OPINION – International Institution: Panacea for problems of international cooperation?

Do international institutions make the world a safer place? As the world transitions, there is a widespread assumption that international institutions cause stability and peace among nations by creating a powerful mechanism that convinces nations to opt for long-term cooperation rather than focusing on short-term gain. Is this true?

International relations involve a complex strategic interaction between global actors motivated to obtain the most desired outcome given what they believe to be the interests and likely actions of others. So, in many cases, cooperation fails due to states’ individual interests, lack of information, and collective action problems. In analyzing the problems and solutions to cooperation, this essay will address three impediments to cooperation, primary tools institutions use to encourage cooperation, two major limitations institutions face when trying to encourage states to cooperate and lastly, why states comply with the rules of institutions.

What are the impediments to international cooperation? The primary factor that hinders cooperation is states’ desire to dominate the political arena. Such phenomenon is exemplified in the Prisoner’s Dilemma. Since September 2, 2010, Israel and Palestine have been in a state of peace negotiation. Both actors agreed to peace negotiations because they saw the possibility of maintaining the sovereignty and security of their own nations at the same time. While cooperation could ensure a positive outcome for both states, they withdrew from negotiation restoring to defection instead. If Israel defects, it could retain possession over all its land. Likewise, if Palestine defects, this would help them generate more support from Iran and other representative bodies of the Palestinian people. As seen from the example, cheating is more appealing than cooperation because states tend to be more concerned about immediate gains than long-term benefits. The less states value future benefits relative to immediate gains, the more willing they will be tempted to cheat on cooperative agreements. Thus, cooperation is hard to come by.

The lack of availability of information about the other side also affects the likelihood of cooperation. When actors lack information about the other state’s behavior, this lack of transparency undermines trust and increases chances of misperception, thereby causing cooperation to fail. There are two other possible scenarios. A state might defect having mistaken that the other party cheated or broke the rule and agreement. Or when a state is wrongly accused of defection and receives a punishment, it will view the punishment as an offensive act and withdraw from cooperation as retaliation. Therefore, a lack of information about what the other side is actually doing or planning can lead to a simple misperception, which can make cooperation difficult.

Most importantly, cooperation fails because it only pays off if others do so as well. For instance, in the case of public goods, since contributions are voluntary, actors can enjoy public goods whether or not they have contributed to their provision. So, in most circumstances, actors try to benefit from the contributions of others without bearing the costs themselves. Therefore, incentives to free ride without being detected cause cooperation to fail.

As I have suggested, even when actors have common interests, cooperation can fail when the problems identified above-incentive to cheat, imperfect information, and collective action problem-are not successfully resolved. For this reason, institutions exist to provide solutions to these problems.

First, institutions can help actors set the standards of behavior to which they should adhere. Clear standards of behavior specify what actors can expect from complying with the rules and standards, enabling them to calculate long-term costs against sort-term benefits from defection. This enhances cooperation by reducing ambiguity. This also reduces administrative costs in ensuring the legitimacy of actors’ behaviors. For example, following the 1991 Persian Gulf War, the UNSC passed the Resolution 661 prohibiting Iraq from possessing or developing any type of harmful and dangerous weapons such as nuclear weapons and ballistic missile with a ranger greater than 150 kilometers that could possibly bring about war. The UNSC having a strict definition of the types of weapons not to be possessed, developed or produced deterred any war from occurring for a significant period of time by acting as an enforcement mechanism through making the costs of non-compliance clear and predictable.

Second, institutions can encourage cooperation through monitoring compliance. In many international institutions, states are required to submit a report promising that they will comply with the rules established by the institution. Once states make such promise, they have to ensure that the information they release to the world is prompt and undistorted dissemination of information. For example, in the fall of 2002, when the United States asked the Iraq to submit the report on WMD programs, it noticed that the report that Iraq submitted was significantly different from the past record reports and documents. As a result, Iraq was punished and criticized. In this manner, institutions encourage cooperation and discourage defection by resolving the problem of lack of information or imperfect information.

Lastly, institutions can also help address the public goods problem. Institutions can contribute to enhancing the provision of public goods and reducing public bads by imposing certain requirements and internalizing the costs associated with free-rider benefits. For example, UN Framework on Climate Change (UNFCCC) plays a significant role in controlling global carbon emissions by drawing countries’ voluntary reduction commitments. Climate change problem which otherwise might aggravate without a brake could now be better coped with through the existence of such international mechanism.

Indeed, the benefits of establishing an institution are substantial. International institutions however, are characterized by anarchy. While most states have the central authority to enforce laws and rules, there is no central authority in the global level that can enforce cooperation among the members. So, it is the members’ responsibility to punish the defectors. Thus, although international institutions can serve to facilitate cooperation by setting standards of behavior and verifying compliance, it cannot force states to cooperate. As a result of cooperation being an option, international institutions sometimes face the difficulty of encouraging large number of states to cooperate.

Another problem international institution face when trying to make states cooperate is that even when actors have common interests, there is some situations in which individual’s interest cause them to defect. Arms race in general provides a good example. On one hand, if all government spends a lot of money on military forces, no government gains any additional security or is better able to influence others. Thus, states are better off if they can somehow all agree to refrain from engaging in a military build up. Nevertheless, due to many instances such as domestic politics or regional security tension, arms races are sometimes difficult to be contained, making the role of international institutions less effective.

Despite the fact that international institutions do not have the power to enforce rules, one of the reason actors still comply with institutions is because the value of cooperation that institutions encourage outweighs the potential benefit from a disadvantageous bargain. For example, many states follow the rules of the WTO not just because having an authority prevents other countries from cheating or violating, but also because the system of free trade that the WTO supports and promotes is of great benefit to themselves. They fear that if they go against the mandates created by the WTO, it would place their gains from trade at a great risk, causing harm to long-term gains they can expect when the global free trade system is upheld.

Another reason actors comply with institutions is that although the maintenance of an institution entails costs, making use of existing procedures and mechanisms to build on past successes in dealing with new problems is less costly than creating a new institution. This is because in the case of existing institutions, even if they might be biased towards or be in favor of particular group of actors, extra cost is not needed as the cost of setting up the rules and the institution has already been paid. On the other hand, creating a new institution from scratch requires paying for those costs anew. As a result, its net gains could be significantly less than those from using existing institutions. Therefore, in most circumstances, since the marginal costs of creating an entirely new set of norms, rules, and procedures outweigh the costs of maintaining an original institution, most actors will choose to sustain the existing arrangements and rules rather than abandoning them for new ones unless the policy bias of the institution is too large.

Definitely, in international relations, in most cases cooperation makes actors better off, but sometimes cooperation fails due to each actor’s individual interest, lack of information, and collective action problems. Other factors that hinder cooperation include where the costs, or associated risks outweigh the benefits of partnership. In solving these issues, institutions exist. However, institutions are not a panacea for problems of international cooperation and have their own shortcomings. Yet, institutions do make international cooperation more likely and states comply with the rules by the institutions in expectation of higher long-term benefits than short-term gains from non-compliance.