COURSE MATERIAL REVIEW 2

Jo H N GERARD Ru G GI E / Multilateralism: The Anatomy of an Institution 331

Multilateralism: The Anatomy
of an Institution

JOHN GERARD RUGGIE

The author examines the role of normative constraints and institutions in inter-
national relations. In arguing that norms and institutions do, in fact, matter, he
clarifies the meanings of the term multilateralism and discusses its conceptual
utility.

Seen through the lenses of conventional theo-
ries of international relations, which attribute
outcomes to the underlying distribution of
political or economic power, the roles played by
normative constraints and institutions in the
current international transformation must seem
paradoxical. Norms and institutions do not
matter much in that literature to begin with;
they are viewed as byproducts of, if not epiphe-
nomena! adjuncts to, the relations of force or
the relations of production. What is more, inso-
far as the conventional literature has any expla-
nation at all of extensive institutionalization in
the international system, the so-called theory of
hegemonic stability is it. But in addition to all
the other historical and logical problems from
which that theory suffers, merely finding the
hegemony to which the current array of regional
and global institutional roles could be ascribed
is a daunting, if not insurmountable, challenge.

The fact that norms and institutions matter
comes as no surprise to the “new institutional-
ists” in international relations; after all, that has
long been their message. 1 But, curiously, little
explicit and detailed analytical attention has
been paid in this literature to a core feature of
current international institutional arrange-
ments: their multilateral form. A literature

search keyed on the concept of multilateralism
turns up relatively few entries, and only a tiny
number of these are of any interest to the inter-
national relations theorist. The focus of the new
institutionalists has been on “cooperation” and
“institutions” in a generic sense, with interna-
tional regimes and formal organizations some-
times conceived as specific institutional subsets. 2

For example, no scholar has contributed more
to the new institutionalism in international rela-
tions than Robert Keohane. Yet the concept of
multilateralism is used sparingly in his work,
even in a literature survey on that subject. And
the definition of multilateralism that he employs
is purely nominal: “the practice of coordinating
national policies in groups of three or more
states.” 3

The nominal definition of multilateralism
may be useful for some purposes. But it poses
the problem of subsuming institutional forms
that traditionally have been viewed as being
expressions of bilateralism, not multilateral-
ism-instances of the Bismarckian alliance sys-
tem, for example, such as the League of the
Three Emperors. In short, the nominal defini-
tion of multi1ateralism misses the qualitative
dimension of the phenomenon that makes it
distinct. 4

From Multilateralism Matters: The Theory and Practice of an Evolutionary Form, ed. John Gerard Ruggie.
Copyright 1993, Columbia University Press. Reprinted with permission of the publisher.

332 J o H N GERARD RU G G IE I Multilateralism: The Anatomy of an Institution

In a superb discussion of this issue, at-
tempting to sort out the enormous variety of
trade relations in the world today, William
Diebold insists for starters on the need to distin-
guish between “formal” and “substantive” mul-
tilateralism-by which he means roughly what I
mean by nominal vs. qualitative. “But that is far
from the end of the matter. The bilateral agree-
ments of Cordell Hull were basically different
from those ofHjalmar Schacht.”‘ That is to say,
the issue is not the number of parties so much,
Diebold suggests, as the kind of relations that are
instituted among them. It is this substantive or
qualitative characteristic of multilateralism that
concerns me in the present essay, not only for
trade, but also for the institutional dimension of
international relations in general.

Nor is the missing qualitative dimension
captured entirely by the concepts of interna-
tional regimes or intergovernmental organiza-
tions. Instances of international regimes exist
that were not multilateral in form, such as the
Nazi trade and monetary regimes, to which we
will return momentarily. As for multilateral for-
mal organizations, although they entail no ana-
lytical mystery, all practitioners of the new
institutionalism agree that these organizations
constitute only one small part of a broader uni-
verse of international institutional forms that
interest them.

The missing qualitative dimension of multi-
lateralism immediately comes into focus, how-
ever, if we return to an older institutionalist
discourse, one informed by the postwar aims of
the United States to restructure that inter-
national order. When we speak here of multi-
lateralism in international trade we know
immediately that it refers to trade organized on
the basis of certain principles of state conduct,
above all, nondiscrimination. Similarly, when
we speak here of multilateralism in security rela-
tions we know that it refers to some expression
or other of collective security or collective self-
defense. And when President George Bush
[enunciated] a <'new world order" for the Mid- dle East and elsewhere-universal aspirations, cooperative deterrence, joint action against aggression-whether it constitutes vision or rhetoric, the notion evokes and is entirely con- sistent with the American postwar multilateral- ist agenda, as we shall see below. In sum, what is distinctive about multilateralism is not merely that it coordinates national policies in groups of three or more states, which is something that other organizational forms also do, but addi- tionally that it does so on the basis of certain principles of ordering relations among those states. Thus, a compound anomaly exists in the world of international relations theory today. An institutional phenomenon of which conven- tional theories barely take note is both wide- spread and significant, but at the same time, the particular features that make it so are glossed over by most students of international institu- tions themselves. This essay is intended to help resolve both parts of the anomaly. The premise of the present paper is that we can better understand the role of multilateral norms and institutions in the current interna- tional transformation by recovering the princi- pled meanings of multilateralism from actual historical practice, by showing how and why those principled meanings have come to be institutionalized throughout the history of the modern interstate system, and by exploring how and why they may perpetuate themselves today even as the conditions that initially gave rise to them have changed. My "grounded" analysis of the concept sug- gests a series of working hypotheses, which require more extensive testing before strong validity claims can be made for them. Neverthe- less, we believe that they are sufficiently interest- ing, and that the case we make for them is sufficiently plausible, to warrant such further study, and we present them here in that spirit. The argument, in brief, goes something like this. Multilateralism is a generic institutional form of modern international life, and as such it has been preS< tional forr fused witl relatively 1 modest i1 formofm tional arn internatio: age coordi laboration the multi; quent. In has been e monies ar tional con: a permi~si ing power Looking n situation, American sionofmu ican heg, institution form hav capacities lack and" roles that 1 bilizing th tion. The Mean At its core ing relatic accordanc, precisely, a cisely, do 1 the constr1 us begin b something is not: bila Earlie, ceeded inf ism into a as Diebold f s J o H N G E RA RD Ru G G I E / Multilateralism: The Anatomy of an Institution 333 been present from the start. The generic institu- tional form of multilateralism must not be con- fused with formal multilateral organizations, a relatively recent arrival and still of only relatively modest importance. Historically, the generic form of multilateralism can be found in institu- tional arrangements to define and stabilize the international property rights of states, to man- age coordination problems, and to resolve col- laboration problems. The last of these uses of the multilateral form historically is the least fre- quent. In the literature, that fact traditionally has been explained by the rise and fall of hege- monies and, more recently, by various func- tional considerations. Our ana]ysis suggests that a permissive domestic environment in the lead- ing powers of the day is at least as important. Looking more closely at the post-World War II situation, for example, it was less the fact of American hegemony that accounts for the explo- sion of multilateral arrangements than of Amer- ican hegemony. Finally, we suggest that institutional arrangements of the multilateral form have adaptive and even reproductive capacities which other institutional forms may lack and which may, therefore, help explain the roles that multilateral arrangements play in sta- bilizing the current international transforma- tion. The Meanings of Multilateralism At its core, multilateralism refers to coordinat- ing relations among three or more states in accordance with certain principles. But what, precisely, are those principles? And to what, pre- cisely, do those principles pertain? To facilitate the construction of a more formal definition, let us begin by examining a historical instance of something that everyone agrees multilateralism is not: bilateralism. Earlier in this century, Nazi Germany suc- ceeded in finely honing a pure form ofbilateral- ism into a systemic organizing principle. Now, as Diebold notes, the everyday term bilateral is entirely neutral with regard to the qualitative relationship that is instituted among countries.' So as to give expression to its qualitative nature, the Nazi system therefore typically has been referred to as bilateralist in character, or as embodying bilateralism as its organizing princi- ple. In any case, once the New Plan of the Nazi government took effect in 1934, Hjalmar Schacht devised a scheme of bilateralist trade agreements and clearing arrangements. 7 The essence of the German international trade regime was that the state negotiated "reciprocal" agreements with its foreign trading partners. These negotiations determined which goods and services were to be exchanged, their quantities, and their price. Often, Germany deliberately imported more from its partners than it exported to them. But it required that its trading partners liquidate their claims on Germany through reinvestment there or by purchasing deliberately over-priced German goods. Thus, its trading partners were doubly dependent on Germany. This trade regime in turn was linked to bilateralist monetary clearing arrangements. Under these arrangements, a German importer would, for example, pay marks to the German Reichsbank for its imports rather than to the foreign source of the goods or services, while the foreign counterpart of the transaction would receive payment in home country currency from its central bank-and vice versa for Ger- man exports. No foreign exchange changed hands, the foreign exchange markets were bypassed, and artificial exchange rates prevailed. The permissible total amounts to be cleared in this manner were negotiated by the two states. German bilateralism typically but not exclusively focused on smaller and weaker states in East-Central Europe, the Balkans, and Latin America, exchanging primary commodity imports for manufactured exports. But the scheme had no inherent limit; it could have been geographically universalized to cover the entire globe, with an enormous spiderweb of 334 J O H N G ER ARD R U G G I E / Multilateralism: The Anatomy of an Institution bilateralist agreements radiating out from Ger- many.' The nominal definition of multilateralism would not exclude the Schachtian bilateralist device: it coordinated economic relations among more than three states. Nor is the fact decisive that negotiations took place bilaterally: after all, many tariff reductions in the General Agree- ment on Tariffs and Trade (GATT) are also negotiated bilaterally. The difference is, of course, that within GATT bilaterally negotiated tariff reductions are extended to all other parties on the basis of most-favored nation (MFN) treatment, whereas the Schachtian scheme was inherently and fundamentally discriminatory, so that bilateral deals held only on a case-by-case and product-by-product basis even if they cov- ered the entire globe in doing so. Let us examine next an institutional ar- rangement that is generally acknowledged to embody multilateralist principles: a collective security system. None has ever existed in pure form, but in principle the scheme is quite sim- ple. It rests on the premise that peace is indivis- ible, so that a war against one ipso facto is considered a war against all. The community of states is therefore obliged to respond to threat- ened or actual aggression, first by diplomatic means, then through economic sanctions, and finally by the collective use of force if necessary. Facing the prospect of such a community-wide response, any rational potential aggressor would be deterred and would desist. Thus, the inci- dence of war would gradually decline. A collective-security scheme certainly coor- dinates security relations among three or more states. But so too, as noted above, did the League of the Three Emperors, which was nothing more than a set of traditional alliances.' What is dis- tinct about a collective-security scheme is that it comprises, as Sir Arthur Salter put it a half-cen- tury ago, a permanent potential alliance "against the unknown enemy" 10 and, he should have added, in behalf of the unknown victim. The in- stitutional difference between a bilateral alliance and a collective-security scheme can be simply put: in both instances, state A is pledged to come to the aid of B if B is attacked by C. In a collec- tive-security scheme, however, A is also pledged to come to the aid of C if C is attacked by B. Thus, A cannot regard itself as the ally of B more than of C, because theoretically it is an open question whether, if an act of war should occur, B or C would be the aggressor. In the same way B has indeterminate obligations towards A and C, and C towards A and B, and so on with a vast num- ber of variants as the system is extended to more and more states. 11 It was precisely this difference between a collec- tive-security system and alliances that ultimately doomed the fate of the League of Nations in the U.S. Senate. 12 The United States frequently invoked the collective-security model in leading the anti- Iraq coalition in the Persian Gulf crisis and then war, though what if any permanent institutional consequences will follow from that effort remains to be seen. NATO reflects a truncated version of the model, in which a subset of states organized a collective self-defense scheme of indefinite duration, de jure against any potential aggressor though de facto against one. Never- theless, internally the scheme was predicated on the indivisibility of threats to the collectivity- that is, it did not matter whether Germany or Great Britain, or the Netherlands, or Norway was attacked, nor in theory by whom-together with the requirement of an unconditional col- lective response. We are now in a position to be more pre- cise about the core meaning of multilateralism. Keohane has defined institutions, generically, as "persistent and connected sets of rules, formal and informal, that prescribe behavioural roles, constrain activity, and shape expectations." 13 Very simply, the term multilateral is an adjec- J ( tive that mo, multilateralis form in interr tilateral modi multilateralis1 coordinates r states on the conduct: that i priate conduc regard to the F ties or the stra any specific o classic exampl bids discrimin ing the same p1 in security rel states responc wherever it occ instance suits t In contrast, ti Schachtian dev ferentiates rel.: cisely on a pr situational exig Bilateralisr. exhaust the in Imperialism ca, institutional fm tution that coor more states, th multilateralism, eignty of the sul Two corollc of multilateralis principles logica the members of range of behavi circumstances, t different forms, 1 railway lines that dardize across fo tion by states 1 indivisible. But r social constructio; J o H N G E RA RD Ru G G I E / Multilateralism: The Anatomy of an Institution 335 tive that modifies the noun institution. Thus, multilateralism depicts a generic institutional form in international relations. How does mul- tilateral modify institutionl [We] suggest that multilateralism is an institutional form that coordinates relations among three or more states on the basis of generalized principles of conduct: that is, principles which specify appro- priate conduct for a class of actions, without regard to the particularistic interests of the par- ties or the strategic exigencies that may exist in any specific occurrence. MFN treatment is a classic example in the economic realm: it for- bids discrimination among countries produc- ing the same product-full stop. Its counterpart in security relations is the requirement that states respond to aggression whenever and wherever it occurs-whether or not any specific instance suits their individual likes and dislikes. In contrast, the bilateral form, such as the Schachtian device and traditional alliances, dif- ferentiates relations case-by-case based pre- cisely on a priori particularistic grounds or situational exigencies. Bilateralism and multilateralism do not exhaust the institutional repertoire of states. Imperialism can be considered a third generic institutional form. Imperialism is also an insti- tution that coordinates relations among three or more states, though, unlike bilateralism and multilateralism, it does so by denying the sover- eignty of the subject states.14 Two corollaries follow from our definition of multilateralism. First, generalized organizing principles logically entail an indivisibility among the members of a collectivity with respect to the range of behavior in question. Depending on circumstances, that indivisibility can take very different forms, ranging from the physical ties of railway lines that the collectivity chooses to stan- dardize across frontiers, all the way to the adop- tion by states of the premise that peace is indivisible. But note that indivisibility here is a social construction, not a technical condition: in a collective-security scheme, states behave as though peace were indivisible, and thereby make it so. Similarly, in the case of trade, adherence to the MFN norm makes the system of trade an indivisible whole among the member collectiv- ity, not some inherent attribute of trade itself. 15 Bilateralism, in contrast, segments relations into multiples of dyads and compartmentalizes them. Second, as we shall see below, successful cases of multilateralism in practice appear to generate among their members what Keohane has called expectations of"diffuse reciprocity." 16 That is to say, the arrangement is expected by its members to yield a rough equivalence of bene- fits in the aggregate and over time. Bilateralism, in contrast, is premised on specific reciprocity, the simultaneous balancing of specific quids pro quos by each party with every other at all times.17 What follows from this definition and its corollaries is that multilateralism is a highly demanding institutional form. Its historical incidence is, therefore, likely to be less frequent than that of its alternatives, and if its relative incidence at any time were to be high, that fact would pose an interesting puzzle to be ex- plained. The obvious next issue to address is the fact that, as Keohane points out, the generic concept of international institution applies in practice to many different types of institutionalized rela- tions among states. 18 So too, therefore, does the adjective multilateral: the generic attribute of multilateralism, that it coordinates relations among three or more states in accordance with generalized principles of conduct, will have dif- ferent specific expressions depending on the type of institutionalized relations to which it pertains. Let us examine some instances. Common usage in the literature distinguishes among three in- stitutional domains of interstate relations: inter- national orders, international regimes, and international organizations. Each type can be, but need not be, multilateral in form. p 336 J o H N GERARD RU G G I E / Multilateral.ism: The Anatomy of an Institution The literature frequently refers to interna- tional economic orders, international security orders, international maritime orders, and so on. An "open" or "liberal,, international eco- nomic order is multilateral in form, as is a mar- itime order based on the principle of mare liberum. The New Economic Order of the Nazis was not multilateral in form, for reasons I have already suggested, and neither was the European security order crafted by Bismarck. The concept of multilateralism here refers to the constitutive rules that order relations in given domains of international life--their architectural dimen- sion, so to speak. Thus, the quality of "open- ness" in an international economic order refers to such characteristics as the prohibition of exclusive blocs, spheres, or similar barriers to the conduct of international economic relations. The corresponding quality in an international security order-which would cause it to be described as "collective" -is the condition of equal access to a common security umbrella. To the extent that these conditions are met, the order in question may be said to be multilateral in form. In short, multilateralism here depicts the character of an overall order of relations among states; definitionally it says nothing about how that order is achieved. Regimes are more concrete than orders: typically, the term refers to functional or sec- toral components of orders. Moreover, the con- cept ofregime encompasses more of the "how" question than does the concept of order in that, broadly speaking, the term "regime" is used to refer to common, deliberative, though often highly asymmetrical means of conducting inter- state relations. That much is clear from com- mon usage. But while there is a widespread assumption in the literature that all regimes are, ipso facto, multilateral in character, this as- sumption is egregiously erroneous. For exam- ple, there is no reason not to call the Schachtian schemes for organizing monetary and trade rela- tions international regimes; they fully meet the standard criteria specified by Stephen Krasner and his colleagues.19 Moreover, it is entirely pos- sible to imagine the emergence of regimes between two states-superpower security re- gimes, for example, were a topic of some discus- sion in the l 980s20-but such regimes by definition would not be multilateral either. In sum, what makes a regime a regime is that it sat- isfies the definitional criterion of encompassing principles, norms, rules, and decision-making procedures around which actor expectations converge. But in and of themselves, those terms are empty of substance. What makes a regime multilateral in form, beyond involving three or more states, is that the substantive meanings of those terms roughly reflect the appropriate gen- eralized principles of conduct. By way of illus- tration, in the case ofa multilateral trade regime, these would include the norm of MFN treat- ment, corresponding rules about reciprocal tar- iff reductions and the application of safeguards, and collectively sanctioned procedures for implementing the rules. In the case of a collec- tive-security regime, they would include the norm of nonaggression, uniform rules for use of sanctions to deter or punish aggression, and, again, collectively sanctioned procedures for implementing them. Finally, formal international organizations are palpable entities with headquarters and let- terheads, voting procedures, and generous pen- sion plans. They require no conceptual elaboration. But, again, their relationship to the concept of multilateralism is less self-evident than is sometimes assumed. Two issues deserve brief mention. The first, though it may be moot at the moment, is that there have been interna- tional organizations that were not multilateral in form. The Comintern and later Cominform come to mind; they were based explicitly on Leninist principles of organization, which were quite different from their multilateral counter- parts. Along the same lines, the ... collapsed Soviet-East European system of organizations differed from multilateral forms in ways that students of international organization never JO fully came to more problem dency exists in organizations, community, tc multilateralisn organizations c cussion makes may be the cas cerning aspect1 likely, internat multilateral fc exhibits this en the failed que, New Internatio exhibits the de on most intern ters fall somew ally, multilater, distinct type o fined by such g, as voting or cm In sum, th1 that modifies ti guishes the mw it coordinates states on the b conduct. Acco1 tional instituti• qualitative dir bound to be a fa is silent about 1 tions within the tutional forms. it is important . ing of multilat< institutional ex tional order, re! be, but need ~ addition, the rr equated with u1 attributes of m tions within spt often do fall sl nations. Finally Jo H N GERARD RUGG IE / Multilateralism: The Anatomy of an Institution 337 fully came to grips with. The second issue is more problematic even today. A common ten- dency exists in the world of actual international organizations, and sometimes in the academic community, to equate the very phenomenon of multilateralism with the universe of multilateral organizations or diplomacy. The preceding dis- cussion makes clear why that view is in error. It may be the case empirically that decisions con- cerning aspects of international orders or, more likely, international regimes are in fact made in multilateral forums. The European [Union] exhibits this empirical pattern most extensively; the failed quest by developing countries for a New International Economic Order in the 1970s exhibits the desire to achieve it; and decisions on most international trade and monetary mat- ters fall somewhere in between. But definition- ally, multilateral organization is a separate and distinct type of institutionalized behavior, de- fined by such generalized decision-making rules as voting or consensus procedures. In sum, the term multilateral is an adjective that modifies the noun institution. What distin- guishes the multilateral form from others is that it coordinates behavior among three or more states on the basis of generalized principles of conduct. Accordingly, any theory of interna- tional institutions that does not include this qualitative dimension of multilateralism is bound to be a fairly abstract theory and one that is silent about one of the most crucial distinc- tions within the repertoire of international insti- tutional forms. Moreover, for analytic purposes it is important not to (con)fuse the very mean- ing of multilateralism with any one particular institutional expression of it, be it an interna- tional order, regime, or organization. Each can be, but need not be, multilateral in form. In addition, the multilateral form should not be equated with universal geographical scope; the attributes of multilateralism characterize rela- tions within specific collectivities that may and often do fall short of the whole universe of nations. Finally, it should be kept in mind that these are formal definitions, not empirical descriptions of actual cases, and we would not expect actual cases to conform fully to the for- mal definitions .... Conclusion This essay was written with two sets of protago- nists in mind. The first are those theorists of international relations for whom institutions matter little. It may be true, as these theorists insist, that they do not purport to explain every- thing but that what they do explain is impor- tant.21 It does not follow, however, that what they leave unexplained is unimportant. And institutions, clearly, are not unimportant. The second set of protagonists are those of my fellow institutionalists for whom the form that institutions take is left unexplored. Their focus is on institutions in a generic sense or on cooperation even more generally. Much can be learned about international relations from that perspective. But at the same time, too much is left unsaid. And what is left unsaid~the form that institutions assume-affects vitally the role which institutions play on the world stage today. Above all else, policymakers groping for …

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