Theories of International Cooperation and the Primacy of Anarchy SUNY series in Global Politics James N. Rosenau, Editor Theories of International Cooperation and the Primacy of Anarchy Explaining U.S. International Policy-Making After Bretton Woods Jennifer Sterling-Folker State University of New York Press Published by State University of New York Press, Albany © 2002 State University of New York All rights reserved Printed in the United States of America No part of this book may be used or reproduced in any manner whatsoever without written permission. No part of this book may be stored in a retrieval system or transmitted in any form or by any means including electronic, electrostatic, magnetic tape, mechanical, photocopying, recording, or otherwise without the prior permission in writing of the publisher. For information, address the State University of New York Press, 90 State Street, Suite 700, Albany, NY 12207 Production by Michael Haggett Marketing by Michael Campochiaro Library of Congress Cataloging-in-Publication Data Sterling-Folker, Jennifer Anne, 1960– Theories of international cooperation and the primacy of anarchy : explaining U.S. international policy-making after Bretton Woods / Jennifer Sterling-Folker. p. cm. — (SUNY series in global polics) Based on the author’s dissertation (University of Chicago, 1993). Includes bibliographical references and index. ISBN 0-7914-5207-7 (alk. paper) — ISBN 0-7914-5208-5 (pbk. : alk. paper) 1. Monetary policy—United States. 2. United States—Foreign economic relations. 3. Economic policy—International cooperation. 4. International cooperation. 5. International agencies. 6. United Nations Monetary and Financial Conference (1944 : Bretton Woods, N.H.) I. Title. II. Series. HG540.S735 2002 337.73—dc21 2001049285 10 9 8 7 6 5 4 3 2 1 Contents Preface and Acknowledgments vii Glossary of Abbreviations xi 1 Explaining International Cooperation 1 The “New” International Organization 5 Prior Periods of Liberal Cogency 8 Constructivism in an Era of Liberal Cogency 13 A Second Look at Interdependence and Regimes as Explanations for Cooperation 18 A Realist-Constructivist Alternative 24 Overview of the Book 32 2 Liberal Cooperation Theory 37 Defining Interdependence 38 Autonomy and Sovereignty in Interdependence 41 Interdependence and Cooperation According to Issue Areas 45 Complex Interdependence: Issue Areas of Mutual Gain in Conditions of Interdependence 48 Domestic Structural and Cognitive Barriers to Cooperation 51 Changing Cognitive Maps: Learning, Information, Linkages, and Regimes 58 Interdependence as Process and By Way of Conclusion 63 3 A Realist-Constructivist Alternative 67 The “Conventional Wisdom” 67 Revisiting the Concept of Anarchy 70 Human Social Practice in an Anarchic Environment 76 The Foundation for a Neoclassical Realist Approach to Autonomy and Cooperation 84 Autonomy as a Social Practice 92 The Realist-Constructivist Approach to International Cooperation 100 v vi CONTENTS 4 Empirical Propositions and the Bretton Woods Monetary Regime 105 Monetary Elite Networks and Opportunities in the American Context 107 Operationalizing Liberal Expectations: A First Cut 116 Post-Bretton Woods as Regime Creation and Policy Optimizing 118 Defining Functional Institutional Efficiency in International Monetary Affairs 123 Post-Bretton Woods as Regimes Maintenance and Satisficing Stabilization 131 Operationalizing Realist-Constructivist Expectations 136 Research Design Summary 139 5 U.S. International Monetary Cooperation, 1971–1993 143 “The Dollar May be Our Currency But It’s Your Problem” 143 “In a Boat With an Elephant” 152 “The Magic of the Marketplace” 158 “Cowboys at the Hotel” 164 “Remember, It Was Only Dinner Conversation” 171 “Once in a While I Think about those Things, But Not Much” 176 6 Why Liberal Theories Fail to Account for the Empirical Record 183 Revelations from the Empirical Record 184 Economic Policymakers in History 188 The Shift From Regime Creation to Regime Maintenance 194 Interdependent Demand and Functionally Efficient Supply 201 7 Explaining U.S. International Monetary Cooperation with Realist-Constructivism 211 Returning to the Hotel 215 Why Toast the God of Cooperation? 218 Post-Plaza Polite “Dinner Conversation” 223 Directions for Future Research 226 Cooperation and the Possibility of Fundamental Systemic Change 230 Notes 235 Bibliography 269 Index 289 Preface and Acknowledgments Methodological and historical disciplinary differences aside, why is the study of political science divided into the subfields of international relations (IR), comparative politics, and American politics when clearly political outcomes result from an interaction of factors that cut across each of these subfields? My professional inquiries are driven by this central conceptual question, and it has informed this present study. It is a “second-image reversed” question because it presumes that it is impossible to treat the systemic environment in which nation-states exist, the internal composition and politics of nation- states, and the institutions and politics of the United States in particular, as if they were in causal isolation from one another. It presumes instead that processes and outcomes in each of these areas are caused by variable interac- tion across them. Much of the IR scholarly community remains convinced that because the liberal IR theoretical paradigm explicitly recognizes the causal role of subsys- temic variables, it adequately allows for the integration of subfield analysis. I am firmly convinced otherwise, however, and one of the goals of this work is to reveal why that particular paradigm is insufficient to the task at hand. Alternatively I seek to develop a more holistic explanatory approach which can deductively combine the three standard levels-of-analysis under the same causal framework, but which is also concerned with the totality of historical and global political phenomenon. I believe realism offers such an approach, if the explanatory implications which might be derived from its ontology are fully considered. Hereto, however, I recognize that this view is not widely shared by other scholars who seek a holistic perspective, which is why this work involves the careful analysis of theoretical approaches as comparative alternatives to one another. Such comparisons reveal that there is enormous potential in realist theorizing if it is carefully developed and if theoretical boundaries are recog- nized and acknowledged. This means, to put it bluntly, that realism cannot do everything. Indeed a core argument of this book is that realism needs an approach like constructivism in order to complete its narratives of social reality. However realism still does provide the basis from which we may begin vii viii PREFACE AND ACKNOWLEDGMENTS to think about human social activity writ large and to understand why it is a fundamental truism of human existence that the more things change, the more they stay the same. In developing the ideas and arguments in the book I owe an enormous debt of gratitude to numerous individuals. The most important of these is my husband, friend, and colleague, Brian Folker, who has always supported my personal and professional efforts and who is responsible for pushing my in- tellectual development beyond the confines of what is considered standard realist theorizing in the discipline. His intellectual input into the process was tremendous, and exposure to ideas from his discipline of literary theory and criticism led me to reconsider the relationship between realism and construc- tivism specifically. His commitment to me and our family remains a source of professional inspiration and personal joy. My daughter, Katherine Folker, also deserves special mention, not because she personally assisted the intel- lectual development of this book. Far from it, her birth in the middle of its writing held up the process considerably. But her presence has confirmed for me a central aspect of my argument, which is that to be a “nurturing realist” is not an oxymoron. A number of scholars reviewed the manuscript. Their recommendations not only helped the book find a congenial home at State University of New York Press, but their suggestions also shaped the structure of the present manuscript and the substantive revisions to my theoretical arguments. These scholars include Yale Ferguson, Patrick Thaddeus Jackson, Jeff Taliaferro, Joe Grieco, and Donald Puchala. Each one of these scholars provided me with insights, suggestions, and personal encouragement. Significantly many of them are not realists or do not practice the “neoclassical” variant to which I sub- scribe, yet all were willing to give this variant a fair hearing, which I believe amply testifies to the extensive intellectual and personal capacities that each of these individuals brings to the profession. All of them have also been professionally supportive well beyond the confines of the manuscript itself and in ways that I only hope I may repay in the years to come. The book was presented at the “Northeast Circle: New Scholarship Roundtable” during the International Studies Association—North East’s Annual Meeting in Albany in November 2000. There I received more valu- able advice from the roundtable participants just as the book was being finalized. Yale and Patrick agreed to participate and read a draft of the manuscript yet one more time, and suggestions from Eric Leonard, Craig Murphy, Dan Nexon, and audience participants were incorporated as much as possible into the final draft. Portions of the present chapters 3 and 7 should demonstrate that I was indeed listening and taking your advice quite seriously. Thank you all for being willing to participate and helping me revise the work accordingly. I would also like to thank the ISA-NE Gov- PREFACE AND ACKNOWLEDGMENTS ix erning Council, State University of New York Press, and Michael Rinella for their support at the conference. Various other scholars have read portions of the manuscript while it was in progress and provided detailed suggestions. These include Jon Mercer, Ernie Haas, Jack Snyder, Chuck Gochman, and Annette Freyberg-Inan. Each of these scholars let me use them as sounding boards for my ideas and provided me with honest reactions that I very much appreciated. Once again many of these scholars are not realists, which leads me to value all the more their willingness to seriously consider the ideas involved. Two individuals whom I would like to single out for particular thanks are Mark Boyer and Randy Schweller. Both of them have provided me with intellectual and personal encouragement not only regarding the manuscript but regarding my work in general. At certain points during the process each of them kept me from despairing about the book and the profession at large (without even realizing it I’m sure), and at other points in time their inter- vention and involvement tipped the professional scales in my favor. I will be eternally grateful to each of them for their encouragement and support. Although pieces I presented in several other forums during the writing of the manuscript were not part of the final copy, those pieces proved foun- dational for the development of the neoclassical realist-constructivist perspec- tive I provide in chapter 3. The participants in the October 1999 ISP Friday seminar series, Belfer Center for Science and International Affairs, at Harvard University, deserve thanks for providing their reactions and comments. The support I received from Colin Elman and Miriam Fendius-Elman in that venue and in other situations has been steadfast, considerable, and instrumen- tal to the development of this book. Their feedback and comments on other pieces I have written has also been insightful and of tremendous value. Another forum which allowed me to develop ideas related to the book was the “Conference on Evolutionary Approaches to International Relations,” organized by Bill Thompson at Indiana University in December 1998. Bill has consistently encouraged my work and provided me with publication opportunities that were absolutely essential to my ability to continue working as an academic. Hereto I only hope that I may repay his support in kind someday. Participant feedback at the conference was useful in formulating the arguments which became chapter 3. Comments and support from fellow participants Vincent Falger and John Vasquez were particularly pertinent and continued well after the conference had ended. In an entirely different venue, at the 1999 ISA Annual Meeting Marty Finnemore also provided comments on a paper that informed some aspects of the realist-constructivist perspective I develop in the book. The graduate students in my International Organization seminar during the 1998 spring semester deserve special mention for allowing me to organize