Introduction
The emergence of the General Agreement on Tariffs and Trade (GATT) in 1947 marked a substantial turning point in the American trade policy from protectionism to free trade. High tariff barriers and the absence of free trade were seen as one of the main reasons for the Great Depression in the 1920s. To prevent such international economic crisis in the future the United States of America pushed forward negotiations about international economic cooperation that led to the GATT. Until today the imitation of the GATT, the WTO, is – together with the International Monetary Fund and the World Bank – the most important international economic cooperation.
Cooperation between states only comes into being if certain requirements are fulfilled. The different theories of international relations aim to explain under which circumstances such international cooperation emerges. Thereby each of these theories is based on different assumptions, i.e. about state behavior or the shape of the international system. The central research question of this paper is how good these assumptions of different theories fit the reality.
The objective is therefore to test if and how theories of international relations can explain the emergence of the GATT as an successful case of international cooperation. This will be done by concentrating on two different theories of international relations. The first one will be Neorealism and the second one Neoliberal Institutionalism.
In the first part the circumstances under which the GATT was created are briefly described. According to Neoliberal Institutionalists one of the main problems of inte rnational cooperation, cheating or free-riding, can be solved by international regimes. To understand if the GATT fits the requirements of an effective regime a definition of regime is given before the core assumptions of the two chosen theories are outlin ed. In the following second part the explanatory power of the two theories is tested by examining if the creation of the GATT fulfilled certain requirements of each theory. This will lead to the confrontation of the strength and weaknesses of each applied theory. It will be shown that the emergence of the GATT can be best explained by the Neorealistic Theory of Hegemonic Stability. The Neoliberal Institutionalism can explain why it was rational for several states to join the GATT but the theory fails in ex plaining who bears the costs of setting up the regime. [...]
Table of Contents
Introduction
1. Definitions
1.1 Regime
1.2. The emergence of the General Agreement on Tariffs and Trade (GATT)
1.3. Neorealism
1.4. Neoliberal Institutionalism
2. How can Neorealism and Neoliberal Institutionalism explain the Emergence of GATT?
2.1. Neorealism’s approach
2.1.1. Theory of Hegemonic Stability
2.1.2. The United States of America – the hegemonic power after World War II
2.1.3. Incentives for other states to join the cooperation
2.2. Neoliberal Institutionalism’s approach
2.2.1. The Problem of Cheating and Free-riding
2.2.1.1. Exceptions
3. Strengths and Weaknesses of the applied theories
3.1 Neorealism
3.2. Neoliberal Institutionalism
Conclusion
Research Objectives and Themes
The primary objective of this paper is to evaluate the explanatory power of two major international relations theories—Neorealism and Neoliberal Institutionalism—in the context of the emergence of the GATT as a successful case of international cooperation. By examining the specific historical circumstances of 1947 and the roles played by participating states, the paper aims to determine how well the core assumptions of these theories align with historical reality.
- The influence of hegemonic stability on international regime creation.
- The role of common interests and collective action in institutional formation.
- Transaction cost reduction and the mitigation of cheating and free-riding behaviors.
- The impact of post-World War II economic and security requirements on trade policy.
- Comparative effectiveness of institutional governance versus power-based leadership.
Excerpt from the Book
1.1 Regime
Cooperation between different states only arises if there is an interdependent structure between them in the concerned area of conflict. Certain political goals can only be reached in cooperation with other states. The beginning of negotiations about a regime is very likely if the sum of all uncoordinated actions of single states is smaller than in the case of cooperation. The possible maximisation of a states’ welfare in a certain issue area can only be reached through cooperation. Further, there has to be a sufficient amount of trust that all partner states have a converging idea of the concerned area of political interest, that they pursue the same interests and that they will follow the rules.
In their paper: 'The GATT and the regulation of trade barriers: regime dynamics and functions' Jock A. Finlayson and Mark W. Zacher define a regime as a composition “…of sets of explicit or implicit principles, norms, rules, and decision-making procedures around which actor expectations converge in a given area of international relations and which may help to coordinate their behavior.”
Regimes are lasting systems limited to a certain area of political interest. They distinguish themselves by ensuring certain standards of behavior. If a regime is created the attending states agree on certain principles, norms, rules, and decision-making procedures that determine their behavior in the concerned area in the long-run. Sanctions for violation of theses principles, norms, rules, and decision-making procedures are defined.
Summary of Chapters
Introduction: Outlines the historical context of the GATT and introduces the central research question regarding the applicability of Neorealist and Neoliberal Institutionalist theories.
1. Definitions: Establishes conceptual frameworks for regimes and provides historical background on the emergence of the GATT, Neorealism, and Neoliberal Institutionalism.
2. How can Neorealism and Neoliberal Institutionalism explain the Emergence of GATT?: Analyzes how each theory accounts for the GATT's formation, specifically focusing on hegemonic stability, incentives, cheating, and free-riding.
3. Strengths and Weaknesses of the applied theories: Critically evaluates the explanatory limitations and successes of both Neorealism and Neoliberal Institutionalism in explaining the GATT's existence.
Conclusion: Synthesizes findings, suggesting that Neorealism provides a more robust explanation for the GATT's emergence while highlighting the theoretical gaps in Neoliberal Institutionalism.
Keywords
GATT, Neorealism, Neoliberal Institutionalism, International Regimes, Hegemonic Stability, Trade Policy, Cooperation, Free-riding, Transaction Costs, Post-World War II, Multilateralism, International Relations.
Frequently Asked Questions
What is the core focus of this research paper?
The paper explores the emergence of the General Agreement on Tariffs and Trade (GATT) through the lens of international relations theory, specifically comparing Neorealism and Neoliberal Institutionalism.
Which theoretical frameworks are applied in this work?
The work utilizes Neorealism—specifically the Theory of Hegemonic Stability—and Neoliberal Institutionalism to analyze the motives and structures behind international trade cooperation.
What is the central research question?
The research asks how well the assumptions of Neorealism and Neoliberal Institutionalism regarding state behavior and international systems explain the reality of the GATT's formation.
What methodological approach does the author use?
The author uses a comparative analysis, testing the explanatory power of the two theories against the historical facts of the GATT's establishment in 1947.
What topics are discussed in the main body?
The main body examines definitions of regimes, the role of the U.S. as a hegemon, the problem of cheating and free-riding, and the effectiveness of GATT rules and sanctions.
How is the paper characterized by its key terminology?
The paper is defined by terms such as hegemonic stability, transaction costs, collective action, and regime theory.
Does the author conclude that one theory is superior to the other?
Yes, the author argues that the Neorealistic Theory of Hegemonic Stability offers a stronger explanation for the GATT's emergence, noting that Neoliberal Institutionalism fails to account for the start-up costs of such regimes.
How did U.S. post-war power influence the establishment of the GATT?
The author posits that the U.S. economic and military dominance enabled it to bear the costs of establishing the GATT, using it as an instrument to ensure economic stability and advance its own foreign policy goals.
- Quote paper
- Theresia Schnell (Author), 2004, The Emergence of the GATT - What do realists and neoliberal institutionalists say?, Munich, GRIN Verlag, https://www.grin.com/document/34008
