Multilateralism may be an Existential Reality but Unilateralism is Open to One and All – AAS

The analytic question is whether there is an option of unilateralism versus multilateralism, and secondarily whether it is available to all states or is only the luxury of a hegemonic power such as the US.

I want to argue what may seem to be two contradictory points.  First,  there is a sense in which multilateralism is an existential reality.  And second, to the extant that unilateralism is an option, it is one available to all states and not just to a hegemonic US.

1) It is possible to argue that multilateralism is an existential reality.

This is akin to the argument made in the security literature that deterrence is an existential reality and not a doctrinal choice.  However much governments procure weapons and espouse doctrines to the contrary, deterrence is simply a fact of life, one which constrains nuclear states.

The same point can be made about multilateralism.  It is an existential reality.  Much as governments try to deny the reality, much as they try to go it alone, they are in the end constrained by the reality that little of any consequence can be accomplished without acting in conjunction with important others.  One can say that this lesson has even been learned by the Bush administration.  Blowing things up is something the US can accomplish on its own (though even there it needs others’ approval for the use of overseas bases and for overflight permissions), but little else.  In one domain after another, the US is looking for the support of others and has discovered this hard reality of international politics.

2) Unilateralism is open to one and all.

On the other hand, states do have a choice, and the choice of going it alone, separate from its efficacy and advisability, is open to all.

Think of the list of particulars used against the current US administration as evidence of its unilateral proclivities and ask how many of these steps are open only to a hegemonic power.  Could Canada not decide to leave Kyoto?  Could Canada have decided not to join the ICC?  The consequences of joining or not may be different (both for the country and for all other countries), but the choice remains.

The same is true for the use of force.  Take the case of Australia.  It has militarily intervened twice in East Timor, once at the request of the international community and once at the request of the East Timorese government (I think I’ve got this right).  The point, however, is that Australia has the ability to intervene militarily in its region and in line with its interests, and can do so even if it does not obtain Security Council approval.

The issues for any middle power are capability and cost.  A state has the choice of acting on its own if it has the capability to do so and is willing to bear the cost.  Israel chose to attack the Osirak reactor in Iraq in 1981.  It had the ability and it was willing to pay the political costs of going ahead.

Unilateralism is more consequential the more powerful the state exercising it.  A middle power pursuing a unilateral course can be seen benignly as a free rider or malevolently as a system challenger.  But a hegemon pursuing unilateralism is likely upsetting the very possibility of a cooperative solution.

The Social Psychology of Small Groups and International Relations

I attended a talk by a sociologist, Noah Friedkin (UCSB), discussing the structure of influence in networks and groups and his findings strike me as interesting for our discussion of multilateralism.

Friedkin has done experiments in which people are asked for some assessment and then get a chance to interact and then make a post-discussion assessment. A general finding in groups of 3 or more is that the second assessment almost invariably is within the bounds set by the initial assessment. Whether people modify their initial assessments or Continue reading

Domestic Politics and Multilateralism/Unilateralism

This post explores the relationship between domestic politics and a multilateral or unilateral foreign policy (and the pursuit of multilateral or unilateral solutions to problems).

One way to cut into this question is to ask whether political leaders are punished or rewarded for flouting the norms of the international community, or even for ignoring the outside world. Alternatively, we can ask whether leaders find it important to obtain international support for their foreign policy positions.

Arguments have been made for two diametrically opposed logics characterizing the relationship between the outside world and internal politics. On the one hand, the outside world is a source of legitimacy for both domestic and foreign policy. States want the recognition of others. Individual leaders go to summits with others as a way of establishing their political legitimacy. The acceptance of a government as an interlocuter by the outside world enhances internal legitimacy.
Unilateral policies are ones that either run the risk, or assure, the hostility of the outside world and thus run the risk Continue reading

What is New in the New Multilateralism? A partial answer

Bob Wolfe asks an important questions, what is new in the new multilateralism. One of his answers has to do with how the term is currently being used by different governments and different ends of the political spectrum. The tack I take here is to try to present an analytic answer which has to do with the altered international environment.

Multilateralism reflects a basic reality of international politics, the distribution of power. Modern multilateralism, consisting largely of the international institutions developed over the course of the last 150 years, has emerged in quite different settings. The first wave emerged during a multipolar age, when there were a number of great powers. The ability to fashion arrangements for such a setting was critical. Thus, the standard criticism that the League of Nations failed in part Continue reading

The Legacy of Bretton Woods

CIGI Conferenc, Waterloo, Ontario June 9-10 2006

The “par value” exchange rate system designed in 1944 ended long ago, but the legacy of Bretton Woods persists in the International Monetary Fund, particularly in its core surveillance function. From the beginning, political struggle has shaped its evolution. Its trajectory, especially after 1973, signaled a continuing attempt by the Fund’s most powerful member-states to find the golden mean in a globalizing economy between binding monetary rules and unbridled national discretion. Principled intentions and ambiguous consequences have been its hallmarks, ever since a process of formal multilateral consultations on exchange rate matters gave it birth. That it remains the subject of tough criticism, sharp debate, and regular reform efforts, even as memories of the original rules and purposes of the par value system fade, suggests the endurance of the normative quest begun at Bretton Woods. As my friend David Andrews argues in a book we are working on, the “binding agent” at Bretton Woods was an “overriding commitment to the establishment, and later the maintenance, of a cooperative international monetary order consistent with two goals: a maximum degree of national policy autonomy and a massive expansion of international trade.” The experience of competitive currency depreciation during the inter-war period had left the strong impression that such an order entailed the development of consensual rules to guide the re-opening of national payments systems and an institutional mechanism to monitor those rules and encourage monetary cooperation. In the first section of the first article in the IMF’s founding document, its member states agreed “to promote international monetary cooperation through a permanent institution which provides the machinery for consultation and collaboration.” Upon this base developed what would become the core mandate and mission of the Fund.

Like an academic department comprised of tenured colleagues who do not necessarily all enjoy one another’s company but who soon come to realize that some minimal level of compromise is in their personal interest, the actual process of monetary collaboration in the Bretton Woods order depended on the existence, but not always the effectiveness, of an administrative entity. Like a department chair, the Fund’s own autonomy would be limited, both constitutionally and in evolving practice. It would, stand for certain principles. It would have privileged access to knowledge that could not always be fully shared. And it would have to be endowed with the legitimate authority to mediate and adjudicate, with the technical ability at best to forestall and at least to manage crises, and, in principle if not in always in practice, with the capacity to sanction. In a world of integrating markets and still-sovereign polities, the Fund’s delegated authority would have to be clear and universally applicable even if its actual power would remain ambiguous and variably applied. In this light, the historical discontinuity between what preceded the 1944 Bretton Woods agreement and subsequent practice remains sharp, sharper in a fundamental sense than the 1973 break in the par value exchange rate system.

Despite persistent external criticism concerning the scope, terms, and effectiveness of the Fund’s main role in the monetary system, member states have never moved to abolish it. To the contrary, formal reviews have been undertaken regularly since 1977, and the conclusion is nearly always the same: Fund surveillance remains central and should be enhanced and reformed.

Heightened attention both inside and outside the Fund has lately also been given to increasing the transparency of the surveillance process, heightening the candor of Fund advice, and (sometimes by the same critic in the same breath) encouraging humility among Fund management and staff. In truth, such ‘enhancements’ would typify the modest incrementalism that has characterized the evolution of Fund surveillance from the beginning. Member-states and critics always seem to want more from the Fund, what they mean by that is often contradictory, and no one is fully prepared to endow this or any other intergovernmental institution with the actual supranational power necessary to match the most ambitious aspirations for its legal authority.

Prominent voices have recently reiterated Keynes’ famous admonition that the Fund must be less in the business of banking and more in the business of “ruthless truth-telling,” that it had to become an “independent umpire” articulating and “policing” the “rules of the game.” Such advocacy is well-intended, even if ironic considering its source in key G7 central banks, but far from novel. The more serious challenge to Fund surveillance is the gathering erosion of normative solidarity represented by a proliferation of regional competitors and alternative forums with selective memberships and weak or non-existent secretariats.

After the emergence of the euro, European members understandably shifted their attention away from Washington toward Frankfurt, even as they demonstrated little interest in reducing their formal stakes in an IMF seeking ways to reform its internal governance. More recently, key East and Southeast Asian states indicated serious interest in constructing a regional system for voluntary consultations, technical assistance, and temporary financing. Parallel efforts in Africa and Latin America periodically gain and lose momentum. Ted Truman, in his new book on the subject, asks the key question: “Can the global monetary system function effectively with more than one set of understandings, conventions, and rules, for example about the trade-off between financing and adjustment or about the ultimate goals of capital account liberalization?”

At this moment, and hardly for the first time, the Fund seems to be going through an identity crisis. What should give us all pause to reflect is the following statement made last June at a BIS conference: “Under its rules, the IMF has responsibility for the exchange rate system and for preventing countries from using undervalued exchange rates to promote domestic employment objectives. Current policies in many Asian countries surely call for more effort by the IMF to enforce this rule. On the other hand, Asian countries are surely correct when they claim that the US national saving rate is a cause of imbalances. And US policymakers are correct when they claim that slow growth in Europe and Japan are part of the problem. Each is correct. That’s why a multilateral solution to put the world economy on a more stable path is both desirable and probably necessary.”

The speaker was none other than Allan Meltzer, the same conservative critic who wanted sharply to curtain the role of the

Fund just a few short years ago. The aspirations and the frustrations of Bretton Woods live on. QED.

Excerpted from: “IMF Surveillance and the Legacy of Bretton Woods,” in Bretton Woods Revisited, edited by David Andrews, under review.

Louis Pauly, University of Toronto