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Spruyt: Institutional selection in international relations

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Spruyt. 1994. Institutional selection in international relations: State anarchy as order. International Organization 98 (autumn): 527-557.

Abstract

Question

An external change (the "emerging precapitalist economic environment," pg 529) rendered old ways of organization (feudalism, empire, the church universal) unsuitable. Three new ways of organizing competed to replace it: city-states (e.g. Bremen), city leagues (e.g. Hanseatic), and sovereign-territorial states (e.g. what became the Westphalia system). The question: why did the latter win? The answer: because it combined internal hierarchy with territorially-defined authority.

Evolutionary Analogy

"This article does not examine the origins of these organizations [the three competing systems]. The literature on state formation is vast and diverse, and no attempt is made to engage the literature on the emergence of particular systems of rule. There is no suggestion that the territorial state emerged as an optimal solution to individual preferences. Rather, I examine why sovereign territorial states eventually displaced other institutional possibilities in Europe. The emphasis is thus placed on explaining selection among already existing alternatives." In other words, this is a Darwinistic theory. The first step is to explain the emergence of new forms; the second is to explain the selection mechanism that eliminates some of those forms. This article examines only the second step (but Spruyt's 1994 book examines both steps).

Main Argument

"I argue that the sovereign territorial state prevailed because it proved more effective at preventing defection by its members, reducing internal transaction costs, and making credible commitments to other units. It did this in three ways. First, sovereign rulers were better at centralizing jurisdiction and authority. Consequently, they were in a better position to prevent free riding and to gradually rationalize their economies and standardize coinage and weights and measures. This economic rationalization corresponded with a greater capacity to wage war. The institutional makeup of sovereign territorial states thus gave them competitive advantages over other organizational possibilities.

"Second, sovereign territoriality, when confirmed to other actors, was a means of structuring interunit behavior. States, or rather the political and social elites within sovereign states, preferred similar types of units in their environment because sovereign rulers could more credibly commit the members of their organization (through their control of free riding and defection) and because their authority was exactly specified by territorial parameters.

"Third, and as a consequence of the first two conditions, actors from other institutional arrangements defected to states or copied their institutional makeup. Displacement of alternative types thus occurred from the bottom up as well as the top down--actors "voted with their feet" [bottom-up] or copied what they perceived to be the superior organizational type [top-down]."

Research Question:

Why did the sovereign-territorial state replace the city-states and city-leagues as the preferred institutional form for organising political and economic life?

Answer: "The sovereign-territorial state prevailed because it proved more effective at preventing defection by its members, reducing internal transaction costs, and making credible commitments to other units." The sovereign-territorial state managed to "win out: [in a "Darwinian selective process"] over its rivals due to three main reasons. First, its greater competitive institutional efficiency (centralisation of authority and jurisdiction created internal unity); second, sovereign territoriality, when confirmed by other actors, set the basis for structuring interunit behaviour (provision of focal points for IR); and, finally, its greater efficiency led to a displacement of the alternatives and the imitation of this state model.

Argument:

By the end of the 14th century, the emergence of monetary trade and translocal trade marked the end of feudalism, centralised empire, and theocracy as viable forms of social organisation. Consequently, three new institutional arrangements appeared: city-leagues (primarily the Hansa), city-states (in Italy) and the sovereign-territorial state (England and France). These three new forms responded in some degree to the demands of commercial actors or the townspeople as well as to the precapitalist opportunities in the period.

It is mistaken to argue that there was a linear succession from feudalism into sovereign territorial states. There was a two-stage process: First, the old system (feudalism, empire, and church) was weakened, leading to the rise of new forms (states, city-leagues, city-states); second, a selection mechanism led states to beat their competitors. This is an evolutionary theory: First, it explains the rise of new "species," then it explains why natural selection favored one of these over the others.

The new political institutions faced many problems: reduction of crosscutting and rival jurisdictions (multiplicity and divergence of legal codes), defection of its constituents, proliferation of mints, variance in laws, weights and measures, and the need for an institution to enforce credible commitments to international agreements.

Why did the city-league and city-state fail to solve these problems?

  • City-league's nature: main example, Hanseatic or Hansa League. No internal hierarchy nor clear territorial boundaries. No central authority to provide collective goods. Arena of mutual distrust, unstable economic transactions. Enormous variety of legal codes and manipulation of weights and measures. No credible commitments possible. Free riding as a regular practice, impossible to engage in iterative behaviour with other actors.
  • City-states: ex. Venice and Florence. Lacked clear internal hierarchy and unity; subjugated cities did not enjoy same benefits as dominant ones; late standardisation of weights and measures; divergence of legal codes; transit and protectionist duties as well as barriers to trade were common features yet externally they did indeed have means to establish credible commitments (behaved very much like sovereign territorial states at international level)