Neoliberal institutionalism

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Central theme

Concentrates on the role of international institutions in mitigating conflict (Navari, 2008).

Dynamics

As expressed by Navari (2008), Robert Keohane and Robert Axelrod point to the ability of institutions such as the UN to redefine state roles and act as arbitrators in state disputes. Although institutions cannot transform anarchy, they can change the character of the international environment by influencing state preferences and state behaviour.

International institutions influence state preference and behaviour by using a variety of methods that either create strong incentives or disincentives for cooperation like;

1)      Favourable trade status – Most Favourable Nation (MFN) is a tag given to states where preferential treatment is given when trading with each other to foster cooperation among states.

 

Investopedia

“A level of status given to one country by another and enforced by the World Trade Organization. A country grants this clause to another nation if it is interested in increasing trade with that country. Countries achieving most favored nation status are given specific trade advantages such as reduced tariffs on imported goods. “
Read more: Most Favored Nation Clause Definition | Investopedia http://www.investopedia.com/terms/m/mostfavorednation.asp#ixzz3nAnfOt4P
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2)      Trade sanctions – a disincentive to get states who are going against the rules of the game to change their behaviour and cooperate with other states.

Investopedia

A trade penalty imposed by one nation onto one or more other nations. Sanctions can be unilateral, imposed by only one country on one other country, or multilateral, imposed by one or more countries on a number of different countries. Often allies will impose multilateral sanctions on their foes.
Read more: Trade Sanction Definition | Investopedia http://www.investopedia.com/terms/t/tradesanction.asp#ixzz3nAtaU0La
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Notion of transaction costs

According to Navari (2008, p. 43) the notion refers to the costliness of information, the cost of measuring the valuable attributes of what is being exchange and the cost of protecting rights and policing and enforcing agreements. Institutions reduce the transaction cost associated with rule-making, negotiating, implementation, enforcing, information gathering and conflict resolution. They serve as means of providing information, reducing transaction cost, and altering the payoffs associated with cooperation.

In other words, international institutions are vital to international governance because they pay for public services such as peacekeeping. The UN as stated in Article 17 of the UN Charter gets funding from every Member State for peacekeeping. There is a formula used by the UN to determine how much a country pays. The amount is dependent on relative economic wealth of member states. Obviously, wealthy countries pay more compared to countries like PNG. Apart from monetary funding PNG has now contributed peacekeepers to serve in peacekeeping missions.    

Constructivist institutionalism

Navari (2008) said institutions are a collection of norms, rules and routines, rather than a formal structure. Barnett and Finnemore (cited in Navari 2008) also said institutions do not simply change the preferences of actors, but can also shape their identity. Constructivism focuses on the central role of ideology, rules, and norms that institutions diffuse to constitute agents (Navari, 2008).

Logic of appropriateness argues according to Navari (2008) that the action of states are guided by social expectations rather than utility maximization. For example, PNG can charge tariffs on goods from Australia disregarding PICTA but the state will opt not to because of the social expectations of others states who are members of the PIF. All PIF members will expect us to adhere to the agreement to foster cooperation in the region. If we do otherwise, then it will signal to others that we care less about the collective effort to better the livelihood of people in our country and the Pacific as a whole.   

Security

NATO is a very good example of addressing the issue of security under the neoliberal institutionalism framework. Lake, Keohane and Wallender (cited in Navari 2008) argued that NATO is still in existence because it is and was not a simple alliance but is becoming a security institution. The Russian Deputy Defence Minister in March 2015 also said the security institution’s activities have expanded considerably over the past years. He said NATO is using the situation in Ukraine to push closer to Russia’s border.

The key logic is that international institutions foster cooperation and via cooperation actual and potential conflict will be minimized or avoided. This will help ensure both international and regional security.

Griffiths, O’Callaghan and Roach

Neoliberal institutionalism is also known as regulatory or institutional liberalism and operates at the level of the international political structure according Griffiths, O’Callaghan and Roach (2008, p. 190). The scholars say at this level collective interest is of uttermost importance in comparison to realists who consider national interest. Through collective interest a system of governance can be put in place with international laws to govern the behaviour of states and international institutions to provide international public goods and moderate the security dilemma among states.  

Reference

Griffiths, M., O’Callaghan, T., & Roach, S. C. (2008). International relations the key concepts (2nd ed.). New York: Routledge.

Navari, C. (2008). Liberalisms. In Williams, P. D. (Ed.), Security studies: an introduction (pp. 32-47). London: Routledge Taylor and Francis Group.

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