Scenario building

Scenario building is the practice of "prediction in the absence of data." Although IR is a field that is rich in theory, a certain amount of applied work is also performed by its scholars. Scenario building is an exercise that is most often used in military applications (e.g. war games) but has proven to be valuable as a planning tool for multinational businesses and other international organizations as well. This practice also makes appearances in forms such as media projects like the BBC's "2015: Where Will We Be?" exploration of global development issues.

The fundamental purpose of scenario building is to aid in the allocation of scarce resources in the present in order to prepare for future possibilities; What issues can be ignored, what must be addressed, and what might arise that is currently not being planning for?

The art of scenario building begins with certain simple base assumptions, followed by the selection and justification of a limited number of independent variables. A continuum of values for each variable is then posited, and any interrelationships between variables must be considered. From the possible values and interactions between these independent variables, distinct scenarios or "worlds" are developed. In a simple model, two dichotomous variables are used to produce four separate worlds.

Several methodological approaches can be taken during a scenario building exercise, including exploratory forecasts based on current trends or instead the specification of a normatively preferred end in order to develop strategies to bring it about. Data and variables might included known general patterns of behavior or the extrapolation from current trends via statistics. An overriding problem or "prime mover" may be introduced whereby all strategies are colored by the organization’s biggest problem or by one central independent variable that affects all others. Conversely and more creatively, the "writing of fictions" produces alternate and distinct futures as typologies (Wilsonian, Hobbesian, etc. or often a Nirvana, Armageddon, and Status Quo world).

The worlds produced by a scenario building exercise must all be realistic possibilities and plausible based on stated conditions, assumptions, and variable interactions. Because of the abstracted nature of scenario building, a rigorous methodology is vitally important to ensure this result. An analyst must be able to show how a certain end is achieved, and even a result that might initially appear incredible and fantastic (such as the collapse of the USSR) ought to be explainable step-by-step to show its true possibility.

Not all are comfortable with this type of work; it requires tolerance of and even comfort with ambiguity. In spite of this obstacle, scenario building has valuable functional and practical uses to test alternative policies, assess risk, provide a common point of departure for planning, and spotlight issues or opportunities that may have been overlooked. The scenario building process in and of itself can be appreciated as a learning experience and heuristic tool.

For more information on scenario building, see Peter Schwartz's The Art of the Long View or Richard Falk's A Study of Future Worlds.

Constructivism defined

I must admit that the "unusual analogy" that I used in the previous post to discuss the development of state interests and environments that foster cooperation actually originated as an analogy to explain aspects of the theory of constructivism.

Constructivism is an identity and perception-based explanation of state interests that resembles (at least to me) aspects of post-modern philosophy. The analogy of a child maturing into a parent is used within the context of constructivism to describe the evolution of perspectives from "me-ness" to we-ness."

Constructivism uses immaterial bases to explain how national interests in fact follow from national identity and how state behavior reflects intersubjective perceptions about the world and "other"s.

These interests and identities are no longer rationally derived, rather how a state behaves and what its interests are depend on how it perceives itself, how it perceives the world, and how it perceives others. As such, constructivists argue that international cooperation is derived from the presence of collective interests, which in turn are derived from the development of collective identity.

Collective identity is the progression from an "I" to a "we" (a perspective that, note, also presupposes the existence of an "other"). Returning to the previously used analogy, it is the development of a wholly egoistic child or teenager into an adolescent with initial relationships that include some collective action/cooperation; then into a married individual who retains some portions of their individuality; and finally into a family with children where individuals have now been melded together into a single unit.

States that have achieved this kind of collective identity share common interests and have common goals. Among states with this communal bond, the problems of collective action that impede cooperation evaporate.

Constructivist theory suggests three paths by which collective identity can be formed. Through the path of "structural context," state interactions within international institutions create shared social practices, shared expectations, and shared understandings. A collective identity ossifies from this context in a manner that one might characterize as through a 'team-building' exercise. Within "systemic process," system-level progress (note that a future post on systems theory will make this path a bit more understandable) is made from interdependence to a convergence of norms either through a dense network of interactions that foster common interests and goals or through the emergence of a common "other" that fosters a common aversion. Finally, according to "strategic practice," states realize their initial joint interests and problems and see collective action as a viable way to alleviate them. Over time, this strategic choice changes their disparate identities into a collective one.

The primary criticism of constructivism is that it has no basis in empirical evidence. By relying on intersubjective perceptions to explain why states behave as they do, this theory can never be tested or proved wrong/right. As a further weakness, it is quite difficult to see how this approach can ever produce future predictions as opposed to merely the description of past state actions. As such, this IR theory is unlikely to have the sort of respect and longevity that the neorealist and neoliberal traditions have achieved.

Regime theory

As a theoretical exploration within the tradition of neoliberal institutionalism, regime theory seeks to explain how non-state actors arise, persist, and fade away. It also seeks to discover if international institutions can acquire autonomous authority, how this might happen, and why they are useful as independent actors in international relations.

Put simply, regimes arise because they are useful in solving problems that confront states. A functional approach (taken by Robert Keohane) explains this usefulness in three ways. First, regimes are "quasi-contracts" that organize state relations by establishing mutual expectations of behavior and a pattern of state responsibilities. Second, they lower the transaction cost of cooperation, thus producing productive cross-linkages between states and facilitating such cooperation. Finally, regimes reduce uncertainty and increase the amount of information available to states, thus offsetting the fear and security dilemma that states face in an anarchic international environment.

Regimes will most likely dissipate without the interest and support of dominant states, but regimes can persist autonomously without such support as explained by the concept of "lags." Lags occur when the power and interests that created a particular regime change and yet the regime itself does not. This can occur due to state customs and habits that arise through usage, actor uncertainty that a world without the regime would be better than a world with it, or states' inability to produce a viable alternative regime or institution.

Autonomous regimes can exert influence on states in several significant ways: they can change how states perceive their interests (e.g. assigning new value to cooperation), alter the interests themselves (e.g. redefining what is acceptable/unacceptable), act as a source of power (e.g. particularly for dominant states whose power is fading), or alter states' actual power and capabilities (e.g. through the allocation of rights within the regime's structures).

In response to realist criticisms regarding these supposed "value-laden" arguments that idealistically promote an orderly and rather static international environment, an unusual analogy describes how regimes can proliferate amidst self-interested states: the evolution of state interests is likened to the maturing of a child. An ego-centric child who is unaware or indifferent to the welfare or interests of others grows into an "instrumentally interdependent" adolescent, wherein others matter to them only insomuch as those others can affect or intrude upon them. Upon marriage, this young adult becomes "situationally interdependent," wherein improvement to one's partner(s) is an improvement to one's self as well. Finally, as a parent this person becomes "empathetically interdependent," wherein they become altruistic towards the welfare of their offspring.

The second and third phases in this analogy, characterized by interdependence without altruism, represent international environments wherein regimes are likely to be used by rational actors who find cooperation to be in their own self-interest. This analogy also serves to explain why regimes are created, the hurdles that they face in their arising and persisting, but also why they will tend to persist once an interdependent relationship between states has been fostered.

While much time is spent in international relations theory discussing and explaining why cooperation is so difficult, regime theory makes interesting and valuable contributions towards explaining the real-life phenomenon of cooperation amidst self-interested states.

Game theory

Game theory draws on the rational choice theory of decision-making in order to create an abstract environment in which some quantitative models and formulas can be introduced into the theoretical study of state behavior. Game theory seeks to model situations in international relations in which cooperation between states is more likely or less likely, though its level of abstraction and demanding premises grant it little practical value to IR practitioners.

Game theory presents states as unitary actors with two available strategies (to cooperate or to cheat) and a dual goal of minimizing loss and maximizing gain. In a two-actor game, an ordinal pay-off structure is created based on four possible outcomes: mutual cooperation (M), mutual defection (O), unilateral cooperation by the first state (U) coupled with free-riding by the other (F), and unilateral cooperation by the second state (U) coupled with free-riding by the other (F).

M, O, F, and U are assigned numerical values in order to describe the basic pay-offs and preferences that states have in certain international environments. In a game called “Harmony,” M>F>U>O and cooperation is the default strategy for both states. In a game called “Prisoner’s Dilemma,” F>M>O>U and mutual cooperation is difficult, if not impossible, to achieve.

Although these games are not by necessity zero-sum, neorealist theorists have used game theory (in particular the Prisoner’s Dilemma model) to explain why cooperation between states is so difficult and why defection, free-riding, and “cheating” typically become dominant state strategies. In response, neoliberal institutionalists suggest that international institutions can increase cooperation between states and discourage cheating (F) in order to allow states to reach the optimal position and pay-off of mutual cooperation (M).

This contest between neorealists and neoliberals is also often framed in the absolute vs. relative gains debate. For example, mutual cooperation grants State 1 an absolute pay-off of M, but a relative pay-off of zero, that is, M minus M (because State 1 is sensitive to the relative gain that State 2 is making, State 2’s pay-off is subtracted from its own pay-off). In this case, there is no value in mutual cooperation, and only defection can grant a state a relative gain (F minus U), for F is always greater than U in the context of game theory.

Game theory also discusses states’ sensitivities to relative gains as coefficients in the mathematical calculation of pay-offs. In doing so, neorealists are able to convert nearly all game theory models into Prisoner’s Dilemmas, while other formulas have less drastic effects.

IR scholars have found that refinements such as iterated games that include the value of future cooperation would increase the applicability of game theory to real-life inter-state relations. Game theory is also criticized for its highly abstract and artificial theoretical nature as well as its assumptions of perfect rationality and perfect information. Although the introduction of quantitative measures is a step in the right direction for IR theory, it is a fair criticism that game theory does not in fact bridge the gap between abstract theory and empirical measurement.