Suddenly, both top policymakers and academic observers in the United States realized that global issues required systematic policy coordination and that such coordination required institutions. How does cooperation occur among sovereign states and how do international institutions affect it? Indeed, why should international institutions exist at all in a world dominated by sovereign states? This question seemed unanswerable if institutions were seen as opposed to, or above, the state but not if they were viewed as devices to help states accomplish their objectives.
The new school of thought argued that, rather than imposing themselves on states, international institutions should respond to the demand by states for cooperative ways to fulfill their own purposes. By reducing uncertainty and the costs of making and enforcing agreements, international institutions help states achieve collective gains.
This new institutionalism was not without its critics, who focused their attacks on three perceived shortcomings. First, they claimed that international institutions were fundamentally insignificant since states wield the only real power in world politics.
The second counterargument focused on "anarchy": the absence of a world government or effective international legal system to which victims of injustice can appeal. The third objection to theories of cooperation was less radical but more enduring. Theorists of cooperation had recognized that cooperation is not harmonious: it emerges out of discord and takes place through tough bargaining. Nevertheless, they claimed that the potential joint gains from such cooperation explained the dramatic increases in the number and scope of cooperative multilateral institutions.
Critics pointed out, however, that bargaining problems themselves could produce obstacles to achieving joint gains. The general problem of bargaining raises specific issues about how institutions affect international negotiations. The end of the Cold War also shattered a whole set of beliefs about world politics and made scholars increasingly aware of the importance of ideas, norms, and information. Some years earlier, such a reorientation might have faced fierce criticism from adherents of game theory and other economics-based approaches, which had traditionally focused on material interests.
However, since the mids, bargaining theory has shown more and more that the beliefs of actors are crucially important for outcomes.
As illustrated most recently by the far-reaching interventions of the IMF in East Asia, the globalization of the world economy and the expanding role of international institutions are creating a powerful form of global regulation. But these international institutions are managed by technocrats and supervised by high government officials. Only in the most attenuated sense is democratic control exercised over major international organizations.
Scholars must now explore how to devise international institutions that are not only competent and effective but also accountable, at least ultimately, to democratic publics. One promising approach would be to seek to invigorate transnational society in the form of networks among individuals and nongovernmental organizations.
As a result, the future accountability of international institutions to their publics may rest only partly on delegation through formal democratic institutions. Summary: In this article, Keohane provided an analysis on the major debates over institutionalism and its capability to produce cooperation between states given the conditions of anarchy.
Assumptions: Accepts Anarchy States play a major role in interstate negotiations and international organisations Growing need for international cooperation and hence international organisations because of global nature of problem outgrowing capability for individual nations to solve them; E. Global Financial Crisis, Climate Change, etc. Who has authority? Proposed Solution: New Mechanisms Involve transnational societies Internal and external pressure for procedural reforms and transparency Openness to routine evaluation by transnational societies advocacy groups Confirmation by Senate for governors of Federal Reserve Board.
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