International cooperation and game theory

Abstract The study of international cooperation has emerged and evolved over the past few decades as a cornerstone of international relations research.

Keywords international cooperation theory international cooperation rational choice approach international relations international institutions game theoretic approach international politics. Access to Document Together they form a unique fingerprint.

View full fingerprint. Oxford Research Encyclopedia of International Studies. Crucially, the design approach takes a first step toward explaining institutional origins and change by moving beyond the somewhat empty functionalist language that is sometimes erroneously equated with the rationalist approach to focus on the intentional sources of institutions.

As a result, the design approach has recently broadened from considering the causes of design choices to also explore their consequences. A focus here has been on investigating empirically the consequences of certain design choices with respect to trade agreements, particularly in terms of depth and rigidity Johns, Elsewhere, Cooley and Spruyt addressed the downstream implications of agreement flexibility for states engaging in sovereign transfers through the lens of an incomplete contracting framework.

Pelc evaluated the welfare effects of agreement flexibility at the WTO. Regardless of why states design and create them, what effects do international institutions have? Do international institutions help states resolve their collective action problems by promoting compliance with agreements? Studies on compliance, in particular, specify causal mechanisms by which international institutions induce states to comply with international agreements.

Do states comply and why? Different answers hold different implications for understanding international institutions. In contrast, the enforcement school Downs et al. This reminds us that the rationalist ICT program can be usefully supplemented by related understandings of international cooperation. There is a vast empirical literature on compliance and the effects of international institutions spanning many issue areas. These examples illustrate the penetrating impact of ICT on the entire international relations discipline.

While no brief review can do justice to the voluminous insights generated in the large empirical literature, it is clear that empirical studies provide much of the basis for the continuing effort to specify causal mechanisms for institutional effects. Increasingly, scholars examine international institutions in a broader range of strategic settings. Simmons argued that international institutions raise the cost of noncompliance and thereby enable complying governments to send signals to the market.

Highlighting domestic dynamics, Dai argued that international institutions influence national policies through empowering domestic constituencies. Chapman and Fang modeled how international institutions provide informational clues to domestic audiences and thereby alter domestic politics.

Simmons found that human rights treaties constrain states because they help mobilize domestic stakeholders. Works on indirect effects of international institutions are closely related to the literature on domestic politics and international cooperation discussed above. Works reviewed in the section on Domestic Politics , including Vreeland , Powell and Staton , Lupu , , and Chaudoin among others, all speak to the domestic conditions that may facilitate or prohibit the effects of international institutions.

This line of research continues to uncover previously underspecified channels of influence. ICT has been criticized, with some justification, for paying insufficient attention to distribution and power Wendt, Its original problematic of cooperation under anarchy implicitly treated the achievement of order through international regimes as a public good that benefited all Kindleberger, While Keohane , for instance, recognized the distributive issues at stake, the literature emphasized efficiency explanation for international regimes in promoting cooperation.

Despite attention to coordination problems, bargaining, relative gains, and distributional issues in design as noted above, distributional issues and conflicts have not been sufficiently prominent. This benign view of cooperation in turn deemphasizes the importance of power.

But of course, institutions are often tools of redistribution, and Knight argues that distributional effects of social institutions are central to understanding their development and change.

To correct the insufficient attention paid to power and distribution by early ICT then, more recent work has refocused on these issues albeit without drawing the same overly pessimistic conclusions of neorealism , Gruber , for example, contends that power asymmetries, rather than undermining cooperation entirely, can mean that some international cooperative arrangements work to the disadvantage of some participants: where powerful states have the ability to go it alone, weaker states must choose the lesser evil between being left out of an international institution or joining it, even when both options leave them worse off compared to the status quo.

In a similar vein, Oatley and Nabors explained the Basle Accord on banking regulations as a case of a powerful state using international agreements for redistributive purposes. In particular, the United States redefined the choice set to transfer income from Japanese commercial banks and compensate American commercial banks for the costs of domestic regulation.

While many other works view the powerful as a driving force behind international institutions e. In their view, international institutions are not just bargains that reward participants unequally but may actually diminish the welfare of some. Abbott and Snidal offered a more benign but still distributive view that weaker states accept unfair deals in return for the stability and protection provided by international law.

In more recent work along these lines, Sampson showed how institutional design can be shaped by relative power dynamics, with powerful, rising states in particular able to take advantage of the development of initially limited institutions over time in order to shift distributional outcomes in their favor. While these works bring power considerations into ICT, they differ sharply from standard realist perspectives in emphasizing the continuing importance of cooperation even when it leads to asymmetric distributions, as well as the centrality of institutions in shaping the impact of power.

These works extend ICT by viewing international redistribution as another key driver of international institutions but also by pointing to domestic sources for international redistribution. Downs and Rocke examined how domestic uncertainty shapes the design of international trade institutions.

Goldstein found that the Free Trade Agreement between the United States and Canada helped to strengthen the executive in controlling a bureaucracy with protectionist preferences. Moravcsik argued that newly democratic states joined the European human rights regime to stabilize their domestic political status quo against nondemocratic threats. More generally, Brewster suggested that the demand for international institutions may indirectly come from providing certain domestic interest groups with policy advantages.

Adding to the broadening of the design agenda but also closely related to issues of distribution, recent research considers the mechanisms and processes by which institutions evolve. Historical institutionalists in particular have provided an important qualification to the rational design agenda by pointing to the timing and sequence of events as central to shaping institutional outcomes Fioretos, , While this can be seen as a challenge, ICT may actually benefit from internalizing some of these critiques.

As illustration Jupille, Mattli, and Snidal combine standard rationalist theory with historical institutionalist accounts through the bounded rationality assumption and offer a theoretical framework to explain why and how institutions emerge, evolve, and persist. In coming at this problem from a more traditional rationalist approach Morse and Keohane pointed to the ways in which institutional creation is driven by competition between existing multilateral institutions.

Finally, another strand of this literature points to the reasons why institutions may be changed or created because existing institutions are no longer be considered fit for purpose, perhaps because they fulfill different objectives to those initially intended by their designers. This work is discussed in more detail in the next section on Institutions as Independent Actors. While continuing to demonstrate the central role of institutions in facilitating cooperation among states, attention has turned to the role of institutions as independent actors.

In addition to continued exploration of the principle agent problem that arises from delegation of powers to institutions from states Elsig, , new research points to the ability of institutions to undermine states through a different mechanism: orchestration of sub-state actors. Abbott, Genschel, Snidal, and Zangl showed how international organizations are able to leverage their limited resources to increase their autonomy from states.

Elsewhere Barnett and Finnemore argued that the power to make rules from which institutions derive independent power can also make them unresponsive and ineffective at the tasks for which they were originally designed. Green and Colgan found that to avoid this problem states tend to delegate functions to institutions with lower sovereignty costs, such as implementation and monitoring, but rarely delegate rule making and enforcement.

In contrast to these approaches Drezner emphasizes the positive aspects of independent institutional action with reference to the crucial role of international institutions in mitigating the effects of the financial crisis. Adopting a similar approach Fang and Stone modeled the ways in which international organizations independently exert influence on policymaking elites.

The difference in emphasis between those that highlight the negative and positive aspects of institutional independence suggests that exploration of the more normative aspects of international cooperation is an area which might present fruitful opportunities for further research.

It is difficult to end our discussion because ICT is a continuing and evolving research program; any synopsis will be quickly out of date. Instead of a conclusion, this article points toward several ongoing trends, needs, and possibilities for the ICT research program. First, while the easy gains of theoretical progress through adapting results from game theory have largely been harvested though they are surely not yet exhausted , there are several other stimuli for further theoretical progress.

Some stimuli are internal to the ICT research program and involve pursuing its theoretical logic into more detailed analyses of specific cooperation issues. Important examples highlighted above include ongoing work incorporating domestic politics into ICT, examining the role of IOs as independent agents, and exploring the design features of specific international institutions in detail.

Other stimuli are external as alternative approaches, especially constructivism, emphasize different aspects of international cooperation and its failures for which rational approaches do not yet provide a satisfactory explanation. These different stimuli often come together in raising questions regarding institutional change and creation, which have largely eluded all perspectives to date. While there are natural tensions between different approaches, there are also complementarities including, above all, a common concern to better understand international cooperation.

An important external stimulus increasingly comes from work in psychology on the nature and limits of decision making; in ICT this has led to work that has focused on developing or qualifying the rationality assumption traditionally associated with cooperation theory. In a number of areas this has led to employment of bounded rationality to explain counterintuitive outcomes, Skovgaard Poulsen for example uses bounded rationality to explain why states adopt investment treaties despite the high sovereignty costs that they incur for doing so.

Elsewhere this research has taken a different tack by identifying fundamental biological constraints on actor decision making. Another important direction for research in this vein has been to consider how to model the effects of emotion on the behavior of international actors.

Consequently, there exist opportunities for new developments to be explored within ICT without discarding the methodologically useful assumption of consistent preferences. In applying these ideas to the field of international cooperation more specifically, Hall considered the role of anger in diplomacy and suggests that anger makes certain issues sensitive and volatile—and thus outside the realm of standard bargaining interactions.

Relating these insights to conflict Ross argued that institutions tasked with reducing violence cannot afford to assume that emotions are an obstacle rather than resource for conflict resolution. Mercer broadened analysis of emotions to groups and contended that group-level emotion is powerful, pervasive, and irreducible to individuals. People do not merely associate with groups or states ; they can become those groups through shared culture, interaction, contagion, and common group interest.

In addition to these theoretical developments, there continues to be extensive empirical scholarship dedicated to both testing and refining the ICT program. This work is likely to provide continuing grist for advancing ICT. While there have been complaints that this style of work tends to shy away from the big questions in the context of international political economy, see Weaver, , that danger can be overcome by keeping the research program tightly connected to the big questions that originally motivated ICT and that continue to be important problems both theoretically and in the world.

A great deal of new empirical research has begun to move away from questions of centralization and to return to analyzing forms of decentralized cooperation albeit in ways that often also incorporate institutions through network analysis.

This research has tended to focus on issues such as the relationships between particular governance institutions or the influence of network neighbors on state behavior. In a return to questions of design, Kinne showed how bilateral agreements constitute an evolving network of cooperative ties and that these networks define the strategic environment in which states bargain. Such work suggests that ICT has important policy implications for how we can promote international cooperation through better policies and by designing better institutions—as well as for general issues of international and global governance.

Because its results are at a fairly abstract and general level, ICT does not offer immediate solutions to specific problems. But it does provide important insights—including broad guidelines for how to approach solutions to cooperation problems—that can be usefully conveyed to the policy community. We now know much more about the possibilities of cooperation and about the associated institutional needs; it is irresponsible not to make such knowledge more widely available.

In doing so, ICT must continue overcoming its statist heritage states as actors by recognizing the greater complexities of, and possibilities for, international governance raised by the inclusion of other actors. ICT has already taken important steps in this direction by incorporating domestic politics to a greater degree and by recognizing the agency of international organizations; it has more work to do in incorporating NGOs and private actors such as firms that play an increasing role in private-public partnerships at the global level.

Finally, ICT needs to be connected to the normative issues that have always been important but usually unspoken in its development. Especially if ICT is to be used for policy purposes, it must be married to careful consideration of what should be the goals of cooperation see Diehl et al.

Similarly, for an analysis of topics such as distribution and power to have any real bite, we must evaluate the distributive effects and the ends to which power is being used. Thus, while ICT has been successful as a positive theory, it can be even more successful and much richer by expanding its normative side. Under the terms of the licence agreement, an individual user may print out a single article for personal use for details see Privacy Policy and Legal Notice.

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Search within Show Summary Details. International Cooperation Theory and International Institutions. Keywords international cooperation international institutions international relations rational choice approach game theoretic approach international politics international cooperation theory. Introduction The study of international cooperation has emerged and evolved over the past few decades as a cornerstone of international relations research.

The Developmental Logic of International Cooperation Theory States have practiced international cooperation since well before Thucydides discussed diplomacy, treaties, and alliances over two thousand years ago. Major Themes in the Study of International Cooperation ICT challenges neorealism not by arguing that the neorealist view is entirely wrong but by showing that cooperation is possible even under its highly pessimistic assumptions.

Key Assumptions Before engaging key issues and themes, it is important to be explicit about the major assumptions underlying ICT. Folk Theorem and the Possibility of Cooperation ICT disproves the realist assertion that cooperation under anarchy is impossible without hegemony.

Reciprocity and Reputation Cooperation is supported in repeated settings because of the possibility of reciprocity: if you cooperate with me, then I will cooperate with you in the future; but if you do not cooperate, then neither will I. Different Strategic Settings Different payoff structures represent different strategic settings, where the likelihood of cooperation varies Oye, The Largely Illusory Problem of Relative Gains Building on Waltz , Grieco argued that states do not seek absolute gains as ICT presumes but pursue relative gains defined as maximizing their advantage over others.

The Large-n Problem Large numbers of actors have contrary implications for cooperation. Domestic Politics Another factor affecting international cooperation is domestic politics. International Institutions Although ICT began with the question of whether international actors can cooperate without a central sovereign, it has ultimately laid the foundation for the study of central arrangements in the form of international institutions. What Do International Institutions Do?

Design Features of International Institutions Because international institutions can enhance cooperation through mechanisms such as promoting issue linkage or providing necessary information, states therefore create institutions to solve their collective action problems.

Effects of International Institutions Regardless of why states design and create them, what effects do international institutions have?

Distribution and Domestic Sources of International Institutions ICT has been criticized, with some justification, for paying insufficient attention to distribution and power Wendt, Institutional Change Adding to the broadening of the design agenda but also closely related to issues of distribution, recent research considers the mechanisms and processes by which institutions evolve.

Institutions as Independent Actors While continuing to demonstrate the central role of institutions in facilitating cooperation among states, attention has turned to the role of institutions as independent actors. References Abbott, K. Why states act through formal international organizations. Journal of Conflict Resolution , 42 1 , 3— Abbott, K. Hard and soft law in international governance.

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International Organization , 42 3 , — Oxford: Wiley-Blackwell, NNNTraces the history of applications of game theory in international relations. Provides a useful historical overview. Users without a subscription are not able to see the full content on this page. Please subscribe or login. Oxford Bibliographies Online is available by subscription and perpetual access to institutions.

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Introduction Game theory is the analysis of how decision makers interact in decision making to take into account reactions and choices of the other decision makers. General Overviews of International Conflict Although many scholars have used game theory to examine particular parts of international conflict, others have examined international conflict more generally. How to Subscribe Oxford Bibliographies Online is available by subscription and perpetual access to institutions. Jump to Other Articles:.