I am probably best known for my book Ruling the World: Power Politics and the Rise of Supranational Institutions (Princeton University Press, 2000).
The last few decades have witnessed an extraordinary transfer of policy-making prerogatives from individual nation-states to supranational institutions. If you think this is cause for celebration, you are not alone. Within the academic community (and not only among students of international cooperation), the notion that political institutions are mutually beneficial – that they would never come into existence, much less grow in size and assertiveness, were they not ‘Pareto-improving’ – is today’s conventional wisdom. But is it true?
In Ruling the World I suggest that this emphasis on cooperation’s positive-sum consequences has been leading scholars of international relations down the wrong theoretical path. By introducing and developing the concept of ‘go-it-alone power’, the book highlights the logical fallacies embedded in conventional ways of thinking about the causes and consequences of international cooperation. It shows how the process of international economic integration can end up inflicting large political costs on some participants without necessarily causing that process to collapse. How can zero-sum outcomes like this be sustained? And how do they emerge in the first place? They emerge because the political leaders of some countries do not lose out and, crucially, these countries are in a position to go it alone. Assuming this is the case – that certain nations would benefit from an open market regime even if they were to be its only members – the regime itself becomes a fait accompli, leaving other nations to choose between what their leaders may view as a bad option (voluntarily opening their markets to foreign trade and investment) and an even worse alternative (opting out of those markets and incurring the economic and political costs of exclusion). Under these circumstances, the anti-globalization countries would be foolish to choose the second option. But if they are better off choosing the first, it is only because a third alternative – returning to the days when all countries restricted access to their domestic markets – is now outside their choice sets. Their pro-globalization neighbors have removed it..
To elucidate the argument, my book walked the reader through a series of simple utility mappings and extensive-form game trees. This was followed by a detailed empirical analysis of two major cases of international cooperation – the European Monetary System and the North American Free Trade Agreement. Both arrangements furthered the economic and political objectives of their respective ‘enacting coalitions’. But while the French and German governments may have benefitted from the EMS, and the Canadians and Americans from NAFTA, the evidence I assembled in my dissertation suggests that other governments signed up to these arrangements because – and, in some cases, only because – they lacked a better alternative. If these other EMS and and NAFTA signatories had been able to restore the non-cooperative status quo, they would have been only too happy to do so.
Praise for Ruling the World
“Ruling the World is based on a powerful insight. The arguments by Gruber are made very rigorously, and the research is carefully done. There are few works in the field of integration and institutions that have the scope of this book…. Gruber also writes very well and tells a great story. His style is simple, direct, and engaging. The book would be terrific for both graduate and undergraduate audiences.”
–James Caporaso, University of Washington
“Gruber has given eloquent testimony to the strength and power of new international organizations as clubs.”
–Richard Rosecrance, Harvard Kennedy School of Government (from ‘Has Realism Become Cost-Benefit Analysis?: A Review Essay’, International Security, Fall 2001)
“[D]istributional issues are undoubtedly more complex than the argument in After Hegemony indicates…. What I did not sufficiently appreciate are the implications of the fact that states or coalitions of states may be able, through international agreement, to change the status quo, and therefore reduce the value of the reversion point for other states. The latter states may then face an unpleasant choice: between accepting an agreement that is worse than the previous status quo, on the one hand, and remaining independent of commitments under conditions that are also worse than the previous status quo, on the other (Gruber, 2000). This criticism has implications for our ethical evaluations of international regimes: we should be even more skeptical than I was in 1984. I warned that international regimes would not necessarily increase welfare, since states could be excluded and regimes could be directed against them. I criticized the International Monetary Fund (IMF), GATT, and other international institutions quite specifically for reflecting the ideologies and interests of powerful, wealthy states, and therefore falling far short of what would be demanded by cosmopolitan ethical standards. However, I retained the faith that these institutions would not worsen the situation of poor countries relative to a situation in which no such institutions existed. But the WTO negotiations on intellectual property rights (TRIPs) provide a specific illustration of the problem that Lloyd Gruber highlighted. The agreement establishing the WTO required states to accept all provisions of the Uruguay Round if they wished to benefit from any of them.”
–Robert O. Keohane, Princeton University (from Keohane’s new preface to After Hegemony)
“A recent book by Lloyd Gruber stands apart from the rest. Gruber takes the mainstream to task for building a cooperationist theory of international institutions that largely ignores power, and he launches a challenge that is truly fundamental: arguing that nations sometimes join international institutions even when they expect to be worse off for doing so. What looks like cooperation often hides the underlying exercise of power.
“Gruber’s argument is based on an insightful idea that is both simple and correct. Some nations, he notes, are so important in a given sphere of activity-as nations with large economies are in international trade-that when one or more of them decide to ‘go it alone’ in creating a multinational institution, other nations may eventually choose to join even if they never wanted such an institution in the first place and expect to be worse off. This may seem inconsistent with rational behavior, but it actually isn’t. For the key issue is: worse off compared to what?
“This is where the novel insight comes in. When the prime movers band together to form an institution-say, to promote free trade and the coordination of their economic policies-nations that oppose such a development are faced with a fait accompli. The original status quo has been taken away from them, and the new reality is that this new institution does exist. They can either join or be left out in the cold-but they can’t go back to the way things were. If they now decide that joining makes them better off than not joining, they will voluntarily become members. But they expect to be worse off than if the institution had never existed in the first place.
“Gruber marshals evidence for his argument by studying NAFTA and the European Monetary System. He shows that in both cases there were prime movers (the United States and Canada for NAFTA, Germany and France for the EMS) that engineered a new status quo, as well as nations that preferred not to have any institution at all (Mexico for NAFTA, Italy and Britain for the EMS) but joined nonetheless once the original status quo was taken away from them. Other scholars may or may not agree with Gruber’s empirical conclusions, as it is difficult to calculate each nation’s expected benefits under alternative scenarios. Even so, his argument is provocatively subversive. For it not only suggests how power can worm its way into the very foundations of ‘voluntary’ choice, but also asserts that institutions may not be cooperative and mutually beneficial even for the insiders that willingly join them.”
–Terry Moe, Stanford University (from Moe’s ‘Power and Political Institutions’, Perspectives on Politics, June 2005)
Table of Contents
1. Introduction: From Anarchy to Organization, p. 3
PART I: WHY DO NATIONS COOPERATE?
2. Institutions, Collective Action, and the Prospect of Mutual Gain, p. 15
3. Winners and Losers: The Case for Theoretical Reorientation, p. 33
PART II: HOW DO NATIONS COOPERATE?
4. The Efficiency Rationale for Supranational Governance, p. 61
5. Broadening the Debate: The “Power Politics” of Institutional Design, p. 81
PART III: NORTH AMERICAN TRADE
6. Jump-Starting the Free Trade Bandwagon, p. 95
7. NAFTA and Beyond: Is Free Trade Contagious?, p. 122
PART IV. EUROPEAN MONEY
8. Winners and Losers in the European Monetary System, p. 171
9. Rigging the System: Why Did the EMS Take the Form It Did?, p. 213
PART V. CONCLUSIONS
10. Rethinking International Cooperation, p. 251