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INTERDEPENDENCE IN WORLD POLITICS

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We liye in un era of interdependence, This vague phrase expresses a poorly understood hut widespread feeling that the very nature af warld politics is changing. The power Df nations _ that age.old touchstone of analysts and statesmen~_ has_become more elusive: "calculations of power
are even more delieate and deceptive than in previaus ages."
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Henry

Kissinger, though deeply rooted in the classical traditioll has stated that "the traclitional agenda Df internntional affairs _ the balance among major powers, the security af nations - no longer defines our perus OI' OU! possi~ b~Jities.... Now we are entering a new era. OId international patterns nrc ~rllmbling; oId sIognlls m"e ullinstructivc; oId solutions are unavailing. The worId has become interelepenclent in economics, in communications, in human aspirations." 2 I-Iow profound are thc changes? A modernist school sees telecommunicntions anti jet traveI as creating a "global village" anel believes that hurgeoning social and economic transactions are creating a "world without borders,".'3 To greater or lesser extent, a number of scholars see our era as one in which the territoriuI state, wbich has been dominant in world politics for the four centuries since feudal times endeeI, is being eclipsed by nonterritorial actors such as multinational Corporations, transnational social movements, anel international organizations .. As ooe economist put it, "the stnte is about through as an economic unit." li Trnditionalists cnIJ thcse nssertions unfounded "globaloncy." They point to the c()lltinuity in worlcl politics. Military interdepenclence has nlways

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1 INTEflDEPENDENCE

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INTERDEPENDENCE IN WORLD POLITICS

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existed, and military power is still important in world politics _ witness nuclear deterrence; the Vietnam, Middle Enst. and India-Pakistan wars; and "Soviet infLuence in Eastern Europe ar American inHuence in the Caribbean. Moreover, as the Soviet Union has shoWl1, authoritarian states can, to a considerable extent, contraI telecommunications and social transaetions that they consider disruptive. Even poor and weak countries have bee,n ab~e to nationalize multinational corporations, and the prevalence of nationahsm casts doubt on the proposition that the nation-state is fading away. Neither the modernists l10r the traditionalists have an adequate '{ramew~rk for understanding the politics of global interdependence.G Modernists pOll1t correctly to thc fundamental dmnges now tnking placc, but thcy ?ften assu,me w~thout sufficient analysis that advances in telmology and 1l1creases ll1 soclill and economic transactions will lead to a t~ew worId in v.:~ch s~ates, and their control af force, will no longer be important." Trndltianahsts ,u:e ad~pt at showing Raws in the modernist vision by pointing out how mllitary Illtcrdcpcndcncc continucs, but find it very difficlllt ac~ curately to intcrprct today's multidimensional economic, social, and ecological interdependence. OUI" task in this book i,'inct to argue cither thc morl~rnist OI' tl'aditionalist position. Bec~lUse aur em is marked by both continuity and changc, thb woul~ be frUltl~ss. Hather, our task is to provide u meaus of "distilling nnd blendmg the wlsdom in both positions b)' developing a coherent theoretical framework for the paliticnl analysis of interdependence. We shall develop several different but potentially complementary rnodels, 01' intelleetual tools, for grasping the reality of interdependenee in contemporary ,,:,orld politics. ~qually important, we shall attempt to explore the condittOns under whleh eaeh mode1 wiU be most likely to prduee accurate predictions and satisfactory explanations. Contemporary \VorId polties is not a seamless web; it, is a tapestry of diverse relationships. In s'Jeh a ,:orl.d, one ~ode1 c~nnot explain alI situatons. Th~ secret af nderstanding hes m knowmg WhlCh appro<tch or combination of approaches to use in analyzing a situation. There wiII never be a substitute for, careful analysis of actua1 situations. Yet theory is ineseapable; alI empirical or practical anal)'sis rests 011 it Pragmatie po.lic)'makers might think that the)' need pa)' no. mo.re heed te theo:cttcal dlsput,es over the nature of worId politics than they pay to rnedle:al seholast~c disputes over how many angels can dance on the hcnd of a pm. Academlc pens, however, leave marks in the minds of statesmen with profound results for poliey. Not onl)' are "practicaI men who believe themselves to be quite exempt fram uny intelleetuaI influences" uneonscious captives of eoneeptions created b:, "some academic scribbler of a few years back," but increasingly the scribblers have been playing a direct

role in forming foreign policy.7 InuppropTate images and i1l~eonceived p~re~ptions of worId politics cau lead directly to inappropriate ar even disastrous national policies. Rn~ionale und rationalization, systematic presentation and symbolism, become so intertwined that it is difficult, even for policymakers themselves. to disentangle reality from rhetoric. Traditionally, classical theories of \VarId politics have portrayed a potential "state of war" in which states' ~)(~haviarwas c10minatcd by the constant danger of militm-y confliet. Dur~ 1I1gthe Co.ld War, e'peeiall)' the fir,t deeade after World War lI, thi, conception, labeled "politicaI realism" by its proponents, beeame widely ncccptcd by studcnts tlml prm:titioncrs of intcrnational rclations in Europe and the United States.8 uuring the 19605, many otherwise keen observers who"accepted realist approaches were slow to pereeive the dcvelopment of ncw issucs that did not eenter on military-security conccrns. o The same dOl11ina~timage in the late 1970, or 1980, wo."ld be likel)' to !ead to even more u\u'calistic expcctations. Yet to exehange it for an equaJly simple vic\V- for instancc, that military force is obsolctc and economic interdc. pendence benigll - would condemn one to equally grave, though different, crrors. \'~hat are thc ma.!or.featurcs of world politics whcn intcrdepenclence, partlculnrly eem,anuc lIlterdependence, is extensive? l} This is one of the two major quest!ons we address in this book. In Chapter 2 we explore this questian ~.ngeneral terms; in Chapter 5 and part of Chapter 7 we investi~ate it further in four case studiesj and Chapter 8 examines the implica~ tlons for Ame:'ican foreign polil.:y. To lay the groundwork for these analyses, in the rest of this chapter we define what we mean by interdependence, diferentiate its major types, aDd relate them to the concept of power, whch remains fundamental to the analysis of world polities, Interdependence affects worId politics and the behavior of states; but ~cvernmentaI .actions also inRuence patterns of interdependence, By creatlIlg OI' accepting procedure3, rules, ar institutions for eertain kinds of nctivity, governments regu)ate and contraI transnationaI und interstate rela~ tjons. "Ve refer to these governing arrangements as international regimes. Th: s~cond major question of this book is, How and why do international regimes change? Chapter 3 develops a set of explanation, for the development of internationnI regimes, and their eventual" decline. In Chapter 6 we apply these explnnations to issues of occans alid rnoney, and in Chapter 7 we u~e them to understnnd some featmes of Canadial1~Arneriean and Australinn-American relntionships.
o In The Troublcd Parhwrs/iip (New 'Ynrk; MeGrnw-Hill for the Council on Foreign Rclations, 1965) Henry A. Kissingcr discussed alliance probJems with hardJy a refcrence to economic issues, although economic iSSllC.~ were beginning seriously to divide the

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WOIlLD

POLITICS THE NEW RHETDRlC DF INTERDEPENDENCE

But interdepende~ce is not simply nu analytical concept. It is also fi rhetorical device empJoyed by publicists and statesmen. For the stntesm::m, eager to increase the number af people marching beneath hi5 banner, :ngue words with brend nppeaI are l1sefuI. For thc anaJyst, sueh vagucncss IS the path to fi swamp of confusion. Before we can construct usable caBcepts, much less incrense Our understanding cf interdependence and regim~ change, we must deur a way through the rhetorical jungle. Our tnsk 15 to analyze the politics of interdependence, not to eelebmte it.

THE NEW RHETORIC OF INTERDEPENDENCE


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During the Cold War, "national security" was fi slogan American political leaders used to generate Support for their policies. The rhetoric of national security justHi.ed strategies designed, at considerable cost. to bister the economic. military, Dnd political structure of the "free world." It 'also pro~ vided a rationale for international cf)operation and support for the United Nations, as well as justiflcation for nlliances, fmeign aid, anel cxtcnsive military involvcments, . National security became the favorite symhol of the internationalists who favo!ed increaseel American involvement in worId affairs, The key foreign poliey coordinating unit in the White House was namcd the National Security Council. The Tr~unan administmtion used th~ allegeel Soviet threat to American security ta push the loao to Britnin anel then the Marshall PIaI} through Congress, The Kennc1y administratioll employed the security argument to promote the 1962 Trade Expansion Act. Presidents invokeq national security to contraI certain sectoral economie nterests in Congres~. particularly those favoring protectianist trnde poli. cies, Congressmen who protes~ed alvel'se economic effects on their rlistricts 01' increased taxes Were assured - and in turn explained to coilstituents_ that the "national security interest" required their sacrifice, At the same time, special interests frequently manipulated the symboIism of national security for their a~n purposes, as in the case of petroleum import quotas, promoted particularIy 'by domestic oil producel's nnd their politicnl alIies,lO N. \tionnl security symbolism was Iargely n product of the Cold Wnr and the severe threat Americans then felt. Its persuasiveness was increased by realist analysis. which insisted that national security is the primary national gaal and that in international paIitics security threats are pennanent. National security symbolism, and the realist made of allalysis that supported it, not ollIy epitomized a c~rtain way of reacting to. events, but helped to codify a perspective in which some challges, pnl'ticularly those taward radical regimes in Third World countries. seemed ininlicai to na-

tional security, while fundamental changes in the economic relations among advanced industrinlized countries seemed insignicant. As the Cold War sense of security threat slackened, foreign econornic competition allg domestic distributiOllul conflict increased. The intellectual ambiguity of "national security" became more pronounced as varied and often contradictory forms of involvement took sheIter under a single rhetorical umbrella,l1 In his imagery .of a world balance of power among Dve major centers (the United States. the Soviet Union, China, Europe, Japan), President Nixon tried unsuccessfully to extend traditional realist concepts to apply to the economic chalIenge posed, by America's postwar alIies, as welI as the political and military actions of the Soviet Union and China. As the descriptive accuracy of a vicw af national security dominated by military concerns decIineu, so did the term's symbolic power. This decline reHected not only the increased ambiguity 'of the concept, but also American reaction to the Vietnam imbroglio. to the less hostile relationship with Rusfa and China summed up by the word detente. and to the misuse of national security rhetoric by President Nixon in the Watergate affair. National security had to share its position as the prime symboI in the internationalists' Iexicon with interdependence. Poltical leaders often use interdependence rhetoric to portray interdependence as a natural necessity, as a fact to which policy (and, domestic interest groups) must adjust, rather than as a sihmtion partialIy created by policy itself. They usually argue that conflicts of interest are reduced by interdependence, and that cooperation alone holds the answer to world problems, . "We are alI engaged in a. common enterprise. No nation ar group of nations ca.n gain by pushing beyand the limits that sustain world economic growth, No one benefit'l from basing progress an tests af strength." 12 These \Vords eIearly belong to a. statesman intending to limit demands from the Third World und influence pllblic attitudes at home. rather than to analyze contemporary reality, For those who wish the United States to retain world leadership, interdependence has become part of the new rhetoric, to be used against both economic nationalism at home and assertive challenges abroad, Altho'lgh the connotations of interdependence rhetoric may seem quite different fram those of national security symbolism each has often been used to legitimize American- presidentiaI leadership in world alfairs. Yet interdependence rhetoric anel national security symbolism coexist only uneasiIy. In its extreme formulaton, the formeI' suggests that conBicts of interest are pass, whereas the latter argues that they are, and wiIl remain, fundamental, and potentially violento The confusion in knowing what analylical models to apply to world polilics (as we notd earlier) is

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INTERDEPENDENCE

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thus parallekJ by eonfusiOIl about the policies that should be employed by t~e United States. Neither interdependence rhetoric 110r national security symbolism provides reliable guidelines for problems af extensive interdependence. Rh~toriticians af interdependence often clairn t:lat since the survival af the human race i5 threatcncd by environrnental as well as military dangers. conflicts af interest among stntes and peoplcs no longer existo This concIu 5ion would anIy follow if three conditions were met; an international economic system o; which everyone depended or our basic life-supporting ecological system were in danger; alI countries were significantly vulner. able to such a catastrophe; anel there were only one solution to the prob1em (leaving no room for conflict about how to solve it and. who should bear the costs). Obviously these conditions are rarely alI present. Yet balance of power theories and national security imngery are also poorly adapted to analyzing problems of economic or ecologicaI interdeM pendence. Security. in traditionaI terros, s not likely to be the principal issue facing governmentS. Insofar as miIitary force is ineHective on certain issues, the conventional notioo of power Iacks precision. -In particular, diHerent power resources may qe needed to deaI with diHerent issues. FnalIy, in the politcs of interdependence, domestic anel transnationaI as weIl as governmentn1 interests are involved. Domp.stic and foreign polic)' become cIosely linkccl. Thc notion of national interest _ the trnditionalists' 10destar - becomes increasingly difficult t use effectiveIy. Tmclitionnl maxims Df international politics - that states will act in. their national interests or that they will attempt to maximize their power _ become ambiguous.
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We are not suggesting that internationaI conflict disappears when interM dependence prevails. 00 the contrary, conflict wiII take new forms, and may even inerease. But the traditional approaches to undcrstanding conM Hict in worId politicoSwil! not cxplain interdepcndcnce conHict~aIticularIy weIl. AppIying the wrong image and the wrong rhetOl'ic to problcms wiII Iead to erroneous analysis and bad policy.

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INTERDEPENDENCE

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moncy, goocls, pcople, and messages across ,international bounda'ries. S"l1ch transactions have increased dramatically since World War II: "Recent deeades reveaI a general tendency for many forms of hum.h.n interconM nectedness ac:ross national boundaries to be doubling every'ten years," la Yet this interconnectedness is not the sJ.m as interdependence. The effects of transactions on interdependence will depend on the constraints, or costs, associated with them. A country that import'i all of its oil is likely to be more dependent on a contnuaI flow of petroIeum than a country importing furs, jewelry, and perfum.c (even of equivaIent monetary value) wilI be on uninterrupted access to these Iuxury goods. Where there are reciprocal Jlthough not necessarily symmetrical) costly effects of transactons, there is interdependence. Where interactions do not have significant eostly effects, there is simply nterconnectedness. The distinction is vital if we are to undcrstand the politics of interdependence. Cost1y,.effeets m"y"be imposed directIy .and intentionally by another actor - QS in Soviet.American strategic. interdependence, which derives from .lhe mutuaI threat of nuclear d~struction. But some costIy effects do nol come directly or intentonalIy from other actors. For exampIe, collecM tive actioo may be necessary to prevent disaster for nn al1iance (the memM bers of which are nterdependent), for an international economic system (which may face chaos because cf the absence of eoordination, rather than through the maIevolcnce of any actor), 01' for an ecological system threatened by a gradual increase of industrial effiuents. We do 1l0t limit the term interclependence to situations of mutuaI bcnefit. Such a deflnition wou1d assume that -the concept is onIy useful analytically where the modernist view of the worId prevails: where threats of military force are fcw and k:veIs of conflict are low. It would excIude from interdependence cases of mutuaI dependence, such as the strategic interdependcnce bctwccn the Unitcd Stntes anel the Soviet Union. FurtherM more, it would mnke it ve.ry ambiguous whether relations between indus. trinlized countries anel less developed countries should be considered interdependent or not. Their inclusion would- depend on ao inherentIy subjeetive judgment about whether the relationships were "mutually beneficiaI." Bcctluse wc wish to avoid stcrile argurncnts about whether a given set of relationships is characterized by interdepcndence ar not, and because wc scck to use thc conecpt of interdependence to intcgratc rather than furtl~er to divide moderni~t and traditional approaches, we choose a brbader definition. Our perspective implies that interdependent rclatiollM ships will alwu)"S involvc costs, sincc intcrdcpendence restricts autonomy; but it is impossible to specify '2 priori whether the benefits of a reIalion. ship wilI excced the costs, This will depend on the values of the aetors as

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In eommon parIancc, clepellclellCe mcallS a statc of being c1ctcrmillcu. or significantly affected by externaI forces. Interdependence, most simply defined, means mutual dependence. Interdependence in world politics refers to ::.:ituationseharaeterized by reciproca1 effects i.\mollg countries or among actors in different countries. These effects often rcsult from internatonaI transactions _ flows of

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weIl as ou the na.ture of the reIationship. Nothing guarantees that relatianships that we designate as "interdepcndent" wiU be characterized by mutual benent, Two di!fercnt perspectives can be adopted for analyzing the cost, and bcneRts of nn interdependent relationship. The flrst focuses on the joint gains ar joint lasses tc the parties invoIved. The other stresses relative gains and dis~rib1J.tfonaIissues. CIassicaI economists adopted the first ap~ proaeh in formulnting their powerful insight about comparative advan~ tnge: that undistorted internntionnl trade wiU provide overaIl het beneflts. Unfortunntely, an exc1usive focus on joint gain mny obseure the second key issue: how those gains are divided. Many af the crucial political issues af interdependence revolve mound the oId question of politics,. "who gets what?" It is important.to guard against the assumption that mensures that in~ crease joint ~gain from a relationship wiII somehaw be free 'of distributional confliet. Governments and nongovernrnental organizations wil}.strive to increase their sha.res of gains from transactions, even when' th~y both proRt enorrnously from the relationship. Oil-exporting governments nnd multinational oil con:tpanies, for instance, share an interest in high prices for petroleumj but they have also been in conBict over shares of the profits involved. We must therefore be cautious about the prospect that rising interdependence is creating a brave new world of cooperation to replace the bad oId world of international conB.ict. As every parent of smal! children knows, baking a larger pie does not stop disputes over the size of the slices. An optimistic npproach wnuld ovcrlook the uses af ecollolllic and cvcn ccological interdepcnclence in competitive inter'ational poIitics. The differerlce between traditional international politics and the politics of ccollomic und eeologicnl intcrdepcndence s not the difference bctwcen a warld of "zero-sum" (where one side':; gnin is the other side's 10ss) and "nonzero-sum" games. Military interdependence need not b~ zero-sumo Indeed, military alIies aetivcly scck intenlepcnclcncc to provide cnhnllced security for alI. Even balance of power situations need nat be zero-sumo H one side seeks to upset the starns quu, then its gain is at th~ expense of the other. But if most ar ali participants want n stabIe status' quo, they can jointly gain by preserving the balance oi power among thern. Conversely, the poltics af ecanomic and eealogicaJ interdependence involve compctition even whcn large net benefits cnn be cxpccted fram coopcrn~ tion. ll1crc are important continuities. as wel! as marked differences, between the traditional politics of military security '1nd the polilics of economic and ecological interdependence, We must aIso be careful not to define interdependence entirely in terrns of situatians of evenly balanced mutuaI dependence. It is asymmetries in

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dependence that are most likely to provide saurces of inB.uence for actars in their dealings with one another, Less dependent aetors can often use the interdependent relatianship as a source af power in bargaining over an issue uacl perhaps to affect other issues. At the other extreme rom pure symmetry is pure dependence (sorneti::nes disguised by caIling the situation interdependence)j but it toa is rare. Most cases lie between these two extremes. And that is where the heart of the poltical bargaining proeess of interdependence lies.

POWERANDINTERDEPENDENCE
Power has always been an elusive eancept f~r statesmen ando ~nalys~ af intern".tional politics; now it is even more shppery. The tradition~I Y1ew was that rnilitary power dominated other forms, and that states Wlth the most miIitary pawer controIled world affairs. But the resources that praduce power eapabilities have becorne more complexo In the eyes of ane astute observer, "the postwar era has witriessed radical transformatians in the elements, the uses, and the achievernents of power." H And Rans Morgenthau, author of the leading realist text on international politics, went so far in his reaction to the events of the early 1970s as to announce ao histaricaIly unprecedented severing of the functional relationship be. tween poltical, military, and economic power shown in the possessian by rnilitarily weak countries of "monopolistic ar quasi-monopolistic controI of raw materiaIs essentiuI to the operation af advanced economies." 1:i Power can bc thought of as the ability of an actor to get others to do somethng they otherwise would not do (and at an acceptab!e cost to lhe nctor). Powcr can "Iso bc conccived in terms of contraI over outcomes. In either case, measurement is not simple.H\ We can look at the initial power resaurces that give an actor a potential ability; or we can look at that actor'.~ aetnaI influcnce avcr pntterns of outcomes. When we say that asyrnmetrical interdependence can be a source af power we are thinking of power as controI over resourees, or the potential .to ~ffeet out~o~es. A less dependent nctor in a reIationship often hns a slgl11ficant pohttcal resource. because ehanges in the relationship (which the actor may be able to initiate or threaten) wiIl be less costly to that actor than to its partners, This advantage does not guarantee, however, that the political resources provided by favorable asymmetries in interdependence will lead to ,simil~r patterns of control over autcomes. There is rarely a one-to-one reIationship between power measured by any type of resources and pawer measured by effects on outcornes. Poltical bargaining is the usual means of traoslating potential into effects, and a Iat is often last in the transla,tion. .. To understand the role af power in interdependence, we must distin~

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guish between two dimensions, sensitivity and vulnerability. Sensitivity il1volves degrees af responsiveness within a poIicy frarnework _ how quicldy do changes in one country bring costly changes in another, and how great are the costly effects? It is measured Dat merely by the volume af Bows across borders but also by the costly effects af changes in transactions 011 the societies ar governrnents. Sensitivity interdependence is created by interactions within a framework af policies. Sensitivity assumes that the framework rCl1uins ~nchanged. The fact that a set af policies remains constant may reflect the difficulty in formulating new policies within fi short time, ar it may reflect fi cammitment to a certain pattern af domestic and international rules. Ao example af sensitivity dependence is the way the United States, Japan, and "Vestem Europe were affected by increased ail prices in ~971 and again in 1973-74 and 1975, In the absence of new 'policies, which could take many years or decadcs to implement, the sensitivity of these ecanomies was a function of the greater costs af foreign oil and the propartion af petroleum they imported. The Unitecl Stntes was less sensitive than Japan to petralcllll1 price riscs, bccal1sc a smallcr proportion of its petroleum requirements was accounted for by imports, but as rapid price increases and long lines at gasoline stations showed, the United Stntes was indeed sensitive to the outside change. Another example of sensitivity interdependence is provided by the international monetary situntion prior to August 15, 1971. Given the constraints on policy created by the roles of the International Monetary Fund (IMF), European governments were sensitive to changes in American monetary policy, and the United States was sensitive to European decisions whether ar not to dernand the converson of dolIars into gold. Sensitivity interdependence can be social OI' political as well as eco. nomic, o For example, there are social "contagion effects," 511ch as the trivial but rapid spread of the fad of "streaking" fram American to Euro. pean society" in 1974, ar, more significant, the way in which the development of radical .student movement.s during the la~e 1960s was reinforced by knowledge of each othcr's activities. The rapid growth of transnational communications has enhanced such sensitivity. Television, by vividly presenting starvation in South Asia to Eurapeans and Americans aboU'~to sit dowll to their dinners, is almost certain to ncrease attentioll to and concern about the issue in Eurupean and American societies, Sensitvity to such an issue may be reflected in demonstrations or other poltical
o Since we .are referring to the .;en.~itivity of economics aod polities to ooe another, not merely to pricc sensitivijes ar interest rutc scnsitivitics as llsed by economists, our de6nition builrb on, but differs Irom, that of Richard Cooper, TIlfJ Ecollomics of Interdepelldellce (New York: l'.lcGraw-Hili, 1968),

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action, even if no action is taken to alleviate the distress (and no economic sensitivity thereby results). ., . Using the word illterdepenclence, however, to refer only to sensItlvIt)' ObSCll'CS some Df tbe most impcrtant poltical aspects of mutual dependence,17 \Ve must aIso consider what the sit-uation would be if the frame~ work of policies could be changed. If more alternatives were available, and new and very different policies were possiblc, what wou.ld be the costs of adjnsting to the outside change? In petroleum, for instanc~, wh~t matters is not only the prop(1rtion of one's needs that is imported, but toe altematives to imported energy and the costs of pursuing those alternatives. Two countries, each importing 35 percent of their petroleum needs, may scem equally sensitive to price rises; but if one could shift to domestic SOluces at moderate cost, and the other had no such alternative, the second state would be more vulnerable than the first. The vuInerability dimnsion of interdependence rests on the re~ntive nvailability and costli~ ness of th alternatives that various actors face. Under the Bretton Woods mO:1etary regime during .the late 1960s, both thc'United States and Great Britain were sensitive to decisions by foreign spccuiators 01' central banks to shift asseu; out of dollars ar sterling, respectively. But the United States wns Iess vulne~able than Bri~ain because it had. the option (which it exercised in August 1971) of changmg, the mIes af the s)'stem at what it considered toleuble costs. The underlymg capa~ bilities of the United States reduced its vuInerability, and therefore made its sensitivity less !ieriaus politically. In terms of the costs of dependence, sensitivity .means liability to costly effects imposed from outside before policies are a:ltere.d ~o ~~ to change the situation, Vulnerability can be defined as an actor 5 hablhty to suffer costs imposed by externa} events even after policies have been altered. Since it s usually difficult to change policies quickly, immediate effect~ .of externaI chonges gellemlly reHect sensitivity. dependence. Vulnerabihty depcndence cnn be mensurcd only by the costliness of makl1lg efFecbve adjustments to a changed environment over a period of time, . Let tiS ilIustrate this distinction graphically by imagiIng three countrlcs faced simultaneonsl)' with all externaI event that imposes costs on them for example, the situation that oil-col1suming countries face when producers raise prices, ,. Figure 1.1 indicates the sellsitivity of the three countnes to costs lmposed by such on outside change. Initially, country A has. ~o~ewhat higher sensitivil)' to the change than B and much hlgh~r sensltlvlty th,an C, Over time, furthermore, C's senstvity falls even wtthout any pol~cy changes. This change might be caused by price rises in ,country C, WhlCh gradually rcduce oil consumptian, and thcrefore reduce lmports, The total

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FIGURE 1.2 Vulnerability of three countries (assume polit::y ch~nged)

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sensitivity of each country over the time covercd by the graph is\l'cpresented by the arca under its respective lne. Qo Suppose we now alter this picture by assuming that each country tries to change ~ts policies in arder to reduce the costs imposec1" by outside actians, In OUl' oil example, this attempt rnight involve deciding to incur the high .domestic costs af rntioning or developing expensive internaI encrgy sonrces. The extent of thesc costs and the poltical willingnes'i to bear them would be the mensure of vulnerability. The vulnerability af a country such as Japan is impased primarily by that country's physical endowments anel is virtuaIly inescapablc without dnP.-ltic cost'i._ For other countries, sueh as the United States. physical vulnerability is not so great, but sociopolitieal eonstraints on poliey change ror,y cause vulnerability. For instance, American efforts to farmulate a new e'lergy palic)' after 1973 were slowed bv the lack af domestie consensus on the issue . In Figure 1.2, eepi~ting vulneralJility. we cau sec that ~ountry A's vuInerabiIity is much less than its sensitivity. A palie)' challge at the beginning of the seeond time period allows that eountry, by the third period, to reduce costoS imposed by externaI change almost to the vanishing poinl. Country A's _diminished vulnerabiIity would reHect an -efFective poliey to beeome aetually or potentially self.sufficient in petroleum. For instance. it rnight possess new sources of energy that could be developed by the govemment. B and C are less able to alter their situations by changing poli:y, thus remaining vulnernble to eO'its imposed by autside events.
Qur exnmplc is dclibemtely simplificd. Among" othcr thing.~, thc cost.~ of th<: ,~itlMtinn at lat(Jf POillts wOllld, f COlll'Sc, bav(J tu IJc retltlcud hy au appl'Ilpriate dj,~coutlL rale,

The sensitivity dependence of the three countries at the time of the first externaI event is not. therefore. the same as their vulnerability dependence> at that time. Measures of the immediate cffects of changes will not pre~ cisely indicate long~term sensitivites (note that C's sensitivity ~ecIines naturally over tim~\ but they are likeIy to be even less a~c~rate ~n rnea:mring Iong~term vulnerabiIities, whieh will depend on pohtical WllI, govM ernmentaI ability, and resouree capabilities. In our example, aIthough country A is more sensitive than eountry B, it is rnuch less :,ulnerable ... Vlllnernbility is particuIarly important for understa,ndmg the pohti~aI strueture af interdependenee relationships. In a sense. 1t foeuses on wruch aetors are "the definers of the ceteris paribus cIause," or can set the roles of the game.18 Vulnerability is clearly IT1nrerel~vant than sensitivity, for example, in anaIyzing the politics of raw materiaIs such as the suppased transformation of power after 1973. AlI too often, a high percentage of imports of a material is taken as an index of vulnerability, when b'y itseIf it mere!y suggests that sensitivity may be high. The ~~y question !or determining vulnerability is how effectiveIy altered poliCies coul~ bnng into being sufficient quantities of this, or a eomparabIe, raw matenal, and at what cost, The faet lhat the United States imports approximateJy 85 pereent of its bauxite suppIy does not indieate A~eriean vulne:abi.lity to actions by bauxite exporters. until we know what lt wouId eost (m time as well as money) to obtain substitutes. .. . Vulnernbility applies to sociopolticaI as well as pohtlCo.economlc relaM tionships. The vulnerability of societies to transnati~nal ra~ieal mov~~ents in the late 1960, depended on their abilities to adJust national pobeles to deal with the ehange al]d reduce the costs of disrup~o.n. When Swe~en criticized American poBey in Vietnam, its vulnerablhty to a posslble Ameriean suspension of cultural contacts would have depended on how it eould adjust poliey to the new situation. Could exchange professor.s and tourists be attracted Erom eIsewhere? ]9 Let tiS look again at the eIfects. on the United States of a famine in South Asia. The vulnerablity of au American administration to domes~c protests over its Jaek of a food aid poliey would depend on the ease. Wlth whieh it eould adjust poliey (for instanee, by sh'ppmg more gram to India) without incurring other high poBtical or economic costs. How does this distinction help us understand the relationship between interdependenee and power? Clear1y, it indicates that sensitivity interd~M pendence will be less important thar. vuInerability interdep~ndenee m providing power resources to aet~rs. If one. actor e.an reduee lts eo~t~ ?y altering its poliey, either domesheally or mternatlOnaIly, the sensltivlty patterns will Dat be a good guide to power resources. Consicler trnclc in agriculhlral products hetween the United States and the Soviet Union Eram 1972 to 1975. lnitially, the American economy was

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16

~NTEnDEPENDENCE

IN WORLD POLITICS POWER AND INTEnDEPENDENCE

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highly sensitive to Soviet grain purchases: prices af grain rose dramnticaIly in the United States. The Soviet Union was also sensitive to the availability af surplus American stocks, since its absence could have intemal political as weIl as economic implications. The vulnerability asymmetries, however, fun strongly in favor of the United States. since its alternatives to selling grain to the USSR (such as governrnent storage, lower domestic prices, and more fooci aid abroad) were mOfe attractive than the basic Soviet alternative to buying grain from the United States (slaughtering livestck and reducing meat consumption). Thus, as long as tbe United States government could retain coherent controI of the policy - that is, as long as interest groups with a stake in expanded trade did not controI it - agricultural trade could be used as a tooI in poltical bargaining with the Soviet Union. Vulnerability interdependence inc1udes the strategic dimension that sensitivity inl<:rdependence omits, but this does not meao that scnsitivity is. political1y unimportant. Rapidly rising sensitivity often Ieads to com~ plaints about interdependence anel political cfforts to alter it, particularly in countries with pluralistic poli tical systems. Textile and stecl workers anel m.anufacturers, oil consumers, anel conservatives suspicious of radical movements originating abroad are alI likcly to dcmnnd ~overnmcnt policies to protect thcir intcrcsts. Policymakcrs anel policy analysts, howcver, must examine underlying patterns of vulnerability interdcpendcnce when thcy decide On strategies. What can they do, at what cost? Anel wha~ can other actors do, nt what cost, in l'esponsc? Although patterns of sensitivit)' interdependence may explain where the shoe pinches 01' the wheel squeaks, coherent policy rnust be based on an analysis of actual and potential vulnerabilities. An attempt to manipulate asymmetrical sensitivity interdepenclence without regard for underlying patterns of vulnerability is likely to fai!' Manipulating economic or sOciopoIitical vulnernbHities, however, alsc bears risks. Strategies of manipulating interdependence are Iikely to Iead to counterstrategies. It must always be kept in mind, furthermore, that military power clominates economic power in the sense 'that ecanomic means alone are likely to be ineffective against the serious use of military force. Thus, even effective manipulation of asymmetrical interdependcnce within a nonmilitary area can create risks of rnilitary counteractioll. 'Vhen the Unitcd States expIoitcd Japancsc vulncrability to cumomic emhargo in 1940-41, }apan countered by attncking Peurl l-Ial"bo1" anel thc Philip. pines. Yet rnilitary adians are usual1y vel'Y costly; anel for mi1ny typcs of actions, these costs have riscn steeply during the last thirty years. TabJe 1.1 shows the three types of asymmetrical illterdependence that we have beco discussing. The domillance ranking colunm inclicates that the power resources provided by rniIitary interdepenclence dominate those

TABLE J.l Source of

ASYMMETRICAL

INTERDEPENDENCE Cost

AND ITS USES

Domllance

,.
Contempora.'ry use
Used in extreme situations or against weak foes when costs may be slight.

illterdependence
Military (coStS af usng militJ.ry force) Nonmilirary vulnerability (cosrs af pursuing alterna~ tive policies)

ranking

ranking

Use'd when norma tive constr~ints are low, and international r\l!es are not considered binding (induding nonmilita;y relations between adversaries, and situations of extremely high _con~iet between dose partners ahd alIies). A powcr resource in the short run or'when norma~ tive constraints are high and internacional rules are binding. Limited, since if high cOSts are imposed, disadvantaged actors may formulate new policies.

Nonmilitary sensitivity (costs of change under cxi.~ting policies)

.,
provided by nonrnilitary vulnerability, which i~l.turn dominat~ those provided by asymmetries in sensitivity. Yet eXerClSlng more ~omlllant forms of powcr brings highcr costs. Thus, relative to cost, there IS no guara~tee that military means wilI be more efFective than economi~ ones to nch1Cve a given purpose. We can expect, however, that as the mterests at stake become more important) actors wiII tend to use power resources that rank higher in both dominance and cost. A movement from ooe power resource to a more effective, but more costly, resource, wiU be rnost Iikely where there is a sub.stanti~l incongruity between the distributian of power resources on one dlmensl0n and those on anotl1el'. In such a situatioll, the disadvantagcd actor's power position would he impr0ved by raising the level at which th~ c?ntrov~rsy is <.:ondl'cted. For instuncc, in n c{)ncession ngrcc-Illcnt, a multinutlonal 011 com. pany may seem to have a bctter Largaining position than the host government. The agreement may alIow the company to set the levei of output, and the price, of the petroleum produced, thus mak~ng ~ove:n~ent revenues sensitive to company decisions. Yet -such a sltuatlOn IS mherently

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INTERDEPENDENCE

IN WOllLD ~OLITICS lNTEnNATlONAL RECIME CHANCE

19

~nstable, since the government may be stronger OU the vulnembility climcnSlOn, Once the country has determined that it cun afford to nlter the ngreement unilaterally, it may ha.ve the upper hand .. Any attempt hy the c.ompaJ~Y to take advantage af lts superior position 011 the sensitivity dimen51011, wlthout recognizing its weakness at the vulnerabiIity levei (much Iess at the leveI of military force) is then Iikely to end in disaster. We concJude that a useful beginnillg in the poltical analysis Df international in~erdependence cao be made by thinking af asymmetricaJ interdep~ndel1CICS as SOurccs af power among actors. Such a framework Ciln be apphed .to l'elatons betwecn transnationnl actors (51.1ch as multinational corporatJons) and govcrnrnents as welI as interstate relatiOl~s. Different ~pes Df interdapendence lead to potential politicaI inRuence, bilt under ~lff~rent constraints. SelJsitivity interdependence can provide thc uasis for slgmucant politicaI" influence only when the rules and norms in cIfect cun be .takcn for granted, OI' when it would be prohibitively costly for dissatisfl~d sta~es to ch~nge their policies quickly. If one set af ruIes puts an actor In a d~s~d"antageous position) that netor wilI probably tl'Y to hunge those rules lf lt ean do so at reasonnble cost. Thus influence deriving from rab le .hvo ..~~ymmetries i~ :,ensitivity is very limtocl wholl the IllldorIylll': ,ISY.lnlllctlIcs 1Il vnlncrablhty are unfavoraulc. Likewise, if a state chafes at lts econo~ic ~Inerabilities, it may use military force to attempt to redress thnt sl~untlOn ns)apan did in 1941; OI', it may subtl)' threaten to use force, as dld the Umted States in 1975, when facing the possibility nf ~uture 011 boycotts. But in many contemporary situations, the use of force 1S so co~tly, and its threat 50 difficult to rnake credible, that a military strategy IS an act of desperation. . Yet this is nat the whale story of power nnd intei"dependence. Just as 1mportant a.s understanding the wny that manipulation of interdependence ~an. be an lnstru~en: of power is an understanding of that instrument's hmlts. Asymmetneal l~terdependence by itself cannot explain bargaining outcomes. even, i.n traditionaJ relr..tion~ among states, As we said earlier, power measured in terms of resollrces 01' potential may look diffGrent Erom power measured in terms af influence ave!, outcomes. "Ve must 'lIso look ~t the "ttansIatiou" in the poltical bargaining processo One of the most lmportant renSOns.for this is that the commitment of n weaker state may be much greater than that of its stronger partner. The more dependent act?r may be (ar appear to bel more willing to 5uJfer. At the politicomilltary level, the. United States' attempt to coerce North Vietna~ provides an obvlQUSexample. . . Yet ~he point holds even in more cooperative interstate relations. In the ~anadlan~American relationship. for example, the use OI' threat of for(,'e is vlrtual1y e~~luded Eram consideration by either side. The faet that .eanada has Jess mlhtary' strength than the United States is therefore l10t a majOl'

f<.lctorin the bargaining processo .The Canadians can take ndvantage of their superior position on such economic issues as oH and natural gas exports without fearing military retaliation 01' threat by the United States. Moreover, other conditions of contemporary internationaI interdependence tend to limit the abilities of statesmen to manipu1ate asymmetrical interdependence, In .particular, the smalIer state may have greater internaI poltica1 unity than the larger one. Even though the more powerfuI state may be lcss dependent in aggregate terms, it may be more fragmented internally und its coherence reduced by eonflicts of interest and difficulties of coordinntion within its own government. We wiII explore this question further in Chapter 7 when discussing our findings on Canadian-American and Australian-American relations between 1920 and 1970. What we have said is sufficient to indicate that we do not expect a measure af patential power, such as asymmetricaI interdependence, to predict perfectly actors' successes 01' failures at inHuencing outcom~s. It mereIy provides fi flrst approximation of initial bargaining advantages available to either side. Where predictions based on patterns of asymmetrical interdependence are incorrect, one must Iook closely for thc rcasons. Thry will often bc fOllnd in thc lprgnining process thnt translates POWCl' l'esources in to power over outcarnes. '

INTERNATIONAL REGIME CHANGE


Understanding the concept of interdependence und its relevance to t~e concept of power is ne.cessary to answering the fi~s~major questio~. of thlS book - what are the characteristics of warId pohtlcs under condltions of extensive interdependence? Yet as we have indicated, relationships of interdependence often OCcur within, and may be affected by, networks of rules, norms, and procedures that.regularize behavior and contro~ its effects. We refer to the sets of governing arrangements that affect relationships of interdependence as international regimes. Although not so obvious as the poli tical Largaining process, equally important to understanding pawer and interdependence is our second major question: How and why uo regimes chnnge? In world politics ruIes and procedures are neither so complete nor 50 weJI enfol'ced as in welI-ordered domestic politica1 systems, and the insti. tutions are neither so powerful nor so nutonornous, "The mIes of the game include some national ruJe5, some international ruIes, some private roles - and large areas of no mIes at alI." 20 The weakness of international organizations and the problems of enforcing international law sometimes misJead observers into thinking that international regimes are insignificant, 01' ioto ignoriog them entirely. Yet although overall global integration is

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'20

INTEnDEPENDENCE

IN WORLD POLITICS INTEn~ATIONAL REGIME CHANGE

j 21

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weak, specific international regimes often have impol'tnnt effects on interdependent relationships that invo}vc a few countries, ar involve many counties 011 a speciflc issuc. Since World War U, for instnnce, specific sets of roles and procedures have becn developed to guide states and transnational actors in a wide variety af areas, including aid to Iess developed countries, environrnentnl protection, fisheries conservation, inter1.( national fooci poIicy, internntional meteorological coordination, international monetary policy, regulation af multinational corporntions, htcrnational shipping policy, inlernational telecommunications policy, and internn21 tional trade. In some cases these regimes have been formal and comprehensive; in others informal and partial. Their effectiveness has varied from issue-area to issue-area and from time to time. 011 a more selective ar regional leveI, specic groups of countries such as thosc in the European Community or the Organization for Eeonomic Cooperatiol1 and Development (OECD) have devcIoped regimes that alfect several aspeets of their countries' relationships with each other. . International regimes ma)' be incorporated into interstate agreement!'i or treatics, as WCl'Cthe international monetar)' arrangernents devclopcd at Bretton Woods in 1944, or the)' may evolve Erom proposed formal arrangcments that were never implemented, as was the General Agreement :111 Tarilfs and Trade (GA TI), which derived from the International Trade Organization i~roposed after World War lI. ar the)' may be mereI)' i111pItcit. as in the postwar Canadian-American relationship. They vary not only in their cxtensivencss but in the dcgrec of adhcrencc they receive from major aetors. When there are no agreed norros and procedures or when the exceptions to the mIes _are more important than the instances of adherence. there is a nonregime situation. o To understand the international regimes that affect patterns of interdependence, one must look, as we will in Chapter 3, at structure and pro..::ess in international systems, as well as at how they affeet cacho other. The structure of a system refers to the distribution of capabilities among similar units. In international poltical systems the most important units are states, and the relevant capabilities have been regarded as their power resources. There is a long tradition af categorizing the distribution of power in interstate systems nceording to the number and importance of major actors (for instance. as uni polar, bipolar, multipolar, and clispersed) just as economists describe the structure of market systems as monopolistic, duopolistic, oligopolistic, and competitive.2:! Structure is therefore
o We are concemed in this book with the general question of adherence to specilled basic nonns af the regimes we examine. Rcgirnt:s can aIso be categorzed in terms of the degree and type of politic:d integration amoo/{ thc states adlwrl1R to th"lll. See J. S. Nye, Peaee ill Parts (Boston: Little, I3rowu, 1971), Clmpter 2, for discussion of rneasurernent of thc integra tive aocl institutional dimensions of regimes.

distinguished from process, which refers to allocative ar bargaining behavior within a power structure. To use the analogy of a poker game, at the process leveI anall'sts are interested in how the plal'ers plal' the hands thel' have heen dealt. At the struetural leveI thel' are int""ested in how the cards and ehips were distributed as the game started. InternationaI regimes are intermediate factors between the. power s.tr~cture of an international system and the poltical and economl.c ~arg~tnmg that takes plaec within it. The strueture of the sl'stem (the dlStnbution of power resources among states) profoundly affects the nature of the regime (the more or less 100se set of formal and informal nprms, rules. and proce~ dures relevant to the system). The regime. in rum, affects and to some extent governs the political bargaining and daly decision-making that occurs within the system. . . Changcs in intcrnatiollal regimes are very impOI,.tant. In ,mt~rn.atlOnal traJe, for example, 'an international regime includlllg nondlscnn:mutory trride praetices was Iaid down by the General Agreement 00 Tanffs and Trade (GATT) in 1947. For almost three deeades, the GATI arrangements have constituted a relatively effective international regime. 1?ut the last decade. particularly sipee the first United Nations Conference on Trade and Development in 1964, has been marked by the partll' successful eflorts (J' Icss developed eountries to ehange this regime. More broadll', bl' the mid-1970s the demands of less developed countries for a NQW International Eeo'nOInic Order involved struggles over what internntional reg~mes shoulc1 govern trade in raw materiaIs and rnanufactU1:es.as wcll as dnect foreign investment. . In the two issue areas that wc will investigate in Part II - money and oce".ns - some regime change5 have been rapid and dr~m~tic wh~reas others have been gradual. Dramatie changes took place 1Il mternatlOnal monetary poliel' in 1914 (suspension of the gold standard); 193;' (abandonment of the gold-exchange st,ndard); 1944 (agreement o~, the Bretton ,Voods Sl'stem"); and 1971 (abandonment of. the eon,vertlblhty of dolla1's into gold). Rulcs govcrning the uses of the worId 5 oceans changed more sIowly, but with signi6cant turning points in 1?45 and aftel' 1967. Yet we have no theor)' in the field of international relatlOns that adequately explains sueh changes. Indeed, most of our theories do not foeus on this (lucstioll at alI. . . In Chapter 3, we shall look cIosell' at the problem of explallllng th, ehangc or pcrsistcnce in the patterns af norms, mIes, and. procedures that govern interdependence in various issues. TIlere we wl11 lay out four models, or inteI1eetual constructs, designed to explain regime change, and cxilmine thcir strcngths anel weaknesses. The models rest on different assumptions about the basic conditio.ns of world pOltic,s. Since world poltics varies, over time and from plaee to place, there IS no reason to

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