Political Science - International Relations

Political Science - International Relations The paper discusses the rationality of creating a social institution for Latin American countries, resembling the mechanisms of the European Union. This is because Brazil, Argentina and other Latin American countries recently met in a conference to discuss such a possibility. Paper starts by discussing the role of international institutions and organizations in the present world order. Here the scholars present the importance of international institutions in order to not only maintain inter-state and inter-regional and inter-continental harmony but also to enhance trade and commerce.

The paper follows up with complete, yet concise, literature review, which integrates the literature on the theories pertaining to the need to create international institutions and the modes, scope and extent of cooperation that can be achieved through international institutions. Subsequently, the paper provides the rationale for the creation of a social institution in Latin America and argues in favor of its formation by revealing the failures of the international institutions and global organizations and by highlighting the dilemmas of the national governments in the present world order.

Lastly, the paper provides brief yet concise mechanisms of the social institution that will assist the Latin American countries in resolving the present discrepancies and problems confronting them. Introduction The financial and economical structure of the world has drastically transformed and leading this transformation are international institutions and organizations. The growth and development of International Institutions and Organizations has been directly proportional to the growth and development of the new globalized world economy.

Presently, all economic activities are being governed and managed by these international institutions and organizations through international laws developed by complicated and complex processes. Lisa L. Martin (2003) elaborates on the current phenomenon and writes, "Institutionalization is a hallmark of the new global economy. International institutions, which are integrated structures of norms, and formal international organizations (IOs) both led to the formation of the global economy and have resulted from its development. International economic interactions are largely institutionalized. That is, they occur within a framework of norms, rules, and organizations.

Many of these rules have been made explicit and formally agreed by states; others remain more informal. It is difficult to understand the functioning of the global economy without an understanding of its institutionalization (Lisa L. Martin, 2003)." Furthermore, the amalgamation of the study of international politics and economy is a relatively new subject. Therefore, extensive amount of research is required to comprehensively understand the characteristics underlying the phenomenon of international institutions and organizations. Jeff Frieden and Lisa L.

Martin (2000) write, "International Political Economy (IPE) is a relatively new sub-discipline within Political Science. The first textbook in the area was published in 1977 and regularly scheduled undergraduate and graduate courses were not routinely offered until the middle 1980s. Even today, the boundaries of IPE are not always clear (Jeff Frieden and Lisa L.

Martin, 2000)." The thought of creating an international social institution in Latin America, resembling the European Union structure needs careful examination as it is clear from the above mentioned facts that research and study on this subject is neither very extensive nor very comprehensive.

However, before we assess the justification and the possible working structure of an international institution in Latin America, it is imperative we briefly review the theories pertaining to this subject so that we may be able to clearly evaluate not only the workings of the Latin American social institution but also the fundamental reasons and motivations underlying such a development.

Review of Related Literature The contractual theory presented by Krasner (1983), Keohane (1984) and Goldstein (1996) propose that countries that confront the dilemma of individual irrational behavior, such as that of criminals, robbers, thieves and murderers, leave all segments of the society unhappy and discontent with the workings of the government. The identical situation in economics is referred to as market failure because markets that function correctly do not give rise to second-class results (Krasner, 1983; Keohane, 1984; and Goldstein, 1996).

In international relations, Martin (1992) Snidal (1985) and Stein (1983) assert that this theory is referred as cooperation and collaboration amongst countries so that each may attain their individual objectives. In addition, these theorists believe that the underlying motivation behind the creation of an international institution is for individual countries to reach a point where they can no more acquire shared-advantages from cooperating and collaborating with other countries.

This stage is referred as "Pareto frontier." At "Pareto frontier," one country profits at the expense of another country, which means that collective gains are no more available and each country has got to protect its own individual interests (Martin, 1992; Snidal, 1985; and Stein 1983). Keohane (1984) reveals how the international institutions can assist individual states in solving their combined-act problems. He believes that markets cannot be unsuccessful, unless the property rights are vaguely defined and/or contract costs are small. As he writes, "the Coase theorem could be interpreted..

As predicting that problems of collective action could easily be overcome in international politics through bargaining and mutual adjustment," (Keohane 1984, p. 86). However, these conditions are superficial rather than realistic. While one cannot disagree with the theory presented by Keohane (1984), it is worth noting here that in international politics neither the contract and transaction costs are low nor the property rights are clearly defined.

Therefore, individual governments are always in a state of mistrust as they feel that the other party may not live up to its end of the agreement, that they may not be able to satisfactorily observe and learn from others' actions and behaviors or that they may act opportunistically given that penalty methods are insufficient (Keohane, 1984). Lisa L. Martin (2003) highlights the same fundamental problem. She writes, "In order to states to cooperate, they must overcome a range of collective-action problems.

No external enforcement exists in the international economy, so any agreements must be self-enforcing. This means that states must find ways to avoid temptations to cheat, such as reneging on agreements to encourage trade by erecting protectionist barriers," (Lisa L. Martin, 2003). This is specifically where international institutions can solve the problems of mutual-actions confronted by individual states. Keohane (1986) presents a theory in which international institutions serve as a catalyst in the process of collective action between two or more independent countries.

International institutions carry out this role through sharing information about the preferences, motives, attitude, principals and informal facts and data about other countries. Consequently, the most important effect of international institutions in contractual theory is an efficiency effect, in that they permit independent countries to arrive at covenants that are on the point of the "Pareto frontier" (Keohane 1986). Over the years, the contractual theory has been developed and redrafted by many scholars and theorists.

Krasner (1991) and Fearon (1998) assert that the modes, scope and level of cooperation and coordination depend solely on the interests of each nation; that all nations should have the liberty to agree or disagree with the agreements proposed by other countries (Krasner 1991; Fearon 1998). However, Stein (1983) has argued that it will be easier for countries to coordinate than to collaborate their problems in order to solve them (Stein 1983).

On the other hand, Fearon (1998) revealed that negotiating and bargaining can be as troublesome as coordinating, for states that are cooperating to solve their problems (Fearon 1998). Krasner (1991) proposes that once the modalities of agreements are put forward, the states, through their exercise of power, can then decide whether to be a party to that agreement or not (Krasner, 1991). Conclusion of this Section The concepts discussed above have been, by and large, adopted by the international institutions to coordinate and collaborate in order to solve their problems.

Having had a clear picture of the theories pertaining to the concept of international institution and the motives and intentions of independent states to be a part of them, it is important now that we move on to the crux of the paper, the idea of creating an international institution in Latin America, the rationale behind this thought, the reasons underlying its creation and the working parameters of this Latin American social institution.

The Rationale for the Creation of a Latin American Social Institution Many scholars believe that international institutions serve the interests of not only the developed countries but also the underdeveloped countries. They allow equal participation of all members and promote justice and harmony amongst its members and encourage societal transformations on a constant basis. However, Isabelle Grunberg, Inge Kaul and Marc a.

Stern (1999) assert that the international institutions and organizations, such as the UNO, IMF and the World Bank do not cater to the needs of the developing countries and exist simply to protect the interests of the developed countries.

They point out three major disparities, (1) "A jurisdictional gap -- the discrepancy between the global boundaries of today's major policy concerns and the essentially national boundaries of policy-making, (2) "A participation gap -- which results from the fact that we live in a multi-actor world but international cooperation is still primarily intergovernmental" and (3) "An incentive gap -- because moral persuasion is not enough for countries to correct their international spillovers or to cooperate for the global public good (Isabelle Grunberg, Inge Kaul and Marc a.

Stern, 1999)." The continued existence and development of these disparities have made a mockery of international institutions as they have failed to assist the developing nations to implementing their national goals and interests. One does not need to elaborate on this subject as the mechanism of the international institutions are common knowledge to all those even remotely associated with this subject.

Therefore, a new approach to inter-state and inter-regional cooperation, coordination and collaboration is necessary in order to resolve the existing problems; an approach, which does not make the sphere of public ends at its national borders, but rather, an approach, which distinguishes and crafts an effective regional political and socioeconomic system that not only helps the governments solve their problems, but also has the trickle down effect to the masses. As Isabelle Grunberg, Inge Kaul and Marc a.

Stern (1999) assert, "A clear jurisdictional loop, reaching from the national to the international (regional and global) level and back to the national; a participation loop, bringing into the process all actors -- governments, civil society and business; all population groups, including all generations; and all groups of countries; an incentive loop to ensure that cooperation yields fair and clear results for all (Isabelle Grunberg, Inge Kaul and Marc a.

Stern, 1999)." An argument in favor of the creation of a Latin American Social Institution social-regional institution in Latin America will not only help those countries better understand the present day problems but it will also allow them to draft policies and roadmaps that may assist them in solving their problems.

This cannot be done at the international level because in order to successfully craft policies that assist in solving the problems, it is imperative that all participating states should have common aims and goals and should have good motives and intentions. This can only take place at the regional level, since; many conflicting interests exist at the international level.

In addition, democracy, pluralistic approach of governance along with technological advancements has created an atmosphere where it has become imperative for the Latin American governments to look not only internally but also externally in order to solve their present day problems. This attitude has given rise to the idea of creating an institution where common grounds can be achieved to move in the direction of resoling disputes and problems. Isabelle Grunberg, Inge Kaul and Marc a.

Stern (1999) write, "With the lowering of at-the-border controls, but also with enhanced political pluralism and democracy, countries have become more open. Combined with technological advances, this has encouraged more international economic activity -- more foreign trade, more foreign investment and more international travel and communications-international economic activities act as ever more powerful transmission belts of externalities.

It is this fact that makes Kapstein conclude that the time has come when many hitherto domestic issues, such as labor rights and taxation, can no longer adequately be dealt with at the national level, but ought to be taken to the international level (Isabelle Grunberg, Inge Kaul and Marc a. Stern, 1999)." They further emphasize the need for cooperation, coordination and collaboration amongst states by highlighting the present day dilemma of healthcare and natural and man-made disasters in the Latin America. Isabelle Grunberg, Inge Kaul and Marc a.

Stern (1999) write, "The integration of markets -- and the internationalization of marketing -- even non-communicable diseases today are a global health issue (Isabelle Grunberg, Inge Kaul and Marc a.

Stern, 1999)." The writers point towards, "global warming, the growing international inequality, the crisis-prone financial markets, the emergence of new drug-resistant disease strains, the rapid loss of biodiversity and genetic engineering," as well as, "the spread of unhealthy consumption patterns, such as smoking, which worldwide advertisements inflict on new consumer groups that may lack the information to make an informed choice about whether to consume the product.

Clearly, openness has increased the meaning of interdependence, which used to be de facto connectedness among legally sovereign nations (Isabelle Grunberg, Inge Kaul and Marc a.

Stern, 1999)." Since, all these issues are relatively important and pose tough challenges for the future generations in not only Latin America but also the world at large, steps will have to be taken by the Latin American governments that lead to greater cooperation, at least, at the regional level, so that the effect and influence of these global menaces can be at least slowed down if not eradicated.

Furthermore, another argument in favor of the creation of a Latin American social institution is the shift is state authority and power, from the representative governments to the international organizations, such as the IMF, WTO and the World Bank. Boyer and Drache (1996), Matthews (1997), Ndegwa (1996) and Strange (1996) all show concern towards the weakening of the state authority over the international institutions. Isabelle Grunberg, Inge Kaul and Marc a. Stern (1999) argue, "Governments today are accountable to both domestic and international constituencies.

Governments are transmission belts between internal and external demands, intermediaries rather than myopic agents of "purely" national self-interest. No doubt, politicians are elected by domestic constituencies, their primary point of reference. But to serve domestic interests well, policy-makers have to take the outside into account, certainly not to build protectionist barriers or just to defend the country against outside influences, but in a much more demanding task, to combine national interests with international exigencies in a way that maximizes the country's welfare.

Put differently, the challenge is to tackle the interlinked, internal-external issues that the new class of global public goods presents (Isabelle Grunberg, Inge Kaul and Marc a. Stern, 1999)." The Possible Mechanisms of the Latin American Social Institution Almost all theorists agree that the fundamental problem hindering cooperation at the international level is (1) the lack of trust and (2) free riding on the pains and hard work of others. While the former problem can be tackled through unconditional.