Reading Report: Neo-Liberalism and Neo-Realism


Keohane and Martin’s belief in institutionalism falls into a logical trap as these have little influence over state relations and international stability in the post-Cold War world. States, inhabiting a competitive world, will invariably behave in aggressive ways for three reasons: states in the state system fear each other; each state naturally aims at guaranteeing its own survival; and they aim at maximizing their relative power positions over other states. The key factors that prevent cooperation are therefore privilege of relative gains and concerns about cheating.

Liberal institutionalism in this context struggles when it comes to security issues potential free-riding of one actor (state) will come at a much higher price to those that complied with agreed norms and rules. Liberal institutionalism forgets: about relative gains; that psychological and strategic trade logic can also explains why states go for relative gains; and that even if cheating is resolved relative gains will still be an issue as gains by one state would necessarily threaten the others.

The conclusion is that liberal internationalist efforts struggle with practical historical examples for the abstract models they use, it also struggles to grasp state worries concerning relative gains and that this logic of relative gains is actually not restricted to the military security sector as it can also be applied for example to the cultural and economic sectors.

Keohane and Martin

Mearsheimer’s criticisms of Neo-liberal institutionalism are argued to be problematic for at least three reasons: he over-privileges his own views; fails to explain the systemic conditions where the theoretical abstracts are to be applied; and tends to abuse rhetoric to overcome logical shortcomings. He does not account for all the buzz and evolutions witnessed around international institutions such as the EU, NATO and GATT.

There are actually occasions where institutions do matter. Institutions can: provide information; reduce transaction costs; make commitments credible; establish focal points for coordination, and in general facilitate the operation of reciprocity. The assumptions of liberal institutionalist theory can be applied to the security sectors and the divide between economics and security, that Mersheimer criticized the theory for, was blown out of proportion. What Keohane defends is that states are dependent on the existence and good function of institutions to make them more aware of what are the potential gains of cooperating. They also do more than just preventing cheating. Institutions can work moderators controlling “fears of unequal gains from cooperation” (Keohane 1995).

All liberal institutionalism says is that institutionalization is on the onset easier in economic aspects than in security ones. Just because institutions are seen as relevant and holding agency however it does not mean they are always necessarily seen as independent variables. Difference between the two schools lie, overall, in explaining why institutions come about and what is their actual input in the international architecture, in the case of liberal internationalism, “international institutions operating on the basis of reciprocity will be components of any lasting peace.”


Mearsheimer’s critique surrounding the failure of liberal internationalism to give practical examples of their abstract international system models can also be directed towards neo-realism. Both schools of thought “spin” historical events and provide equally disputable interpretations of empirical data, moulding it to “fit” their theoretical abstracts.

Mearsheimer asks for evidence of cooperation between states that would not occur had not there been for previously provided institutional arrangements. This is like asking for evidence of cooperation that would occur between groups if there was not an overarching council body to encompass them. In this case as in the case of international institutions, cooperation is possible at localized non-institutionalized levels. However, I tend to agree with Keohane in that a growing process of socialization within a propitious setting where information is constantly improving can lead for a great reduction of free-riding. It can also bring concerns over relative gains to “healthier” secondary levels and better provide for absolute gains.

The European Union in particular stands out as a unique “political animal” where the role of institutions and the socialization of both its member states and its constituting sub-state units cannot be underestimated. Despite difficulties, stability, cohesion and economic growth have been remarkable.

Keohane, R. & Martin, L. (1995) “The promise of Institutionalist Theory” in International Security, vol.20, no.1

Mearsheimer, J. (1994) “The false promise of International Institutions” in International Security, vol. 19, no.3


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