Do institutions really matter?

This essay attempts to address the undue focus on the lessened role of institutions on security issues while ignoring their (institutions) achievements in many other issue-areas to let them be conceived as weak instruments of international relations.Thomson and Snidal (1999), in their article International Organization have cited a lot of authorities witnessing that the application of institution has been expanded to a wide variety of issue-areas, including international security, trade, finance, telecommunications, and the environment. International legal scholars have also increasingly used institutions to understand better issues such as international trade laws, arms control agreements, and the law of treaties.

Problem of defining ‘institution’

One of the problems in this area is that scholars do not agree on the definition of the term institution. A widely adhered ‘standard’ definition by S. Krasner (1983) presents regimes/institutions as sets of implicit principles, norms, rules and decision making procedures around which actors’ expectations converge in a given area of international relations. However, scholars like Mearsheimer, in his article entitled false promise of international institutions do not agree on this definition. Even he mocks that Krasner’s definition lacks analytical bite. Strange (1982) has also criticized it as vague. They have, instead, provided their own definitions. Nevertheless, the way Krasner defines institutions enables us to assess the role of institutions in almost all walks of life. The definition makes up Regime Theory that premises: international politics is highly interdependent (Keohane and Nye, 1977) implying mutual interests in cooperation and (b) international behavior is institutionalized in a variety of ways (Ruggie, 1975).

Main scholars and theories said on the score

Mearsheimer (p.8) derisively wrote that institutionalists consider institutions to be a powerful force for stability. R. Keohane, for example, declares that, avoiding military conflict in Europe after the Cold War depends greatly on whether period is characterized by a continuous pattern of institutionalized cooperation. Commenting on the aftermath of the Soviet collapse and the end of the Cold War, John Ruggie maintains that there seems little doubt that multilateral norms and institutions have helped stabilize their international consequences. Indeed, such norms and institutions appear to be playing a significant role in the management of a broad array of regional and global changes in the world system today.

Realists maintain that institutions are basically a reflection of the distribution of power in the world. They are based on the self-interested calculations of the great powers, and they have no independent effect on state behavior. Realists therefore believe that institutions are not an important cause of peace. They matter only on the margins. Mearsheimer (P.8) himself concludes that institutions have minimal influence on state behavior, and thus hold little promise for promoting stability.

Institutionalists directly challenge this view arguing instead that institutions can alter state preferences and therefore change state behavior. Institutions can discourage states from calculating self-interest on the basis of how every move affects their relative power positions. Institutions are independent variables, and they have the capability to move states away from war. (ibid) Liberal institutionalism maintains increased cooperation in economic and environmental cooperation is presumed to reduce the likelihood of war. (In Mearsheimer, p.9)

David Mitrany’s functionalist theory states that technological advancements and the desire to promote welfare concerns were seen as creating a need for intestate cooperation that required both international governmental organizations and non-governmental organizations to manage the necessary technical support. Neofunctionalism extended this argument by suggesting that successful collaboration in one area would increase the benefits of cooperation in related areas, and generate joint pressure from domestic interest groups and international officials to extend the realm of cooperation. (Haas, 1964; Linberg and Scheingold 1971; Groom and Taylor, 1975)

Interdependence theory: Long term and increasing interactions among states in all fields of activity – including health, technology, security, environment, culture and economics – mean that even the most powerful states are sensitive to occurrences elsewhere and cannot always achieve their goals by themselves. Small states that are dependent on larger states have even stronger reasons to seek support from such organizations. Moreover, this interdependence takes increasingly complex forms, including the increase in the number of significant transactional actors such as multinational corporations and environmental groups. (Keohane and Nye, 1972, 1977)

Institutions are of various forms. There are more of institutions if we see them as ordering principles. The emphasis on formal international organization represents a narrow view of the forms, and possibilities for, international governance. Focusing on the formal ‘classic’ model of institutions blinds us not to see their improved roles somewhere else. It is good to note that formal organizations are only one amongst numerous institutional possibilities.(Thomson and Snidal, pp. 701-2) The following conceptions provide a broad ordering principle of international system: the realist conception of self-help in anarchy, English school view of ‘society’, Marxist theories of imperialism (Lenin, 1917), and ‘world capitalist system’ (Wallerstein, 1979).

Hugo Grotius’ international society focuses on the system of states as an international society that contains persistent elements of order (Bull, 1977; Wight, 1977) According to Bull, states form a society in the sense that they conceive themselves to be bound by a common set of rules in their relations with one another, and share in the working of common institutions. This framework of rules and institutions guides state behavior in patterned ways. Finnimore (1996a) emphasizes on this score: states embedded in a dense network of social relations that shape their judgments, define their interests according to ‘internationally shared norms and values that structure and give meaning to international political life’. The English school theorists (see Hurrell, 1993) connote that states abide by rules and norms, even when it is not in their material interest, for they have a long-term interest in the maintenance of a ‘law-impregnated international community and share a sense of moral community.

Robert Keohane’s AfterHegemony (1984) is another important vanguard that provides very strong argument for institutions. For him, regimes can respond to political market failures. Like imperfect markets, world politics is characterized by institutional deficiencies that inhibit mutually advantageous cooperation. While bargaining could correct these problems (Coase, 1960) he argues that the underlying conditions like well-defined property rights, perfect information and zero transactions costs do not naturally exist in the international system. It is institutions that can solve the problem so as to facilitate cooperation among states on a decentralized basis. By clustering issues together in the same forums over a long period of time, regimes help to bring governments into continuing interaction with one another, reducing incentives to cheat and enhance the value of reputation. By establishing legitimate standards of behavior for states to follow and by providing ways to monitor compliance, they create the basis for decentralized enforcement founded on the principle of reciprocity.

Personal reflection

I believe institutions do matter. There are massive international trade, investment (economic), political, and social relations that run amongst members of the international system due to institutions. They are not mere expressions of power. They are not always there for the hegemon. If we open our eyes wide, we see institutions working on their own. On the contrary, if we are enslaved by the only more than few exceptions to the rule of smooth working of institutions, it is natural to conclude institutions are totally dependent on other variables like power – that puff towards the power breaths.

Krasner’s definition allows us to take treaties as institutions. Many focus on a small fraction of treaties that happened, unfortunately, to be violated to use as evidence that institutions/treaties do only matter a little. But, how many treaties (including bilateral ones) are really violated? Does it mean the agreements did not work? A law is broken by individuals does not necessarily mean there is no order in the country.  I think it should be taken as normal violation of law.

To use analogy from law: If you ask ordinary people what law means, they will at first thought tell you about criminal law and not civil and commercial law. Why? It is merely because that part of law they usually hear violated. It is all on the news! On the contrary civil law violations do not make hot news. However, to our surprise only 5% to 10% of the law of a given country comprises criminal law. Ordinary people do not mention civil law which is by far the greatest part of the law that affects their daily life. The same holds good for institutions: it is only when institutions are violated that we say - here we go, look! Institutions do not work. Would it be made an issue if the agreement/institution is observed, if a contract/institution is respected? Not really.

In sum, I am not saying that institutions are working in absolute terms. Rather, what I argue is that the actual contribution of institutions is not appreciated as it should have been. Exceptions have reigned over the rules – few violations of institutions have dominated the relatively smoothly working institutions.

It is true that international institutions are not strong in bringing world peace and stability as they do in other issue-areas does not necessarily imply they are totally weak in all walks of life.  Institutions do greatly promote trade, investment, culture in addition to greatly contributing in the world peace and stability.

Contemporary examples

The recent Copenhagen and Cancun forums for climate discussion are good examples of the growing role of institutions on common affairs. The result may not be perfectly fitting to what the world in general and developing countries in particular needed. It is better to opine like half-full glass not the other way round - we have to emphasize on what has been achieved not only on what is not and then seek more. It is a progress.

Another example is the strong institution created by African states and China. Currently, China seems the most advantaged from the relations but majority of African countries (which I am sure of Ethiopia!) are gaining much, may be, for the first time in history. Not many countries have ever been happy in history in their relations with other countries as with China. Is it because of force?