The Facilitation of Regime Formation

Two different routes have been followed by liberal institutionalists in their attempt to explain the emergence of regimes. First they have drawn on the work of microeconomists who have insisted that state intervention is not the only mechanism avail­able to produce public goods. It is suggested that if there is a dominant or hegemonic actor operating within the market, then that actor may well be pre­pared to sustain the cost of producing a public good (Olson: 1965). The liberal institutionalists have had no difficulty extending this line of argument to the international arena. During the course of the nine­teenth century, for example, a regime was estab­lished which outlawed the international traffic of slaves. States agreed to observe the humanitarian principle which underpinned this regime because they expected other states to do so. The expectation emerged because it was recognized that Great Britain intended to police the regime and possessed the naval capacity to do so. The regime was consol­idated, therefore, because of Britain's hegemonic status within the international system.

As already indicated, it is widely accepted that the economic regimes established after the Second World War owe their existence to the presence of the United States as a hegemonic power. But when liberal institutionalist examined the consequences of hegemonic decline, they concluded that there is no reason to suppose that established regimes would cease to exist. Although the Prisoners' Dilemma indicated that market failures occur because in an anarchic system there is an expecta­tion that states will compete rather than collabo­rate, once states have moved away from the suboptimum outcome resulting from mutually competitive strategies, then there is no incentive to defect from the mutually collaborative strategies and return to the suboptimum outcome. Even in the absence of a hegemon, therefore, liberal institu­tionalists argue that established regimes should persist (Keohane 1984).

The second route explored by the liberal institu­tionalists has reinforced this conclusion. It is argued that the Prisoners' Dilemma exaggerates the difficulty of generating collaboration within the anarchic international system. The Prisoners' Dilemma presupposes that the game is only played once. But, in reality, because situations persist over time, it is more appropriate to think of the game being played over and over again. The 'shadow of the future' looms over the players, affecting their i strategic calculations. Because the game will be played on future occasions, it becomes worthwhile, taking a risk and pursuing a collaborative strategy in order to produce the optimum outcome. If all states can be persuaded to do the same, then there will be little incentive to defect in the future, because if one state defects, then, 'tit for tat', all the others will follow. Accepting this line of argument, then the major mechanism for establishing and maintaining a regime is not the existence of a hege­mon, but the principle of reciprocity. Liberal insti­tutionalists, therefore, have increasingly come to focus on factors that will strengthen reciprocity within the system. Inspection and surveillance facilities become very important to ensure that states are operating within the parameters of a regime. The establishment of satellite surveillance, for example, was a significant factor in encouraging the United States and the Soviet Union to reach arms control agreements. Attention has also been drawn to the importance of scientific knowledge. States are unwilling to restrict their activities on the basis of speculation and respond much more effectively when scientists start to agree about the sig­nificance of their findings. As states become ever more open and the constant expansion in scientific understanding, so the international environment will become increasingly 'information rich'. It is this trend, liberal institutionalist argue, that will do most to facilitate regime-building in the future (Keohane 1984).