Anarchic Bargain: Power Politics and the Purchase of International Order

Mariya Grinberg

mgrinberg@uchicago.edu

Abstract

In international hegemonic order, the assumption of a power trajectory for the leading

state leads to certain incentives for this state and determines what type of order is created. Most

hegemonic theories of order assume an eventual declining trajectory creating incentives to build

a constructed, static order. However, a declining trajectory is not the only possible situation and,

empirically, is not even the most likely situation. A more probable scenario is that states

recognize that they cannot predict a power trajectory and focus on building a situational order

which is considerably more flexible as it is based on short term bargains that can be renegotiated

with a change in the strategic environment. The paper uses the post-Cold War period to analyze

the differences between the two possible types of order, focusing specifically on instances of

NATO expansion.

2

Since the end of the Cold War, there has been a surge of interest by international relations

scholars and policy makers in understanding the dynamics of international order – meaning, the

basic rules regulating the behavior of states in the international system. Although realist, liberal

institutionalist, and constructivist theories of international order go back even further, the rise of

the United States as the world’s sole superior stimulated an important new wave of thinking

about the kinds of hegemonic order that were and were not possible in modern international

affairs. At stake in this debate are policy questions, such as how long the US will stay at the top,

what kind of leadership other states can expect, and whether the order can change peacefully or

only via conflict. More fundamentally, however, these policy issues turn on the central

theoretical question of whether the incentives exist for states to construct international order that

would meaningfully bind strong as well as weak states.

Prominent theories of hegemonic order commonly start by assuming a major

international “reordering moment”(ie victory in great power competition) and that the hegemon

will eventually decline, and so has incentives to build a lasting order while it can. Different

hegemonic order theories disagree about when such a decline will set in, but share the common

assumption that decline will certainly occur. For example, Robert Gilpin assumes that following

a great power war, the leading state will redistribute the territorial and economic centers of

power in such a way as to boost its power base, but then eventually declines only to be replaced

by a new hegemon facing similar incentives to lock in the order. In the same vein, John

Ikenberry argues that after victory, the hegemon will immediately decline, creating incentives for

the leading state to adopt a constitutional bargain that locks in the power trajectories of both the

leading and weaker states through binding institutions.

3

This paper challenges the core theoretical assumption underlying the most prominent

explanations of hegemonic order. While others have criticized hegemonic order theories based

on their ability to create a binding, lasting set of rules, this paper focuses on the more

fundamental, prior issue of whether the states, even at so-called “reordering moments,” would

have the incentives to establish such rules in the first place. The main assumption creating the

incentives for binding order is confidence in a future power trajectory, which is why hegemonic

order theories have this assumption. There are, however, strong reasons to doubt whether states

would accept this assumption.

Even at so-called re-ordering moments, the level of uncertainty about the future power

trajectory of leading and weaker states is high. It is impossible to predict what the power

trajectory will be. Because of this, the leading state will not have the incentives to create any sort

of long term order. Instead, it will choose the flexibility of a reiterated short term bargain through

which the rules can change based on the changes in the environment. The leading states will

avoid locking itself into anything, maintaining the international order through a series of short

term mutually beneficial bargain with the rest of the states.

This paper is organized into five sections. The first deals with important definitions for

the concept of order. The second section describes the two possible types of international order,

delineating the differences between a constructed and a situational order. The subsequent section

points out theoretical problems with a constructed conception of order. The fourth section

explains what a situational order would look like and how it would function. The last section

applies these concepts to the cast study of the post-Cold War period.

Structure and Order

Before the possible types of international order are discussed, two important concepts

need to be defined and distinguished from each other – structure and order. The two concepts are

4

intrinsically linked; however, a change in order is possible without a change in the structure. On

the other hand, a change in the structure necessitates a change in the order.

Structure is an arrangement of parts. Waltz writes that there are three aspects of structure:

the ordering principle, differentiation of units and the distribution of capabilities across those

units. 1 The ordering principle for the international system can be either anarchy or hierarchy

depending on the level of control the leading state has over the international system.2 For the

second dimension, there are different units of analysis that can be used in discussing structure –

states, individuals, multinational corporations, etc.3 The distribution of capabilities determines

another important dimension of structure – the number of poles of power in the system.4 This

paper focuses on hegemonic order, therefore the ordering principle is anarchy, the differentiation

of units is focused on states and the distribution of capabilities is assumed to be unipolar. Thus

hegemonic structure is the anarchic arrangement of states in the international system with one

overwhelming pole of power.5

Order is the collection of rules concerning the regulation of how the parts interact. There

are two types of rules that are important to the construction of international order. First, there are

structural constraints. These are limiting conditions imposed by the specific structure within

which the states are interacting. The structural constraints of multipolarity would be different

from those of unipolarity; however, each structure does have specific constraints that any rules of

interstate behavior have to conform to. Structural constraints do not have to be recognized by the

actors of the system; they are a byproduct of the overarching structure. Since this paper focuses

1 Waltz 1979, 79.

2 Lake 2009; Waltz 1979.

3 State centric view - Bull 1977; Keohane 1984; individual centric view – Cox et al 1996; Falk 1975, 211-58; non-

state actors – Stivachtis 2007; Suter 2003. 4 Multipolar view – Mearsheimer 2003; unipolar view – Wohlforth 1999, 5-41; Monteiro 2011, 9-40.

5 Most scholars of international order would agree, at the very least, that these three dimensions make up the

structure of the international system. The disagreement over order stems not from how the structure is described but

from the rules that govern state interaction and turn that structure into an order.

5

specifically on hegemonic order, the structural constraint is assumed to be that the leading state

has the opportunity to create the rules of the international order and has the responsibility to

maintain and enforce them.6 It is important to note that the structure is still assumed to be

anarchic; the structural constraint stems from the one sided distribution of power in the anarchic

system.

The second type of rules is acknowledged rules. These are rules created by the states to

govern their interactions, and as such all state of the system are cognizant of these rules. They

are typically created and enforced by the great powers of the structure; thus, in a hegemonic

order, the specific set of rules for the interaction among states that the hegemon creates are the

acknowledged rules of that international order (but not of that structure). This paper assumes

away the structural constraints of the international order, since structure is held constant. The

focus then becomes the acknowledged rules of the order.7

Each structure has only one set of structural constraints. They stem from the structure

itself and thus are unique to the structure. The structural constraints of an order change only

when the structure within which the states interact changes. Within the specific structure, the

acknowledged rules are variable with the wishes of the leading state. If the structure remains

constant, but different hegemon have control of the international system at different period in

history, they are likely to create different sets of acknowledged rules.

By limiting the structure strictly to anarchic with an asymmetric distribution of power –

ie hegemonic – and focusing on acknowledged rules, it becomes possible to put scope conditions

6 The leading state has this opportunity by virtue of its preponderance of power; it has the responsibility not in any

normative sense, but meaning simply that if it wants to remain in power, it needs to maintain the order it creates. 7 For example, Keohane, in his discussion of hegemony, focuses on the structural rule – a state with a preponderance

of power can overcome collective action problems. On the other hand, when Ikenberry is discussing hegemony, he

focuses on acknowledged rules – the leading state will bind its power and provide voice opportunities to the weaker

states. His notion of hegemony, in itself, presupposes the structural rule that Keohane focused on. Keohane 2001.

6

on the types of order that will be discussed in this paper as well as which theoretical conceptions

of order will be engaged with.

Hegemonic Non-Hegemonic

Structural Constraints Keohane Waltz, Mearsheimer

Acknowledged Rules Ikenberry, Gilpin Wendt, Bull, Dem Peace

Specifically, both Ikenberry’s theory of the constitutional bargain and Gilpin’s theoretical

account of hegemonic change fall into the comparable types of international orders. The theories

obviously assume a hegemonic structure. Both deal with state in a state of anarchy with one

leading state in the system. Gilpin makes this assumption travel through all of time, claiming that

there is always a hegemon in the international system.8 Ikenberry, claims that while great

asymmetry of power has not been a constant condition of the international system, it is a

necessary component to achieve a constitutional bargain.9 Both also focus on acknowledged

rules. Gilpin makes the acknowledged rule that the leading state redistributes the spoils of

victory to gain the greatest portion of territorial and economic conquest. Ikenberry structures the

constitutional bargain on a set of rules that the leading state and the rest of the states in the

system agree on.10

What is Hegemonic Order? There are numerous versions of hegemonic order which are united by the structural

constraints they share but can be differentiated by the acknowledged rules that govern the order.

Hegemonic order is described by the hegemonic stability theory which in its most basic

form posits that the international system is stable only when the economic and political power is

8 Gilpin 1983, 10.

9 Ikenberry 2001, 5.

10 Ikenberry actually defines order in such a way as to focus only on acknowledged rules. “An essential element of

political order … is that the participants within the order must have some acknowledgement or awareness of the

order” (45).

7

concentrated in one state.11

The leader of the order, the hegemon, is defined as “the state with

predominant power in the international system, measured in terms of that state’s share of world

gross domestic product or other material resources.”12

While this state holds on to power, the

international order is maintained; as the dominant state’s power begins to decline, the control of

the system also declines and the created order disintegrates.

How the hegemon chooses to wield its power differs based on the theory. In some

conceptions of the hegemon stability theory, the hegemon provides public goods and creates an

open international economy that benefits all of the members of the system.13

The hegemon does

not extract any ‘taxes’ from the other states in the system. It provides a service that benefits itself

and since that service is a public good and thus nonexclusive, ends up paying for the system that

benefits everyone.

Another version is based on the idea that the hegemon acts as a solution to the collective

action problem, helping states in the system to cooperate.14

The presence of the hegemon allows

for the creation of a system of rules – a process that is difficult to accomplish with a group of

powerful states; however, after this system is created and embedded into institutions it can be

maintained without the hegemon. The hegemon acts as a ‘benevolent leader’ who is responsible

for the creation of a system that benefits most of the states. This version of the theory is often

critiqued for ignoring the issue of free riders.15

The weaker states have a lot of incentives to free

ride and exploit the dominant state, perhaps even driving it to the point where it can no longer

afford to provide the public good any more.

11

Kindleburger 1981:242-254. 12

Pahre 1999, 4. 13

Krasner 1976:317-413; Lake 1983: 517-43. 14

Keohane 1984; Charles P. Kindleberger 1981. 15

Snidal 1985:579-614.

8

As a response to this critique came the ‘coercive’ conception of the leadership by the

hegemon. The dominant state sets up a system that allows it to benefit at the cost of the other

states.16

The rules of the system created suit the needs of the hegemon and it uses coercion to

force other states to participate in the system. Not only are other states expected to participate,

they are also forced to contribute ‘taxes’ for the maintenance of the international order.

For the purposes of this paper, Ikenberry’s theory of the constitutional bargain, presented

in After Victory, will be considered as the model for a benevolent hegemony, while Gilpin’s

theory of hegemonic change, from War and Change in World Politics, will be considered as the

model for a coercive hegemony.

Constructed Order versus Situational Order No matter which theoretical variant of the hegemonic order is considered, the order

created by the leading state is a constructed one. This means that a one time permanent bargain

for international order is struck between the dominant state and the other states of the system.

This bargain contains the rules that regulate state interaction and is meant to last as long as the

dominant state is in power. There is one moment, typically after a great power war, when the old

international order has been broken down, and the new one needs to be made.17

In this moment,

the assumptions about the environment move the leading state to create a permanent bargain for

international order. No matter what changes in the environment after the creation of this bargain,

short of a new reordering moment, it cannot be changed. This is the basis for long term order.

In a constructed order, there is no mechanism for amending the terms of the bargain.18

There is likewise no exit strategy; the states that are part of the order have to remain in the other

16

Ibid. 17

Ikenberry 2001, 21. 18

This does not mean that there cannot be small changes to the specific rules of interaction, but that there can not be

amendments to the structure of the bargain. For example, if the bargain states that the leading state can exercise its

9

– their attempt to leave would bring about a new reordering moment as the existing order is

breaking up due to the desire of state to leave. Both of these characteristics lead to the

implication that the bargain has to be binding as long as the order lasts. A second implication is

that the dominant state has only one strategy for dealing with the weaker states and this strategy

is uniformly applied to all of the states in the order.19

What the hegemonic stability theory does not consider is that there is a possibility for a

different type of order, a situational one, which likewise has a leading state at the helm creating a

bargain for international order. While a constructed order has a one permanent bargain which

lasts as long as the power of the leading state does, a situational order rests on repeated short

term20

bargains for maintaining international order. At the reordering moment, instead of

choosing one strategy through which to engage with all the weaker states, the leading state

chooses to deal with the weaker states in groups (bilaterally or multilaterally) offering each

group a tailored strategy.

Since the bargains of the situational order are not permanent, the leading state can change

which strategy it uses in dealing with which states. The bargains can be reiterated as long as both

sides still benefit from it or the substance of the bargain can change to reflect the changes in the

environment. Since the bargains that maintain international order are short term, it is very much

possible to amend them. The rules of the bargains are binding for the duration of the bargain and

can be renegotiated between the iterations of the bargain.

power and dominate the weaker states, this cannot be amended by the weaker states. On the other hand, if a rule of

engagement stated that the leading state has to give a five day warning before dominating a state, and this is changed

to a ten day warning, this does not constitute an amendment to the bargain. 19

The three strategies of a leading state are borrowed from After Victory, they are abandon, dominate or transform. 20

Short term in this instance does not refer to any specific range of time. It is used to mean a period that is shorter

than the entirety of the order. Long term means that a bargain is struck to last as long as the order does, however

long that happens to be. Anything shorter than that, that is any temporal limit on the bargain in considered to be

short term.

10

While the situational nature of the order is beneficial in that it allows the leading state to

renegotiate the bargain, there is also a potential drawback. The weaker states in the system could

chose to stop the relationship with the leading state since they are likewise not bound by a set of

long term rules. While this is a possibility, it is not a likely one, because the circumstances are

set up to benefit the leading state as much or more than the weaker states. Each time the bargain

is changed, the new arrangement is created to provide the leading state with a greater share of

relative power compared to the weaker state. Thus it would be very difficult for the weaker state

to reach a situation in which the new proposed bargain would no longer be beneficial to the

weaker states. This is only possible if the weaker state experiences an exogenous shock that

increases its power relative to the leading state.

A situational order is a durable order, despite the fact that the bargains between the

leading state and the weaker states can change. As the other versions of the hegemonic stability

theory, it lasts as long as the leading state remains in power. The difference is that the leading

state never locks itself into a specific bargain that ought to be followed throughout the order.

Instead, the leading state retains the right to alter the bargain whenever the situation changes.

However, at each restructuring, the new bargain still benefits the leading state more relative to

the other states. In such a way, the leading state can maintain its level of power doing what is

necessary to overcome the challenges posed by the current environment or taking advantage of

beneficial events.

Constructed Hegemonic Order

Both Ikenberry’s and Gilpin’s models of hegemonic order are examples of constructed

order. In fact, the standard method of thinking about hegemonic order is that it is inherently a

constructed order. Each variant of the hegemonic order is based in part on the assumption that

the leading state will inevitably face its decline. This assumption alone creates the necessary

11

incentives for the leading state to invest in a constructed order to either stay at the height of

power for a longer period of time or to lock-in the distribution of power indefinitely. However,

there is reason to doubt this fundamental logic.

For order to be constructed, that is to give incentives to the leading state to lock-in a

specific set of rules for the interactions between states, there must be confidence at the

restructuring moment in the long term trajectory of power. Theorists of hegemonic order, Gilpin

and Ikenberry included, assume that this is possible, which leads them to make specific

conclusions about the resultant order.

Gilpin assumes that after the hegemonic war, the leading state redistributes territory and

economic centers to increase its power. Thereafter, the dominant state can continue to expand

through territorial conquest or economic expansion. With the advantage that comes from creating

the post-war settlement, the dominant power expands rapidly. But this expansion can only last as

long as the benefits outweigh the costs; thus, the rate of expansion slows and stops. At this point,

“although the hierarchy of prestige, the distribution of territory, the rules of the system, and the

international distribution of labor favor the traditional dominant power,” decline becomes

inevitable.21

Further expansion to increase power becomes cost prohibitive. At the same time the

cost of maintaining the territory already controlled by the leading state increases since the

technology used for war has a tendency to diffuse between states rapidly. The economic centers

that the dominant state controls also start to fragment with the center. All of these changes lead

the dominant state to decrease in relative power, allowing a weaker state to challenge it for

control of the international system. Because leaders are aware of this power trajectory, they are

motivated to create the settlement agreement in a way that is beneficial to them and that

necessarily creates losers – those that lose the territory the leading state expands into. By the

21

Gilpin 1983, 186.

12

very nature of the power trajectory assumed, the leading state in Gilpin’s theory has no choice

but to be a coercive hegemon.

Ikenberry starts with the assumption that the leading state is already at the height of its

power during the restructuring moment and is facing inevitable decline in relative power. Fearful

of this, the leading state would seek to lock in the existing power balance by creating institutions.

To make these institutions into a ‘constitutional order’ and thereby acceptable to the other states,

the leading state will chose to restrain its own power in the short term to reap the rewards in the

long term.22

A constitutional order set up with these characteristics would limit what the leading

state could do with its disproportionate power after a great war thus greatly reducing the return to

power. This would also limit the potential losses of the losers of war. Due to this arrangement,

the weaker states that take part in the order have an incentive to follow the rules and principles

and thus view the international order as legitimate. Because the leaders of the leading state

assume that their state will decline in relative power in the future, they are willing to forgo the

short term returns their heightened position of power could bring them and instead focus on the

long term. In fact, this assumption plays in the calculations of all states, influencing greatly the

motivations for the formation of the constitutional bargain. By making this assumption,

Ikenberry’s leading state, by necessity, has to be a benevolent hegemon.

Problem with a Constructed Hegemonic Order

As can be seen in these two representative cases, what gives states the incentives to create

a constructed order is the assumption of a power trajectory. The specific trajectory of power,

creates incentives for the leading state to create a specific set of rules to guide the interactions

between states. Because the variants of hegemonic order assume eventual decline of power as the

last leg of the trajectory, this gives the incentive to solidify the rules at the restructuring moment.

22

Ikenberry 2001, 4.

13

However, these assumptions do not accurately describe the range of possibilities that exist at the

end of a great war and thus fail to accurately portray the incentives that the leading state and the

weaker states are faced with.

Specifically at the moment of restructuring that comes after a great power war, the

leading state just emerging from war has no idea what its power trajectory will be. It is

impossible to predict when in the long term the leading state’s decline will occur, if indeed it

does occur. There might be intermittent periods of rise and decline, or decline might be staved

off completely. More importantly, the short term distribution at the reordering moment can vary

considerably. And this variation necessarily plays into the decision making of the leading state.

Figure A

There are three potential situations that can arise in the short term, exiting the tumult of a

great war: (1) the leading state’s power will start to decline in relation to the weaker states

(Curve A), (2) the leading state’s power stays relatively unchanged in relation to the weaker

x2 x1 0

R

e

l

a

t

i

v

e

P

o

w

e

r

Time

A

B

C

Situation Incentives Type of Order

14

states (Curve C), or (3) the leading state’s power increases in relation to the weaker states (Curve

B). Immediately at the end of the great war, all three cases are possible and there is considerable

uncertainty about which trend will accurately describe the near future.

While both Gilpin and Ikenberry advocate locking in the rules of the new constructed

order, this is a rational decision in only one of the three possible cases – in Ikenberry’s assumed

case (Curve A). If the leading state is certain that its power will decline, it is rational for it to

seek to lock in a set of rules that might for however brief a period maintain its level of power.

However, in the other two of the three possible cases, it is more rational for the leading

state not to limit its options with a constructed order. If the leading state’s power is relatively

stable or, especially, if is increasing compared to the other states, the leading state would want to

take advantage of this mounting power difference. The time to lock in the rules of the new

international order would be when the leading state has reached the zenith of its power, just prior

to the decline. If the leading state’s power is rising relative to the other states (Curve B), the best

lock in time would be X1. If the leading state’s power is relatively stable compared to the other

states (Curve C), the proper lock in time would be X2. With this third case, it could be argued that

locking in the rules earlier would not gain the leading state anything, since the leading state has

not gained any power in the interim. While true, locking in prior to the beginning of the decline

would force the leading state to give up the time it could have used its power to its advantage

before the rules start functioning. In both of these cases immediate construction of order prevents

the leading state from taking full advantage of its victory in the great war.

With all three curves there exists an ideal time to lock in the international order, whether

it is time 0, time X1 or X2. While theoretically this moment is very clear, empirically it is

impossible to tell when decline has began in real time. It is only possible in hind sight. The

15

uncertainty of predicting the future only increases the further out a prediction is made. Because

of this uncertainty, the leading state will have little incentive to lock-in a specific set of rules for

the new international order. It is impossible to tell when point X1 or X2 is, and the leading state

will always have an incentive to assume that it is still in the future. That incentive is the fact that

it doesn’t need to limit its own power in the short term, and thus does not need to give up the

gains associated with that power. Arguably the same lack of incentive to assume that the leading

state is in decline would prevent Ikenberry’s preferred case (Curve A) from ever occurring

empirically. It would also prevent the leaders in Gilpin’s preferred case (Curve B) from realizing

they are declining until considerably after the decline has begun.

Benefits of Stability versus Opportunity Cost of Stability

The optimum moment to lock-in the bargain for the international order is when the

leading state is at the zenith of its power and is assured of its total decline. On the one hand this

suggests that the leading state should wait for this moment before limiting its power options. The

argument made by proponents of constructed order is the opposite. If there is such uncertainty

about the future, why shouldn’t the leading state lock-in the order immediately, regardless of

optimum moment, to receive the benefits of stability that would guard it against such

uncertainty?

The case for lock-in can best be exemplified with Ikenberry’s assumption of future power

trajectory. (Figure B). All constructed orders are based in some respect on the assumption that

eventually the power trajectory will turn towards decline. In such a case, as well as to guard

against the uncertainty of when decline comes, it is beneficial to lock in the bargain for

international order immediately at the restructuring moment. All of the increased relative power

16

the leading state receives from locking in above their assumed power trajectory is the benefit of

stability.

Figure B

This is a compelling reason for why an order should be based on one permanent bargain;

however, such an explanation looks at only one side of the cost-benefit analysis. When only the

benefit is considered, naturally the situation looks compelling. By making the assumption of a

declining future power trajectory, Ikenberry can conveniently expel the costs of stability from the

equation.

The other side of the equation is the opportunity cost of stability. For the sake of the

example, let’s assume that it is possible to measure a state’s relative power solely by looking at

its GDP share of the world total.23

If the US share of the world GDP, or by assumption its power

trajectory since 1920s, is plotted against the constructed order’s locked-in power line, it is

possible to see that the stability of order has an opportunity cost. All of the relative power the

leading state has to give up for the sake of stability is the opportunity cost of locking in a bargain

at the reordering moment.

Figure C

23

There are considerably more components of relative power, such as military power and latent power. However,

the relative power level of the US would only be greater if these factors are considered, so this momentary

assumption should bias the example towards constructed orders.

Ikenberry’s

assumed power

trajectory

Locked-in power

trajectory Benefits of stability

17

The example of the US is not meant to claim that the opportunity cost of stability is

always going to be as great as it seems to be in this case. However, the opportunity cost will

always be there and it has to be considered as part of the equation to make the decision of

whether to lock-in the order for a measure of stability or to engage in a situational order to reap

the benefits of relative power. If the leading state wants a stable order, it has to give up all of the

potential future costs it could have made. Stability is only “free” when the leading state starts

declining as soon as the order is made.

The benefit of stability requires the leading state to incur certain costs in the present for

uncertain benefits in the future. Due to the uncertainty of the future power trajectory, the

opportunity cost of stability is uncertain but potentially quite great. At the reordering moment

especially, the leading state has good reason to be optimistic about its relative power prospects;

while it cannot make the cost benefit analysis of stability due to the uncertainty of the future, it

does have reason to consider the opportunity cost.

Situational Hegemonic Order – The Anarchic Bargain

Opening up the power trajectories has significant implications for the types of incentives

the leading state faces in creating the international order. Considering the uncertainty that comes

from trying to predict which power trajectory a leading state is on and the significant incentives

Ikenberry’s

assumed power

trajectory

Locked-in power

trajectory

Rather imperfect but

fairly accurate

portrayal of US share

of world GDP since

1920s

Opportunity cost

of stability

Benefit of

Stability

18

to assume that the leading state is actually increasing in power, only a situational order would

seem attractive. The leading state will form a short term agreement with the weaker states that

will be more beneficial to the leading state; there will be the possibility of renewing this bargain

in the future.24

The Anarchic Bargain

Such an agreement – the anarchic bargain – would closely respect the constraints of

relative gains and last only as long as it benefits both the leading and the weaker states. As soon

as either party perceives a shift in their power, they will either chose to renegotiate the bargain to

match the new balance of power or end it completely. Because of this close adherence to the

balance of power, the anarchic bargain would favor the leading state. Negotiating from the

position of strength, the leading state would require foreign policy concessions from the weaker

states, to make them follow policies that are beneficial to the leading state. For this, the weaker

states are guarded from the three sources of threat that they face, most significantly the threat of

continued decline. The asymmetrical exchange of foreign policy concessions for economic or

military security ameliorates marginally the relative gains problem.

Leading State

From the perspective of the leading state, between the options of dominate, abandon, or

anarchic bargain, the anarchic bargain would be the best option. It is the only available choice

which allows the leading state to preserve the power that the leading state already has and

24

The rational design of institutions literature also deals with the idea that in the face of uncertainty, states chose to

design institutions with built in flexibility. However, this literature focuses on the purposeful formation of

institutions to serve a specific function. While the anarchic bargains themselves are very purposeful and designed -

they have less flexibility precisely because they are short term. On the other hand, the whole situational order (the

collection of all the anarchic bargains from the hegemon to the weaker states) is very flexible, but also far from

"purposefully designed." Koremenos et al 2001: 761-799.

19

leaving open the potential to continue increasing its power. For both the option to dominate and

abandon, a full cost benefit analysis is difficult to calculate as it necessarily has to include the

consequences of long term effects. As the future is highly uncertain, whether each strategy will

bring greater costs or greater benefits is also uncertain. The anarchic bargain, being a situational

order, deals only with the short term. Therefore, it is possible to establish what the costs and

benefits of the bargain will be. Since the bargain is always negotiated to be in favor of the

leading state, it will always turn out a positive cost benefit analysis.

Domination is a credible alternative as it does increase the power level of the leading

state. There are two possible strategies that a leading state could pursue. It could either quickly

raid the weaker states of which ever resources it wants and then abandon it, or it could

completely control the domestic and the foreign policy of the state. The first strategy allows for

some quick gains but no chance for long term gain. It also leaves behind a state with a newly

developed grudge against the leading state. The second dominate strategy does allow for greater

gains for the leading state, but it comes at a cost that would have to be greater than the anarchic

bargain. In addition to the costs associated with helping the weaker states arrest their decline, the

leading state would also have to pay the cost of domination. The two costs combined make this

option more expensive than the anarchic bargain.

The option to abandon the weaker states is even worse from the perspective of the

leading state concerned with its power level. Abandoning the weaker states to their own devises

would require the leading state to give up the potential gains available from its great power

position. As history shows this option is a possibility; however, it is usually chosen for domestic

reasons which are outside the scope of this paper. This option also leaves open the possibility

that another state will dominate the weaker states, amassing enough power to challenge the

20

leading state. In the end, the best outcome from this strategy is lack of gain and the worst is a

potential challenger trying to actively decrease the power level of the leading state.

What would be a much better option would be to extract foreign policy concessions from

the weaker states in return for helping them arrest their decline. This option is the best

considering a cost-benefit analysis and it allows the leading state to moderate against the

possibility of a potential shift in the balance of power. Since it is negotiating from strength and

ultimately has the choice of whether the bargain is struck or not, there is little that this bargain

could not provide for the leading state. At the same time, the costs are less than the dominate

option since the leading state does not have to pay the cost of domination, only the cost of

helping the weaker states with their internal problems.

Weaker States

The uncertainty about the future trajectories of power also affects the weaker states.

Assuming that the weaker states will increase in power ignores the situation in which the weaker

states exist. Some systemic reason has caused these states to become weakened in the first place,

and there is no guarantee that this reason simply disappears at the time of a bargain. Whatever

caused the decline in the weaker state will continue to push the state down the same path, unless

the weaker state has the capabilities necessary to prevent this. While it is certainly not inevitable

that the weaker states are on a path of continued decline, they are the most likely to fear this

trajectory. This particular power trajectory adds a new source of fear for the weaker states and an

additional motivation to bargain with the leading state.

The weaker states have to contend with potential threats from three different sources. The

first source of threat is from the leading state. If the leading state were to choose to dominate the

weaker state, the weaker states would not be able to do anything about it, because of the power

21

asymmetry between the two types of states and the weakened condition of the weaker state. The

second potential source of threat is also external and stems from the leading state’s choice of

abandonment. This might leave the weaker states in a situation where they have to face a third

party military threat that they are unable to stop due to their lack of capabilities stemming from

their weak condition. The third source of threat is internal; the weaker states could face the threat

of continued decline. The systemic causes of the decline of the weaker place could still be

operating to continue to decrease the power of the weaker states, or the weakened states could

simply be unable to reverse their course without external aid.

While the weaker states do not have any influence over which option the leading state

chooses among domination, abandonment or anarchic bargain, they do have a hierarchy of

preferences in terms of how each options will affect their power position. The absolute worst

outcome for the weaker states is if the leading state were to pick domination. For the weaker

states this most likely means state death, and as such a loss of all power. The next worst option is

abandonment as this leaves states with their threat of continued decline and the potential to be

conquered by a third party. While surviving as a state, this option definitely represents a decline

in state power.

Under these conditions of multiple threats and few options of how to deal with them, the

weaker states would have little choice but to seek assistance from the leading state to find a way

to diminish the threats they face. The internal threat of continued decline would be of the greatest

influence in the decision to bargain with the leading state. First, it is the most immediate threat as

external threats cannot possibly be dealt with by a state that cannot even control its internal

conditions. Second, it is the most concrete threat, as domination by the leading state or conquest

by a third party state is only a possibility not an eventuality. Thus the trajectory of continued

22

decline is not just a short term fear but also an incentive to bargain because the leading state can

provide the resources necessary to arrest the decline of the weaker states. By striking an anarchic

bargain with the leading state to help the weaker states reverse their internal conditions and arrest

their decline, the weaker states will have to make a highly asymmetrical bargain that does not

favor them. However, the choice to provide the leading state with foreign policy concessions

does not seem like too great of a burden, considering the benefits the weaker states receive from

it.

Such an anarchic bargain would have the additional benefit of ameliorating all possible

sources of threat to the weaker states. The threat of continued decline will obviously be

ameliorated as that is what the weaker states receive from the bargain. Additionally, the fact that

the weaker states are bargaining with the leading state would decrease the threat of domination

by the leading state. Since the leading state would already be receiving what it wants from the

weaker states, there is considerably less reason for it to bother with the costs of dominating the

weaker states. Bargaining with the leading state might also provide the weaker states with a

guarantee against the abandonment threat. As the leading state is helping the weaker states

recover from their internal problems, it is allowing these states to increase their capabilities

perhaps even to the level necessary for their defense. The leading state might also dislike other

states poking into its sphere of influence and chose to protect the weaker states against the third

party threat.

This bargain does not have to continue indefinitely. Once the weaker states have

overcome their major sources of threat, states will no longer have an incentive to allow the

hegemon the political influence it receives as payment. The threats can be considered as

overcome when the economy of the weaker states is stable and can once again support the

23

necessary functions of the state, when the ruling regime is stable in its control of power, when

the external military threat is no longer threatening. In essence, once the weaker states no longer

require the assistance of the hegemon, the hegemon becomes the only major threat to them, thus

they end the bargain by refusing the hegemon political influence over their foreign policy.

Incentives to Join

Two questions need to be answered about the anarchic bargain. First, if the weaker states

get the worse end of the bargain, why would they accept it in the first place? The second

questions deals with the same issue from the perspective of the leading state. If the anarchic

bargain can come to an end, why would the leading state, knowing this, accept the bargain in the

first place? Is it not simply helping other states grow at its own expense?

The weaker states have four reasons to accept the anarchic bargain. First, to a certain

degree the weaker states have very little choice in the decision to accept the bargain. Since the

bargain is offered at “reordering moments” – in situations when the weaker states have been

decimated by war – any offer of aid, would be better then the state disintegrating completely.

The weaker states are in such a dire situation, they might need the bargain to survive or to

ameliorate the continued threat of future decline.

Second, even though the leading state gains more compared to the weaker state, the

weaker state gains more compared to the pre-bargain status quo. For the leading state, the

anarchic bargain is a convenience and a benefit, but it is certainly not a necessity. Without the

bargain, if the leading state needs to accomplish a goal, it can afford to force its will upon the

weaker states – especially in the period right after the end of a major war. The weaker states, on

the other hand, face a situation in which they suffer considerably without the bargain and receive

much needed assistance with it.

24

Third, while the bargain is more beneficial to the leading state, it might be difficult to

determine the extent of the inequality. The anarchic bargain trades foreign policy concessions by

the weaker states for material assistance from the leading state. In such a comparison, it is hard

to judge by how much the leading state benefits over the weaker states. Due to this mismatch

between types of entities being traded, the problem of relative gains is weakened to an extent.

Fourth, and most importantly, the bargain is short term and it can be broken from both

sides. As such, the weaker states are not signing up for a long term deal where they are saddled

with the same terms until the international order changes. Each party to the bargain is quite

aware that the bargain can be renegotiated or even dropped in the next round. Since the bargain

is finite and beneficial to the weaker states, there are considerably less apprehension about

accepting it.

Despite the fact that the weaker states can chose not to renegotiate the bargain at a

subsequent round, the anarchic bargain is still in the interests of the leading state. The bargain

ends when the balance of power shift dramatically enough for the bargain to no longer be

profitable to one side or the other. However, it is difficult to know when this will occur. Since

the future trajectories of power are so uncertain, states have significant incentives to discount the

effects of the long term in their calculations. Thus the leading state would have little reason to

assume that the anarchic bargain would end. It is true that the leading state is paying for the

recovering of the weaker states, thus increasing their capabilities and helping them increase their

power. But the leading state is gaining power from this bargain as well. It is hard to calculate

precisely the advantage or disadvantage of exchanging domestic gains for foreign policy gains.

Since both states are increasing their power, neither has a reason to expect the anarchic bargain

25

to change the balance of power between them sharply. Thus neither state can reasonably expect

the anarchic bargain to end without a systemic change, which neither side could possibly predict.

26

Works Cited

Bull, Hedley. 1977. The Anarchical Society: A Study of Order in World Politics. New York:

Columbia University Press.

Cox, Robert W. and Timothy Sinclair. 1996. Approaches to World Order. Cambridge:

Cambridge University Press.

Falk, Richard. 1975. Towards a New World Order: Modest Methods and Drastic Visions. In On

Creation of a Just World Order, edited by Saul H. Mendlovitz, 211-58. New York: Free

Press.

Gilpin, Robert. 1983. War and Change in World Politics. Cambridge: Cambridge University

Press.

Ikenberry, G. John. 2001. After Victory: Institutions, Strategic Restraint, and the Rebuilding of

Order After Major Wars, Princeton: Princeton University Press.

Ikenberry, G. John. 2002. America’s Imperial Ambition. Foreign Affairs 81(5): 44-60.

Ikenberry, G. John. 2011. Liberal Leviathan: the Origins, Crisis, and Transformation of the

American World Order. Princeton: Princeton University Press.

Keohane, Robert. 1984. After Hegemony: Cooperation and Discord in the World Political

Economy. Princeton: Princeton University Press.

Kindleburger, Charles P. 1981. Dominance and Leadership in International Economy

International Studies Quarterly 25:242-254.

Krasner, Stephen D. 1976. State Power and the Structure of International Trade. World Politics

28:317-413.

Lake, David A. 1983. International Economic Structures and American Foreign Economic

Policy, 1887-1934. World Politics 35: 517-43.

Lake, David A. 2009. Hierarchy in International Relations. Ithaca: Cornell University Press.

Mearsheimer, John J. 1994. The False Promise of International Institutions. International

Security 19(3): 5-49.

Mearsheimer, John J. 2003. The Tragedy of Great Power Politics. New York: W. W. Norton &

Company.

Monteiro, Nuno P. 2011. Unrest Assured: Why Unipolarity is Not peaceful International

Security 36(3): 9-40.

Pahre, Robert. 1999. Leading Questions: How Hegemony Affects the International Political

Economy. Ann Arbor: University of Michigan Press.

Snidal, Duncan. 1985. The Limits of Hegemonic Stability Theory. International Organization

39:579-614.

Suter, Keith. 2003. Global Order and Disorder: Globalization and the Nation-State. Santa

Barbara: Preager.

Waltz, Kenneth N. 1979. Theory of International Politics. New York: Random House.

Wohlforth, William C. 1999. The Stability of a Unipolar World. International Security 24(1): 5-

41.