After Victory Ikenberry UP TILL PG 78

Institutions, Strategic Restraint, and the Persistence of American Postwar Order Author(s): G.
John Ikenberry Reviewed work(s): Source: International Security, Vol. 23, No. 3 (Winter, 1998-1999), pp. 43-78 Published by: The MIT Press Stable URL: http://www.jstor.org/stable/2539338 . Accessed: 17/08/2012 20:52
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Ikenberry StrategicG.John Institutions, and the Restraint, Persistenceof AmericanPostwar Order

One of themostpuz-
zling aspects of world order afterthe Cold War is the persistenceof stable and cooperative relations among the advanced industrial democracies. Despite the collapse of bipolarity and dramatic shiftsin the global distributionof power, America's relationswith Europe and Japan have remained what they and highlyinstihave been for decades: cooperative,stable, interdependent, but order tutionalized. The Cold War is over, the postwar forged between the United States and its allies remains alive and well fifty years after its founding. This is surprising.Many observershave expected dramatic shiftsin world theCold War-such as the disappearance of Americanhegemony, politicsafter the returnof great power balancing,the rise of competingregionalblocs, and Yet even withoutthe Soviet threatand Cold War the decay of multilateralism. bipolarity, the United States along with Japan and WesternEurope have reexpanded affirmedtheir alliance partnerships,contained political conflicts, rivalry between them,and avoided a returnto strategic trade and investment and great power balancing. The persistenceof the postwar Westernorder is particularlya puzzle for neorealism.Neorealism has two clearlydefinedexplanationsfororder:balance of power and hegemony.Neorealist theoriesof balance argue that order and cohesion in the West are a resultof cooperationto balance against an external in thiscase the Soviet Union, and with the disappearance of the threat, threat,
is Associate at theUtniversity and in G. John Science ofPennsylvania Professor ofPolitical Ikenberry 1998-99 Scholar D.C. He isatuthor ofReasons of at theWoodrow Wilson Center in Washington, Visiting
N.Y.: Cornell State:Oil Politicsand the Capacities of AmericanGovernment University Press, (Ithaca,
AfterVictory: and the Rebuilding of Order after Institutions, StrategicRestraint, forthcoming book, Major Wars. I wish to thank Daniel Deudney, James Fearon, Joseph M. Grieco, John A. Hall, Charles A. Kupchan, David Lake, Keir Lieber,Charles Lipson, Michael Mastanduno, Nicholas Onuf, Duncan at the University of Chicago. Snidel, and PIPES seminarparticipants International Vol.23,No. 3 (Winter 1998/99), pp. 43-78 Secuirity,
andcoeditor coauthor New Thinking Minnesota, 1989), of TheState(Minneapolis: University of 1988), of in International of the Relations Colo.:Westview Press, 1997).He is theauthor Theory(Bouilder,
? 1998 by the Presidentand Fellows of Harvard College and the Massachusetts Institute of Technology.
43
International Security 23:3 | 44
alliance and cooperation will decline.' Neorealist theoriesof hegemony conof material power capabilities tend that order is a result of the concentration in a single state,which uses its commanding position to create and maintain order; with the decline of hegemonic power, order will decay.2In this view, it is the preponderanceof Americanpower thatexplains order,with the United States using its materialresourcesto co-opt,coerce,and induce European and Asian countriesto cooperate. But neorealist theories are inadequate to explain both the durability of Westernorder and its importantfeatures,such as its extensiveinstitutionalization and the consensual and reciprocalcharacterof relationswithinit. To be cooperationamong sure,decades of balancing against Soviet power reinforced these countries, but the basic organizationof Westernorderpredated the Cold War and survives today without it. Hegemonic theoryis more promisingas an explanation,but the neorealistversion is incomplete.It misses the remarkably liberal characterof American hegemony and the importanceof international institutions in facilitating cooperation and overcoming fears of domination or exploitation.It was the exercise of strategicrestraint-made good by an open polity and binding institutions-more than the direct and instrumental exerciseof hegemonicdominationthatensured a cooperativeand stable postwar order. For all these reasons, it is necessary to look beyond neorealism for an understanding of order among the advanced industrial societies. To understand the continued durabilityand cohesion of the advanced industrialworld, we need to turnneorealisttheoriesof order on theirhead. It is actually the ability of the Westerndemocracies to overcome or dampen the manifestations of anarchy(orderbased on balance) and domination underlying and persistence (orderbased on coercivehegemony)thatexplains thecharacter foundationsof Western of Westernorder.Neorealism misses the institutional political order-a logic of order in which the connectingand constraining effects of institutions and democraticpolities reduce the incentivesof Western states to engage in strategicrivalryor balance against American hegemony.
1. See KennethN. Waltz, Theory ofInternational Politics(Reading, Mass.: 1979). For extensionsand debates, see Robert0. Keohane, ed., Neorealism and Its Critics(New York: Columbia University "Why We Press, 1986). For an extensionof thisbasic positionto the West,see John J.Mearsheimer, Will Soon Miss the Cold War,"Atlantic Monthly, August 1990,pp. 35-50. 2. See Robert Gilpin, Warand Change in WorldPolitics(New York: Cambridge UniversityPress, in William 1981). See also Stephen D. Krasner,"American Policy and Global Economic Stability," (New York: P. Avery and David P. Rapkin, eds., Americain a ChangingWorldPoliticalEconomy and Hegemony (Boulder, Longman,1982); and see the debate in David Rapkin,ed., World Leadership Colo.: Lynne Rienner,1990).
Persistence ofPostwar Order | 45
The Westernstates are not held togetherbecause of external threatsor the simple concentration of power. Rather, Westernorderhas what mightbe called "constitutionalcharacteristics"-a structureof institutions and open polities that constrainpower and facilitate "voice opportunities,"therebymitigating the implicationsof power asymmetries and reducing the opportunitiesof the leading state to exit or dominate. This is one of the greatpuzzles thathas eluded fullexplanation:Why would the United States, at the height of its hegemonic power afterWorld War II, agree to limitthatpower? It is equally a puzzle why weak and secondarystates mightagree to become more ratherthan less entangled with such a potential hegemon. The answer has to do with the incentivesthatpowerfulstateshave to create a legitimate political order, and it also has to do with the way institutions-when wielded by democracies-allow powerful states to both lock in a favorable postwar order and overcome fears of domination and abandonmentthatstand in the way of postwar agreementand the creationof legitimateorder. Weak and secondary states get institutionalized assurances that they will not be exploited. Paradoxically,a leading or hegemonic state, seeking to hold on to its power and make it last, has incentivesto findways to limitthatpower and make it acceptable to otherstates. This institutional explanation of Westernorder is developed in four steps. First,I argue thatthe basic logic of order among the Westernstates was set in place during and immediatelyafterWorld War II, and it was a logic that addressed the basic problem of how to build a durable and mutually acceptable orderamong a group of stateswith huge power asymmetries. To gain the cooperation and compliance of secondary states, the United States had to restraint-toreassure weaker states thatit would not abanengage in strategic don or dominate them.Cooperative order is built around a basic bargain: the hegemonic state obtains commitmentsfrom secondary states to participate within the postwar order, and in returnthe hegemon places limits on the exercise of its power. The weaker states do not fear domination or abandonment-reducing the incentivesto balance-and the leading statedoes not need to use its power assets to enforceorder and compliance. restraint is possible because of the potentialbindingeffects Second, strategic of international institutions. do not simply serve the International institutions functional costs and solving collective purposes of states,reducingtransaction actionproblems,but theycan also be "sticky"-locking statesintoongoingand predictablecourses of action. It is this lock-ineffect of institutions thatallows them to play a role in restraining the exerciseof state power. In effect, institutionscreateconstraints on stateaction thatserve to reduce thereturns topower-
thatis, theyreduce the long-term implicationsof asymmetries of power. This is preciselywhat constitutions do in domestic political orders. Limits are set on what actors can do with momentaryadvantage. Losers realize that their losses are limited and temporary-to accept those losses is not to risk everythingnor will it give the winners a permanentadvantage. Political ordersdomestic and international-differ widely in their "returns to power." The Westernpostwar order is so stable and mutually acceptable because it has found institutional ways to reduce the returnsto power. Third, the Western postwar order has also been rendered acceptable to Europe and Japan because American hegemony is built around decidedly liberal features.The penetrated character of American hegemony,creating transparencyand allowing access by secondary states, along with the conof economic and securityinstitutions, strainingeffects has provided mechanisms to increaseconfidencethatthe participating stateswould remainwithin the order and operate according to its rules and institutions. American hegemony has been renderedmore benign and acceptable because of its open and accessible internalinstitutions. Fourth,the Westernorder has actually become more stable over time because the rules and institutions have become more firmly embedded in the wider structures of politicsand society. This is an argumentabout the increasing to institutions, in this case Westernsecurityand economic institutions. returns Over the decades, the core institutions of Westernorder have sunk theirroots ever more deeply into the political and economic structures of the states that participate within the order. The result is that it is becoming increasingly difficult for "alternativeinstitutions" or "alternativeleadership" to seriously and path dependent-that emerge.Westernorderhas become institutionalized is, more and more people will have to disrupt theirlives if the order is to radicallychange. This makes wholesale change less likely. Overall, the durabilityof Westernorderis built on two core logics. First,the constitution-like characterof the institutions and practicesof the order serve to reduce the returnsto power, which lowers the risks of participationby strongand weak states alike. This in turn makes a resort to balancing and relativegains competitionless necessary.Second, the institutions also exhibit an "increasing returns" character,which makes it increasinglydifficult for would-be orders and would-be hegemonic leaders to compete against and replace the existingorder and leader. Although the Cold War reinforced this order,it was not triggered by it or ultimately dependent on the Cold War for its functioning and stability.
Persistence ofPostwarOrder| 47
The implicationof this analysis is that the West is a relativelystable and expansive political order. This is not only because the United States is an unmatched economic and militarypower, but also because it is uniquely and facilitating capable of engagingin "strategic restraint," reassuringpartners cooperation. Because of its distinctively open domestic political system,and it has createdto manage because of the arrayof power-dampeninginstitutions the United States has been able to remain at the centerof a political conflict, large and expanding institutionalized and legitimatepoliticalorder.Its capacityto win in specificstruggleswith otherswithinthe systemmay rise and fall, and the distribution of power can continue to evolve in America's favor or against it,but the largerWesternorderremainsin place with littleprospectof decline. In the next section,I sketch the theoreticaldebate about American power and post-WorldWar II order and the contendingpositions of neorealismand liberalism.Following this,I develop an institutional theoryof orderformation and the "constitutional bargain" thatlies at the heart of the Westernpostwar political order. I then examine America's postwar strategyof hegemonic reassurance and the major institutional characteristics of this order that, in "doomed" the United States to succeed in overcomingfearsof dominaeffect, tion and abandonment.Finally, I develop the argumentthatthe postwar order has experiencedan increasingreturnsto institutions, which in turnreinforces the underlyingstabilityof relationsbetween the United States and the other advanced industrialcountries.
TheDebate aboutOrder
The debate over American grand strategyafterthe Cold War hinges on assumptions about the sources and characterof Westernorder.Neorealism advances two clearly defined answers to the basic question of how order is created among states: balance of power and hegemony.Both are ultimately pessimisticabout the futurestability and coherence of economic and security relationsbetween the United States,Europe, and Japan.3
3. For an extended critiqueof neorealistexpectationsof post-Cold War order,see Daniel Deudney and G. JohnIkenberry, "Realism, Structural Liberalism,and the Western Order,"in Ethan Kapstein and Michael Mastanduno, eds., Unipolar Politics: Realism and StateStrategies after theCold War(New York: Columbia UniversityPress, forthcoming). For a sophisticatedsurvey of realistand liberal theoriesof international order,see JohnA. Hall, International Order(Cambridge: PolityPress,1996), chap. 1.
Balance-of-power theoryexplains order-and the rules and institutions that emerge-as the result of balancing to counterexternalor hegemonic power.4 Order is the product of the unending process of balancing and adjustment among states under conditions of anarchy.Balancing can be pursued both internallyand externally-through domestic mobilization and through the formation of temporaryalliances among threatenedstates to resistand counterbalancea looming or threatening of power. Under conditions concentration of anarchy,alliances will come and go as temporaryexpedients, states will guard theirautonomy,and entanglinginstitutions will be resisted.5 A second neorealist theory, hegemonic stabilitytheory, holds that order is created and maintained by a hegemonic state,which uses power capabilities to organize relationsamong states.The preponderanceof power held by a state allows it to offer both positive and negative,to the otherstates to incentives, withinthehegemonicorder.Accordingto RobertGilpin, agree to participation an international order is, at any particularmomentin history, the reflection of the underlyingdistribution of power of states withinthe system.6 Over time, that distributionof power shifts,leading to conflictsand ruptures in the system,hegemonic war, and the eventual reorganizationof order so as to reflectthe new distribution of power capabilities. It is the rising hegemonic state or group of states,whose power position has been ratified by war, that defines the terms of the postwar settlement-and the characterof the new order. The continuity and stabilityof the Westernpostwar order is a puzzle for both varietiesof neorealism.With the end of the Cold War,balance-of-power thesecurity theoryexpects theWest,and particularly organizationssuch as the North Atlantic TreatyOrganization (NATO) and the U.S.-Japan alliance, to weaken and eventually returnto a pattern of strategicrivalry.The "semisovereign" securityposture of Germanyand Japan will end, and these coun4. Waltz, Theory ofInternational Politics.On the balance-of-threat theory, see Stephen M. Walt,The OriginsofAlliances(Ithaca, N.Y.: Cornell University Press, 1987). 5. Three assumptionslie behind the neorealistclaim thatbalance of power is the only real solution to the problem of order.First,all states seek security, but because otherstates can always become threats,that security is never absolute. Second, the intentionsof other states are inherently uncertain.A state can never be absolutely certainthat its currentallies will remain allies in the futureand not turninto adversaries. This is because all states have the capacity to threatenand theirintentionsare unknowable. Finally,relative capabilities are more importantthan absolute capabilities to ensure the securityof states because securityis derived fromthe relativestrength of a state in relationto competingstates. Politics. 6. Gilpin, Warand Changein World
ofPostwarOrder| 49 Persistence
greatpowers.7The Soviet threat trieswill eventuallyrevertback to traditional within the West-and also served to dampen and contain economic conflict afterthe Cold War, economic competitionand conflictamong the advanced industrialsocieties is expected to rise.8Neorealist theoriesof hegemony also expect that the gradual decline of American power-magnified by the Cold More reand institutional disarray.9 War-should also lead to rising conflict cently, some realistshave argued thatit is actuallythe extremepreponderance of American power, and not its decline, that will triggercounterbalancing reactionsby Asian and European allies.10 The basic thrustof these neorealist theories is that relations among the Western states will returnto the problems of anarchy afterthe Cold War: economy rivalry,securitydilemmas, institutionaldecay, and balancing alliances. The fact that post-Cold War relations among the Westernindustrial and countrieshave remained stable and open, and economic interdependence cooperationhave actuallyexpanded in some areas, is a puzzle institutionalized
Vol. Security, Politics,"International of International 7. KennethN. Waltz,"The EmergingStructure in Europe 18, No. 2 (Fall 1993), pp. 44-79; JohnJ. Mearsheimer,"Back to the Future: Instability "Why Security, Vol. 15, No. 1 (Fall 1990), pp. 5-56; Mearsheimer, afterthe Cold War,"International We Will Soon Miss the Cold War"; Conor Cruise O'Brien, "The Future of the West," National "Realism,the Balance of Power, Interest, Vol. 30 (Winter1992/93),pp. 3-10; and BradleyA. Thayer, in the Twenty-first 1997. Century,"unpublished paper, Harvard University, and Stability 8. As RobertLieber argues: "In the past, the Soviet threatand the existenceof an American-led that could develop among the Western bloc to contain it placed limitson the degree of friction partnersand Japan.The need to cooperate in the face of the Soviets meant thatdisagreementsin economic and otherrealms were preventedfromescalatingbeyond a certainpoint because of the could only benefit theiradversaryand thus an intra-allied confrontation perceptionthattoo bitter weaken common security."Lieber,"Eagle without a Cause: Making Foreign Policy without the (New American Foreign Policyat theEnd of theCentury Soviet Threat,"in Lieber,ed., Eagle Adrift: York:Longman, 1997), p. 10. This point is also made by KennethOye in "Beyond Postwar Order and the New World Order," in Oye, Lieber, and Donald Rothchild,eds., Eagle in a New World: American GrandStrategy in thePost-Cold WarEra (New York:HarperCollins,1992), pp. 3-33. Relations (PrinceofInternational views, see RobertGilpin, The PoliticalEconomy 9. For contrasting Press, 1987); Paul M. Kennedy,The Rise and Fall oftheGreatPowers ton,N.J.:PrincetonUniversity American Nature BoundtoLead:TheChanging of (New York:Random House, 1987);JosephS. Nye,Jr., Power(New York:Basic Books, 1990); Henry Nau, TheMythofAmerica'sDecline:LeadingtheWorld Press, 1990); and Susan Strange,"The Persistin the1990's (New York:OxfordUniversity Economy Vol. 41, No. 4 (Autumn 1987),pp. 551-574. Organization, ent Mythof Lost Hegemony,"International 10. See, for example, ChristopherLayne, "The Unipolar Illusion: Why New Great Powers Will Security, Vol. 17, No. 4 (Spring 1993), pp. 5-51; Layne, "From Preponderance Arise," International Security, Vol. 22, No. 1 International to OffshoreBalancing: America's Future Grand Strategy," Joffe, "'Bismarck'or 'Britain'?Toward an American Grand (Summer 1997), pp. 86-124; and Josef International Vol. 19, No. 4 (Spring 1995), pp. 94-117. For a Security, StrategyafterBipolarity," discussion of these views, see Michael Mastanduno, "Preservingthe Unipolar Moment: Realist Vol. 21, No. 4 (Spring Security, afterthe Cold War,"International Theories and U.S. Grand Strategy 1997), pp. 49-88.
in the distributhatneorealismis hard-pressedto explain. Despite sharp shifts tion of power withinthe West,the politicalorderamong the industrialdemocracies has remained quite stable. Highly asymmetrical relationsbetween the United States and the other advanced industrialcountries-in the 1940s and again today-or declines in thoseasymmetries-in the 1980s-have not altered the basic stability and cohesion in relationsamong these countries. Liberal theoriesprovide some promisingleads in explainingfeaturesof the postwar Westernorder,but theytoo are incomplete.11 Many of these theories in the West-but theircausal arguments would also predictorderand stability are too narrow.The key focusof liberalinstitutional is theway in which theory institutions provide information to states and reduce the incentivesforcheating.12 But this misses the fundamentalfeatureof order among the advanced industrialcountries:the structures of relationsare now so deep and pervasive thatthe kind of cheatingthatthese theoriesworryabout eithercannothappen, or if it does it will not really matterbecause cooperation and the institutions are not fragilebut profoundlyrobust.The basic problem is thatthese institutionalistargumentshave not incorporatedthe structural featuresof Western order in their explanations. In particular,they miss the problems of order associated with the great asymmetriesof power between Westernstates,the and the importanceof the path-dependentcharacterof postwar institutions, open and accessible characterof Americanhegemony. In general terms, liberal theories see institutionsas having a variety of and impacts-serving in various ways to facilitate cofunctions international and pursue theirinteroperation and alter the ways in which states identify
11. No single theoristrepresentsthis composite liberal orientation,but a variety of theorists provide aspects. On the democraticpeace, see Michael Doyle, "Kant, Liberal Legacies, and Foreign Vol. 12, No. 3 (Summer 1983), pp. 205-235, 323-353. On Affairs," Philosophy and Public Affairs, Atlantic Area (Princeton, and theNorth security communities, see Karl Deutsch, PoliticalCommunity of domestic and international N.J.: PrincetonUniversityPress, 1957). On the interrelationship of National and politics, see James N. Rosenau, ed., LinkagePolitics:Essays on the Convergence theory, see Emst Haas, International integration Systems (New York:Free Press,1969). On functional Calif.:StanfordUniand International Organization (Stanford, Beyond theNation-State: Functionalism see and complex nature of power and interdependence, versityPress, 1964). On the fragmented (Boston: Little,Brown,1977). On the RobertKeohane and JosephNye, Powerand Interdependence and of the liberaltradition, see Edward Morse, Modernization modemization theoryunderpinnings Relations(New York: Free Press, 1976); and James Rosenau, the Transformation of International N.J.:Princeton University ofChangeand Continuity (Princeton, Turbulence in World Politics: A Theory Press, 1991). 12. Robert 0. Keohane, After Hegemony: Cooperation and Discord in the WorldPoliticalEconomy Cooperation: Explaining Press,1984); and Lisa Martin,Coercive (Princeton, N.J.:Princeton University Press, 1992). Multilateral Economic Sanctions(Princeton, N.J.:PrincetonUniversity
ests.13 Liberal theories have also identifiedand stressed the importance of
institutions among states that serve as foundationalagreementsor constitutional contracts-what Oran Young describes as "sets of rightsand rules that 14 Liberal institutional are expected to govern theirsubsequent interactions." theoriesare helpful in explaining why specificinstitutions in the West may persist-even after the power and interests that established them have But therehas been less attention changed."5 to the ways thatinstitutions can be used as strategiesto mitigatethe securitydilemma and overcome incentives to balance. Liberal theoriesgrasp the ways in which institutions can channel and constrainstate actions, but they have not explored a more far-reaching view in which leading statesuse intergovernmental institutions to restrain the exerciseof power and dampen the fearsof dominationand abandonarbitrary ment. The approach to institutions I am proposing can be contrastedwith two alternativetheories-the rationalist(or "unsticky")theoryof institutions, and the constructivist (or "disembodied") theoryof institutions.16Rationalisttheory sees institutions as agreementsor contractsbetween actors that function to reduce uncertainty, lower transactionscosts, and solve collective action problems. Institutionsprovide information, enforcementmechanisms, and otherdevices thatallow states to realize joint gains. Institutions are explained in termsof the problems theysolve-they are constructs thatcan be traced to
13. For a recentsurvey,see Lisa Martin,"An Institutionalist View: International Institutions and State Strategies,"in T.V. Paul and JohnA. Hall, eds., International Orderand theFutureof World Politics (New York: Cambridge UniversityPress, 1999). The liberal literatureon international institutions and regimes is large. See Stephen D. Krasner,ed., International Regimes(Ithaca, N.Y.: Cornell University Press, 1981); Stephan Haggard and Beth Simmons,"Theories of International Regimes,"International Vol. 41, No. 3 (Summer1987),pp. 491-517; and VolkerRittberOrganization, and International Relations ger,ed., RegimeTheony (Oxford:OxfordUniversity Press, 1995). 14. Oran Young,"Political Leadership and Regime Formation: On the Development of Institutions in International Society,"International Organization, Vol. 45, No. 3 (Summer 1991), p. 282. See also Young, International and theEnvironment Cooperation: Building Regimes forNaturalResources (Ithaca, N.Y.: Cornell University Press, 1989). The concept of constitutional contractis discussed in James M. Buchanan, The Limits of Chicago Press, 1975), esp. chap. 5. ofLiberty (Chicago: University 15. See Robert B. McCalla, "NATO's Persistenceafterthe Cold War," Internationial Organization, Vol. 50, No. 3 (Summer 1996), pp. 445-476; Celeste Wallander and Robert 0. Keohane, "When ThreatsDecline, Why Do Alliances Persist?An Institutional Approach," unpublishedms., Harvard and Duke University, University 1997; and JohnS. Duffield,"International Regimes and Alliance Behavior: ExplainingNATO Conventional Force Levels," International Organization, Vol. 46, No. 4 (Autumn 1992), pp. 819-855. 16. For a good survey of these two alternativetraditionsof institutional theory, see Robert 0. StudiesQuarterly, Keohane, "International Institutions: Two Perspectives," International Vol. 32, No. 4 (December 1988), pp. 379-396.
Security 23:3 | 52 International
individuals or groups.17 Constructivist theorysees the actionsof self-interested institutions as diffuseand socially constructedworldviews that bound and are overshape the strategicbehavior of individuals and states. Institutions and actions ofrelationsthatdefineand reproducetheinterests archingpatterns of individuals and groups. Institutions provide normativeand cognitivemaps and action,and theyultimately affect theidentities and social forinterpretation as purposes of the actors.18 A thirdposition advanced here sees institutions both constructsand constraints.19 Institutionsare the formal and informal organizations,rules, routines,and practices that are embedded in the wider political order and define the "landscape" in which actors operate. As such, across individuinstitutional structures influencethe way power is distributed als and groups withina politicalsystem-providing advantages and resources the options of others.20 to some and constraining
17. The rationalist approach argues thatinstitutions are essentiallyfunctional or utilitarian "soluin ways tions" to problemsencounteredby rationalactors seeking to organize theirenvironment that advance their interests.Kenneth A. Shepsle describes institutions as "agreements about a structure of cooperation" that reduce transactioncosts, opportunism,and other formsof "slipin HerbertF. Weisberg, page." Shepsle, "Institutional Equilibriumand Equilibrium Institutions," ed., PoliticalScience:The ScienceofPolitics(New York:Agathon,1986), p. 74. 18. As Alexander Wendtargues, "Constructivists are interested in the construction of identity and interestsand, as such, take a more sociological than economic approach" to theory.Wendt, "Collective IdentityFormationand the International State," American PoliticalScienceReview, Vol. 88, No. 2 (June1994), pp. 384-385. 19. This "thirdview" of institutions is dissatisfiedwith both rationalist and constructivist theory. Rationalisttheoryproves too "thin"-it provides too much agency and not enough structure. It is silenton what otherssee as the heartof how institutions matter, namely, the impactof institutional on the interests and goals of individuals and groups. Constructivist structures theory, on the other hand, is too "thick"-it does not allow enough agency,and it has problemsexplaininginstitutional change. It rendersuniversal and deterministic what is really only a contingent outcome, namely, the impact of institutions on the way people conceive theiridentitiesand interests. 20. This theoretical view-often called "historicalinstitutionalism"-makesseveral claims. First, state policy and orientationsare mediated in decisive ways by political structures-such as institutional configurations of government. The structures of a polityshape and constrain thegoals, and actionsof thegroups and individuals operatingwithinit.Second, to understand opportunities, how these institutional and opportunitiesare manifest, constraints theymust be placed withina historicalprocess-timing, sequencing, unintended consequences, and policy feedback matter. have path-dependentcharacteristics-institutions are established and tend to Third, institutions forinstitutional persistuntil a later shock or upheaval introducesa new momentof opportunity structures have an impact because theyfacilitate or limitthe actions change. Finally,institutional of groups and individuals-which means thatinstitutions as a complete explaare never offered nationof outcomes.The impactsof institutions, with therefore, tend to be assessed as theyinteract other factors, such as societal interests, culture,ideology,and new policy ideas. For surveys of historicalinstitutional theory, see Peter A. Hall and RosemaryC.R. Taylor,"Political Science and the Three New Institutionalisms," PoliticalStudies,Vol. 44, No. 5 (April 1996); and Sven Steinmo et al., Structuring Politics: in Comparative Historical Institutionalism Analysis(New York:Cambridge University Press, 1992).
gives attentionto the ways in which instituThis approach to institutions of power withina political order. tions alter or fixinto place the distribution It offersa more "sticky" theoryof institutions than the rationalistaccount, institutional stickinessis manifestin the practical but unlike constructivism, interaction between actors and formaland informalorganizations,rules, and between actors and instiroutines.Because of the complex causal interaction to historical attention timingand sequencing is necessaryto appreciate tutions, the way in which agency and structure matter. Debates over post-Cold War order hinge on claims about the characterof relations among the major industrial democracies. Neorealist theories trace order to the operation of the balance of power or hegemony,and theyanticipate rising conflict and strategyrivalrywithin the West. Liberal theoriesare and relationsof and inertiain the institutions more inclined to see continuity postwar order,even if threatsdisappear and power balances shiftsharply.It is the sharply contrasting view of institutional "stickiness,"as RobertPowell The argurealistand liberal institutional theories.21 argues, thatdifferentiates mentadvanced here is thatinstitutions are potentially even more "sticky"than liberal theories allow, capable under specificcircumstancesof locking states into stable and continuous relationsthat place some limitson the exercise of state power, thereby the insecurities thatneorealismtracesto anarmitigating chy and shifting power balances.
TheConstitutional Bargain
The most fundamentalstrategicrealityafterWorld War II was the huge disparity of power among the great powers that had foughtthe war-and, in the commanding hegemonic position of the United States. British particular, scholar Harold Laski, writingin 1947, captured the overarchingcharacterof American power: "Today literallyhundreds of millions of Europeans and of theirlives depend upon Asiaticsknow thatboth the quality and the rhythm decisions made in Washington.On the wisdom of those decisions hangs the
21. Robert Powell, "Anarchy in InternationalRelations Theory: The Neorealist and Neoliberal Debate," International Organization, Vol. 48, No. 2 (Spring 1994), pp. 313-344. For a skepticalrealist Institutions," view of institutions, see JohnJ. Mearsheimer,"The False Promise of International International Security, Vol. 19, No. 3 (Winter1994/95), pp. 5-49. For a less skeptical view, see Randall L. Schweller and David Priess, "A Tale of Two Realisms: Expanding the Institutions Debate," MershonInternational StudiesReview, Vol. 41, Supplement 1 (May 1997), pp. 1-32.
fate of the next generation."22 George Kennan, in a major State Department review of Americanforeign policyin 1948,pointed to thisnew strategic reality: "We have about 50% of the world's wealth but only 6.3% of its population.... Our real task in the comingperiod is to devise a patternof relationships which will permitus to maintainthispositionof disparitywithoutpositivedetriment to our national security."23 It is the examinationof the choices and options that the United States and the major European and Asian statesfaced afterthe war thatallows us to see the underlyinglogic of postwar order. In a commanding postwar position, the United States had three major options. It could dominate-use its power to prevail in the endless distributive struggleswith other states. It could abandon-wash its hands of Europe and Asia and return home. Or it could seek to convert its favorablepostwar power positioninto a durable orderthatcommanded the allegiance of theotherstates within it. A legitimatepolitical order is one in which its members willingly To achieve participateand agree with the overall orientationof the system.24 a legitimate ordermeans to secure agreementamong the relevantstateson the basic rules and principlesof political order.States abide by the order's rules and principlesbecause theyaccept them as theirown. To gain the willing participationof other states, the United States had to overcome theirfearsthatAmerica mightpursue its otheroptions: domination or abandonment.In this situation,the criticalelementto order formation was the abilityof the United States to engage in "strategicrestraint"-to convey to its potential partnerscredible assurances of its commitmentsto restrainits power and operate within the agreed-upon rules and principles of postwar order. In the absence of these assurances, the weaker states of Europe and Japanwould have serious incentivesto resistAmericanhegemonyand engage in strategicrivalryand perhaps counterbalancing alliances. A durable and legitimatepostwar order was possible preciselybecause the In effect, the United States had the ability to engage in strategicrestraint. United States agreed to move toward an institutionalizedand agreed-upon politicalprocess and to limitits power-made credibleby "sticky"institutions and open polities-in exchange forthe acquiescence and compliantparticipafrom Wilson toReagan 22. Quoted in Norman Graebner, America as a World Power: A Realist Appraisal (Wilmington, Del.: ScholarlyResources, 1984), p. 275. to the Secretary of 23. George Kennan,Memorandum by the Directorof the Policy PlanningStaff State and the Under Secretaryof State Lovett,ForeignRelations of the UnitedStates,1948, Vol. 1 D.C.: GovernmentPrinting (Washington, Office),February24, 1948, p. 524. 24. See David Beetham,The Legitimation ofPower(London: Macmillan, 1991).
tion of secondary states. At the heart of the Western postwar order is an the United States agrees to operate withinan institutionalongoing trade-off: ized political process and, in return, its partnersagree to be willing participants.25
More specifically, the United States had an incentive to move toward a "constitutional"settlement afterthe war-that is, to create basic institutions and operating principles that limit what the leading state can do with its In effect, power.26 constitutional agreementsreduce the implicationsof "winning" in international relationsor, to put it more directly, theyserve to reduce thereturns topower. This is fundamentally what constitutions do withindomestic orders.They set limitson what a state thatgains disproportionately within the order can do with those gains, therebyreducing the stakes of uneven gains.27This means that constitutions reduce the possibilitiesthat a state can turn short-term gains into a long-termpower advantage.28Taken together, constitutional agreementsset limits on what actors can do with momentary advantages. To lose is not to lose everything-the stakes are limited; to lose today does not necessarilydiminishthe possibilityof winning tomorrow.29 The role of constitutionallimits on power can be seen within domestic constitutionalpolities. When a party or leader wins an election and takes thereare fundamentaland strictly controlof the government, defined limits on the scope of the power thatcan be exercised.A newly elected leader cannot use the militaryto oppress or punish his rivals, or use the taxing and lawenforcement powers of governmentto harm or destroythe opposition party or parties.The constitution sets limitson the use of power-and thisserves to reduce the implicationsof winning and losing withinthe political system.To lose is not to lose all, and winningis at best a temporary advantage. As a result, both parties can agree to stay withinthe systemand play by the rules.
25. Anotherrecentcase of strategic restraint is Germanywithinthe European Union: here also is a powerful state that has agreed to operate within an institutionalized political process, and in return,its partnersagree to be willing participants.Neorealists missed this development, and expected Germanyto be a predatorypower afterthe Cold War. An Essay in International 26. See Alec Stone, "What Is a Supranational Constitution? Relations Theory,"ReviewofPolitics, Vol. 56, No. 3 (Summer 1994), pp. 441-474. 27. See discussion in Jon Elster and Rune Slagstad, eds., Constitutionalisin and Democracy (New York:Cambridge University Press, 1988). and the Market(New York: Cambridge UniversityPress, 28. See Adam Przeworski,Democracy 1991), p. 36. 29. For a discussion of how formalinstitutions provide ways forpowerfulstatesto convey credible to weaker states,see Kenneth W. Abbottand Duncan Snidal, "Why States Act through restraint Formal International Organizations,"Journal ofConflict Resolution, Vol. 42, No. 1 (February1998), pp. 3-32.
absolute, or guaranteed in relations Limits on power are never as clear-cut, even in highly complex and intebetween states. The underlyingstructure, where institutions can be established that still anarchic. But grated orders,is on states,and where provide some measure of mutuallybinding constraints the polities of the participatingstates are open democracies, the conditions with constitutional characteristics. exist fora settlement
STRATEGIC RESTRAINT AND POWER CONSERVATION
itself by agreeingto limits Why would a newly hegemonicstatewant to restrict on the use of hegemonic power? The basic answer is that a constitutional ifthehegemonic settlement conserveshegemonicpower,fortwo reasons. First, state calculates that its overwhelming postwar power advantages are only ordermight"lock in" favorablearrangements momentary, an institutionalized the creation of basic that continue beyond the zenith of its power. In effect, are a formof hegemonic investmentin the future.The orderinginstitutions hegemonic state gives up some freedomon the use of its power in exchange in the future. fora durable and predictableorder thatsafeguardsits interests The hegemonic state motive rests on several assumptions. This investment must be convinced that its power position will ultimatelydecline-that it is windfallin relativepower capabilities.If currently experiencinga momentary this is the state's strategicsituation,it should want to use its momentary positionto get what it wants. On theotherhand, ifthenew hegemon calculates that its power position will remain preponderantinto the foreseeablefuture, the incentiveto conserve its power will disappear. Also, the hegemon must be it creates will persist beyond its own power convinced that the institutions have some indecapabilities-that is, it must calculate that these institutions If institutions of the distrisimply are reflections pendent orderingcapacity.30 bution of power, the appeal of an institutionalsettlementwill obviously are potentially"sticky,"powerful states that are decline. But if institutions enough to anticipatetheirrelativedecline can attemptto institutionfarsighted
once created, can have an inde30. The argument that internationalregimes and institutions, pendent orderingimpact on states comes in several versions. The weak version of this claim is of regimesas power and interests realistpositionthatsees lags in the shifts the modifiedstructural change. See Stephen D. Krasner, "Structural Causes and Regime Consequences: Regimes as Press, Regimes (Ithaca,N.Y.: Cornell University ed., International Intervening Variables,"in Krasner, version entails assumptions about path dependency and increasing 1983), pp. 1-12. The stronger in returns. For a survey,see WalterW. Powell and Paul J.DiMaggio, eds., TheNew Institutionalism pp. 1-38. of Chicago Press, 1991), Introduction, Organizational Analysis(Chicago: University
alize favorable patternsof cooperation with other states that persist even as power balances shift. The second reason why a hegemon mightwant to reach agreementon basic institutions, even ifit means giving up some autonomyand short-term advantage, is that it can reduce the "enforcement costs" of maintainingorder.The constantuse of power capabilities to punish and reward secondary statesand resolve conflicts is costly.It is far more effective over the long termto shape the interestsand orientationsof other states ratherthan directlyshape their actions throughcoercion and inducements.31 A constitutional settlementreduces the necessityof the costlyexpenditureof resourcesby the leading state on bargaining,monitoring, and enforcement. It remains a question why weaker states might not just resistany institutional settlementafter the war and wait until they are strongerand can Several factorsmightmake this a less negotiatea more favorable settlement. attractive option. First,without an institutional agreement,the weaker states will lose more than theywould under a settlement, where the hegemonicstate of agrees to forgosome immediategains in exchange forwilling participation secondarystates.Withoutan institutional settlement, bargainingwill be based simply on power capacities, and the hegemonic state will have the clear advantage. The option of losing more now to gain more later is not attractive fora weak statethatis struggling to rebuildafter war. Its choices will be biased in favorof gains today ratherthan gains tomorrow. The hegemon,on the other hand, will be more willing to trade offgains today for gains tomorrow.The in the two time horizons is crucial to understandingwhy a constidifference tutionalsettlement is possible. A second reason why weaker statesmightopt fortheinstitutional agreement is that-if the hegemon is able to crediblydemonstratestrategicrestraint-it does buy them some protectionagainst the threatof dominationor abandonment. As realist theorywould note, a central concern of weak or secondary states is whether they will be dominated by the more powerful state. In an internationalorder that has credible restraintson power, the possibilityof indiscriminateand ruthless domination is mitigated.Justas important,the possibilityof abandonmentis also lessened. If the hegemonicstateis rendered
31. The argumentthathegemons will want to promotenormativeconsensus among states so as to reduce the necessityof coercive management of the order is presented in G. JohnIkenberry and Charles A. Kupchan, "Socialization and Hegemonic Order,"Initerniationial Organiizationi, Vol. 44, No. 3 (Summer 1990), pp. 283-315.
more predictable, the secondarystatesdo not need to spend as many resources on "risk premiums,"which would otherwisebe needed to prepare foreither domination or abandonment. In such a situation,the asymmetriesin power are renderedmore tolerableforweaker states. Importantly, institutional agreementis possible because of the different time horizons that the hegemonic and secondary states are using to calculate their interests.The leading state agrees to forgo some of the gains that it could achieve if it took full advantage of its superior power position, doing so to conserve power resourcesand invest in futurereturns.The weaker states get more returns on theirpower in the early periods,but in agreeingto be locked into a set of postwar institutions, they give up the opportunityto take full potentialadvantage of risingrelativepower capacities in later periods. These alternativecalculations are summarized in Figures 1 and 2. The leading state trades short-term gains forlong-term gains, takingadvantage of the opportuthat will ensure a favorable order well nityto lay down a set of institutions into the future.Gains in the later periods are greaterthan what that state's power capacities alone, withoutthe institutional agreement,would otherwise yield. Weaker and secondary statesgive up some later opportunities to gain a more favorable returnon theirrisingrelativepower, but in returntheyget a betterpostwar deal in the early postwar period. The option of losing more
on Power Assets: LeadingState. Figure1. TimeHorizonsand the Return
Relativepower capabilities (P) High
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(P)
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Figure2. TimeHorizonsand the Return on Power Assets: SecondaryState.
Relativepower capabilities (P) High
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now so as to gain more later is not an attractive option fora weak state that is struggling to rebuild afterwar. But beyond this,the weaker states also get an institutional against the threatof agreementthatprovides some protections domination or abandonment-if the leading state is able to crediblydemonstratestrategic restraint. Taken together, the Westernpostwar order involves a bargain: the leading state gets a predictable and durable order based on agreed-upon rules and institutions-itsecures the acquiescence in this order of weaker states,which in turnallows it to conserve its power. In return, the leading state agrees to limitson its own actions-to operate according to the same rules and institutions as lesser states-and to open itselfup to a politicalprocess in which the weaker states can activelypress theirinterests upon the more powerfulstate. The hegemonicor leading stateagrees to forgosome gains in theearlypostwar thatallow it to have stable returns period in exchange forrules and institutions later,while weaker states are given favorable returnsup frontand limits on the exerciseof power.
STRATEGIES OF RESTRAINT: BONDING, BINDING, AND VOICE OPPORTUNITIES
The American postwar hegemonic order could take on constitutional characteristicsbecause of the way institutions, created by and operated between
23:3 | 60 International Security
democraticstates,could be wielded to facilitate strategic restraint. Institutions can shape and limit the way power can be used in the system, thereby renderingasymmetric postwar power relationsless potentially exploitiveand commitment more certain.The returnsto power are reduced.32 Where institutions createrestraints on power,weaker and secondarystateshave less fearof abandonment, or domination is lessened. Institutionscan also dampen the effectsof the securitydilemma and reduce the incentives for weaker and secondary states to balance against the newly powerful state. By creatinga mutuallyconstraining environment, institutions allow states to convey assurances to each otherand mitigatethe dynamics of anarchy.33 The hegemonic state has a disproportionaterole in creatingconfidencein postwar order: it has the most capacity to break out of its commitments and take advantage of its position to dominate or abandon the weaker and seconAs a result,in its efforts dary states.34 to draw other states into the postwar order,the leading state will have strongincentivesto find ways to reassure these other states, to demonstrate that it is a responsible and predictable wielder of power and thatthe exerciseof power is, at least to some acceptable degree,circumscribed. To achieve thisgoal, the leading statecan pursue strategies thatinvolve bonding,binding,and institutionalized voice opportunities. Bonding means to certify state power: to make it open and predictable.A powerful leading state with a governmentaldecisionmaking process-and wider politicalsystem-that is open and transparent, and thatoperates accord-
32. Obviously,neorealistsargue that such guarantees are never sufficient enough to go forward with far-reaching institutionalized cooperation. Under conditions of anarchy,neorealistsassert, stateswill be reluctant to seek even mutuallyadvantageous agreementsifitleaves themvulnerable to cheatingand/or the relativegains of others.In a self-helpsystemsuch as anarchy, states face huge obstacles to institutionalized cooperation because the interdependenceand differentiation thatcome with it are manifest withinan anarchyas vulnerability. See JosephM. Grieco,"Anarchy and the Limitsof Cooperation: A Realist Critique of the Newest Liberal Institutionalism," InternationalOrganization, Vol. 42, No. 3 (Summer 1988), pp. 485-507. 33. For a discussion of the general problem of credible commitment and its importanceto institutionaldevelopment and the rule of law, see BarryWeingastand Douglass C. North,"Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth-Century England," Journalof Economnic History,Vol. 44, No. 4 (December 1989), pp. 803-832. 34. As PeterCowhey argues, otherstates"will not become fullycommittedto workingwithinthe multilateralorder unless they believe the dominant powers intend to stay within it." Cowhey, "Elect Locally-Order Globally,"in John Gerard Ruggie,ed., Multilateralismn: TheTheory and Practice ofan Institutionlal Formn (New York:Columbia University Press, 1993),p. 158. Secondary statesmay have feweroptions than the leading state,but theirwillingnessto participatewithinthe orderthat is, to engage in voluntary compliance-will hinge on the ability of the leading state to demonstrateits reliability, and willingnessof forgothe arbitrary commitment, exerciseof power.
rules and procedures,can reassure weaker and ing to predictableinstitutional or exploitive. secondarystates thatthe exerciseof power will not be arbitrary ofa firm attempting JonElsterargues that"bonding" is analogous to theefforts to attractoutside shareholders: "It must incur 'costs of bonding,' such as in order to attractcapital."35Potential conservativeprinciplesof accountancy, shareholders are more likely to lend their capital to a firmwhen the firm operates according to established and reasonable methods of record keeping to outside when a state is open and transparent and accountability. Similarly, states,it reduces the surprisesand allows otherstatesto monitorthe domestic decisionmaking that attends the exercise of power. The implication of this argumentis thatdemocraticstateshave an advantage in the process of bonding. Democraticstateshave a more ready capacityto incurthe costs of bonding because those costs will be relativelylow. Democratic states already have the that provide secondary states with decentralized and permeable institutions reassurance. access, and ultimately information, The leading state can go beyond internalopenness to establishformalinstitutionallinks with other states, limitingstate autonomy and allowing other "voice opportunities"in the decisionmakingof statesto have institutionalized have been explored by binding strategies the leading state.These institutional JosephGrieco and Daniel Deudney. Grieco argues that weaker states within links the European Union (EU) have had an incentiveto create institutional with strongerstates so as to have a "voice" in how the strongstates exercise their power, therebypreventingdomination of the weaker by the stronger states. Weak states are likely to find institutionalizedcollaboration with if it provides mechanisms to influencethe policy of strongerstates attractive the strongerstates. "States . . . are likely to assign great significanceto the in a cooperativearrangement, of such effective voice opportunities enjoyment redress if theyare concerned it whether states can obtain determine for may about such mattersas the compliance of stronger partnerswith theircommitmentsin the arrangement, or imbalances in the division of otherwisemutually Put differently, the positive gains thatmay be produced by theirjointeffort."36 ofrelationsbetween weak and strongstates,when it creates institutionalization
35. Elster,"Introduction," in Elsterand Slagstad, Constitutionalism awed Democracy, p. 15. 36. JosephM. Grieco, "State Interests and Institutional A Neorealist InterpretaRule Trajectories: tion of the MaastrichtTreatyand European Economic and MonetaryUnion," Security Studies, Vol. 5, No. 3 (Spring 1996), p. 288. See also Grieco, "Understanding the Problem of International Cooperation:The Limitsof Neoliberalismand the Futureof RealistTheory,"in David A. Baldwin, anidNeoliberalism: ed., Neorealism The Contemporary Debate (New York:Columbia University Press,
voice opportunitiesfor the weaker states,can be a solution forthese weaker states thatwant to work with but not be dominated by stronger states. Deudney also describes the dynamic of binding,but emphasizes its other feature:it is a practiceof establishinginstitutional linksbetween the units that reduce theirautonomyvis-'a-vis one another.37 In agreeingto be institutionally connected,statesmutuallyconstraineach otherand thereby mitigatethe problems of anarchythatlead to securitydilemmas and power balancing. According to Deudney, binding practicesare particularly available to and desired by democraticpolities thatwant to resistthe state-strengthening and centralizing the range of freeconsequences of balance-of-powerorders. Binding restricts dom of states-whether weak or strong-and when states bind to each other, theyjointlyreduce the role and consequences of power in theirrelationship. Each of these strategies involves the institutionalization of state power. instituAsymmetries of power do not disappear, but institutions-democratic the way tions and intergovernmental institutions-channel and circumscribe that state power is exercised. Institutions make the exercise of power more predictableand less arbitrary and indiscriminate, up to some point. When a newly hegemonic state seeks to create a mutually acceptable order,doing so to preserveand extendthe returns can to its power into the future, institutions be an attractive tool: theylock other states into the order,and theyallow the leading state to reassure and co-opt other states by limitingthe returnsto power.
PostwarHegemonic Reassurance
By design,inadvertence, and structural circumstance, the United States was in a positionafter WorldWar II to mute the implicationsof unprecedentedpower between itselfand its postwar partners, asymmetries alleviatingfearsof domination and abandonment. These strategiesof reassurance were manifestin
1993), pp. 331-334; and Grieco, "The MaastrichtTreaty, Economic and MonetaryUnion, and the Vol. 21, No. 1 (January1995), Neo-Realist Research Programme,"Reviezv of International Stuldies, of this logic is Albert0. Hirschman,Exit,Voice, and Loyaltypp. 21-40. The classic formulation Responses toDeclinie in Firmns, Organizations, and States(Cambridge,Mass.: Harvard University Press, 1970). 37. Daniel Deudney,"The PhiladelphianSystem:Sovereignty, ArmsControl,and Balance of Power in the AmericanStates-Union," International Organization, Vol. 49, No. 2 (Spring 1995),pp. 191-228; and Deudney, "Binding Sovereigns: Authorities,Structures,and Geopolitics in Philadelphian as Social Construtct Systems," in Thomas Bierstekerand Cynthia Weber, eds., State Sovereignty (Cambridge: Cambridge University Press, 1996), esp. pp. 213-216.
three ways: in America's "reluctant"orientationtoward hegemonic domination; in the open and penetratedcharacterof the American polity;and in the ways postwar economic and securityinstitutions shaped and circumscribed the exercise of American power. Together, these strategiesand circumstances served to limitthe returnsto power in the postwar order,creatingthe conditions forits legitimacyand durability.
RELUCTANT HEGEMONY
Behind specificinstitutional strategiesof reassurance,the United States exhibited a general orientationtoward postwar order and the exercise of coercive hegemonicpower thatserved to reassureotherstates.The United Statesmight be seen as a "reluctanthegemon" in many respects,seekingagreementamong the Westernstateson a mutuallyacceptable order,even ifthismeant extensive compromise,and pushing for an institutionalizedorder that would require littledirect "management" by the United States or the active exercise of its presented hegemonicpower. It is revealingthatthe initialand most forcefully American view on postwar order was the State Department'sproposal for a an American postwar systemof freetrade. This proposal did not only reflect but it also was a vision of order convictionabout the virtuesof open markets, that would require very littledirectAmerican involvementor management. The system would be largely self-regulating, leaving the United States to operate withoutthe burdens of directand ongoing supervision. This view on postwar trade reflected a more general American orientation as thewar came to an end. The new hegemonwanted a world orderthatwould advance Americaninterests, but it was not eager to activelyorganize and run thatorder.In this sense, the United States was a reluctantsuperpower.38 This was not lost on the Europeans, and it matteredas Amergeneralcharacteristic ica's potentialpartnerscontemplatedwhetherand how to cooperate with the United States. To the extentthatthe United States could convey the sense that it did not seek to dominate the Europeans, it gave greater credibilityto America's proposals for an institutionalized postwar order.It provided some reassurancethatthe United States would operate withinlimitsand not use its overwhelmingpower position simply to dominate.
A History Reoch(New 38. See RichardHolt, The Reluctant Superpozwer: ofAmerica'sGlobalEcoiionoic York: Kodansha International, 1995); see also Geir Lundestad, "An Empire by Invitation?The Vol. 23, No. 3 (September United States and WesternEurope, 1945-1952,"Jourinal ofPeace Research, 1986).
More generally, the overall patternof Americanpostwar policies reflected a self-consciouseffort officialsto infuse the postwar system by administration with a sense of legitimacyand reciprocal consent. When American officials began to organize Marshall Plan aid for Europe, for example, there was a strongdesire to have the Europeans embrace Americanaid and plans as their At a own-thus enhancing the legitimacyof the overall postwar settlement. May 1947 meeting, George Kennan argued that it was importantto have "European acknowledgementof responsibility and parentage in the plan to preventthe certainattemptsof powerful elements to place the entireburden on the United States and to discreditit and us by blaming the United States forall failures."Similarly, State Departmentofficial Charles Bohlen argued that United States policy should not be seen as an attempt"to force'the American The United Stateswanted to createan orderthatconformed way' on Europe."39 to its liberal democraticprinciples,but this could be done only if other governmentsembraced such a systemas theirown. in the compromisesthattheUnited States This orientation was also reflected made in accommodatingEuropean views about the postwar world economy. and the continental The British Europeans, worried about postwar depression and the protectionof their fragile economies, were not eager to embrace America's starkproposals foran open world tradingsystem,favoringinstead a more regulated and compensatorysystem.40 The United States did attempt to use its material resources to pressure and induce Britain and the other European countriesto abandon bilateraland regional preferential agreements and accept the principlesof a postwar economy organized around a nondiscriminatory systemof trade and payments.4'The United States knew it held a commanding position and sought to use its power to give the postwar order a distinctiveshape. But it also prized agreementover deadlock, and it ulti-
39. Quoted in "Summary of Discussion on Problemsof Relief,Rehabilitation, and Reconstruction of Europe," May 29, 1947,Foreigni Relations oftheUnitedStates,1947,Vol. 3, p. 235. 40. The strongest claims about Americanand European differences over postwarpoliticaleconomy are made by Fred Block, The Originsof Internatiolnal Disorder(Berkeley:Universityof Ecoionmic CaliforniaPress, 1977), pp. 70-122. 41. The 1946 British loan deal was perhaps the most overteffort by the Trumanadministration to tie Americanpostwar aid to specificpolicy concessionsby allied governments. This was the failed Anglo-AmericanFinancial Agreement,which obliged the Britishto make sterlingconvertiblein exchange for American assistance. See Richard Gardner,Sterling-Dollar Diplomacy, 2d ed. (New York: Columbia UniversityPress, 1980); and AlfredE. Eckes, Jr., A Search forSolvency: Bretton Woods and the International MonetarySystem,1944-71 (Austin: University of Texas Press, 1971).
matelymoved a great distance away fromits originalproposals in settingup the various postwar economic institutions.42
OPEN HEGEMONY
A second way thatthe United States projectedreassurancewas structural-its own liberal democratic polity.The open and decentralized characterof the American political systemprovided opportunitiesforother states to observe decisionmakingand exercise their"voice" in the operation of American postwar foreign could be policy,thereby reassuringthese states thattheirinterests activelyadvanced and thatprocesses of conflict resolutionwould exist.In this sense, the American postwar order was a "liberal hegemony,"an extended systemthatblurreddomestic and international politics as it created an elaborate transnationaland transgovernmental political system with the United States at its center.43 There are actually several ways in which America's open hegemony has reinforced the credibility of the United States' commitment to operate within an institutionalized is simply the transparency of the political order.The first which reduces surprisesand allays worriesby partnersthattheUnited system, Statesmightmake abruptchanges in policy.This transparency comes fromthe fact that policymakingin a large, decentralized democracy involves many players and an extended and relatively visible politicalprocess. However, it is not only that it is an open and decentralized system; it is also one with competingpolitical parties and an independent press-features that serve to and viabilityof major policy commitments.44 expose the underlyingintegrity The open and competitive process may produce mixed and ambiguous policies at times,but thetransparency of theprocess at least allows otherstatesto make more accurate calculations about the likely direction of American foreign policy,which lowers levels of uncertainty and provides a measure of reassurance, which-everything else being equal-creates greater opportunitiesto cooperate.
42. See JohnGerard Ruggie, Winning thePeace: Amer-ica and World Orderin theNew Era (New York: Columbia University Press, 1996), chap. 5. 43. This section and the nextbuild on Daniel Deudney and G. JohnIkenberry, "The Sources and Characterof Liberal International Order,"Reviezv ofInternational Studies,forthcoming. 44. This poilntis made in James Fearon, "Domestic Political Audiences and the Escalation of International Disputes," American Political ScienceReviezv, Vol. 88, No. 3 (September1994), pp. 577592.
Anotherway in which the open hegemonic order provides reassurances to partnersis that the American systeminvites (or at least creates opportunities and penetratedAmerican for) the participationof outsiders.The fragmented of a vast networkof transnational systemallows and invitesthe proliferation and transgovernmental relations with Europe, Japan, and other parts of the industrialworld. Diffuseand dense networksof governmental, corporate,and private associations tie the systemtogether. The United States is the primary site for the pulling and hauling of trans-Atlantic and trans-Pacific politics. in Washington-but they Europeans and Japanesedo not have elected officials do have representatives.45 Although this access to the American political process is not fullyreciprocatedabroad, the openness and extensivedecentralization of the Americanliberal systemassures otherstatesthattheyhave routine access to the decisionmakingprocesses of the United States. The implicationof open hegemonyis thatthe United States is not as able to in relations use its commanding power position to gain disproportionately with Japan and Europe-or at least it diminishes the leverage that would otherwiseexist.For example, thereis littleevidence thatthe United States has been able to bring more pressure to bear on Japanese importpolicy,even as its relative power capacities have seeminglyincreased in the 1990s with the end of theCold War and the slump in theJapaneseeconomy.Beginningin July 1993 with the signingof a "framework" the Clintonadministration agreement, launched a series of efforts to pin Japan to numericalimporttargets, including threatenedsanctions to boost American automobile imports.But despite in February 1994 and the spring of 1995, Prime Minister repeated efforts Morihiro Hosakawa, helped by protests from the European Union, was largely able to resist American pressure.46The advent of the World Trade Organization (WTO) also has provided additional ways forJapan to narrow
45. For the transnational politicalprocess channeled throughthe Atlanticsecurityinstitutiolns, see on U.S. Foreign Thomas Risse-Kappen,Cooperation The European amongDemocracies: Influence Policy (Princeton, N.J.:PrincetonUniversity Press, 1995). On the U.S.-Japaneseside, see PeterJ.Katzenstein and Yutaka Tsujinaka,"'Bullying,''Buying,'and 'Binding':U.S.-JapaneseTransnationalRelations and Domestic Structures,"in Risse-Kappen, ed., Bringing Transnational RelationsBack In: and Interncational Non-State Actors, Domestic Structures, Institutions (Cambridge: Cambridge UniversityPress, 1995), pp. 79-111. 46. See Andrew Pollack, "U.S. Appears to RetreatfromSettingTargets to Increase Japan's Imports," New YorkTimes,July 10, 1993; David Sanger, "Hosakawa's Move Foils U.S. Strategy," International HeraldTribune, April 11, 1994; Nancy Dunne and Michito Nakamato, "Wiser U.S. to Meet Chastened Japan,"FinancialTimes, May 18, 1994; and Reginald Dale, "JapanGains the Edge in Trade War,"International HeraldTribune, September 13, 1994.
Persistence ofPostwar Order | 67
trade disputes to specificissues, bringinternational proceduresof review into play, and diminish the capacity of the United States to bring its hegemonic power to bear. In the recentKodak case, forexample, the WTO basically ruled against the United States in its effort to push Japan toward greateropenness. Afterthis ruling,the United States quietly lowered its voice and sat down.47 The open and penetratedcharacter of the United States serves to fragment and narrow policy disputes, creates a more level playing field for European and Japaneseinterests, and reduces the implicationsof hegemonicpower asymmetries.
BINDING INSTITUTIONS
A finalway in which reassurancehas been conveyed is through theinstitutions themselves,which provide "lock in" and "binding" constraints on the United States and its partners,therebymitigatingfears of domination or abandonment.The Westerncountrieshave made systematic efforts to anchor theirjoint in principled and binding institutionalmechanisms. Governcommitments mentsmightordinarily seek to preservetheiroptions,to cooperate with other statesbut to leave open the option of disengaging.What the United Statesand the otherWesternstates did afterthe war was exactlythe opposite: theybuilt long-term economic,political,and security thatwere difficult commitments to retract. They "locked in" theircommitments and relationships,to the extent thatthis can be done by sovereign states. The logic of institutional binding is best seen in security alliances. Alliances have oftenbeen formednot simply or even primarilyto aggregate power so as to balance against externalthreats, but ratherto allow alliance partnersto restraineach other and manage joint relations. Alliances have traditionally been seen as temporaryexpedients that bring states togetherin pledges of mutual assistance in the face of a common threat, a commitment specifiedin the casus foederis articleof the treaty. But as Paul Schroeder and othershave
47. As Clyde V. Prestowitz,Jr.writes: "In the past, the United States would have attemptedto negotiate a bilateral settlementwith the potential imposition of sanctions lurkingin the background as an incentiveto reach an agreement.Under the new WTO rules, however,all disputes are supposed to be submittedto the WTO forcompulsoryarbitration and unilateralimpositionof trade sanctions is illegal....But if America then attempts to solve the problem unilaterallyby imposing sanctions,Japan could have the U.S. sanctions declared illegal by the WTO. Knowing this,Japaneseofficials have refusedeven to meet with U.S. negotiators-and have effectively told the United States to buzz off."Prestowitz,"The New Asian Equation," Washinigton Post,April 14, 1996.
noted, alliances have also been created as pacta de contrahendo-pactsof restraint.48 They have served as mechanisms for states to manage and restrain their partners within the alliance. "Frequently the desire to exercise such controlover an ally's policy,"Schroederargues, "was the main reason thatone power, or both, entered into the alliance."49Alliances create binding treaties thatallow states to keep a hand in the securitypolicy of theirpartners.When alliance treatiesare pactade contrahendo, potentialrivals tie themselvesto each and creatinginstitutional other-alleviating suspicions,reducinguncertainties, mechanismsforeach to influencethe policies of the other.50 The practiceof mutual constraint makes sense only if international institutions or regimes can have an independent orderingimpact on the actions of states.The assumption is thatinstitutions are sticky-that theycan take on a lifeand logic of theirown, shaping and constraining even the statesthatcreate them.When states employ institutional binding as a strategy, theyare essentiallyagreeing to mutuallyconstrainthemselves.In effect, institutions specify what it is that states are expected to do, and theymake it difficult and costly forstatesto do otherwise.51 In thissense, institutional bindingis like marriage: two individuals realize thattheirrelationshipwill eventuallygenerateconflict and discord, so they bind themselvesin a legal framework, making it more difficult to dissolve the relationshipwhen those inevitablemomentsarrive.In the case of international institutions, examples of bindingmechanismsinclude treaties, interlocking organizations, joint managementresponsibilities, agreedupon standards and principles of relations,and so forth. These mechanisms raise the "costs of exit" and create "voice opportunities,"therebyproviding mechanismsto mitigateor resolve the conflict.
48. See Paul W. Schroeder,"Alliances, 1815-1945:Weapons of Power and Tools of Management," in Klaus Knorr, ed., Historical Dimensions ofNationalSecurity Problems (Lawrence: University Press of Kansas, 1975),pp. 227-262. As Schroedernotes,the internalconstraint of alliances was function earlier observed by George Liska. See Liska, Nations in Alliance:The Limitsof Interdepetndence (Baltimore,Md.: JohnsHopkins University Press, 1962), p. 116; Imperial Amnerica: The International Politicsof Primnacy (Baltimore,Md.: JohnsHopkins UniversityPress, 1967); pp. 9-11, 20-21; and Alliances anidtheThirdWorld Md.: JohnsHopkins University (Baltimore, Press, 1968), pp. 24-35. 49. Schroeder,"Alliances, 1815-1945," p. 230. 50. For a recentextension of this argument,see Patricia A. Weitsman,"Intimate Enemies: The Politics of Peacetime Alliances," Security Studies, Vol. 7, No. 1 (Autumn 1997), pp. 156-192. 51. This view accords with our general view of what institutions are and do. As Lorenzo Ornaghi argues: "The role of institutions in politics is to give the rules of the game, in that,by reducing the uncertainand unforeseeablecharacterof interpersonalrelations,insurance is mutually provided." Ornaghi, "Economic Structureand Political Institutions: A Theoretical Framework,"in Mauro Baranzini and RobertoScazzieri, eds., The Econiomnic Thieory of Structure and Chanige (Cambridge: Cambridge University Press, 1990), p. 27.
The BrettonWoods economic and monetary accords exhibit the logic of institutionallock-in. These were the firstaccords to establish a permanent institutional and legal frameworkto ensure economic cooperainternational as elaborate systemsof rules and tion between states. They were constructed obligations with quasi-judicial procedures for adjudicating disputes.52The of joint dollar-gold standard collapsed in 1971, but the broader institutions the Westerngovernmentscreated an array of managementremain. In effect, organized transnationalpolitical systems.Moreover, the demofunctionally craticcharacter of the United Statesand the otherWesterncountriesfacilitated the constructionof these dense interstateconnections. The permeabilityof domesticinstitutions provided congenial grounds forreciprocaland pluralistic "pulling and hauling" across the advanced industrialworld. It was here thatthe Cold War's securityalliances provided additional instiThe old sayingthatNATO was createdto "keep tutionalbindingopportunities. the Russians out, the Germans down, and the Americans in" is a statement comforlocking in long-term about the importanceof the alliance structures alliance also had a similar mitments and expectations.The U.S.-Japansecurity not only served as alliances These institutions "dual containment"character. in the ordinarysense of organized efforts to balance against externalthreats, but they also provided mechanisms and venues to build political relations, conduct business, and regulateconflict. The constitutionalfeatures of the Western order have been particularly into the importantforGermany and Japan. Both countrieswere reintegrated advanced industrialworld as "semisovereign"powers: thatis, theyaccepted unprecedented constitutionallimits on their military capacity and independence.53 As such, they became unusually dependent on the array of Western regional and multilateraleconomic and security institutions.The Westernpolitical order in which they were embedded was integralto their and functioning. The ChristianDemocrat WaltherLeisler Kiep argued stability alliance . . . is not merelyone aspect of in 1972 that "the German-American but a decisive element as a result of its preeminent modern German history, it provides a second constitution forour counplace in our politics.In effect,
since Bretton Woods(New York: Oxford 52. See Harold James,International Monetary Cooperation University Press, 1995). 53. On the notionof semisovereignty, see PeterJ.Katzenstein,Policyand Politicsin WestGermany: Press,1987). For a discussion The Grozvth ofa Semi-Sovereign State(Philadelphia: Temple University see Masaru Tamamoto,"Reflecof Japanese semisovereignty and the postwar peace constitution, tions on Japan's Postwar State," Daedalus,Vol. 125, No. 2 (Spring 1995), pp. 1-22.
This logic of Germany'sinvolvementin NATO and the EU was reaffirtry."54 med recently by theGermanpoliticalleader VoigtKarsten:"We wanted to bind thatpractically Germanyinto a structure obliges Germanyto take the interests of its neighbors into consideration.We wanted to give our neighborsassurances thatwe won't do what we don't intendto do."55Westerneconomic and securityinstitutions provide Germany and Japan with a political bulwark of thatfartranscendstheirmore immediate and practicalpurposes. stability The recentrevision of the U.S.-Japansecuritytreaty in May 1996 is another indicationthatboth countriessee virtuesin maintaininga tightsecurityrelationshipregardlessof the end of the Cold War or the rise and fall of specific securitythreatsin the region.56 Even though the threatsin the region have become less tangibleor immediate,the alliance has been reaffirmed and cooperationand jointplanninghave expanded. Partof thereason is thatthealliance is still seen by many Japanese and American officials as a way to render the bilateralrelationship more stable by bindingeach to the other.57 The expansion of NATO is also, at least in part,drivenby the binding aspects of the alliance. This view of NATO as "architecture"that would stabilize relations within Europe and across the Atlantic,ratherthan primarilyan alliance to counter externalthreats, was first signaled in Secretaryof State JamesBaker's famous of thefallof theBerlinWall in 1989.58 speech in the aftermath Some supporters of NATO expansion see it as an insurance policy against the possibilityof a
54. Quoted in Thomas A. Schwartz, "The United States and Germany after 1945: Alliances, TransnationalRelations,and the Legacy of the Cold War," Diplomatic Histony, Vol. 19, No. 4 (Fall 1995), p. 555. 55. Quoted in Jan Perlez, "Larger NATO Seen as Lid on Germany,"Internationcal Herald Tribunie, December 8, 1997. 56. PresidentBill Clinton and Prime MinisterRyutaroHashimoto signed a JointDeclaration on Securityon April 17, 1996, which was a revision of the 1978 Guidelines forU.S.-JapanDefense Cooperation. The agreement declared that the U.S.-Japan securitytreatyof 1960 "remains the cornerstone"of theirpolicies, thattheircombined forcesin Japan would engage in policy coordination fordealing with regionalcrises,and on a reciprocalbasis provide equipment and supplies. Overall, the Japanese made a commitment to actually move toward closer securityrelationswith the United States. 57. Peter J. Katzensteinand Yutaka Tsujinaka argue that "the securityrelationshipbetween the United States and Japan is best described by 'binding,'with the United States doing most of the 'advising' and Japanmost of the 'accepting.'By and large since the mid-1970sdefensecooperation has increasedsmoothlyand apparentlyto the satisfaction of both militaries. Since thatcooperation involved primarilygovernmentsand sub-units of governmentsimplementingpolicy, 'binding' resultsprimarily fromtransgovernmental relations."Katzensteinand Tsujinaka,"'Bullying,''Buying,'and 'Binding,"'in Risse-Kappen,Bringin1g Trau1sn1ation1al Relations BackIn, p. 80. See also Richard Finn, "Japan's Search for a Global Role," in WarrenS. Hunsberger,Japan'sQuest: The Searchfor International Role,Recognition, and Respect (New York:M.E. Sharpe, 1977), pp. 113-130. 58. See Michael Smith and Stephen Woolcock, The UnitedStatesand theEuropeanl Communility in a Transformed World (London: Pinter/RoyalInstitute of International Affairs, 1993), p. 1.
But others, in theClinton future and revisionist Russia.59 particularly resurgent administration, see the virtues of expansion more in termsof the stabilizing, thatcome fromNATO as an institution.60 integrating, and binding effects All open, and highlyinstitutionalized. Overall, U.S. hegemonyis reluctant, a ratherstable and durable pothese characteristics have helped to facilitate restraint afterWorldWar II leftthe Europeans liticalorder.Americanstrategic more worried about abandonment than domination,and theyactivelysought American institutionalizedcommitmentsto Europe. The American polity's fosteredan "extended" political order-reachtransparency and permeability ing outward to the otherindustrialdemocracies-with most of its roads leadand transgovernmental relationsprovide the ing to Washington. Transnational bind channels. Multiple layers of economic,political,and securityinstitutions of theirmutual the credibility these countriestogetherin ways thatreinforce The United States remains the centerof the system,but other commitments. states are highlyintegratedinto it, and its legitimacydiminishesthe need for the exerciseof coercive power by the United States or forbalancing responses fromsecondary states.
Returns to PostwarInstitutions Increasing

The bargains struckand institutions created at the early momentsof postwar orderbuilding have not simplypersistedforfifty years,but theyhave actually of politics and societyof become more deeply rooted in the wider structures the countriesthatparticipatewithinthe order.That is, more people and more and operationsof the American of theiractivitiesare linked to the institutions liberal hegemonic order. A wider array of individuals and groups, in more have a stake-or a vested interest-in countriesand more realms of activity, thecontinuation of the system.The costs of disruptionor change in thissystem this means that "competing have steadily grown over the decades. Together, orders" or "alternative institutions"are at a disadvantage. The system is hard to replace. increasingly The reason institutionshave a lock-in effectis primarilybecause of the phenomenon of increasingreturns.61 There are several aspects to increasing
Times, December 28, 1994. York 59. See Zbigniew Brzezinski,"NATO-Expand or Die?" Nezw without a Mission? (London: Policyafter theCold War:Superpower 60. See Michael Cox, U.S. Foreign Affairs), pp. 79-83. of International Royal Institute theoriesof institutional offer path 61. Both rationalchoice and sociological theoriesof institutions See Paul Pierson,"Path dependency-both emphasizing the phenomenon of increasingreturns. 1996. Dependence and the Study of Politics,"unpublished paper, Harvard University,
returns to institutions. First, thereare large initialstart-up costs to creatingnew institutions. Even when alternativeinstitutionsmight be more efficient or accord more closely with the interestsof powerful states,the gains fromthe new institutions must be overwhelminglygreaterbefore they overcome the sunk costs of the existinginstitutions.62 Moreover, there tend to be learning effects thatare achieved in the operationof the existinginstitution thatgive it advantages over a start-upinstitution. Finally,institutions tend to create relations and commitments with otheractors and institutions thatserve to embed the institution and raise the costs of change. Taken together, as Douglass North concludes, "the interdependent web of an institutional matrixproduces massive increasingreturns."63 When institutions manifestincreasingreturns, it becomes very difficult for to compete and succeed. The logic is seen potential replacementinstitutions most clearlyin regard to competingtechnologies.The historyof the videocassetterecorderis the classic example, where two formats, VHS and Beta, competed for standardization.The two formatswere introduced roughly at the same time and initiallyhad equal market share, but soon the VHS format, throughluck and circumstancesunrelated to efficiency, expanded its market share. Increasing returnson early gains tilted the competitiontoward VHS, allowing it to accumulate enough advantages to take over the market.64 Even if Beta was ultimatelya superior technology, a very small marketadvantage by VHS at an early and criticalmoment allowed it to lower its production costs, and the accumulation of connecting technologies and products that made it increasinglyhard for the losing technologyto require compatibility to theothertechnology rise as productioncosts compete.The costsof switching are lowered, learningeffects accumulate, and the technologyis embedded in a wider systemof compatible and interdependent technologies.65
62. On sunk costs, see ArthurL. Stinchcombe,Conistrutcting Social Theories (New York: Harcourt, Brace and World,1968), pp. 108-118. 63. Douglass C. North, Institutions, Institutional Change,and EconomicPerformance (New York: and their Cambridge University Press, 1990),p. 95. For discussions of path dependency argtuments implications,see Stephen D. Krasner,"Approaches to the State: Conceptions and Historical Dynamics," Comparative Politics,Vol. 16 (January1984); and Paul Pierson, "When EffectBecomes Cause: PolicyFeedback and PoliticalChange," World Politics, Vol. 45, No. 4 (July 1993),pp. 595-628. 64. See W. BrianArthur, "Positive Feedbacks in the Economy,"Scientific Ame1rican (February1990), pp. 92-99. Reprintedin Arthur, Increasing Returns and Path Dependence in theEconiomy (Ann Arbor: University of Michigan Press, 1995), pp. 1-12. 65. W. Brian Arthur,"Competing Technologies, Increasing Returns,and Lock-In by Historical Small Events," Economic March 1989, pp. 116-131. Journial,
American postwar hegemonic order has exhibitedthis phenomenon of increasingreturnsto its institutions. At the early momentsafter1945,when the imperial,bilateral,and regionalalternatives to America'spostwar agenda were most imminent, the United States was able to use its unusual and momentary advantages to tiltthe systemin the directionit desired. The pathway to the presentliberal hegemonic order began at a very narrowpassage where really only Britain and the United States-and a few top officials-could shape decisively the basic orientationof the world political economy.But once the institutions, such as those erected at BrettonWoods and the General Agreement on Tariffs and Trade, were established,it became increasingly hard for competingvisions of postwar orderto have any viability. America'sgreatburst of institution building after World War II fitsa general patternof international and change: crisisor war opens up a momentof fluxand opportucontinuity nity, choices are made, and interstate relationsget fixedor settledfora while.66 The notion of increasingreturnsto institutions means that once a moment of institutional selection comes and goes, the cost of large-scale institutional when compared with change rises dramatically-even ifpotentialinstitutions, In termsof American hegeand desirable.67 existingones, are more efficient mony,this means that,shortof a major war or a global economic collapse, it is verydifficult to envisage the typeof historical breakpointneeded to replace the existingorder.This is true even if a new would-be hegemon or coalition in and agenda foran alternativeset of global instituof states had an interest tions-which theydo not.68 While the increasingreturnsto institutions can serve to perpetuateinstitutions of many sorts,Americanhegemonicinstitutions that have characteristics lend themselves to returns. the set of particularly increasing First, principles thatinfusethese institutions-particularly principlesof multilateralism, openness, and reciprocity-are ones that command agreement because of their seemingfairnessand legitimacy. Organized around principlesthatare easy for
66. See Peter J. Katzenstein,"InternationalRelations Theory and the Analysis of Change," in Ernst-Otto Czempiel and James N. Rosenau, eds., Global Changesand Theoretical Challenges: Approaches to World Politics forthe1990s (Lexington,Mass.: LexingtonBooks, 1989), pp. 291-304. 67. This notion of breakpoint or critical juncture is not developed in the increasing returns literature, but it is implicitin the argument,and it is very important forunderstandingthe path dependency of Americanhegemony. 68. Major or greatpower war is a uniquely powerfulagent of change in world politicsbecause it tends to destroy and discredit old institutions and force the emergence of a new leading or hegemonicstate.RobertGilpin discusses the possibility thatwith the rise of nuclearweapons, this sort of patternof global change may end, therebyleaving in place the existinghegemonicorder. See Gilpin, Epilogue, Warand Changein World Politics, pp. 231-244.
states to accept, regardless of theirspecificinternational power position, the institutional patternis more robustand easy to expand. Moreover,the principled basis of hegemonic order also makes it more durable. This is JohnRuggie's argument about the multilateralorganization of postwar international "All other thingsbeing equal, an arrangement institutions: based on generalized organizingprinciplesshould be more elastic than one based on particularisticinterests and situationalexigencies."69 Potentialalternative institutional orders are at an added disadvantage because the principles of the current institutional orderare adaptable, expandable, and easily accepted as legitimate. Second, the open and permeable characterof American hegemonic institutions also serves to facilitateincreasingreturns.One of the most important is thatonce a particularinstitution aspects of increasingreturns is established, other institutions and relationstend to grow up around it and become interconnected and mutually dependent. A good analogy is computer software, where a softwareprovider like Microsoft, aftergaining an initial marketadof softwareapplications and programs vantage, encourages the proliferation based on Microsoft's operatinglanguage. This in turnleads to a huge complex of providers and users who are heavily dependent on the Microsoftformat. The result is an expanding marketcommunityof individuals and firmswith an increasingly dense set of commitments to Microsoft-commitments thatare notbased on loyaltybut on thegrowingreality thatchangingto anotherformat would be more costly, even if it were more efficient. The open and penetratedcharacterof American hegemonyencourages this A dense set of sort of proliferation of connectinggroups and institutions. into transnationaland transgovernmental channels are woven the trilateral regions of the advanced industrialworld. A sort of layer cake of intergovernmental institutions extend outward fromthe United States across the Atlantic and Pacific.70 such as the InternaGlobal multilateraleconomic institutions, tional MonetaryFund (IMF) and WTO, are connected to more circumscribed such as the Group of Seven (G-7) and the Group of governance institutions, Ten. Privategroups, such as the Trilateral Commission and hundreds of business trade associations,are also connectedin one way or anotherto individual
in Ruggie, ed., Multi69. JohnGerard Ruggie, "Multilateralism: The Anatomyof an Institution," lateralism Matters:The Theony and Praxis ofan Institutional Form(New York: Columbia University Press, 1993), pp. 32-33. 70. See Cheryl Shanks, Harold K. Jacobson,and Jeffrey H. Kaplan, "Inertia and Change in the Constellationof International Governmental Organizations,1981-1992,"International Organization, Vol. 50, No. 4 (Autunn 1996), pp. 593-628.
governments and theirjointmanagementinstitutions. The steady rise of trade and investment across the advanced industrialworld has made these countries more interdependent, which in turn has expanded the constituencywithin these countriesfora perpetuationof an open, multilateral system.71 Not only have more and more governments and groups become connected to the core institutions of the Westernorder; still more are seeking to join. Almost every countryin the world, including China, has now indicated a desire to join the WTO, and the line formembershipin NATO stretches all the way to Moscow. In the recentAsian currency crisis,even countrieswith little for the IMF and its operating methods have had littlechoice but to affinity negotiatewithit over the termsof loans and economic stabilization.Russia has it into the Summitof the Eight,and the joined the annual G-7 summit,turning eventual inclusionof China is quite likely.In the meantime,the G-7 process in the 1990s has generated an expanding array of ministerialand intergovernmentalbodies in a wide varietyof functionalareas, tacklingproblems such as the environment,aid to Ukraine, and organized crime, energy,terrorism, global finance.72 Together, relationsamong the advanced industrialcountries since the end of the Cold War are characterizedby an increasinglydense latticeworkof intergovernmental institutionsand routinized organizational relationshipsthatare servingto draw more governments and more functional into the extended postwar Westernpoliticalorder. parts of these governments This means that great shiftsin the basic organizationof the Westernorder are increasingly costlyto a wideningarrayofindividuals and groups thatmake up the order.More and more people have a stake in the system,even if they have no particularloyalty or affinity for the United States and even if they order.As the decades have worn on, the opermightreally prefera different of the postwar Westernorder have expanded and deepened. atinginstitutions More and more people would have theirlives disruptedif the systemwere to for radically change-which is another way of saying that the constituency
71. This is the dynamicthatRobertKeohane and JosephNye seek to capturein their"international organization" model. "Internationalorganization in the broad sense of networks,norms, and institutions includes the norms associated with specificinternational regimes,but it is a broader categorythan regime,because it also includes patternsof elite networksand (if relevant)formal institutions." They go on to argue that "the international organizationmodel assumes that a set of networks,norms, and institutions, once established, will be difficult either to eradicate or drastically to rearrange.Even governments with superiorcapabilities-overall or withinthe issue area-will find it hard to work theirwill when it conflicts with established patternsof behavior withinexistingnetworksand institutions." See Keohane and Nye, Powerand Interdependence, p. 55. 72. See Peter I. Hajnal, "From G7 to G8: Evolution, Role, and Documentation of a Unique Institution," unpublished paper, Centre forInternational Studies, University of Toronto,1998.
International 23:3 | 76 Security
preservingthe postwar politicalorder among the major industrialcountriesis greaterthan ever before.It is in this sense thatthe Americanpostwar order is stable and growing. The dominance of the United States has sparked complaintsand resistance in various quarters of Europe and Asia-but it has not triggeredthe type of counterhegemonic balancing or competitiveconflictthat might otherwisebe expected. Some argue thatcomplaintsabout America's abuse of its commandUnwillingnessto pay United ing power positionhave grown in recentyears.73 Nations dues, the Helms-BurtonAct, which inhibits trade with Cuba, and resistanceto commitments to cut greenhouse gases-these and otherfailures are thegristof European and Asian complaintsabout Americanpredominance. But complaintsabout theAmerican"arroganceofpower" have been a constant minor theme of postwar Westernorder. Episodes include the "invasion" of American companies into Europe in the 1950s, the dispute over Suez in 1953, the "Nixon shocks" in 1971 over the surprise closure of the gold window, America'sfailureto decontroloil prices duringthe 1970s energycrisis,and the of the early 1980s. Seen in postwar perspective,it is Euro-missilescontroversy difficult to argue that the level of conflict has risen. Today,as in the past, the differences tend to be negotiatedand resolved withinintergovernmental channels-even while the Europeans, Americans, and Japanese agree to expand the their cooperation in new areas, such as internationallaw enforcement, and nonproliferation. More important, despite complaintsabout environment, the American abuse of its hegemonic position, there are no serious political movementsin Europe or Japan that call for a radical break with the existing It is the Westernorder organized around American power and institutions. of the order,in spite of policy strugglesand complaints,thatis more stability remarkablethan any changes in the characterof the strugglesor complaints.
Conclusion
The twentiethcenturymay be ending, but the American centuryis in full and remarkableas swing. The characterof American power is as interesting the factof its existence.American domination or hegemony is very unusual,
summarized thisview: "The chorusof dismay with Postrecently 73. A reporter forthe Washington America's overwhelmingpower has grown louder lately as the United States findsitselfincreasingly accused of bullyingthe rest of the world. Indeed, the United States is discoveringthat its nationsthatno longer feelpreventedby fromfriendly behavior has come under sharpestscrutiny Cold War loyalties from expressing their disagreementswith Washington."William Drozdiak, Post,November 4, 1997. "Even Allies Resent U.S. Dominance," Washington
and the larger Western political order that surrounds it is unique as well. open, and highlyinstitutionAmericanhegemonyis reluctant, Fundamentally, alized-or in a word,liberal.This is what makes it acceptable to othercountries thatmightotherwisebe expected to balance against hegemonic power, and it is also what makes it so stable and expansive. of global distribution Even with the end of the Cold War and the shifting industrial counthe other the United States and power, the relationsbetween stable and cooperative.This article triesof Europe and Asia remainremarkably offers two majorreasons why Americanhegemonyhas endured and facilitated among the major industrialcountriesratherthan cooperation and integration triggeredbalancing and estrangement.Both reasons underscore the imporfountance of the liberal featuresof Americanhegemonyand the institutional dations of Westernpolitical order. WorldWar II to ensure that First,theUnited Statesmoved veryquicklyafter relations among the liberal democracies would take place within an instituthe othercounthe United States offered tionalized political process. In effect, tries a bargain: if the United States would agree to operate within mutually of power asymmetries, mutingtheimplications thereby acceptable institutions, as well. The United the othercountrieswould agree to be willingparticipants States got the acquiescence of the other Westernstates,and they in turngot the reassurance that the United States would neitherdominate nor abandon them. The stabilityof this bargain comes fromits underlyinglogic: the postwar and practices that reduce the hegemonic order is infused with institutions returnsto power. This means thatthe implicationsof winning and losing are relationsand minimized and contained. A state could "lose" in intra-Western yet not worrythatthe winnerwould be able to use those winningsto permaof domestic liberal constitunentlydominate. This is a centralcharacteristic tional orders. Parties that win elections must operate within well-defined limits.They cannot use theirpowers of incumbencyto undermineor destroy the opposition partyor parties.They can press the advantage of officeto the limitsof the law, but thereare limitsand laws. This reassures the losing party; it can accept its loss and prepare for the next election. The featuresof the the open and penetrated characterof the postwar order-and, importantly, Americanpolityitself-has mechanismsto provide the same sortof assurances to America's European and Asian partners. of American hegemony also have a durabilitythat Second, the institutions comes from the phenomenon of increasing returns.The overall systemand multilateralism-has organized around principlesof openness,reciprocity,
of politics become increasingly connectedto the wider and deeper institutions and society within the advanced industrialworld. As the embeddedness of forpotential difficult these institutions has grown,it has become increasingly Amerito introduce set of and institutions. principles rival states a competing and path dependent. Short can hegemonyhas become highlyinstitutionalized of large-scalewar or a global economic crisis,the American hegemonic order appears to be immune to would-be hegemonic challengers.Even if a large coalition of states had intereststhat favored an alternativetype of order,the of change would have to be radicallyhigherthan those thatflowfrom benefits the presentsystemto justify change. But thereis no potentialhegemonicstate (or coalitionof states) and no set of rival principlesand organizationseven on the horizon. The world of the 1940s contained farmore rival systems,ideologies, and interests than the world of the 1990s. The phenomenon of increasing are returnsis really a type of positive feedback loop. If initial institutions established successfully,where the United States and its partners have and functioning, thisallows these statesto make confidencein theircredibility choices thatserve to strengthen the binding characterof these institutions. The postwar Westernorder fitsthis basic logic. Its open and decentralized characterinvites participationand creates assurances of steady commitment. Its institutionalized characteralso provides mechanisms for the resolutionof conflicts and creates assurances of continuity. Moreover,like a marriage,the of the partnershiphave spread and deepinterconnections and institutions ened. Withinthis open and institutionalized order,the fortuneof particular while remaining states will continue to rise and fall. The United States itself, at the centerof the order,also continues to experience gains and losses. But the mix of winningand losing across the systemis distributed widely enough to mitigatethe interestthatparticularstates mighthave in replacing it. In an order where the returnsto power are low and the returnsto institutions are will be an inevitablefeature. high, stability

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Institutions, Strategic Restraint, and the Persistence of American Postwar Order Author(s): G.

Ikenberry StrategicG.John Institutions, and the Restraint, Persistenceof AmericanPostwar Order

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ests.13 Liberal theories have also identifiedand stressed the importance of

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Relativepower capabilities (P) High

Return on power assets

Figure2. TimeHorizonsand the Return on Power Assets: SecondaryState.

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Returns to PostwarInstitutions Increasing

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