Putnams Two-Level

Theory of Negotiations

Kishan S Rana

Today, the distinction between the domestic and the external is increasingly difficult
to maintain, and economic diplomacy often gets into the domestic decision-making
process. In 1991 Robert Putnam put forward his two-level concept of modern
negotiation that captures very well the manner in which international negotiations
(Level I) today involve a parallel domestic negotiation process involving the home
principals (Level II), with the difference that the latter is informal, and not always
understood for what it is. In a modern democracy, where domestic opinion
parliament, political parties, the media, thinktanks and the foreign affairs community
is increasingly articulate on external policy, with the border between home-foreign
issues is porous, Putnams ideas help us to understand the way major international
negotiations unfold.

Putnam puts forward the notion of win-sets, the range of options is acceptable to the
negotiation partner, whether it is the foreign counterpart in a bilateral process, or the
home publics that have an interest in that issue. It is usually not easy to identify the
exact contours of the win-sets; but the effort to understand these win-sets is
worthwhile, because it helps to identify the range of possibilities that are going to be
acceptable, to the foreign partner and to the domestic stakeholders. (The win-sets are
distinct from Odells concept of BATNA, though the two are of course related;
BATNA refers to the minimum that the other partner is prepared to accept, and if that
minimum demand is not met, that partner will not be interested in that agreement.
Thus BATNA tells us that if we do not offer that minimum, the partner has no real
interest in the negotiations.)

The task of negotiation involves efforts to change the win-sets at both the levels, to
match ones own win-sets. This is a dynamic and complex process. Consider the
following elements that govern the process:

The narrower the win-sets, the less the scope for making concessions, which
forces the other side to move forwards, in achieving a settlement.

Wider win-sets mean a weaker negotiation position. This is a counter-intuitive

point, but reflection shows its validity. The side that has narrow win-sets will be
inflexible, and must perforce take a strong position.

One may try and widen the domestic win-sets by offering good explanations to
convince stakeholders, and also perhaps through side deals.

One needs to monitor the domestic debate in the partner country, to understand
and track their Level II process, and one may also try and influence their win-sets
through ones public diplomacy, i.e. by reaching out and trying to influence the
relevant foreign publics and decision-makers. One example is of developing
countries that make common cause with the development ministries in OECD
states, to counter pressure from their trade ministries.

Negotiators work under what is called bounded rationality, i.e. imperfect

knowledge of the win-sets of the other side, and sometimes even their own winsets.

Is it worthwhile to convey false or misleading information to the foreign partner

on ones own win-set? This is called the negotiators dilemma, and it features in
any difficult, prolonged negotiations. While it may produce short-term or singletime advantage, misleading the other side is seldom wise. It is far better to keep
the trust of the other side. But if the other side develops an exaggerated
appreciation of ones win-sets, of course it is best to let this impression persist, if
it is to ones advantage. It is active deception that is dangerous.

Where one encounters a heterogeneous structure on the other side, it makes it

difficult to estimate win-sets. But it also makes it possible to try coalition building
with like-minded elements.

Often, negotiators from developing counties who enjoy wide local autonomy (e.g.
at an international process) have wide win-sets, which in effect weakens their
negotiation position.

Putnams singular contribution is to prompt us to think of the two distinct levels and
to plan strategy accordingly. A country such as Japan, which carries out extensive
harmonization of the domestic consensus prior to foreign negotiations gains in three
ways. First, it knows well the domestic win-sets and builds these into the official
stance. Second, the relative inflexibility this produces (because any new compromise
must be cleared with the home Level II) gives it a strong negotiating position. Third,
implementation of an accord is easy because of the consensus already established with
the stakeholders.