Page 104 - Global Political Economy_Understanding The International Economic Order

INT ERNAT IONAL POLIT ICAL E CONOM Y
repeated over and over again and a participant pursues a “tit-for-tat”
strategy in which cooperative moves are rewarded and uncooperative
moves are punished, the participants in the game will learn to trust
and cooperate with one another. 30
The literature on the theory of repeated or iterative games has be-
come extensive and has been subjected to intense theoretical criticism
and defense. Although scrutiny of the theory has vastly increased our
understanding of the compliance problem, this scholarly debate has
not yet enabled us to predict when cooperation or defection from
(cheating)a regime will in fact occur. The fundamental problem of
uncertainty and hence of regime compliance has not yet been solved
and probably never will be; a player can never be absolutely sure
whether another player will cooperate or defect, and the costs of mis-
calculation could be extremely high. The absence of an adequate body
of research on the actual functioning of specific regimes makes it im-
possible to be confident that regimes are of decisive importance in the
behavior of states. In addition, a fundamental methodological prob-
lem makes it difficult to determine whether or not regimes actually
make a difference in the conduct of international affairs. As one
strong supporter of regime theory has stated, “Investigating the con-
sequences of international regimes requires a counterfactual argu-
ment,” that is, knowledge of what would happen if the regime did
not exist. 31
The “new economics of organization,” or what some scholars pre-
fer to label “neoinstitutionalism,” has produced another important
effort to solve the compliance problem. This theory of international
cooperation has been described by George Downs and David Rocke
as “a loose composite” of transaction-cost economics and noncooper-
ative game theory. 32 According to new institutionalism, regimes can
provide a solution to such problems as market inefficiencies, eco-
nomic uncertainties, and market failures. However, as Downs and
Rocke point out, this theory of international cooperation makes only
a limited contribution to solution of the compliance problem, and
30
Criticisms of Axelrod’s approach to the cooperation problem include Joanne
Gowa, “Anarchy, Egoism, and Third Images: The Evolution of Cooperation and Inter-
national Relations,” International Organization 40, no. 1 (winter 1986): 67–186; and
David E. Spiro, “The State of Cooperation in Theories of State Cooperation: The Evo-
lution of a Category Mistake.” Journal of International Affairs 42, no. 1 (fall 1988):
205–25.
31
Rittberger, ed., Regime Theory and International Relations.
32
George W. Downs and David M. Rocke, Optimal Imperfection? Domestic Uncer-
tainty and Institutions in International Relations (Princeton: Princeton University
Press, 1995), 19.
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