Gravity Probe B: An Experiment in General Relativity
3.3 The Objective of the Experiment
3.3.1 The geodetic effect
In Lakatosian terms, institutional theory shares much of its hard core with realism. However, institutional theory was inspired by the observation of serious anomalies in neorealist theory, and it responded by changing one of the core assumptions of realism. Instead of treating information as a scarce commodity, whose provision is beyond the scope of intentional action, institutional theory treated information as a variable that could be influenced by the activities of states. This change in the hard core led to a change in the positive heuristic, directing researchers’ attention to the attempts of states to improve their informational environment via the construction of international institutions.
Institutional theory has survived a number of attacks from skeptics, establishing itself at least initially as a progressive research program.
The fact that it takes actors and preferences as given means that it
should not be viewed as a comprehensive theory of world politics.
Were it to take on such pretensions, it would be vulnerable to a powerful critique, both from theories emphasizing domestic politics and from theories stressing the construction of interests and identities through human choice and human institutions. As compared to its initial rival, realism, institutional theory has empirically held up quite well, helping us to understand how international institutions operate and the kinds of effects they exert. However, even within the limited range of its ambitions, experience over the last two decades reveals some serious methodological and theoretical shortcomings.
Methodologically, institutionalists have often been satisfied with
“existence proofs” and weak tests of their information-oriented hypotheses about institutional action. They have found it difficult to distinguish the effects of institutions from the effects of underlying structure. More rigorous analysis that seeks to distinguish these effects is needed if institutionalist theory is to progress.
Three theoretical shortcomings of institutionalist theory are most evident. The first is that although distributional issues have been recognized from the beginning as important, they have not been adequately incorporated into institutionalist theory. This problem is not well-specified by the formulation of “relative gains,” but distributional issues lead to important problems of bargaining that shape the form and effects of international organizations. The second shortcoming is that institutional theory has until recently assumed that states are unitary actors. Important work is now being done to show that state preferences can be explained in ways that are consistent with, and that will enrich, institutional theory. Finally, there is the problem of endogeneity. Insofar as structures and functions explain the form and effects of international organizations, their own agency may seem to disappear—and institutionalist theory would seem to be easily folded into a more sophisticated version of structural realism. In this chapter we have relied on game theory, organization theory, and on theories of delegation to show that endogeneity—the fact that international institutions are created and maintained by states to suit their interests—does not reduce international organizations to
inconsequentiality. There is space for agency: structures do not determine outcomes.
Our emphasis on organization theory and agency theory clearly refutes any suggestions that institutionalist theory assumes efficient adaptation of institutions to the circumstances of international politics.
Such a claim would be inconsistent with a crucial argument of institutional theory: that the sunk costs involved in creating institutions, and the risks involved in discarding old institutions, create tendencies toward persistence of institutions even when circumstances change.81 It would also be inconsistent with agency theory, which by no means assumes that agents’ incentives will be perfectly aligned with those of principals, particularly when there are multiple principals.
Taking sunk costs and agency incentives into account means that discrepancies between the “right” institution to solve a problem and the institution that is actually used may appear with some frequency:
as circumstances change, institutions adapt in a “path-dependent,”
step-like manner, rather than smoothly. Recent institutional theory has, following work of Douglass North, clearly adopted the path-dependent rather than the functionalist-determinist position.82 Structures, and the functions they are designed to perform, do not perfectly predict behavior, as our emphasis in this chapter on agency theory suggests.
Hence, an understanding of contemporary game theory, organization theory, and agency theory allows us to recognize the space between structure and the actions of international organizations.
Actions are partially but not entirely endogenous to the power-interest structures in the neorealist sense, and to the institutional arrangements established by powerful states. Institutional design matters: institutions can be designed with built-in incentives for action consistent with designers’ intentions, or they can be misdesigned. Rational anticipation ensures that there is likely to be some relationship between cooperation problems and the form of delegation, but organizational and agency
81. Keohane, After Hegemony, p. 102.
82. Douglass C. North, Structure and Change in Economic History (New York:
Norton, 1981); North, Institutions, Institutional Change and Economic Performance.
problems make it likely that gaps will appear between problem and form.
In his most important argument, Imre Lakatos emphasized that progressive theories must not only patch up anomalies or apparent contradictions, but predict novel facts. Over the past fifteen years, institutional theory has predicted novel facts about the roles played by international institutions that have to some extent been corroborated.
We hope that in the future its extension to politics and institutions within states will lead to further progressive explanation of important patterns of behavior in world politics.