Discuss theoretical perspectives on Neo-Liberalism to study of
International Relations?
NEO LIBERALISM
There was a new positivist orientation and shift in the scope of the Realist
approach that has come to be called Neo-realism or structural realism. A similar
shift occurred in Liberalism, largely as a reaction to the rise of Neo-realism.
Two seminal works that marked a break from the existing liberal tradition in
international relations are Robert Keohane’s After Hegemony:Cooperation and
Discord in the World Political Economy (1984) and Robert Axelrod’s Evolution
of Cooperation (1981). While the former focused on complex interdependence,
the latter applied game theory to explain how cooperation emerges and persists.
These publications introduced a new conceptual framework in liberal studies
which has come to be called as Neo-liberalism. The use of the ‘neo-liberal’
label is no doubt because the theories developed by Keohane and Axelrod
shared a lot with neo-realism. They accepted the two basic assumptions of
international anarchy and rational egoism of states to show that it was possible
for rational egoists to cooperate even in anarchic systems. They also drew on
material from the same kind of sources as the neorealist in particular game
theory, public choice and rational choice theory.
A Break with Traditional Liberalism
Neo-liberalism differed from classical liberalism in several important ways.
To begin with Liberal thought had not addressed the question of anarchy in the
international system. Neo-liberals accepted the neorealist proposition that the
international system is anarchic, but rejected the realist assertion that this
condition would lead to conflict. Instead, Neo-liberals emphasized the centrality
of cooperation in international politics. An important question that they pose to
the Realists is “If the anarchic international system necessarily creates a self-
help environment a war of all against all as Hobbes suggested then why is war
not more common?”
Neo-liberals also differ from classical liberals on the causes of conflict.
Liberalism had emphasized on the centrality of human nature and argued that
conflict and war was the result of bad actors or failure of cooperation. Neo-
liberalism, on the other hand, stress on the importance of international
institutions in structuring international environment in ways that mitigate
against anarchy.
In other words, causes for conflict cannot be traced to human nature, but to the
presence or absence of international institutions. Neo-liberals assert that
international institutions perform the following tasks:
1) Encourage communication and dialogue between states creating a forum to
negotiate their differences.
2) Promote transparency in interaction between states and in the agreements that
they negotiate.
3) Help to shape expectations and to develop collective international norms that
offer stability and predictability in global politics
4) Establish a framework to promote reciprocity and bargaining between states
facilitating the peaceful resolution of disputes. They permit the coordination of
policy to address tensions in collective action problems and thus help to avoid
the security and prisoners’ dilemmas.
It is because of the importance placed on global institutions that the Neo-liberal
theory of international relations is also referred to as Neo-liberal
Institutionalism.
Secondly, Neo-Liberalism differs with Liberalism on the question of
important actors in global politics. Liberalism tends to emphasize the
importance of individual agents as actors in global politics. Individual choice
and psychology tend to play an important role in the Liberal explanations and
analysis. In sharp contrast, Neo-liberals accept the Realist assertion that the state
is the most important actor though they add international institutions as
essentially as collections of states as well. Other actors would include non state
actors like MNCs and NGOs. They accept the Neo-realist claim that the state is
a rational actor and that it engages in cost benefit analysis in pursuit of defined
goals. Liberals would not be necessarily comfortable with this claim.
Finally, Neo-liberalism differs with Liberalism in its analysis of conflicts.
Liberalism is generally historical and philosophical in their orientation,
explaining conflict in specific historical context. It draws extensively on fields
like political theory and philosophy. Neo-liberal explanations of conflicts, on
the other hand, tend to be more focused on a historical structural explanation.
Neo-liberals draw extensively from game theory and behavioral economics
rather than history and philosophy in their analysis. Neo-liberals often use
concepts from game theory to show how the structure of the international
system can force particular outcomes or can lead to situations where rational
decision making which may appear to be rational but which lead to suboptimal
outcomes.
The Darker side of Neo-Liberalism
A number of studies based on the neoliberal approach have emerged since the
1980s. However, almost all studies have focused on the experience of Western
Countries with international interdependence and regimes. As Robert Cox has
observed, “regime theory has much to say about economic cooperation among
the Group of 7 (G- 7) and other groupings of advanced capitalist countries with
regard to problems common to them. It has correspondingly less to say about
attempts to change the structure of world economy, e.g. in the Third World
demand for a New International Economic Order (NIEO). Indeed, regimes are
designed to stabilize the world economy and have the effect, as Keohane has
underlined in his work, of inhibiting and deterring states from initiating radical
departures from economic orthodoxy, e.g. through socialism.”
The principal cooperative institution of the Global South during the Cold
War, the Non- Aligned Movement (NAM) has received scant attention from the
Neoliberal theorists.
Secondly, these theories would ‘assume, rather than establish, regimes as
benevolent, voluntary, cooperative and legitimate’ a highly questionable
assumption when one considers the exclusionary nature of some of the regimes
and multilateral institution, at least from the point of Global South. Consider the
case of those Latin American countries which have experienced economic
inequality as a result of privatization and Structural Adjustment Policy (SAP).
Bolivia, Venezuela and other Latin American nations have expressed their
voices in protest of the neoliberal economic policies.
Moreover, it needs to be remembered that due to the increased mobility of
capital, the government of states have faced difficulties in taxing the profits
incurring from privatization-led development projects had the government been
able to earn revenues from these projects, it could have been channelized
towards the development of social sectors such as health, education and social
security measures. Hence, it can be argued that as a theory, neo-liberalism is a
construct of the developed world. As Robert Cox famously argued, ‘Theory is
always for someone and for some purposes’.
Conclusion
The neoliberals point out that states do cooperate with one another on those
issue areas where they have similar interests. Neo-liberals are optimistic about
cooperative behaviour and therefore argue in favour of absolute gains. When
states are conducting economic interactions, it leads to a positive sum game. All
parties involved in the process benefit. Neo-liberalism gives more importance to
the preferences and intentions of states. Neo-liberals argue that international
regimes play an important role world politics. They can help states to cooperate
among themselves.
