Liberalism and Neoliberal Institutionalism 85tive prob lem solving in a multilateral forum. Liberals also place faith in international
law and legal instruments such as mediation, arbitration, and international courts. Still
other liberals think that all war can be eliminated through disarmament. What ever
the specific prescriptive solution, the basis of liberalism remains firmly embedded in
the belief in the rationality of human beings, the irreducibility of the human condition
to the individual (unlike realists, who model human insecurity on an isolated human
being, liberals observe that humans exist everywhere in society), and that through learn-
ing and education, humans can develop institutions capable of ensuring and advanc-
ing human welfare.
During the interwar period, when the League of Nations proved incapable of main-
taining collective security, and during World War II, when atrocities made many
question the basic goodness of humanity, liberalism came under intense criticism. Was
humankind inherently good? How could an institution fashioned under the best
assumptions have failed so miserably? Liberalism as a theoretical perspective fell out
of favor, replaced by realism and its preferred solution to the scourge of war: a balance
of power.
neoliberal Institutionalism
Since the 1970s, however, liberalism has been revived under the rubric of neoliberal
institutionalism. Neoliberal institutionalists such as the po liti cal scientists Robert
Axelrod and Robert O. Keohane ask why states choose to cooperate most of the time,
even under the anarchic conditions of the international system. One answer is found
in the simple but impor tant story of the prisoner’s dilemma.^15
The prisoner’s dilemma is the story of two prisoners who are interrogated sepa-
rately for an alleged crime. The police have enough evidence to convict both prisoners
on a minor charge but need a confession to convict them on a major charge. An inter-
rogator tells each prisoner that if one testifies against the other (defects) and the other
stays silent (cooperates), the one who defects will go free, but the one who cooperates
will get a one- year prison term. If both defect, both will get three- month prison terms.
If neither defects (i.e., they both cooperate and stay silent), both will receive one- month
prison terms for the minor charge. Let’s say that both prisoners defect. Each will serve
a longer sentence than if they had cooperated and kept silent. Why didn’t each pris-
oner cooperate? So long as the game is played once, neither prisoner can be certain of
what the other will do, so each chooses to testify against the other (defect) because
each will be better off regardless of what the other prisoner decides. Two impor tant points
follow. First, the prisoner’s dilemma is actually not a dilemma, because so long as the
game is structured as it is, any rational prisoner would choose to defect: it is the only
sure way of minimizing the possibility of disaster (a full year in jail). Second, the
prisoner’s dilemma is famous as an illustrative game because it highlights how the