

post-Cold War period, what is in question are the processes of expansion of these institutions
and their effective binding of hegemonic power as core features of liberal order. As such, the
above criteria might be reframed as: (5) the expansion process must be purposefully driven by
the hegemon; (6) the institution must bind hegemonic power; (7) the institutions must
generate benefits for other states; and (8) the expansion process must be willingly accepted by
other states.

The simplest alternative hypothesis to consider is that states were coerced into joining
institutions. Given the power disparities after World War II, this is a reasonable supposition.
Moreover, the fact that membership in international organisations was voluntary might not
suffice. Hegemons often have what Gruber named ‘go-it-alone power’, the fact that, given
their power and scale, they will continue to benefit from institutions even if other states drop
out. In this way, weaker states might be passively coerced into joining institutions with little
benefits or even net losses, as the previous status quo was changed by the actions of great
powers. 155

Another explanation worth exploring is the idea that a constitutional bargain was not needed.
Compromise might precede institutionalisation and, as such, institutions will not necessarily
have binding characteristics. 156 The institutions this in case would be the result of previous
commitments and external commonalities, not the source of binding and power restraints. 157
Possible causes of previous and external factors could amount to a minimum set of shared
principles and norms, which allowed allies to acquiesce to US goals; and the (initial) threat of
Germany’s re-emergence and of Soviet expansion.

Lastly, regarding the post-Cold War period, one needs to assess whether the noticeable
expansion of international institutions followed the logic of the liberal model. The most
obvious alternative hypothesis is Realism’s explanation that institutions serve the interest of
great powers, the US being first amongst them. 158 Nevertheless, authors have shown how
institutions developed into complex bureaucratic organisms with the technical power,

155
Gruber, 2000.
156
In a somewhat similar argument, Badredine Arfi argues that binding institutions are founded through an
‘arbitrary exercise of power’. Badredine Arfi, 'Rethinking International Constitutional Order: The Auto-immune
Politics of Binding Without Binding' (2010).
157
Ikenberry, 2001, p. 35, note 39. As Robert Dahl wrote about the US, ‘to assume that this country remained
democratic because of the Constitution seems to me an obvious reversal of the relation; it is much more plausible
to suppose that the Constitution has remained because our society is essentially democratic.’
158
Mearsheimer, 1994.
 73

authority and legitimacy to set agendas and influence policies. 159 In this sense, this research is
also oriented by the fact that power might be exercised through international law and
institutions, not despite them. 160

159
Barnett and Finnemore, 2005. and Barnett and Finnemore, 2004.
160
Igor Abdalla Medina de Souza, 'An offer developing countries could not refuse: how powerful states created
the World Trade Organisation' (2013), p. 14.
3. US foreign policy and financial institutions

The following three chapters examine the concept of liberal order focusing on the IMF,
GATT/WTO and NATO as the main institutions of financial, trade and collective security
regimes. As such, this and the two following chapters are all divided into two main sections,
referring to the distinct historical periods examined.

Chapter 3 starts the analysis looking at US foreign policy and the planning and negotiations
that led to the creation of the IMF. The detailed account of the historical record provided
below allows a better evaluation of the concepts of binding institutions and constitutional
bargain, based on the characteristics articulated in Chapter 2. For the post-World War II
context, at the creation of such institutions, these criteria are: (1) the creation process must be
purposefully driven by the hegemon; (2) it must be intended to bind hegemonic power; (3) it
must generate benefits for other states; and (4) it must be willingly accepted by other states.

3.1. IMF: post-war planning, negotiations and implementation

Liberal interpretations consider the post-war economic order as an expression of embedded

liberalism, ‘organized around a set of monetary and trade schemes, embodied a unique blend
of laissez-faire and interventionism – of liberal multilateralism and the welfare state.’ 1 Its core
is composed of ‘a relatively open and multilateral system of trade and payments’ which
‘reconcile openness and trade expansion with the commitments of national governments to
full employment and economic stabilization.’ 2

Accordingly, this order came to represent a movement from ‘free trade to managed openness’.
The US initial focus on free trade and non-discrimination evolved to a more flexible order in
which European priorities were safeguarded. G. John Ikenberry argues that changes in US
policies resulted from three factors. Firstly, the State Department, highly oriented towards
non-discrimination and free trade, ended up losing the control of negotiations to the Treasury.
Its officials considered monetary stabilization central to the new order, which put aside

1
G. John Ikenberry, 'A World Economy Restored: Expert Consensus and the Anglo-American Postwar
Settlement' (1992), p. 294. See also: John Gerard Ruggie, 'International Regimes, Transactions, and Change:
Embedded Liberalism in the Postwar Economic Order' (1982).
2
Ikenberry, 1992, p. 289.
 75

contentious trade topics. Secondly, a technical consensus achieved between US and British
experts favoured the design of new institutions. Finally, the weakness of European
economies, which did not respond to the early incentives, led to US concessions allowing
more flexibility and state interventionism.

Technical consensus among experts is a particularly praised element in liberal accounts. 3

However, the vast majority of the literature describing Bretton Woods depicts disagreement,
not consensus. 4 Richard Gardner and Armand van Dormael, for instance, recount the history
of the negotiations focusing on the differences between US and British plans, with disputes
ultimately being solved by the US preponderance of power. Ikenberry praises both works
respectively as a ‘definitive history of the negotiations’ and ‘a fairly straightforward and
detailed history’; as the following sections demonstrate, the idea of technical consensus as a
defining element of the post-war economic order cannot be supported by either work. 5

The liberal notion that the economic order was created around a ‘set of monetary and trade
schemes’ or was composed of a ‘system of trade and payments’ only makes sense if one takes
a broad view of the period. Financial and trade institutions developed at a different pace. The
IMF was planned and negotiated from 1941 to 1944. The ITO, after initial meetings in 1943,
would only be seriously negotiated in 1945, and never properly established. Provisional at
first, the GATT was only signed in 1947. These institutions were planned, negotiated and
implemented at different moments. Each process contained its own bargains and trade-offs,
and did not constitute anything like a constitutional bargain.

The research below shows that, regarding monetary and financial institutions, liberal
interpretations of binding institutions and constitutional bargaining derive from a generalised
account of the historical record and biased interpretations of US foreign policy. When
examined in detail, these processes turn out to be more complex and based on different logics
and power structures. Liberal accounts overemphasize technical consensus to the detriment of
key political implications. The following sections demonstrate that founding principles and
designs of institutions were settled by the US’s relative power position. Concessions did not

3
Alfred E. Alfred E. Eckes Jr., A Search for Solvency: Bretton Woods and the International Monetary System,
1941-1971 (1975); Ikenberry, 1992.
4
See among others: Gardner, 1956; Armand van Dormael, Bretton Woods: birth of a monetary system (1978);
Raymond Frech Mikesell, The Bretton Woods debates: a memoir, Essays in international finance, (1994);
Schild, 1995; Eichengreen, 1996; James M. Boughton, 'Why White, Not Keynes? Inventing the Postwar
International Monetary System', (2002).
5
Ikenberry, 1992, p. 297, note 16.
 76

originate from constitutional bargains, but from failed US policies. Moreover, international
financial institutions never had binding power over the US or European countries.

3.1.1. Early differences: Atlantic Charter and Lend-Lease

US post-war planning was based on two premises: the necessity of permanent engagement in
international politics after the war, and the notion that security and economic prosperity were
inseparable elements of peace. 6 The experience of the Great Depression and its implications –
beggar thy neighbour policies and a world economy organised around competing trade blocs
and currency areas – strongly influenced policymakers.

But the US emphasis on an open economic order was not shared with other countries in all its
nuances. The most sensitive resistance came from the UK, as exemplified by early
negotiations of the Lend-Lease Agreement. In December 1940, President Franklin Roosevelt
had announced his intention of establishing a lend-lease program to help the British war
effort. The Neutrality Acts forced the UK to buy US goods on a cash and carry basis.
Roosevelt was confident that the Nazi victories would soften Congress opposition and turn
the US into the ‘arsenal of democracy’. The Lend-Lease Act was approved on March 11,
1941, and in the following weeks the British decided to send a representative to negotiate its
terms. The person chosen was John Maynard Keynes, who arrived at Washington in May.

At the State Department, Under Secretary Dean Acheson was responsible for the US side of
the negotiations. On one of their first meetings, Keynes provided Acheson with a draft stating
merely that ‘lend-lease should be extended; that the British should return what was practicable
for them to return; that no obligation should be created; and that they would be glad to talk
about other matters’. 7 Finding that unacceptable, Acheson came out with a revised draft
agreement. His version of Article VII stated that lend-lease exchange should

promote mutually advantageous economic relations between them and the betterment
of world-wide economic relations; they shall provide against discrimination in either
the United States of America or the United Kingdom against the importation of any
product originating in the other country; and they shall provide for the formulation of
measures for the achievements of these ends.

6
Ruth B. Russell, A history of the United Nations Charter; the role of the United States, 1940-1945 (1958), p.
14, 19, 32-33.
7
Dean Acheson, Present at the Creation: My Years in the State Department (1970), p. 29-30.
 77

Keynes asked if the article referred to imperial preferences and exchange and trade controls.
Upon an affirmative answer from Acheson, Keynes ‘burst into a speech such as only he could
make.’ His arguments were that it would be impossible for the UK to sign such an agreement
without disrespecting imperial commitments and that affirming non-discrimination would
mean a return to failed nineteenth century policies, which would imply the return of the gold
standard and the lack of flexibility on conducting economic policy. 8 A few weeks later, before
returning to London, Keynes wrote a letter of apology to Acheson, explaining that he was not
defending discrimination in the ‘old-bad sense’ of the word, but he worried that economic
needs for reconstruction in the post-war period would require flexibility from governments. 9

The exchange makes clear the different priorities of both countries. Keynes denounced a
system of indiscriminate free trade and strict gold standard; he envisaged a post-war economic
system that would be flexible enough to allow governments to pursue reconstruction policies.
As much as the US supported reconstruction, it had significantly different views as to the
means through which countries could better achieve it. US proposals put emphasis on the free
flow of trade and investments, instead of flexible arrangements and governmental policies.

This rather sanguine US view on non-discrimination was a product of both economics and
politics. The Great Depression and the Smoot-Hawley Act of 1930 had triggered retaliatory
practices abroad against US exports. 10 The most significant of these was the signature of the
Ottawa Agreements by the UK and the Dominions in 1932. Protectionism was broadly
accepted as economic policy in the US, but discrimination, favouring trade with some states
but not with others, was condemned in every sense. The key figure on the topic was the
Secretary of State Cordell Hull, who worked diligently to repeal protectionism at home and
abroad. 11 But in order to curb protectionists at home, Hull had to obtain equivalent gains
abroad. As such, ending British imperial preferences became the mostly highly sought prize to
State Department negotiators. 12

The quarrel between non-discrimination and trade preferences was re-enacted at the Atlantic
Conference in August 1941. Paragraph four of the British proposal for the Atlantic Charter
carried the statement that the UK and the US should ‘strive to bring about a fair and equitable

8
FRUS 1941, vol. III, p. 6-15. See also: van Dormael, 1978, p. 22-28.
9
FRUS 1941, vol. III, p. 16-17.
10
The Smoot-Hawley Act of 1930 raised US tariffs on over 20,000 imported goods to record levels.
11
Patrick, 2009, p. 112-13.
12
Susan Aaronson, 'How Cordell Hull and the Postwar Planners Designed a New Trade Policy' (1991). Douglas
A. Irwin, Petros C. Mavroidis and Alan O. Sykes, The Genesis of the GATT (2008), p. 12.
 78

distribution of essential produce, not only within their territorial boundaries, but between the
nations of the world.’ 13 Roosevelt considered the wording too vague, and suggested an
amendment adding ‘without discrimination and on equal terms’. Prime Minister Winston
Churchill immediately complained that such phrasing would compromise the Ottawa
Agreement of 1932 and would need to be cleared in advance with the Dominions. 14 In a
heated exchange, Churchill was eager to point out decades of US protectionist policies. 15
After successive rephrases, a commitment was reached on: ‘endeavor, with due respect for
their existing obligations, to further the enjoyment by all States, great or small, victor or
vanquished, of access, on equal terms, to the trade and to the raw materials of the world which
are needed for their economic prosperity’. 16

When the US-UK Lend-Lease Agreement was finally signed, on February 1942, the wording
of Article VII mentioned not only ‘the elimination of all forms of discriminatory treatment in
international commerce and to the reduction of tariffs and other trade barriers’, but also ‘the
attainment of all the economic objectives set forth in the Joint Declaration made on August
14, 1941’, that is, the principles of the Atlantic Charter. Even more, the agreement posed that:

At an early convenient date, conversations shall be begun between the two

Governments with a view to determining, in the light of governing economic
conditions, the best means of attaining the above stated objectives by their own agreed
action and of seeking the agreed action of other like-minded Governments.

This same clause was repeated in all lend-lease agreements the US signed during the war, the
USSR and China among them, and would be the basis for the economic negotiations that
ensued.

This narrative supports the first condition of a constitutional bargain as identified above: the
creation of post-war financial institutions was a US-initiative. Nevertheless, the same record
puts in question the fourth element. Through lend-lease agreements, the US committed other
countries to negotiate post-war economic arrangements, setting up principles of free trade and
non-discrimination as its basis. Such principles were not decided through negotiations or
technical consensus. Given the need of allies for war supplies and resources, they were
compelled to accept US conditions. This initial option, thus, was not the product of a

13
Schild, 1995, p. 34.
14
FRUS 1941, vol. I, p. 361.
15
Gardner, 1956, p. 45.
16
Schild, 1995, p. 35.
 79

constitutional bargain once states were required to accept these conditions. At least at this
point, negotiations for post-war institutions reflected the relative power of the US rather than
a bargaining process.

3.1.2. Post-war economic planning in the US and the UK

Post-war economic institutions emerged after a long process of planning and negotiation. In
the US, this process started in December 1941 at the Department of the Treasury. Secretary
Henry Morgenthau initially requested a plan for an Inter-Allied Stabilization Fund from Harry
Dexter White, the Director of Monetary Research. 17 The first version of White’s plan set out
two objectives for a post-war economic arrangement: stabilizing exchange rates and providing
the capital needed by allies for economic reconstruction and short-term foreign trade
shortages. In order to accomplish these two goals, White proposed the establishment of two
different institutions: an Inter-Allied Stabilisation Fund and an Inter-Allied Bank. 18

The plans were informed by White’s perceptions of the economic crisis of the interwar period
and the projected interests of the US after the end of World War II. During the 1930s,
countries had reverted to protectionist policies, refusing the gold standard, adopting various
monetary regimes, and implementing a series of ‘beggar thy neighbour’ policies. Clearly,
these methods did not provide a satisfactory answer to the crisis and prolonged its effects.
Moreover, it was widely accepted that the US would end the war as the world’s main creditor
country. The US would be the world’s main supplier of goods and run an export surplus for
many years to come. Under these conditions, the US would benefit from an international free
trade economy and stable exchange rates.

In early May 1942, White presented to Morgenthau an extensive draft of a United Nations
Stabilisation Fund and a Bank for Reconstruction of the United and Associate Nations. The
Secretary convened an inter-agency group, composed of members of the White House staff,
the State, Commerce and Treasury Departments, the Federal Reserve System, the Board of

17
‘Notes from the Secretary’s Record’, December 15, 1941.
18
van Dormael, 1978, p. 43. White dismissed upfront Morgenthau’s request for consideration of a postwar
international currency. According to White, the idea that an international currency could promote trade was
illusory. Any new currency would need to have its value fixed in relation to gold or other currencies. Apart from
symbolic meanings, a new international currency would not foster international trade any more than would a
good and stable exchange rate system. Ibid., 40-47. White’s lack of interest in the idea of an international
currency would materialize again in his discussions with Keynes.
 80

Economic Warfare, the National Resource Planning Board, and the Air Corps to consider the
plan. This American Technical Committee, under White’s leadership, would be the main
forum for post-war economic planning and negotiation with foreign governments. 19 Around
July, the State and Treasury departments were disputing the leadership of the process. While
the Treasury wanted to move on to a large scale conference, State pressed for informal talks
with the British and other great powers first. State held the stronger hand, although the
meetings did not take place. 20

Instead, pushed by the US inaction, the British decided to circulate a copy of their own plan in
Washington. British planning had begun earlier and Keynes was the main incumbent. 21 He
had started considering the issue in July 1940, after the announcement of Walther Funk’s
plans and Nazi propaganda for post-war economic relations. 22 During his stay in Washington
in 1941, Keynes already had a draft plan for a post-war economic order and submitted the
draft to Roosevelt. The President praised the document, but replied that it was too soon to
have such conversations. After his return to London, Keynes continued to work on the plan.
After a series of drafts and revised versions, a more robust plan emerged on what Keynes
called an international Clearing Union. By August 1942, the plan was consistent enough to be
discussed with the US. However, British officials in London and Washington had
continuously asked US representatives to open conversations with no positive answer. At last,
a representative from London went to brief the State and Treasury Departments. Morgenthau
demonstrated a lot of interest in the British suggestions, and at the same time gave them a
copy of White’s stabilization fund proposal.

In the following months, a series of meetings between US and British officials took place,
often with written questions being sent from one party to the other. By the end of the year, the
British were trying to resuscitate the idea of an informal meeting between experts of the two
countries. This time, the State Department denied the requests saying discussions would be
pursued on a multilateral basis with the USSR, China and other countries. The US did not
have any objections if the UK wanted to discuss the Clearing Union plan as a proposal for this

19
Mikesell, 1994, p. 6-7.
20
van Dormael, 1978, p. 53-55.
21
After the fall of France and the withdrawal of the British Expeditionary Force, the UK Cabinet faced the
critical question of war or armistice. Once the decision was taken, in a process highly influenced by Churchill,
the debates over war and peace aims and post-war planning grew in relevance. In this sense, in order not to
repeat past mistakes, ‘it was significant that J. M. Keynes was brought into the official process of war aims
formulation’. Christopher Hill, Cabinet decisions on foreign policy: The British experience October 1938-June
1941 (1991), p. 190. See also: John Maynard Keynes, The Economic Consequences of the Peace (1919).
22
van Dormael, 1978, p. 3-11.
 81

gathering; in fact, the US had sent copies of White’s plans to allied embassies on February
1943, upsetting the British. By March, both plans had been sent to more than thirty allied
countries, and the US was inviting states to send experts to Washington. Rumours about the
plans started to circulate in the media, and Congress started to question the administration
about it. The British had decided to publish their plans by early April, but in the US,
Roosevelt decided against it in order not to attract public criticism to post-war planning.
Nevertheless, US plans were leaked to the British press on April 1943, and cabled back to US
newspapers. 23 After another British request in mid-August, the US agreed to hold
conversations and in early September 1943, a delegation led by Keynes arrived in
Washington. 24

3.1.3. Technical discussions and consensus

US Treasury officials tried as much as possible to direct post-war planning as a technical

matter. Such an approach led the planning process to be conducted through informal meetings
and exchanges between experts up until the final phases of the negotiations. This choice for
technical discussions was manifested inside government as well as in relation to other states.
Within the Roosevelt administration, when the inter-departmental groups started working in
May 1942, they took White’s plan as its basic document of discussion. Technical meetings
from then onwards took the basic principles of a post-war economic order for granted, while
more sensitive political questions were simply pushed aside. An example can be seen in the
first meeting of the American Technical Group on May 28. Commenting on the proposals for
the Fund, Alvin Hansen, from the National Resource Planning Board, argued that it

laid too much stress upon technical financial problems, and indicated the basic
necessity for international cooperation in the prevention and mitigation of depressions.
He thought that the other countries would be more interested in assistance of this
broader character than in temporary aid in meeting an adverse balance of payments.
Within the technical financial sphere itself, Mr. Hansen indicated that stability of
exchange might be important only as among large industrial countries. It might well
be that the smaller countries needed flexibility in exchange rates, and in any case
could be left to follow their own bent without seriously troubling the remainder of the
world. 25

23
Ibid., 76.
24
The British mission had a broad agenda in the US, including tariffs and trade issues. See Chapter 4 of this
thesis, Section 4.1.2. See also: Gardner, 1956, p. 101-09.
25
Minutes of Meeting Held in Mr. White’s Office, May 28, 1942.
 82

These and other questions were simply ignored by White, who replied that: ‘tacit agreement
with respect to the desirability of a few simple economic principles had been assumed (…) it
was unnecessary to debate these few simple principles before such a group of experts.’ In
September 1943, when the US finally accepted an official visit from a British delegation, the
discussions were focused on the drafts of the White and Keynes plans, and not on the
underlying principles of the new order. As Gardner notes, even the ‘most influential post-war
planners seem to have persuaded themselves that the economic institutions after the war could
operate in a political vacuum, dispensing their resources without regard to the political
policies of the recipients.’ 26

This relates to Liberal IR interpretations of technical consensus among experts. Liberals

conceive of the post-war economic institutions as a product of technical consensus emerging
from agreements on: (a) currency stability and convertibility; (b) the establishment of an
international stabilization fund; and (c) new international economic management
techniques. 27

Nonetheless, the White and Keynes plans for post-war economic institutions originated from
different economic realities. They reflected US and UK preferences and, therefore, projected
diverging economic principles. White was based on the prospect that the US would be the
main world supplier and creditor after the war. Accordingly, his proposed Fund was small in
size, financing only short-term balance-of-payments deficits, did not propose macroeconomic
adjustments for creditor countries, and focused mostly on the stability and convertibility of
exchange rates, which supposedly would enable trade and investment worldwide. These
policies protected the value of the US dollar, of its exports and accumulated gold reserves,
and would put the burden of macroeconomic adjustments on debtor nations.

Keynes, on the other hand, looked at the post-war economic picture from a British, and
reasonably European, perspective. The UK would finish the war with depleted gold reserves,
with massive foreign debts particularly to Commonwealth states that financed the war effort,
and with its industries and infrastructure in desperate need of reconstruction. As such,
Keynes’ Clearing Union was much larger in size, reflecting the amount of capital available for
loans. As an international clearing house, countries could liquidate their external balances
against each other, and transfers of foreign exchange would only be needed to settle the net

26
Gardner, 1956, p. 11.
27
Ikenberry, 1992.
 83

balances. In case of continuous trade imbalances, the Clearing Union plan required
adjustments on debtor and creditor states, as one’s deficit would be necessarily someone
else’s surplus. Moreover, accounting would be based on an international currency (bancor)
and its value would be determined by a weighted measure of other national currencies. If
needed, liquidity problems could be dealt with by expanding credit in bancors.

These policies reflected British, and more widely European, preferences. Such countries had
low hard currency reserves and had lost foreign export markets during the war. They needed
large amounts of capital to finance reconstruction, capital controls to avoid the withdrawal of
hard currency reserves, and flexibility to set adequate currency exchange rates. Moreover,
they needed to answer public demands for employment and welfare. The shadow of the Great
Depression still loomed large over European policymakers and public opinion. 28 Such needs
were alien, and very much contrary, to US preferences.

As such, the liberal interpretation that technical consensus was an important institutional
feature in post-war economic negotiations is valid only at the most general level. Technical
consensus regarding the desirability of currency stability and convertibility existed, but
mattered very little. US planners considered currency stability and convertibility as ends in
themselves. British officials saw currency stability and convertibility as a means to promote
stabilization, economic growth and full employment. They wanted more flexibility in the
definitions and fluctuation bands of exchange rates. Convertibility was desirable, but not
immediately needed. More importantly, these differences were settled by US relative power,
and not by any technical criteria.

The same is true for the discussions regarding the establishment of an international
stabilization fund. The mechanisms by which a clearing union would stabilize the
international economy were very different from the concept of the Fund. The Clearing Union
called for total funds of US$ 26 billion, while the Stabilization Fund amounted to a meagre $5
billion. 29 Moreover, the US contribution under the Clearing Union would be up to US$ 23
billion, as quotas were calculated based on a countries share of world exports. Since the US
would be the major world exporter, other states would need to finance imports in dollars.

28
Perhaps the most iconic example is conservative Prime Minister Winston Churchill who, after leading the UK
to victory in World War II, lost the 1945 elections to the Labour Party.
29
Boughton, 2002, p. 16.
 84

Contrariwise, the Fund worked based on fixed contributions, and US planners suggested their
share as US$ 2 or 3 billion.

British officials only dropped their appeal for a more expansive Clearing Union, as well as for
the bancor as an international accounting currency, when US planners made clear that such
measures would not gain approval in Congress. 30 Contrary to liberal thinking, UK negotiators
only settled for the more traditional concept of a fund because of US resistance and power
preponderance, not due to technical consensus or benefits of the US proposal. The liberal
notion that technical consensus was a major element in a constitutional bargain clearly does
not apply. Neither does the related idea that hegemonic power was constrained by institutional
arrangements, as the exercise of US power was essential in defining these arrangements.

3.1.4. Multilateral negotiations

The talks in Washington lasted until October 9 and produced the Joint Statement by the
Experts of United and Associated Nations on the Establishment of an International
Stabilization Fund. The conversations were carried in good spirits, but the underlying
differences in state preferences were always present: US officials pushed for stable and
convertible currencies while British delegates defended flexibility for full employment
policies. 31

Important agreements were reached in Washington. The Fund would start off with capital
subscriptions and the part to be paid in gold would be the lesser of: (a) 25% of the countries
quota; or (b) 10% of its current gold reserves. Countries would be allowed to exit from the
Fund by giving written notice (a British request), and the flexibility of exchange rates was
defined as follows: the Fund would not oppose a change of 10% of the initial parity value; if
needed, the Fund would communicate in less than two days its decision on a second parity
change of an additional 10%. Most importantly, the Fund would not oppose changes essential
to correct ‘fundamental disequilibrium’. Up until today the IMF has never defined the concept

30
Gardner, 1956, p. 112.
31
Ibid.
 85

of a fundamental disequilibrium. 32 The discussion on the question of an international currency

(bancor) was put on hold by US officials and would wane in the following months. 33

The Joint Statement also carried a British reservation saying that the ‘draft’ did not commit
the UK to accept it. For the following months, White and Keynes exchanged ideas on articles
to be included in the Joint Statement. In the UK, the document passed through different
instances in Westminster. In the US, Morgenthau tried to convince the President to call for an
international conference, while also dealing with the State Department, Congress, and
organized groups of bankers that criticized the proposals. The Treasury was also clearing the
plans with the Soviets and Chinese. The Joint Statement was finally released to the public on
April 21 and President Roosevelt would issue an invitation for a UN Monetary and Financial
Conference in late May.

Two weeks in advance, a preliminary meeting was hosted in Atlantic City. White arranged a
gathering of all US officials who would serve as the secretariat of the conference. At first, US
delegates were not part of the group, but were then incorporated. Later, selected countries
were also invited. 34 The Atlantic City meeting was a notorious example of the exercise of US
institutional power via agenda setting. 35 White briefed every US participant on the details of
the Bretton Woods conference. Every section of the proposals was revised, and committees
and commissions were rehearsed. White was confident that a successful conference would
depend on this small group of men, and he wanted to make sure that they all understood and
stood for the US positions. 36 White’s control of the conference was close to absolute. 37 As
Benn Steil puts it, White

had kept the British constructively occupied while giving away nothing of substance.
He had acquired actionable intelligence on the issues that would animate the other
delegations. (…) And he had trained a private militia that would be instrumental in
controlling the outcome of the main drama to come. 38

32
Eichengreen, 1996, p. 95.
33
van Dormael, 1978, p. 99-108; Benn Steil, The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter
White, and the Making of a New World Order (2013), p. 149.
34
Steil, 2013, p. 197-99.
35
Michael Barnett and Raymond Duvall, 'Power in International Politics' (2005).
36
van Dormael, 1978, p. 156-67.
37
Ibid., 203. Answering Acheson’s comments on the confusing series of special and ad hoc committees and
commissions, White says ‘… I don’t know where you get your idea. There is no confusion as far as the Fund is
concerned. All the important problems have been settled.’ To which Acheson quickly replies ‘I am sure they
have been settled but I don’t think the delegates know that.’
38
Steil, 2013, p. 199.
 86

The liberal model conceptualises constitutional bargains as binding hegemonic power, but in
the case of post-war economic institutions there was a clear exercise of US power both
directly and via agenda setting. When the main conference began, on July 1, White took
charge of the Commission I, on the Fund, and Keynes was granted the head of Commission
II, on the Bank. White regarded the Fund as a more important instrument and wanted to take
care of it himself. He also knew that the plans for the Bank were less developed, and that
putting Keynes in charge of them would keep the British economist very busy. In this way,
White wanted to distract Keynes from US preferred policies on the Fund, in such a way that
Keynes could not properly oppose them. 39

The major controversy at Bretton Woods regarded the size of states’ quotas in the Fund and
the Bank. 40 In short, countries wanted a large quota in the Fund because subscriptions were
proportional to voting power and, more importantly, to withdrawal rights. On the other hand,
subscriptions to the Bank did not correspond to the availability of credit the country would
have. In order not to reduce interest in the Bank, a compromise formula was agreed upon: the
size of quotas would be the same for both institutions. The amounts reached at Bretton Woods
signalled total contributions for the Fund of US$ 8.8 billion, and US obligations of 2.75
billion. The result was much closer to White’s plan and reflected the ‘asymmetric bargaining
power of the British and Americans.’ 41

As the Fund had a maximum limit of capital imposed by US officials, determining each
country’s contributions turned into a zero sum game. Granting someone a larger share meant
that somebody else would get a smaller one, and vice versa. Moreover, negotiators had to deal
with symbolic questions: the Soviets did not want to have large contributions, but would not
accept to lag much behind the British; the French wanted the fifth quota, but so did India (the
fourth would be China); the Indians wanted the same quota as the Chinese, and were
supported by the British; the voting power of the British Commonwealth as a whole should
not exceed the US; and Latin American countries had a kind of sub-system balancing each
other’s quotas. 42

As with most of the thorny issues in Bretton Woods, the division of the quotas was settled
through a series of bilateral negotiations between US delegates and other countries, and a few

39
van Dormael, 1978, p. 175.
40
Steil, 2013, p. 229-33.
41
Eichengreen, 1996, p. 95.
42
Mikesell, 1994.
 87

closed door meeting between the US and the UK. 43 The Soviets were a particularly difficult
delegation. 44 In spite of its being a state run economy, Morgenthau and White saw USSR
participation as indispensable for a credible agreement. The first Soviet request was for a
quota of US$ 1,2 billion, just behind UK. They also wanted a reduction of 25% of their initial
subscription in gold. The agreement reached gave the USSR its desired quota but not the
reduction in gold subscriptions. In general, a lot of effort was made to bring the USSR into
the post-war economic arrangement. 45 Such evidence does not fit the liberal model of two
completely distinct international orders: a constitutional order within the West and an
unrelated balance of power order opposing US and USSR. 46

Another instance of exercise of US institutional power was the question of having the US
dollar as a hard currency equivalent to gold in the final agreements. White knew Keynes
would strongly oppose giving the dollar this privilege, but as Keynes was too busy with the
Bank, White took advantage of a series of rewordings of specific articles. References to ‘gold’
were rephrased into ‘gold and gold-convertible currencies’ and finally ‘gold and U.S. dollars’.
The changes were referred to a special committee and the results were only seen in the final
agreement. 47

The conference ended on July 22 and resulted in the Articles of Agreement of the IMF and the
IBRD. Eventually, the US won most of the disputes regarding specific articles, including the
distribution of quotas and voting procedures; the total amount of resources; limits to
unconditional drawing for members; conditions to changes in the currency parity system;
required macroeconomic adjustments solely for debtor countries; and the role of the dollar as
a gold-equivalent. These questions were settled by the sheer size of US power or through
institutional power and the manipulation of conference’s procedures. They were not technical
issues and reflected US preferences as much as US power. As such, the binding of hegemonic
power was not an element in the creation of the Bretton Woods institutions. 48

43
van Dormael, 1978, p. 179-83.
44
Steil, 2013, p. 233-49.
45
van Dormael, 1978, p. 191-97.
46
In the planning and negotiations for the creation of the United Nations organisation, efforts were also made to
appease the Soviets. See, among many: Divine, 1967; Hoopes and Brinkley, 1997; Schlesinger, 2003.
47
van Dormael, 1978, p. 200-03; Steil, 2013, p. 177, 95-96, 215-16.
48
van Dormael, 1978, p. 206-11.
 88

Even in the few questions in which a compromise apparently favoured the British, such as in
the scarce resource clause, the ratification debates in the US Congress made it very clear that
the US would not abide by any rules that infringed on its sovereignty.
 89

3.1.5. Domestic reactions

After the conference, a new struggle began with US public opinion, interest groups and
Congress, regarding ratification. As the end of the war eased the sense of urgency, the Bretton
Woods agreements started to be seen in a broader spectrum, together with the efforts to create
a UN organisation. The Senate would only ratify the Articles of the Agreement on July 19,
1945. 49

Public debates reinforced the discrepancy between US and UK views of the Fund. The
Treasury was fully aware of the opposition from bankers and conservative members of
Congress, and started early on to hold meetings with these groups. In a letter addressed to
White after one of such meetings, Randolph Burgess, Vice President of the American Bankers
Association and an outspoken critic of Bretton Woods, noted the differences between US and
British approaches. ‘The interpretation of the fund as a means for expansion rather than
stabilization is encouraged by Lord Keynes’ address before the House of Lords.’ 50 The issue
reappeared months later. The Office of War Information reported to the Treasury that:

the New York Herald-Tribune and the New York Times make an argument against the
fund out of the fact that our official spokesmen claim that the fund provides for
stability and make a place for gold in the world’s monetary system, whereas the
British spokesmen have said it will not prevent devaluation and “is the exact opposite
of the Gold Standard.” 51

While US officials guaranteed to Congress that the IMF was the closest thing to an
international gold-standard system, Keynes and the British officials tried to convince
Parliament of the flexibility of the system. US officials assured Congress that the
interpretation of the Articles of the Agreements would not infringe Congressional authority.
This type of guarantee was given explicitly regarding the most controversial clauses, like the
scarce currency clause or regarding members’ automatic rights of borrowing. The Bretton
Woods Agreements Act further removed autonomy from the Fund by making the US
Executive Directors accountable to the new National Advisory Council on International
Monetary and Financial Problems. 52

49
Ibid., 240-65.
50
Randolph Burgess to Harry D. White, June 9, 1944.
51
Bretton Woods Plans, March 12 – March 30, 1945.
52
Bretton Woods Agreements Act, Federal Reserve Bulletin, Vol. 31, August 1945, p. 764-779.
 90

Any misconceptions about the autonomy and binding character of the IMF can be dispelled
by looking at the nature of its ratification. The idea that the Bretton Woods institutions
actually bounded US power completely misrepresents the dynamics of these debates. As such,
this narrative clearly contradicts the constitutional bargain second pre-requisite: that the
creation of institutional arrangements be intended to bind hegemonic power.

3.1.6. The British Loan, US power and binding institutions

Finally, the most explicit instance of the exercise of US power, and the clearest contradiction
of the liberal model, was the negotiation of the British Loan. 53 With the abrupt end of Lend-
Lease after the war, the UK faced a desperate need for dollars to balance its many obligations
incurred during the conflict and its needs for reconstruction. The British government clearly
signalled that the ratification of Bretton Woods was directly linked to US financial aid. The
British negotiators first hoped for a grant or interest-free loan, based on the Lend-Lease
principle of equality of sacrifice. When US officials declared that out of the question, a
broader Anglo-American Financial Agreement was negotiated. As Gardner notes:

Like the decision on the matter of interest, the decision on the size of the financial aid
was finally determined more by political than by economic factors. There was never
any detailed consideration at a high level in the American government of just how
much assistance Britain required. The question was how much assistance could safely
be asked of Congress. (...) The disagreement was eventually settled by Truman
himself, who ‘split the difference’ at $3.75 billion. 54

The agreement included the settlement of Lend-Lease debts, but also required the British
government to dismantle the sterling area arrangements of the war period, unfreeze the
sterling holdings of Commonwealth members and, more importantly, re-establish sterling
convertibility after one year, much before IMF’s transitional period deadline. What followed
was a disaster. The funds of the loan agreement signed in 1946 were supposed to last until the
end of the decade. After six weeks of the reestablishment of convertibility in July 1947, its
credit was almost drained out leaving British officials with no choice but to suspend
convertibility. US officials underestimated the state of the British economy, the size of the
needed reconstruction effort, and overestimated the positive effect that convertibility could
create through the expansion of trade flows and private investment.

53
Detailed accounts are given in: Gardner, 1956, p. 188-254 and 306-47; van Dormael, 1978, p. 266-85. See
also: Eichengreen, 1996, p. 100-04.
54
Gardner, 1956, p. 202.
 91

European imbalances continued through the 1947-49 period. France devalued twice in 1948.
Under continuous pressure, the UK devalued the pound in 1949. These cases serve as
examples of the non-binding character of the Bretton Woods institutions. The IMF had begun
its operations in March 1947. Nevertheless, more than twenty countries devalued their
currencies within a week of the UK with the IMF playing virtually no role. 55 Since its
inception, the Bretton Woods system did not represent a strict binding commitment either to
the US or to European countries. Another example is the fact that the Article XIV exceptions
for a transitional period, originally planned at 3 years, were in place for more than a decade. 56
The US accepted further compromises with the creation of the European Payments Union in
1950. 57

The case of the British Loan and its repercussions speaks directly to the idea of liberal order
and binding institutions. First, as much as there were institutional arrangements in place
regarding monetary and financial matters, the US and the UK negotiated the loan bilaterally.
In this exchange, there were absolutely no constraints on US hegemonic power. The US
behaved as any realist would predict, exercising its power by establishing the size of the loan,
its duration and attached conditions. This clearly contradicts the idea that institutions in a
constitutional bargain tend to bind hegemonic power. Secondly, it was not only that the IMF
did not bind the hegemon; other states also disregarded the institution when in need, given
their precarious domestic economic situation. As such, the case of the IMF as a binding
institution offers very little support for the liberal order model.

Thirdly, the incident illustrates the process of the emergence of embedded liberalism. 58 The
US progressively changed its liberal multilateral project designed for the post-war economic
order due to the failure of its original policies, the growing perception of the fragility of
European economies, and the strategic importance of the continent in the emerging Cold
War. 59 The compromise between liberal market principles and full employment goals
developed through a process of which the failed British Loan figured as one of the inflection
points. Embedded liberalism was not created in one grand constitutional bargain as the liberal
model suggest.

55
Eichengreen, 1996, p. 103.
56
Current-account convertibility would only be reinstated in the system in 1959.
57
Eichengreen, 1996; Ruggie, 1996.
58
Ruggie, 1982.
59
See the discussion of the emergence of the Cold War in Chapter 5 of this thesis, Section 5.1.1.
 92

******

Using the aforementioned criteria to evaluate the constitutional bargain on financial and
monetary institutions after World War II, the analysis of the historical record shows that the
planning and negotiation of the Bretton Woods institutions was driven by the US as the
hegemonic power, but also counted on the important participation of the British.
Nevertheless, as the negotiations and later developments show, such institutions bound
neither the US nor European powers. In fact, nothing suggests the arrangements had any such
intention regarding the US. Although other states were initially constrained to join
negotiations, it seems that they willingly joined the institutions and saw benefits in them.
Even though the size and flexibility of the Fund and Bank were not as desired by most, it was
still better to be in the system than outside of it. The ambiguities in implementation and the
long transitional period further eased IMF membership. All in all, the evidence does not
provide strong support for the liberal model.

In all the important instances where US preferences clashed with British or European
preferences, the US’s relative power position settled disputes. The US had a de facto veto
over the Fund and its monetary policies were never subject to its scrutiny. During the 1960s,
amid international outcry regarding US debt, foreign expenditures and the outflow of dollars,
US policies were not seriously influenced by any international institution. When the US
unilaterally decided to abandon the gold-dollar parity in 1971, the Fund was informed, not
consulted.

In a similar manner, the European states were not seriously bound by the Articles of the
Agreement. The start of full operations of the Fund was delayed by more than a decade.
Devaluations of European currencies were never challenged. 60 In the decades after their
creation, as Gardner noted very early on, the IMF and the IBRD progressively changed their
focus from Western Europe to ‘underdeveloped countries’. 61 The binding character of these
institutions would be later expressed in their policies towards such states. The UK and the
other European states gradually came to be in a position to resist liberal policies, especially
after the pound-sterling convertibility fiasco. The economic weakness of the Europeans after
1947 and their strategic importance in the emerging Cold War made it necessary for the US to

60
Eichengreen, 1996, p. 100-04.
61
Gardner, 1956, p. 304.
 93

adjust its liberal policies. These conditions were not present in other parts of the world during
the Cold War. US liberal multilateralist principles became institutionalized within the IMF
and shaped much of the thinking and practice of the Fund. The analysis now turns to the
period after the Cold War to address the concepts of binding institutions and constitutional
bargain in the radically new circumstances.

3.2. IMF: post-Cold War expansion and practices

The liberal order model proposes that, after the end of the Cold War, the US projected its
leadership in the international system through the expansion of binding institutional
arrangements. To assess the liberal model, the following sections recur to the criteria
aforementioned, namely that regarding the post-Cold War constitutional bargain and binding
institutions: (5) the expansion process must be purposefully driven by the hegemon; (6) the
institution must bind hegemonic power; (7) the institutions must generate benefits for other
states; and (8) the expansion process must be willingly accepted by other states.

Within the confines of international finance, the IMF is the institutional arrangement in
question. Its membership expanded significantly during the 1990s. Thus, the next section
addresses how the expansion of the membership in the IMF took place, followed by an
assessment of the US’s stances in these processes. Then, the chapter examines the US-IMF
and the question of binding of hegemonic power. Finally, the research looks at existence of
benefits from IMF’s policies and programs to other states than the US.
 94

3.2.1. Expansion of membership in the 1990s

The liberal model implies that, at the end of the Cold War, the US would have extended its
successful strategy of liberal order building via binding institutions to the recently freed areas
of the world. In order to assess this interpretation of US policies, one needs to examine the
expansion of the IMF in recent decades. In fact, membership in the Fund rose from 152
countries in 1989 to 182 countries a decade later. 62 The collapse of the USSR created fifteen
states that promptly applied to join the Fund. Others in the Soviet economic sphere, such as
Albania, Bulgaria, Czechoslovakia, and Mongolia, also became members. The breakup of
Yugoslavia created another six new members. 63

The end of the Cold War was the main driver of IMF’s expansion. Up until the 1980s, only a
handful of planned economy states were part of it. Yugoslavia was a founding member that
defied Soviet influence. Romania, Yugoslavia’s neighbouring country, had joined the Fund in
1972. The unification of Vietnam, in 1975, made yet another socialist state part of the
organization. 64 In 1980, China replaced the Taiwanese representation, followed by Hungary
and Poland which became members in the same decade. 65 But the treatment of former Soviet
republics would acquire a different meaning in the 1990s. Short of providing financing and
leverage to countries with low hard currency reserve levels, the Fund would now engage in
full restructuring of the planned economies.

Contrary to predictions that the US would try to lock in new states, the expansion of IMF
membership was not driven by any one member. Former Soviet republics were eager to take
part in the Fund. Sovereignty and statehood concerns explain part of it. International
organisations are an important way to gain recognition from other states. This is mostly true
of the UN, but also applies to the IMF. Grigore Pop-Eleches states that Moldova’s strict
adherence to IMF programs and policies was a way to halt external pressure from Russia and
Romania. 66 Recognition also allows access to instruments of international law and dispute
settlement. The same is true of funding from the World Bank, the IMF and other

62
Most of the IMF expansion of membership during the Cold War happened during the 1960s and 1970s as a
product of decolonisation processes, as with most UN institutions in general.
63
At the time of writing, the only UN members outside the IMF were Cuba, North Korea, Andorra,
Liechtenstein, Monaco, and Nauru. See: James M. Boughton, Tearing Down Walls: The International Monetary
Fund 1990-1999 (2012), p. 50.
64
James M. Boughton, Silent Revolution: The International Monetary Fund 1979–1989 (2001), p. 965.
65
Boughton, 2012, p. 11.
66
Grigore Pop-Eleches, From Economic Crises to Reform: IMF Programs in Latin America and Eastern Europe
(2009), p. 126-27.
 95

organizations. For the countries leaving the Soviet sphere of influence, membership in
multilateral organisations was just common sense. Recognition by the society of states would
help to make the dissolution of the USSR irreversible.

Economics explain another part of the story. Most new countries had immediate borrowing
needs. With very few exceptions, Soviet economies did not answer to market prices.
Production chains were spread through the bloc and trade patterns were mostly set within it.
Countries were highly dependent on the USSR as their major exports destination, source of
basic imports, and financing provider. With its collapse, Russia was in no position to keep
playing this role. Newly independent states faced low levels of international currency, their
exports could not compete in international markets, and their previous source of basic imports
was closed to them. Due to insulation, they could hardly borrow from private sources. ‘In
Eastern Europe (with the notable exceptions of Poland, Hungary, and Bulgaria), the main
problem was (…) the extremely low international reserves and very limited access to capital
markets.’ 67 Membership of the Fund was driven by financial needs for stand-by arrangements
and other borrowing instruments. 68 IMF membership was also a stamp of credibility, allowing
access to funding from banks and other private lenders.

Apart from sovereignty and financial concerns, the Fund’s relations with new members
developed through technical assistance. IMF officials were a major source of expertise and
guidance in liberalisation processes. On the one hand, the Fund had to figure out substantive
questions such as the speed of openings, which reforms should be pushed forward and in
which sequence. On the other hand, the IMF had to deal with the lack of strong institutions in
prospective borrowers. During the Soviet era, economic planning was centralized in Moscow.
Newly independent republics lacked strong institutions and personnel to handle the
transition. 69 Some of the Fund’s advice was only implemented due to harsh obligations
attached to its loans and programs. But in general, if compared with the IMF’s image in Latin
America during the same period, its programs were well-received. 70

This analysis supports criteria outlined above that other states saw benefits in joining the IMF
and willingly did so. Nevertheless, this narrative seems to contradict the idea that institutional

67
Ibid., 16.
68
Another example is that membership in the World Bank and access to its long-term subsidised is conditioned
to membership in the IMF.
69
Boughton, 2012, p. 258.
70
Pop-Eleches, 2009, p. 16.
 96

expansion was driven by the US. In order to further investigate this issue, the next section
looks at US responses to some relevant membership processes.

3.2.2. US responses to expanding membership

The liberal model implies that the US expanded institutions as ways to lock in states within
the liberal order. The historical evidence, nevertheless, is more nuanced. Throughout the Cold
War, instead of using institutions to co-opt states in the Soviet sphere of influence, the US
opposed the membership of Soviet satellites in the IMF. One example is Hungary, explicitly
denied membership by State Department officials in 1948, as the country tried to set an
independent course. In 1966, another Hungarian flirtation with the institution was blocked by
US authorities. Following a program of economic reform in 1978, the Hungarian external
debt rose quickly. The high oil prices and interest rates of the period added to the problem.
After the Soviet invasion of Afghanistan in 1979, Hungary decided to turn again to the Fund.
With no prior announcements to Soviet authorities, the Hungarians applied for membership at
the IMF on November, 1981. Only then, with no opposition from the US and no reprisals
from the USSR, was the application accepted. Hungary officially became a member in May,
1982. 71

Another example is Poland. In troubled economic waters of its own, the Polish tried to use the
window of opportunity created by Hungary. An original signatory of the Fund, Poland
withdrew its membership in 1950 under Soviet pressure. As early as 1957, the Polish
government started to implement economic reforms and consider resuming IMF association.
But the Eisenhower administration rebuffed Polish efforts. 72 In the late 1970s, Polish relations
with the US improved under the government of Edward Gierek, as did the pace of economic
reforms. But the development of national industries, financed by foreign private banks,
suffered major setbacks from the increase in interest rates of the period. Popular
manifestations and support for the trade union Solidarity eventually drove Gierek out of
power.

General Wojciech Jaruzelski assumed control and further deepened economic

decentralization. Leszek Balcerowicz was one of his main economic reformers, and would

71
Boughton, 2001, p. 980-83.
72
Paradoxically, at the time the US government was granting credits to Poland for food imports. Ibid., 987.
 97

later be Deputy Prime Minister and Minister of Finance on Poland’s transition to democracy.
IMF and US officials encouraged Poland’s reforms. In November 1981, Poland again applied
for IMF admission, 6 days after Hungary. But the declaration of martial law by Jaruzelski in
December put a halt to the process. The US and allied countries opposed any Polish moves on
the Fund in protest against the crackdown. 73

Jaruzelski formally lifted martial law in July 1983, but not before banning Solidarity and all
trade unions earlier. In July 1984, the general finally gave in to US demands and granted
amnesty to Solidarity members. In December, the Reagan administration allowed the
continuation of Poland’s membership process, but stretched it until June 1986. The US
abstained from the vote on Poland’s entry and made it clear that no Polish stand-by
arrangement or loans would be approved. It took democratic elections and a drastic program
of economic liberalization led by Balcerowicz, known as ‘shock therapy’, to the normalisation
of relations with the Fund. In February 1990, a stand-by arrangement with Poland was finally
put in place. 74

Hungary and Poland were large countries in the Soviet sphere. During the 1950s and 1960s,
the US position reflected geopolitical considerations, not a liberal order strategy. The interest
of both countries in approaching the IMF was rebuffed. Only in the 1980s, with a fragile
USSR, did US officials reluctantly consider, and eventually grant, admission to them. The US
did not use institutions to attract other countries and lock in principles and norms. Rather,
membership at the IMF was initially opposed, then slowly moved forward and, particularly in
the case of Poland, granted as a prize for good behaviour and reforms. The pattern resembles
a standard sticks and carrots approach rather than a constitutional bargain. Again, this seems
to contradict the criteria for constitutional bargains, as entering countries were not concerned
with institutional constraints on the use of US power as a reason for membership.
Nevertheless, states saw benefits and willingly and patiently sought membership.

Czechoslovakia and Russia followed a similar pattern. Between March and May 1989,
Czechoslovakia inquired of IMF officials about resuming its membership. The country had
been expelled from the Fund in 1954, after not complying with exchange rate and data
reporting regulations. The US and other main creditor countries immediately opposed the
membership on political grounds. It was not until Václav Havel came to power that

73
Ibid., 987-88.
74
Ibid., 989-92.
 98

membership was considered. 75 From that point onwards, the process was remarkably fast.
‘Czechoslovakia applied for IMF membership in January 1990, began receiving technical
assistance from the staff in May, held its first free elections in June, and joined the Fund in
September.’ 76 The evidence suggests that instead of the US using the IMF to attract countries,
it used membership as a reward for liberal reforms.

Russia is by far the most relevant case. The first move towards membership was made by
Mikhail Gorbachev in July 1990, just before a G7 summit. Writing to President Bush,
Gorbachev asked for a dialogue with G7 countries and agencies like the IMF towards the
‘transition to a market economy in the USSR’. After agreement by G7 leaders, the Fund
quickly sent officials to Moscow and organized a multi-agency group to collect information
and draft reforms. In September, a Soviet delegation took part in the annual meetings of the
Board of Governors of the IMF and the World Bank Group for the first time. 77 Even so, as
Boughton states, ‘suspicions still ran deep, especially in the U.S. government (…) The U.S.
government was not ready to drop its formidable opposition to that giant step, but it wanted to
encourage and help Gorbachev to keep moving in the right direction.’ 78 In December, a few
days before the Fund released its first study on the USSR economy, Bush called for a ‘special
association’ between the USSR, the IMF and the World Bank.

Throughout much of 1991, the IMF kept sending people to and conducting research on the
USSR. As domestic political conditions deteriorated, IMF officials had to start hosting
meetings with two sets of authorities: the Soviets and an incipient Russian government.
Gorbachev tried to take control of the reforms and pushed forward an economic plan devised
by Grigory Yavlinsky. In order for liberalizing reforms to work, Gorbachev and Yavlinsky
needed large-scale financing from the West and policy and technical assistance. Yet, while the
G7 approach was to give public encouragement for reform there was only limited financial
assistance. 79

Attending the G7 summit in July 1991, Gorbachev made a last-effort, taking authorities by
surprise when he formally applied for IMF membership. At the time, US Treasury Secretary
Nicholas Brady publicly called the initiative ‘a tactical error’ and ‘counterproductive’. But

75
Boughton, 2012, p. 51-55.
76
Ibid., 55.
77
Ibid., 59-60.
78
Ibid., 61.
79
Ibid., 62-63.
 99

things drastically changed with the attempted coup against Gorbachev the following month.
Faced with the threat of hardliners taking control, France, Germany and Italy were now in
favour of accepting USSR’s full membership and providing financial support. The US and the
UK did not agree yet with full membership. Instead, G7 countries reached a compromise in
the form of a special association between the IMF and the USSR. From that point on, the
Fund was rushed through by US officials to finalise conditions for the special association. In
October, Managing Director Michel Camdessus signed the special association agreement with
Gorbachev to little avail, since the Soviet government was already transferring most of its
powers to the republics. After Gorbachev’s resignation in December and the formal
dissolution of the USSR, the Russian government led by Boris Yeltsin became the prime
negotiator in the bid for the Fund. 80 During 1992, fourteen out of the fifteen former Soviet
republics became members of the IMF. 81

Russia would still face strong pressure in setting the size of its quota and its first stand-by
arrangement from the Fund. 82 Even when G7 support was announced in April 1992, some of
it disbursed through the IMF, financial aid was not at pace with Russia’s needs. 83 As in the
other cases above, rather than strike a constitutional bargain and locking in principles and
norms, the US did not actively pursue expansion; on the contrary it opposed or slowed down
initiatives by countries joining the IMF, and made membership conditional on reforms. This
is not surprising; the US’s relative power position allowed it to do so. Yet, this is contrary to
the liberal model: Russia and other countries were forced to accept reforms in order to join
institutions. Rather than been restrained by institutions, US power was exercised through
institutional arrangements.

80
Ibid., 64-65.
81
The fifteenth, Tajikistan, was under civil war and would become a member in April 1993.
82
Boughton, 2012, p. 290-91, 97-99.
83
Ibid., 292.
 100

3.2.3. The US-IMF relationship

As recent approaches demonstrate, institutions are not simply instruments of powerful states
or structures for cooperation. 84 Since its creation, the IMF has developed into a complex
bureaucratic organism, with technical power, authority and the legitimacy to set agendas and
influence decisions. 85 In order to assess if IMF processes and structures bind US hegemonic
power as suggested by the concept of constitutional bargain, the relations between the US and
the Fund are addressed below.

Voting

The US has always been the IMF’s most powerful member. US officials were the main
architects of the Articles of the Agreement. Its headquarters are in Washington, which conveys
proximity to the US Treasury. By means of an informal agreement in 1946, Europeans
nominate the top IMF job, while the US appoints the head of World Bank. 86 Nevertheless, the
US has always appointed the IMF’s First Deputy Managing Director, a high-ranking position
in charge of much of the Fund’s day-to-day operation.

Voting in the IMF follows a weighted system. Voting power is distributed according to
members’ quotas, which in turn is a measurement of the country’s GDP, openness, economic
variability, and international reserves. The IMF conducts general reviews of the quota system
in five-year cycles, addressing the overall size of the Fund and the need for an increase, and
the distribution of the quotas among its members. In all of the fourteen General Quota
Reviews conducted, the US remained the largest contributor. Starting roughly with 35% of
the Fund’s quota in the 1940s, the share of US participation and voting power will come
down to 16.5% if the 2010 measures take full effect.

But the relatively diminished quota does not mean loss of control. In so-called ‘issues of
procedure’, such as transfers of assets between accounts, determination of service charges,
loans and remuneration rates on members' subscribed quotas, establishment and termination

84
A discussion of the standard realist and liberal IR accounts can be found in: Mearsheimer, 1994; Robert O.
Keohane and Lisa L. Martin, 'The Promise of Institutionalist Theory' (1995).
85
Barnett and Finnemore, 2004; Barnett and Finnemore, 2005; Ngaire Woods, The Globalizers: The IMF, the
World Bank, and Their Borrowers (2006); Jeffrey M. Chwieroth, Capital Ideas: The IMF and the rise of
financial liberalization (2010).
86
Only recently these practices have been seriously questioned by emerging powers, although they are still in
place.
 101

of certain facilities within the Fund, a 70% voting majority is required in the Fund. In the
more critical ‘issues of substance’, which include adjustment of quotas, amendments to
exchange rate arrangements, disposition of the Fund's gold reserves, allocation and
cancellation of Special Drawing Rights, expulsion of members, or changes in the size or
composition of the Executive Board, an 85% voting majority is required. 87 Therefore,
controlling 16.5% of the vote, the US is the sole country with veto power over ‘issues of
substance’. Furthermore, the threshold of substantive issues approval was increased from 80%
to 85% in the Second Amendment to the Articles of the Agreements, in 1978. This move was
instrumental for lowering the US quota under 20% of the overall size of the Fund. In this way,
the US kept its veto power. 88

Quota reviews also open another path for US influence. Every time subscriptions are
increased, US agreement is necessary due to the 85% threshold. Additionally, new US
subscriptions must be approved by Congress. Over time, legislators used these opportunities
to exert power and promote US interests. 89 In the 1980s, the Reagan administration held quota
increases hostage during the Latin America debt crises in order to promote new conditionality
policies. 90 In the 1990s, Congress pushed forward IMF reforms in issues as diverse as human
rights, the role of the private sector, worker rights, and military spending. 91 J. Lawrence Broz
and Michael Hawes conducted a detailed study of voting patterns in Congress on IMF matters
from 1983 until 1998. 92 Congress has proved to be more aggressive than the State or Treasury
Departments in setting its special conditions. As a result, other countries have grown used to
placating US interests, enhancing its capacity ‘unilaterally to determine aspects of policy and
structure within’ the IMF. 93 Regarding voting procedures, nothing in the literature suggests
that the Fund can bind US hegemonic power.

87
Jacob S. Dreyer and Andrew Schotter, 'Power Relationships in the International Monetary Fund: The
Consequences of Quota Changes' (1980).
88
Approval of procedural matters is also extremely difficult in face of US opposition.
89
Similar processes took place with the financing of World Bank’s International Development Association
(IDA) and with the withholding of funds from the UN’s budget.
90
Stone, 2011, p. 76.
91
Ngaire Woods, 'The US, the World Bank, and the IMF' (2003), p. 99.
92
J. Lawrence Broz and Michael Brewster Hawes, 'US domestic politics and International Monetary Fund
policy' (2006).
93
Woods, 2003, p. 102.
 102

Executive Board

Decision-making within the IMF happens at the Executive Board. The body is composed of
24 executive directors. The five largest contributors appoint their own directors; currently the
US, Japan, Germany, France and the UK. The other nineteen directors should be elected by
the remaining members. Elected directors should not represent one single country, but
constituencies of countries grouped by the size of their quotas. In practice, China, Russia and
Saudi Arabia have enough votes to elect their own directors. Other members form
constituencies for the remaining seats.

There is no precise regulation on how the constituencies should be grouped. Originally, a

constituency could hold no less than 19% of the proportional voting of the Fund, and no more
than 20%. Nowadays, the rules state that no director should represent a constituency formed
of less than 4% or more than 9% of the voting. But in practice, these rules have been bent on a
number of occasions. Lisa Martin and Ngaire Woods found various constituency patterns. 94
Over time, stable electoral groups have been created in two manners: regional coherent
constituencies or countries seeking more influential roles within a constituency.

In practice, what we find is that voting power is unequally spread both across
Directors and also within constituencies. Some groups have relatively balanced voting
powers among members. In other groups, one country clearly has a preponderant
voting power. 95

Executive directors carry the weighted voting power of their whole constituency. Since these
constituencies follow unequal patterns, members’ demands are not coherently reflected. Even
constituencies that are regionally shaped can make little sense. States financial needs reflect
the size, diversity and strength of their economies, not their geographical location. Developing
countries, for example, cannot vote together because they are spread throughout different
constituencies, some of which are led by European nations. 96 The structure of the Executive
Board makes it harder for countries to oppose policies supported by the US and other
developed countries. To some extent, this is due to countries favouring short rather than long
term interests and proper representation at the institution. But the structural feature that

94
Lisa Martin and Ngaire Woods, 'Multiple-State Constituencies in the IMF: An Agency Approach', (2005), p.
17-18.
95
Ibid., 19.
96
Woods, 2006, p. 27.
 103

enhances the US and developed countries positions remains. As above, Executive Board
procedures provide evidence of few restraints on US hegemonic power.

Personnel and groupthink 97

Recruitment is another way in which US interests and ideas have indirectly influenced the
IMF. Recently, the Fund has adopted a staff diversity policy, taking gender into account and
reflecting as much as possible the Fund’s membership. But geography is not a good measure
of plurality. As the IMF’s own annual report on diversity notes:

Traditionally, the Fund has identified well-qualified candidates from a wide range of
universities worldwide, but has hired many of its incoming staff from a highly select
base of top universities and, for its core economic staff, has generally sought an
advanced degree – almost always a Ph.D. – in the major sub-disciplines of
macroeconomics (fiscal, monetary, growth analysis, trade, exchange rates, and related
areas). 98

Unlike other multilateral organizations, the resident expertise at the IMF is almost entirely
economic. 99 As Peter Evans and Martha Finnemore point out, ‘Not only are the Fund’s staff
members virtually all economists, but they are almost all macroeconomists, and most have
been trained at American or Anglo-American universities.’ 100 This creates a convergence
between US and IMF positions. One example regards the use of capital controls. During the
Nixon administration, after the unilateral closing of the gold window, the US started
advocating the end of restrictions on capital flows. At the time, capital controls were used by
other states to manage financial turbulence. 101 Approaches to capital controls would change
within the staff in the following decades, in alignment with US preferences. As Jeffrey
Chwieroth points out:

97
Groupthink is a concept that refers to policy-making and decision-making environments and situations in
which the people involved refrain from making suggestions that do not fit with the group’s core beliefs and
preferences. Such desire for harmony and conformity often leads to unsound decisions, as there is no critical
evaluation of alternative viewpoints. Decision-making is particularly vulnerable to groupthink when group
members are similar in background, when there are no clear rules or procedures, when dissenting viewpoints are
actively suppressed, and when the group is insulated from outside influence. See: Irving L. Janis, Groupthinking:
Psychological Studies of Policy Decisions and Fiascoes (1982); Paul 't Hart, Groupthink in Government: A Study
of Small Groups and Policy Failure (1994).
98
Diversity Office, 'Diversity & Inclusion: IMF Diversity Annual Report 2011', (2012).
99
The World Bank and the WTO, for instance, recruit their staff from a broader range of academic disciplines.
100
Peter Evans and Martha Finnemore, 'Organizational reform and the expansion of the South's voice at the
Fund', (2001), p. 8.
101
Stone, 2011, p. 71-72.
 104

By the 1970s, most academic economists had come to define capital account
liberalization as desirable. (…) Exposure of cohorts of graduate students to this belief
fostered an informal transnational network of economists who supported the norm of
capital freedom. (…) This informal network then sought to insert its beliefs within the
decision-making processes of the Fund, and the Fund – which recruits almost
exclusively from the economics profession – saw its behavior affected accordingly. In
the mid-1980s, recruitment and promotion patterns brought to senior positions a new
cadre of staff members who, as a result of their professional training, were inclined to
view liberalization as desirable. 102

Neoclassical economics is not simply a set of methodological and technical instruments. As a

particular academic approach, it has an embedded normative stance. In effect, the IMF’s
recruitment serves as a convergence mechanism towards US interests. Economic approaches,
theories, and methods are shared by the staff and US officials who were often trained at the
same institutions. Neoclassical economics’s elegant models and narrow analyses often lead to
the same policy preferences as those of US officials who share them. 103 As Woods concludes
regarding failed IMF programs of the 1990s:

In both Mexico and in South Korea, the United States and its G-7 partners who
command a controlling share of votes on the boards of the Fund and Bank failed to
mitigate or contain groupthink in either institution. To the contrary, the explicit
preferences of the United States seem to have driven the institutions further into a
blind spot from which a crisis could not be seen. 104

Informal governance

Other authors claim that the IMF is plagued not by groupthink but by informal governance. 105
Randall Stone argues that three institutional features ‘serve as backdoors that allow the United
States to exert a controlling influence over lending decisions.’ 106 These are the minimal
number of formal votes in the Fund’s Executive Board, a strong role of management, and
highly centralized information, representing the backbone of informal governance.

Voting rarely occurs in Executive Board meetings. A rule adopted in 1946 allows the
Managing Director or one of its deputies to assert the ‘sense of the meeting’ instead of taking
a formal vote. As a result, the Fund’s management has a lot of discretionary power and
leverage, particularly on lending decisions. Letters of intent are negotiated beforehand

102
Chwieroth, 2010, p. 12-13.
103
Woods, 2006, p. 53-56.
104
Ibid., 63.
105
Stone, 2011, p. 65.
106
Ibid., 55.
 105

between borrowing governments and the Fund’s staff; executive directors have almost no
power to change the terms of the deals at meetings. The rules allow any executive director to
call for a formal vote, but the rejection of a loan proposal would have disastrous consequences
in crisis situations. In practice, almost all proposals regarding lending pass unanimously. ‘In
effect, the Executive Board ratifies whatever the IMF management proposes.’ 107 The lack of
formal voting enhances the gate-keeper status of IMF’s management. Not only does the
Managing Director control the agenda of the Board: management writes the Board’s decisions
beforehand. The documents are not previously circulated and are read to the executive
directors at the conclusion of the meetings, sometimes amended with issues that were brought
up during the session. 108

The strong role of management is mirrored in its relationship with the Fund’s staff. Access to
information in the IMF is highly centralized. Apart from representatives of borrowing
countries, executive directors do not have access to negotiation terms or documents and do
not take part in field missions. Tightness is justified to avoid leaks that could destabilise
markets, to insulate the technical staff from political pressure, and to permit free-wheeling
debate. On the one hand, the IMF’s staff is extremely disciplined and risk averse. Once
management comes to a conclusion or adopts a policy, the Fund’s officials follow suit.109
Executive directors do not have access to internal documents or divergent opinions from staff,
strengthening management’s role. On the other hand, executive directors try to protect the
members of their constituencies, and will take issue with staff reports perceived as too critical.
As a risk averse bureaucracy, the staff tones down its reports to management whenever they
have strong criticism or contentious advice to give. Woods characterised these processes as
groupthink, but Stone supports that IMF economists are completely aware of troubled
economic conditions. The question is rather, as he puts it, that ‘Reports to the Executive
Board are not used as an opportunity to ring alarm bells.’ 110

A crude reading of the IMF’s formal rules and unwritten practices would produce the picture
of a strong international organization with an insulated staff. Yet, what Woods and Stone’s
studies show is that instead of – or in addition to – direct, compulsory power, the US also
exerts productive and institutional power within the Fund. 111 Stone names this US informal

107
Ibid., 56.
108
Ibid., 60-61.
109
Ibid., 63.
110
Ibid., 65.
111
Barnett and Duvall, 2005.
 106

governance, in fact allowed by the structure of IMF principles and norms. Instead of binding
hegemonic power, this structure seems to enhance US preponderance. 112

Loans as a foreign policy instrument

As discussed above, one of the premises of binding institutions is that they are ‘sticky’ and
function in a manner independent of their most powerful members. If so, US preferences
should not define IMF’s policies and loans decisions. However, most statistical analyses
support the conclusion that it is easier to get an IMF loan – or more flexible conditions – if
states are aligned with US policies. 113 The seminal work of Strom Thacker traced UN votes in
key questions for 87 countries and found a strong correlation between US alignment and
concessions of IMF programs. 114 Since then, a series of studies applying similar analyses
found corroborating evidence, focusing on US proximity to African countries, post-
communist states, and relating IMF support to levels of bilateral US foreign aid. 115

The elements above show a strong US influence in the Fund’s activities, both directly through
its voting power and by other more subtle and abstract means. Additionally, institutional
practices in the IMF conform to the opposite of liberal predictions. Instead of binding
hegemonic power, the formal rules and unwritten norms of the IMF allow great leverage to
the US. No regulations go against its will due to its veto power; instead of attracting countries,
it uses membership to reward or punish countries for their behaviour; loans and programs are
issued on preferable conditions whenever its interests are at stake; and at critical junctures, it
has completely circumvented the institution and its policy advice.

112
Another example is that the US executive director routinely requests interviews with chiefs of missions,
before and after visits to borrowers. In particularly important cases, US Treasury officials join these briefing
sessions. Apart from the specific cases of former British and French colonies, no other executive director is
granted such access. Stone, 2011, p. 57.
113
James Raymond Vreeland, The International Monetary Fund: Politics of conditional lending (2007), p. 42-
44; Martin C. Steinwand and Randall W. Stone, 'The International Monetary Fund: A review of the recent
evidence' (2008).
114
Strom Thacker, 'The High Politics of IMF Lending' (1999).
115
Graham Bird and Dane Rowlands, 'IMF lending: how is it affected by economic, political and institutional
factors?' (2001); Robert J. Barro and Jong-Wha Lee, 'IMF programs: Who is chosen and what are the effects?',
(2002); Randall W. Stone, Lending credibility: The international monetary fund and the post-communist
transition (2002); Randall W. Stone, 'The political economy of IMF lending in Africa' (2004); Barry
Eichengreen, Poonam Gupta and Ashoka Mody, 'Sudden Stops and IMF-Supported Programs', (2006); Randall
W. Stone, 'The Scope of IMF Conditionality' (2008); Pop-Eleches, 2009.
 107

3.2.4. Benefits to weak states

Finally, if constitutional bargains are the main reason for the expansion of international
institutions after the end of the Cold War, the existing and incoming members must see
benefits in their existence. Extensive research has looked at the benefits from IMF’s policies
and programs for borrowing states. The results are not nearly as positive as the liberal model
would make one think.

Selection problems make addressing the effects of IMF’s programs a daunting task. Countries
that request IMF loans do so usually because of poor economic conditions: recurring deficits
on balance of payments, low levels of hard currency reserves, high levels of foreign debt,
fiscal deficits and low economic output, among others. If one takes a before-after approach,
IMF programs tend to look particularly beneficial due to the countries’ precarious initial
stance. If one takes a with-without approach, comparing countries which go to the IMF for
help to the ones that do not, the programs and policy prescriptions tend to look like having
disastrous effects. Then again, that would be like comparing sick patients that go to a
physician to healthy people that do not have to. Even when controlled for similar conditions,
one still has to be careful not to attribute to IMF counselling the effects of extraneous
variables. 116

Yet, the available data on IMF’s programs do provide some findings. James Vreeland
classifies four effects, on: balance of payments; inflation and budget deficits; economic
growth; and income distribution and social spending. 117 Regarding balance of payments, there
is a general consensus that IMF programs have a positive effect in reducing or eliminating
deficits. The impact of Fund’s programs on budget deficits is less clear. Although some
studies show that budget deficits tend to fall under IMF prescribed policies, research made by
the Fund’s staff shows that this does not happen in the projected amounts. On inflation, the
record is even more dubious. Earlier studies show inflation falling, staying unaltered and even
rising in some cases, but most results are not statistically significant. Some argue that the
problem lies in compliance by local governments and not in the possibility that the Fund’s
policies were not effective to address inflation. Stone’s research on post-communist
economies points in that direction, although his methods have not been tested in larger

116
Vreeland, 2007, p. 76-84; Steinwand and Stone, 2008.
117
Vreeland, 2007, p. 84-94.
 108

datasets. 118 Vreeland also points out that when IMF’s policies work, as in reducing balance of
payment deficits, the question of compliance by borrowing governments is not raised.

Conclusions become worrisome though when considering economic growth, and income
distribution and social spending. After all, balance of payments, inflation and budget deficits
are only relevant economic variables because of their direct or indirect effects on the economy
and society’s general level of welfare. Growing economies can sustain balance of payments
and fiscal deficits, as well as moderate inflation. Any sensible economist or politician would
chose economic growth and good income distribution over low inflation or small balance of
payments and budget deficits.

Up until the 1990s, the consensus proclaimed by IMF economists Nadeem Ul Haque and
Mohsin Khan was that programs hurt economic output in the short term, due to the demand-
reducing elements of its policies, but that the structural reform elements benefit long-term
growth. 119 But scrutiny of assumptions of these studies found them dubious. Recent research
and advanced statistical techniques shows exactly the opposite: IMF programs have a
generally negative impact on economic growth. In one study, the short-term negative effects
were confirmed, while the long-term benefits were not found. 120 Another study showed no
statistically significant negative effects in the short-term, but strong statistically significant
negative effects in the long term. 121 Addressing arguments about noncompliance, research on
Latin America found generally negative effects on economic output and even lower growth in
countries that complied fully and completed IMF programs. 122

On income distribution, various studies using different methodologies point to the same
conclusion: IMF programs enhance income inequality. An earlier study in 1987 pointed out
that the ‘most consistent effect’ of IMF programs was to redistribute income away from
workers. 123 In 2000, a more sophisticated account of the effects of overall income distribution
using the ‘Gini coefficient’ as a parameter also found indications that IMF programs

118
Stone, 2002.
119
Nadeem Ul Haque and Mohsin S. Khan, 'Do IMF-Supported Programs Work? A Survey of the Cross-Country
Empirical Evidence', (1998).
120
Adam Przeworski and James Raymond Vreeland, 'The effect of IMF programs on economic growth' (2000).
121
Robert J. Barro and Jong-Wha Lee, 'IMF programs: Who is chosen and what are the effects?' (2005).
122
Michael M. Hutchison and Ilan Noy, 'Macroeconomic effects of IMF-sponsored programs in Latin America:
output costs, program recidivism and the vicious cycle of failed stabilizations' (2003).
123
Manuel Pastor, The International Monetary Fund and Latin America: economic stabilization and class
conflict (1987).
 109

exacerbate income inequality. 124 When researchers looked at data solely from manufacturing
sectors of the economy, the worsening conditions of income distributions were confirmed. 125
In 2003 and 2004, the Independent Evaluation Office of the IMF conducted studies pointing
out that governments under the Fund’s supervision actually increase spending on health and
education programs. 126 However, when the data were analysed by external scholars, the
findings turned out somewhat differently. 127 Taken as a whole, the impact of IMF programs
on health and education spending is positive, but not statistically significant. Moreover, when
segmenting the countries between democratic and autocratic states, it was found that under
dictatorships, ‘where spending on health and education is small, the IMF indeed has a positive
effect, although spending levels remain well below democracy levels.’ 128 But under
democracies, IMF programs have a statistically significant negative effect on health and
education spending. The awkward conclusion is that IMF programs make dictatorships and
democracies look alike when it comes to health and education spending.

Former World Bank economist William Easterly found that IMF and World Bank programs
would have the effect of insulating the poor from any effects of economic growth. When
economies under IMF supervision grow, the positive effects and benefits are not shared by the
poor; likewise, when economic output slows down, the consequences also hurt them less. 129

The results and its implications are disturbing, especially when countries that comply with
prescribed programs and policies still experience negative effects. 130 Some IMF economists
have been quite straightforward regarding this fact. The usual prescription of high interest
rates drags both good and bad companies to closure. The Fund’s policies reduce public
investment and cut demand, a direct hit on economic growth. As for long term growth, the
IMF, and most orthodox economists in fact, insists that economic stabilization eventually
leads to economic growth. Nevertheless, while macroeconomic stability might be necessary, it
is far from being sufficient. As Vreeland concludes:

124
Gopal Garuda, 'The Distributional Effects of IMF Programs: A Cross-Country Analysis' (2000).
125
James Raymond Vreeland, 'The Effect of IMF Programs on Labor' (2002).
126
Independent Evaluation Office, 'Evaluation Report: Fiscal Adjustment in IMF-Supported Programs', (2003);
Ricardo Martin and Alex Segura-Ubiergo, 'Social Spending in IMF-Supported Programs', (2004).
127
Irfan Nooruddin and Joel W. Simmons, 'The Politics of Hard Choices: IMF Programs and Government
Spending' (2006).
128
Vreeland, 2007, p. 93.
129
William Easterly, 'The Effect of World Bank and IMF Programs on Poverty' (2003).
130
Axel Dreher, 'IMF and economic growth: The effects of programs, loans, and compliance with conditionality'
(2006).
 110

There is no theory that says a balanced budget, a balance of payments, and low
inflation should induce economic growth. Moreover, it appears that programs that
stabilize inflation, reduce deficits, improve the balance of payments, and at the same
time do not hurt growth, are yet to be developed. 131

The above discussion shows that a state’s benefits arising from IMF programs and policies are
not self-evident, to say the least. Elements of the liberal model state two reasons for secondary
states to join a constitutional bargain: the binding of hegemonic power and expected benefits
from membership. As much as states can see political benefits coming from IMF
membership, as in the form of international recognition, or initial economic benefits, as in
access to capital markets or technical assistance, the statistical evidence shows that states have
very little to gain from the Fund’s policy prescriptions and, in some cases, are net losers.

******

Recalling the criteria for the evaluation of constitutional bargains and binding institutions in
the post-Cold War period, the discussions above conclude that: the US did not lead the
processes of expanding membership of the IMF, and in some cases opposed them; the Fund
did not bind US hegemonic power and, in some sense, enhanced its exercise; other countries
saw benefits in IMF membership, although statistical evidence from programs show small
gains and even net losses; and countries willingly entered the institutions, even if pressured by
the need of access to capital markets or pushed to adopt domestic reforms even before joining.

131
Vreeland, 2007, p. 90-91.
 111

3.3. Conclusion

Looking at the IMF case, there is little evidence that, after World War II, the US created an
institutional arrangement to bind its own power, or that other countries joined the IMF
because of this supposedly constitutional bargain. Likewise, there is no evidence to support
liberal interpretations of a post-Cold War US foreign policy expanding international
institutions through binding and mutually beneficial institutional arrangements. The liberal
model, as with Liberal IR in general, is based on premises and generalisations which create
narratives and a sense of purpose for events that are not necessarily related. In creating such
narratives, and particularly in claiming scientific status for them, the advocates of the liberal
order perform a normative and political act.

If the evidence shown above is not sufficient to conclude the inadequacies of the liberal
model, one can look at the contemporary trajectory of the Fund. As the effects of IMF’s
austerity were felt in Latin America during the 1980s, and as the goodwill with IMF’s advice
dissipated during Eastern European transitions in the 1990s, the Fund’s programs started to be
highly criticised. When Southeast Asian economies collapsed in 1997, many suggested that
the Fund’s misguided liberalisation policies were part of the problem. In the 2000s, in a
context of emerging centres of power in the international system, the IMF was gradually put
aside.

These views were already present in public and policy discourse in the 1990s. As Jagdish
Bhagwati stated, US politicians, media and public opinion have a hard time in seeing the ‘US
as a bully’ and understanding ‘the backlash that liberalisation policies can cause in developing
economies.’ 132 Liberal interpretations of institutions and neoclassical macroeconomics add to
that. Similarly, Chwieroth argues that without changing its structure and policies, emerging
states would distance and protect themselves from the IMF.

As recently as October 2008 the IMF seemed to be slipping towards terminal

irrelevance. For several years, the demand for its loans had been in sharp decline, as
emerging markets were awash with private capital flows and many of them pursued
self-insurance strategies. Even after summer 2007, as the world sank into financial
crisis, there was little demand for its resources. 133

132
Jagdish Bhagwati, 'The Capital Myth: The Difference between Trade in Widgets and Dollars' (1998), p. 11.
133
Chwieroth, 2010, p. 7. Chwieroth was of course referring to large emerging economies able to generate
enough hard currency reserve to keep away from IMF loans. Such comments do not apply to smaller economies,
as the Greek crisis shows.
 112

In the aftermath of the Southeast Asian crisis, Martin Feldstein correctly predicted that the
‘desire to keep out of the IMF's hands will also cause emerging market economies to
accumulate large foreign currency reserves.’ 134 Brazil, a constant IMF borrower for decades,
paid back all its dues in 2005 and has since been resisting the Fund’s advice over its economy.
China absorbed similar lessons: as it opened its economy, its fortunes were linked to the rest
of its region and the global market.

Working together to head off potential crises at a regional level is increasingly seen as
being in China’s own self-interest – especially if such regional cooperation can
mitigate the need to rely on the US dominated global financial institutions in times of
crisis. (…) At a time when there was considerable discontent in the region against the
terms of bailout conditions from the US dominated international financial institutions,
and a feeling that this was in someway ‘pay-back time’ for Asia’s previous economic
success, there was ample space for a Chinese ‘charm offensive’ in Southeast Asia. 135

Shaun Breslin recounts that ‘having China’s massive foreign currency reserves as a bulwark
against any future financial instability’ was attractive and effective, as it helped consolidate
Chinese monetary diplomacy and the country’s image as a responsible partner worth
engaging. 136 As such, liberal premises and generalisations also contradict contemporary
evidence. There is no point in talking about a liberal order with binding and mutually
beneficial institutions if emerging states, as much as possible, are avoiding these institutional
arrangements and concentrating on accumulating their own power resources.

134
Martin Feldstein, 'Refocusing the IMF' (1998), p. 31.
135
Shaun Breslin, 'China’s Rise to Leadership in Asia - Strategies, Obstacles and Achievements', in Regional
Powers in Asia, Africa, Latin America, the Near and Middle East (2006), p. 8-9.
136
Ibid.
4. US foreign policy and trade institutions

The previous chapter discussed the concepts of liberal order, binding institutions and
constitutional bargain regarding financial and monetary institutions on the post-World War II
and post-Cold War periods. Chapter 4 now follows the same structure of analysis focusing on
the international trade regime.

The first half of the chapter addresses the 1940s period, examining the failure of the ITO
project and the implementation of the GATT. The historical analysis of decision-making and
negotiation processes enables the appraisal of liberal concepts based on the aforementioned
criteria: (1) the creation process must be purposefully driven by the hegemon; (2) it must be
intended to bind hegemonic power; (3) it must generate benefits for other states; and (4) it
must be willingly accepted by other states.

4.1. ITO’s failure and GATT’s success

Recalling liberal interpretations of the post-World War II settlement, the liberal order led by
the US would be ‘a relatively open and multilateral system of trade and payments’, created in
a process of adapting US strategies from ‘free trade to managed openness’. 1 Chapter 3 looked
at the financial and monetary side of this supposedly constitutional bargain. The following
sections examine the other side of the economic order: the international trade regime.

Financial institutions were negotiated by the US and allied countries before trade issues
because, among other things, such matters were less contentious. In the years after Bretton
Woods, US and British planners had to go back to divisive trade topics in order to complete
the structure of the post-war economic order. The liberal model argues that the US accepted
constraints in its hegemonic power, through binding institutions, in order to attract other states
to its constitutional order. On commercial matters, the GATT would be such an institutional
arrangement. The liberal model further supports the existence of two unrelated post-war
orders: a constitutional order and a balance of power order. However, as discussed below, the
relation between the two orders is more important for understanding the institutions of
international trade than liberals accept.

1
Ikenberry, 1992, p. 289.
 114

Taking one step back, the research below addresses the planning and diplomatic negotiations
towards the creation of the ITO. Its Charter was signed in 1948 but never ratified; as a result,
the interim GATT established in 1947 was made permanent. The negotiations of these
arrangements, and the reasons why the latter was implemented while the former was not, shed
light on the concepts of liberal order, binding institutions and constitutional bargain.

4.1.1. Domestic precedents

As discussed in Chapter 3, post-war planning in the US started early during the war years.
Planners assumed that economic prosperity would be essential to the maintenance of peace
after the war, and that the best way to achieve such prosperity would be an open world
economy. As such, the IMF goal was to maintain a permanent foreign exchange parity system
and currency convertibility, enhancing confidence in the international economy. The IBRD
should provide for reconstruction, allowing war-torn countries to take part in international
exchanges. By design, the IMF and IBRD resources were meagre. The Bretton Woods
institutions should solely enable states to take part in an open international trading system: US
planners believed that the main driver of the post-war economy would be international trade.

US officials believed that a free trade system would maximise the efficiency of national
economies and generate greater levels of wealth. At the same time, international trade would
put nations in closer relations with each other, helping to promote peace and stability.
Discrimination, protectionism and competing regional blocs were thought of as causes of
World War II. Therefore, a free and open international trade system was essential to economic
prosperity and peace. Accordingly, planners recognised the need for another institutional
arrangement to govern world trade.

In order to understand US efforts to create such institution, supposedly in a constitutional

bargain, one needs to examine the domestic politics of international trade. Protectionism and
tariff levels had always been contested topics in the US. Since the end of the Civil War, the
country had practised a policy of high tariffs, insulating domestic industries from foreign
competition. Protectionists had strong support within the Republican Party, and the absence of
Democrats in Congress after the Civil War favoured them. Southern Democrats in particular
regarded high tariffs as a subsidy to Northern industrial groups, at the expense of farmers and
 115

consumers. 2 This situation changed during the Wilson administration, when Democrats won
the presidency and Congress majorities. With the passage of the Underwood-Simmons Act in
1913, tariffs were significantly reduced. But when Republicans regained the White House and
Congress after World War I, protectionism started up again. Beginning in 1921, US tariffs
went up reaching unprecedented levels when the Smoot-Hawley Tariff Act was signed into
law in 1930.

The consequences of US protectionism at the time of the Great Depression were retaliatory
policies abroad. Most significant was the signature of the Ottawa Agreements by the UK and
the Dominions in 1932, which in practice shielded a significant part of world markets from
US competition. Dismantling British imperial preferences would become a central tenet of US
trade policy in the following years. 3 The key figure in steering US trade policy to a liberal
course was the former Democrat senator from Tennessee, Cordell Hull. 4 Deeply committed to
lowering US tariffs, Hull was calling for an international trade conference as early as 1916.
As Roosevelt’s Secretary of State, ‘Hull was the most important individual responsible for
what ultimately became the GATT.’ 5

Two factors helped Hull. First, he knew the inner workings of Congress and carried a lot of
leverage over his former colleagues. Before serving in the Senate from 1931 to 1933, Hull had
been at the House of Representatives for 22 years. 6 His relations with Congress were
fundamental for the approval of many treaties and pieces of legislation in his 12 years as
Secretary. Second, Hull was able to imprint his visions of international trade and post-war
order on State Department’s bureaucracy. 7 By the time of his retirement in 1944, State
Department officials shared a ‘uniformity of opinion and purpose’ and the Secretary’s
‘passionate commitment’ to an open international economic order free from discriminatory
commercial policies.

Nothing of that was taken for granted at the beginning of the Roosevelt administration. The
President had been keeping tariff reductions at arm’s length to avoid Republican criticism.
Many New Dealers opposed Hull’s enthusiasm for an open economic order and saw tariffs

2
Patrick, 2009, p. 112-13.
3
van Dormael, 1978, p. 24. See also: Patrick, 2009, p. 113-15.
4
Aaronson, 1991.
5
Irwin, Mavroidis and Sykes, 2008, p. 12.
6
Hull’s eleven terms at the House ranged from 1907 to 1921 and 1923 to 1931.
7
James N. Miller, 'Wartime Origins of Multilateralism, 1939-1945: The Impact of the Anglo-American Trade
Policy Negotiations' (University of Cambridge, 2003), 12.
 116

and quotas as worthy instruments to promote national development. Opposition came

particularly from the Department of Agriculture, where officials tried to control production of
basic crops, boost prices, impose import quotas and provide subsidies to farmers. 8

As they could not cut tariffs in the midst of the Great Depression, Hull and his planners
developed a new approach. The administration would push for bilateral reductions of tariffs
through bilateral trade agreements with other countries. Roosevelt agreed to the strategy
because it could be portrayed as efforts to boost businesses and jobs. With the approval of
Democrat majorities in Congress, the President signed the Reciprocal Trade Agreements Act
(RTAA) in June 1934.

The legislation allowed for tariff reductions up to 50% from the level of the Smoot-Hawley
Tariff Act. Although significant, the cuts were not its major contribution. Through the Act,
Congress ceded its constitutional power to set tariff levels to the Executive branch. The
President was allowed to negotiate and sign trade agreements within given parameters.
Congress would then vote agreements up-or-down as a whole, not being able to amend them.
As such, legislators had renounced their ability to set tariff levels. Since Congressmen answer
to the particular interests groups from their districts or states, higher levels of protection were
pushed by various members fearing electoral setbacks. Presidents, however, are less
responsive to specific interest groups and tend to have a broader view of economic and
strategic issues. Compromises between different sectors are more easily reached by Executive
officials than by Congressmen concerned with re-election. Additionally, previous trade
treaties negotiated by the Executive had to be ratified by a two-thirds vote in the Senate. Now,
agreements were subject to single majority votes. This made it more difficult for
protectionists to muster votes opposing trade deals. 9

The legislation committed the US to the principle of unconditional most-favoured nation

treatment. All tariff benefits extended to one trading partner would be applicable to all, and in
negotiating trade agreements the US would demand the same treatment from other countries.
Hence, the approval of the RTAA signified a change from a protectionist position to one that
promoted free trade, non-discrimination and reciprocity. Lacking an international trade
conference to open markets, the US would use bilateral agreements to promote a freer trading

8
Patrick, 2009, p. 118.
9
Over time, the RTAA also favoured the articulation of export-oriented lobbies. Irwin, Mavroidis and Sykes,
2008, p. 8-9.
 117

system, and expand benefits through the MFN clause. It was bilateralism working towards
multilateral goals.

One should not forget, however, that the RTAA was export-oriented legislation. It faced
resistance in Congress, and its approval was only secured after agricultural and industrial
groups were granted extra layers of protection. 10 Moreover, the RTAA was presented as a
temporary measure. It was originally approved for a three-year period and it would have to be
renewed afterwards. At every subsequent renewal, the struggle between protectionists and
free traders resurfaced.

This brief history relates to the liberal model and the concepts of binding institutions and
liberal bargains. The coming efforts to create institutional arrangements regulating
international trade were driven by US planners. However, such efforts were part of a process
that started much earlier, before World War II and the prospects of building a post-war order.
Through bilateral trade agreements at first, the US was working towards the expansion of its
export markets. In practice, the US was the larger trading partner in all such deals, enabling
the country to extract better conditions from other countries and implement its MFN clause.
There was no binding of US power in such agreements; in fact, it was the US relative power
position which allowed their conclusion. This is important to note, because these dynamics
would be re-enacted in the negotiations of the post-war trade regime.

The origins of the US free trade agenda have been well documented in the literature. 11
However, the fact that the US agenda was primarily export-oriented, that it had faced and
would continue to face resistance from domestic protectionist groups, and that the size of the
US economy positioned it to extract better conditions from its partners, have been simply
ignored in the articulation of the post-war trade institutions as part of a liberal international
order. 12 Instead of considering the way in which such origins might have impacted upon post-
war institutional arrangements and the political dimensions of international trade institutions,
the liberal model assumes a general conception of the benefits of free trade to all parties. Yet,
when the post-war political and economic realities are looked at in detail, the results are much
different than what liberal premises suggest.

10
Patrick, 2009, p. 121-22.
11
Gardner, 1956, p. 1-23; Alfred E. Eckes Jr., Opening America's Market: U.S. Foreign Trade Policy Since 1776
(1995); Thomas W. Zeiler, Free Trade, Free World: The advent of the GATT (1999), p. 6-19. See also: Patrick,
2009, p. 105-36.
12
Ikenberry, 2001, p. 176-77, 85-88; Ikenberry, 2012, p. 169-74.
 118

After 1934, the US had some success with trade agreements, but the volumes involved were
negligible. The country reached an agreement with the UK in 1938, but that came to no effect
with the beginning of World War II and the imposition of import controls. Nonetheless, the
RTAA had a profound impact in post-war planning. By taking the locus of trade policy away
from Congress, the legislation favoured concessions and compromise. Moreover, it mobilised
the bureaucracy, particularly the State Department, to specialise in trade issues. When post-
war negotiations began, US planners had had years of experience to develop their ideas on
international trade.

By the end of 1939, the United States had concluded trade agreements with 22
countries. While the impact of the tariff reductions in these agreements was modest,
the provisions in the agreements formed the basis for a future multilateral accord. (…)
These provisions served as the basis for U.S. trade proposals during the war and many
were ultimately included in the GATT. Hence, the GATT was not created from
scratch, but represented a continuation and expansion of U.S. efforts during the
1930s. 13

4.1.2. Bilateral negotiations, 1943-45

Negotiations towards post-war commercial collaboration started simultaneously with their

financial counterpart. 14 Harry Hawkins and the staff of the Division of Commercial Policy
and Agreements of the State Department were the main incumbents in the US. 15 They
assumed that a significant expansion of international trade was necessary to maintain full
employment in the US and elsewhere after the war. States would have to lower tariffs on a
non-discriminatory basis, relinquish quantitative restrictions, and abandon any other devices
that limited trade. The US was the only country capable of promoting such a system, due to
its economic strength, favourable balance of payments and the attractiveness of its market to
foreigners. Planners also recognised that negotiations should start as soon as possible, reaping
benefits from the war alliance. 16

13
Irwin, Mavroidis and Sykes, 2008, p. 12.
14
Harley Notter, Postwar Foreign Policy Preparation, 1939-1945 (1949); Susan Aaronson, Trade and the
American Dream: A Social History of Postwar Trade Policy (1996), p. 23-29.
15
Hawkins was one of Hull’s most trusted advisors. Cordell Hull, The Memoirs of Cordell Hull (1948), p. 366;
Zeiler, 1999, p. 17. John M. Leddy, Oral History Interview, Truman Library. Available at:
http://www.trumanlibrary.org/oralhist/leddyj.htm.
16
Gardner, 1956, p. 102.
 119

In the UK, planning developed in similar lines. James Meade, working at the Economic
Section of the War Cabinet Secretariat, released a plan for an International Commercial Union
in July 1942. 17 Recognising the British stakes in free trade, his plan sought to avoid excessive
discrimination but retain safeguards for British interests. Preferential tariff treatment would be
forbidden, ‘except for nations grouped by political affiliation’ like the Commonwealth.
Quantitative barriers would also be prohibited, but only after a transitional period and with an
exception for countries with balance of payment difficulties. Just like Keynes’s financial plan,
the Commercial Union discriminated between creditor and debtor countries, with the latter
allowed to hold on to protectionist policies. Meade’s plan eventually evolved into the Overton
Report, transmitted to the War Cabinet in January 1943. 18 The Report was the basis for
discussions with the US.

In September 1943, British trade officials were also part of the delegation sent to Washington.
Just like the financial talks, the Washington Seminar on post-war trade was conducted at the
level of experts. As Richard Gardner puts it, the meetings were informal consultations and
‘entirely exploratory – in the spirit of a university seminar’. 19 On the US side, Myron C.
Taylor led the delegation, which included Dean Acheson, Hawkins, and experts from different
agencies. The British were led by Richard Law, Minister of State in the Foreign Office,
accompanied by Sir Percival Liesching from the Board of Trade, Lionel Robbins, head of the
Economic Section of the War Cabinet Secretariat, and Meade. 20 The main topics discussed
were tariffs, preferences, quotas, employment, cartels, investment and state trading. 21

Concerns about UK economic position drove discussions on tariffs and preferences. US

officials emphasised the necessity of eliminating imperial preferences, going further than the
50% reductions the British were offering. British officials, while agreeing to its desirability,
took into account the political and economic implications of eliminating preferences.
Moreover, they downplayed the differences between preferences and tariffs. A substantial
decrease in preferences, they argued, would have to be compensated with significant
reductions of US tariffs. Hawkins strongly opposed this linkage; to US officials, tariffs and
preferences were different in kind.
17
Meade’s plan was complementary to Keynes’s Clearing Union discussed in Chapter 3.
18
Zeiler, 1999, p. 28-29.
19
Gardner, 1956, p. 104.
20
Meade and Robbins were major figures in Economics at a later stage. Robbins was head of the Department of
Economics at the London School of Economics. Meade, while also working at the LSE and Cambridge, was
awarded the 1977 Nobel Memorial Prize in Economic Sciences with Bertil Ohlin for their research on
international trade and capital movements.
21
Gardner, 1956, p. 103-09; Zeiler, 1999, p. 33-37; Irwin, Mavroidis and Sykes, 2008, p. 37-43.
 120

Liesching brought in another element to this discussion. The Overton Report suggested a
formula of horizontal tariff cuts by an agreed-upon percentage across entire sectors. US
officials rejected horizontal cuts, referring to the technical difficulties and the fact that
Congress would never accept it. The RTAA was based upon negotiating reductions on
individual items, later generalised through the MFN clause. The piecemeal approach
permitted interest groups to pressure the Executive on specific products. As the strongest
party in most negotiations, the approach also permitted the US to extract maximum benefits
from each concession. Liesching, however, defended sectorial cuts as the only way to achieve
reductions large enough to guarantee substantial elimination of preferences. Reluctantly,
Hawkins agreed to study the impacts of the proposal.

The differences regarding US tariffs, imperial preferences and horizontal cuts relate variously
to the disputes regarding the Clearing Union proposal, the size of the IMF and the creation of
an international currency (bancor). 22 In the latter cases, US officials appealed to the argument
that ‘Congress would never approve’ and took advantage of the US relative power position to
promote its preferred policies. US trade officials attempted the same strategy, but with
different results. Trade and imperial preferences were sensitive issues and UK representatives
did not accede to US policies. Discussions would continue, but it is evident that at that point
US officials did not intend to bind hegemonic power: they wanted to abolish the imperial
system in exchange for tariff concessions the British considered insufficient, and wanted to
negotiate tariffs on a by-product basis enhancing their bargaining power.

The talks finished in mid-October and a joint report was produced combining the results of
the financial negotiations. After that, bilateral negotiations slow downed significantly. 23 Most
of the halt came from the UK growing concern with its balance of payments position after the
war. Resistance to eliminating imperial preferences came both from economic grounds and
from resurgent Empire advocates. 24 In the US, White House priority was the 1945 renewal of
the RTAA. Officials lobbied for additional authority to lower tariffs up to 50% from current
levels. During the process, the administration relinquished the idea of broad sectoral cuts
opposed by Congress. To appease protectionist concerns, all future trade agreements would
contain escape clauses permitting parties to withdraw concessions in case of serious injury to

22
See Chapter 3 of this thesis, Section 3.1.3.
23
Zeiler, 1999, p. 37-40; Irwin, Mavroidis and Sykes, 2008, p. 43-65.
24
Gardner, 1956, p. 154-55.
 121

domestic producers. Contrary to the liberal model, Congress was also not concerned with
restraining US power, but with enhancing its leverage.

In the meantime, Hawkins was appointed Minister-Counsellor for Economic Affairs at the US
Embassy in London in September 1944 and Hull retired after Roosevelt’s re-election in
November. The President died in April 1945 and was succeeded by Harry Truman. The
leading figure on post-war trade planning became Will Clayton, the new Assistant Secretary
of State for Economic Affairs, who perhaps embraced non-discrimination with even greater
passion than Hull. Structural elements also weighted in. After the Japanese surrender in
August, Truman abruptly ended Lend-Lease. The UK’s dire financial condition led to the
negotiation of the British Loan. 25 The attachment of currency convertibility and other
conditions to the loan served to augment opposition to free trade in the UK.

Bilateral trade talks restarted on October 1, in Washington. 26 Clayton had direct orders from
Truman to guarantee that financial aid was linked to the elimination of trade preferences.
After an initial firm stance, and in face of robust British resistance, US negotiators eventually
backed down. Clayton grew extremely frustrated with British insistence in tying imperial
preferences to US tariff concessions, especially after negotiators deemed US offers of up to
50% tariff cuts insufficient. British officials had reacted negatively to the US stepping away
from horizontal tariff cuts. 27 The US counterproposal was to have a multilateral conference in
which countries would negotiate bilaterally on a product-by-product basis, with concessions
shared through MFN treatment. 28 Liesching and Robbins hardly thought this would be enough
to reach the level of concessions needed to support the elimination of preferences. Now, they
redrafted the language of Article VII compromise as follows:

In the light of the principles set forth in Article VII of the Mutual Aid Agreements,
members should enter into arrangements for the substantial reduction of tariffs and for
the elimination of tariff preferences, action for the elimination of tariff preferences
being taken in conjunction with adequate measures for the substantial reduction of
barriers to world trade, as part of the mutually advantageous arrangements
contemplated in this document. 29

25
See Chapter 3 of this thesis, Section 3.1.6.
26
Gardner, 1956, p. 145-61; Zeiler, 1999, p. 51-58; Miller, 2000; Irwin, Mavroidis and Sykes, 2008, p. 65-72.
27
Irwin, Mavroidis and Sykes, 2008, p. 60-61.
28
See also: Joanne Gowa and Soo Yeon Kim, 'An Exclusive Country Club: The Effects of GATT on Trade,
1950-92' (2005).
29
'Proposals for the Expansion of World Trade and Employment', (1945).
 122

The new wording represented important concessions to the British. As much as the US
obtained an official commitment to the elimination of preferences, the principle was also
formally tied to ‘substantial reductions of barriers’ in ‘mutually advantageous arrangements’,
both measures being undefined.

The US included a limited version of its escape clause in the final document, while the British
obtained concessions on the use of quotas for countries with balance-of-payment difficulties.
British positions also prevailed on provisions for cartels and state trading. As James Miller
argues, US officials were outplayed by British negotiators, who extracted major concessions
out of their fragile economic position. 30 The British also resisted accepting final
commitments, pushing them forward to multilateral negotiations. This strategy inhibited the
US from presenting a single unified proposal to other countries and later, in an enabling
environment created by the emerging Cold War, allowed the UK to outnumber and
overwhelm the US at conferences in London, Geneva and Havana, supported by
Commonwealth members.

4.1.3. Multilateral negotiations, 1946-48

Talks in Washington ended in October 1945, with agreement on the Proposals for
Consideration by an International Conference on Trade and Employment. 31 The plan was not
released until December, to coincide with results from British Loan discussions. Needing to
secure Congressional approval, the Truman administration tried to link both issues. The UK,
nevertheless, refused to co-sponsor the Proposals. In spite of various exemptions obtained by
its negotiators, British criticism grew. US attempts to link financial aid and trade concessions
had a negative effect, and many in the UK pointed to the unfairness of eliminating preferences
while only reducing tariffs. 32

A changing international environment and the emerging Cold War would affect trade
planning. 33 In early 1946, when Congress was reluctant to approve the British Loan,
administration officials eagerly pointed to Stalin’s speech on February 9 for support. Stalin

30
Miller, 2000.
31
The plan was part of a larger document released by the State Department: Proposals for the Expansion of
World Trade and Employment, 1945.
32
Gardner, 1956, p. 157.
33
Walter A. McDougall, Promised Land, Crusader State: The American Encounter with the World since 1776
(1997), p. 159.
 123

implicitly compared the US and the UK to Nazi Germany and asserted that coexistence with
the USSR would lead to conflict. 34 On February 22, George Kennan sent his famous ‘Long
Telegram’, stating that coping with the USSR was ‘undoubtedly [the] greatest task our
diplomacy has ever faced and probably [the] greatest it will ever have to face.’ 35 Strategic
concerns would soften US officials and Congress regarding the number of concessions they
would be willing to bear in order to establish and international trading system. As discussed
below, the USSR was a main variable in the creation of this supposedly liberal constitutional
order.

Following the publication of the Proposals, the State Department tried to put together a
nuclear club of nations to discuss the creation of a trade organisation. The attempt was
subsumed in a formal UN initiative convened by its Economic and Social Council. In
September 1946, the State Department published the Suggested Charter for an International
Trade Organization of the United Nations, a revised version of the Proposals. 36 The First
Session of the Preparatory Committee to draft a Charter for an International Trade
Organization opened in London, in October 1946. For the first time, the US faced a resistance
to its free trade principles that did not come solely from the UK. 37 In fact, there was evidence
of opposition even before the conference:

Australia and New Zealand sought to strengthen the employment provisions and aid
for industrializing nations in the Suggested Charter. They were so serious about their
demand for freedom to resort to discrimination that they had not yet signed the Bretton
Woods accord to protest IMF restraints on trade controls. 38

In London, developing countries such as Australia, India, China, Brazil and Chile demanded
attention to employment and economic development issues. They were successful in adding
new chapters to the ITO Charter on both. Australia and India defended a developing country
exception permitting the use of quotas to foster industrialisation. This added to the British
pressure towards more flexible quantitative restrictions. As the US conceded, the use of
quotas was allowed for longer than the established IMF transitional period and the ITO only
had to be consulted in the event of new or intensified restrictions. The Charter now allowed
for substantial exceptions, even discriminatory ones, and placed domestic policy above

34
Zeiler, 1999, p. 60.
35
George Kennan’s “Long Telegram”, The National Security Archive, The George Washington University.
Available at: http://www.gwu.edu/~nsarchiv/coldwar/documents/episode-1/kennan.htm.
36
'Suggested Charter for an International Trade Organization of the United Nations', (1946).
37
Gardner, 1956, p. 269-86; Zeiler, 1999, p. 69-73; Irwin, Mavroidis and Sykes, 2008, p. 77-80.
38
Zeiler, 1999, p. 66-67.
 124

international goals. As Gardner points out, ‘Some of the language now incorporated in the
London Charter, far from suggesting that quantitative restrictions were generally to be
avoided, seemed actually to encourage members to employ them’. 39

The London session also created a tariff protocol between the negotiating parties, which came
to be known as the GATT. The protocol was needed due to the complexity of tariff cuts on
various products and to guarantee concessions. Countries should provide schedules of
maximum tariffs to be appended to the protocol and benefits were extended through MFN
treatment. US domestic politics again came into play. To avoid protectionist criticism in the
November midterm elections, tariff discussions were postponed. An interim committee met
later, in January and February 1947, at Lake Success, New York, and produced the first full
draft of the GATT. Employment and domestic policy provisions were not included since the
agreement was to be subsumed into the ITO once the latter had been implemented. 40

The Administration’s concerns about domestic politics were warranted. Republican gains in
the November elections turned into majorities in Congress. Protectionists threatened the
Second Session of the Preparatory Committee, scheduled for April, calling for a suspension of
tariff reductions until domestic impacts of liberalisation were addressed. As a compromise,
Truman accepted further strengthening of the escape clauses on GATT negotiations, granting
the US Tariff Commission the right to ask for a concession to be withdrawn or modified if
deemed harmful to domestic industries.

The Second Session opened in Geneva on April, 1947. Delegates negotiated on two tracks:
refinement of the ITO text and GATT tariff concessions. Tariff negotiations started first, and
early disputes almost ruined them. US delegates did not have a mandate to reduce tariffs on
wool, an export of extreme importance to Australia. Just as the conference opened,
Republicans in Congress were ready to approve price support programs and import fees on
foreign wool. A dismayed Australia delegation threatened to leave the conference, backed by
other Commonwealth countries. Clayton flew back to Washington to intervene and Truman
eventually vetoed the bill in June. The President gave Clayton the authority to negotiate tariff
reductions on wool as he planned to offset cuts with domestic subsidies programs. 41

39
Gardner, 1956, p. 283.
40
Zeiler, 1999, p. 62-63; Irwin, Mavroidis and Sykes, 2008, p. 80.
41
Zeiler, 1999.
 125

Commonwealth threats to leave the conference show the amount of resistance that US
delegates faced. Likewise, Truman’s key decision has to be understood in a broader context,
and shows how foreign policy took precedence over economics. Earlier in March, the
President had laid out what became known as the Truman Doctrine. The pledge against
communism came in the form of support for Greece and Turkey. Both countries had close ties
with the UK, but those could no longer be counted on to balance Soviet power. UK weakness
and the evolving strategic environment increasingly affected trade negotiations by drawing
the US into European diplomacy again. In such environments, the US could not risk the
collapse of trade talks.

Along with the liberal model, US concessions on tariff levels in the GATT and the inclusion
of employment and development chapters in the ITO text can be interpreted as restraints on
US power and initiatives to lock in other countries in institutional arrangements. 42 However,
what liberal accounts overlook is the role of the USSR in such a process. 43 US officials were
making concessions based on great power politics, not constitutional bargains. The prospect
of failure of the GATT and ITO negotiations would represent a significant loss of foreign
policy prestige and would boost the USSR’s communist rhetoric. The impact would be even
worse if the collapse came from a split between the US and the UK.

Such a possibility existed. Stafford Cripps, the president of the Board of Trade and leading
British negotiator, bluntly refused to abandon Imperial Preferences. His ideology and
personality contrasted sharply with Clayton’s. 44 At an opening press conference, Cripps stated
that the US’s proposed concessions were not sufficient to abolish preferences. Astonishing
US officials, Cripps later suggested that the US ‘should withdraw some of its offers if it
believed it had not received adequate concessions.’ 45 By August, Clayton was advising his
superiors to discontinue negotiations with the UK and conclude agreements with other
countries. 46

42
‘Judith Goldstein and Joanne Gowa, for example, argue that the United States’ agreement to bind itself to the
GATT was necessary to encourage smaller states to make a risky move toward market liberalization.’ Ikenberry,
2012, p. 100. See also: Judith Goldstein and Joanne Gowa, 'US national power and the post-war trading regime'
(2002); Ikenberry, 2012, p. 179-83.
43
See for instance: Judith Goldstein, Ideas, Interests, and American Trade Policy (1993), p. 158-63; John H.
Jackson, The World Trading System: Law and Policy of International Economic Relations, Second Edition
(1997), p. 35-43.
44
James N. Miller, 'Personality, Ideology, and Interest in the Origins of the Modern World Trading System: The
Case of Stafford Cripps and Will Clayton', in The Historical Society Annual Conference (2002).
45
Irwin, Mavroidis and Sykes, 2008, p. 89.
46
FRUS 1947, vol. 1, p. 977-979.
 126

Apart from Cripps’ ‘austere and stubborn personality’, British resistance was explained by
external factors. 47 Its balance of payments and its hard currency reserves were weakened. On
June, the convertibility clause of the Loan Agreement came into effect, draining massive
amounts of dollar reserves in weeks. The government had to suspend convertibility and
approve additional austerity measures.

Facing relentless British opposition, the US capitulated. After consulting with Truman, Under
Secretary of State Robert Lovett instructed Clayton to conclude an agreement including the
UK. Lovett made clear that strategic interests were at stake. 48 Should negotiations fail, the UK
international position would be further weakened and the USSR’s strengthened. Appeasing
British needs was consistent with the administration’s broader approach. Earlier in June,
Secretary of State George Marshall had called for recovery assistance to Europe. The policy,
later known as the Marshall Plan, was based in part on a report Clayton had written after a trip
to Europe. 49 Contrary to the liberal model, it was Cold War politics that enabled the
conclusion of trade negotiations.

But even after State Department mediation, negotiations stood on the brink of collapse for
weeks. As the US searched for a face-saving accord, Cripps would not give away anything. In
September, the British Cabinet refused an offer devised by Clair Wilcox, the director of the
State Department Office of International Trade Policy, postponing requests on preferences for
three years and then phasing out margins over the next ten years. In October, the Cabinet
modified, and almost ruined, another proposal negotiated by Winthorp Brown, chief of the
Committee on Trade Agreements, and James Helmore, from the Foreign Office. The plan,
prepared with Canada and Australia, abandoned the idea of gradual elimination of preferences
and shifted concessions from the UK to the Dominions. At the risk of breaking up
negotiations, the Cabinet reconsidered the plan, reinserted offers it had stripped out the first
time, and approved it in mid-October.

The GATT negotiations concluded on October 30, 1947. 50 Twenty-three states had concluded
more than one-hundred agreements, covering about one half of the value of world trade. ‘But
reductions in duties were rather modest at the time, and many of those reductions had little

47
Irwin, Mavroidis and Sykes, 2008, p. 90.
48
FRUS 1947, vol. 1, p. 980-982.
49
See Chapter 5 of this thesis, Section 5.1.1. See also: Janis, 1982, p. 159-72.
50
Zeiler, 1999, p. 111-26.
 127

effect on trade because quantitative restrictions and exchange controls remained in effect.’ 51
In fact, post-war inflation would have a greater effect in reducing the impact of duties and
margins of preferences than the negotiations themselves. Thomas Zeiler states that US
concessions were ‘roughly two for each one received.’ Nonetheless, GATT’s exemptions and
escape clauses meant it ‘incorporated protectionism under the banner of trade liberalism.’ 52
Recalling the elements of the constitutional bargain set above, trade negotiations were one
instance in which countries saw advantages in joining institutional arrangements, and
willingly did so.

Meanwhile, the ITO text was discussed in Geneva from May 16 to August 15. Talks generally
followed the same pattern, with countries asking for flexibility from free trade principles and
the US granting them. US officials chose not to exert hegemonic power, not solely in order to
lock in other countries, as the liberal model supports, but to avoid empowering the USSR and
communist rhetoric. Power politics was a main element in the establishment of the institutions
of international trade. After various amendments, Wilcox conceded on important issues, such
as weaker clauses on investment protection and more autonomy for states to raise or impose
tariffs and quotas. 53 At each round of negotiations, resistance from other countries and
strategic imperatives further distanced the Charter from US preferences.

4.1.4. End game and domestic reactions

Late in 1947, the Truman administration lobbied Congress for the passage of the Marshall
Plan. Recovery aid to European nations was thought of as a temporary and emergency
program to help economies get back on their feet. The Marshall Plan would achieve what the
IMF and the IBRD did not. After that, the ITO and free trade were the long-term solution.

Following Geneva, the last multilateral round of negotiations took place in Havana, where the
UN Conference on Trade and Development opened on November 18, 1947. Once again, US
preferences were at odds with those of other states. Most of the overwhelming 800
amendments proposed at Havana came from the thirty-nine developing countries present. The
revolt was led by Latin America, Australia and India. Mexico alone submitted eighty-five

51
Irwin, Mavroidis and Sykes, 2008, p. 94.
52
Zeiler, 1999, p. 121.
53
Ibid., 127-36.
 128

amendments. Many of these countries felt excluded from the planning process and wanted to
imprint protectionism, government regulation and resistance to imperialism on the document.

Allowances for taxes and preferential trade networks, reducing price disparities
between raw materials and manufactures, and inclusions of social security guarantees
were amendments aimed at fuelling development. The chapters on cartels and
investments were assailed for benefiting strong nations, the state trading section for
not giving governments enough freedom. 54

The Cold War empowered developing nations. On the one hand, they were objects of dispute
between the US and the USSR. On the other hand, Europe’s trade deficit with the US would
have to be balanced by surpluses somewhere else. The UK was in a particularly odd position:
while it joined the US in opposing harsh changes in the text, it could not condemn other
governments for seeking the same exemptions it sought for itself.

Negotiators missed the original deadline of January 15. Prospects were not positive and, once
again, the State Department took a bad deal over no deal at all. To appease developing
nations, flexibilities were included on provisions for investment protection, preferential trade
areas, and preventing ITO penalties if commitments were not fulfilled. Additionally, a
compromise on Articles 21 and 23, respectively regulating quotas and non-discrimination,
extended the transitional period for the use of balance of payments escape clauses. 55 The
conference closed on March 28, 1948.

Concessions were made in order to secure an anti-communist international economic area.

State Department officials portrayed exemptions in the ITO Charter as temporary measures
caused by poor economic conditions at the time. They laid greater importance on the fact that
the Charter was achieved after all; exemptions would eventually fade away as the
international economy recovered. Optimism, nevertheless, could not hide differences between
US preferences and foreign approaches. ‘America’s “views about a free economic world are
not universally held”’ said Wilcox. ‘Regulation of trade unfortunately represented “the kind
of world we live in.’” 56

Such resistance to US preferences coming from other countries, and their success in obtaining
concessions, is a good example of constraints on US hegemonic power which the liberal

54
Ibid., 138-39.
55
Ibid., 136-46.
56
Ibid., 144.
 129

model attributes to binding institutions and the US desire to lock in other states. These liberal
premises, however, are conflicting with the historical record: US planners were concerned
with Cold War politics. The historical record shows that, at this stage, it was considerations
about the USSR’s power which limited US actions, not institutional arrangements. Moreover,
the US would at last not accept institutionalised concessions and restrictions, as the outcome
of the ITO demonstrates.

The disparities between US and other countries would be manifested in the domestic debates
over the ratification of the ITO Charter. William Diebold Jr. argues that the Charter lacked
supporters inside and outside government. 57 In the late 1940s, the Truman administration
could not amass the same support Roosevelt had had in the war years. No one in the State
Department had the political weight of former Secretary Hull. Moreover, interest groups
concerned with free trade faded. Cotton and tobacco, the traditional southerner exports, were
losing ground to products which were protected by tariffs and import controls. Foreign aid
programs also helped to secure some export markets. Most economists and academics
favoured the ITO proposal, even allowing for its problems, but they had no role in the
ratification debates.

Business groups were the real drivers of ITO discussions. Organisations such as the US
Chamber of Commerce, the National Association of Manufacturers, the National Foreign
Trade Council and the United States Council of the International Chamber of Commerce
came out against it. Diebold Jr. calls these critics perfectionists: they did not oppose the
Charter on protectionist grounds; they opposed it because the document did not go far
enough, it ‘was not “liberal” enough and not “internationalist” enough.’ 58 Throughout the
negotiations, perfectionists were calling for ‘tighter rules on cartels, import and exchange
controls, subsidies, and state trading, as well as protection for overseas investors.’ 59 There
were protectionist groups which laid criticism on the Charter as well. Those were well known
positions from previous RTAA debates. But even protectionist criticism took some arguments
from perfectionists. The ITO did not grant US major trade benefits or investment protection,
while other countries got greater concessions and were allowed to discriminate under various
exemptions. 60

57
William Diebold Jr., 'The End of the I.T.O.' (1952), p. 10-11.
58
Ibid., 14.
59
Zeiler, 1999, p. 63.
60
Diebold Jr., 1952, p. 24.
 130

Aware of criticism and concerned with the 1948 elections, the administration decided not to
seek ratifications that year. Truman’s re-election and the Democrat majorities in Congress in
1949 allowed the State Department to send the Charter to Congress in January as a joint
resolution. Had it been sent as a treaty, as Republicans demanded, opposition from just one-
third of the Senate would have defeated it. On April 28, the President transmitted the Charter
to Congress asking for its ratification. The administration, however, had many priorities and
did not press the issue. The North Atlantic Treaty had just been signed, the Soviets had
exploded their first atomic bomb, and the communists were triumphing in China. 61

The House Committee on Foreign Affairs would only start hearings on April 1950. Again, the
timing was not ideal. The National Security Council released its NSC-68 that same month,
raising alarms about security threats and calling for a military build-up. The message had
much resonance when the Korean War began in June. And a few months earlier, Joseph
McCarthy had given a speech accusing the State Department of being infested with
communists thus starting a witch-hunt in government circles. Even though the Charter could
have been approved in the House, Foreign Affairs Committee chairman John Kee asked
Truman to wait until a more favourable moment. In the Senate, Eugene Millikin and other
protectionists waited to report the joint resolution as a treaty, ruining its chances. In August,
with the Korea War raging and mid-term elections approaching, Kee informed Truman that he
would not put the Charter to a vote that session. 62

These events sealed the ITO’s fate. In December, the State Department announced it would
not seek ratification. Other countries had waited for the US, as its main proponent, to ratify
the Havana Charter. In the following months, other parties informed the US they were not
seeking ratification either. As such, it is hard to defend the conception of a liberal order of
binding institutions led by the US regarding international trade matters. Whether or not such
an order really existed in the ITO, the US was the main party responsible for its death at birth.

Besides domestic opposition, the US decision to drop the ITO was made easier by the
existence of the GATT. To bypass Congressional opposition, the agreement had not been set
up as an organisation; its signatories were ‘Contracting Parties’ and not members. In this way,
the President implemented the GATT through an executive order without the need for Senate
ratification. With the difficulties of the ITO, the administration refocused its free trade efforts

61
See Chapter 5 of this thesis, Section 5.1.5.
62
Zeiler, 1999, p. 159-62.
 131

towards the GATT. At the Torquay negotiation round, US officials asked their British and
Canadian counterparts to help in establishing a permanent executive committee for the
agreement. For the next five decades, the GATT would be the main institutional arrangement
regulating international trade.

******

Evaluating the liberal concepts of binding institutions and constitutional bargain regarding
post-war trade institutions, the analysis of planning and negotiations above can be
summarised as follows. The initiative to create institutional arrangements to regulate
international trade was clearly led by US planners; the origins of this process, nevertheless, lie
in export-led initiatives before the war which would have impacts on post-war institutions. At
first, US negotiators did not exercise restraint in the use of hegemonic power in negotiations
or accept the need to make concessions on post-war planning. At a later stage, concessions
were made due to strong resistance from other countries and the emergence of the Cold War –
bipolarity played an important role on the conclusion of ITO negotiations. In the end, facing
domestic opposition from interest groups and Congress, the Truman administration dropped
the ITO Charter. Its substitute, the GATT, did not include earlier compromises on
employment and development policies. Other countries saw benefits from the ITO Charter,
particularly since most of their demands had been accounted for; the institution did not come
to be, nevertheless. The GATT was a more restricted mechanism, with tariffs negotiated on a
by-product basis according to US preferences; states willingly joined the mechanism, but it is
significant that while the ITO Charter had 53 signatories, the GATT was joined by only 23
states.

The analysis above supports also supports two findings from previous chapters. First, there is
a distinction between two post-war periods. The settlement of 1944-45 was different from the
arrangements of 1947-49. The UN and the Bretton Woods institutions were designed to
accommodate the USSR. Yet, from 1946 onwards, post-war planning developed in the
shadow of the emerging Cold War and in reaction to Soviet power. 63 The liberal model does
not account for the change. Second, approaches to multilateralism diverged. US planners were
committed to substantive multilateralism, associated with free trade and non-discrimination.
Other states accepted only formal multilateralism, a majority decision-making mechanism
with no preordained principles.

63
See Chapter 5 of this thesis, Section 5.1.
 132

As such, it is difficult to sustain that there was a constitutional bargain on post-war trade
institutions. The GATT emerged out of historical conditions in which the US tried to promote
free trade and non-discrimination and encountered resistance from other countries; it was not
a constitutional bargain. Embedded liberalism was neither planned nor given at first; it
developed out of necessity in face of post-war social, economic, and political realities.

4.2. GATT/WTO: expansion, institutional features and practices

After the collapse of the ITO, the GATT became the central institution in regulating
international trade. The liberal order model proposes that, in a post-Cold War environment,
the US expanded its leadership in international trade, with the establishment of binding
institutions such as the Asia-Pacific Economic Cooperation (APEC), in 1989, and the North
American Free Trade Agreement (NAFTA), in 1994. 64 The creation of the WTO is seen as
the peak of this process, with particular emphasis on its improved Dispute Settlement
Understating (DSU). 65 The DSU subjects all members to mandatory panel resolutions in a
sophisticated system with well-defined timeframes, compensations and retaliatory measures.
WTO’s DSU would be the ultimate example of a constitutional bargain.

The expansion of the multilateral trade system is undeniable. Apart from growth in
membership, the WTO consolidated agreements in trade of manufactured and agricultural
goods, services, intellectual property rights, investments and other sensitive areas. Liberal
accounts assume this expansion is to be explained by the GATT/WTO effects in promoting
cooperation, improving efficiency, and guaranteeing countries that they will not be exploited
by the market power of hegemonic states. 66

64
Ikenberry, 2001.
65
G. Richard Shell, 'Trade Legalism and International Relations Theory: An Analysis of the World Trade
Organization' (1995); Judith Goldstein and Lisa L. Martin, 'Legalization, Trade Liberalization, and Domestic
Politics: A Cautionary Note' (2000); Anne-Marie Slaughter, International Law and International Relations
Theory: Millennial Lectures (2000); Ikenberry, 2001, p. 244-45.
66
Gilbert R. Winham, 'The World Trade Organization: Institution-Building in the Multilateral Trade System'
(1998), p. 351-53; Ikenberry, 2001, p. 244-45; Olivier Cattaneo and Carlos A. Primo Braga, 'Everything You
Always Wanted to Know About WTO Accession (but Were Afraid to Ask)', (2009), p. 4-6; Ikenberry, 2012, p.
234, 341. As an example, when accounting for China’s rationale to join the WTO, Ikenberry states that: ‘The
WTO provides the Chinese with multilateral trade principles and dispute settlement mechanisms that should be a
huge attraction to Chinese leaders because they offer tools with which to defend against the threats of
discrimination and protectionism that rising economic powers confront.’ Ikenberry, 2012, p. 347.
 133

In order to assess the accuracy of such liberal assumptions, the following sections examine the
general conditions that: (5) expansion processes must be purposefully driven by hegemons;
(6) institutions must bind hegemonic power; (7) institutions must generate benefits for other
states; and (8) the expansion process must be willingly accepted by other states. In turn, the
remainder of Chapter 4 looks at the expansion of membership and the politics of accession in
the GATT/WTO; the rule-making and negotiating processes, particularly in the Uruguay
Round; the record of the WTO dispute settlement mechanism; and the benefits created by the
multilateral trade system.

4.2.1. Expansion of membership and accession process

The GATT experienced three main waves of entrants from 1947 to 1994. In the 1950s, the
seventeen countries that joined the agreement were mostly US allies from Europe and Latin
America. The second wave came with decolonization in the 1960s: out of 39 new members,
29 joined the GATT through special arrangements for former colonies under Article XXVI. 67
With the end of the Cold War, another 33 countries joined the institution, a group roughly
composed by two-thirds of former colonies and a third of former communist countries. Since
its creation, in 1995, more than thirty new members have entered the WTO.

If the liberal interpretation of post-Cold War order is correct, one should expect the US to
‘accelerate the process [of GATT/WTO membership] in order to reap the benefits of more
rapid market liberalization.’ 68 However, evidence points in a different direction. While some
of the factors discussed below are structural characteristics of the WTO, many influences
come from US and EU-driven policies. 69 Rather than demonstrating restraint in the use of
hegemonic power, the records of WTO entrants show examples of how the US and the EU
exploit their relative power position.

Three structural elements distinguish WTO accession from the former GATT: (a) the scope of
negotiations has expanded significantly, incorporating trade in goods, services and intellectual
67
Stone, 2011, p. 98.
68
Ibid., 100.
69
From the 1960s onwards, propelled by the reconstruction and integration processes, Europe became a major
player in international trade. Reflecting this new distribution of economic power, the US and the European
Communities – succeeded by the EU – have been main players in succeeding multilateral trade rounds.
Currently, all EU member states are also WTO members. Additionally, the EU is a member of the WTO,
manned by the European Commission, and speaks for all EU states at almost all WTO meetings. As such, in
regards to the liberal model, one can consider the EU as an additional hegemonic power in international trade
matters, in alignment or opposition with the US on different topics.
 134

property rights; (b) the required levels of market access of entrants are higher due to
successive rounds of trade liberalisation over decades; and (c) the number of states possibly
demanding concessions from entrants has increased as the institution expanded. 70 As such,
WTO membership processes last longer, the average time being seven years. 71 Some
accessions take considerably more time, like those of China (fifteen years) and Russia
(eighteen years).

Accession is ruled by Article XII of the WTO Agreement, which asserts that any state can
join ‘on terms to be agreed between it and the WTO’. In practice, this loose definition is
supplemented by formal procedures for membership. The most important include: the
submission of a memorandum on the applicant’s foreign trade policies; the creation of a
Working Party of WTO members to consider the application; satisfactory responses to
questions about the memorandum posed by WTO members; bilateral negotiations on tariffs
and other measure with each of the Working Party members; the adoption of the Protocol of
Accession by the Working Party by consensus, and then by all WTO members by a two-thirds
majority vote. 72

As membership happens ‘on terms to be agreed’, there are no clear requirements regarding
levels of concessions entrants have to make. These are negotiated bilaterally between the
applicant and members of the Working Party. In this sense, there is a fundamental difference
between accession and negotiations in multilateral trade rounds. The bargaining in accession
processes is one-sided: entrants have no means of enhancing the benefits they will receive.
What is offered to entrants is the current level of WTO commitments valid to all members on
MFN basis; the only thing negotiated is the price of entry they are willing to pay. 73 Such a
structure has implications for accessions as well as for the liberal idea of the WTO as a
binding institution.

Any member state can chose to join accession working parties. States do so in order to obtain
tariff concession for their exports, or to protect domestic markets by guaranteeing an entrant’s
compliance with WTO norms. Over time, the one-sided aspect of negotiations has increased
the price of accession. Compiling data from the first twenty entrants to the WTO, Simon

70
Cattaneo and Braga, 2009, p. 14.
71
Krzysztof J. Pelc, 'Why Do Some Countries Get Better WTO Accession Terms Than Others?' (2011), p. 650.
72
Simon J. Evenett and Carlos A. Primo Braga, 'WTO Accession: Moving the Goalposts?' (2006), p. 232. The
majority vote by all members is the only formal requirement in Article XII.
73
Pelc, 2011, p. 644.
 135

Evenett and Carlos Braga concluded that applicants commit to average tariff bindings ‘well
below those agreed by developing countries in the Uruguay Round.’ 74 Entrants also commit
to an average of 104 services sub-sectors, much higher than Uruguay Round standards. 75 In
other words, entrants accept higher levels of liberalisation on trade in goods and services than
existing members at a similar level of development. 76

Differences become clearer when one looks at commitments on rules. In addition to the WTO
Agreement, Evenett and Braga found that acceding countries committed on average to 25
rules, not all of them trade-related. 77 This is the source of what authors have named WTO-
plus obligations and WTO-minus rights. 78 Entrants have been pressed to accept commitments
which go beyond the WTO Agreement and to forfeit rights granted to founding members.
China provides the most notorious example; its accession maintained ongoing trade
discrimination against it at the time and permitted the imposition of more flexible safeguards
against Chinese products. 79 Similarly, entrants have been asked to join plurilateral agreements
which have not been accepted by all WTO members. 80 As such, WTO accessions have
created a two-tier membership, in conflict with the principle of non-discrimination and with
implications to WTO law.

As the largest members, the US and the EU are the main drivers and beneficiaries of such
extended concessions. In theory, the fact that any existing member can join accession working
parties, and that working parties decide on protocols of accession by consensus, would give
veto power for all participants. In practice, a series of primary and secondary norms regulate
which countries are allowed to block accessions and for what reasons. 81 One such norm is that
the largest exporter of each product leads negotiations on respective tariff concessions. Not
coincidentally, such a norm makes the US and the EU the main participants in most
negotiations. 82

74
Evenett and Braga, 2006, p. 233. The only exceptions were the accession of Nepal and Cambodia, which got
better terms due to their LDC status.
75
Ibid., 235. In the Uruguay Round, LDCs committed on average to 20 services sub-sectors, while developing
and developed members committed to 44 and 108, respectively.
76
Cattaneo and Braga, 2009, p. 18.
77
Evenett and Braga, 2006, p. 235. China was excluded from this sample, as it committed to 144 rules alone and
thus would distort the average. Stone, 2011, p. 100.
78
Evenett and Braga, 2006; Steve Charnovitz, 'Mapping the law of WTO accession' (2008); Cattaneo and Braga,
2009.
79
Charnovitz, 2008. Cattaneo and Braga, 2009, p. 20-21.
80
The Agreement on Government Procurement and the Information Technology Agreement are two examples.
81
Stone, 2011, p. 100.
82
So far, the US, the EU, Japan, Australia and Switzerland have taken part in all working parties. Cattaneo and
Braga, 2009, p. 16.
 136

Another unwritten norm of accession is that the ‘process is not invoked [by existing members]
as a pretext for extracting concessions on non-germane issues;’ that is, extracting non-trade
related concessions from entrants. However, WTO members also behave according to a
secondary norm: only the US and the EU may violate the previous compromise. 83 The US, for
instance, blocked the opening of Iran’s accession talks for reasons unrelated to trade from
1996 to 2005. 84 It publicly linked Russia’s WTO membership with the country’s cooperation
in US efforts in Afghanistan and Iraq. The EU used WTO membership to pressure Russia into
ratifying the Kyoto Protocol. 85 Such uses of accession to push non-trade related foreign policy
goals indicate behaviour coherent with traditional power politics, not constitutional bargains.

But perhaps the most damaging contradiction to the liberal interpretation of the expansion of
the WTO as a constitutional bargain is that changes in the accession process were made to
enhance hegemonic power. While negotiating the WTO Agreement, the US successfully
modified GATT’s opt-out clause. Former Article XXXV established that a member could
refuse to extend GATT concessions as a whole to an entrant. However, such clauses could
only be invoked if the parties had not engaged in bilateral negotiations during the accession
process. The US removed this pre-requisite from the text, as a way to threaten punishment for
applicants who fail to comply with negotiating demands. 86 Contrary to the liberal model, US
behaviour was not self-binding; it enhanced leverage for the exercise of its relative power
position. 87

As per the abovementioned criteria for binding institutions and constitutional bargains,
accession negotiations provide conflicting evidence. The US (and the EU) lead the expansion
process, but do so in a rather different way than liberals predict. Instead of attracting other
states with self-binding, mutual benefits and predictability, the US and the EU use their
relative power to make membership conditional on higher levels of liberalisation and
commitments on rules. Even if pressured to accept policies they would not take otherwise,
entrants still see benefits in joining and willingly do so. However, contrary to the liberal
model, the institution does not restrict the use of hegemonic power in accession processes.

83
Stone, 2011, p. 101.
84
Evenett and Braga, 2006, p. 241. The WTO eventually opened accession talks in May 2005, in what was
interpreted as a goodwill gesture by the US to ease tensions over the negotiations of Iran’s nuclear program.
85
Stone, 2011, p. 101.
86
Pelc, 2011, p. 644.
87
Similarly, US leverage is expressed when, in agreeing to new entrants and conceding them Permanent Normal
Trading Relations status, Congress makes reservations to protocols of accession.
 137

The next section looks into different patterns of negotiation, between existing members in
multilateral trade rounds.

4.2.2. Trade negotiations

The main elements of the multilateral trade system are the commitments states make
regarding maximum tariff schedules and trade-related rules, such as subsidies, dumping and
safeguards. Throughout the history of the GATT, these commitments were negotiated in trade
rounds. The Uruguay Round (1986-1994), the eighth and last GATT round, was responsible
for the creation of the WTO and the expansion of commitments to trade in services and
intellectual property rights. Such commitments, liberals argue, are binding and represent
mutual benefits for all members. In order to address such claim, this section looks at the
dynamics of trade negotiation rounds.

GATT’s first five rounds of trade negotiations were almost exclusively about tariffs. Most of
the proposed tariff reductions regarded industrialised products, reflecting the preferences of
the US and European states. Agriculture and textile products, on which developing and least
developed countries could have comparative advantages, were kept out of the GATT. The de
facto exclusion of agriculture was an unintended consequence of a US waiver request to the
GATT in 1955, in order to comply with protectionist legislation approved by Congress. 88
Other countries followed suit and started to protect their agricultural markets. During the
Kennedy Round (1962-1967), the sixth round of trade negotiations, the US and other
agricultural exporters like Australia and Canada tried unsuccessfully to bring back agriculture
liberalisation into the GATT. 89 They tried and failed again during the Tokyo Round (1973-
1979), the seventh, being mostly concerned with trade distortions caused by European
agricultural policies. With the creation of the WTO, agriculture and textiles were finally
incorporated, but under special terms.

The Tokyo Round also set precedents for the WTO in other ways. After previous rounds of
tariff reductions, states had found ways to protect sensitive markets through so-called non-
tariff barriers. The US and other developed countries wanted new regulations to cover trade

88
Jackson, 1997, p. 57-58, 314-15. The best account of institutional efforts to the liberalization of agriculture is:
Christina L. Davis, Food Fights Over Free Trade: How International Institutions Promote Agricultural Trade
Liberalization (2003).
89
The Kennedy Round also started discussions on non-tariff obligations, but achieved limited success. Jackson,
1997, p. 43, 73-74.
 138

distorting practices such as subsidies and dumping. Negotiations resulted in the creation of
multilateral codes on dumping, subsidies, and customs valuation. Such regulations, however,
were opposed by most developing countries. At the closing of the round, a group of 55
developing countries came to a position that the new rules ‘could be considered
interpretations of the GATT, which would therefore require support by a consensus of the
Contracting Parties.’ As such a consensus did not exist, the codes were signed by developed
countries as side-agreements. 90

Adding insult to injury, developing countries referred to Article I of the GATT (non-
discrimination) and argued that ‘the benefits of those codes had to be provided to all GATT
Contracting Parties on an MFN basis’. 91 In practice, developing countries managed to
guarantee benefits from the subsidies and anti-dumping codes without having to abide by
their regulations. This free-riding outcome was only possible because of Cold War politics.
US negotiators were disturbed by the developing states’ strategy and defended a more forceful
negotiation position. 92 Some wanted to break the developing countries’ position by
threatening to create an alternative trade regime between OECD members.

The plan provided that the EC, the United States, and most industrialized countries
would deepen trade liberalization among themselves, extending the benefits of the
arrangements only to those willing to undertake the obligations. The result would have
been a two-tiered global trade regime, which would quietly pressure the developing
countries into liberalizing or otherwise facing the trade and investment diversion
associated with the more liberal GATT-Plus regime. 93

As Richard Steinberg shows, the State Department strongly opposed and eventually killed this
idea. With a broader strategic agenda, officials considered that the threat could worsen the
tensions with developing countries and spill over into other multilateral forums. The free-
riding strategy of the developing world won the day, but resentment and the idea of forum-
shifting strategies would inform US policies in the Uruguay Round. 94

In part due to the results of the Tokyo Round and to losses of disputes in the GATT, the US
started to use the threat of unilateral sanctions as an instrument of its trade policy. Such

90
Richard H. Steinberg, 'In the Shadow of Law or Power? Consensus-Based Bargaining and Outcomes in the
GATT/WTO' (2002), p. 357.
91
Ibid.
92
Ibid., 358-59.
93
Ibid., 358.
94
For forum-shifting strategies, see: John Braithwaite and Peter Drahos, Global Business Regulation (2000), p.
29.
 139

authority emanated from Section 301 of the Trade Act of 1974, but was in conflict with
GATT regulations. 95 US threats and imposition of unilateral sanctions continued with the
creation of Super 301 and Special 301 by Congress in 1988, the latter related to intellectual
property rights. If the liberal model premises were right, the existence of institutional
arrangements regulating international trade should have prevented the exploitation of
hegemonic power. Instead, the US circumvented such institutional arrangements through
unilateral policies, making use of the sheer size of its trade and investment relations to shape
other countries’ policies. Contrary to the liberal model, the GATT did not function as a
binding institution in limiting the exercise of US power. At the launch and negotiations of the
following trade round, Europe and Japan saw inhibiting US unilateralism as one of their top
priorities. 96

US policies at the closing of the Uruguay Round serve as a further example. Since the
beginning of the round, developing countries had opposed new regulations on trade in
services, intellectual property rights, and investment measures (GATS, TRIPS and TRIMs).
US negotiators had feared the same results as the Tokyo Round, in which developing states
blocked similar initiatives. But in a post-Cold War environment, US officials were
uninhibited in making use of their improved power position.

According to Steinberg, in early 1990, USTR officials started to design what was internally
known as ‘the power play’. 97 The strategy was presented to Europeans at the end of the year
and later became known as the single-undertaking. All agreements negotiated during the
Uruguay Round, including the GATS, the TRIPS, and regulations on subsidies, safeguards,
anti-dumping and others, would be part of the Final Act which would eventually establish the
WTO. States could choose to sign all agreements or no-agreement at all. But the point of the
strategy was that what became known as GATT 1994 was legally distinct from GATT 1947.
In the closing of the Uruguay Round, the US and the EU exited from GATT 1947, effectively
cancelling their obligations with other members. States could sign the Uruguay Round Final
Act, including GATT 1994 and all other agreements, and join the WTO, or be excluded from
US and EU preferential treatment. 98

95
John H. Barton et al., The Evolution of the Trade Regime: Politics, Law, ans Economics of the GATT and the
WTO (2006), p. 69-71.
96
John Croome, Reshaping the World Trading System: A History of the Uruguay Round (1999), p. 126-27;
Barton et al., 2006, p. 71.
97
Steinberg, 2002, p. 360.
98
Ibid., 359-60.
 140

The strategy was a resounding success and allowed the creation of the WTO. But while liberal
accounts focus on the higher degree of institutionalisation of the new organism, on binding
commitments in many sectors, and on the renewed DSU, they are silent on the fact that the
WTO was founded on a power play, ultimately by coercion. The forum-shifting strategy of
the US and the EU forced other states to accept a condition not only that they would not have
taken otherwise, but which was worse than the condition in which they encountered
themselves previously. This strategy could only have been achieved by extinguishing the
existing condition and offering other states new options: to surrender to new principles and
norms or to be left out. It was the economic power of the US and Europe which allowed them
to employ such a strategy. At the end of the Tokyo Round, such an option had been present
but Cold War politics inhibited it. At the end of the Uruguay Round, no such restriction
existed. Both factors above emphasise the role of hegemonic power in the trade regime. This
outcome does not resemble in any way a constitutional bargain.

Similarly, Michael Finger makes an interesting and often forgotten point regarding gains and
losses from the Uruguay Round. Many commentators point towards the unbalanced bargain
between the few concessions made by developed countries in agriculture and textile products,
and the many compromises accepted by developing and least developed countries in
consolidating and reducing tariffs, and accepting regulations on services, intellectual property
rights, investments and other areas. Finger recalls that, from a standard neoclassical
economics approach, there are always absolute gains regarding the regarding liberalisation of
tradable goods. Even when states accept unbalanced bargains or concessions they would not
take otherwise, they benefit from freeing up economic resources which would eventually be
put to better use.

However, that is not the case with regulations; there are no comparable absolute gains or
mutual benefits. There are obvious costs of royalties and copyrights being paid to developed
countries, but there are also indirect costs related to the setup of new domestic regulatory
system and institutions previously inexistent in developing and least developed countries. A
World Bank study estimated that the customs valuation, TRIPS, and sanitary and
phytosanitary measures required by the Uruguay Round agreements would cost US$ 150
million each to be implemented. 99 All this ‘in return for minimal liberalization in agriculture

99
Michael Finger, 'The Uruguay Round North-South Grand Bargain: Will the WTO get over it?' (2002), p. 303-
04.
 141

and textiles and clothing’, as Sylvia Ostry puts it. 100 Finger estimated that developing
countries like Brazil, Mexico and South Korea are net losers on the relation between losses
from the TRIPS agreement and gains from manufacturing liberalization (by margins of 1.6;
2.0; and 0.9, respectively). On the other hand, the US would ‘gain 7.5 times as much from
TRIPS as from all other countries’ tariff concessions on manufactures.’ 101

Once again, the evidence does not seem to corroborate the liberal model. Instead of binding
hegemonic power, the rules that emerge from trade negotiations enhance power disparities.
Liberal accounts overlook such power disparities, focusing rather on the sophisticated
institutional design of WTO, and particularly on its DSU as an example of a constitutional
bargain. The next section analyses such arguments in turn.

4.2.3. Dispute settlement under the GATT/WTO

Liberal IR and legal scholars consider the creation of WTO to be one of the most important
developments in international law, characterising it as a ‘highly legalized’ institution and its
rules as ‘hard law’. 102 Dispute settlement has always been part of the multilateral trade
system. Under the former GATT system, the parties of a dispute could block a panel or veto
its decision. The new WTO mechanism put an end to the defendant’s veto, created a
permanent Appellate Body, and formalised the processes of adjudication under well-defined
timeframes. Due to its institutionalised nature, analysts point to the reduction of biased
decisions towards powerful states. 103 Differently than the GATT in which weaker members
‘lacked the political or economic clout to enforce their rights and to protect their interests’, in
the WTO ‘right perseveres over might.’ 104 What liberal accounts overlooks is that, as in
domestic law, legal systems provide better protection for those who can make the best use of
it.

At first glance, developed and developing countries take part in the same proportion of cases
in the DSU, both as plaintiffs and defendants, and have similar results as percentage of cases

100
Sylvia Ostry, 'The Uruguay Round North-South Grand Bargain: Implications for Future Negotiations' (2002),
p. 288.
101
Finger, 2002, p. 304.
102
Kenneth Abbott et al., 'The Concept of Legalization' (2000); Kenneth Abbott and Duncan Snidal, 'Hard and
Soft Law in International Governance' (2000).
103
Goldstein and Martin, 2000, p. 629.
104
Julio Lacarte-Muro and Petina Gappah, 'Developing Countries and the WTO Legal and Dispute Settlement
System: A View from the Bench' (2000), p. 400-01. Emphasis in the original.
 142

won. 105 Such apparent balance, however, hides diverging evidence. For instance, instead of
focusing on who wins cases, Marc Busch and Eric Reinhardt measured the amount of
concessions obtained by winning countries from 1980 to 2000. 106 Their results showed that,
due to GATT’s less structured mechanism, a greater number of complaints were resolved
through initial bilateral consultations. In these early settlements, plaintiffs usually got better
results.

In the highly structured WTO, countries were less inclined to achieve early settlements. Once
the litigation process starts, the probability that plaintiffs achieve all their demands diminishes
significantly. Defendants can use various legal procedures to extend, delay and appeal from
the panel’s decision. As time goes by, the costs of the legal process grow and the disputed
policies continue to hurt affected economies. Even when the case is closed, retaliatory rights
must be estimated and often do not amount to total claims. The effects of trade distortions
might have disrupted economies in ways that retaliatory rights might not make any difference.
It so happens that developed countries can better sustain these impacts than developing and
least developed nations. In this sense, the DSU favours developed nations. For poor countries,
the new system ‘substitutes (or compounds) the traditional source of weakness – namely, the
lack of market size and thus retaliatory power – with a new one: legal capacity.’ 107 In their
most recent assessment of legal capacity of WTO members, Busch, Reinhardt and Gregory
Shaffer conclude that ‘the greater legalization of the multilateral trade regime poses
asymmetric challenges for developing countries’ and legal capacity is the main constraint
limiting access to dispute settlement. 108

Even when developing and least developed states win cases, their lack of capacity to retaliate
makes the DSU of little avail if developed countries do not agree to change policies.
Retaliatory rights granted by WTO’s panels and Appellate Body consist of an estimation of
how much the plaintiffs economy was hurt by trade distortions. The complainant then can
alter policies in order to balance effects by the same amount. This implementation depends on
the country’s market power, and on how much a disruption of its imports can affect the
defendant. When imports from one country only account for a negligible proportion of

105
Andrew T. Guzman and Beth A. Simmons, 'Power Plays and Capacity Constraints: The Selection of
Defendants in World Trade Organization Disputes' (2005).
106
Marc Busch and Eric Reinhardt, 'Developing Countries and General Agreement on Tariffs and Trade/World
Trade Organization Dispute Settlement' (2003).
107
Ibid., 721-22.
108
Marc Busch, Eric Reinhardt and Gregory Shaffer, 'Does legal capacity matter? A survey of WTO Members'
(2009), p. 576-77.
 143

exports from another country, retaliatory measures from the former are unlikely to have any
significant effect on the latter. In practice, given the great imbalance in terms of trade volume
and economic power in the system, very few countries can impose sanctions on the US, the
EU, Japan and China, apart from themselves. Moreover, if free trade really benefits countries,
to artificially adjust trade policies would only hurt the complainant’s economy further.

One of the most revealing examples is the EC – Bananas case. In 1996, the US and a group of
Latin American countries filed a case against the EU’s banana import regime favouring
imports from former European colonies and other developing countries under the Lomé
Convention. After the ad hoc panel and the Appellate Body found the EU regime to be
discriminatory and in violation of several WTO commitments, the US ‘moved aggressively to
impose sanctions’. 109 In contrast, Ecuador, one of the other injured parties, never had the
economic clout to impose meaningful sanctions. As one commentator puts it, ‘Ecuador never
implemented its authorized retaliation against Europe in the case of the bananas and was
unable to find a way to sting the Europeans without hurting itself more.’ 110 Even the WTO
Arbitrator examining the case concurred. Since Ecuador imported at the time less than 0.1 per
cent of EU exports, it could never effectively retaliate by withdrawing tariff concessions. 111
The example shows that the DSU, celebrated by liberals as an effective binding mechanism,
only results in punishment for violators of WTO law if complainants have enough market
power to implement sanctions.

Similarly, Stone argues that DSU’s timeframes and procedures can be beneficial for countries
that can afford to disobey the system in favour of domestic political and economic
pressures. 112 During the Bush administration, the US raised tariffs on steel products above its
WTO commitments. By the time the EU litigation ran its course, the administration had
already collected the electoral benefits of protecting steel producing districts. Likewise, the
US and the EU have been filing multiple cases against each other concerning Boeing-Airbus
subsidies since 2004. The formal procedures and mutual appeals have been going on for long
enough to ‘shield’ both parties ‘from any costly adjustments’ while appeasing its domestic
constituencies. In the meantime, the economics of the airplane industry changed, rendering
the cases less important as major companies outsource their manufacturing to Asia. As much

109
Geoffrey Garrett and James McCall Smith, 'The Politics of WTO Dispute Settlement', (2002), p. 15.
110
Karen J. Alter, 'Resolving or exacerbating disputes? The WTO's new dispute resolution system' (2003), p.
787.
111
Hunter Nottage, 'Developing Countries in the WTO Dispute Settlement System', (2009), p. 7.
112
Stone, 2011, p. 87-88.
 144

as it is framed as a binding mechanism by liberal authors, the DSU seems rather meaningless
in terms of effectiveness when great economic powers are involved.

Appeasing domestic constituencies is also a factor in the way developed states resort to anti-
dumping cases. 113 Anti-dumping plays a unique role in GATT/WTO because it is the only
way to impose penalties on a single trading partner. Nevertheless, Stone states that ‘the
standard of evidence to establish these claims is low’, that the evidence ‘in the majority of
anti-dumping cases is very weak’, and that ‘the incidence of anti-dumping actions is not well
explained by the price data that are supposed to justify them.’ The author concludes that anti-
dumping has come to be a respectable way for members to apply protectionist measures. The
majority of anti-dumping investigations are filed by developed countries against developing
economies. Anti-dumping measures serve as a protectionist escape valve, and powerful
countries resort to it often since they are less subject to retaliation. Rather than bind state
power as the liberal view suggests, WTO regulations seem to enhance developed states’
capacity to legitimately exploit their relative power position.

Finally, there is a question of direct or indirect influence on the institution’s staff. Although
the initial phases of litigation are transparent, decisions are often contested at the standing
Appellate Body. Moreover, it is common for the judges in the Appellate Body to reform
decisions. Steinberg argues that the US and the EU exert influence in the Appellate Body by
selecting its members. 114 They hold an informal veto over nominations and that this capacity
is routinely used to ensure that candidates ‘are not exceedingly activist, biased, or expansive
lawmakers.’ Additionally, USTR staff carefully review each candidate’s application and past
legal positions and statements, and personally interview them in Washington or Geneva. 115

Geoffrey Garrett and James Smith found that the Appellate Body is particularly prone to
reform rulings involving the US and the EU. 116 Even when the ruling stands, sometimes the
legal reasons behind it are modified. The authors argue that these practices are strategic. In
order to maintain its status, the Appellate Body would have incentives to accommodate US
and EU interests. If powerful members were increasingly discontented with its rulings and
openly defied them, the system would collapse. Panel decisions are modified in ways to

113
Ibid., 89-90.
114
Richard H. Steinberg, 'Judicial Lawmaking at the WTO: Discursive, Constitutional, and Political Constraints'
(2004), p. 264.
115
Ibid. Steinberg sources are interviews with USTR officials and WTO’s Appellate Body members.
116
Garrett and Smith, 2002.
 145

minimise such conflicts. On the other hand, the US and the EU also refrain from opening
particularly sensitive cases. Since it is useful for both to have a credible DSU, especially to
deal with developing economies, they practise self-restraint and do not file delicate cases with
high domestic political costs.

Statistical analysis of trade data confirms the institutional bias. In one early study, Chad Bown
found that developing economies are less likely to take part in WTO litigation. Controlling for
the economic weight of disputed sector market access, he concludes that a state will refrain
from disputes ‘if it has inadequate power for trade retaliation, if it is poor and does not have
the capacity to absorb substantial legal costs, if it is particularly reliant on the respondent
country for bilateral assistance, or if it is engaged with the respondent in a preferential trade
agreement.’ 117 More recent statistical analysis confirms this bias. Looking at 185 cases from
1995 to 2005, Sebastian Wilckens shows that a country’s incentive to start a dispute increases
according to its economic size, the value of the case, and its real capacity to retaliate.
Conversely, it diminishes according to the costs of litigation as well as the economic size of
the defendant. In a disappointing conclusion, Wilckens states that ‘all else being equal, bigger
countries do have a greater incentive than smaller countries for using the DSS.’ 118 As much as
liberal theory praises WTO’s dispute settlement system, evidence shows that the mechanism
is tilted towards developed states and cannot impose credible sanctions on great economic
powers. As such, its capacity to bind hegemonic power is doubtful.

4.2.4. Trade benefits of the GATT/WTO

An increase in trade flows is the most obvious benefit that countries seek when joining the
GATT/WTO. Nevertheless, the seminal work addressing trade flows in the post-war era
found no evidence that the GATT/WTO would be responsible for trade growth. 119 The
debates over if and how much trade was promoted by the GATT/WTO have important effects
for liberal theory. Trade is the quintessential example of an international regime. ‘If the
GATT/WTO is inconsequential, what should one expect from thousands of other, ostensibly
lesser, international agreements?’ 120

117
Chad P. Bown, 'Participation in WTO Dispute Settlement: Complainants, Interested Parties, and Free Riders'
(2005), p. 308.
118
Sebastian Wilckens, 'The Usage of the WTO Dispute Settlement System: Do Power Considerations Matter?'
(2009), p. 236.
119
Andrew K. Rose, 'Do We Really Know That the WTO Increases Trade?' (2004).
120
Judith L. Goldstein, Douglas Rivers and Michael Tomz, 'Institutions in International Relations:
Understanding the Effects of the GATT and the WTO on World Trade' (2007), p. 38.
 146

This literature brings up interesting questions. Initially, Andrew Rose estimated the impact of
the GATT/WTO covering 1948-1999. In a dataset of 175 countries, the author found no
significant evidence that joining or belonging to the GATT/WTO changed trade patterns. 121
Moreover, Rose found that the Generalized System of Preferences (GSP, unilateral trade
concessions granted by developed countries to developing and least developed nations) had a
strong effect in promoting trade. 122 Subsequently, Arvind Subramanian and Shang-Jin Wei
adapted Rose’s dataset and refined his econometric model. 123 The authors accounted for four
asymmetries within the data: developed versus developing countries; imports of members
from other members versus imports from non-members; liberalised versus exempted sectors;
new versus old developing country members. They concluded that the GATT/WTO has
increased world trade ‘by about 120 percent or about US$ 8 trillion in 2000 alone (relative to
the counterfactual of a world without the WTO).’ But their analyses also show that
GATT/WTO trade promotion has been uneven. Developed countries witnessed a larger
increase in trade. Bilateral trade was also greater when both partners undertook liberalization
rather than when only one did. Additionally, sectors of the economy that did not witness
liberalization did not see an increase in trade.

Joanne Gowa and Soo Kim reach a similar conclusion regarding the uneven benefits to
developing and least developed nations. 124 Their analysis shows that the GATT had a positive
and significant impact promoting trade only between Canada, France, Germany, UK and US.
The authors argue that this effect resulted from rules governing tariff negotiations. As
discussed above, since no broad formula for sectoral cuts was agreed to, negotiations in early
GATT trade rounds were conducted bilaterally on a product-by-product basis, with reductions
applied to all countries via MFN treatment. Tariff negotiations for each product were led by
the leading exporter of that product. In this way, countries granting tariff reductions could
extract concessions and diminish domestic complaints that ‘other countries were getting
something for nothing’. This became known as the principal-supplier rule, and was mostly a
product of US domestic politics and the RTAA. 125

121
The idea that expected increase in trade flows is the reason behind the expansion of membership in the
GATT/WTO is but one hypothesis. Liberal accounts often emphasise gains in transparency, stability and security
of market access concurrent reasons. Oliver Cattaneo and Braga articulate a typology of six inward and outward
reasons for membership. Cattaneo and Braga, 2009, p. 4-6.
122
Rose, 2004.
123
Arvind Subramanian and Shang-Jin Wei, 'The WTO Promotes Trade Strongly but Unevenly' (2007).
124
Gowa and Kim, 2005.
125
Ibid., 457-58. Also, see Section 3.1.2 above.
 147

In practice, the principal-supplier rule allowed for discrimination in the multilateral trade
system. Negotiations were conducted mostly by the five countries listed above, as the main
suppliers of almost every product in question. Furthermore, concessions were tailor-made:
‘the products on which tariffs were cut were defined as narrowly as possible in an effort to
restrict their benefits to a single country.’ 126 Tariff specialisation, separating one line of
product in different variants, was instrumental. In this way, tariff reductions shared through
MFN treatment had little impact since almost no other country would benefit from specific
concessions apart from the country that negotiated them, and most negotiations occurred
between Canada, France, Germany, UK and US.

Gowa and Kim argue that as later negotiation rounds of the GATT were formally governed by
a linear approach, their participants reverted to principal supplier practices on most products
and exception lists. Even in the Uruguay Round, participants abandoned the use of an across-
the-board formula. The authors concluded that ‘successive GATT rounds consisted largely of
a series of bilateral negotiations on specific products, biasing tariff reductions in favor of the
goods traded between members of the privileged group.’ 127 Their empirical findings support
this uneven distribution of benefits.

Judith Goldstein, Douglas Rivers and Michael Tomz contest previous research giving a more
positive view of the GATT/WTO. 128 The three authors find that Rose’s results carried a
selection problem. Rose’s compared GATT/WTO members to non-member states.
Nevertheless, GATT members have also extended rights and obligations to other countries
and territories. These were mostly former or current colonies, or countries in the accession
process which benefited from MFN tariff privileges. In this way, the authors establish three
different groups in order of comparison: member countries, non-member countries benefiting
from reduced tariffs, and non-participants to the system. Their data show a significant impact
of the GATT/WTO on trade promotion. When compared to non-participants, they estimate an
increase of 41% on trade for two members of the GATT/WTO, 46% for a member and a non-
member participant, and 56% for two non-member participants. Additionally, their analyses
show benefits for both developed and developing countries. They estimate an expansion of
commerce by more than 70% for two developed nations, by about 45% between a developed
and a developing one, and by approximately 33% between two developing nations. Although

126
Ibid., 461.
127
Ibid.
128
Goldstein, Rivers and Tomz, 2007.
 148

still uneven, trade promotion effects for developing countries are significantly larger than
those obtained by Gowa and Kim. 129 The three authors also extend their analyses further into
the WTO years until 2004, which could distort comparisons. 130 Addressing most of this
literature, with an altered methodology, Theo Eicher and Christian Henn conclude that
previous approaches ‘all produce one consistent result: the WTO does not boost trade among
its members. Rather, regional and bilateral preferential trade agreements (PTAs) strongly
influence trade flows.’ 131

Finally, Gowa takes the debate in a different direction trying to test hypothesis from the
regimes theory literature, specifically regarding market-failure theory and security
externalities. 132 Market-failure theory states that institutions would help large states escape
Prisoners’ Dilemma type problems. Regarding the post-war trade regime, three hypotheses
could be inferred:

(1) trade expansion will be skewed toward its largest-industrial country members; (2)
smaller industrial countries will realize an increase in their trade as a result of the
MFN clause; and (3) developing countries, because of their different relative factor
endowments and because they were rarely the ‘principal suppliers of anything’, will
gain little from the specialization of labor the postwar regime produced. 133

From the security externalities literature, Gowa takes the argument that joint membership in a
security alliance and in a trade institution can exert a positive impact on trade involving
developed and developing states, which would not be observed if either of these memberships
stood alone. Gowa’s empirical analysis, using a dataset adapted from Goldstein, Rivers and
Tomz, confirms all hypotheses. The post-war trade system favoured trade between its largest
developed members. Trade between large and small industrial countries, and between smaller
industrial countries themselves, also flourished but to a smaller amount. In terms of regime
theory, large developed states dominated the institutional arrangement but could not avoid
free riding by smaller industrial states. For developing states, nevertheless, the picture was
different. As security externalities would dictate, there were only substantial increases on

129
Gowa and Kim also include colonies and other territories in their sample. Gowa and Kim, 2005, p. 463-64.
130
Herz and Wagner also find positive effects of GATT/WTO on trade promotion, although the authors were
mostly addressing methodological issues in earlier versions of the papers by Goldstein, Rivers and Tomz, and
Subramanian and Wei. See: Bernhard Herz and Marco Wagner, 'Do the World Trade Organization and the
Generalized System of Preferences foster bilateral trade?', (2007).
131
Theo S. Eicher and and Christian Henn, 'In Search of WTO Trade Effects: Preferential Trade Agreements
Promote Trade Strongly, But Unevenly', (2009), p. 3. The authors address the works of Rose, Subramanian and
Wei, and a different version of Goldstein, Rivers and Tomz paper. Michael Tomz, Judith Goldstein and Douglas
Rivers, 'Do We Really Know that the WTO Increases Trade? Comment' (2007).
132
Joanne Gowa, 'Alliances, market power, and postwar trade: explaining the GATT/WTO' (2010).
133
Ibid., 492.
 149

trade when developing countries were also part of security alliances. The insights from
market-failure theory and security externalities literature seem compatible with Gowa and
Kim’s previous conclusion that, due to the uneven benefits of the system, ‘the GATT can be
understood primarily as an exercise in great power diplomacy.’ 134 This is hardly the type of
constitutional bargain that the liberal order model proposes.

What could account for the trade expansion in the post-war period if not the GATT/WTO?
How can we explain the uneven benefits of the multilateral trade system? 135 There is no
consensual outcome evident from the literature. As Eicher and Henn put it, the ‘identification
of WTO trade effects depends on empirical specifications or coding conventions.’ 136 Some
studies show no effect on increasing international trade for participants of the GATT/WTO
system as opposed to nonparticipants. Other studies show increases on trade, but uneven
distribution between developed and developing countries. In some cases, these differences are
large enough for authors to label the GATT/WTO an ‘exclusive country club’. 137

The empirical evidence presents a hard test for liberal theory. If other states join institutional
arrangements expecting benefits from coordination, information sharing, successive rounds of
negotiation and predictability, it is hard to see such benefits materialized in trade expansion.
The evidence shows that the GATT/WTO, to a higher or lesser degree, disproportionally
benefits the US and European countries. As with Liberal IR, the concept of a constitutional
bargain in which other states would have mutual benefits is based on premises and
generalisations. Moreover, as the distribution of gains is unbalanced, the institution promotes
power disparities instead of limiting its exploitation.

******

Following the aforementioned criteria for constitutional bargains and binding institutions in
the post-Cold War environment, one can conclude the following from the analysis in the
sections above. The US and the EU led the GATT/WTO expansion process, but did so
exploiting their power leverage over entrants. The GATT/WTO did not bind the use of US (or
EU) hegemonic power, whether in its accession processes, in negotiations during multilateral
trade rounds, or even in its institutionalised dispute settlement system. Power relations

134
Gowa and Kim, 2005, p. 477.
135
For tentative answers, see: Rose, 2004, p. 117. Andrew K. Rose, 'Do WTO Members have More Liberal
Trade Policy?' (2004). Andrew K. Rose, 'Do We Really Know that the WTO Increases Trade? Reply' (2007).
136
Eicher and Henn, 2009, p. 3.
137
Gowa and Kim, 2005.
 150

pervade the institutions and, instead of its use being limited, hegemonic power is legitimised
and enhanced by institutional arrangements. Regarding accession processes, states see
benefits and willingly join the WTO, even if pressured to accept higher levels of liberalisation
and other commitments they would not take otherwise. But in regards to trade negotiations,
particularly the Uruguay Round, many developing and least developed states did not see
benefits in the new agreements and were coerced into joining the WTO because of US and
EU forum shifting strategies. Furthermore, there is evidence that there were net losers from
the Uruguay Round.

4.3. Conclusion

The failure of the ITO and the development of the GATT/WTO provide little evidence to
support the idea that the US created a constitutional order based on self-binding arrangements
after World War II, or that things changed in the expanded order of the post-Cold War period.
Restrictions on the use of US power – as in the acceptance of concessions during ITO
negotiations or at the closing of the Tokyo Round – were a product of Cold War politics, not
of institutional arrangements. In the post-Cold War period, with the absence of the USSR,
numerous examples show the use of hegemonic power. The closing of the Uruguay Round is
the most notorious case, but power is also exercised within institutions, as on accession
processes and on the DSU. The liberal model, as with Liberal IR in general, is based on
premises and superficial generalizations regarding mutual benefits and power restraints. It
provides a compelling narrative, but one that finds little empirical support once power
disparities and disputes are accounted for. Promoting such apolitical and biased narratives,
contrary to the scientific status claimed by liberals, is a deeply normative and political act.

In regard to gains and losses from international trade, part of the problem is that, as stated by
Long, Liberal IR is ‘liberalism by analogy’. 138 Its first premise is that politics starts with
individual and private groups, but then it aggregates these interests in states preferences and
adopts a rather state-centric approach from then onwards. Given the contemporary global
economy, economic groups spread across state borders. In order to properly address
international trade and its regulations, Liberal IR would need to look at the role of
multinational corporations within different states, and their relations with governments, civil

138
Long, 1995, p. 498-99.
 151

society and international organisms. This is not the approach that informs the liberal order
model.

If the discussion above is not sufficient to expose the deficiencies of the liberal model,
contemporary developments of the multilateral trade system provide further evidence. The
first try at a new negotiation round happened at the 1999 WTO Ministerial Meeting, in
Seattle. US and EU proposals centred on the so-called Singapore themes: investments,
competition policy, transparency in government procurement, and trade facilitation.
Developing and least developed states strongly opposed this agenda, as they did not have
immediate gains and were still absorbing the costs of adaptation to Uruguay Round
agreements. Moreover, the proposals did not address any of their demands: further market
access in agriculture and textile products and the end trade distorting subsidies. The event
became known as the Battle of Seattle: protesting against the effects of globalization and in an
attempt to stop the conference, activists clashed with security forces. In the midst of street
protests and discord among negotiators, the meeting ended without the signature of a final
document.

The new round would only be launched in 2001, at the WTO Ministerial Meeting in Doha.
Also called the Development Round, its launch was possible because developed countries
agreed to include initiatives to improve the trading prospects of developing countries and
address problems of implementation of WTO agreements. Such concessions were indirectly
influenced by the September 11 terrorist attacks and the idea that improving the economies of
developing and least developed countries would counter the emergence of new security
threats. Nonetheless, the compromise soon started to collapse. In the 2003 Ministerial
Meeting, in Cancun, US and EU proposals for agriculture products presented minimum
benefits for other countries. Led by Brazil and India, a group of developing states later named
G20 presented an alternative proposal. After harsh debate, the meeting ended abruptly and
without compromise.

Throughout the next period, different attempts were made to accommodate preferences from
developing and developed countries, with no success. Negotiations were led by Brazil, the
EU, India and the US, and centred mostly on a bargain between market access in agriculture
and non-agricultural products. Initially thought likely to last four years, the Doha Round has
been open for almost fourteen years at the time of writing and with no credible prospect of
closure. International trade and the world economy have certainly changed in this period, with
 152

the economic rise of China and the 2008 financial crisis being marked examples. But for those
who challenge the liberal premise of an open, benign and mutually beneficial international
trade order ruled by institutional arrangements, the current deadlock was predictable and
expected.

The negotiations and closings of previous trade rounds were determined by power politics,
not mutually beneficial constitutional bargains. The Uruguay Round represented the apex of
benefits developed states extracted from developing and least developed countries. Without
the strategic constraints of the Cold War, and emboldened by economic growth in large
developing countries, these states started to oppose policies that were previously imposed on
them. In this process, developing states made use of the opportunities created by formal
multilateralism in order to challenge liberal substantive multilateralism. Tellingly, the US and
the EU started to developed forum-shifting strategies once again in an attempt to use their
market power to define the contours of international trade. The negotiations of so-called
plurilateral trade agreements, such as the TTP and TTIP, carry an unspoken threat of
abandoning the multilateral trade system. As such, the pattern of contemporary international
politics also contradicts the concept of an international liberal order.
5. US foreign policy and collective security

So far, previous chapters have discussed liberal interpretations of US foreign policy and
international institutions, examining the creation of the IMF and the GATT after World War
II, and the expansion of these arrangements in size and scope in post-Cold War era. Chapter 5
continues this analysis by examining NATO, often cited as the cornerstone of liberal order.
The first half of Chapter 5 addresses the late 1940s in regards to the decision-making and
negotiation processes leading up to the signature of the North Atlantic Treaty. The second half
deals with the distinguishing liberal features of the alliance, its characterisation as a
‘pluralistic security community’, and its expansion after the Cold War. In both parts, the
liberal concepts of binding institutions and constitutional bargain are addressed on the criteria
previously outlined: the constitutive and the expansion processes must be purposefully driven
by the hegemon; they must bind hegemonic power; they must generate benefits for other
states; and they must be willingly accepted by other states.

5.1. The North Atlantic Treaty

As mentioned in preceding chapters, the liberal model conceives the post-World War II
settlement as twofold: a bipolar balance of power order opposing the US and the USSR, and a
liberal constitutional order within the Western bloc. 1 This twofold characteristic of the liberal
model has important implications. Liberals place the creation of NATO within the domain of
the constitutional order.

According to Ikenberry, the US agenda to Europe was ‘driven by the demands of post-war
economic renewal and the need for some solution to the German problem, imperatives that
existed independently of the worsening of relations with the Soviet Union – although the Cold
War did raise the stakes and sped the process.’ Likewise, the ‘European search for an
American security tie was not simply a response to the rise of the Soviet threat.’ 2 As such, the
liberal narrative underemphasizes the role of the Soviet threat and Cold War politics in the
creation of NATO. Liberals acknowledge the existence of concern with the USSR, but

1
Ikenberry, 2001; Ikenberry, 2012.
2
Ikenberry, 2001, p. 206, 11.
 154

downplay its importance. In such interpretation, NATO or something similar to it would have
come into being even in the absence of the USSR.

As much as debating the role of the USSR in the creation of NATO might seem innocuous,
even common sense to most, the discussion has wider implications for the liberal model. If
NATO could indeed have been created through a constitutional bargain independently of the
Soviet threat, this would constitute evidence of the applicability of the liberal model in
contexts absent of external threats. On the other hand, if reactions to Soviet policies are an
essential part of the NATO creation process, this would constitute evidence of serious
theoretical and empirical flaws in the liberal model. In the same manner, this discussion has
implications for the legitimation of the liberal order, international institutions and US foreign
policy after the end of the Cold War. The liberal narrative reinforced the case for NATO’s
continuing existence and eventual expansion after the demise of the USSR. If the liberal
interpretation does not stand scrutiny, US policies supporting NATO and its expansion after
the Cold War would have to be explained by referring to other factors than NATO’s
supposedly liberal origins and mission. 3

According to the liberal model, the US and Europeans established a ‘process of mutual and
reciprocal binding’ after World War II:

…the United States conceded only as much commitment as was needed to keep the
Europeans on their path toward integration and reconstruction. Restraint, reassurance,
and commitment were the price the United States had to pay (…) The Europeans
engaged in a similar trade-off: they agreed to steps toward European integration and
accepted western Germany back into Europe, in part because in exchange they got a
more institutionally restrained and connected postwar America. 4

Nevertheless, this liberal narrative hides the fact that the main reason the US put so much
effort into keeping Europeans ‘on their path toward integration and reconstruction’ was to
avoid the spread of communism in the continent. Similarly, the main reason why Europeans
needed a security guarantee of a ‘connected postwar America’ was to oppose Soviet
influence. The strategy of containment and the Truman Doctrine preceded, and were
constitutive parts, of the Marshall Plan and NATO. A close reading of Ikenberry’s historical
discussion evidences such contradiction. The author recognises, for instance, that US
opposition to an Atlantic security system was only broken after the Czech coup in 1948, and

3
See Section 5.2 below.
4
Ikenberry, 2001, p. 212.
 155

that initiatives towards a large NATO bureaucracy and an integrated military structure were
responses to the Soviet nuclear test and the Korean War. 5 The importance of Cold War
politics, however, subtly disappears from his conclusions, giving pride of place to the concept
of constitutional bargain.

Instead of producing a detailed review of Ikenberry’s historical analysis, the sections below
address directly the foreign policymaking processes which led to the signature of the North
Atlantic Treaty. As much as European concerns with Germany and the need for economic
reconstruction existed, the historical record analysed in this chapter shows that security
concerns and reactions to the USSR were an essential enabling condition of the negotiations
and compromises between the US and European countries. In other words, the conditions in
which the treaty was achieved, and NATO further institutionalised later on, rest outside the
logic of the liberal model.

5
Ibid., 196-97.
 156

5.1.1. Precedents

Although it is impossible to single out a date as the beginning of the Cold War, a series of
significant events took place in early 1946 which changed the nature of US-Soviet relations. 6
On February 9, speaking in Moscow, Stalin stated that coexistence with capitalist powers
would eventually lead to conflict, implicitly comparing US and Britain to Nazi Germany.
That same month, Canadian authorities disclosed information about Soviet espionage in
relation to the nuclear program. The case led to 22 arrests, including scientists, civil servants
and one Member of Parliament. 7 The Director of the Office of European Affairs at the State
Department, John Hickerson, remembered the case as ‘absolutely an eye opener.’ 8 On March
5, Churchill gave his ‘Iron Curtain’ speech in Fulton, Missouri. In his most quoted passage,
Churchill warned of the expansion of a Soviet of sphere influence in Central and Eastern
Europe. 9 These ideas were reinforced by the USSR’s broken promises from Yalta and the
establishment of Soviet-controlled regimes in Poland, Rumania, Bulgaria, as well as by the
impasse in Iran in early 1946. 10

All of these events added up to a paradigm change in US foreign policy thinking. From the
US embassy in Moscow, George Kennan epitomised these thoughts in his Long Telegram, an
8,000 words message cabled to Washington on February 22, 1946. 11 Drawing on his
knowledge of Russian history and Marxists ideology, Kennan pictured the USSR as ‘a
political force committed fanatically to the belief that with US there can be no permanent
modus vivendi.’ Nevertheless, he was confident that ‘the problem is within our power to solve
– and without resource to any general military conflict.’ Kennan pointed out that the USSR

6
There is a large debate on the origins of the Cold War. Initially, US historians followed the government line
and attributed the beginning of the confrontation to Stalin’s aggressive actions in Germany and Eastern Europe.
Such an approach was challenged in the 1960s by a group of revisionist historians, who related the start of the
Cold War to US actions driven by economic interests and the necessity of maintaining an open international
economic order. See: Joyce Kolko and Gabriel Kolko, The Limits of Power: The World and United States
Foreign Policy, 1945-1954 (1972); William Appleman Williams, The Tragedy of American Diplomacy (1972).
A later generation of post-revisionist scholars characterised the beginning of the Cold War as neither the fault of
the US nor the USSR, but the product of mutual misunderstanding, and divergent interests and world views
which could not be made compatible. See: John Lewis Gaddis, The United States and the Origins of the Cold
War (1972); Melvyn P. Leffler, A Preponderance of Power: National Security, the Truman Administration, and
the Cold War (1992); Marc Trachtenberg, A Contested Peace: The Making of the European Settlement, 1945-
1963 (1999).
7
McDougall, 1997, p. 159.
8
John D. Hickerson Oral History Interview, Truman Library. Available at:
http://www.trumanlibrary.org/oralhist/hickrson.htm.
9
The Sinews of Peace: by Winston S. Churchill, NATO On-line library. Available at:
http://www.nato.int/docu/speech/1946/S460305a_e.htm.
10
Harry S. Truman, Years of Trial and Hope: 1946-1953 (1956), p. 98-101.
11
George Frost Kennan, Memoirs: 1925-1950 (1967), p. 292-93.
 157

would ‘easily withdraw’ whenever ‘strong resistance is encountered… Thus, if the adversary
has sufficient force and makes clear its readiness to use it, he rarely has to do so.’ Success in
this venture would depend on the cohesion the Western block. For Kennan, the downfall the
Soviet regime would lie in internal power transitions, as succeeding generations would
gradually dissociate themselves from communism. 12

It was against this background of increasing tensions that a British note regarding the
termination of their financial and military support to Greece and Turkey was received on
February 21, 1947. 13 The government in Greece was fighting a civil war against northern
guerrillas, who were believed to be supported by the USSR. Turkey was suffering from
extreme pressure from the USSR to renegotiate access to the Dardanelles Strait. The British
thought that if one or both countries fell under Soviet influence, the whole Mediterranean
would be at risk. Nevertheless, they could not sustain their financial and military support, and
urged the US to take over. Dean Acheson, who was Under Secretary of State at the time,
received the note and immediately conveyed its contents to Truman. The President set the
State Department to formulate policy options and, after consulting with other Departments
and senior congressmen, officials produced a statement asking Congress to authorize
immediate aid to Greece and Turkey. 14 The resulting speech was delivered in a Joint Session
of Congress on March 12, 1947. Truman described the Greek and Turkish cases, and the
impossibilities of the UK to sustain its aid policy. He asked the Congress for US$ 400 million
for assistance to both countries, as well as the authority to dispatch US military and civil
personnel. Most importantly, the speech laid down the basis of US engagement with the
USSR, in what later would be labelled the Truman Doctrine. 15 The President stated that US
support ‘should be primarily through economic and financial aid which is essential to
economic stability and orderly political processes.’ 16 This echoes Kennan’s Long Telegram,
in its position that there was no need for military action against the USSR.

In parallel, officials at the State Department were concerned by the slow pace of European
reconstruction. Will Clayton wrote a memorandum in March describing the total economic
disruption in Europe and the urgent need for the US to counter ‘hunger, economic misery and

12
George Kennan’s “Long Telegram”, The National Security Archive, The George Washington University.
Available at: http://www.gwu.edu/~nsarchiv/coldwar/documents/episode-1/kennan.htm.
13
Truman, 1956, p. 101-15; Acheson, 1970, p. 217-23.
14
Truman, 1956, p. 111.
15
Truman Doctrine, The Avalon Project at Yale Law School. Available at:
http://www.yale.edu/lawweb/avalon/trudoc.htm.
16
Truman, 1956, p. 117; Kennan, 1967, p. 329; Acheson, 1970, p. 226.
 158

frustration’. 17 His concerns were mirrored by Secretary of State George Marshall. 18 Upon
returning from a meeting of the Council of Foreign Ministers in Moscow, 19 on April 28, the
Secretary directed the recently formed Policy Planning Staff, headed by Kennan, to work on
the problem. 20 The Staff reported back on May 23, setting forth ‘the principles that should
govern any effort to correct the “economic maladjustment” that made Europe vulnerable to
communism: the initiative of drawing up an economic recovery program should come from
the Europeans; the program should be open to all European countries, putting the burden onto
the Soviets to refuse it; and the recovery of Germany would be pivotal in a strong and
independent Europe. 21 On May 27, a second and much more robust memorandum came in
from Clayton. Among its recommendations, it bluntly stated that the US should not leave the
program to international initiatives. 22 The results from these discussions were disclosed by
Marshall in his speech at Harvard University on June 5, 1947. After stressing the gravity of
the European economic situation and the willingness of the US to support its recovery,
Marshall called upon the Europeans to organize themselves. 23

Quickly following the Harvard speech European capitals demonstrated their eagerness to set
up a joint program of economic assistance. The British Foreign Secretary Ernest Bevin and
the French Minister of Foreign Affairs Georges Bidault led the way. In a short while,
invitations were sent to twenty two European countries. Czechoslovakia and Poland initially
accepted the invitations, but had to withdraw their participation due to Soviet pressure. On
July 12, sixteen European nations met in Paris to coordinate their needs for reconstruction.

In the following months, the Marshall Plan initiative and emerging Cold War tensions would
set the stage for negotiations of a defence alliance within the Western bloc. On December 17,
after another unsuccessful Council of Foreign Ministers meeting, Marshall met with Bevin in
London. The British Foreign Secretary was disillusioned with the prospects of reaching

17
Acheson, 1970, p. 226.
18
Kennan, 1967, p. 325; Acheson, 1970, p. 228.
19
The Council was established by the Potsdam Agreements. It was originally composed by the foreign ministers
of the US, UK, USSR, France and China. At this point in time, its main purpose was to discuss occupation
policies in Germany.
20
Janis, 1982.
21
Kennan, 1967, p. 343; Michael J. Hogan, The Marshall Plan America, Britain, and the reconstruction of
Western Europe, 1947-1952 (2002), p. 41.
22
Acheson, 1970, p. 230-32.
23
The Marshall Plan speech, NATO On-line library. Available at:
http://www.nato.int/docu/speech/1947/s470605a_e.htm.
 159

agreement with the Soviets regarding the future of Germany. 24 Bevin then brought up for the
first time the idea of a Western federation,

some western democratic system comprising the Americans, ourselves, France, Italy
etc., and of course the Dominions. This would not be a formal alliance but an
understanding backed by power, money and resolute action. It would be a sort of
spiritual federation of the west. 25

Marshall received the proposal with caution, even though he ‘had no criticism of Mr. Bevin’s
general idea.’ Hickerson was put in charge to find out more about Bevin’s plans. 26 The British
Ambassador in Washington, Lord Inverchapel, followed-up on the idea of a Western Union
with Marshall. On January 13, 1948, he delivered a letter that summarized Bevin’s thoughts:
the initial plan was a British-French proposal of extending the Treaty of Dunkirk to the
Benelux countries. 27 Again, the US reception was cautious. On January 19, Secretary
Marshall told Inverchapel that the initiative was welcomed, that he considered the Benelux
talks a first stage, but he ‘particularly asked the Ambassador not to press him on the subject of
US participation’. 28 On January 21, Hickerson showed the British Ambassador an informal
memorandum stressing that those ideas were being considered on a ‘pick and shovel level’.
Hickerson expressed uncertainty about the Dunkirk Pact model, since it was a general alliance
against Germany, and suggested the Rio Treaty formula as it covered ‘aggression or attacks
from any source’. 29 Bevin’s plan was still unclear and they could not conceive what would be
the US commitment under it. Any such commitment would have to respect the principles of
the United Nations Charter. Moreover, similarly to the Marshall Plan, the initiative should
come from Europe; once an organization was in place, the US would consider the best
approach. 30

Marshall was taking a cautious approach to the idea of a security alliance between Europeans
and the US, as were Kennan and Charles Bohlen, the two most senior Russian specialists in
the Department. Both were raising objections to the purpose of such alliance, arguing that
there was no need for a formal treaty to appease European concerns ‘since the very presence
of our troops between Western Europe and the Russians is an adequate guarantee that we wi1l

24
Nicholas Henderson, The Birth of NATO (1982), p. 1.
25
FRUS 1948, vol. 3, p. 1.
26
John D. Hickerson Oral History Interview.
27
FRUS 1948, vol. 3, p. 3-6.
28
Henderson, 1982, p. 4-5.
29
The Inter-American Treaty of Reciprocal Assistance, signed on September 2, 1947, in Rio de Janeiro.
30
FRUS 1948, vol. 3, p. 9-12.
 160

be at war if they are attacked’. 31 At this early stage, the idea of a formal security arrangement
with Europe was not a US initiative. In liberal model terms, this was not a constitutional
bargain driven by the US.

In spite of US resistance, processes in Europe were moving forward. On January 22, Bevin
delivered a speech in the House of Commons asking for the consolidation of a Western
Union, referring to the Treaty of Dunkirk with France as a firm basis for arrangements
between the two nations and the Benelux countries. In parallel, the British continued to ask
for military talks with the US. On January 27, Inverchapel brought up the topic once again
with Under Secretary of State Robert Lovett, this time suggesting ‘secret, frank and informal
discussions, without commitment of any kind on either side’. 32 Lovett replied that a topic of
such importance would need clearance with the President, the National Security Council and
senior members of Congress. The State Department could not give any definitive answers,
and they feared that pushing the idea too fast could create problems for the approval of the
Marshall Plan in Congress. 33

This record shows that NATO was not a US initiative and that senior State Department
officials opposed it at first. However, Stalin’s actions changed things. The Soviet coup in
Czechoslovakia in February 1948 confirmed the fear of many regarding communist indirect
aggression: the subversion of the domestic order without resorting to explicit use of force.
The State Department was worried about the April elections in Italy, where the communist
party had a real chance of winning. At the same time, the Soviets were pressuring Finland for
a military treaty that would basically put the country into its sphere of influence. The tipping
point came from pressures on Norway. The State Department received information that the
Norwegians would soon face a Soviet treaty offer similar to the Finns. The British sent an
aide-memoire on March 11 describing the situation and once again requesting military talks. 34
On the next day, with a short and blunt note, Marshall agreed to talks with the UK and
Canada. 35

The early stages of the North Atlantic Treaty negotiations do not fit the liberal concept of
constitutional bargain, as they were not the result of a US proposal. In fact, they were initially

31
FRUS 1948, vol. 3, p. 109.
32
FRUS 1948, vol. 3, p. 14-16.
33
FRUS 1948, vol. 3, p. 21-23.
34
FRUS 1948, vol. 3, p. 46-48.
35
FRUS 1948, vol. 3, p. 48.
 161

resisted by US officials. Additionally, the administration’s eventual change of mind is not

explained by the liberal model. The shift was not driven by a liberal impetus to build
institutional arrangements or adopt self-binding behaviour. What made the US change its
position were USSR actions and Cold War politics. These elements remain outside the
domain of the constitutional order as proposed by Liberal IR.

5.1.2. First round of foreign and domestic talks

The so-called Pentagon Talks opened secretly on March 22. A few days earlier, negotiations
in Europe had led to the signature of the Brussels Pact in March 17. Truman seized the
opportunity to deliver a special message to the Joint Sessions of Congress, acclaiming the
European efforts and asking for US commitment in its support. 36 The ensuing tripartite talks
in Washington were subject to a high level of secrecy. The UK, for instance, did not inform
other Brussels Pact members of the negotiations. 37 Lewis Douglas, US ambassador in
London, and Hickerson were the most senior members of the US delegation; Theodore
Achilles, director of Western European affairs, was also present. He and Hickerson were the
two greatest supporters of the treaty within the State Department. Gladwyn Jebb, one of
Bevin’s closest advisors at the Foreign Office, came from London to join Lord Inverchapel.
The Canadian Ambassador Hume Wrong was also joined by Undersecretary Lester Pearson
from the Department of External Affairs.

The conversations consisted of a total of six meetings in which ideas were exchanged without
commitment from the governments. British officials strongly believed that security measures
of the Brussels Pact and its eventual extension to other European countries ‘required a firm
commitment on the part of the US to aid militarily in the event of any aggression in Europe.’
With that aim, the group started to ‘explore the various types of defense pacts which might be
adopted to extend resistance to the Soviet Communistic threat.’ 38 The first two meetings
considered three options: the US (and Canada) could become members of the Brussels Pact; a
new Atlantic Pact; and a worldwide self-defence pact based on Article 51 of the UN Charter.
At their third meeting, the group settled on a compromise solution: a North Atlantic pact

36
Special Message to the Congress on the Threat to the Freedom of Europe, March 17 1948, Truman Library.
Available at: http://www.trumanlibrary.org/publicpapers/index.php?pid=1417&st=&st1 .
37
FRUS 1948, vol. 3, p. 55-58.
38
Minutes of the First Meeting of the United States-United Kingdom-Canada Security Conversations, Held at
Washington, March 22, 1948. FRUS 1948, vol. 3, p. 59-61.
 162

based on Article 51. 39 The sessions eventually produced a comprehensive report named as the
Pentagon Paper. 40 In addition to the US, Canada, and the Brussels Pact countries, it suggested
invitations to Denmark, Norway, Sweden, Iceland, Ireland, Italy and Portugal, and it
contemplated the future inclusion of Germany, Austria, and Spain. In general terms, the
criteria of selection of these countries reflected their domestic political situation and which
countries were ‘now directly threatened by Soviet Communism.’ Similarly, the paper also
recommended that, although Greece, Turkey and Iran would not be part of the pact, they
should receive security pledges. The paper contained a draft of what the articles of the treaty
should be, in a mix of the Rio Treaty and Brussels Pact provisions.

In the following months, the Pentagon Paper was introduced in the National Security Council
and became the basis of its report NSC-9, of April 13. Meanwhile, on April 11, Lovett
presented a slightly altered version to Senator Arthur Vandenberg, chairman of the Senate
Foreign Relations Committee. 41 Vandenberg was an influential leader in the Republican
Party, a perennial presidential candidate, and experienced in foreign policy matters. The
Senator had been one of the US delegates at the UN Conference in San Francisco and
instrumental in the defeat of isolationists in Congress. Once ratified, the UN Charter became a
well-regarded document, as was the organization itself. When Lovett briefed Vandenberg on
the topic of a mutual defence alliance, the Senator’s first reaction was a negative. 42 His focus
was on the importance of making the UN ‘an effective instrument for the maintenance of
international peace, urging the President to give attention to the perfection of certain steps,
and dealing with the problem of security in general terms.’

Most Europeans thought of a Western security alliance as the means of deterrence against
Soviet aggression. In the US, the idea had to be approached from a different angle. A military
alliance in peacetime would never pass Congress. The North Atlantic Treaty had to be
conceived as a complement to the UN. More than simply being compatible with the Charter,
the treaty was framed as a way out of the inaction of the UN Security Council. On his address
to the Congress supporting the Brussels Pact, Truman made this linkage clear. The President
stressed that the US had joined the United Nations in ‘an attempt to build a world order based
on law and not force.’ However, the USSR had ‘persistently obstructed the work of the

39
Minutes of the Third Meeting of the United States-United Kingdom-Canada Security Conversations, Held at
Washington, March 24,1948. FRUS 1948, vol. 3, p. 66-67.
40
FRUS 1948, vol. 3, p. 72-75.
41
FRUS 1948, vol. 3, p. 82-88.
42
FRUS 1948, vol. 3, p. 82-84.
 163

United Nations by constant abuse of the veto. That nation has vetoed 21 proposals for action
in a little over 2 years.’ To challenge Soviet obstruction and defiance to the Charter’s
principles, it was necessary to ‘take additional measures to supplement the work of the United
Nations and to support its aims.’ 43 During the Pentagon Talks, negotiators decided that the
basis of the pact would be Article 51, but restricted to a regional scope. 44

Now that the Senate was part of the process, Vandenberg did not want to give Truman credit
for a new foreign policy initiative in a presidential election year. He insisted with Lovett that
US actions should not be based only on the President’s declaration on March 17, but should
have endorsement by Congress. 45 After weeks of negotiations, Vandenberg’s associates and
State Department officials, Hickerson and Achilles among them, reached agreement on
Senate’s Resolution 239. 46 The so-called Vandenberg Resolution opened the way for
negotiations of a mutual defence alliance, although it was in fact a UN reform resolution. The
document called for the establishment of regional or other collective self-defence
arrangements, stressed the right of individual and collective self-defence under Article 51, and
authorised US association with these new regional arrangements. 47 With the new authority
granted by Senate, the US issued invitations for formal negotiations of a security alliance on
June 23, 1948.

5.1.3. Negotiating the treaty

In this same period, the US and the USSR engaged in one of their most notorious Cold War
confrontations. Reacting to the launch of the deutsche mark in western Germany, Stalin began
the blockade of Berlin on June 24. At a time when US and British policies diverged on
Palestine, and France resented what it perceived as a US-UK special relationship and their
policies on Germany’s occupation zones, 48 the blockade and ensuing airlift helped to affirm

43
Special Message to the Congress on the Threat to the Freedom of Europe, March 17 1948, Truman Library.
Available at: http://www.trumanlibrary.org/publicpapers/index.php?pid=1417&st=&st1 .
44
FRUS 1948, vol. 3, p. 67, 73.
45
Escott Reid, Time of Fear and Hope: The Making of the North Atlantic Treaty, 1947-1949 (1977), p. 89;
Lawrence S. Kaplan, NATO 1948: The Birth of the Transatlantic Alliance (2007), p. 94.
46
Theodore Achilles Oral History Interview, Truman Library. Available at:
https://www.trumanlibrary.org/oralhist/achilles.htm.
47
U.S. Senate Resolution 239, NATO On-line library. Available at:
http://www.nato.int/docu/basictxt/b480611a.htm.
48
Effective on January 1, 1947, the US and the UK merged their German zones of occupation, advancing a
gradual process of returning political power to Germans. France opposed such policies and did not collaborate
with interzonal administration up until 1949.
 164

Western solidarity and the powers’ resolve towards the transatlantic alliance. 49 The
Washington Exploratory Talks on Security opened on July 6, 1948 between the US, Canada,
and the five states of the Brussels Pact. 50

Most countries were represented by their ambassadors in Washington and Lovett presided
over most of the meetings of this so-called Ambassadors’ Committee. In his statement at the
opening session, Lovett asserted that the Vandenberg Resolution defined four criteria for US
engagement in the initiative: that it was established within the United Nations framework; that
it respected US domestic constitutional processes; that it was based on the principles of self-
help and mutual aid between the parties involved; and that it generally advanced the national
security of the US. 51 Lovett also stressed that the proposed alliance was a significant
departure from traditional US foreign policy. He wished the talks to be frank and informal;
the US was in no position for commitments at that point, especially in an election year.
Arrangements for the secrecy of the conversations were also made; leaks, otherwise common
in international negotiations, could jeopardize all their efforts on such a sensitive topic.

The first meetings of the committee discussed the situation in Europe and the Soviet threat;
the security measures already taken or to be taken by the Brussels Pact powers; the security
questions regarding other Western European countries; and the nature of US association with
European security arrangements. 52 After its fifth meeting on July 9, the Ambassadors’
Committee established a Working Group that would carry on with the more technical
questions of framing the proposed mutual defence alliance. The Working Group was
conducted by Hickerson and had fifteen meetings between July 12 and September 9, 1948. It
was responsible for most of the negotiations, agreements and drafting of the alliance.
According to Achilles, it was at the Working Group that the real North Atlantic spirit was
born. 53

On September 9, the efforts of the Working Group culminated in a report to be submitted to

the respective governments for approval and comments. 54 It contained a summary of the
discussions and agreements reached regarding the security situation in Europe, the territorial
49
Kaplan, 2007, p. 107-08.
50
FRUS 1948, vol. 3, p. 148.
51
FRUS 1948, vol. 3, p. 150.
52
FRUS 1948, vol. 3, p. 152-182.
53
Theodore Achilles Oral History Interview. Reid states that Hickerson and Achilles were the two most
influential State Department officers in the negotiations. Reid, 1977, p. 63. Sir Nicholas Henderson says that
they deserve ‘a large share of the credit for the success of the negotiations.’ Henderson, 1982, p. 59.
54
FRUS 1948, vol. 3, p. 237-248.
 165

scope of a North Atlantic security arrangement and its relations with other nations, and the
general nature of the proposed pact. At the end, the document contained an ‘outline of
provisions which might be suitable for inclusion in a North Atlantic security pact’. 55 The
suggestions in this draft treaty covered provisions from the Rio Treaty, the Brussels Pact, and
the Vandenberg Resolution.

After adjourning the sessions on September 10, the parties took the Washington Paper back to
their governments. In the US, everything had to wait on the presidential elections in
November. On October 29 the Brussels Pact members communicated the State Department
their acceptance to negotiate a North Atlantic Treaty. Hickerson replied that US officials ‘had
not been, and were not now, in a position to commit the U.S. government to such an
agreement.’ 56 Even after Truman’s unexpected re-election, the State Department was still
cautious. On November 27, replying to another query from the Permanent Commission of the
Brussels Pact, Achilles stated that a draft treaty was ‘premature’ and that the State Department
wanted to consult ‘Senators and Congressmen on the broad outlines of the Treaty’, not to
present them with a fait accompli. 57 Even at this point in the process, US officials were still
uncommitted to the idea of a binding institution covering transatlantic security. It had been
emphasised throughout the negotiations that such arrangements would have to respect US
domestic politics and Congress demands regarding its autonomy. As such, the evidence does
not suggest enthusiasm for a constitutional bargain and self-binding behaviour coming from
the US.

Talks reconvened on December 10. After two meetings of the Ambassadors Committee, the
Working Group resumed its work. This time a full-draft of the treaty was produced and
reported on December 24. The group had come to agree terms on all but a few questions: the
procedures of ratification and duration of the treaty; the extension or not of the area to be
covered to include the Algerian Departments of France; a French proposal of including an
article referring peaceful settlement of disputes to the International Court of Justice; and
whether Italy should be invited. 58

55
FRUS 1948, vol. 3, p. 245.
56
FRUS 1948, vol. 3, p. 270.
57
FRUS 1948, vol. 3, p. 297.
58
FRUS 1948, vol. 3, p. 334.
 166

5.1.4. Isolationism and domestic reactions

After Truman’s inauguration in January 1949, Marshall and Lovett retired from the State
Department. Acheson took over as Secretary of State, and led the last leg of the negotiations.
Democrats had taken control of the Senate and Tom Connally was the new chairman of the
Foreign Relations Committee. Connally was another veteran from UN negotiations and, in
most respects Vandenberg’s counterpart in the Democratic Party. Acheson found out that,
although the Senate had been kept informed of the general lines of the negotiations, no one
apart from Vandenberg had been briefed on its full content. The Secretary himself was not
fully familiar with the December draft treaty and all the effort taken particularly to reach the
compromise text of Article 5. Once Senators became aware of the contents of the draft in
early February, opposition started to grow. Many Senators were concerned that, by accepting
the draft language, they would be giving away Congress’s constitutional prerogative to
declare war. Connally sought to remove references such as ‘military and other actions’ from
the text. He even wanted to change the central pledge that an attack against one party would
‘be considered an attack against them all’ to ‘be regarded as a threat to the peace of all’, a
wording even weaker than the Rio Treaty. Isolationist sentiments reminiscent from the
League of Nations and UN debates were afloat.

On February 14, a crisis erupted when a Republican Senator Forrest Donnell cited a
newspaper article in which Acheson seemed to have told the Norwegian Foreign Minister that
the North Atlantic Treaty would put the US under a moral obligation to declare war in the
event of an attack on one of its parties. Infuriated with the quote, Acheson made some
discourteous comments about Donnell. Instead of smoothing over the incident, Connally’s
statements in the Senate floor made it worse. 59 The event provides an example of how, as in
previous post-war negotiations, the US Congress played the role of defending its prerogatives
and US autonomy in face of institutional arrangements. When one looks at the decision-
making and negotiation processes in detail, there is little evidence to support the view that the
US willingly created binding institutions.

European negotiators, who had not been aware of such discontent in Congress during the
previous year, became increasingly distressed about the US unwillingness to accept the
treaty’s provisions. Acheson’s style and personality did not help to appease European

59
Kaplan, 2007, p. 200-01.
 167

concerns. In fact, the Secretary shared the Senate’s concerns that Article 5 would
automatically commit the US to war. 60 Meeting the Ambassador’s Committee on February 8,
the Secretary stated that mentions of ‘military action’ in the draft were simply ‘an
unnecessary embellishment’. 61 Although offended by this ‘arrogance of expression’,
Europeans gradually impressed on Acheson the importance of the Article 5 wording and the
efforts taken to agree on the language of the draft text. 62 At the same time, Achilles started
briefing journalists about the particularities of the treaty in an effort to swing public opinion
in its favour. 63 By the end of February, the crisis had subsided and Acheson was able to forge
a compromise. His exchanges with the Senate and the Ambassadors Committee were crucial
in at least two aspects: the final wording of Article 5, creating a commitment that was stronger
than the Rio Treaty language but softer than its Brussels Pact equivalent; and regarding the
duration of the treaty. On the latter, Vandenberg’s suggestion was that the pact would have an
indefinite duration, allowing countries to withdraw after a specific period (later settled as 20
years).

The following weeks were marked by a period of intense diplomatic consultation with
prospective candidates. Ireland was approached and soon dismissed once Dublin tried to link
the issue with the secession of Northern Ireland from the UK. Sweden preferred to retain its
neutrality policy. Norway was eager to participate from the beginning, and even joined in the
negotiations in January. Denmark and Iceland also agreed to take part. Portugal was able to
join, once Spain was reassured that this would not compromise their previous security
arrangements. And after a lot of pressure from France, the other parties agreed on Italian
accession, once Italy reaffirmed that it would not use the treaty to try to renegotiate the terms
of its peace agreement. 64

The final version of the treaty was a variation of the September and December drafts, with the
Senate’s considerations taken into account, particularly in regards to the wording of Article 5.
It was signed in a ceremony in Washington on April 4, and submitted for Senate ratification
on April 12. In addition to the expected criticism from isolationists, the treaty was attacked
by another group of lawmakers, led by Democratic Senator William Fulbright, who were
concerned with the impact of the treaty on European integration. According to them, besides

60
Ibid., 200. See also: FRUS 1949, vol. 4, p. 109-110.
61
FRUS 1949, vol. 4, p. 85.
62
Reid, 1977, p. 150.
63
Kaplan, 2007, p. 201-02.
64
Reid, 1977, p. 198-211.
 168

providing a security guarantee, and further aid being devised under the Military Assistance
Program, the arrangement fell short of promoting political integration. Their reasoning
followed from a domestic analogy: in order to avoid the tragedies of a third straight war,
European nations should mirror the pattern of the US states and evolve into a federation.
According to the supporters of this idea, US economic and military aid should promote
political and economic integration. Otherwise, once nations had rebuilt, nationalist tendencies
would emerge once again.

The idea of European integration as a way to promote peace had many adherents inside and
outside government. The Marshall Plan had been thought of as an initiative to bring European
nations together and possibly to nurture a ‘United States of Europe’. This is one of the reasons
why the State Department made the case that Europeans should be responsible for the
distribution of Marshall Plan aid. NATO was conceived in a similar way. European states
were not all of the same opinion regarding integration. The OEEC had been created in April
1948 to distribute Marshall Plan aid, but had produced few results by early 1949. 65 Moreover,
the European Recovery Program was set to expire in 1952, and there were no guarantees
about the continuation of the agency.

When the North Atlantic Treaty was considered in the Senate, Fulbright and US Europeanists
were not able to insist on further measures towards European integration. On July 21, the
North Atlantic Treaty was approved by the Senate with a vote of 82 to 13. Nevertheless, these
issues would have implications for the development and institutionalisation of NATO.

5.1.5. Creating the organization

Despite, or perhaps because of, the fact that NATO was not a US initiative, the planning and
negotiations for the new arrangement resembled somewhat the concepts of binding
institutions and a liberal bargain. NATO was a European proposal that took a lot of
convincing within the US government and it did not exactly bind US hegemonic power. As an
example of the latter, the security pledge in Article 5 had to be watered down to appease
Congress. However, once US committed to the institution, it took a series of actions to
implement transatlantic security. This amounted to military and development aid, the

65
Original members of the OEEC were the European signatories of the North Atlantic Treaty joined by Sweden,
Ireland, Austria, Switzerland, Spain, Greece, Turkey and West Germany.
 169

stationing of troops and armaments in Europe, as well as the institutionalisation of NATO.

Even though US leaders still had control over resources and policy, the Europeans were
successful in obtaining a permanent US commitment to the continent’s security. This amounts
to binding in terms of meeting their fears of abandonment.

Such a narrative is reasonably consistent with liberal concepts of binding institutions and a
constitutional bargain. The only exception, often forgotten by liberals, is the fact that NATO
in the sense of the institutional arrangement described above did not exist when this bargain
was negotiated, neither in fact nor in terms of the treaty’s commitments. In developing such a
structure – putting the ‘O’ in the North Atlantic Treaty – the balance of power order and Cold
War politics played a large role.

Right after its signature, in April 1949, the North Atlantic Treaty was simply a legal
commitment to mutual defence in case of an attack in one of its parties. Article 9 of the treaty
established a Council to deal with matters of implementation and ‘set up such subsidiary
bodies as may be necessary’, but that was the sole administrative structure mandated by the
document. The first meetings of the North Atlantic Council in September and November
established such bodies as a Standing Group, consisting of the Chiefs-of-Staff from the US,
UK and France; a Defence Committee; a Defence Finance and Economic Committee; and a
Military and Production Supply Board. The committees and the Supply Board would be
supported by a permanent staff in London, but there was an agreement that no political bodies
should be convened ‘unless and until experience has demonstrated their need.’ 66

For the following months, discussions circled around the relationship between the North
Atlantic Treaty and other organisations, particularly the OEEC. Article 2 of the North Atlantic
Treaty promoted ‘conditions of stability and well-being’ between the parties, seeking ‘to
eliminate conflict in their international economic policies’ and to ‘encourage economic
collaboration between any or all of them.’ In early 1950, Canada strongly defended the
development of North Atlantic institutions through the auspices of Article 2. The UK also
favoured the creation of new institutions as a way to differentiate NATO from the OEEC. 67
France, on the other hand, wanted to strengthen European integration by associating the US
and Canada, even if unofficially, with the OEEC. The French reasoned that new institutions

66
John Milloy, The North Atlantic Treaty Organization, 1948-1957: Community Or Alliance? (2006), p. 35-36.
67
Ibid., 35-52.
 170

would weaken European integration, a view shared by other countries like the Netherlands. 68
The US was rather non-committal; although favouring Western economic integration, the
State Department opted for a wait-and-see approach regarding further institutionalisation. In
an exchange with State Department officials, Acheson stated that ‘before the creation of new
machinery was examined, there must be a better meeting of minds on the problems
themselves and the directions in which solutions could be sought.’ 69

These uncertainties were solved in the next few months, with increasing levels of
institutionalisation, the establishment of a permanent and independent civil staff and, more
importantly, with definitions regarding the integration of military forces, the standardisation
of equipment and procedures, and ultimately the establishment of central headquarters under a
sole commander. 70 There are two competing explanations for this change of pace regarding
institutionalisation. The first, and most accepted, credits the Korean War as the major catalyst
for NATO’s institutionalisation. 71 On this argument the invasion of South Korea on June 25,
1950 renewed fears of communist expansion and led to the creation of the supreme allied
commanders and a civilian coordinating body, a massive increase in US military assistance,
and the expansion of the alliance’s strategic sphere to include Greece, Turkey and West
Germany. 72 In this sense, the threat of communist expansion, amplified by the war in Asia,
resolved the OEEC-NATO debate. 73

A second explanation, however, is provided by Lawrence Kaplan, one of the leading scholars
on the history of NATO. Revisiting the few months between the signature of the treaty and
the beginning of the conflict, Kaplan disavows previous analysis, including his own, and
downplays the role of the Korean War. 74 He argues that the institutionalisation of NATO had
been taking place before the conflict. The invasion might have speeded up the process, but its
origins were found on Article 9 and on a transatlantic bargain between the US and Western
Europe. Kaplan’s language is stirringly similar to Liberal IR: the US had abandoned its
isolationist tradition and was committed to rebuild Western Europe, economically and

68
Not coincidentally, the Dutch Foreign Minister Dirk Stikker was chairman of the OEEC. Lawrence S. Kaplan,
NATO before the Korean War: April 1949 - June 1950, New Studies in U.S. Foreign Relations (2013).
69
Milloy, 2006, p. 49-50.
70
The creation of SHAPE and SACEUR was decided on the North Atlantic Council in December, 1950.
71
Lawrence S. Kaplan, The United States and NATO: The Formative Years (1984); Steve Weber, 'Shaping the
Postwar Balance of Power: Multilateralism in NATO' (1993); Milloy, 2006.
72
Greece and Turkey would join NATO in 1952, and West Germany in 1956.
73
Milloy, 2006, p. 52.
74
Kaplan, 2013.
 171

militarily. In exchange, Europeans were agreeing to end previous patterns of conflicts and
take measures towards integration.

Institutionalisation and military preparedness were indeed taking place before the Korean
War. On April 5, 1949, the day after the treaty’s signature, Belgium, Denmark, France, Italy,
Luxembourg, the Netherlands, Norway and the UK requested military and financial assistance
from the US. In October, Congress would approve of such measures through the Mutual
Defense Assistance Act and by March 1950, before the Korean War, the US was sending
military equipment to Europe. As mentioned above, the first and second meetings of the
North Atlantic Council established a series of organs. NATO’s Strategic Concept, approved at
the Council’s third meeting in January 1950, outlines many areas of military cooperation,
such as standardisation of military doctrines and procedures; combined training exercises;
intelligence-sharing; and cooperation in construction and maintenance of military
installations, among others. 75

The problem with Kaplan’s revised account, as with the liberal order model as applied to
NATO, is that although institutionalisation was taking place before the Korean War, it was
not taking place in the same manner as it did afterwards, nor it was taking place in spite of
bipolarity. The first defence plan approved by the North Atlantic Council, in April 1950,
preserved the national command of military forces and did not approach the integration of
forces as it would later. 76 In the midst of their reconstruction efforts, Europeans were reluctant
to increase military spending as demanded by the US. These positions would change after the
Korean War. But independent of the conflict in Asia, earlier communist activities in 1949 had
framed US responses. For instance, in late August 1949, the Soviets had exploded their first
atomic bomb. Acheson emphasises the effects of the Soviet nuclear test in overcoming
divisions in Congress over the approval of the Mutual Defense Assistance Program, which
ultimately funded military aid to NATO allies and other countries: ‘Once again the Russians
had come to the aid of an imperilled nonpartisan foreign policy’. 77 By October, communists
had won the civil war in China. Even though Mao Zedong and Stalin had many
disagreements, the so-called loss of China was interpreted by the US as a victory for Moscow.

75
Ibid.
76
Weber, 1993, p. 247.
77
Acheson, 1970, p. 313.
 172

In January 1950, reflecting the loss of China and Soviet control of atomic energy, Truman
ordered an overall review of US foreign and defence policy. This led to the preparation of
National Security Council policy paper number 68, finished on April 12. The
recommendations in NSC-68 represent the transition from a non-military containment policy,
as originally conceived by Kennan, to highly militarised containment in the following years.
NSC-68 was produced before the Korean War, but it reflected Cold War tensions originating
from China communist takeover and the Soviet nuclear test. Moreover, once NSC-68 was
made into a budget proposal for increased military expenditure, it encountered a lot of
resistance in Congress and the specialised media. Truman would only succeed in going
forward with this renewed militarised strategy after the communist threat was made clear by
the Korean War. 78

The point to be made here is that NATO institutionalisation in the way it happened cannot be
regarded as a product of a transatlantic bargain or a natural development of the North Atlantic
Treaty, as liberal accounts propose. Cold War politics and US strategic preferences, or a
balance of power order in the terminology of the liberal model, were essential parts in
defining the contours of the transatlantic alliance.

*****

In spite of not fulfilling the condition of being an initiative from the hegemonic power, NATO
is perhaps the post-war institutional arrangement that most resembles the concept of binding
institutions. Although not restraining the use of US power (binding against exploitation),
NATO represented a strong US commitment to European security, in theory and practice
(binding against abandonment). As shown above, European states clearly saw benefits in
these arrangements, advocated them, and willingly joined the institution. These processes,
however, were not driven by the liberal logic of constitutional bargains but by the Cold War
politics and the Soviet threat.

The liberal order model is based on the idea that hegemons create binding institutions in order
to lock in other states to their own principles and norms. Constitutional bargains enable this
process as hegemonic states bind themselves to such arrangements. In the same manner,
binding institutions would serve as guarantors of agreements reached in constitutional

78
Stephen E. Ambrose and Douglas G. Brinkley, Rise to Globalism: American Foreign Policy Since 1938, 8th
edition (1997), p. 95-126.
 173

bargains. The case of NATO points in a different direction. Consensus between members
regarding principles and norms preceded the institution. Europeans agreed on the necessity of
deterring Soviet and agreed that the US was the only state capable of providing such
deterrence. NATO was a product of a previously existing consensus, not a product of
constitutional bargaining; European states did not have to be attracted to it.

This speaks to one of the main differences between NATO and the institutions examined in
previous chapters. Rather than being universal in scope, NATO is a regional defence
institution, and thus exclusive in nature even within the non-communist world. It is a
reasonable hypothesis that the above mentioned consensus regarding NATO existed among a
limited number of states because of the common Soviet threat and a higher degree of
homogeneity regarding past historical experiences (the two World Wars), cultural and
religious values, and political and economic principles. In this sense, it is reasonable to
suggest that NATO resembles binding institutions because the disposition of its members,
their characteristics and goals are similar to the processes that inspired the concept of binding
institutions. 79 The following sections turn to the post-Cold War period to see how the
institution adapted to radically new circumstances and if or how these same concepts can be
applied.

79
See Chapter 2 of this thesis, Section 2.4.2.
 174

5.2. NATO and liberal order after the Cold War

In comparison with the analysis in previous chapters, the case of NATO after the end of the
Cold War is particularly relevant for interrogating the liberal model. Two aspects account for
such importance. First, the liberal order model was conceived from generalisations about the
behaviour of hegemons after the end of great power conflicts. The end of the Cold War is
often categorised as one of these ‘after victory’ situations. 80 NATO was a central part of the
Cold War settlement and of US-Soviet relations during this period. The end of the Cold War
and NATO’s role in it are precisely the type of cases that the liberal model was built to
analyse. 81 Second, NATO is the closest example of an international institution composed
solely of democracies. With few exceptions, NATO has been for the most part an alliance of
liberal states. As such, NATO has special relevance in the evaluation of the liberal model and
Liberal IR predictions about cooperation between democracies. 82

In this context, the second half of Chapter 5 discusses the distinguishing liberal features of the
alliance and its expansion. The first section looks into Karl Deutsch’s characterisation of
NATO as a ‘pluralistic security community’. According to liberal authors, the patterns of
cooperation and restraint between NATO members explain the resilience of the institution.
NATO’s liberal characteristics have often been invoked to explain other states’ interests in
joining the alliance, as well as the impact NATO has had on the political and military
structures of its members. Such ideas are related to the liberal concepts of constitutional
bargain and binding institutions.

Then, NATO’s enlargement is put into a broader context of US and European relations with
Russia. The liberal model points towards a US-led expansion of NATO after the end of the
Cold War. At face value, such predictions were right: from 16 members in 1991, NATO
expanded to Central and Eastern Europe and totalled 28 members at the time of writing. The
following two sections analyse NATO’s post-Cold War expansion in the light of US-Russia
relations, examining whether such marked expansion followed the liberal rationale. As in
previous chapters, the analysis is guided by the criteria that: the expansion process must be
purposefully driven by the hegemon; the institution must bind the hegemonic power; the
institution must generate benefits for other states; and the expansion process must be willingly
80
Ikenberry, 2001.
81
In fact, the liberal order model was articulated after the end of the Cold War and concurrent with NATO’s
double enlargement.
82
See Chapter 2 of this thesis, Section 2.3.
 175

accepted by other states. The chapter concludes by evaluating liberal accounts of these
dynamics.

5.2.1. A resilient transatlantic security community

For decades, liberal authors have emphasised the unique characteristics of NATO. According
to early approaches, NATO was more than a military alliance, being in the process of
developing into a transatlantic ‘security community’, a group of states which shared a sense of
‘we-ness’ and the belief that ‘problems must and can be resolved by processes of “peaceful
change.”’ 83 Deutsch’s original depiction of pluralistic security communities was not restricted
to democracies, but later fitted well with the democratic peace thesis. 84 Democracies would
perceive each other as peaceful as a result of domestic liberal norms and decision-making
processes, and thus would rarely fight each other. Likewise, democracies would be better
suited to form pluralistic security communities. 85

The existence of security communities, however, does not imply the absence of conflicts
between its members. What characterises a security community is how such conflicts are
solved, i.e. peacefully, through consultation and negotiation, and without breaking up the
institution. 86 In fact, conflicts of various kinds have plagued NATO. In its early years,
disputes revolved around budgetary commitments and military strategies over European
defence. 87 Differences over the size of contributions kept appearing between the US and
Europe during the Cold War, and later between poorer European states and the alliance’s
richer nations. Such burden-sharing tensions reflected the fact that some members were
exploiting a security structure which was mostly supported by US resources. 88 More recently,
with the expansion of NATO’s out-of-area operations, disputes developed over the imposition
of operational restrictions on troops on the ground by their national governments. These

83
Deutsch et al., 1957, p. 5.
84
Doyle, 1983; Russett, 1993; Brown, Lynn-Jones and Miller, eds., 1996.
85
For a constructivist interpretation of the same processes, see: Emanuel Adler and Michael Barnett, eds.,
Security Communities (1998).
86
Vincent Pouliot, 'The Alive and Well Transatlantic Security Community: A Theoretical Reply to Michael Cox'
(2006), p. 120-22.
87
Stanley R. Sloan, Permanent Alliance? NATO and the Transatlantic Bargain from Truman to Obama (2010);
Kaplan, 2013.
88
Keith Hartley and Todd Sandler, 'NATO Burden-Sharing: Past and Future' (1999); Todd Sandler and Hirofumi
Shimizu, 'NATO Burden Sharing 1999–2010: An Altered Alliance' (2014).
 176

differences have led analysts to consider a two-tier NATO, differentiating ‘warrior states’ or
‘burden-bearers’ from free-riders or ‘ration-consumers’. 89

Other examples of conflicts between members range from NATO responses to the
development of Soviet ballistic missiles and to the Suez crisis in the 1950s; to France’s
decision to withdraw from NATO’s military structures and to the collapse of the planned
multilateral nuclear force (MLF) in the 1960s; to disputes over the deployment of NATO
intermediate-range nuclear missiles (INF) and to reactions to the Soviet invasion of
Afghanistan in the early 1980s. 90 NATO’s role in the Bosnian civil war, its reactions to the
US invasion of Iraq, and NATO’s mission in Afghanistan are examples of high-tensions in
transatlantic relations after the end of the Cold War. 91

Although such disputes exist, and sometimes take on important proportions, liberal
interpretations emphasise the resilience of the alliance and the fact that differences have
always been solved through consultation and negotiation. Addressing some of the cases
mentioned above, Wallace Thies argues that the ‘NATO-in-crisis’ narrative overstates the
extension and impacts of conflicts between members and understate the self-healing processes
in place. That fact that some members disagree with others over specific issues hides the fact
that they keep agreeing with each other on a whole set of other themes. Likewise, conflicts
rarely involve all members. As such, states do not push disputes too far, looking for
reconciliation in order not to jeopardise their relations with other alliances members not
involved in that specific quarrel, and in order not to compromise all other undisputed areas of
NATO’s structure. Similarly, members often appeal to alliance solidarity so as to gain
leverage over other members’ policy preferences. 92 Generally speaking, research findings
support the place of NATO in the liberal order model. The alliance provided for some binding
of hegemonic power, as the US maintained its security guarantee, consulted policy options
with other members and refrained from discarding the institution when disputes arose. 93

89
Timo Noetzel and Benjamin Schreer, 'Does a Multi-Tier NATO Matter? The Atlantic Alliance and the Process
of Strategic Change' (2009). See also: David P. Auerswald and Stephen M. Saideman, NATO in Afghanistan:
Fighting Together, Fighting Alone (2014).
90
Wallace J. Thies, Why NATO Endures (2009).
91
Michael Cox, 'Beyond the West: Terrors in Transatlantia' (2005); Thies, 2009; Auerswald and Saideman,
2014.
92
Thies, 2009, p. 19-20.
93
Thomas Risse-Kappen, 'Collective Identity in a Democratic Community: The Case of NATO' (1996).
 177

Thies and others acknowledge that, during the Cold War, the presence of the Soviet threat was
a powerful element for the cohesion of the alliance. 94 The USSR made the benefits of
cooperation under NATO more evident to its members and the thoughts of leaving or
breaking up the alliance less likely. But in the absence of the Soviet threat, various authors
expected NATO’s cohesion and importance to diminish, and the alliance eventually to
disappear. 95

5.2.2. NATO after the Cold War

After the end of the Cold War, officials from NATO and from member states made significant
moves in order to transform the institution. As pointed out by many authors, NATO
experienced a political process of redefining its mission and identity. 96 For both political and
institutional reasons, the alliance embarked on a path of transformation in order to maintain its
relevance in a post-Cold War world. 97 As Michael Williams and Iver Neumann put it:

This transformation involved a rearticulation of the identity and history of the

Alliance. Increasingly, NATO became portrayed not as a conventional alliance
defined by the existence of the Soviet threat and the Cold War, but as an organisation
whose essential identity and history is correctly understood as one of cultural, or even
civilisational commonality centred around the shared democratic foundations of its
members. 98

NATO’s transformation was embedded in a larger process of changing concepts and practices
of security, which also involved other institutions such as the CSCE. The alliance and its
members were gradually replacing an ‘outside mode’ of pursuing security, based on
competitive state relations and power balancing, by an ‘inside mode’ of cooperative security.
In this new ‘inside mode’ paradigm of security relations, stability relied on states’ domestic
institutions, mutual transparency, accountability and confidence-building. 99 In the post-Cold

94
John J. Mearsheimer, 'Back to the Future: Instability in Europe after the Cold War' (1990); Kenneth N. Waltz,
'The Emerging Structure of International Politics' (1993).
95
Mearsheimer, 1990; Waltz, 1993.
96
Michael C. Williams and Iver B. Neumann, 'From Alliance to Security Community: NATO, Russia, and the
Power of Identity' (2000); Felix Ciuta, 'The End(s) of NATO: Security, Strategic Action and Narrative
Transformation' (2002), p. 43; Vincent Pouliot, International Security in Practice: The Politics of NATO-Russia
Diplomacy (2010).
97
As discussed below, as early as 1989, the senior Bush administration pushed for enhancing NATO’s political
dimension as a way to ease the pressure from Soviet hardliners on Gorbachev and to help with negotiations on
Germany’s reunification.
98
Williams and Neumann, 2000, p. 367.
99
Pouliot, 2010, p. 150-51. See also: Alexandra Gheciu, 'Security Institutions as Agents of Socialization? NATO
and the 'New Europe'' (2005).
 178

War environment, traditional concepts like containment and balance of power lost ground in
strategic doctrines and practices, as security increasingly came to be ‘identified with the
cultural and civilisational principles now held to be the foundation of NATO itself.’ 100

Part of this process was the creation and diffusion of a revisionist history of NATO,
emphasising its democratic principles, in a way to support the redefinition of its purposes and
missions. NATO officials, diplomats and commentators promoted the transatlantic alliance as
always having been more than a military alliance; as always having been more than about the
Soviet threat. 101 The collapse of the USSR would have allowed NATO to go back to its
original aim of uniting liberal states and promoting liberal values. For instance, NATO
Secretary-General Manfred Wörner wrote in 1991:

The Treaty of Washington of 1949 nowhere mentions the Soviet Union but stresses
instead the need for a permanent community of Western democracies to make each
other stronger through cooperation, and to work for more peaceful international
relations. The Alliance has played a major role in reconciling former adversaries, such
as France and Germany, in counteracting neo-isolationism within the world greatest
power and in promoting new standards of consultation and cooperation among its
members. All these elements would still have been fundamental to security and
prosperity in Europe even in the absence of the post-war Soviet threat. 102

Similarly, German Defence Minister Volker Rühe noted in 1993 that: ‘Europe and North
America’s political and strategic positions are based on shared values and common interests.
It is this, and not the presence of an existential threat, that is the hub of the Alliance.’ 103 A
decade later, Rebecca Moore summarised these processes stating that ‘NATO has, from the
beginning, understood the values enshrined in its preamble to be central to its mission.’ The
defence of those values would be ‘NATO’s principal political mission’ and ‘were central to
the way in which the individual allies conceived their interests and to the collective identity of
the alliance as a whole.’ 104

This transformation of NATO, however, was not a consensual process. Commentators and
policymakers disputed the wisdom of NATO’s policies based on shared values rather than on

100
Williams and Neumann, 2000, p. 369.
101
Risse-Kappen, 1996, p. 372; Ikenberry, 2001, p. 211; Rachel A. Epstein, 'Nato Enlargement and the Spread of
Democracy: Evidence and Expectations' (2005), p. 65; Thies, 2009, p. 88-89.
102
Manfred Wörner, 'The Atlantic Alliance in a New Era' (1991), p. 5. See also: Lene Hansen, 'NATO’s New
Discourse' (1995); Williams and Neumann, 2000.
103
Volker Rühe, 'Shaping Euro-Atlantic Policies: A Grand Strategy for a New Era' (1993), p. 130.
104
Rebecca R. Moore, 'NATO's Mission for the New Millennium: A Value-Based Approach to Building
Security' (2002), p. 3.
 179

the national interest. The expansion of the alliance to include new members and NATO’s
interventions in the Balkans in the 1990s have been criticised in this regard. 105 Even so, the
redefinition of the identity, mission and structure of NATO in a new post-Cold War
environment was successful, and has been addressed as such by many authors and from
different perspectives since. 106

At this point, an important distinction has to be made. As a political process happening in the
1990s, there was nothing wrong with the redefinition of NATO’s identity and mission. But
from an analytical point of view, the revisionist account of NATO’s history – that was part of
the aforementioned political process – bears no scrutiny. The brief history summarised above
shows that NATO was not a product of shared liberal values, sense of community, or
historical and cultural ties. NATO eventually developed into a pluralistic security community
as the literature indicates, but a very significant security threat was initially needed to
overcome individual states’ preferences and guarantee US participation. 107 The problem arises
when scholarly analyses acknowledge these political processes and the revisionist account of
NATO’s history in an uncritical manner. Such historical accounts, and the analyses that
follow from them, obscure the fact that the political and security environment in the late
1940s was entirely different from that of the 1990s. In order to support this view of NATO as
always having been about more than the Soviet threat, a political discourse has to be taken as
historical fact. Collective identities and interests gain importance to the detriment of Cold
War politics. There are important implications of such moves. If one accepts these generalised
views, NATO’s double enlargement after the end of the Cold War – geographical and
functional – becomes an innate outgrowth of its identity as a pluralistic security
community. 108

105
Obviously, values and interests are not intrinsically incompatible. This fact has not deterred critics of
NATO’s initiatives and the Clinton administration approach to security problems. For criticism of NATO’s
expansion, see the sections below. For criticism of NATO’s actions in the Balkans, see for instance: Michael
Mandelbaum, 'A Perfect Failure: NATO’s War Against Yugoslavia' (1999).
106
John Duffield reasoned that the alliance had the ability to acquire new tasks through institutional adaptation
and served as an instrument to smooth relations between its members. Robert McCalla attributed NATO’s
persistence to logics of organizational survival, while Celeste Wallander explained the processes of institutional
adaptation by looking at changes in NATO’s assets – norms, rules and procedures – during and after the Cold
War. John S. Duffield, 'NATO's Functions after the Cold War' (1994); Robert B. McCalla, 'NATO's Persistence
after the Cold War' (1996); Celeste A. Wallander, 'Institutional Assets and Adaptability: NATO after the Cold
War' (2000).
107
See Section 5.1.5 above.
108
Ronald D. Asmus, 'Double enlargement: redefining the Atlantic partnership after the Cold War' (1997);
Pouliot, 2010, p. 88-89.
 180

In considering NATO’s role after the end of the Cold War, liberal authors commit just such a
mistake. Instead of seriously considering the historical record and the processes by which
NATO developed into a pluralistic security community, liberal analysis accepts and
corroborates the claim that NATO has always been what it is today. 109 For many liberal
authors,

The origins of NATO are supposed to have been temporarily altered and muted by the
historical anomaly represented by the Cold War (…) as if the creation and
performance of NATO could be – or could have been – conceived in isolation from its
historical and strategic context (then and now), with all the embedded understanding
of alliances, alliance politics and security. 110

The next two sections look in detail at these claims, analysing the debates over NATO’s
expansion process and the relations between the US, NATO and Russia.

5.2.3. A broader view of NATO’s enlargement

NATO’s early enlargement respected the strategic realities of the Cold War: Greece and
Turkey became members in 1952; West Germany in 1955; and Spain in 1982, after the end of
the Franco regime. Germany’s reunification put the territory of East Germany, a former
Warsaw Pact member, under the umbrella of the alliance’s security pledge. 111 In the post-
Cold War period, NATO experienced three rounds of expansion. In 1999, the Czech
Republic, Hungary and Poland were admitted. In 2004, Bulgaria, Estonia, Latvia, Lithuania,
Romania, Slovakia and Slovenia became members. In 2009, Albania and Croatia joined
NATO’s ranks.

Liberal accounts portray NATO’s enlargement as a compelling example of the liberal model:
the expansion process was mostly negotiated by the US; acceding members saw benefits in
joining the institutions and willingly did so; and although not binding US behaviour in terms
of its use of hegemonic power (binding against exploitation), NATO maintained a strong US
commitment to European security (binding against abandonment). Nevertheless, one can
challenge these liberal conclusions by questioning the appropriateness of such cases.

109
See for instance: Risse-Kappen, 1996; James Kurth, 'NATO Expansion and the Idea of the West' (1997);
Moore, 2002.
110
Ciuta, 2002, p. 43.
111
One of the Soviet demands during the reunification negotiations was that NATO troops would not be
deployed in the territory of former East Germany. Still, the country was under full protection of Article 5.
 181

The rationale behind the concept of a constitutional bargain suggests that hegemonic states
attract others by offering binding commitments against exploitation and abandonment. As
these new entrants requested admission, there was little need for binding commitments
against exploitation. What Central and Eastern European states wanted was a security
guarantee against a renewed Russian threat. The US offered such guarantee, bearing a
disproportionate amount of the costs, mostly in return for base rights and some degree of
political solidarity. But at no point were these prospective members concerned about
exploitation from the hegemonic power, i.e. the US. In this sense, a constitutional bargain that
would bind US power from being exerted over these countries was never in question. Just as
with the Western European states in 1949, Central and Eastern European states wanted to join
NATO; they did not need to be convinced of it. Thus, NATO’s expansion to Central and
Eastern European states can be only a partial test of the liberal framework and its concepts of
constitutional bargain and binding institutions. In other words, this is a weak case to support
the liberal model.

With regard to NATO, a better assessment of the liberal model comes from an analysis of the
alliance’s relation with Russia. It is reasonable to hypothesise, following the liberal model,
that the US as the victorious state in the Cold War would use NATO in order to attract Russia,
the defeated state, into its liberal order. In this sense, the following sections analyse US-
Russia relations in face of NATO’s first enlargement after the Cold War.
 182

5.2.4. The case of Germany’s reunification

NATO’s expansion was hardly a given when the Cold War ended. 112 During the negotiations
of Germany’s reunification, in February 1990, US Secretary of State James Baker and
German Chancellor Helmut Kohl had promised Soviet leader Mikhail Gorbachev that NATO
would not expand eastward further than the territory of East Germany. 113 In July, the North
Atlantic Council’s (NAC) London Declaration stated that ‘security and stability do not lie
solely in the military dimension’ and declared its intention ‘to enhance the political
component of the Alliance’. 114 In November 1991, the NAC created the North Atlantic
Cooperation Council (NACC), establishing ministerial level meetings between NATO and
Warsaw Pact members. These initiatives were intended to appease Gorbachev’s opponents in
Moscow and assure them that NATO would not try to benefit from the USSR’s demise.

The negotiations over Germany’s reunification are one of the major examples in support of
the liberal interpretation that, after the end of the Cold War, the US adopted policy initiatives
aimed at expanding the binding institutions previously developed with its Western
constitutional order. Ikenberry gives great attention to this case. 115 In short, the US would
have used NATO’s institutional framework as a way to lock in a reunified Germany in its
international security order while placating fears of reunification in the USSR, UK and
France. During the negotiations with the Soviets, this bargain and the role of NATO in it were
made explicit. 116 In an often quoted passage of a meeting between Baker and Gorbachev, the
Secretary of State asked the Soviet leader if he would rather have a Germany independent and
outside of NATO or one tied to the alliance. As Gorbachev was still unconvinced that
Germany should be allowed to remain a NATO member, Baker made reiterated assurances
that ‘there would be no extension of NATO’s jurisdiction for forces of NATO one inch to the
east’. After similar guarantees from Chancellor Kohl in the following days, Gorbachev
eventually signed up to the plan.

112
In fact, some authors predicted that NATO itself would fade away, with no rationale any longer. See:
Mearsheimer, 1990; Waltz, 1993.
113
Ronald D. Asmus, Opening NATO's door: how the alliance remade itself for a new era (2002); Mary Elise
Sarotte, 'Not One Inch Eastward? Bush, Baker, Kohl, Genscher, Gorbachev, and the Origin of Russian
Resentment toward NATO Enlargement in February 1990' (2010).
114
London Declaration on a Transformed North Atlantic Alliance, NATO On-line library. Available at:
http://www.nato.int/docu/comm/49-95/c900706a.htm.
115
Ikenberry, 2001, p. 222-33.
116
James A. Baker III, The Politics of Diplomacy: Revolution, War and Peace, 1989-1992 (1995); George H. W.
Bush and Brent Scowcroft, A World Transformed (1998); Sarotte, 2010.
 183

The liberal analysis of these developments interprets NATO’s institutional framework as

being instrumental in providing the involved parties with the security guarantees needed. For
the Soviet leadership, the fact that Germany would remain in NATO meant that the US would
watch over reunification and any future military development, diminishing the risk of a
renewed German threat to Europe. In fact, this reasoning was even more acute regarding
British and French concerns. In this way, the NATO structure provided for binding against the
abandonment of the hegemonic power, the US, and locked in Germany within its institutional
framework. But as much as the liberal analysis is right in this interpretation, there is also a
forgotten side of the bargain. In the liberal model terminology, the USSR was also promised
binding commitments against exploitation, that is, that the US would not exploit the USSR
fragile power position and expand further east, towards the territory of former Warsaw Pact
members and former Soviet republics. Baker’s pledge of no further expansion to the East is an
example of such commitment against exploitation, but not the only one. The aforementioned
process of redefining NATO’s mission and identity also has to be seen in this way. In his
memoirs written with National Security Advisor Brent Scowcroft, President Bush remarks
that, if they ‘were to have any chance of convincing them [the Soviets] that this would not
pose a threat [a united Germany in NATO], we would have to demonstrate how the character
of the alliance itself was changing.’ 117 This effort led to the London Declaration of July 1990,
aiming at making NATO ‘more of a political alliance.’ 118 Bush, Baker and Scowcroft all
understood that, in face of domestic opposition from hardliners, it was essential to Gorbachev
to ‘be able to point to changes in NATO to reassure the Soviet people that they no longer
faced a threat from the alliance, or Germany, or the United States.’ 119

Once again, the narrative seems compatible with the liberal model. US leaders were conscious
of the need to make commitments to the Soviets signalling against the exploitation of their
privileged power position. They did so in their pledge of no further expansion eastward and in
the redefinition of NATO’s mission in order to placate Russian fears. Two problems remain,
nevertheless. Firstly, as much as NATO was used to lock in Germany in a post-Cold War
security order, the same ordering principle was not used to lock in the USSR. Germany was
already part of NATO and other international institutions. The USSR, on the other hand, was
a very different case. As narrated in Chapters 3 and 4, the US resisted Soviet and later Russia
entry in the IMF in the 1990s, and only recently finalised Russia’s membership in the

117
Bush and Scowcroft, 1998, p. 262.
118
Baker III, 1995, p. 245-46.
119
Bush and Scowcroft, 1998, p. 292.
 184

WTO. 120 Regarding NATO, as the following sections discuss, no serious effort was made to
incorporate the USSR and later Russia. Secondly, as much as a constitutional bargain was put
in place, with the US providing commitments against abandonment and exploitation, some of
these promises did not hold. The remaining of Chapter 5 addresses NATO’s expansion in the
late 1990s. But notwithstanding the motives of such policies, the fact is that the institutional
arrangements put in place by the senior Bush administration did not have a binding character
and did not prevent the change of US policy at a later stage. For the two reasons presented
above, US policies towards the USSR regarding the reunification of Germany cannot support
the concepts of constitutional bargain, binding institutions and the liberal order model.

5.2.5. US, Russia and NATO in the early 1990s

Gorbachev’s New Thinking was heavily inspired by the CSCE and by the redefinition of
security in Europe as a mutual and common process. Russia’s new leaders also subscribed to
these views, personified by President Boris Yeltsin and Foreign Minister Andrei Kozyrev.
According to Vincent Pouliot, Russia’s reactions to NATO’s functional transformation in the
early 1990s clearly demonstrated its willingness to be incorporated into ‘the new order of
things imposed by NATO.’ 121 For instance, at the first gathering of the NACC, ‘Yeltsin wrote
a letter declaring his country’s readiness to examine the issue of Russia’s membership of
NATO in the long term.’ 122 Another example is Russian positions on the alliance’s
involvement in the Bosnian civil war. In September 1991, Gorbachev had agreed on UN
Security Council Resolution 731, imposing an arms embargo on all warring parties. By June
1992, Yeltsin had further agreed to Resolutions 727, 740, 743, 757 (which imposed sanctions
on Serbia in response to its escalating policies), and most importantly to Resolution 836,
authorising the deployment of peacekeepers and threatening ‘tougher measures’ on Serbia. 123

Yeltsin’s early foreign policy embraced international regimes and institutions. While adopting
domestic political and economic reforms, Russia strengthened arms-control regulations,
banned nuclear testing, destroyed chemical weapons, banned space weapons and reduced
military forces to levels sufficient for defensive operations only. 124 The USSR and later

120
The process lasted nineteen years, from 1993 to 2012.
121
Pouliot, 2010, p. 157.
122
NATO turned down this Russian declaration of interest in joining NATO, as it would again in 1996 and 2002.
Ibid., 158, 71.
123
Ibid., 160.
124
Kathleen J. Hancock, 'Russia: great power image versus economic reality' (2007), p. 73-74.
 185

Russia concurred with UN economic sanctions on Iraq in 1990-91, on Libya for not
extraditing suspects of terrorism, and on Serbia, all three long-time Soviet clients. The
acceptance of these sanctions, estimated as amounting to US$ 15.8 billion during a period of
serious economic hardship, indicates how serious Russia was in cooperating with the
international community. 125

Meanwhile, Russia had to confront regional conflicts in the former Soviet republics. Georgia,
Azerbaijan, Moldova and Tajikistan faced internal conflicts involving Russian ethnic
minorities. 126 Russian nationals also faced adverse conditions in the Baltic, where more than
30 percent of Russians living in Estonia and Latvia lost their citizenship due to new laws. In
Ukraine, a country which held a large number of Soviet nuclear weapons, former Soviet
military personnel were asked to swear allegiance to the new government, including officers
from the Black Sea fleet in Crimea. Economic turmoil and challenges from regional
nationalism strengthened Yeltsin’s opposition at home, who pointed to a causal connection
between his policy of alignment with the West and the country’s disintegration, economic and
regional. 127 The newly empowered Russian voters and some of their representatives
complained that there was no Marshall Plan equivalent for Russia. 128

US-Russia discussions on NATO enlargement were significant in this sense. Bill Clinton had
been elected US president in 1992, and helping Russia’s transition was one of his declared
foreign policy goals. 129 Such a goal, however, would end up dividing the administration over
enlargement. One of the first instances in which the topic came to Clinton’s attention was in
April 1993, during a visit of Central and Eastern European leaders to Washington. The
President heard from many of those present that their ‘number one priority was to get into
NATO.’ 130 In the summer of 1990, Czechoslovakia, Hungary and Poland had formed the
Visegrad group, asking for the dissolution of the Warsaw Pact. In February 1991, joined by
Romania and Bulgaria, they succeeded. But the failed coup attempt against Gorbachev in
August 1991 reminded these leaders of how vulnerable their independence was. 131 Now,
Poland’s Lech Walesa, Czech’s Vaclav Havel and Hungary’s Arpad Goncz impressed directly
on Clinton why they wanted to join NATO. As Ronald Asmus puts it: ‘They had a common

125
Ibid., 75-76.
126
Ian Bremmer and Ray Taras, eds., New States, New Politics: Building the Post-Soviet Nations (1997).
127
Hancock, 2007, p. 77-80.
128
Williams and Neumann, 2000, p. 359.
129
Strobe Talbott, The Russia Hand: A Memoir of Presidential Diplomacy (2003).
130
James M. Goldgeier, Not whether but when: the U.S. decision to enlarge NATO (1999), p. 20.
131
Asmus, 2002, p. 10-17.
 186

view. Their countries were vulnerable. They still feared Russia. They did not trust the major
West European powers. They trusted America.’ 132

Initially, Clinton and National Security Advisor Anthony Lake were the only voices
supporting NATO’s expansion inside the administration. Enlargement suited Clinton’s
foreign policy platform of expanding democracy and market economies, which Lake
articulated through the concept of ‘engagement and enlargement’. 133 Policy debates over
NATO started in June 1993, in preparation for Clinton’s trip to Brussels the following
January. A working group with members of the State Department and the National Security
Council was created to discuss how to enable the NACC to deal with peacekeeping operations
in Bosnia. In part as a result of the scenario described above, Russia experienced a violent
constitutional crisis September 1993, culminating in Yeltsin’s shelling of the parliament. At
the same time, the US and Russia were negotiating the removal of nuclear weapons from
Ukraine, deemed a more critical issue. 134 Most officials considered enlargement premature, as
they worried about the impact on US-Russia relations. 135

The working group eventually agreed on the Partnership for Peace (PfP) proposal. Assistant
Secretary of Defence for Regional Security Affairs Charles Freeman Jr. and his staff drafted
the core of PfP, after discussions with US General John Shalikashvili, in July. 136
Shalikashvili, serving as SACEUR, was concerned with NATO’s command structure in out-
of-area operations and relations with non-members. According to the proposal, NATO would
establish bilateral programs with non-member states in order to modernise their military,
standardise operational procedures, and enable them to conduct joint-peacekeeping
operations. PfP did not exclude the possibility of NATO membership, but SAUCER and the
Defence Department agreed that enlargement at that point would not serve US and NATO
interests. The membership question should be raised after states had achieved NATO
standards, when they could contribute to the security alliance. 137 PfP was deliberately
designed to put off questions regarding the expansion of membership. 138

132
Ibid., 23.
133
Lake, 1993. Such themes derived from the debates around the democratic peace thesis. See Section 2.3.1
above.
134
Goldgeier, 1999, p. 29-32, 36.
135
Ibid., 21-26.
136
The program was named Peacekeeping Partnership, but had its name changed after the US debacle in Somalia
in October, 1993. Elizabeth Drew, On the Edge: The Clinton Presidency (1994), p. 404.
137
Goldgeier, 1999, p. 26-29; Madeleine Albright, Madam Secretary: A Memoir (2003), p. 167-68.
138
Jonathan Eyal, 'NATO's Enlargement: Anatomy of a Decision' (1997), p. 703; Goldgeier, 1999, p. 34.
 187

After getting the consent of Secretary of Defence Les Aspin, Freeman presented PfP to the
working group on September 13. Although members agreed on its desirability, some State
Department officials tried to impinge on Secretary Warren Christopher that PfP was not
enough. Led by Lynn Davis, Under-Secretary for Arms Control and International Security
Affairs, the group wanted to seize the opportunity of the 1994 ministerial meeting to put
forward clear criteria for membership, a timetable, and perhaps even associated membership
status for the Czech Republic, Hungary, Poland and Slovakia. 139 Christopher seemed to be
leaning in this direction until Strobe Talbott intervened. Ambassador-at-large for the New
Independent States, Talbott was a Soviet and Russian specialist, and a personal friend of the
President. He convinced Christopher that PfP was the best way forward, as listing candidates
or a timetable would impair relations with Russia. 140 When the principals met in October 19,
Lake was the only voice promoting a public commitment to enlargement. Aspin and
Christopher preferred to announce the PfP in the January meeting, with no discussion on
expansion. Clinton sided with State and Defence, but mentioned that he should make a
statement about ‘NATO’s openness to eventual expansion.’ 141

After publicly announcing PfP, the US was strongly criticised in Central and Eastern Europe
for its indecisiveness about NATO enlargement. Visiting his neighbour Poland on October 21,
Havel stated that dialogue and observer status on NATO were welcomed, but should not
exclude eventual full membership. Preceding the NATO meeting, Walesa demonstrated his
unhappiness and threatened Polish rejection of PfP. 142 Russia, on the other hand, had always
been sceptical about enlargement. Although Yeltsin had made positive remarks regarding
Polish membership in NATO in August 1993, the Russian leader backed down from his
position in a letter to all NATO heads of state in mid-September. Yeltsin envisioned a closer
relation between Russia and NATO than between the alliance and the states of Central and
Eastern Europe. Earlier in September, Kozyrev had told US Ambassador Tom Pickering that
‘Moscow did not oppose enlargement, but that Russia should be the first to join.’ 143 When PfP
was announced, Yeltsin thought it a ‘stroke of genius’: it would give something to European
states but stop short of enlargement. This interpretation was not rectified by US officials

139
Goldgeier, 1999, p. 29-32.
140
Ibid., 36-38.
141
Ibid., 40.
142
Eyal, 1997, p. 702; Goldgeier, 1999, p. 35, 52-53.
143
Asmus, 2002, p. 47.
 188

during Christopher’s trip to Moscow in October 1993, or during Clinton’s visit in January
1994. 144

The liberal framework proposes that, in ‘after victory’ situations, hegemonic powers attract
countries into binding institutions by setting up constitutional bargains which protect weaker
states from the risks of abandonment and exploitation. Moreover, the liberal framework
clearly affirms that, the greater the power differential, the greater the incentives for the
hegemon to strike constitutional bargains. A hypothesis derived from this liberal model would
suggest that the US would try to lock in Russia into its institutional network by making
binding commitments and adopting self-restraining behaviour. Nevertheless, the US made no
efforts to bring Russia into NATO. Contrary to the liberal model logic, at the height of its
power the US did not use NATO to attract Russia into its liberal order, despite Russia’s
weakest position in decades and its evident willingness to cooperate. 145

The reasons why the US did not offer Russia NATO membership are many. It appears that no
one in the senior Bush and Clinton administrations seriously considered such option.
Domestic constituencies and politicians would most likely have opposed it, as probably would
most of the European allies. NATO’s structure would have been greatly modified with the
inclusion of Russia, both in military and political terms. But the case in point here is not why
the US did not offer Russia NATO membership, or if it should have offered it. What this
discussion highlights is the lack of evidence to support hypotheses generated by the liberal
order model. In a hard case scenario such as US and NATO relations with Russia, evidence
for the liberal model is frail.

NATO’s eventual expansion to Central and Eastern European countries only provides a weak
case for the liberal model. Similarly to Western Europe in the late 1940s, Central and Eastern
European states saw in NATO a defence mechanism against Russia and requested
membership. They did not have to be attracted into binding institutions. Even so, at this early
stage, not all US officials were convinced of the merits of expanding the alliance and
committing resources to the defence of former communist countries. PfP would improve
operations with non-member states, but it was clearly designed to postpone decisions on
enlargement.

144
Goldgeier, 1999, p. 59.
145
Pouliot, 2010, p. 155-61.
 189

5.2.6. US, Russia and NATO drift apart

While pursuing PfP, Clinton was criticised by the opposition for being too slow on
enlargement. Just like the Central and Eastern European leaders, Republicans saw NATO as
an instrument against the possibility of renewed Russian threats. Talbott would face harsh
questioning at his confirmation hearing, as he was promoted to Deputy Secretary of State in
February 1994. As a Russian specialist, Republicans worried that he ‘was willing to sell out
NATO’s effectiveness to appease Russia’. 146

Within the administration, agreement was reached in late 1994. In September, Assistant
Secretary of State for European Affairs Richard Holbrooke convened an interagency group to
move expansion forward. Holbrooke’s push led the new Secretary of Defence William Perry
to ask for clarifications from Clinton. Defence officials were not convinced that enlargement
was official US policy. On December 21, Perry and Shalikashvili explained their concerns
about an early expansion to Clinton. They wanted to give the PfP more time and only later
make a decision on enlargement. Postponement would allow the time to reassure Russia that
expansion was not a threat. Nonetheless, Clinton sided with the two-track solution pushed
forward by Lake, the NSC staff and the State Department. One of his reasons was domestic
politics: delay would strengthen opposition claims that Clinton was giving Russia a veto over
NATO. 147

Around the same time, Yeltsin started to drop his Western oriented foreign policy.
Responding to political and economic pressure, Russia adopted an Eurasian approach. 148
Among various reasons, this change arose from European and US positions on NATO.
Tensions mounted over the Bosnian civil war, which started in 1992. When NATO accepted a
request from the UN Secretary General for airstrikes on Bosnian Serb forces, in response to
an attack in a Sarajevo market, Russia expressed outrage at being side-lined in the decision. In
April, in an attempt to regain diplomatic relevance, Yeltsin pushed for the creation of the
Contact Group with France, Germany, UK, US and later Italy. Research shows, however, that
US officials considered the Contact Group a way to create the appearance of Russian
inclusion, while keeping decision-making power in the alliance’s hands. 149 Such an approach

146
Goldgeier, 1999, p. 65.
147
Ibid., 73-76.
148
Hancock, 2007, p. 80.
149
James M. Goldgeier and Michael McFaul, Power and Purpose: U.S. Policy Toward Russia After the Cold
War (2003), p. 199; Talbott, 2003, p. 123; Pouliot, 2010, p. 161-63.
 190

carried on during the negotiations of the Bosnian implementation force in the summer of
1995. After Bosnian Serbs took peacekeepers hostage and encircled Srebrenica, Russia agreed
to give NATO authority to bomb them and declared it would not veto reinforcements to
UNPROFOR. Most US officials, nevertheless, opposed including Russian forces in military
operations, as they were not strategically necessary. Only after intricate negotiations by
Secretary Perry and Russian Defence Minister Pavel Grachev, was an arrangement put in
place by which Russia served with, but not under NATO. 150 As Talbott puts it, ‘Russia
wanted inclusion but not subordination’, although they continuously felt they had been given
the latter. 151

With regard to enlargement, Russian officials realised the extent of US intentions in

September 1994. 152 Visiting Washington, Yeltsin heard from Clinton that NATO membership
was open to all European democracies but that no new members would be announced before
the Russian and US elections in 1996. Regardless of US efforts to show that expansion was
not a threat to Russia, the reaction came fast. Kozyrev was expected to sign the PfP initiative
and establish a NATO-Russia special dialogue during a foreign ministers meeting in Brussels
on December 1. Earlier at the same meeting, it was announced that NATO would conduct an
enlargement study to be completed in less than a year. In response, Kozyrev refused to sign
either document and strongly censured NATO for pursuing enlargement. At the CSCE
meeting in Budapest, a few days later, Yeltsin harshly criticised NATO for drawing of new
lines of division in Europe. 153

The Russians were betting on the CSCE process to produce an inclusive European security
architecture. NATO’s double enlargement shattered this perspective, relegating Russia to the
margins of Europe. As Kozyrev remarks in Foreign Affairs,

If a partnership is built on mutual trust, then it is natural to recognize other rules as

well: the need not only to inform one another of decisions made, but also to agree on
approaches beforehand. It would be hard to accept an interpretation of partnership in
which one side demands that the other coordinate its every step with it while the
former retains complete freedom for itself. 154

150
Ashton B. Carter and William J. Perry, Preventive defense: a new security strategy for America (1999), p. 43-
44.
151
Goldgeier, 1999, p. 96-98; Talbott, 2003, p. 170.
152
Goldgeier, 1999, p. 72-73.
153
Ibid., 86-88.
154
Andrei V. Kozyrev, 'The Lagging Partnership' (1994), p. 66.
 191

A statement such as this, from a moderate and Western-oriented Russian politician, serves as
an example of the insufficiencies of the liberal model. The US did not offer concessions in
order to attract Russia into its liberal order. Likewise, institutional arrangements did not bind
the use of US power. As Williams and Neumann indicate, the Western rhetoric of integrative
European security combined with its contradictory actions helped to weaken liberal political
forces in Russia. 155 Ignoring Western appeals, Russian troops entered in Chechnya in
December 1994. In January, Moscow concluded a nuclear reactor deal with Iran. 156 From
1995 onwards, Russia started pursuing exclusivist economic and trade deals in Central
Asia. 157 The corollary of this Eurasian turn was the appointment of Yevgeny Primakov as
Foreign Minister in 1996. As head of the Federal Security Bureau, Primakov had long been a
critic of Russia’s alignment with the West. 158

As Pouliot argues, by the end of 1994 the prospects of establishing a working security
community between Russia and NATO had vanished. 159 The same reasoning applies to
constitutional bargaining and binding institutions. As much as the Clinton administration tried
to conciliate Russia, it needed to signal to prospective NATO members that enlargement was
on track. It also needed to answer Republican opposition, which was energised by the
takeover of both houses of Congress in the 1994 and continuously criticised the
administration for jeopardising NATO expansion in deference to Russia. In an attempt to
mend US-Russia relations, Clinton accepted an invitation to go to Moscow in May 1995. The
trip received considerable criticism at home and from European allies as well. This time, the
US message was conveyed clearly: expansion was inevitable, but the US was not trying to
exploit Russian weaknesses. While the US would seek to establish a strong NATO-Russia
relationship before expansion, Russia did not have a veto over enlargement. The
reconciliation efforts paid off: Yeltsin kept denouncing NATO’s expansion, but Russia joined
the PfP later in June. 160

With the Russian track in place, NATO published its enlargement study in September
1995. 161 But it was Talbott’s article in the The New York Review of Books which more clearly
stated the US rationale for enlargement. Talbott argued that the reasons for expansion were

155
Williams and Neumann, 2000, p. 359.
156
Goldgeier, 1999, p. 89.
157
Hancock, 2007, p. 80-81.
158
Asmus, 2002, p. 48; Pouliot, 2010, p. 165-66, 76.
159
Pouliot, 2010, p. 148-61.
160
Goldgeier, 1999, p. 88-93.
161
Ibid., 94-95.
 192

the promotion of democracy, free markets, and regional stability. But, uncharacteristically for
the administration’s most moderate voice in US-Russia relations, Talbott stated that ‘NATO
is and will remain for the foreseeable future (…) a military alliance and a collective defense
pact’. Moreover,

among the contingencies for which NATO must be prepared is that Russia will
abandon democracy and return to the threatening patterns of international behavior
that have sometimes characterized its history, particularly during the Soviet period. 162

Unapologetically, Talbott recognised two sets of factors which justified NATO’s expansion,
one of which was, in his own words, ‘anti-Russian’. He also recognised that such anti-Russian
factors were opposed by reformists committed to democracy in Russia, ‘largely because the
issue lends itself to such xenophobic demagogy’. But in concluding his article, Talbott’s only
answers to such tensions were that enlargement was going to happen regardless and that
Russian opposition to it was only going to make matters worse. Such a position, taken by
arguably the official most concerned with US-Russian relations, hardly supports the liberal
premise of US concessions and commitments in expanding its liberal order.

After Yeltsin’s re-election in July 1996, Secretary Christopher had called upon NATO heads
of states to meet the next year to issue invitations for the expansion of the alliance and
produce a formal charter to institutionalise NATO-Russia relations. 163 Negotiations for such a
charter would start only in late 1996, given Yeltsin’s health problems. Although NATO’s
Secretary General Javier Solana served as the formal negotiator with Primakov, his
instructions came directly from US officials. 164 The NATO-Russia Founding Act was signed
in Paris, on May 27, 1997. 165 The document was ‘based on an enduring political commitment
undertaken at the highest political level’ and established a consultative Permanent Joint
Council. Nonetheless, the Founding Act was not the type of legal commitment Russian
officials wanted from NATO. The only policy-relevant themes discussed in Paris were the
reaffirmation of previous unilateral statements made by NATO on the deployment of nuclear
weapons and on the deployment combat forces. The pattern of apparent Russian inclusion
while denying it real decision-making power was repeated. Contrary to the liberal model, the

162
Strobe Talbott, 'Why NATO Should Grow' (1995), p. 28-29.
163
Goldgeier, 1999, p. 105-06.
164
Ibid., 112-13.
165
Founding Act on Mutual Relations, Cooperation and Security between NATO and the Russian Federation.
NATO e-Library. Available at: http://www.nato.int/cps/en/natohq/official_texts_25468.htm.
 193

US did not make binding commitments in order to attract Russia into international
institutions; the NATO-Russia Founding Act was not binding by design.

Ironically, the main criticism the administration faced domestically was that its policies
conceded too much power to Russia. The most important voice in the opposition was Senator
Jesse Helms, chairman of the Senate’s Foreign Affairs Committee. While NATO members
were meeting in Madrid in July 1997, issuing invitations for the Czech Republic, Hungary
and Poland to join the alliance, Helms publicly criticised the administration. In the European
version of The Wall Street Journal, Helms accused Clinton and Talbott of transforming
NATO into a ‘into a nebulous “collective security” arrangement’, focused on nation-building
rather than on defence. 166 He further denounced the NATO-Russia Founding Act for giving
Russia ‘a voice at every level of the Alliance's deliberations’ and for citing ‘the U.N. Security
Council, where Russia has a veto.’ Declaring that the Senate could only approve NATO’s
expansion if the alliance retained its military character, Helms contrasted the administration’s
liberal arguments to Central and Eastern Europeans security concerns:

Lithuania’s former president, Vytautas Landsbergis, put it bluntly: “We are an

endangered country. We seek protection.” Poland, which spent much of its history
under one form or another of Russian occupation, makes clear it seeks NATO
membership as a guarantee of its territorial integrity. And when Czech President
Vaclav Havel warned of “another Munich,” he was calling on us not to leave Central
Europe once again at the mercy of any great power, as Neville Chamberlain did in
1938. 167

Such criticism, and the administration’s response to it, provides another element against
liberal interpretations of NATO’s expansion. As the administration prepared an elaborate
campaign to gather support in Congress and public opinion, NATO started to be presented
less as an institution of shared values and more as a collective defence pact. 168 When
Secretary of State Madeleine Albright appeared in front of the Senate Foreign Affairs
Committee to defend expansion, on October 7, she emphasised ‘NATO’s role as a military
alliance that was not being diluted by enlargement or by the NATO-Russia Founding Act.’
For at least three times during her statement and answers, which had been cleared previously
with Helms’ staff, Albright stressed that Russia would have no role in the alliance’s internal
matters, NATO doctrine, strategy, readiness, nor in the admission of new members. 169

166
Jesse Helms, 'New Members, Not New Missions', The Wall Street Journal Europe, July 9, 1997.
167
Ibid.
168
Goldgeier, 1999, p. 124.
169
Ibid., 128-30.
 194

In practice, the Clinton administration had never granted Russia a say over NATO issues,
either on enlargement or military actions in Bosnia. But it was only at the end of the process,
and in response to domestic opposition, that US official discourse caught up with its practices.
Contrary to what can be implied from the liberal model, that the ‘greater the power of the
leading state, the more incentives and capacities it will have to build order around binding
institutions’, the US did not make binding commitments in order to attract Russia towards
NATO. 170

5.2.7. Liberal contradictions

So far, the discussion above has shown how the concepts of constitutional bargain and
binding institutions find weak support in addressing the role of NATO in the German
reunification process and the alliance’s first round of expansion after the Cold War. However,
on a hard case scenario such as US and NATO relations with Russia, there is no evidence to
support the idea of an expanding liberal constitutional order based on binding commitments.
Eventually, the insufficiencies of the liberal order framework catch up with authors that had
been promoting its concepts throughout the 1990s and 2000s. When trying to account for
contemporary developments which do not fit the concept of a liberal international order,
liberal authors expose contradictions in their arguments and ultimately the normative content
of their analysis.

After Russia’s military intervention in Georgia in the summer of 2008 and increasing tensions
with the US and the EU, Daniel Deudney and Ikenberry tried to put these problems in the
context of a post-Cold War liberal international order. 171 The authors argue that the problem
with NATO’s expansion after the Cold War was ‘the insufficiency of its reach: integration
needed to incorporate Russia itself.’ Moreover,

the fact that NATO expansion was occurring at the same time that the Alliance was
fighting its first hot war, against Serbia (long the ‘little Slavic brother’ of Russia in the
Balkans), reinforced the Russian perception that NATO was essentially anti-Russian
in purpose. 172

170
Ikenberry, 2001, p. 72. Also, see Section 2.4.1 above.
171
Daniel Deudney and G. John Ikenberry, 'The Unravelling of the Cold War Settlement' (2009). In fact, both
authors had for some time been writing about emerging competitors and the characteristics which would make
the liberal international order prevail. See: G. John Ikenberry, 'The Rise of China and the Future of the West:
Can the Liberal System Survive?' (2008); Deudney and Ikenberry, 2009.
172
Deudney and Ikenberry, 2009, p. 51.
 195

NATO’s anti-Russian character would be reinforced by the three rounds of post-Cold War
expansion to former Soviet republics and former Warsaw Pact members, including the 2008
Bucharest Declaration stating that Ukraine and Georgia ‘will become members of NATO’; 173
by the termination of the Anti-Ballistic Missile Treaty by the George W. Bush administration
and the following build-up of missile defence in Europe; and by US efforts to bypass Russia
by creating other oil-pipeline routes from the Caspian Basin. 174

Deudney and Ikenberry argue that the initial Cold War settlement, mainly negotiated by the
George H. W. Bush administration, took into account Russian interests and used international
institutions to appease tensions and build trust, the main example being the role of NATO in
the German reunification process. These senior Bush administration policies would be
evidence of the US effort to expand its liberal model. However, the efforts unravelled during
the Clinton and second Bush administrations. The authors explain such outcomes not by
faulting the liberal model itself, but by pointing to ‘the incomplete democratic-capitalist
transition in Russia’ and a ‘combination of hardcore realists and neo-conservatives, together
with domestic interest groups representing, in particular, corporations and ethnic communities
with foreign attachments’ which shaped US policy towards Russia. 175

The fact that Deudney and Ikenberry do not discard the liberal model – but criticise US
foreign policy-makers for not acting according to it – displays how normative and analytical
elements are intrinsically linked in Liberal IR. Their attempt to interpret Russia’s reactions to
US, EU and NATO’s policies through the lenses of the liberal framework exposes at least
three clear contradictions. Firstly, even if one considers the initiatives of the senior Bush
administration as proper liberal policies, as the authors do, they were soon dismantled. This is
problematic for two reasons. Since US policies shifted with the change of administrations in
the White House, there is little evidence to state, as Deudney, Ikenberry and other liberal
authors do, that the US has pursued a strategy of liberal order building after the Cold War. At
most, one could say that the senior Bush administration adopted such a policy, but there were
no structural elements which made these initiatives carry over to the Clinton administration.
The second reason is that the change of policy also challenges the conceptual framework of
the liberal model and its institutional arrangements. Binding institutions are supposedly based
on binding commitments. As the policy on NATO’s expansion changed with the incoming

173
Bucharest Summit Declaration, NATO e-Library. Available at:
http://www.nato.int/cps/en/natolive/official_texts_8443.htm .
174
Deudney and Ikenberry, 2009, p. 41.
175
Ibid., 54, 57.
 196

administration, it is clear that nothing actually bound the US to its commitments towards
Russia. The case serves as an example of how liberal authors take the idea that institutional
arrangements bind the use of US power as a premise, with actual little evidence in this regard.

Secondly, Deudney and Ikenberry’s comments on the Russian economic transition are not
compatible with the liberal model interpretation of the post-Cold War era. Although the
derailing of the Russian economy was mostly a product of domestic factors, the authors
recognise that the strain of capitalism exported by the US and financial international
institutions placed

no emphasis on social equality and is widely associated with rising concentrations of

wealth. The extremely oligarchic distribution of wealth in modern Russia is to some
significant measure a result of this indifference to asset distribution. 176

But while recognising the negative impacts of neoliberal economic ideology in Russia,
Deudney and Ikenberry ignore the fact that these same neoliberal economic principles were
exported worldwide. The IMF, World Bank, WTO, and other economic institutions of the
US-led liberal international order exported neoliberal principles and practices to various
developing and least-developed states after the end of the Cold War. It is a reasonable
hypothesis, as previously discussed in Chapters 3 and 4, that these same principles had
deleterious effects in other parts of the world. As such, the benign effects of liberal
institutions should be questioned and examined, rather than merely asserted, as liberal
accounts tend to. 177

Thirdly, Deudney and Ikenberry point to ‘the intrusion of narrow but highly mobilised
domestic ethnic, corporate and bureaucratic groups into the policymaking process’ as the
source of misguided US policies. 178 Such reasoning poses an even more fundamental
contradiction. The liberal order model and Liberal IR in general are based on the premise that
liberal democratic states behave differently than others. 179 They are more peaceful, stable and
trustworthy. But Deudney and Ikenberry also recognise one of the central dilemmas of
modern democracy: ‘popular pressures and short-sighted interest groups’ at times drive
politics. If this is an ‘enduring basic tension in liberal societies’, as they put it, there is no
reason to accept the premise that liberal states and international constitutional settlements

176
Ibid., 54-55.
177
See Chapters 3 and 4 for an analysis of the IMF and GATT/WTO, respectively.
178
Deudney and Ikenberry, 2009, p. 59.
179
See Chapter 2 of this thesis, Section 2.3.1.
 197

would perform any better than others. As it does, Liberal IR cannot dissociate analysis from
its embedded normative elements.

In blaming misguided policy-makers and short-sighted interest groups, Deudney and

Ikenberry go against Liberal IR’s premises. The theory states that policy outcomes emanate
from societal preferences, even when prevailing forces happen to be ‘popular pressures and
short-sighted interest groups’. The authors’ call for an enlightened foreign policy, which
would recognise and adopt a liberal order strategy as the best available, is certainly legitimate.
But it is also ultimately political and cannot be sustained by a supposedly neutral and
scientifically-oriented Liberal IR.

5.3. Conclusion

With regard to the three cases addressed in this thesis, NATO is the international institutional
arrangement that most resembles the concept of a binding institution. Nevertheless, the
analysis above shows that these characteristics are not the product of constitutional bargaining
or liberal rationale. Both in the post-World War II and post-Cold War period, NATO did not
restrain the use of US power (binding against exploitation), although it did represent a strong
US commitment to European security (binding against abandonment). This characteristic was
not born out of a US-led constitutional bargain. Western European countries after World War
II requested a security guarantee from the US, just as Central and Eastern European countries
asked to join NATO after the Cold War. The Soviet and Russian threats respectively were
responsible for such initiatives.

The analysis above demonstrates how Liberal IR makes use of generalised historical accounts
in an attempt to support the liberal model. NATO was created as a security treaty; it only
evolved to a security organisation in the face of communist threats. After the Cold War,
liberal analysis assumed that NATO has always been a collective defence organisation, albeit
one based on shared ideas and values. NATO eventually developed into such a pluralistic
security community, but it was not created that way. Furthermore, the redefinition of its
purpose and missions was a political process put into place after the end of the Cold War,
which promoted a revisionist history of the alliance’s creation. Liberal IR uncritically accepts
such revisionist history, and in this way carries and reproduces its political and normative
content. Finally, authors support the liberal order model using the weak cases of NATO’s
 198

expansion to Central and Eastern Europe. On a hard case scenario, such as US and NATO
relations with Russia, the liberal hypothesis finds little support. The insufficiencies and
contradictions of the liberal model become apparent when liberal authors try to account for
contemporary political developments. Ultimately, these cases show that Liberal IR cannot
dissociate its analytical and normative stances; its authors often promote liberal principles and
values embedded in supposedly scientific and neutral analysis.
6. Liberal IR, policy and policymakers

Previous chapters have examined liberal interpretations of US foreign policy at the creation of
the IMF, GATT and NATO, and in relation to the expansion and changes in these institutions
in the post-Cold War period. On the basis of the same pivotal cases as Liberal IR, the research
in this thesis has shown that liberal accounts are theoretically and empirically flawed. Chapter
6 now turns to issue of the influence which Liberal IR concepts and interpretations have had
in US policy and public debates, by addressing the relationship between academia and
policymaking in the US.

The first half of the chapter discusses the so-called theory-practice gap and the apparent
paradox that an academic paradigm such as Liberal IR might be influential in closing such a
gap. Part of the answer lies in the way one defines influence: directly over the policymaking
process, or indirectly by various elusive pathways. Liberal scholars have served in different
US administrations and governmental agencies; they also populate think tanks, which often
work as transmission belts between theoretical concepts and practical policy prescriptions. As
such, the sections below position Liberal IR scholars in relation to government and think
tanks in order to properly address their influence. The second half of the chapter looks at
Liberal IR in relation to competing approaches, particularly neoconservatism. The evolution
of the democratic peace thesis, the Princeton Project on National Security, and the idea of
international institutions and cooperation, are analysed in sequence as cases of direct and
indirect Liberal IR influence over policymaking processes.
 200

6.1. Liberal IR and the theory-practice gap

Theory and practice, academics and practitioners, the Ivory Tower and the Beltway; various
names have been given to the differences between those who study International Relations
and those who practise international relations. 1 The reasons for such distance are well
documented, relating to different structures and incentives in government and academia, but
ultimately to the different nature of these activities.

Regarding US foreign policymaking, authors who support the existence of a theory-practice

gap, and the need to bridge it, often share three assumptions. 2 The first assumption is that
academic knowledge can make policy better. 3 The second assumption is that there was a
golden age of the theory-practice relationship in which academic knowledge was influential
over policymaking. The end of World War II and the beginning of the Cold War marked this
era. At the time, US officials ‘had much of their general worldview formed or reinforced by
exposure to Hans Morgenthau’s stark Realpolitik’. 4 The academic literature on arms control,
as one example, had an ‘impact on key aspects of U.S. nuclear weapons deployments,
investments in the command-and-control apparatus, and operational nuclear doctrines.’ 5
Michael Desch states that the apex of the golden age was the Kennedy administration, ‘full of
the individuals whom author David Halberstam notably described as “the best and
brightest”.’ 6

However, from the 1960s onwards the academic and policymaking circles started to diverge.
One given reason is that the civil rights movement and the war in Vietnam drove academia
towards the left of the US political spectrum, especially in regards to defence policymakers. 7
Other reasons focus on what Steve Van Evera calls academia’s ‘cult of the irrelevant’ and Ian

1
Alexander L. George, Bridging the gap: theory and practice in foreign policy (1993); Christopher Hill and
Pamela Beshoff, eds., Two worlds of international relations: academics, practitioners and the trade in ideas
(1994); Bruce W. Jentleson and Ely Ratner, 'Bridging the Beltway-Ivory Tower Gap' (2011).
2
George, 1993; Joseph Lepgold and Miroslav Nincic, Beyond the Ivory Tower: International Relations Theory
and the Issue of Policy Relevance (2001); Bruce W. Jentleson, 'The Need for Praxis: Bringing Policy Relevance
Back In' (2002); Stephen M. Walt, 'The relationship between theory and policy in international relations' (2005);
Joseph S. Nye Jr., 'The Relevance of Theory to Practice' (2008); Joseph S. Nye Jr., 'Scholars on the Sidelines',
The Washington Post, April 13, 2009; Jentleson and Ratner, 2011.
3
Although this first premise might sound consensual, Janice Gross Stein reminds us that we have ‘no systematic
evidence that social scientists make “better” policy analysts or policymakers.’ See: Stephen D. Krasner et al.,
'Autobiographical reflections on bridging the policy-academy divide' (2009), p. 120.
4
Lepgold and Nincic, 2001, p. 2. See also: Hoffmann, 1977.
5
Lepgold and Nincic, 2001, p. 2. See also: Hoffmann, 1977.
6
Michael C. Desch, 'If, When, and How Social Science Can Contribute to National Security Policy', (2010).
7
Ibid.
 201

Shapiro names a ‘flight from reality’. 8 These processes would also have started in the 1960s,
with the scientific revolution in US Political Science and IR. 9 The disciplinary focus shifted
from practical political matters that had motivated the ‘traditionalists’ to presenting and
testing explicit and falsifiable hypotheses. Over time, technique triumphed over substance:
research programs became increasingly concerned with methodological and theoretical
advancements at the expense of real-world issues. Similarly, the institutional downgrading of
area studies weakened a long-established source of expertise on foreign societies. The
academic incentive structure reinforced such trends. Scholars get hired and promoted based
mostly on their capacity to publish in specialised journals directed to narrow academic
audiences. 10 Policy-oriented publications are often ignored, as op-eds and policy papers are
not peer-reviewed. Other explanations for the theory-practice gap state that scholarly work is
too theoretical and too quantitative; that it uses too much jargon; that its findings are often
qualified and unable to provide direct policy prescriptions; or simply that scholarly work
takes too long to read in a decision-making environment.

While scholars diverge on the benefits and risks of bridging the gap, they agree on a third and
more fundamental assumption: that it is possible for scholars to influence policymaking. 11
This premise, nevertheless, is not self-evident. Looking at US national security policy from
the 1940s to the 1970s, historian Bruce Kuklick found that the influence of intellectuals in
government was of limited and problematic nature, at best providing the rationale for policies
adopted for political reasons. 12 In probably the only survey of policymaker’s perceptions of
academic influence, Paul Avey and Desch found that respondents ‘were highly skeptical
about social science’s potential to contribute to policymaking.’ 13 Stephen Krasner, who
served as Director of the Policy Planning Staff at the State Department from 2005 to 2007, is
convinced that the academics-practitioners gap is ‘unbridgeable’. 14

8
Ian Shapiro, The Flight from Reality in the Human Sciences (2005); Stephen Van Evera, 'Director’s Statement:
Trends in Political Science and the Future of Security Studies', (2010).
9
Lepgold and Nincic, 2001, p. 12.
10
Ibid., 14-19; Jentleson and Ratner, 2011, p. 7.
11
A complementary shared premise is the fact that such bridging tends to be conducted on policymakers’ terms.
Academics are the ones that have to adapt, often running the risk of getting sucked in to policy agendas. See:
Christopher Hill, 'Academic International Relations: The siren song of policy relevance' (1994). On the risks of
bridging the gap, see also Robert Keohane’s comments in: Krasner et al., 2009.
12
Bruce Kuklick, Blind Oracles: Intellectuals and War from Kennan to Kissinger (2006).
13
Paul C. Avey and Michael C. Desch, 'What Do Policymakers Want From Us? Results of a Survey of Current
and Former Senior National Security Decision Makers' (2014), p. 235.
14
Krasner et al., 2009, p. 116.
 202

6.1.1. Types of influence

In order properly to examine if it is possible for scholars to influence policymaking, it is first

necessary to qualify the distinct types of influences that academics – and intellectuals more
generally – might exert over policymaking and public debates. Additionally, one must also
find ways to substantiate the existence of such influence. 15

One recurrent conception is that the scientific work done in academia eventually reaches
policymaking in a ‘trickle down’ process. This would require no particular work besides
normal academic activities. As scientific research progresses and results become generally
accepted, policymakers would eventually reflect its findings. Also, policymakers are often
trained in graduate schools, in which programs incorporate academic research. Officials
would get influenced by their academic background and by the constant flow of new entrants
in government.

In surveying policymakers from the senior Bush, Clinton and Bush administrations, Avey and
Desch ‘seriously qualify the “trickle down” theory that basic social science research
eventually influences policymakers’. Their results indicate that officials have little knowledge
of, and confidence in, academic methods and theories. 16 The respondents point out that the
most influential roles of scholars in policymaking would be as ‘informal advisers’ and
‘creators of new knowledge’, not necessarily as ‘direct policy participants’ or ‘trainers of
policymakers’, as some would think. 17 Additionally, the survey’s findings indicate that
policymakers more often use academic ‘arguments’ (or theories) rather than ‘evidence’, and
in both cases such knowledge is more useful for framing issues and providing intellectual
background rather than being directly applicable. Despite their aversion to sophisticated
methodologies and theoretical jargon, ‘the thing [sic] policymakers most want from scholars
are frameworks for making sense of the world they have to operate in.’ 18

15
Obviously, governments can also influence scholars and scholarly work, and often do that by commissioning
reports or funding research. See: Hill, 1994, p. 17. Lepgold and Nincic differentiate between ‘demand-driven’
academic knowledge, in which research is ignited by external incentives, and ‘supply-driven’ knowledge, in
which research had been previously conducted and can later become policy-relevant. Lepgold and Nincic, 2001,
p. 55-61. The discussion below only addresses the latter case, in other words, how academics might influence
policymaking without having being previously requested to generate inputs.
16
Avey and Desch, 2014, p. 228.
17
Joseph Nye’s comments in: Krasner et al., 2009, p. 117-20.
18
Avey and Desch, 2014, p. 237, 44.
 203

Moving away from the trickle down interpretation, one simple differentiation is that between
direct and indirect influence. 19 Direct influence might exist when scholars hold official
positions which allow them to take part personally in policymaking processes. Conversely,
indirect influence refers to ways in which scholars exert influence through channels other than
direct involvement. Although apparently straightforward, direct influence can be misguiding.
The fact that scholars personally participate does not mean that their academic background is
a major variable in the tasks they are performing. Government officials and academics have
very distinct obligations: academics-turned-policymakers have to adapt accordingly.
Similarly, the fact that scholars take part in policy arguments does not mean that they can win
such arguments with academic-inspired policy prescriptions.

This speaks to the theory-practice gap in curious ways. The fact that academics take part in
government does not mean necessarily that academia as an institution is contributing to
policymaking. 20 On the other hand, the fact that IR is poorly contributing to real-world
problems in general does not mean that some of its concepts might not be better positioned to
have an impact in policy making. As discussed below, this is part of the explanation of why
Liberal IR has had political implications in spite of the theory-practice gap.

Indirect influence also has its nuances. One way in which scholars exert such influence is
through the media, television and radio broadcasts, and publications in newspapers and
magazines. Academics might also develop influence by publishing books directed to broader
non-academic audiences, and increasingly by establishing a presence on the Internet. 21 By
providing expert knowledge and commentary to broader audiences, scholars can support or
criticise official policy, and even promote their own policy prescriptions.

Indirect influence should also be conceived in broader terms. As Christopher Hill puts it, it is
‘evident that the spirit of an age, the political culture of a society and the preoccupations of a
generation are all likely to be profoundly influenced by the output of those who write, think
and observe for a living.’ 22 Scholarly expertise and opinion tend to be respected and
influential regarding the ways in which particular subjects are, or are not, discussed in the
public and political realms. Scholars have the ability to encourage or discourage particular

19
Aggie Hirst, 'Intellectuals and US foreign policy' (2009), p. 108.
20
Krasner et al., 2009; Avey and Desch, 2014.
21
Avey and Desch data indicate that the printed press is the most media to influence policymakers. Avey and
Desch, 2014, p. 238.
22
Hill, 1994, p. 12.
 204

ways of understanding issues. Over time, this network of narratives frames what is politically
important and what is not. 23 As much as it is difficult to difficult to ‘trace direct links between
political outcomes or agendas and currents of intellectual life’, academics are ‘certainly
crucial intermediaries in determining how the mass of people understand the world beyond
their own experiences’. 24

Nevertheless, direct scholarly influence in policymaking is hard to substantiate. In an

environment in which ideas and policies are often collectively co-authored, it is almost
impossible to point to original sources and their inspirations. The higher the policymaking
level, more of the decision-making process happens orally, with scant paper-trails to be
followed. Scholars have to rely on interviews, personal memoirs or journalistic reports which
are hardly neutral and frequently disputed. Indirect influence presents similar challenges.
Does the number of media appearances, op-eds published or books sold make an author and
its concepts influential regarding policymaking? Even scholars who testify before Congress or
formally serve in government agencies cannot be sure of if and how their ideas shaped policy
outcomes. 25

Given these methodological dilemmas, rather than trying to state categorically that Liberal IR
authors and concepts had distinct influences over specific US foreign policy initiatives, the
following sections discuss when and under what conditions Liberal IR has contributed to
shaping the broader policymaking environment and public debates. The first step in this
direction is to position liberal scholars in relation to government and the think tank
community.

23
Hirst, 2009, p. 108.
24
Hill, 1994, p. 12.
25
Joseph Lepgold, 'Is Anyone Listening? International Relations Theory and the Problem of Policy Relevance'
(1998); Donald E. Abelson, 'What were they thinking? Think tanks, the Bush presidency and US foreign policy'
(2009), p. 94.
 205

6.1.2. Liberal scholars and the revolving door

Academics might exert direct influence in policymaking by taking positions in government

departments and agencies. But another path for influence is the think tank community. In fact,
the growing number, resources and influence of think tanks in US foreign policy has been
pointed out as one of the reasons for the widening of the theory-practice gap. 26 Engaging with
think tanks, nevertheless, might be an efficient way for academic scholars to promote their
ideas to policymaking circles and broader audiences. The discussion below shows how
Liberal IR scholars have worked through think tanks in recent years. This is one of the
reasons why Liberal IR remained relevant outside academia, in spite of the theory-practice
gap.

Think tanks are institutions that perform research and advocacy on public policy issues. They
come in various shapes and sizes: think tanks vary according to their areas of expertise,
according to the size of their funding and staff, on how they are funded, and on their target
audiences. Similarly, some think tanks are more research-oriented while others are more
advocacy-oriented. 27 Regarding foreign policy, one could say that think tanks and the private
foundations that support them actually preceded, and took part in, the institutionalisation of
IR as an academic discipline. 28

In the early twentieth century, think tanks were originally conceived as institutions to insulate
scholars both from teaching responsibilities and partisan politics, as a way to promote better
research to serve the public interest. Nowadays, however, many think tanks ‘resemble interest
groups and political action committees by encouraging decision-makers, through various
channels, to implement policies compatible with their ideological beliefs and those shared by
their generous benefactors.’ 29 Such influence is exerted in a variety of ways. Think tanks
produce a number of studies and publications directed to policymakers, journalists, and
generally broad audiences. This material provides research expertise – which can vary in
quality – in shorter and accessible language as reports or policy papers, often with practical
policy prescriptions. Although they often rely on and summarise academic work – and
sometimes distort it – think tank publications have more appeal to the media and to
policymakers than academic texts.
26
Jentleson and Ratner, 2011, p. 7.
27
Donald E. Abelson, A Capitol Idea: Think Tanks and US Foreign Policy (2006), p. 45.
28
Guilhot, ed., 2011; Parmar, 2012.
29
Abelson, 2006, p. 7.
 206

Large and well-known think tanks carry a presumption of prestige and excellence with them.
Their researchers often appear on television shows and in other media to provide political
commentary. Private addresses to government agencies, business board meetings, trade
associations and university audiences help to disseminate think tank analysis and policy
prescriptions. The same applies for hearings in Congress. The seminars, lunches and other
activities hosted by think tanks serve as much to propagate ideas as to put people in contact,
providing informal access to policymakers. This impact is widened by the network of contacts
these institutions develop over time, originating from personal relationships of its donors and
supporters, from previous work project, and from personal contacts of its members. It is
common for think tank researches to serve for different stretches of time in government and
later return as positions change or administrations finish. 30

As much as a think tank’s influence also poses methodological difficulties in terms of

measurement, there is a general consensus that researchers in think tanks are better positioned
to influence policymaking than academic scholars. 31 If only because their institutional aim is
markedly different: academia’s fundamental concern is with scientific research and teaching,
while think tanks are on the business of producing policy-relevant research and influencing
policymaking. But while some authors see the growing number of foreign policy think tanks
and their advocacy as another reason for the irrelevance of academia in contemporary foreign
policy debates, 32 it is argued below that, at least in the case of Liberal IR, its scholars found
ways to make use of think tank structures to promote their ideas and concepts and augment
their policy relevance.

Anne-Marie Slaughter and G. John Ikenberry deserve special notice here. Both have
developed careers that intersect academic research, projects in think tanks and government
positions. Slaughter climbed higher in serving as Director of Policy Planning for the State
Department during the first two years of the Obama administration. The Policy Planning Staff
is known as the State Department’s in-house think tank. Before that, Slaughter had been the
Dean of Princeton’s Woodrow Wilson School of Public and International Affairs from 2002-
2009, a program regarded as an ‘international affairs school’, not a strict IR academic
department. Its staff combines academics, former practitioners and people with different

30
Ibid., 149-62; Howard J. Wiarda, Think Tanks and Foreign Policy: The Foreign Policy Research Institute and
Presidential Politics (2010), p. 41-44.
31
Abelson, 2006, p. 164-81; Abelson, 2009, p. 94.
32
Jentleson and Ratner, 2011, p. 7.
 207

international relations backgrounds, more focused on contemporary issues. Tellingly,

Slaughter became President and CEO of the think tank New America Foundation in 2013.

The Edmund A. Walsh School of Foreign Service at Georgetown University, where Ikenberry
was a professor from 2001 to 2004, has the same profile of the Woodrow Wilson School at
Princeton, where he is currently employed. 33 Ikenberry has never taken a prominent position
in US government, but he has worked at the State Department Policy Planning Staff as a CFR
Fellow during 1991-92, and later as part of an Advisory Group from April 2004 to January
2005. He has been a long time book reviewer for Foreign Affairs and has taken part in
different projects at the Council on Foreign Relations (CFR). He served as a senior associate
at the Carnegie Endowment for International Peace and held various other fellowships in
policy-geared institutions, including passages at the Woodrow Wilson International Center for
Scholars and the Brookings Institution.

The transits between government, academia, and think tanks, of which Slaughter and
Ikenberry are just two examples, show the ways by which Liberal IR concepts might have an
influence over US foreign policymaking. The following sections discuss some instances in
which influence may have been exerted.

33
Princeton and Georgetown are not, by any means, the only universities to host policy-oriented international
affairs schools. The Kennedy School at Harvard, the SAIS at Johns Hopkins, the Jackson Institute at Yale and
the SIPA at Columbia are but a few examples.
 208

6.2. Liberal influence and new ideas

Avey and Desch’s survey cited above found out that policymakers make use of social science
arguments (or theory) more often than they make use of social science evidence. In the face of
policymakers’ aversion to sophisticated methods, the authors interpret that as evidence of
them looking for ‘middle-range theory’. 34 The survey also points out the preference for
qualitative studies rather than quantitative approaches. 35 Middle-range and qualitative is
precisely the type of Liberal IR research discussed in this thesis, and the finding supports its
policy relevance. Nevertheless, Liberal IR is not the only conceptual framework jousting for
influence over US foreign policy. The section below discusses liberal influence in relation to
the neoconservative movement, which was notably present during the years of the younger
Bush’s administration.

6.2.1. The liberal synthesis

Much was written about the influence of neoconservative academics and policymakers over
the Bush administration, particularly in relation to its disregard of international institutions, its
reactions to 9/11 and the invasions of Afghanistan and Iraq. 36 Deputy Secretary of Defense
Paul Wolfowitz is often pointed out as the highest-ranking neoconservative inside the Bush
administration. Other key figures were: Douglas J. Feith, Under Secretary of Defense for
Policy; Lewis ‘Scooter’ Libby, the Vice President’s Chief of Staff; Elliott Abrams, at the
National Security Council; David Frum, a White House speechwriter; and Richard Perle,
member of the Defense Policy Board. Outside government, neoconservative ideas were
promoted by The Project for the New American Century (PNAC), a small think tank founded
in 1997, and a roster of public figures such as William Kristol and Robert Kagan, founders of
PNAC, Charles Krauthammer, Francis Fukuyama and Max Boot.

During the Clinton administration, neoconservatives started to promote a neo-Reaganite

foreign policy, a conservative strategy different from realist and isolationist tendencies in the
Republican Party. 37 According to Kristol and Kagan, US hegemony was the foundation of

34
George, 1993, p. 139-42; Avey and Desch, 2014, p. 241.
35
Avey and Desch, 2014, p. 232.
36
James Mann, Rise of the Vulcans: The History of Bush's War Cabinet (2004); Stefan Halper and Jonathan
Clarke, America Alone: The Neo-Conservatives and the Global Order (2005).
37
William Kristol and Robert Kagan, 'Toward a Neo-Reaganite Foreign Policy' (1996).
 209

peace and the international order; therefore, the first objective of US foreign policy should be
to preserve and enhance US hegemony. PNAC’s report Rebuilding America’s Defenses,
released in September 2000, gained endorsements from high-profile Republican figures. 38 In
order to achieve its strategic goal to ‘preserve pax americana’, the document established four
core missions for US military:

defend the American homeland; fight and decisively win multiple, simultaneous major
theater wars; perform the ‘constabulary’ duties associated with shaping the security
environment in critical regions; transform U.S. forces to exploit the ‘revolution in
military affairs;’ 39

When the Bush administration started to implement its ‘war on terror’, many analysts pointed
to PNAC and neoconservatives as the main architects of the so-called Bush Doctrine. 40 Since
then, many others have dismissed such accounts. 41 Although neoconservatives populated the
mid-echelon of the Executive branch, there was not one neoconservative among the top Bush
decision-makers. As Stefan Halper and Jonathan Clarke put it,

Vice-President Dick Cheney and Defense Secretary Donald Rumsfeld, who would be
better described as American nationalists than as neoconservatives, have found that
many of their deeply held beliefs about American exceptionalism and unilateralism
parallel neo-conservative thought and have been decisive in their support for the
underlying neo-conservative ideological thrust. (…) Without their support, the neo-
conservative agenda could never have been implemented. 42

Halper and Clarke point out the overlap of ‘deeply held assumptions’ between traditional and
neoconservatives, which enabled a unilateral foreign policy agenda to move forward. In
effect, Cheney, Rumsfeld, and National Security Advisor Condoleezza Rice were traditional
national-interest conservatives. 43 They were previous critics of the Clinton administration’s
focus on nation building and human rights, and highly sceptical of US interventions in the
Balkans, which at the time were defended by neoconservatives. Similarly, traditional
conservative think tanks, as the AEI and the Heritage Foundation, arguably had more
influence over Bush’s foreign policy than neoconservative PNAC. 44

38
PNAC, 'Rebuilding America’s Defenses: Strategy, Forces and Resources For a New Century', (2000).
39
Ibid., iv.
40
Hirst, 2009.
41
Max Boot, 'Think Again: Neocons' (2004); Abelson, 2006, p. 201-24; Inderjeet Parmar, 'A Neo-Conservative-
Dominated US Foreign Policy Establishment?' (2008).
42
Halper and Clarke, 2005, p. 14.
43
Condoleezza Rice, 'Promoting the National Interest' (2000).
44
Parmar, 2008; Abelson, 2009.
 210

If, on the one hand, neoconservatives did not have as much influence over the Bush
administration as might have been the case, on the other hand there was a broad consensus
between traditional conservative groups, neoconservatives, and Wilsonian liberals in
supporting the so-called unilateral neoconservative agenda. Although these groups differed on
the reasons for foreign intervention and on their modus operandi, they all supported the need
for US interventions abroad, either multilaterally or unilaterally, and believed in the benign
character of US hegemony. These traits highlight the influence of liberal ideas and concepts,
or a liberal synthesis. In recasting its brand of foreign policy, neoconservative authors got
considerably closer to Wilsonian liberals regarding the desirability of foreign interventions.
Kristol and Kagan supported the argument that the US should play the role of ‘benevolent
global hegemony’ and put ‘moral clarity’ as one of its main imperatives. 45 Boot calls
neoconservatives ‘hard Wilsonians’, who believe that the US should use force abroad to
promote its ideals and its interests, ‘not only out of sheer humanitarianism but also because
the spread of liberal democracy improves U.S. security’. 46

Much of this discussion was precipitated by the Bush administration change of rhetoric
regarding the invasion of Iraq. In the build-up of the invasion, the need for a pre-emptive
strike was sustained on the threat pose by Iraq’s weapons of mass destruction. Later, as no
such weapons were found, the administration emphasised regime change and the
democratisation of Iraq as the rationale for the invasion. In face of this change, scholars
disagree over whether the spread of democracy has always been part of the neoconservative
ideology. In practice, such a connection was established by Bush’s actions. 47 Liberals
themselves recognise the proximity between neoconservatives and Wilsonians. Likewise, the
misgivings of neoconservatives came to haunt liberal authors, particularly in face of the
continuing debacle in Iraq. 48

This discussion highlights a fundamental consensus around liberal ideas and concepts among
different factions of the US foreign policy debate. Traditional nationalist-conservatives,
neoconservatives and liberals basically agree on interpretations derived from Liberal IR
scholarship. In his autobiographical notes, Krasner provides two examples. He cites Deputy
45
Kristol and Kagan, 1996, p. 20, 27.
46
Boot, 2004, p. 24. Conservatives and neoconservatives had previously criticised the Clinton administration for
putting legalism, humanitarianism and multilateralism before US interests. See: Michael Mandelbaum, 'Foreign
Policy as Social Work' (1996); Rice, 2000. For a liberal rebuttal, see: Stanley Hoffmann, 'In Defense of Mother
Teresa: Morality in Foreign Policy' (1996).
47
For a dismissal of such connections, see: Maria Ryan, Neoconservatism and the New American Century
(2010).
48
Ikenberry et al., eds., 2008.
 211

Secretary of State Robert Zoellick’s use of the idea of ‘responsible stakeholders’ and Rice’s
use of ‘transformational diplomacy’ as examples of theoretically-informed concepts that made
their way into policymaking. 49 Krasner, Zoellick and Rice are realist thinkers by all standards.
Nevertheless, both concepts refer to liberal theories. Transformational diplomacy – the US
aim to work with ‘partners around the world, to build and sustain democratic, well-governed
states’ – is directly derived from the democratic peace thesis and the premise that the
domestic structure of states define their behaviour. The idea that states should be responsible
stakeholders of the international order is derived from liberal studies which assert the benefits
of cooperation in international institutions and the existence of a benign international order –
precisely the literature discussed in this thesis. As much as different schools of US foreign
policy diverge on their analysis of threats and policy prescriptions, they seem all to start from
shared liberal premises: the benign character and desirability of market-democracies, liberal
international order and US hegemony. 50

Similarly, liberals, conservatives and neoconservatives support the reconceptualization of the

concept of sovereignty. Liberals emphasise the idea of ‘sovereignty as responsibility’,
promoted by the UN doctrine of Responsibility to Protect, which imposes duties on states to
ensure the rule of law and to avoid humanitarian crises. 51 This is the same principle of
conditional sovereignty used by conservatives and neoconservatives in the Bush
administration to defend pre-emptive strikes in states supposedly harbouring terrorists and
threatening international peace. 52 As much as analysts and policymakers might diverge on
what constitutes an international crisis and how the US should intervene, there is consensus
over the fact that US foreign policy should not be restricted by the traditional concept of
sovereignty. As Tony Smith argues, it is often the case that the only substantive difference
between neoconservatives and liberals in foreign policy is their preference for either unilateral
or multilateral action. 53

This liberal consensus is not coincidental. As Inderjeet Parmar recounts, three particular
developments forged the liberal synthesis:

49
Krasner et al., 2009, p. 113.
50
For similar arguments, see: Michael C. Desch, 'America’s Liberal Illiberalism: The Ideological Origins of
Overreaction in U.S. Foreign Policy' (2007); Michael C. Desch, 'The More Things Change, the More They Stay
the Same: The Liberal Tradition and Obama’s Counterterrorism Policy' (2010).
51
Anne-Marie Slaughter, 'Wilsonianism in the Twenty-first Century' (2008), p. 100.
52
Ikenberry, 2002, p. 52-53.
53
Tony Smith, 'Wilsonianism after Iraq: The End of Liberal Internationalism?' (2008).
 212

an enormous increase in the influence of conservatism and of conservative

organizations – such as the Heritage Foundation – during the 1990s; the rise of a
vociferous subcomponent of conservatism from the 1970s – the neo-conservatives;
and (…) the development since the late 1980s of a robust, crusading and theoretically
confident liberal interventionism, built around a belief in the efficacy of ‘democratic
peace’ and ‘democratic transition’ theory. 54

The sections below address three instances in which the influence of the liberal synthesis can
be discerned in this new foreign policy consensus: the spread of the democratic peace thesis,
the development of the Princeton Project on National Security, and the diffusion of the idea of
international cooperation within institutions and a liberal international order.

6.2.2. The democratic peace thesis

Chapter 2 briefly discussed the rationale and empirical evidence behind the democratic peace
thesis and its place in Liberal IR. 55 Research showing that democratic states are unlikely to go
to war with each other started to appear in the late 1960s. 56 But it was only in the late 1980s
and early 1990s that more significant statistical results elevated the status of the democratic
peace thesis in IR. 57 As it showed robust results and gained more adherents, the democratic
peace was proclaimed to be ‘as close as anything we have to an empirical law in international
relations’. 58 Nevertheless, the theory is still disputed, particularly regarding causality,
meaning the specific variable or set of variables that generates peace. 59

Scholars claim that the scientific evidence provided by the research on the democratic peace
made it relevant to policymakers, particularly for Clinton but also in the Bush and Obama
administrations. 60 Early on, National Security Advisor Anthony Lake defined Clinton’s
foreign policy strategy as one of the engagement and enlargement of open markets and
democratic regimes to former communist states and other areas of the world. 61 The 1996
National Security Strategy stated that ‘national security policy is (…) based on enlarging the

54
Inderjeet Parmar, 'Foreign policy fusion: Liberal interventionists, conservative nationalists and
neoconservatives - The new alliance dominating the US foreign policy establishment' (2009), p. 178.
55
See Chapter 2 of this thesis, Section 2.3.1.
56
Lepgold and Nincic, 2001, p. 112-13.
57
Zeev Maoz and Nasrine Abdolali, 'Regime Types and International Conflict, 1817-1976' (1989); Zeev Maoz
and Bruce Russett, 'Alliance, Contiguity, Wealth, and Political Stability: Is the Lack of Conflict Among
Democracies a Statistical Artifact?' (1992).
58
Jack Levy, 'Domestic Politics and War' (1988), p. 88.
59
Brown, Lynn-Jones and Miller, eds., 1996; Sebastian Rosato, 'The Flawed Logic of Democratic Peace Theory'
(2003).
60
Avey and Desch, 2014, p. 242-43.
61
Lake, 1993.
 213

community of market democracies while deterring and limiting a range of threats to our
nation, our allies, and our interests.’ 62 On various occasions, President Clinton mentioned his
belief that democracies rarely fight one another and make more reliable partners in
international relations. The President even ‘specifically cited his belief in the democratic
peace findings’ in 1994 ‘as a basis for American action in restoring Bertrand Aristide to
power in Haiti.’ 63

In spite of the apparent policy influence of the democratic peace thesis, Joseph Lepgold and
Miroslav Nincic noted that the White House revisions of the National Security Strategy in
1997 and 1998 did not mention the enlargement of market democracies but rather ‘the more
general heading of engagement.’ 64 National Security Council official Joseph Bouchard gave
two reasons for such change:

The first was the finding that although democracies are unlikely to fight each other,
they are not more pacific overall. The second was the more recent suggestion by a
number of political scientists that, independently of what may apply to established
democracies, nations going through the process of transition from autocracy to
democracy may be quite war-prone. 65

Clinton’s Deputy Secretary of State corroborates these views. In a 1996 Foreign Affairs
article defending democracy promotion, Strobe Talbott explicitly acknowledges that

political science scholarship supports the premise that democracies are less likely to
fight wars with each other – and more likely to win wars against autocratic states (…)
However, there has been considerable debate over whether democracies are more or
less likely to go to war against nondemocratic states. 66

The evidence suggests that policymakers not only took the democratic peace thesis into
account, but also changed their initial policy stance given the disputed status of the academic
literature. The influence of the democratic peace thesis corroborates the aforementioned
survey results showing that policymakers think of academic knowledge as more useful in
terms of arguments and frameworks, as they have adapted the theoretical framework and kept
using it as ‘engagement’, while discarding the contradictory empirical evidence for policy

62
A National Strategy for Engagement and Enlargement, (1996).
63
Bruce Bueno de Mesquita and David Lalman, War and Reason: Domestic and International Imperatives
(1994), p. 232.
64
Lepgold and Nincic, 2001, p. 115.
65
Ibid. Bouchard was probably referring to works such as: Edward D. Mansfield and Jack Snyder,
'Democratization and the Danger of War' (1995).
66
Strobe Talbott, 'Democracy and the National Interest' (1996), p. 49, note 2.
 214

purposes. 67 Joseph Kruzel, a political scientist and Defence Department official during the
Clinton administration, states that the democratic peace ‘had substantial impact on public
policy’ due to its conceptual simplicity rather than its scientific rigor. 68 From a US foreign
policy perspective, the democratic peace clearly defines good states, bad states, and what to
do about it: spread democracy to turn bad states into good states.

Furthermore, as Parmar shows, the democratic peace thesis is a central part of the process of
liberal synthesis described above. 69 The author traces the process of the securitisation 70 of the
democratic peace focusing on liberal and conservative authors, and their work through various
think tanks and institutions. Ideas have a better chance of framing policymaking and public
debates in changing political environments and crisis situations. 71 Clinton’s first presidential
campaign in 1992, following the unexpected demise of the USSR the year before, presented
such an opportunity. Working at the democratic think tank the Progressive Policy Institute
(PPI), Stanford scholar Larry Diamond was able to impress the democratic peace thesis upon
Clinton’s foreign policy team. 72 Parmar shows how Diamond’s work at the PPI and later at
the Carnegie Commission on Preventing Deadly Conflict, and his advocacy inside the
administration, supported Lake’s approach of democracy enlargement as the successor to the
doctrine of containment. 73

Diamond was a scholar-activist, but not the main academic proponent of democratic peace
thinking. That title would better fit Michael Doyle, whose work would also influence US
foreign policymaking. 74 His research on the democratic peace was initially funded by the
Ford Foundation, with subsequent work funded by the MacArthur Foundation. 75 In the
following years, Doyle’s research and democratic peace in general had a central place in the
pages of International Security, one of IR’s most influential journals. International Security is
published by Harvard’s policy-oriented Center for Science and International Affairs. Also

67
Avey and Desch, 2014, p. 237, 44.
68
Joseph Kruzel, 'More a Chasm Than a Gap, but Do Scholars Want to Bridge It?' (1994), p. 180. Avey and
Desch’s survey, nevertheless, did not find policymakers particularly familiar with the democratic peace thesis,
while its predictions were ‘in the middle in terms of respondents’ assessment of their accuracy’ and ‘seemed
reasonably useful.’ Avey and Desch, 2014, p. 233-34.
69
Inderjeet Parmar, 'The 'knowledge politics' of democratic peace theory' (2013).
70
Ole Waever and other authors from the so-called Copenhagen School of IR developed the concept of
securitisation, which consists of a political process in which actors, often states, transform subjects into security
issues. In this manner, actors can justify and implement extraordinary measures in the name of security. Barry
Buzan, Ole Waever and Jaap deWilde, Security: A New Framework for Analysis (1998).
71
Hill, 1994, p. 13-14.
72
Parmar, 2013, p. 241-44.
73
Douglas Brinkley, 'Democratic enlargement: The Clinton Doctrine' (1997).
74
Doyle, 1983.
75
Parmar, 2013, p. 238-41.
 215

called the Belfer Center, it has longstanding linkages with the Ford Foundation. In the mid-
1990s, the journal was not peer-reviewed and, therefore, had more control over the choice of
published articles. 76 In 1996, it published a well-known ‘reader’ on the democratic peace,
which was partially funded by the Carnegie Corporation. Supporters and critics of the
democratic peace thesis made their way into policy relevance through this network of
institutions and publications. Notably, most of the work publicly cited by Talbott comes from
International Security, including the findings of Edward Mansfield and Jack Snyder that
young democracies are more likely to go to war than developed ones. 77 Mansfield and Snyder
also published a more policy-oriented version of their argument in Foreign Affairs. This type
of qualifications on the democratic peace idea marked much of Clinton’s foreign policy
doctrine in his second term, as shown above. 78

A more vigorous interpretation of the democratic peace thesis – democracy promotion via
regime change – would come forth during the George W. Bush administration. Francis
Fukuyama was one of the main promoters of this transposition of democratic peace to
conservative thinking. 79 Fukuyama’s thought-provoking idea of the ‘end of history’ gained a
lot of attention after its publication in 1989. 80 At the time, he was Deputy Director of the State
Department’s Policy Planning Staff. The article was later followed by a book, in which he
discussed Doyle’s work. 81 But Fukuyama’s recommendations went further than Doyle’s: he
envisioned some form of military-armed group of democratic states acting to counter threats
emerging from the non-democratic world. 82 Parmar shows how these ideas were promoted by
other researchers in think tanks, like Kristol and Kagan at the PNAC, and Joshua Muravchik
at the AEI. Although they supported some of Clinton’s military campaigns abroad, they
defended democracy promotion and humanitarian intervention on a case-by-case basis,
differing from liberals who saw it as a principle of US foreign policy. Ultimately, the idea of
democracy promotion became a central part of conservative and neoconservative thinking and
a central part of the Bush administration. 83 Secretary Rice, for instance, supported it publicly
on moral and strategic terms. 84

76
Ibid., 250.
77
Mansfield and Snyder, 1995.
78
Edward D. Mansfield and Jack Snyder, 'Democratization and War' (1995).
79
Parmar, 2013, p. 244-47.
80
Francis Fukuyama, 'The End of History?' (1989).
81
Francis Fukuyama, The End of History and the Last Man (1992).
82
Ibid., 282-83.
83
Tellingly, Diamond served in the Bush administration as a senior adviser in Iraq in early 2004. Parmar, 2013,
p. 242.
84
Condoleeza Rice, 'The promise of democratic peace', The Washington Post, December 11, 2005.
 216

Parmar’s work shows the influence of the democratic peace thesis in policymaking and
governmental bureaucracies through the work of academics as generators of knowledge and
mobilisation in universities, think tanks, foundations and their networks. 85 In the same manner
that the end of the Cold War created an opportunity for the diffusion of the democratic peace
thesis and for the doctrine of engagement and enlargement to eventually substitute
containment, the crisis situation created by the terrorist attacks of 9/11 allowed the idea of
democracy promotion to definitively impregnate conservative and neoconservative thought.
The terrorist attacks created an environment in which liberals, conservatives and
neoconservatives could agree with conditional sovereignty, although they might diverge at
times regarding how the US should intervene abroad.

6.2.3. The Princeton Project on National Security

The spread of the democratic peace thesis is not the only instance of liberal synthesis
processes. Another, interrelated, example of the elite consensus on liberal assumptions is the
Princeton Project on National Security (PPNS). The project was launched in May 2004 with
Ikenberry and Slaughter as co-directors. Although intrinsically critical of Bush’s foreign
policy, the PPNS was conceived as a bipartisan effort to examine and propose new bases for
US national security strategy. Anthony Lake, Clinton’s former National Security Advisor who
was teaching at Georgetown University at the time, and George Shultz, Reagan’s former
Secretary of State and at the Hoover Institution at the time, served as the project’s co-chairs,
demonstrating bipartisanship and the high academic and political profile of the participants.
PPNS’s events and working groups lasted over two years, involving almost four hundred
academics and practitioners, and ended up with the publication of a final report entitled
Forging a World of Liberty Under Law. 86

Although broad and bipartisan, the PPNS members represent a cohesive elite group involved
in US foreign policy studies and practice. Research shows that the project’s sixteen leaders
had multiple connections with Ivy League universities, various foreign policy think tanks
(CFR ranking first among them), and government agencies (the State Department first among
them). 87 This was to be expected, of course, given the goal of the project, the institutions and
the people involved. As pointed out by Parmar, although the PPNS promoted itself as a

85
Parmar, 2013, p. 236.
86
Ikenberry and Slaughter, 2006.
87
Parmar, 2009, p. 185-87.
 217

neutral analysis of US strategic doctrine from outside government circles, its members were
in fact inside players in these discussions.

Of the project’s 398 participants, 188 were academics. 88 Many had connections with think
tanks such as the CFR, the Brookings Institution, the Center for Strategic and International
Studies (CSIS), the Carnegie Endowment for International Peace, the New America
Foundation and the Hoover Institution. Participants also represented multiple links with the
US armed forces, either teaching at military colleges and institutions, or as serving or retired
officers. Participant connections also linked the PPNS with the press, mass media groups and
foreign affairs publications. 89 According to Parmar, PPNS’s participants were chosen in such
manner ‘partly to reinforce the essential liberal-internationalist character of its leadership
group’ and partially to ‘open some space for critiques from out-and-out (conservative) realists
such as Stephen Walt and John Mearsheimer and neo-conservative ‘Wilsonian-realists’ such
as Kristol, Krauthammer and Kagan.’ 90 Besides the Woodrow Wilson School, PPNS’s
activities were funded by the Ford Foundation, by David Rubinstein (a leading financier with
the Carlyle Group), by the German Marshall Fund for the United States, the New America
Foundation and the Carnegie Endowment for International Peace. 91 The participation of these
funding institutions helped to corroborate the narrative of the PPNS as a sober, unbiased,
social scientific scholarly analysis.

The PPNS was at the heart of the US foreign policy establishment. In this way, the project is a
major example of the liberal synthesis and the influence of Liberal IR’s ideas and concepts.
The overlap between liberals and neoconservatives is striking. Following Stephen Walt, 92
Parmar compares passages of the PPNS’s final report with Bush’s 2002 National Security
Strategy:

Where the NSS and neo-cons argued for spreading democracy, the Project argues for
spreading ‘Liberty under Law’. Where NSS wanted ‘a balance of power that favors
human freedom’, PPNS promotes ‘maintaining a balance of power in favor of liberal
democracies’. Both agree that defending and promoting freedom/liberal democracy
requires ‘continued high level of US defense spending …’. NSS emphasised
preventive war and action that PPNS endorses against ‘extreme states’ after approval
from the UN or ‘some broadly representative multilateral body …’ 93

88
The final report lists 398 individuals that took part, in some condition, in the project’s activities.
89
Parmar, 2009, p. 187-90.
90
Ibid., 189.
91
Ibid., 184.
92
Stephen M. Walt, 'Woodrow Wilson Rides Again', TPMCafe Book Club, October 10, 2006.
93
Parmar, 2009, p. 196-97.
 218

While the convergence between liberals, conservatives and neoconservatives is explicit, the
influence of Liberal IR can also be seen in the project’s hidden premises and assumptions.
PPNS’s final report takes the same uncritical view of history that characterises Liberal IR. In
this uncontested version of history, US power is benign, reactive and defensive. The US is
seen as having suffered an unprovoked attacked by Japan in World War II, with no
consideration to the previous state of relations between the two countries. The USSR is seen
as having simply moved from World War II ally to Cold War enemy, with no consideration
given to the geopolitics after the war or US actions. 94 It is as if security threats in the Middle
East emanated from the region itself, with no consideration to US actions in the region. It is as
if all violent opposition to US foreign policy was ‘a global insurgency with a criminal core’,
with no consideration of the rationality of such opposition. 95

Such use of history might pass unchallenged in the midst of standard political posturing. But
PPNS’s authors claim academic legitimacy for their analysis and policy prescriptions.
Nonetheless, academic rigour is hardly found at the PPNS. The report does not conceive the
possibility of negative outcomes of US external policies. It cannot comprehend the fact that
other states might also have legitimate ambitions in international politics, possibly different
from the US, and might have other ideas about the designs of the international order. As Walt
puts it, the PPNS ‘takes for granted the universal appeal of America’s liberal ideology, and
assumes that most of our problems will vanish once the rest of the world adopts these
principles.’ 96

Many of the PPNS’s policy recommendations show up these contradictions. The report calls
upon the US to assure that its ‘deterrent remains credible’, to maintain ‘a safe and flexible
nuclear arsenal’ and, at the same time, to ‘reform and revive the Nuclear Non-Proliferation
Treaty (NPT)’. 97 Under Article VI of the NPT, the US accepted a commitment to pursue
‘general and complete disarmament under strict and effective international control.’ PPNS’s
authors do not seem to grasp that other countries might have legitimate complaints as to how
the US would both revive the NPT and retain a credible nuclear deterrent, as they propose.

94
John A. Thompson, 'Another look at the downfall of "Fortress America"' (1992); Walter LaFeber, America,
Russia, and the Cold War, 1945-2000 (2002); Ikenberry and Slaughter, 2006, p. 16; Parmar, 2009, p. 195.
95
Robert A. Pape, 'The strategic logic of suicide terrorism' (2003); Ikenberry and Slaughter, 2006, p. 9; Parmar,
2009, p. 182.
96
Walt, 'Woodrow Wilson Rides Again'.
97
Ikenberry and Slaughter, 2006, p. 9, 30.
 219

But the most glaring inconsistency regards UN reform and authorisations for the use of force.
The PPNS calls for ‘sweeping’ UN reform, particularly of its Security Council. 98 It supports
proposals from the 2004 UN High Level Panel for the expansion of the Security Council,
including new permanent members with no veto power. But in case UN reform takes too
long, the PPNS also suggests the US to create a ‘Concert of Democracies’. The new
institution ‘would provide an alternative forum for liberal democracies to authorize collective
action, including the use of force’. 99

This example illustrates the many hidden facets of liberal thought. First, it is highly
contradictory to say that one supports the legitimacy of the UN, but if it does not act
according to one’s expectations it is better to form a competing institution with the same
prerogatives. This is similar to the power-based forum-shifting strategy applied by the US and
the EU at the closing of the GATT’s Uruguay Round, as discussed in Chapter 4. 100 Secondly,
these prescriptions show how liberals have difficulty in accepting the legitimacy of formal
multilateralism, as a majority decision-making mechanism with no preordained principles,
rather than substantive multilateralism associated with US liberal principles. Thirdly, while
adopting Liberal IR’s premise that democratic states behave better, the PPNS’s prescriptions
seem to forget that ‘being democratic does not guarantee that other states will want to follow
the US lead’. 101 Divisions over Iraq in the Security Council in 2003 had the US and the UK
on opposite sides to France and Germany (joined by ‘nondemocratic’ Russia). Fourthly, US
liberals seem to be unaware that, outside the US, fellow democracies consider the idea of a
‘Concert of Democracies’ a terrible one. 102 Be that as it may, the PPNS’s proposal speaks to
the liberal synthesis and the influence of academics in US foreign policy. Such concert, or a
‘League of Democracies’ appeared in proposals from both sides of the US presidential
campaign in 2008. 103

98
Ibid., 23-26.
99
Ibid., 7, 23-26.
100
Steinberg, 2002.
101
Walt, 'Woodrow Wilson Rides Again'.
102
Thomas Carothers, 'A league of their own' (2008).
103
Ibid.
 220

6.2.4. International institutions, cooperation and liberal order

In their study of the impact of academic ideas in US foreign policymaking, Lepgold and
Nincic come to the conclusion that scholarly research on international institutions and
institutionalized cooperation had no impact on policy, unlike the democratic peace thesis. 104
Conversely, this thesis makes the opposite claim. Even if direct influence might be weak or
hard to trace, there is ample evidence of indirect influence of the liberal work on institutions
framing debates on US foreign policy strategy. This is specifically the case in relation to the
benign liberal narrative about institutions and the liberal international order critically
addressed in this thesis. This research does not attempt to prove the direction of this liberal
ideology, that is, if it is liberal academics that influence government and public opinion or if it
is the policymaking community and public opinion that pressure and influence liberal
academics. It is the very strength of the liberal discourse both inside and outside academia,
and the consensus around it, which makes it worth studying.

Previous chapters have demonstrated the liberal use of generalised historical accounts. If such
traits are present in academic Liberal IR, they are much more pronounced in liberal policy-
oriented publications. Once again, the PPNS serve as an example. Regarding the Bretton
Woods institutions, it states that they ‘were deliberately designed to allow all members
sufficient latitude to reconcile the demands of an open international economy with the vital
needs of domestic constituencies at home.’ 105 The analysis in the first half of Chapter 3,
clearly establishes that such a design never existed. Instead, the institutions were deliberately
restrictive in order to placate congressional opposition in the US. ‘Sufficient latitude’ between
an open international economy and full-employment policies at home – or embedded
liberalism – was only achieved on a trial-and-error basis, particularly after the US demands on
the British Loan created a major monetary crisis. Moreover, the role of the Soviet threat in
modifying US positions never shows up in reports like the PPNS. It is as if the Marshall Plan
came about solely as US altruism towards European recovery, with no consideration given to
Cold War politics.

Such generalisations deriving from an uncritical use of history inform interpretations in which
US power and hegemony are considered benign and desirable. In the golden age of liberal

104
Lepgold and Nincic, 2001, p. 138-71.
105
Ikenberry and Slaughter, 2006, p. 22-23.
 221

internationalism, the US ‘led but listened, gained by giving, and emerged stronger because its
global role was accepted as legitimate.’ 106 Within international institutions, other states had

a voice – although not a veto – and nations endeavor to work in concert towards
common ends. Such a world is one in which other nations bandwagon with the United
States rather than balance against us, and where they seek to facilitate American goals,
not to inhibit them. That is the world we must rebuild today. 107

Such accounts are either remarkably naïve or deliberately apolitical. It makes no sense to
describe the post-World War II era with no reference to the USSR and its impacts on
international politics. In the liberal narrative, the supposed legitimacy of the US ‘global role’,
the fact that others states ‘bandwagon’ ‘rather than balance’, and the existence of ‘common
ends’ all emanate from enlightened US policies and principles. The liberal narrative does not
take into account the historical conditions and power relations in which these policies took
place. It similarly brushes off the disputes within institutional settings solved by the use of US
power, as discussed in previous chapters. Such a generalised account of history comes to the
celebrated and predictable conclusion that the US ‘must rebuild today’ an international order
through liberal institutional arrangements, or ‘a World of Liberty Under Law.’ 108 But as
liberal analysis does not emphasise the use of power needed to build up the post-World War II
world, and as the distribution of world power has changed dramatically since, its policy
prescriptions are at best self-defeating and at worst have dangerous implications.

Most policy discussions on US foreign policy and international institutions take the liberal
narrative as their premise. A bipartisan report from the moderate think tank CSIS states that
the US foreign policy ‘has sought to promote rules and order’ through ‘institutions such as the
United Nations, World Bank, International Monetary Fund, and the General Agreement on
Tariffs and Trade, all of which provided a framework of rules for maintaining international
security and growing the world economy.’ 109 Similarly, a report from the Center for a New
American Security, jointly written by academics and practitioners, assumes that the ‘success
of American leadership during the Cold War resulted in large part from the United States
pursuing its national interests in ways that promoted the interests of many other countries’
through ‘the creation of global and regional institutions, and support for an open international

106
Ibid., 22.
107
Ibid.
108
Ibid.
109
Richard L. Armitage and Joseph S. Nye Jr., 'CSIS Commission on Smart Power: A smarter, more secure
America', (2007), p. 7-13.
 222

economy.’ 110 Likewise, these benign liberal narratives are also present in US policy
statements. For instance, the Obama’s administration 2010 National Security Strategy, while
commenting on the ‘modernization of institutions, strengthening of international norms, and
enforcement of international law’, states that:

A key source of American leadership throughout our history has been enlightened self-
interest. (…) The belief that our own interests are bound to the interests of those
beyond our borders will continue to guide our engagement with nations and
peoples. 111

The liberal notion that states benefit from cooperation within international institutions, and
that US foreign policy is benign and benevolent while promoting these arrangements, inform
most of the US policy debates. The implications of this liberal rationale might carry important
consequences. As the use of US power remains hidden in liberal accounts, the liberal model
implies a unique character of legitimacy and rationality to the institutions of the liberal order.
Other states’ behaviour in questioning its principles and norms, therefore, becomes deviant
and must be avoided or fought against. According to the liberal argument, emerging or re-
emerging powers like China, India or Russia who might challenge liberal institutions do so
out of a myopic rationality and misunderstanding of their own self-interest.

This is the source of the idea of responsible stakeholders, used in policy discussions during
the Bush administration and then more widely in foreign policy circles. 112 According to such
logic, as the distribution of power changes in the international system and new great powers
emerge, so should they take responsibility for, and pay the costs of, managing international
institutions. The liberal argument states that their emergence was enabled by liberal
institutions and the free-rider status they previously enjoyed. In time, these rising powers
should share costs and invest in the system which benefits them. Acting otherwise would be
irresponsible behaviour, as well as generating opposition from established great powers.

The liberal rationale is as widespread as it is puzzling. Its assumption is that rising powers
benefited from liberal institutions, with no investigation that they might have risen not
because but in spite of liberal institutions. The notion that, acting rationally, emerging powers
would have to sustain the current system derives from liberal fallacies. As we saw in earlier
110
Anne-Marie Slaughter et al., 'Strategic Leadership: Framework for a 21st Century National Security Strategy',
(2008), p. 14.
111
National Security Strategy, (2010).
112
Krasner et al., 2009, p. 113; Jorge Castaneda, 'Not ready for prime time: Why including emerging powers at
the helm would hurt global governance' (2010); Stewart Patrick, 'Irresponsible Stakeholders?' (2010).
 223

chapters, the so-called liberal international order was not born out of a liberal bargain, but
from the exercise of US hegemonic power. The liberal order is based on US preferred
principles and norms, and it does not limit the use of US power. Indeed, US power is
exercised within and through liberal international institutions. There is nothing surprising in
this state of things, a natural development from historical conditions after the end of World
War II, throughout the Cold War and in its aftermath. But the liberal model attributes to such
system a character of legitimacy and rationality which it does not have. In every step of the
way, the US acted as a true hegemon, defending its perceived national interests. To think that
emerging great powers would act differently, or that they would only act responsibly if
uncritically supporting a system designed by others and for others’ interests, is either wishful
thinking or a political project in disguise.
 224

6.3. Conclusion

This chapter set out to show the relations between Liberal IR, US foreign policymaking and
public debates. It argued that, in spite of the theory-practice gap in IR, liberal ideas and
concepts have impacted upon US foreign policy debates and practices. The liberal order
model discussed throughout this thesis matches the ‘background knowledge’ type of
academic contributions that policymakers find most useful. Additionally, liberal scholars have
worked in US administrations and in various foreign policy think tanks promoting their ideas
and concepts, directly and indirectly.

Such influence is also manifested in the current liberal synthesis permeating US foreign
policy debates. Liberals, conservatives and neoconservatives agree on liberal concepts like the
democratic peace thesis and conditional sovereignty. Moreover, they all share the uncritical
narrative of the role of US foreign policy in creating and expanding liberal international
institutions since the end of World War II. Liberals, conservatives and neoconservatives all
agree on the benign character and desirability of market-democracies, and a US liberal
hegemonic international order. 113

There are differences, however, over the fact that liberal policy proposals are often
multilateralist, sound more reasonable and ‘are more likely to gain broader political
acceptance’ than the realist’s crude power politics or the neoconservative’s offensive
unilateralism. 114 Yet, research from earlier chapters demonstrate that liberal theory
understates power relations in its historical accounts and, as a result, ends up with ahistorical
and apolitical concepts of order and institutions. Combined, the two characteristics above
raise concerns about liberal influences over US foreign policymaking.

113
Ikenberry, 2012.
114
Parmar, 2009, p. 182.
7. Conclusion

The Liberal IR literature presented and discussed throughout this thesis conceives the
contemporary international order as a liberal order remade by the US at the end of World War
II and expanded after the end of the Cold War. Such order is said to be based on constitutional
bargains made by the US and weaker states, in which the former made commitments to
protect the latter against both abandonment and exploitation. Such commitments are
embedded in apparently binding institutional arrangements, which give the liberal
international order its main characteristics and design. If one accepts such a description, the
liberal framework must also be used to analyse the current dilemmas of the international order
and its institutions. But this turns out to be problematic, given the internal contradictions and
hidden premises of the liberal approach.

When the financial crisis shook the world economy in 2008, it was not the IMF which was
called upon to manage it. Instead, the leaders of nineteen countries and the EU gathered in a
revitalised G20, an institution originally created in the aftermath of the 1999 Southeast Asian
economic crisis. In the following months, among other initiatives, G20 leaders negotiated an
agreement to redistribute IMF quotas, transferring voting power to emerging economies so
that the Fund would better reflect today’s world economy. But at least since the end of 2012,
the world had been waiting the US administration and Congress approval of the deal. 1 In the
meantime, alternative international economic arrangements started to appear, mostly led by
China. The Asian Infrastructure Investment Bank (AIIB) is the most preeminent of these
organisations, along with the New Development Bank BRICS (NDB BRICS), the BRICS
Contingent Reserve Agreement (CRA), and others. The inclusion of the yuan in the SDRs
basket of currencies, in November 2015, was also another sign of the changes in international
economic arrangements. When the US Congress finally approved the IMF quota and
governance reform, within the text of an omnibus spending bill in December 2015, it did so
with further requirements increasing the role of Congress in US actions in the Fund. 2 Early
analyses indicate that IMF reform was too little, too late, and that the US ‘is no longer seen as
a reliable negotiating partner on IMF issues.’ 3

1
David Rogers, 'IMF funding, IRS guidelines collide in spending bill', Politico, 18 January, 2014; Edward M.
Truman, 'IMF Governance Reform: Better Late than Never', (2015).
2
'IMF Managing Director Christine Lagarde Welcomes U.S. Congressional Approval of the 2010 Quota and
Governance Reforms', IMF Press Release, December 18, 2015; Shawn Donnan, 'US Congress moves closer to
approving long-stalled IMF reforms', Financial Times, December 16, 2015.
3
Leonid Bershidsky, IMF Reform Is Too Little, Way Too Late (Bloomberg, December 18 2015); Truman, 2015.
 226

Another case with analogous implications is the launch of the WTO’s Doha Round in 2001,
with the fundamental objective ‘to improve the trading prospects of developing countries.’ 4 It
has since stalled, with the last serious prospect of completion having been frustrated in 2008.
At the centre of the Doha deadlock remains a dispute between established trading powers
such as the US and the EU, and emerging economies such as Brazil and India. The dramatic
changes in the world economy since 2001, notably the rise of China, and the slowdown of the
world economy after the 2008 financial crises have contributed to the stalemate. Similar
impasses between established powers and emerging states have materialised in other
international regimes, most notably at the UN Security Council. 5

To these impasses and deadlocks, liberal authors simply reply that there is no crisis of the
liberal order. 6 There might have been a legitimacy crisis due to the unilateralism of George
W. Bush’s foreign policy, but ultimately this can be seen as a crisis of US leadership and not
of the liberal order itself. 7 What we would be witnessing is rather the evolution of the liberal
order towards a newer version. 8 ‘The crisis of liberalism today will ultimately bring forth
“more liberalism”’. 9 On this argument, rising powers would be of no threat to the liberal order
since they benefit from its institutions and would have an interest in preserving them. 10

These liberal accounts of contemporary dilemmas of the international order and its institutions
are insufficient. 11 On the basis of the research presented in previous chapters, there is enough
evidence to assert that liberal authors overstate the benefits of international institutions, the
benign character of the liberal order, and the incentives of emerging powers to stay within it.
The idea of a benign US-led liberal international order is based on generalisations and
unarticulated ideological assumptions. The analysis and policy prescriptions that follow from
the liberal framework are at best self-defeating and at worst might have dangerous
implications.

4
WTO | The Doha Round, World Trade Organization. Available at:
https://www.wto.org/english/tratop_e/dda_e/dda_e.htm.
5
For instance: over the invasion of Iraq in 2003, over sanctions against Iran in 2010, and over intervention in the
civil war in Syria.
6
G. John Ikenberry, 'The Liberal International Order and its Discontents' (2010).
7
Slaughter, 2008.
8
Ikenberry, 2009.
9
Ikenberry, 2010, p. 511.
10
Deudney and Ikenberry, 2009.
11
Castaneda, 2010; Patrick, 2010; G. John Ikenberry, 'The Future of the Liberal World Order: Internationalism
After America' (2011); G. John Ikenberry, 'The Illusion of Geopolitics: The Enduring Power of the Liberal
Order' (2014). See also: Ikenberry and Slaughter, 2006.
 227

This thesis set out to present a critical analysis of Liberal IR and its interpretations of US
foreign policy and international institutions. As such, it aimed to contribute to IR and US
foreign policy studies by critically assessing an important academic paradigm. Throughout the
previous chapters, the thesis has argued that liberal accounts are theoretically and empirically
flawed. This last section reviews and summarises the argument, coming to conclusions which
draw out the further implications of this research.

Chapter 2 discussed Liberal IR’s main authors and concepts. In the way liberal scholars
conceive it, the framework of a scientific Liberal IR theory is supposedly nonutopian and
nonideological. However, detailed analysis demonstrates that what is distinctively liberal
about the theory is not its theoretical framework, but rather the prescriptions that follow from
it: rational arguments which legitimate only liberal forms of political and economic
organization. Similarly, when discussing law amongst liberal states, liberal authors ignore the
difficulties of the democratic peace thesis in establishing causal connections and, based on
subjective judgement, proceed to discuss the supposedly distinguishing attributes of liberal
states and its implications. Rather than relying on descriptive or scientific rules of evidence,
Liberal IR lines of demarcation are ideological and normative. As shown in the later chapters,
while Liberal IR takes as a premise that liberal democracies behave better than others states
regarding their international commitments, liberal authors cannot reconcile such a premise
with a central dilemma and basic tension in modern liberal societies: the fact that popular
pressure, organised minorities and interest groups often drive political discussions and
initiatives in the most self-interested ways.

Similarly, the concepts of constitutional bargains, binding institutions and liberal order
reproduce such traits. The concept of a constitutional bargain implies that weaker states join
international institutions fearing abandonment or exploitation by hegemonic states. The
concept of binding institutions implies that such arrangements have the capacity to restrict the
use of power by the hegemonic state. The conclusion of constitutional bargains and the
creation of binding institutions imply that hegemonic states adopt self-restraining behaviours,
creating arrangements to bind their own power. As we have seen, this narrative finds weak
support in the historical record, and is instead based on generalisations and unarticulated
ideological assumptions. Such conceptualisation of liberal order presumes the benign
character of US hegemony and reproduces the assumption while hiding the power dynamics
within international institutions.
 228

Chapter 3 began the historical analysis of the concepts of Liberal IR by looking at US foreign
policy and financial institutions in the post-World War II and post-Cold War periods. The
creation of the IMF in the 1940s bears little resemblance to a constitutional bargain: all the
relevant disputes in the negotiations, such as the size of the Fund or the nature of its lending,
were settled by the use of US power. It is clear from the records of the negotiations and from
domestic debates within the US that the IMF would and could not bind US hegemonic power.
The US had a de facto veto over the Fund and US monetary policies were never subject to its
scrutiny. Likewise, there is no evidence to support liberal interpretations of a post-Cold War
US foreign policy push to expand the IMF through self-binding arrangements. Rather than
binding US hegemonic power, the Fund enhanced its exercise. States were pushed to adopt
market domestic reforms before joining the IMF. Statistical evidence from programs shows
only small gains and even net losses to participant states.

Chapter 4 continued the analysis of the applicability of Liberal IR’s concepts of constitutional
bargain and binding institutions by looking at the international trade regime. In the post-
World War II period, the US guided institutional efforts towards the creation of the ITO.
Trade liberalisation was resisted by the British Commonwealth and Latin American countries
demanding safeguards to their national development policies. The US made concessions in
many instances, but the record shows that such benefits were granted due to fear of breaking
up negotiations and enhancing the Soviet position in the world stage. Power politics and the
Cold War were an essential part of post-war trade negotiations and are unaccounted for by
liberal analysis. Moreover, the ITO never came to be. Its death in the US Congress had much
to do with the concessions granted during negotiations. As with the IMF, Congress had no
intention to approve an institutional arrangement that could bind US power. Similarly, the
workings and expansion of the WTO after the end of the Cold War do not provide much
grounding for the liberal model. The WTO structure does not restrict the use of US power in
its accession processes, in negotiations during multilateral trade rounds, and not even in its
institutionalised dispute settlement system. The creation of the institution itself was a power
play: many developing and least developed states were coerced into joining the WTO by US
and EU forum shifting strategies. There is evidence that many were net losers from the
Uruguay Round agreements.

Chapter 5 looked at the negotiations, signature and institutionalisation of the North Atlantic
Treaty in the late 1940s, and at the expansion of NATO in the 1990s onwards. NATO is the
 229

post-war arrangement that most resembles the concept of binding institutions, as it represents
a strong US commitment to European security. Nevertheless, the analysis showed that these
characteristics are not the product of constitutional bargaining or liberal rationale. Western
European countries after World War II requested a security guarantee from the US, just as
Central and Eastern European countries asked to join NATO after the Cold War. The Soviet
and Russian threats respectively motivated such calls; no bargaining was required because of
mutual US and European interests. In the post-Cold War period, the liberal order narrative can
only be sustained by accounts of the weak cases of NATO’s role in German reunification or
the expansion to Central and Eastern Europe. On a hard case scenario, such as US and NATO
relations with Russia, the liberal hypothesis finds little support.

After critically assessing the concepts of liberal order, constitutional bargain and binding
institutions through the revisiting of historical cases, Chapter 6 turned its attention to the
possible implications of these ideas outside academia. Liberal IR is particularly well-
positioned to jump over the so-called theory-practice gap, at least in the case of the US. The
general character of its concepts provides policymakers with arguments for framing policy
issues, regardless of their scientific validity. Many liberal academics work through think
tanks, which are better equipped to influence policy and public debates than academic
departments. The transposition of Liberal IR concepts to policy debates was an integral part of
the processes of liberal synthesis, establishing a new consensus amongst US foreign policy
elites. The democratic peace thesis, the idea of cooperation within international institutions,
and the interrelated narrative of the liberal order are noteworthy examples. Such distorted but
widespread liberal influence explains the insufficiencies and contradictions of liberal scholars
and analysis in understanding the current crisis of the international order, of its multilateral
institutions and the challenges posed by emerging powers.

The analysis in the previous chapters has provided a critical examination of Liberal IR and its
concepts. It demonstrated how, in the cases relating to the creation of the IMF, GATT and
NATO, Liberal IR has produced an overarching benign narrative of US foreign policy and
international institutions based on generalised historical accounts. The concepts of liberal
order, constitutional bargain and binding institutions do not withstand close historical
scrutiny. Liberal authors’ attempts to interpret US foreign policy and the post-Cold War world
through the lenses of the liberal model are equally selective and biased.
 230

More broadly, the thesis draws upon and engages with the existing literature examining power
relations within international institutions and processes of global governance. 12 But instead of
focusing on specific regimes and institutions, as most of the literature does, this research has
looked at such processes from the perspective of US foreign policy and its impacts on the
international order. The thesis also relates to current literature examining the premises of
Liberal IR and its impacts. 13 It does so particularly in a way to permit dialogue: liberal
thought was not discarded upfront; the research was conducted in an empirical, historical
manner; and the analysis focused on the same examples used to build most of the liberal order
model. As such, it can be considered a form of internal criticism.

The main findings of the thesis point out that the liberal order model makes bad use of the
historical record to produce concepts and a narrative of US foreign policy and international
institutions that is biased and highly normative. As an important academic paradigm, Liberal
IR would benefit from a re-examination of its premises and normative instincts, and to
articulate them explicitly. Only in such a way can Liberal IR discard its overarching, benign,
narrative and attempt to account for two series of factors which would greatly improve its
analysis. First, Liberal IR has to address the illiberal practices which enable supposedly liberal
processes and outcomes. The existence of power relations and the use of coercion in
institutional settings is one such example. Second, liberal analysis has to come to terms with
rational arguments which legitimise forms of political and economic organisation other than
liberal ones. This is needed in order to understand the diversity and the legitimacy of
competing claims to the international system.

A research as broad and encompassing as the one presented here invariably has its limitations.
The decision to address US foreign policy in relation to three major institutional arrangements
at two pivotal moments of world history has diminished the level of detail provided for each
individual case. A more restricted approach would have allowed the presentation and
discussion of additional primary sources and participants’ views. But given the aim of
providing an overview of the liberal order model and its interpretation of US foreign policy,
such costs were inevitable. A related problem is the fact that, as much as the thesis provides a
rebuttal of liberal narratives, it scarcely offers alternative readings. The evidence discussed in
previous chapters shows power relations interfering at critical junctures in the creation,

12
Barnett and Finnemore, 2004; Michael Barnett and Raymond Duvall, eds., Power in Global Governance
(2005); Deborah D. Avant, Martha Finnemore and Susan K. Sell, eds., Who Governs the Globe? (2010); Stone,
2011.
13
Beate Jahn, Liberal internationalism: theory, history, practice (2013).
 231

expansion and workings of international institutions. However, a competing explanation of

when, how and why US power is exercised in institutional settings has not been developed.
Nonetheless, in order to establish the need for such an alternative theory, it was first necessary
to examine the standing of liberal explanations, and the two goals could not be developed in
conjunction.

In this sense, the conclusions offered here open up different paths for further investigation.
One way forward would be to develop a structured explanation of when and how power plays
are used within institutional settings to break deadlocks and advance policy initiatives. Such
accounts would be valuable given the current impasses in multilateral forums, of which some
were described above, and the changing distribution of world power. Another path worth
exploring is to properly evaluate current international institutions. For instance, some studies
support the view that financial institutions have, for all their limits, performed well in the
recent financial crisis. 14 The problem is that such studies often use as comparison a world
without institutional arrangements, contrasting, in this example, the role of financial
institutions in the economic recovery after 2008 with the state of the world economy after
Great Depression in 1929, when no institutions were in place. No one can deny that
institutional arrangements have an impact in today’s international system, but the most
relevant questions concern not if, but what type of impact; who benefits, who benefits most
and who does not. If ‘the system worked’, for whom did it work? The liberal answer that
institutions make us all better off does not hold, as demonstrated throughout this research.

Similarly, there is the question of alternatives to the current order. It is striking that the
literature that supports an interpretation of the benefits and resilience of the current
international institutions does it almost exclusively from a US perspective, without direct
inquiry into the views of other countries, particularly of emerging powers like China and
India. The literature on the rise of China, for instance, is divided between those who predict
that China’s emergence will inevitably lead to conflict and those who predict that China will
peacefully rise within the current international institutional framework. The liberal premise of
the benign effects of liberal order and US hegemony create this sharp divide: emerging
powers will either act according to the liberal rationale and maintain the present institutions,
or they will demonstrate a deviant and irrational behaviour and subvert the order. So far, there
has been no structured investigation on possible designs of the international order and

14
Daniel W. Drezner, 'The Irony of Global Economic Governance The System Worked', (2012).
 232

institutions based on nonliberal – or less liberal – principles and norms, but equally rational
and legitimate from the perspective of emerging powers.

Such a proposition might seem unacceptable: from a moral and ethical perspective, many
would argue that we should strive for more liberal principles, not fewer. Although I
personally agree with such a proposition, I offer three qualifications. Firstly, from an
academic perspective, desirable outcomes should be investigated critically as much as
apparently undesirable ones, in order the better to make such judgments. Mixing moral and
ethical considerations with research and analysis either creates the illusion of one’s preferred
ideas as reality, or creates a pseudo-scientific justification for a political project. Secondly,
denouncing the non liberal character of possible alternatives serves to hide, often
unconsciously, the non liberal practices present within the current international order.
Examples of such illiberalism are abundant in the treatment of the immigrants and refugees,
or in restrictions on the rights and opportunities of minority constituencies, in both developed
and non-developed countries. Finally, as exhaustively demonstrated throughout this thesis, the
current, supposedly liberal, order did not come to be based on the righteousness of liberal
principles and norms. Illiberal practices and power politics were essential to the emergence of
the current configuration of international institutions and governance. If such practices remain
unaccounted for, the defence of the current international order turns simply into the defence of
these practices of power which are still present today.
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