What is Liberal Institutionalism?

Institutional liberalism is a theory of international politics that is a development of liberalism. Liberalism itself differs from realism, which has in various forms been the background of most approaches to international politics. Realism argues that states are unitary items operating in an anarchic international environment in which every other power is operating purely for the sake of its own safety and self-interest. Liberalism counters this by saying, in simple terms, that states are not composed simply of unitary monoliths but instead are composed of coalitions of different interests: those interests may be different classes, different religious or ethnic groups, people with different ideological beliefs and so forth. Liberalism further argues that states interact with each other in a reasonably structured way and with a view to long-term gains through cooperation rather than endless confrontation.

Institutional liberalism builds on this beginning by arguing that it is possible for positive-sum games to exist in the world of international politics: that is, if states work together, they can both benefit from the process and, therefore, it makes sense for cooperation to spread in as many areas as possible. This differs from realism and its variants which has as a basis a zero sum game mentality, according to which one state gains as much as another state loses.

The institutional part of institutional liberalism relates to such organizations as the World Trade Organization, the International Monetary Fund, the World Bank and so forth (and not just in the economic field but across the range of human interests). This entails obeying the rules and regulations of the institutions that are being joined, which may represented a loss in the short-term but with a view to larger gains in the medium and long-terms. In this case, it is clear that it is an advantage for a state to make alliances with other states no matter who they are and in as many fields as possible. In other words, if another state has an inimical social or political ideology or system, it may still be possible to cooperate on an economic or security basis. In general, most states in the twenty-first century are quite strongly attached to the concept of making money and that is why economic agreements and free trade arrangements have become much more prominent than in the past.

Once states are connected in one particular way, it is possible for the range of areas of cooperation to expand on the basis of improved personal relations and various confidence-building measures. Sometimes this might rely on personal networks and sometimes through unusual conduits of communication. During the Cold War period, it was almost impossible to obtain any information or cooperation from China. Just about the only means of communication was through joining table tennis tournaments, when some officials accompanying the group were really responsible for non-sporting affairs. This was given the name ‘ping pong diplomacy.’