Regime Theory

Regime Theory and the Study of International Relations

In IR, we can broadly distinguish between three different regime theoretical approaches: interest-based, power-based, and knowledge-based theories. Interest-based (also known as neoliberal) theories have become the leading school of thought in IR regime analysis. Neoliberals, like Robert Keohane, who shaped this approach decisively, draw on microeconomic (or rationalist) assumptions concerning human action and extend these to state behavior. States are depicted as rational egoists, which seek to maximize their gains. However, in contrast to power-based theories, states seek absolute, and not relative, gains. Neoliberals explain regime creation through this orientation toward absolute gains: In situations where states have homogeneous interests that cannot be attained unilaterally, they tend to cooperate in order to achieve gains through collective action, even if other participants benefit to a greater extent from this cooperation. Thus, the impact of regimes is not to change the interests of the participating states. Instead, they function as catalysts of cooperation that leave the interests of states essentially untouched.

The neoliberal approach regimes further contribute to international cooperation through the reduction of [Page 802]transaction costs. The latter are reduced, for example, because regimes offer a framework for negotiation. Cooperation is facilitated as negotiating partners, procedures, and basic objectives are already established. In addition, regimes can reduce transaction costs by providing control mechanisms in order to ensure compliance among cooperative partners and may thus also contribute to reliability in terms of actors' expectations. Cooperation is also facilitated through issue linkage, which increases the scope for trade-offs across different (sub)sectors. Moreover, regimes help define what cooperation entails in the first place. As a result, states can no longer justify breaches of cooperation with the uncertainty as to what international cooperation asks of them. Default becomes more costly because the reputation of being a trustworthy cooperation partner is damaged. This is of particular importance, especially as most cooperation processes are continuous. Game-theoretical models have been applied by neoliberals to simulate different preference constellations that affect the likelihood of regime creation and maintenance. Interest-based theories highlight the significance of international institutions for the structure of the international system and the realization of common interests. Regimes are portrayed as effective and resilient. States can be shown to have an interest in maintaining regimes even after the conditions that brought the regime into existence are no longer operative. Neoliberals primarily stress the objective of economic welfare and have focused, for example, on issue areas of finance and trade, such as the international trade regime (General Agreement on Tariffs and Trade, or GATT).

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