Category Archives: Globalization II (Realist Perspectives)



J. Odell (1993)

 A Summary

In a Nutshell

Within the context of trade policy and international negotiations Odell looks at when the use of threats and coercion is a valuable tool to influence other countries’ policy choices. Traditionally there have been two schools of thought a) that failure to use the power available to a state simply opens it to exploitation by others b) that coercion rarely pays as it breaks down the networks of trust and thus the beneficial mutual relationships that have been insitutionalised based on a foundation of cooperation and trust. Odell proposes a model that is more subtle and predicts the success or otherwise of coercive tactics on a case by case basis. He acknowledges that the tactics employed by the aggressor (country A) toward the target (country B) as well as the relative harm that can actually be inflicted by country A on country B are important in judging whether coercion could be successful. However he asserts that more important are two other variables: 

  1. Domestic situation in country A – if the constituents of the aggressor government or society do not agree with the threat they may persuade the government not to go ahead, or they may impose political costs if the government goes ahead. Country B knows of opposition within country A and this goes to the credibility of the threat. In this view “some fairly high degree of internal consensus is necessary in order to realise benefits of international power via coercion.”
  2. Domestic situation within country B – assuming the threat is credible, B will not comply with the demands if it faces greater net internal political penalties by doing so than from accepting the consequences on non-compliance. Threats can generate a climate of hostility within the target country (B). 


  • He applies his model to two separate trade disputes. He goes in to a lot of detail regarding the different disputes which will not be summarised here. Only the main conclusions and general evidence seem interesting.
  • Brazil – Reagan in 1985 threatened to retaliate against Brazil if it did not change its program designed to promote domestic computer industries.
  • ED – Reagan in 1985 threatened the EC with trade sanctions if it did not remove feedgrain export barriers between US and Spain/Portugal
  • The results of the trade dispute were very different: the EC capitulated, Brazil did not. Why did the coercive strategy yield less from the weaker country and more from the EC? Brazil was 26 times more dependent on US trade wise as compared the EC, plus it was in the middle of a debt crisis so loss of trade would have been fatal!
  • Tactical differences aside (the threat to the EC was much more specific) how do his two variables explain the differences? 


  • Domestic opposition to the threats in country A (USA): support was not large from US computer industry as many had subsidiaries inside Brazil and knew how to operate in the market, and did not want business to be disturbed. In fact the supposed beneficiaries of the Reagan assault were not pressing for coercion and may well have opposed actually carrying out the threat. The threat then was not hugely credible. Some firms even took steps to undermine Reagan and certainly sought to distance themselves from the policy.
  • Domestic opposition to capitulation in country B (Brazil) – there were strong political pressures to stand fast. Brazil refused to negotiate for more than 8 months. Brazilian imports of US computers was only 1% of the total world market and the law under question was merely a codification of existing practices. The program was supported by industry, political actors aligned with industry, the military (wanting to be less reliant on foreign technology) etc. Only once the US pulled back and said it would not go through with the threats did Brazil come to the table. The political costs of capitulation were too high! 


  • Domestic opposition to the threats in country A (USA) – opposition was virtually non-existent. Feedgrain producers were united in furious protest. Joined by the farm lobby  etc. There were no actions taken to undercut Reagan’s credibility.
  • Domestic opposition to capitulation in country B (EC) – Initially the EC stood fast behind its belief that it was in the right. France was especially hard line (hahaha Amandine) as they stood to lose the most from the removal of the restrictions. However, a list of counter-retaliation restrictions was drawn up by the US which covered white wine, brandy, cheese, olives etc. meaning that many of the countries of the EC would have felt the adverse effects of a trade war with the US. Thus voices from Germany and UK etc. were heard in support of capitulation as a trade war would have been too expensive a price for them to pay for protection of French farmers who could be compensated in other ways. The biggest pressures on the commission to reach agreement was from industry. 
  • “In coercive distribution bargaining, if a substantial share of the constituents of threatening government A who stand to benefit from B’s compliance nevertheless oppose implementing the threat, and is state B is aware of tis internal opposition, the credibility of A;s threat will be undermined, other things being equal, even when A has much greater power resources and B is highly vulnerable to them. Second, even when one reading of B’s interests dictates complying, and even when the government executive prefers to do so, B will not do so if the executive faces greater internal political penalties from complying than from accepting no-agreement.”



J.M. Grieco (1988)

A Summary 

In a Nutshell

Realism as pertaining to international relations means that international anarchy fosters competition amongst states that restrains their ability to cooperate with each other. During the 1950s liberal institutional theory emerged which said that problems in state cooperation (mostly caused by the ability/propensity to cheat) could be overcome by strong international institutions that could effectively police agreements, thus making cheating more costly and ensuring compliance. In other words, institutions can help states to cooperate. The tensions and conflicts of the 1970s in part swept away these ideas, however, the limited cooperation that still occurred in that decade spurred the rise in the 80s of the neo-liberal institutional theory (Axelrod etc.) [Nothing to do with neoliberal in the sense of trade liberalization etc.] This accepted some of the central tenets of the realistic view (anarchy, state centric policy etc.) but maintained that international cooperation could be achieved with international institutions as mediators.

 Grieco argues that the NLI theory does not in fact employ the same meaning of “anarchy” as the realist theory. NLI theory is based on the premise that states seek to maximize their absolute gains in international policy. Therefore they are in a sense indifferent to how much they gain relative to other players. The main obstacle to cooperation in this view (and hence the definition of anarchy) is cheating. The theory suggests that cheating can be overcome by institutions. The realist view on the other hand is that states are concerned with absolute and relative gains. They worry that their partners may gain more than they do, and so even in the absence of cheating a state may withdraw from an agreement if the other partners will gain more from it than they do, hence subverting existing power structures. The main reason for this worry is uncertainty over future intentions of parties that lead states to want to maintain their power vis-à-vis the world. In other words, this is the threat of war. NLI theory fails to consider the threat of war arising from international anarchy.

 Central Features of Realism

  1. States are the major actors in world affairs
  2. The international environment penalizes states if they fail to protect their interests
  3. International anarchy is the force shaping the motives of states
  4. States in anarchy are preoccupied with power and security and often fail to cooperate even in the face of common interests
  5. International institutions affect the prospects for cooperation only marginally.

 New-Liberal Institutionalism

  • NLI broadly accepts 1-4 but says that institutions can help states work together.
  • A state may cooperate or defect. A state prefers CC to DD (CC>DD). But it prefers also to cheat so DC>CC. It also prefers mutual defection to being cheated upon (DD>CD). Overall then DC>CC>DD>CD. The equilibrium then is DD in the absence of some centralized authority that can bind states to their promises. NLI stresses that these forces do actually exist. Moreover if states operate on a tit-for-tat basis, and cooperate based on others’ cooperation (including iterative games) then combined with the costs of defection, mutual cooperation can be the best strategy. This is especially true when the benefits from cooperation are large compared with the costs of sanctioning cheaters and monitoring compliance (costs reduced by the actions of international institutions).
  • Regimes reinforce reciprocity delegitimize defection thus making it more costly.
  • One way of reducing monitoring costs is to keep the number of parties to an agreement small.

 Realism and Neo-Liberal Institutionalism

  • NLI says that states seek the greatest possible individual gain when playing the prisoner dilemma universe. The chosen strategy is the one that yields the highest score given what a state expects the other to do, and institutions ensure that the highest score is achieved by mutual cooperation. i.e. in iterated games, states choose cooperation solely out of a desire to maximize its individual long-term payoffs.
  • States do not gain or lose utility based on the utility gained/lost by other players.
  • Thus the major problem in the NLI world is cheating, and this is overcome by institutions.
  • Realists also think of cheating as a problem. For them, one source of failure to cooperate is the lack of central agency to enforce promises. Anarchy for realists is the absence of a common government in world politics. Therefore, although this includes the absence of an agency to prevent cheating, it also includes the absence of an agency to prevent other states from using violence or the threat of violence to destroy or enslave. Thus states may be driven by greed and ambition, but they are also driven by fear and mistrust.
  • Put like this, it is clear that utility maximization is not the overall goal, rather survival is their core interest. This means they are sensitive to any erosion in their standing or relative capabilities. They therefore are not interested in absolute gains, but in preventing others from achieving advances in their relative capabilities.
  • This is so strong that states may forego pacts which promise sizeable absolute gains, solely in order to prevent partners benefiting from relatively larger gains thus threatening their position in the world.
  • This is called the “relative gains problem”.
  • This is not necessarily an aggressive position. Generally it is defensive.
  • The problem is founded on uncertainty about the future intentions of partners and their relative future capabilities.


  • For the NLI the utility of a state from cooperation is equal to its absolute value: U = V
  • For realists it is also a function of the partner’s payoff U = V – k(W-V) where W is the partner’s payoff and k is the coefficient that captures how sensitive a state is to relative payoff gaps. K will vary, but it will always be greater than zero. It is dependent on factors such as how long partners have been cooperating for, how predictable are the intentions, whether power is on the rise or decline, the particular issue area etc.
  • Faced with both cheating and relative gains problems states seek to ensure that others comply with agreements and that the collaboration produces balanced gains.
  • This balancing is a central part of diplomatic cooperation.

 [What does this mean in the context of globalization? This is presumably why we continue to see trade disputes. Assuming that politicians believe that an open economy is good for everyone (i.e. discounting the possibility that social cleavages, or non-economic state goals affect trade policy) then trade disputes should not arise. There would be no retaliation to unilateral measures by one county to restrict trade, as the unilateral measures in the long run only negatively affect the country that enacts them. However, if trade is part of the power play to retain influence in the world, as Huntington suggests, then allowing one state to gain advantage economically would not be permissible as it would threaten the power position of the other trading partner.

 Perhaps more critically it seems to me, if the realist view is correct then there is no real hope for globalization. Assuming the world opens up all its markets and the equilibrium is achieved whereby each produces subject to its competitive advantage, then states will simply have to accept the level of power which their advantageous industries afford them. This view seems highly unrealistic. States will continue to want to have industries that afford them economic and hence power dominance to maintain their position in their world i.e. technologies, military equipment, etc. and will be highly unwilling to allow another state’s competitive advantage to designate it as producer of products which give greater economic power.

 If the functioning of historical international trade/politics has meant that the USA has gained hegemonic power, and globalization would to some extent threaten that power, the realist theory should predict that they will not be willing to cooperate even if it would mean absolute gains for the USA, as it will necessarily produce potentially even larger gains for other trading partners, especially as the developing world ascends. Could we for example imagine the USA allowing China to achieve a position of dominance based on trade etc.?]





S.D. Krasner (1976)

DV441 LT2

A Summary 

In a Nutshell

Krasner develops a model of receptiveness to open trade based on the interests of states. This contrasts with last week’s readings which focus on societal cleavages that explain the openness to trade liberalisation. He sets up this model not to specifically refute other perspectives although presumably the superiority of his approach is implicit. He does specifically mention wishing to refute the idea that states open trade policy as the result of international elements beyond the control of any state or system created by states. His specific findings are that trade openness is most likely to increase when there is one dominant and ascending hegemonic power. However, states are not always able to act in their best interest due to past policy choice constraints, therefore often some large scale exogenous event is needed to act as a catalyst, to sweep away the previous policy environment.

 The Model

He calls his model the “state-power” model (SPM). It is trying to explain why we see policy that is not in line with neo-classical theory. Theory states that open trade maximises aggregate economic utility and this is what states are seeking to do. Why then do we see protectionism? The answer is that states are pursuing at least four separate goals, and their relative importance and how they interact with freer trade determines policy.

  1. Aggregate national income goal – greater openness leads to greater income. This is so for all states regardless of size or development, although it may benefit smaller states more as they have higher ratios of trade to national income.
  2. Social stability goal – greater openness means exposing domestic economy to the vicissitudes of the world economy. Social instability increases as domestic factors have to adjust to world pricing levels. This is less so in large states as they are less involved in the world economy. Additionally, more developed states are better able to adjust. Instability may be mitigated by increased prosperity.
  3. Political power goal – relative costs of closure are smaller for large states and more for developed states. So a large developed state will find its political power enhanced by an open trading system. [I don’t really understand this point].
  4. Economic growth goal – growth generally associated with openness in small states due to efficiency savings and access to world markets etc. This benefits countries with advanced technology that do not need to protect infant industries etc. Large states need to maintain technological needs if it is to survive the open competition to service its domestic market. It is hard to specify reactions by medium sized states – some say it retards development (ISI, dependistas) others say it spurs economic transformation.

 Next he imagines different international makeups to see which would lead to openness.

  1. Lots of small advanced states – likely to want open structure due to income and growth goals. Instability is mitigated by growth and no loss of power as all in same boat.
  2. Large unequally developed states – likely to want closed structure. Only modest income gains, more instability in less developed countries as well as loss of power.
  3. Hegemonic system – one single state much larger and relatively more advanced than its trading partners. Hegemonic state wants open structure to increase income and growth (when it is ascending – i.e. technological lead is increasing). The open structure increased its power and instability is mitigated by high factor mobility due to skills and technology. Small states likewise will want to be open. Medium states are hard to predict, it depends on the ways the hegemonic state uses its power. Symbolically the hegemonic state stands as an example of successful policies even if they would not be appropriate for all [Washington consensus?]. It can use its resources to create an open structure. It can offer positive incentives (access to market and cheap exports) and negative ones (withholding grants etc. [IMF stabilisation?]). The author states this is the type of situation when we are most likely to see openness increasing.

 Testing the Theory

He looks at tariffs, trade as a proportion of income, and the concentration of trade within specific trading blocs to define periods from 1870-1970 into periods of expanding/contracting free trade. I will not go into all the detail other than to point out the following contradictions highlighted by Krasner:

  • 1945-46 is well explained by the theory. USA was in ascendency and the international trade structure became ever more open. This was the time of the GATT, lowered tariffs, rising trade proportions, and extensions of trade away from traditional blocs (USSR aside). USA used leverage to force Britain to end its imperial preference system. Bretton-Woods revolutionised the monetary system. Behind the economics the USA military stood as protectors of other industrialised market economies – a big incentive for them to accept free trade.
  • 1960 to 1976 is not well explained by the model. The size and development level of the US had fallen but there was no return to protectionism as the model would envisage. This was the time of the Kennedy Round of international tariff cuts. This was a time of increased openness but the SPM predicts a downturn or faltering in these indicators as American power waned.

 Amending the Model

  • Krasner notes that Britain’s free trade commitment lasted well beyond the time when its position in the world declined, and USA’s commitment to openness started many years after it began its rise to hegemonic dominance and continued during its period of decline. So changes do not move in step with state interests.
  • This is because policies are “sticky” (institutions live longer than the environments in which they are created, social groups benefitting from policy have access to lobby etc.) Once they are adopted they are pursued until some event shows them to be no longer feasible. [Presumably this is also a function of needing to placate the new winners and losers that are made by a change in policy]. States become locked in prior policy choices and have to wait until catalytic events allow for dramatic moves of policy to align them with state interests.



S.P. Huntington

International Security, Vol. 17 No. 4 (Spring, 1993) pp. 68-83

 A summary

In a Nutshell

Primacy means a government is able to exercise more influence on the behavior of more actors with respect to more issues than any other government can. With respect to this kind of power, absolute levels (or gains) of power are meaningless. An actor gains or loses power only with respect to some other actor. A state wants international power, partly for ego reasons, but mostly to protect its security and prevent, deflect or defeat threats to that security. It may also promote its values abroad.  This primacy is also a means of achieving one’s international goals without recourse to war.

 Economic primacy in particular is important. To economists, absolute gains are important, but to politicians and states it is relative gains. Economic prosperity is not only a means of increasing well-being, but a means of increasing power. Thus the realist theory of international relations, whereby international politics is anarchic and in order to ensure security states must maximize their power indicates that economic development is another tool for attaining power.  As such decisions about international economics, trade etc. need to be made bearing in mind the relative gains to be made. Thus even if a trade agreement increases substantially economic prosperity in all signatory states, it would not be in the interest of a state to be party to that agreement if it meant losing some economic power relative to another state such that its primacy was challenged.

 In the context of the rise of Japan as an economic superpower, Huntington argues that loss of primacy to Japan would be highly damaging. Thus the US needed to adopt a power maximizing strategy to prevent Japan exploiting the openness of the US economy and to induce Japan to open further its markets.



Globalization (Realist perspective)

If globalization is such a neat solution to the problem of finding prosperity why do we not see more of it? Realists, answer that it is because politicians are in charge not economists, and politicians are only concerned with attaining power. Their policy choices are concerned with capturing and retaining power.

 Globalization and Power

Societal perspective says trade policy will be based on societal cleavages assuming the interested groups can apply sufficient pressure on the government. In a democracy the politicians cater to the interests of the voters, or the ruling elite in an autocracy.

Gowa notes that societal preferences may not end in policy given collective action problems. Certain groups have difficulty voicing their preferences. Why? – Regime, electoral process, voting being a noisy signal, electoral salience, collective action, group characteristics.


Long intellectual history, but in 20th century particularly Krasner, Huntington and Waltz.

When times are hard people look to realism.

 3 Assumptions:

  1. International Politics is Anarchy: states are the actors in international politics so there is no need to describe the domestic societal cleavages. Domestically the officials wield power and have monopoly over the means of coercion. Internationally there is anarchy, as there is no world government. There may be institutions such as the UN, but they are delegated retractable power and have no right to use force. Ultimately there is no higher authority than the state, and this is seen as if there was a violent attack on a country there is no one that could be called upon who is guaranteed to offer assistance.
  • True – even though war in Iraq was no approved at UN, resolutions were sought, so which is it? Repeated games may give a sense of security.
  1. States act rationally – If they do not then they will be severely penalized and possibly eradicated.
  2. States have a preference for security. A state may have many goals, but without security none of them are achievable.

 Realism and Protectionism

When faced with mutual gains from trade, states that care about security are compelled to assess how the distribution of the gains fall. Who gains more? (Griego).