Economic Regimes

It is often argued that the regimes in the economic arena are more firmly entrenched than in any other. As already noted, however, the international econ­omy could not function in the absence of the infra­structure provided by the communication regimes. The two sets of regimes are inextricably interlinked.

Indeed, over the last decade, as the regimes govern­ing the international economy have become ever more firmly established, the underlying liberal prin­ciples governing these regimes have started to impinge on the communication regimes. This devel­opment is reflected in the growing attempts to open postal services, telecommunications, and national airlines to greater competition. This development will lead to a modification of the basic principle underlying these regimes which in the past has always favoured state control over the rules regulat­ing these activities (Zacher and Sutton 1996).

It is not possible to provide even a brief survey of the complex economic regimes established in the era after the Second World War. But it is worth noting that they reflect the determined effort made by the United States, in particular, to consolidate a set of regimes built upon liberal principles. In par­ticular, the United States wished to establish a trad­ing regime established on free trade principles and, as we have seen, the GATT was established to achieve this goal. At the same time, however, the United States also recognized that trade requires stable domestic economies and a stable monetary system to flourish. A range of international organi­zations, such as the International Monetary Fund and the International Bank of Reconstruction and Development were established after 1945 to pro­mote an environment where trade could flourish. Although there were fears that the economic regimes established by the United States would col­lapse as weaknesses in its own economy became apparent in the late 1960s, the economic regimes brought into existence after 1945 have proved to be surprisingly resilient.

Key Points

• Regime theory is an attempt initiated in the 1970s by social scientists to account for the exist­ence of rule-governed behaviour in the anarchic international system.

• Regimes have been defined by principles, norms, rules, and decision-making procedures

• Regimes can be classified in terms of the formality of the underlying agreements and the degree of expectation that the agreements will be observed. Full-blown, tacit, and dead-letter regimes can be identified.

• Regimes now help to regulate international rela­tions in many spheres of activity.

Competing Theories: 1. The Liberal Institutional Approach

Both liberal institutionalists and realists acknowledge that regimes are an important feature of con-temporary international relations and they also start from the same theoretical premiss that a regime represents the response of rational actors operating within the anarchic structure of the inter­national system. But despite this common starting point, realists and liberal institutionalists go on to make very different theoretical assessments of regimes.

Liberal institutionalists work from the premiss that regimes are needed to overcome the problems generated by the anarchic structure of the interna­tional system, they have drawn on a number of theoretical ideas developed outside of international relations in an attempt to understand why anarchy inhibits collaboration and the ways in which the resulting obstacles might be overcome.