Interdependence in International Relations Analysis PDF

Analysing International Relations 4 – Interdependence Prof. dr. Daniel Thomas  The international system: A set of incentives and expectations that shape the identities and the behaviour of actors in international politics. 4 concepts/faces...

Analysing International Relations 4 – Interdependence Prof. dr. Daniel Thomas  The international system: A set of incentives and expectations that shape the identities and the behaviour of actors in international politics. 4 concepts/faces: Step 1: Think about each face separately. Anarchy (5 Nov) Step 2: Compare Hierarchy (7 Nov) various conceptions of each face. Interdependence (12 Nov) Step 3: Think about how the various Capitalism (14 Nov) faces connect and interact.  Concepts of the international system (2 of 4) ( and how it shapes IR) International anarchy: The absence of effective central authority above states. Security dilemma or likelihood of aggression or states’ identification with or against each other  IR. International hierarchy: Vertical relationships of authority and domination. Vertical relationships based on differences in coercive power or wealth and market position or deep social structures and ways of thinking  IR. Remember: These are ways of seeing and understanding – they’re not ‘truths’!  Today: Interdependence Interdependence theory 1.0 Interdependence theory 2.0 Interdependence theory 1.0  Interdependence – the original concept Robert O. Keohane and Joseph S. Nye (1977) Power and Interdependence Interdependence = reciprocal effects among states resulting from cross- border flows of money, goods, people, and information. Immediate consequence: the well-being of a state and its citizens depends on decisions taken by actors in other countries. Interdependence varies… (1) over time (2) across issue-areas – higher in some than others (3) across regions and relationships – higher in some than others (4) within relationships – A may depend more on B than B depends on A  Interdependence and international cooperation Expectations of Keohane and Nye 1977 Interdependence motivates international cooperation by (1) exposing states to a risk of external shocks and (2) creating opportunities for joint gains. States will create international institutions (rules & organizations) to reduce risks and maximize gains from interdependence.  Interdependence and international cooperation Observations post-1977: Interdependence  broad and deep institutionalization of world politics (within and across all regions and issue-areas)  more cross-border integration of economies & societies (globalization). Extensive int’l cooperation & support for rules-based int’l order. Cross-border integration  massive but uneven growth. Continued external shocks to domestic well-being (interdependence)  backlash against globalization & int’l institutions.  Interdependence and the power of states Expectations of Keohane and Nye 1977: Power lies in the two states’ relative dependence on each other -- i.e., the difference in the costs each would pay if cross-border flows were reduced or increased. The less-vulnerable state can (threaten to) manipulate cross-border flows if the more-vulnerable state doesn’t comply with its wishes. Observations post-1977: Massive expansion in use of ‘sanctions’ as a tool of statecraft. States try to shield themselves from sanctions, via: Self-reliance in production Diversification of supply Accumulation of financial reserves  2021 EU – Belarus EU reduces cross-border flows: imposes financial sanctions to punish Belarus govt for election fraud and political repression. Belarus increases cross-border flows: facilitates passage of 3rd country migrants to punish EU for financial sanctions.  2022 EU – Russia, after invasion of Ukraine EU reduces cross-border flows: cuts energy purchases, investment & technology to Russia. Russia reduces cross-border flows: reduces supplies of energy to EU.  Discussion What do you conclude about the dynamics and importance of interdependence? Break time  Interdependence theory 2.0 Original interdependence theory is still very relevant today… … but not sufficient to explain the globalized world of the 21st century.  The ‘new interdependence’ Henry Farrell and Abraham Newman (2016). The new interdependence approach: theoretical development and empirical demonstration. Review of Int’l Political Economy 23(5), 713-736 Decades of pro-globalization policies have restructured the int’l system. Three dimensions of “the world that trade built”… Dimension 1: Rule overlap Development of global rules creates clashes between national and global jurisdictions.  The ‘new interdependence’, continued (Farrell and Newman 2016) Dimension 2: Transnational alliances Institutionalization of globalization enables firms, citizens, NGOs to promote policy change via transnational alliances. Dimension 3: Power asymmetries Institutions are not just ‘rules of the game’ – they’re a source of uneven, asymetric power. Some states have more influence over the institutions that govern interdependence.  Results of the ‘new interdependence’ (Farrell and Newman 2016) The institutions of globalization are contested. “[T]he politics of globalization has expanded from struggles over free trade and protectionism to a much broader and complicated fight over the rules and principles that affect how the economic and political benefits of globalization are distributed.” (714) Non-state actors play a critical role. World politics is not “a world of discrete independent states [but] a world where both overlapping jurisdictions and the need to resolve the problems and disputes that emerge from this overlap create new opportunity structures for actors beneath the level of the unitary nation-state.” (716)  China’s contestation of the institutions that govern interdependence Matthew D. Stephen (2021). China's New Multilateral Institutions: A Framework and Research Agenda. International Studies Review 23(3), 807–834 Two strategies: 1. Place personnel in leadership positions in existing (‘legacy’) institutions. Will senior personnel change the policy agenda of existing int’l institutions? 2. Create new, alternative institutions, less controlled by US & EU. Shanghai Cooperation Organisation; Asian Infrastructure Investment Bank; New Development Bank Will new institutions complement or compete with legacy institutions? Do new institutions have similar or different policy aims, compared to legacy instits?  ‘Weaponized Interdependence’ Henry Farrell and Abraham L. Newman (2019). Weaponized Interdependence: How Global Economic Networks Shape State Coercion. International Security 44(1): 42–79 In complex networks, some actors are more centrally connected than others  new & uneven opportunities for ‘weaponization.’ On power & coercion: Actors who occupy key positions within networks of interdependence can use these positions to gain power by gathering information on others (‘panopticon effect’) and limiting their access to resources (‘chokepoint effect’). “[S]tates with political authority over the central nodes in the international networked structures through which money, goods, and information travel are uniquely positioned to impose costs on others… [They can] gather information or choke off economic and information flows, discover and exploit vulnerabilities, compel policy change, and deter unwanted actions.” (45) On international institutions: “Institutions designed to generate market efficiencies and reduce transaction costs can be deployed for coercive ends.” (46- 7)  Implications Interdependence gives well-connected states a new, non-military source of power. 2001, US threatened to exclude from US financial system any bank world-wide that handled finances of Al Qaeda. 2022, US & EU sanctions excluded key Russian banks from SWIFT, the primary global network for inter-bank transfers. See also: Farrell and Newman (2023). Underground Empire: How American Weaponized the World Economy Interdependence may also be a source of vulnerability for traditional powers. Russian cyber intervention in public opinion before elections in Europe, US. North Korean cyber attacks on Hollywood and other US industries. This gives all states an incentive to de-risk -- to reduce their vulnerability via controls on information, increased financial reserves, and self-sufficiency for key resources. Ex: Russia and China have been developing alternative inter-bank networks (SPFS and CIPS)  Example: A new BRICS currency? Will the BRICS create their own currency? Would it reduce their vulnerability to US power over int’l finance? Would it create new vulnerabilities?  Questions for reflection What are the explanatory advantages and disadvantages of the concept of interdependence? What do interdependence theory 1.0 vs. interdependence theory 2.0 help you to see and understand? What are the explanatory advantages and disadvantages of the first 3 concepts of the international system (anarchy, hierarchy, interdependence)? What does each help you to see and understand?  Coming up… Thursday: Int’l system 4 – Capitalism