Dilemmas and Pathways of Liberal International Order - Liberal Leviathan: The Origins, Crisis, and Transformation of the American World Order - page 219

rule-based order stem from the functional demands of interdependence, strategic calculations
about the preservation of American influence and control in a transforming world, and the
American political tradition and identity.
Interdependence and Functional Cooperation
American support for open, rule-based order is likely to be sustained and even grow. The Un-
ited States will find increasing functional reasons—in both economic and security areas—to
reaffirm and expand its commitment to multilateral cooperation. The international environ-
ment in which even a unipolar state operates is growing more complex and interdependent.
America's ability to achieve its economic and security goals increasingly depends on the
policies and practices of other states. Inevitably, the United States will be drawn outward to
negotiate and build new realms of institutionalized cooperation.
In the economic realm, the more that states become interconnected, the more dependent
they are on the actions of other states for the realization of their objectives. As the global eco-
nomic system in which states operate becomes more interdependent, states increasingly gain
or lose depending on what other states do. The ability of even large, powerful states to ensure
prosperity on their own diminishes. More specifically, as interdependence grows between
states, the costs of not coordinating policies increase in relationship to the costs of reduced
policy autonomy that comes with making binding commitments. 48 In the postwar decades,
the United States and the other liberal capitalist states acted on this logic. They consistently
sought to open markets and reap the economic, social, and technological gains that derive
from integration into the world economy. And these countries also consistently made efforts
to establish rules and institutions that would allow governments to manage this growing inter-
dependence. If the United States and other leading states continue to see open markets as an
integral part of economic growth and modernization, it is easy to predict that the demands for
multilateral agreements—even, and perhaps especially, by the United States—will increase
and not decrease.
Liberal theories of institutions provide an explanation for the rise of multilateral insti-
tutions under these circumstances. Institutions perform a variety of functions, including re-
ducing uncertainty and the costs of transactions between states. 49 Mutually beneficial ex-
changes are missed in the absence of multilateral rules and procedures that help states over-
come problems of collective action, asymmetrical information, and the fear that other states
will cheat or act opportunistically. In effect, multilateral rules and institutions provide a con-
tractual environment within which states can more easily pursue joint gains. Likewise, as the
density of interactions between states rise, the demand for rules and institutions that facilit-
ate these interactions will also increase. In this sense, multilateralism is self-reinforcing. A
well-functioning contractual environment facilitates the promulgation of additional multilat-