Realism versus Neoliberalism: A Formulation

Although the debate between realism and neoliberalism offers deep insights and raises fundamental questions into the nature of international systems, it also offers the confusion that accompanies imprecisely formulated concepts and an imperfect application of subsidiary ideas. Using a noncooperative extensive-form game to model anarchic international systems, this essay seeks to resolve that debate by restating it in a more explicit and deductive context. Arguing that collective security corresponds to the system envisioned by neoliberals, we begin by differentiating between balance of power and collective security in terms of the strategies that characterize the foreign policies of countries. Next, we establish that both balance of power and collective security can correspond to equilibria in our game. Arguments about goals and institutions are then recast in terms of the different properties of these equilibria. In particular, a balance of power equilibrium does not guarantee every country's security, so in it countries must be vigilant about their relative share of resources. A collective security equilibrium, on the other hand, ensures everyone's sovereignty and thereby allows absolute resource maximization. Unlike a balance of power equilibrium, however, a collective security equilibrium is not always strong, and it is not necessarily perfect, so the institutional structures that facilitate the realization of mutual gains from the variety of cooperative "subgames" that characterize the world economy play a critical role in establishing the stability of that equilibrium.