International Relations. A self-Study Guide to Theory

of world politics independently of the actions of particular decision-makers, 
but also on variables that can, to a certain extent, be manipulated by human 
action.” (Keohane 1986b: 199; my italics). These “variables” are internation-
al institutions and cooperation. They involve the calculation of state interests 
and can be influenced by political action. International institutions therefore 
have to be subjected to an investigation by the academic discipline IR. At the 
same time, they also form an issue of policy: “International relations must be 
a policy science as well as a theoretical activity” (Keohane 1986b: 198). 
Theory must be linked to practice in order to bring the insights of modified 
structural theory into the practice of international politics and solve contem-
porary world political problems.
In short, neoinstituionalist theory sees itself as contributing toward a bet-
ter understanding of how to achieve cooperation and build international in-
stitutions. Dealing with international institutions will provide insights into 
processes of change. A strong normative belief exists that international co-
operation and institutions can reduce the effects of anarchy and bestow or-
der, peace and stability on the international system. In terms of the practice 
of international politics, this belief implies discontent with neorealist Real-
politik. The practical political implications of neoinstitutionalism indicate a 
need to devise new international institutions or regimes (beyond the nation 
state), and move towards changes in the principle of sovereignty (Keohane 
1986a: 25). 
1.4.
Summary 
The new elements of a modified structural realism are (1) the splitting of in-
ternational politics into issue areas, (2) the focus on international institutions 
and (3) the issue of peaceful change. 
Any given international system can consist of several structures that differ 
with respect to issue areas and according to the resources that can be used by 
states to affect outcomes. Here, military force is no longer assumed to be at 
the top of a hierarchy of power resources. In neorealist theory, states must 
enhance their power – this is the result of an anarchical international system, 
in which security is not guaranteed (self-help system). 
The starting points of neoinstitutionalist theory are different structural 
conditions for international politics: insecurity is reduced in a system in 
which interdependence is an additional structural feature. States can, but do 
not have to, strive for power. They are free to pursue other goals. States do 
not have to focus on security as the only or most important issue area but can 

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also define goals and objectives in other issue areas. This perspective of 
world politics results from the different assumptions and conceptualizations 
of the structural conditions of state action and state power in neoinstitutional-
ist theory. The modified structural research program offers a structural expla-
nation of the emergence of international rules and procedures, as well as of 
state compliance to those rules. The theoretical explanation of international 
politics is issue-area-specific. Different outcomes of international politics can 
thus be expected in different issue areas.
Step 2: 
The neoinstitutionalist explanation of international politics 
Having established the neoinstitutionalist critique, its core question, basic con-
cepts, assumptions and normative perspective, we will now look at the neoinsti-
tutionalist explanation in more detail. This explanation cannot be understood 
without discussing the concept of interdependence from the first step.
2.1.
The concept of interdependence 
The neoinstitutionalist explanation starts by conceptualizing the rising levels 
of international interdependence in world politics in the 20
th
century. Interde-
pendence is a theory with a systemic, structural approach. The concept, de-
veloped in Power and Interdependence by Keohane and Nye in 1977, is pre-
sented as a systemic or structural feature of the international system that 
modifies the structural realist argument. Interdependence points to variations 
in systemic characteristics, such as mutual economic dependencies and dif-
ferent levels and quality of information in the international system.
The theoretical modification discussed in Step 1.1. is easier to understand 
if Power and Interdependence in the real-world international politics of the 
1970s is “contextualized”. According to Keohane (1986b), the declared ob-
jective of neoinstitutionalist theory was to modify structural realism to “fit 
contemporary reality better” (193). “Contemporary reality” of the 1970s was 
dominated by two oil price shocks that caused a severe economic crisis in the 
Western industrialized world. These price shocks demonstrated the high lev-
els of interdependence among globally integrated national economies at that 
time and caused serious conflicts about the question of what was the “right” 
economic policy to manage the crises. Learning that unilateral, i.e. national, 
crisis management was powerless under conditions of interdependence was a 

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bitter political experience. It was during this time that global economic fo-
rums for the coordination of economic policy such as the G7 were born. 
Keohane and Nye had an explicit policy-oriented purpose for writing 
Power and Interdependence. Their intention was to optimize American for-
eign policy under the “new conditions” of interdependence (hence the subtitle 
World Politics in Transition). Against the backdrop of recognition that an 
“autonomy illusion” exists under conditions of economic interdependence, 
the realist perspective was criticized as inadequate for coping with the new 
realities. Keohane and Nye came to the conclusion that “(u)nilateral leader-
ship under the conditions of complex interdependence is (…) unlikely to be 
effective” (1977: 232). The objective was to formulate an alternative scien-
tific perspective for policy advice (Keohane/Nye 1975: 359, 1977: vii-viii, 
242). 
What is interdependence? In the words of Keohane and Nye (1977), “in-
terdependence, most simply defined, means mutual dependence” (Keo-
hane/Nye 1977: 8). In turn, interdependence has to be distinguished from “in-
terconnectedness”, which “…refers to the volume or frequency of communi-
cation, interaction, or exchange between two sociocultural systems. Intercon-
nectedness is most often expressed in the exchange of goods and services, i.e. 
in trade (…).” (Inkeles 1975: 469-470).
The concept of interdependence emphasizes the political significance of 
these interactions: Interdependence is politically significant because it creates 
costs (Keohane/Nye 1977: 9). It is costly because it constrains autonomous 
state action: National political objectives (security, welfare) depend on the 
politics of all actors being part of the interdependent relationship. Interde-
pendence becomes particularly costly as soon as states in interdependent rela-
tionships become vulnerable: “Vulnerability can be defined as an actor’s lia-
bility to suffer costs imposed by external events even after policies have been 
altered.” (Keohane/Nye 1977: 13) Keohane and Nye (1977) posit that the 
vulnerability dimension of interdependence proves important and “particular-
ly relevant for the analysis of the structure of relations” (Keohane/Nye 1977: 
370, emphasis in the original). This argument will be taken up and developed 
further when looking at the politics of interdependence in more detail (Step 
2.2.). 
To sum up, interdependence is conceptualized as a structural feature of 
the international system. Interdependence is issue area-specific (remember 
the several- structures -argument). At the same time, mutual dependencies 
are central features of interrelations between particular (state) actors. The 
questions for Keohane/Nye are: What is the scope of state action under such 
conditions of interdependence? What should a successful “politics of interde-

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pendence” look like? The answer can be found through a critical engagement 
with neorealist theory.