Neoliberalism in international relations emphasizes the role of institutions in facilitating cooperation among states, suggesting that cooperation can be achieved even in anarchic conditions through effective institutional design. It draws on rationality and utility-maximization, asserting that collective benefits can be realized through increased interaction and information exchange among self-interested actors. The emergence of neoliberalism is linked to historical developments and critiques of realism, positing that modern interdependence and institutional frameworks can successfully mitigate the challenges of an anarchic international environment.

1. NEOLIBERALISM IN IR
Ibrahim Koncak

2. NEOLIBERALISM
• International Institutions facilitate international cooperation.
• Cooperation can be difficult to achieve in anarchic conditions but institutions
allow states to overcome a variety of collective action impediments.
• The primary focus of neoliberalism is how institutions might be redesigned
to more efficiently obtain cooperative outcomes.
• Neoliberalism concurs with structural realism that international cooperation
can be difficult to obtain in an international environment that fosters fear
and uncertainty.

3. NEOLIBERALISM
• Stare centric perspective, states are unitary, rational, utility-maximizing actors.
• States make decisions based on a set of self-interested priorities and
according to a strategic cost-to-benefit analysis of possible choices, reactions,
and outcomes.
• Neoliberalism not only mirrors neorealism but also highly indebted to the
study of rationality and utility-maximization in economics.
• Neoliberalism is a variant of IR liberalism as it is premised on basic liberal
assumptions about the possibility of cumulative progress in human affairs.

4. NEOLIBERALISM
• Collective benefits may be obtained through greater application of human
reasoning.
• Increased interaction and informational exchange among self-interested individuals
and actors are important.
• In comparison to realism, neoliberalism has greater faith in the ability is human
beings to obtain better collective outcomes that promote freedom, peace, prosperity,
and justice on global scale.
• The structure or design of international institutions plays an important role in
determining the extend to which collective goals can be realized.

5. Emergence of neoliberalism
• Influenced from pluralist literature of 1960s and 1970s.
• Neoliberalism differed form pluralism as former’s adoption of state-centric,
unitary actor assumptions.
• Liberal scholars sought to challenge realist pessimism on it own terms by
utilizing realist assumptions.
• Neoliberalism argued that an anarchic environment of self-interested,
egocentric actors did not necessarily impose debilitating realist constraints on
cooperation.

6. Neoliberalism vs. Neorealism
Neoliberalism
• Anarchy, as a vacuum that is gradually
being filled with human created
process and institutions. Anarchy is
mitigated overtime.
• Historical developments in twentieth
century have made realism inaccurate
description of global politics.
Structural Realism
• Anarchy, as an all-encompassing,
unchanging condition, or
environment to which human
beings are subject.
• Ongoing warfare and military-trade
competition between states.

7. HISTORICAL DEVELOPMENTS
• First, increasing interdependence due to modern technological and industrial advances. It is costly
to one’s own interests to threaten or end the relationship. Some factors forcing states to
cooperate are depletion of resources, environmental issues, health, refuges or immigration.
• Second, the period of hegemonic stability that the US provided after the Second World War era.
The UN system, which was to serve as an umbrella for cooperative relations across many
different issue areas.
• Capitalist economic and free trade system with formal institutions such as the IMF, and the
International Bank of Reconstruction and Development (the Bretton Woods system).
• Even if US relative power has declined, interdependence provides a rational, strategic incentive
for states to continue cooperating with one another (Keohane 1984).
• Cooperation, and particularly economic cooperation, could be obtained in anarchy in the absence
or decline of a hegemon.

8. Barriers to international cooperation
• Lack of information or transparency
• Incentive to ‘cheat’ on ones partner or fear of being cheated.
• International institution foster iteration and provide information about the
intentions of partners and therefore provide transparency mitigating the fear
of being cheated and taken advantage in cooperative actions.
• Neoliberals study on designing of effective institutions to curb the defection.

9. Difficulties in institutional design
• Bargaining
• Relative power, institutional design, issue linkage, normative value
• Defection
• Free ride, cheating, compliance and enforcement, monetaring
• Autonomy
• Norm entrepreneurs and agenda setters, neutral parties, control and coordination,
bureaucratic pathologies, principle-agent theory