168
Book Reviews
It is possible that a few readers might feel that there are
a few missing threads in the book. For instance on page 4,
Bagchi has spoken of a case when a person from India
landed up in Germany and fell in love with his supervisors
daughter but could not marry her. The reader might like to
know the underlying reasons due to which the worker
could not get married in Germany; sadly the reasons have
not been explored in the work under review.
It would do the reader considerable good to apprise
himself/herself with terms such as capitalism, Helicopter
parenting, venture capitalist, market-oriented economy,
as these terms have been used without much explanation in
the book.
At a personal life, I feel that the essence of the lives of
great people has been distilled by Robert Frost in his poem
Stopping by Woods on a Snowy Evening
The woods are lovely, dark and deep,
But I have promises to keep,
And miles to go before I sleep,
And miles to go before I sleep.
implying distractions will always exist, but we have to
understand our responsibilities and realise that it is impera-
tive to be determined and stay focused. This old wisdom
has been epitomised in the lives of great men and literary
works with only the characters, situations and dates chang-
ing. Nonetheless, the book under review will be of great
help to the champions of management practices. The book
provides refreshing reading in these days when many
important people are washing dirty linen in public (one
only has to watch a few TV channels and read a few news-
papers) and words such as corruption, scams and scandals
are resonating and reverberating across the globe. The
book is a must-read for the champions of change manage-
ment and the people in fiefdoms of power as it depicts the
ground realities which are often sidelined.
Wallace Jacob
Tolani Maritime Institute
Induri, Pune, Maharashtra
Robert O. Keohane, After Hegemony: Cooperation
and Discord in the World Political Economy, 1984,
Princeton: Princeton University Press, pp. 320,
`2,450 (Imported Edition), ISBN: 9780691122489.
DOI: 10.1177/2319510X14536257
This book focuses on the important aspect of international
cooperation when no hegemonic power is available. The
main contention of the author is that cooperation is not
only desirable but also eminently possible. For this, he uses
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concepts of economics to derive a set of behaviour patterns
that can arise as a result of the end of a hegemonic era.
These patterns of behaviour seek to derive the conditions
under which cooperation can be achieved. He applies the
concepts of maximising behaviour and self-interest to
achieve that. The net result is that we have a framework in
which cooperation is derived as a self-sustaining possibil-
ity. Later on, some of the unrealistic assumptions are
relaxed. Relaxing these assumptions only reinforces these
conclusions. It is important to recognise, though, that these
things have been analysed only in the context of advanced
capitalist market economies. Some of the conclusions
derived here may not apply to developing countries. These
have been pointed out at appropriate places while review-
ing the different chapters of this book.
Chapter 1Realism, Institutionalism
and Cooperation
This gives a brief introduction on the realism and institu-
tionalism and their take on international cooperation. The
author asserts that under conditions of interdependence
some cooperation is necessary for achieving optimal levels
of welfare; but it is not sufficient, and more cooperation
may not necessarily be better than less. This however has
not been elaborated anywhere in the book. It also gives the
plan of this book.
Chapter 2Politics, Economics
and the International System
The author starts with Robert Giplins definition of world
political economy as the study of reciprocal and dynamic
interaction in international relations of the pursuit of
wealth and pursuit of power. He then goes on to describe,
in some detail, what wealth and power mean. Wealth is the
marketable means of want satisfaction. It is complemen-
tary to power. He cites the example of mercantilists in
seventeenth and eighteenth centuries as well as the use of
American power in twentieth century to design the eco-
nomic framework of the world. Again a short-run trade-off
exists between the pursuit of power and wealth. The source
of this trade-off is the choice between investment con-
sumption of power and wealth, which the author contends
is similar to choice between consumption and investment
of wealth. The power is thus build up over a long run. The
power can be consumed as well. But this erodes the basis
of influence and creditworthiness in the long run. He has
not given any specific example of this, so it is not clear
how this idea works out in practice, for example, did
Americas consumption of power during invasion of Iraq
in 1991 erode its influence? This case is not borne out of
subsequent events. He has also not described how a sudden
Book Reviews 169
burst of power can be achieved, for example, USSRs
detonation of nuclear bomb in 1950s increased its
power and eroded US power without its consumption.
These one act generations of power have been missed by
the author.
He stresses on the need for systems analysis both to
give a background and the further progression of actors
in the unit level analysis of world politics. States try to
secure wealth and power and seek to devise and apply
rules and regulations to secure these objectives in the long
run. This explains the behaviour of system as a whole.
This model, however, has its own set of problems. First and
foremost, this model comes from economics, but not from
politics. Another is the assumption of rational-egoistic
behaviour, leading, as it does, to situational determinism.
It is important to keep these things in mind.
Chapter 3Hegemony in the
World Political Economy
This chapter begins with an analysis of the theory of
hegemonic stability. It makes two central propositions
that only a single dominant power can create order in the
world politics; and that perpetuation of world order needs
continuity in that order. A hegemonic world order does
not exactly conjure up a figure of cooperativeness in the
world. Certainly, the colonised countries in nineteenth
century were not cooperating with colonial countries.
The hegemon needs to have control over four sets of
resourcesraw materials (e.g., oil), sources of capital
(IMF, IBRD), markets and competitive advantage in the
high value products market. Perpetuating the hegemony
thus needs the perpetuation of control. The author contends
that existence of hegemony is neither necessary nor
sufficient for the emergence of cooperative relationship
in world political system. In a cooperative system, the
need for control vanishes. In an oligopolistic world politi-
cal economy (the current world order seems to be moving
in that direction), there can be cooperation without a
hegemon.
The question of military power forms an important
critique of hegemonic stability. The hegemonic state needs
to possess enough military power to deter adversaries and
protect its hegemony. Enough in the sense that it does not
have to be absolute. Britain in nineteenth century was not
an absolute world powerit faced active competition from
France and Germany and later from Japan. The hegemon
may use its military power directly in pursuit of economic
resources, for example, US invasion of Iraq for oil. The
author has not analysed this point with empirical detail.
He has just given a discussion at an abstract level. He
talks about military power not being only source of hege-
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mony, but the question here is of a preponderant, though
infrequent use of military power.
The chapter ends with a discussion on the Marxian
notion of hegemony. Marxism takes class struggle and
uneven development as fundamental forces that affect
world political economy. The capitalist system shapes the
world political economy according to its own functional
requirements. The preponderance of financial capital in
the world proves this. These Marxist theories are partial
in the sense that they do not explain the changes in the
contradictions facing capitalism. Wealth and power are
complementary in Marxian thinking. In fact, control over
means of production is the source of all superstructure of
power in the society. At the world level, contradiction
among capitalists cannot be resolved by taking recourse to
class analysis. The ideological hegemony (in Gramscian
terms) is not necessarily enduring. The opponents may
invent some new ideology or use some existing ideology
to counter ideological hegemony of the hegemonic power,
for example, the current use of Islam as a counter ideology
to Western liberal capitalism. Thus, hegemony cannot be
the only source of cooperation in the world political
economy.
Chapter 4Cooperation
and International Regimes
This chapter belongs to Part 2 which forms the core of the
book. It starts with the question of how cooperation can
emerge after hegemony. For this, the author develops a
conceptual background of harmony, cooperation, discord
and international regimes. Cooperation is a situation in
which the actions of separate actors are brought into
conformity with one another through a process of negotia
tion, often referred to as policy coordination. It is to be
distinguished from harmony. In harmony, each actors
policies pursued in the self-interest automatically facilitate
the attainment of others goals. There are no negative
externalities. Cooperation implies that conflicts have been
successfully overcome. The conflicts can be real or
potential. Lack of cooperation leads to discord.
International regime is another concept developed in
this chapter. A regime is defined as set of implicit or
explicit principles, norms, rules and decision making
procedures around which actors expectations converge
in a given area of international regimes. These four
components are specific enough that their violations
are identifiable; and significant enough that they make a
difference in the behaviour of agents. The boundaries
of international regime correspond to the issue-areas
of the world political economy. These issue-areas are
fluid.
170 Book Reviews
Chapter 5Rational Choice
and Functional Explanation
The author begins by analysing problem of collective
action. The framework used comes from Game Theory.
The set up is prisoners dilemma. The conclusion derived
here is that it is always a dominant strategy for an actor to
defect rather than cooperate, even though cooperation is
better for both players. The idea here is to develop a theory
of cooperation from this basis.
First of all there is a discussion on limitations of rational
choice models. They ignore the power relations and assume
that choices are voluntary. This need not be so. Power
relations may affect how the choices of actors imbibe the
preferences of the most powerful. Second limitation is that
they equate the premise of rationality with an atomistic
assumption about the role of an individual in the society.
But the actors may be affected by the environment in
which they operate. And last, rationality could be confused
with egoism. At an ethical level, individuals might value
cooperation and censure action harmful to others. This will
reduce individualistic pay-offs to egoism. To thus counter
this lack of collective action, an oligopolistic collaboration,
where each actor monitors the behaviour of others, can be
effective. The example given to bolster the argument is
about General Agreement on Tariffs and Trade (GATT).
It is not clear how that can be so. In a crises situation, it
may be profitable for a state to go back on its agreements
owing to domestic pressure. It may behave rationally.
The controls given above by the author may not work at
the level of a state. The emergence of the oligopolistic
system depends on the existence of shared interests. The
existence of international regimes also reduces the density
of the policy space.
Chapter 6A Functional Theory
of International Regimes
This chapter is the core of the core. The issues addressed
are: why political market failure happens; and how inter-
national regimes might help to overcome it. The base
of analysis is Coases theorem. It states that presence of
externalities does not necessarily preclude effective coor-
dination among independent actors. The only needs are a
legal framework and low cost availability of information.
The author inverts the Coases law to derive the conditions
under which international regimes help to generate coop-
eration in the world political economy by generating the
expectations of anticipated effects.
Legal liability does not imply the existence of some
supra-structure ruling the world. But bits and pieces of
law can be generated as quasi-agreements that bind the
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governments. The enforcer here is not some supra-authority
but mutual expectation of a stable behaviour pattern.
Transaction costs can be reduced by elevating injunc-
tion to the levels of rules and principles; furthermore
regimes can construct linkages between issues thus reduc-
ing the transaction costs of bargaining. The example of
GATT is quite appropriate. Once a regime is established
the marginal transaction costs are reduced.
Uncertainty and Information has three dimensions.
The first is the asymmetrical information about other
actors trying to build a reputation of behaviour. The second
is moral hazard. It may result from agreements which
insinuate less cooperative behaviour from its comeup-
pance. The third is irresponsibility. Actors may fail to
keep their commitments. International regimes deal
with all these aspects. A pointed observation by Loius
Henkin almost all nations observe almost all principles
of international law and almost all of their obligations
almost all of the time. The example given though is
a let-down.
Existing regimes are also importantboth per se as well
as for furtherance of cooperation. They develop communi-
cation which increases adherence to group goals. The
environment that builds up as a result is stable. Considerable
changes are required to alter that. The international regimes
that build up allow governments to reduce uncertainty
and transaction that builds up reputation which forms the
base for further cooperation. A network of regimes may
prevent governments from pursuing myopic self-interests
and develop far-sightedness. Multiple issues can create
multiple regimes which affect each other. Thus, a loss on
one side may be compensated by a gain on other. This idea,
while true does not really reflect what happens within a
state on these issues. Suppose the loss is distributed widely
enough in a state. The lack of cooperation may yield enough
gain to a group that a government will go ahead with this.
In fact, the single biggest issue with this book is that it
does not analyse the domestic aspects of a states foreign
behaviour.
Chapter 7Bounded Rationality
and Redefinition of Self-interest
This chapter is meant to make the assertions and conclu-
sions of the previous arguments more realistic. The
decision-maker is limited to the extent to which he can cal-
culate as well as foresee the consequences of his decisions.
They may thus satisfice rather than maximise and use rules
of thumb to make and implement decisions effectively.
Classical rationality cannot be applied here. The nature of
governments as large and complex systems hinders the
possibility of governments making classically rational
Book Reviews 171
decisions. International regimes provide these rules of
thumb for the decision-making.
Another aspect is to protect against changes in prefer-
ences. International regimes can impose constraints on the
freedom of action to prevent that. Empathic behaviour can
dilute the assumption of egoism in the definition of self-
interest. The actors may behave in four different ways vis-
-vis othersindifference, instrumentally interdependent,
situationally interdependent and empathetic interdepend-
ence. Again treating rules as moral obligations can reduce
uncertainty about others behaviour and facilitate the coor-
dination of behaviour. Unbalanced exchange, where one
party provides more in tangible resources than other can
also be facilitated by international regimes.
Part 3 is devoted to the empirical application of these
concepts in post-war era. It contains a lot of detail which
may be useful. The book ends with brief conclusions
and review.
In conclusion, we can say that while author has done a
great job in elaborating his ideas, there are still some flaws.
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The first issue is the limited canvas of the book. It covers
only the industrialised market economies. That certainly
reduces the value of its conclusions. The second problem
is that it has taken the internal aspects of actors as given.
It has not analysed; for example, how internal politics
affects the actors response to external issues. It cannot,
thus, account for the reasons why WTOs Agreement on
agriculture is not moving forward.
The reasons are the domestic compulsions of US and
the intransigence of its agriculture interests groups. It is a
major flaw as well. It is needless to repeat the criticisms
already given in review of each chapter. In spite of these
shortcomings, it is an important contribution and highly
relevant in todays world where a structure towards ending
of unilateral US hegemony is developing.
Imtiyaz Ahmad Bhat
Alumni of CESP
Jawaharlal Nehru University
New Delhi, India