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TERMS AND CONCEPTS
The Concept of Interdependence:
Current American Thinking
ROBERT O. KEOHANE
This presentation reviewed recent work, mostly in the United States,
on the politics of international economic interdependence. It began by
defining interdependence in terms of situations characterized by reciprocal
effects across borders. These effects may be military (strategic) or economic,
but they may also be political: such effects exist in situations in which
conditions of rule in one country (or its government's attitude toward other
countries), depend on the policies followed by other governments.
Interdependence implies not just interconnectedness (or sensitivity to
one another), but vulnerability: that is, in a situation of interdependence,
costs can be imposed by the actions of one party on the other. For either
side to disrupt established patterns of relations tends to impose costs on its
partner, as well as on itself.
INTERDEPENDENCE, POWER, AND CONFLICT
Despite what one sometimes hears from liberal enthusiasts, interde-
pendence does not make power obsolete. On the contrary, asymmetrical
interdependence is a basis for power: potential power accrues to the less
dependent actor in a relationship (although this potential power may or
may not be used effectively, and actors with intense preferences may do
better in bargaining than expected on the basis of asymmetries in inter-
dependence). Some examples of the implications of interdependence for
power relationships follow:
· The existence of vastly unequal nuclear or conventional forces
between the United States and the Soviet Union could put the side
with inferior forces in a weak bargaining position.
37
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SOVIET-AMERICAN DL4LOGUE IN THE SOCL24L SCIENCES
U.S. concern about the Soviet gas pipeline to Western Europe in
1982 was based on concern about asymmetrical interdependence.
The "informal imperialism," or neocolonialism, of capitalist states
over countries in Asia, Africa, and Latin America has been based
on asymmetrical economic, political, and military interdependence,
in many cases characterizable as hegemony.
Although interdependence does not make power obsolete, it may
change the incentives for the exercise of power and the means used:
· Strategic interdependence in a nuclear age has created incentives
for at least limited cooperation to avoid nuclear war.
· Economic interdependence among advanced capitalist states has
created incentives for substantial cooperation in order to facilitate
trade.
· This cooperation is not automatic: Germany and Britain were
each other's best trading partners in 1914, but they went to war
nevertheless. Economic incentives for trade may be overshadowed
by concerns about military advantages, as has been the case for
East-West trade since 19413.
The global nature of communications means that the mass media can
have profound impacts on the politics of countries as a result of events in
other countries for example, movements for democratization in formerly
authoritarian polities. There may result opportunities for governments of
certain countries to attempt to influence other countries' domestic politics.
Since interdependence has implications for power relationships, it can
generate as well as ameliorate conflict. More significantly, it may change the
terms of conflict. The nature of convict as a result of interdependence will,
however, depend on the character of international institutions and general
political relations among the interdependent entities—states, multinational
corporations, or transnational movements. In the context of hostility and
territorial exclusivity, interdependence can intensify conflict, as it did in
Japanese-American relations between 1939 and 1941. In the context of
economic openness and cultural empathy, interdependence can reduce the
magnitude and severity of conflict, although it may substitute many minor
points of friction for a few critical foci of hostility. European economic
integration, for example, has increased the number of issues of contention
but greatly decreased their potential for resulting in violent conflict, as
compared to the situation before 1939.
In general, the approach to interdependence outlined here incorpo-
rates elements of bargaining within an overall institutional context. Changes
in the intensify of asymmetry of interdependence help to alter the terms of
bargaining but do not make bargaining obsolete; how they affect bargaining
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TERMS AND CONCEPTS
39
depends critically on the rules and norms of the prevailing international
regimes.
HISTORICAL VARIATIONS IN INTERDEPENDENCE
Interdependence is not a new phenomenon. Consider, for instance,
relations between the United States and Britain between 1776 and 1815.
Interdependence existed at both the security and the economic level. The
American seaboard could be threatened, except toward the end of the
Revolutionary War as a result of French intervention, by the British fleet.
But conversely, British control of Canada could be jeopardized by American
invasion. With respect to economic interdependence, the triangular trade
between the United States, the British West Indies, and Great Britain was
important to both sides; the United States even attempted to use boycotts
and embargoes against Great Britain, although not very effectively.
Despite the historical continuity of interdependence, the intensity of
interdependence has increased.
· Economic interdependence has increased greatly among the ad-
vanced capitalist states since World War II especially interdepen-
dence of financial markets (although world financial markets have
been linked in significant ways for well over a century).
· Strategic interdependence has become worldwide due to nuclear
weapons and other technological changes.
· Mass communications have made political conditions within coun-
tries depend increasingly on events outside them.
Perhaps most important, the variety of actors engaged in interde-
pendent relationships has increased. "Complex interdependence" means
that there are multiple actors involved, especially in the advanced capitalist
world: governments, corporations, social and political movements, religious
organizations, networks of scientists, nonprofit lobbying organizations, and
many others. These actors have multiple channels of influence between
bureaucracies below the level of top political leadership, and in a variety
of ways between societies.
POLICY INTERDEPENDENCE AND INSTITUTIONS
If the military and economic fates of nations are interdependent, it will
often be costly not to coordinate policies. That is, from intensified inter-
dependence we can infer either increased policy coordination or unwanted
conflict.
But political interdependence provides opportunities for governments
to influence others' domestic policies or public policy environments. These
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SOV7ET-AMERICAN DIALOGUE IN THE SOCKS SC ENCES
issues may become linked to economic and military issues, which may also
be linked to one another. This suggests an important research question:
Under what conditions does linkage facilitate, and under what conditions
does it impede, cooperation?
In international relations, policy coordination cannot be legislated from
above, nor can governments rely on one another's goodwill alone. Reci-
proci~ is the central norm governing international relations. Reciprocity
can be defined as exchanges of roughly equivalent values in which the ac-
tions of each party are contingent on the prior actions of the others in such
a way that good is returned for good and bad for bad. Reciprocity gov-
erns not only U.S.-Soviet relations but attempts by the advanced capitalist
countries to regulate their economic relations.
Reciprocity does not guarantee cooperation. Biased notions of equiva-
lence can distort perceptions, and strategies of reciprocity can lead to mutual
retaliation and deadlock. Consider the fate of detente in the 1970s—a fail-
ure of reciprocity due to ambiguity and mutual ambition. This review of
reciprocity suggests the following research question: What different forms
of reciprocity can be distinguished, and under what conditions do these
strategies of reciprocity lead to mutually beneficial cooperation?
Cooperation on a sustained basis also requires regular rules and
practices that is, institutions. Political scientists have borrowed the term
"international regimes" from international lawyers to describe these insti-
tutions; now policymakers are using this language.
What do regimes do in situations of interdependence?
They reduce the costs of transactions by regularizing them and
making them routine.
They provide information (practices for verification in arms con-
trol regimes; monitoring and information exchange in economic
regimes).
They reduce uncertainty by developing expectations of compliance
with rules.
Regimes do not impose rules on sovereign states. They are devices
that governments use to facilitate their cooperation with one another.
Research is needed on the following questions: Under what conditions
are international regimes instituted? What causes changes in international
regimes? What are the sources of compliance or noncompliance with their
rules?
Finally, we should reflect on implications for the American-Soviet
relationship. International economic regimes among the advanced capitalist
states are much more highly developed than the U.S.~oviet regimes. For
extensive cooperation, a much more elaborate and clearer set of mutually
agreed-upon rules would be necessary. We need to ask what sequence of
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TERMS AND CONCEPTS
41
regime development would be most likely to be cumulative and mutually
beneficial to U.S.~oviet relations?
SUMMARY
Increasing interdependence is significant, not because it substitutes
for power and bargaining but because it alters the conditions under which
bargaining takes place. Increasing interdependence economic, strategic,
and political leads either to disorder and conflict or to increasing policy
coordination. Neither is inevitable; the direction taken depends on human
action and the character of international institutions. Policy coordination
is usually based on strategies of reciprocity and is facilitated by appropri-
ate international regimes. American and Soviet scholars and policy makers
should be thinking about what sorts of international regimes could help pro-
gressively to institutionalize peaceful and mutually beneficial relationships
between these two societies.
Representative terms from entire chapter:
policy coordination
