Grieco, Joseph. 1988. Anarchy and the Limits of Cooperation: A Realist Critique of the Newest Liberal Institutionalism.

International Organization 42 (3):485-507. Grieco claims that liberalism has attributed to realism a concept of the state that is not present in realist theory. Liberal literature takes as its unit of analysis a rational-egoist state, defined as one seeking to maximize absolute utility, and hence one that does not consider the effects of cooperation on other states. Realism, in contrast, defines states as positional, not atomistic (487). Uncertain as to whether other states are friends or foes, realist states worry not only about absolute gains for themselves, but also about relative gains for other states. As Grieco argues the fundamental goal of states in any relationship is to prevent others from achieving advances in their relative capabilities (498). Therefore, while liberals conclude that rational-egoist states may cooperate to achieve absolute gains, realism cautions that, even if absolute gains are assured, states that are concerned about relative gains may be unwilling to cooperate (499). Critiques: (1) Grieco concedes that relative-gain problems will differentially affect states calculations about whether to cooperate by a variable, k. Although k must always be positive in his estimation, it can be very small. Even if relative-gains concerns are always present, therefore, absolute gains or other considerations may outweigh them, and cooperation may ensue. (2) Bargaining may solve relative gains problems. As long as bargaining procedures are available, some relative gains problems may be eliminated before a final decision has to be made. As Keohane asserts, that is exactly the purpose of international regimes; International regimes by no means substitute for bargaining; on the contrary, they authorize certain types of bargaining for certain purposes (Keohane, 107). International regimes may therefore diminish the incidence of relative gains problems in cooperation by providing norms for bargaining. (3) Bargaining problems themselves may be misinterpreted as relative gains problems. In other words, relative gains problems may not be as prevalent as Grieco suggests. In the tests of realist versus liberal predictive capabilities Grieco devises, it is difficult if not impossible to separate what he regards as relative-gains problems from what Fearon views as bargaining problems. The failure of cooperative agreements among allies, for instance, does not necessarily prove the dominance of relative gains problems, but may, instead, support Fearons theory that a long shadow of the future makes enforcement easier but bargaining harder. The anticipation that an agreement will be durable (for instance, because common interests and nesting will make it difficult to defect) will, in Fearons configuration, increase the incentives for states to hold out in a costly war of attrition, not because an agreement is impossible, but because it is vital. Discord among allied states, therefore, is a necessary but insufficient condition to prove the prevalence of relative gains problems. (4) Relative gains problems, although insurmountable when decisions are viewed in isolation, may be neutralized through continued interaction. Grieco views cooperation as an all-or-nothing enterprise; he defines state interactions atomistically, apart from previous or future interactions. One of the key points of liberal theory, however, is that states do not interact in a vacuum. International regimes, through the aegis of reputation, confer on each decision the weight of all future decisions. Relative gains in individual

agreements are pertinent to what Keohane refers to as myopic self-interest, where myopic self-interest refers to governments perception of the relative costs and benefits to them of alternative courses of action with regard to a particular issue, when that issue is considered in isolation from others (Keohane, 99). The existence of international regimes, however, means that issues can rarely be considered in isolation from others, and gives states incentives to cooperate even when they will gain relatively less from an agreement. Over the course of continued interactions, states may assume that relative losses in individual agreements will counteracted by gains in others. The relative gains problem then loses much of its potency. (5) Uncertainty may lead states to discount capabilities as they would intentions. Grieco argues that relative-gains are a problem because, states are uncertain about one anothers future intentions, thus; they pay close attention to how cooperation might affect relative capabilities in the future (Grieco, 500). It seems clear that states cannot predict changes in government or ideology that might turn an ally into an enemy. Similarly, however, states cannot predict how relative gains today will influence future capabilities. Even if a relative gain in the present is completely translated into increased military capability, that increase will not remain stable in the future any more than government or ideology will. A small gain today may therefore be completely offset by, for example, a future economic downturn or foolhardy war. If uncertainty can lead states to doubt their friends intentions, surely it can also lead them to doubt their friends continued capacity.