Robert O. Keohane and Joseph S. Nye Jr. review the question of governance in the globalized world in the twenty first century as a very important question that cannot be ignored. Defining globalization is a delicate job. What is clear is that globalization includes the increasing contacts between people around the world. This kind of close contact and interdependence has no precedence in history. Economically, politically and culturally people are influenced by these contacts.
Economically the flow of goods in the world markets has affected the lives of all people in every corner of the world. Politically and militarily the emergence of high destructive weapons deters even the most powerful states and a balance of threat has emerged. Climate change, AIDs and terrorism has provided the international environment to converge and cooperate on these issues. Social and cultural globalism has provided the background for movements of ideas, information and images.
During the history some norms and values have helped regimes to attract cooperation among states. In the 19th century the antislavery movement involved transnational ideas as well as domestic politics. After the Second World War the human right discourse dominated over the public ideology globally. Even the Soviet Union and China signed agreements in this regard.
The useful inefficiency of states in dealing with global challenges has provided the background for states to join hands and cooperate through "networks minimalism" meaning to keep their own sovereignty while using democratic processes to compromise over the benefits of economic and cultural integration. Democracy and international participation provides the background for institutions to have legitimacy and for regimes to represent the interests of human communities.
The need for international regimes may exceed the supply. The deadlocks and frustration may make international institutions ineffective. There may be setbacks such as the 1914 World War in the twenty first century. The quasi judicial processes, soft legislation and effective governance may help avoid these obstacles. Globalization will never go back. It is here to stay. The question is how it will be governed.
Robert O. Keohane compares challenges facing globalization to that of the founders of the United States. Globalization means the shrinkage of distances in the world scale through the emergence of network connections among people in every corner of the world by using new possibilities such as easy transportations, internet and market. Globalization encompasses every aspect of human life such as economic cultural and even political.
Globalization depends on effective governance in the global scale. In our anarchic world there is no global state. States do not withdraw from their own sovereignty and nobody expects globalization to impose limitations on states by using force. Yet considering increasing transnational networks, interstate cooperation is likely. States may find it helpful to bargain a portion of their sovereignty in order to follow common interests of the international community.
Similar to the foundation of the United States, democratically established institutions can play a major role in governance in the twenty first century. First people around the world will find reliable contacts, and then in dealing with common challenges they may provide the background for states to cooperate and bargain over new challenges. Soft power and persuasion will be the best form of power. Through persuasion and soft power the alternatives of people and states may change and they may change their policies and behaviors. Through rational thinking, even the most egoists may consider their long term interests and cooperate with others in designing institutions that help them follow their long term interests.
According to Keohane we should try to overcome the governance dilemma on the global scale; that is we should gain benefit from institutions without becoming their victims. These institutions should be based on democratic values without constraining their effectiveness.
We can study global institutions through rational actor model according to which the states as well as the governing elites of states find it useful to cooperate with these institutions. Also the game theory and the prisoner dilemma may provide a good framework in this regard.
If global institutions are designed well the will promote human welfare; but if they fail the result will be disastrous. It depends on our job and the coming generation in the twenty first century. These challenges resemble those of the founders of the United States in the 18th century.
At the beginning o the 20th century international institutions were unknown and if somebody talked of a comprehensive international organization, nobody would take him seriously. The First World War and Woodrow Wilson, the liberalist American President had a great role in thinking of an international Organization as an alternative to the dominant realist way of thinking. Yet the idea of League of Nations failed in the face of resistance from the American Congress.
After the Second World War the emergence of the United Nation and many other international institutions such as NATO, IMF and later EU, ASEAN, SCO and many other organizations changed the environment to the point that nobody can ignore the role of institutions for international cooperation.
Yet, realists believe that states are the dominant actors in the international realm and these institutions are unimportant. This claim lost its face in the face of growing importance and power of these organizations. The realist commentators again challenge the independent importance of international institutions. They claim these institutions can work effectively only when the great powers are behind them. According to Robert Keohane these institutions have a sense of independence that gradually and over time is shaped. Even the great powers may compromise some of their interests to have the legitimacy and cooperation of other members of the organization.
The logic of realists in rejecting the importance of institutions is in the idea of relative gains versus the absolute gains. According to the logic of relative gain, states overlook their own interests when their rivals gain more. So they always compare their own interests with that of their rivals. But according to the logic of absolute gains, states do not care much about the gains of other members of the international community, they follow their own interests. Today we can say that both logics can be combined. That is, in some military and economic aspects states consider relative gains; while in some other aspects they look at their own interests and ignore the interests of others. Institutions provide the background to find the areas of cooperation that actors agree to cooperate.
During the Cold War the international environment was too much materialistic. States strictly followed their national interests. After the Cold War other issues such as religious values and climate change and other ideologies found space to be more active in the absence of hot bipolar rivalry.
Some Institutions are very successful others are weak. Where there is consensus among members over values such as the EU and NATO these institutions are strong; where there is no consensus such as in ASEAN and the Organization of African Unity, the organizations are weak.
The problem with these institutions is that if they work democratically they will be weak be cause at the beginning they can not move forward. If they work undemocratically they will face the problem of lack of representativeness. If they want to represent do they represent states or people. If they represent people they will be weaker because states do not feel committed to the decisions. If they represent states they should set their goals according to the interests of governments.
Decision making is very essential in foreign policy, yet there are few academic works studying decision making comprehensively. No political or economical event can be understood without studying the decision making of the leaders. In the international relations and foreign policy studies the focus has been mainly on the unitary system actor. These perspectives have overlooked the world of leaders and how foreign policy decisions are made. The realism and liberalism as dominant theories in international relations have not paid enough attention to the process of decision making within the elites of the leaders in states.
For decision making there are several major determining factors such as the political and social environment, the psychology and perceptions of leaders, the international factors such as alliances, and the domestic factor such as the views of the people inside the country. A live example is the decision made by the leaders of the Islamic Republic of Iran in negotiations with the p5+1 to remove sanctions and keep the nuclear capability at the same time. In this case all the political environment, psychological factors and perception of the Rouhani Administration, the international considerations and the domestic factor were involved.
According to the realist paradigm states are considered as rational actors which interact in the anarchic international system. They consider their own security and economic interests and make decisions rationally to choose the best alternative. In Economics people are rational and make the best choices to maximize their wealth so they calculate reasonably to choose the best options among the available goods at the market.
The rival for the rational actor model is the Cognitive Model according to which the actors are not necessarily rational. They make decisions according to their perception, Psychology, feelings experienced and, limitation of time and knowledge. In the cognitive model the leaders in the international decisions have many limitations and make some decisions under pressures from domestic and abroad. Here the psychology and interpretations of leaders plays a major role
Also there are other rivals to the rational and cognitive models such as the bureaucratic model that divides the jobs of different sections of the government to make decisions. For Example in the United States the CIA, Defense Ministry, the Congress and the President had different roles in the decision of invading Iraq in 2003 and not invading Iraq in 1991.
There are different ways to study decision making processes. We can study cases, we can compare them and make comparative analyses, we can study the dimensions of decisions as unimportant or strategic decisions, and we can divide single and on-shot decisions from interactive decisions.
The America's Global Advantage: US Hegemony and International Cooperation by Carla Norrlof (2010) argues that the United States benefits more that any other state in the international cooperation; and American superiority will continue despite some prediction of its decline. This book challenges the prevailing view proposed by the hegemonic stability theory that the United States has provided the public goods for all at its own expense. It claims that the United States has reaped more than any other state because of its advantages in the three areas of trade, monetary currency and security.
Hegemonic stability theory proposed by Kindleberger 1981 and Keohane 1984 considers the United States as a benevolent hegemon that provides public goods. The opposite is the coercive, malevolent and exploitative hegemony that does not consider the interests of other states. Carla Norrlof argues that there is another version of hegemony that does not stand in these two categories; and the United States is following the third path. The idea that small states gain more in the international cooperation than the hegemon is not true; because it is not rational for the hegemon to provide the public goods at is own expense. It is better to consider the club market instead of the world market and let's say the club goods not the public goods. The hegemon according to its own interests may deprive the free-rides of the club goods. For example the World Trade Organization (WTO) does not include many states that do not follow the rules that are established by the hegemon.
Monetary and commercial power of the hegemon is the second factor in keeping the advantages for the hegemon while other smaller powers lack such a credibility to set their own currency in the dominant position. Other states prefer the United States as the hegemon for trading and using its currency. The domination of American currency gives the United States the opportunity to spend more than it earns. This helps American people as well as producers to use this advantage to have more capital and more customer market for their goods. China and other economic power try to buy American bonds and use American currency as their saving deposits. Even China and Europeans are worried about depreciation of American dollar.
The security card is the third advantage to American economy. Although military power does not seem closely related to trade, in practice it is. Reviewing the history shows how the Great Britain enjoyed its military to pursue its own economic advantages. Maybe some argue that today the condition is different or the United States does not use its military advantages to follow economic privileges. The United States used its military power and prestige in the 19th century to lead the European powers out of the Western Hemisphere to make its own currency dominant in that area. By investing heavily in military power and defense industry, the United States has effectively deterred attacks on the homeland. This gives the United States to be safe market for international investment. Furthermore the United States has used its military power to intervene in many areas of the world in pursuit of its own economic interests. The US policy in providing security for the flow of oil from the Persian Gulf is an example for this case. Also the United States through many treaties is committed to the security of many of its allies and trade partners such as European powers Arab oil exporting countries and Japan.
Carla Norrlof concludes that the United States benefits disproportionately from international cooperation today. America as the hegemon power has structural advantages that help it to pursue its interests and gain more from international cooperation.
China's magical economic growth has led to the formation of a new and unprecedented challenge to American interests in Asia and worldwide. Chinese economic growth has marginalized the United State in some economic and political areas; this economic growth has helped China to invest more in its military power and to behave more assertively in political areas.
The challenge of China to American interests is not similar to the challenge of the Soviet Union. Unlike the Soviets, China is not an ideological foe for the American capitalist system. China has accepted the capitalist market economy. China does not pose a military threat against the United States and its allies.
Although China is politically a one party system, it is has economically embraced the capitalist economy and has adopted and accepted the superiority of the United States. But this does not mean that in the future China will remain loyal to American unilateral policies.
Also the challenge of China to America is not similar to Japan. China is politically more independent than Japan. Beijing has an independent and relatively important military power. China's population is much more than that of Japan. This gives more capacity to the Chinese economy to enjoy more labor forces. And finally China is governed by a one party system that is much more different than Japan. Chinese political system does not follow the Western democratic values.