Plan for Today:
Neoliberal Institutionalism
& Concluding Liberalism
1. Complete group activity reporting.
2. Survey neoliberal solutions to the
Prisoner’s Dilemma.
3. Compare neorealist and neoliberal views
on likelihood of cooperation.
4. Evaluate liberalism as theory.
Small Group Discussion
 Think as a group of 2-3 ideas of
modifications to the PD game that might
lead to greater cooperation. (5 minutes)
 But still keep:
 Actors as selfish utility-maximizers.
 Players simultaneously deciding, so each
can’t know what other will choose.
 Payoff values for each possible outcome.
 Leader report group proposals to class.
Prisoner’s Dilemma
Numerical Payoffs
(refer to Lipson for more details)
Player 2
Player 1
Cooperate
Defect
Cooperate
3, 3
1, 4
Defect
4, 1
2, 2
Neoliberal Institutionalism
 Institutional Modifications to
Increase Cooperation (Lipson,
Axelrod):
1. Repeated interactions.
1. Critical mass of “nice” players who start
by cooperating and use “tit-for-tat”
strategy  cooperation.
2. Reputation becomes important.
Neoliberal Institutionalism
 Institutional Modifications to
Increase Cooperation (Lipson,
Axelrod):
2. Monitoring.
1. Agency that monitors who cooperates and
who defects over time.
Neoliberal Institutionalism
 Institutional Modifications to
Increase Cooperation (Lipson,
Axelrod):
3. Number of Players.
1. Fewer players  easier monitoring and
punishment.
Neoliberalism
 Institutional Modifications to
Increase Cooperation (Lipson,
Axelrod):
4. Interdependent Issues.
1. Cooperation can evolve if players meet
repeatedly in varying kinds of issues.
Comparing Realists and
Neoliberals on Cooperation
1. Focus on different issues.
 Neoliberals tend to focus on economic
issues.
 Realists tend to focus on security
issues.
PD in a Security World
 Likely payoffs entirely different.
 “Sucker’s payoff” = steeper loss and more
immediate (i.e. battle loss or nuclear annihilation).
Player 2
Player 1
Cooperate
Defect
Cooperate
3, 3
1, 4
Defect
4, 1
2, 2
PD in a Security World
 Likely payoffs entirely different.
 “Sucker’s payoff” = steeper loss and more
immediate (i.e. battle loss or nuclear annihilation).
Player 2
Player 1
Cooperate
Defect
Cooperate
Defect
3, 3
-10, 4
4,
-10
-1, -1
Comparing Realists and
Neoliberals on Cooperation
2. Relative Gains vs. Absolute Gains.


Neoliberals: states concerned with how
much they can gain in absolute terms.
Neorealists: states concerned with how
much they gain relative to other states.
Comparing Realists and
Neoliberals on Cooperation
3. Fungibility of power.


Neorealists must believe economic power
easily fungible (convertible) into military
power.
Neoliberals must believe economic power
not so fungible.
Summary: Neoliberal
Institutionalism
1. Accepts realists’ assumptions about states-asactors and their interests.
2. Focuses on opportunities to build regimes or
institutions to overcome instances of market
failure.
3. PD as illustration of market failure – introduces
simple mechanisms for changing game to
encourage more cooperation.
4. Disagreements between neorealists and
neoliberals on cooperation: areas of focus,
absolute vs. relative gains, fungibility of power.
Evaluating Liberalism as a Theory
1. Explanatory power:
1. Tells us a lot about how, when, why
cooperation emerges.
1. Better in economic issues than security.
2. Loses explanatory efficiency (“parsimony”)
by including far more actors. (except
neoliberal)
Evaluating Liberalism as a Theory
2. Predictive power:
1. Better than realism at predicting institutional
change.
2. Liberal interdependence: virtually no
predictive power.
1. Too many actors with an infinite number of
interests.
Evaluating Liberalism as a Theory
3. Intellectual consistency and coherence:
1. Neoliberals: Again, can we assume self-help
from anarchy?
2. Other liberalism: Can’t be evaluated easily in
terms of logical consistency as logic often
not strictly specified.
Evaluating Liberalism as a Theory
4. Scope: Good.
1. Liberal interdependence: can say a lot more
about more kinds of actors than realism.
1. E.g. How can realists explain international
campaign to ban land mines?
Evaluating Liberalism as a Theory
5. Self-reflection and engagement with
other theories: OK.
1. Neoliberal institutionalism itself came as
response to identified weaknesses in
liberalism.
2. Liberals have adopted some new
constructivist lines of argument.