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Julian Switala
Feb. 12, 2007
Pol 3835
A Neo-liberal Institutionalist Approach to Trade Liberalization
Trade liberalization is a complex phenomenon which can be elucidated by theories of international relations. Liberalism, and neo-liberal Institutionalism in particular, illuminates important aspects of trade liberalization by focusing on the logic of relative and absolute gains, the possibility of creating a regime of fair trade to diminish the fear of cheating, and the ability of institutions to enforce their rules. However, before explaining how neo-liberal Institutionalism accomplishes this it is necessary to clarify what is meant by “Liberalism.”
Liberalism, at a very basic level, is a theory used to analyze certain features of a multifaceted world dominated by state interaction, economic transactions, and social progress. In stark contrast to Liberalism is Realism, its historical competitor and ideological opposite, and there are important differences which highlight the essentials of any IR Liberalist framework. First, while a Realist worldview is state centric, often ignoring other agents by claiming that they have a negligible effect on international events, a Liberalist worldview encompasses aspects of domestic politics such as individuals’ actions and state intentions, and other international agents such as institutions (Dunne 192; Keohane 48). This Realist bias of states is due to the anarchic international system in which states interact, thereby forcing them to avoid cooperation with each other and focus on self help and competition for fear of being cheated. Even though Liberalism accepts the Realist assumption of the international system as anarchic, Liberalism does not uphold the Realist conclusions of conflict being inevitable, cooperation being implausible, or change being unlikely (Dunne 187; Keohane 41). Therefore, neo-liberals do not stress the significance of state survival as the overarching goal for each...