Regionalism and the Rise of Consensual Empire

Abstract

The proliferation of regional groupings of states is perhaps the most notable and consequential feature of the international landscape to take shape since the Cold War's end. Although bipolarity has yet to be replaced by a defining geopolitical structure, the prospering of the European Union (EU), the North American Free Trade Agreement (NAFTA), and the forum for Asia Pacific Economic Cooperation (APEC) suggests an emerging international order organized around three centers of power. This essays argues that institutionalist approaches to the study of regionalism are inadequate and that contemporary regions are best understood as consensual imperial formations. An imperial perspective underscores the geopolitical intent and consequence of regional formations and interprets them as systems of order and governance based on hierarchic, asymmetric relations between core and periphery. In contrast to traditional empires, which relied on coercion to ensure cohesion, today's consensual empires rest on a bargain between core and periphery. The core binds itself and agrees to subject the exercise of its preponderant power to a set of rules and norms arrived at through multilateral negotiation. In return, the periphery agrees to enter willfully into the core's zone of imperial influence. The essay develops the notion of consensual empire, examines the extent to which it can be applied to the EU, NAFTA, and APEC, and then focuses on the prescriptive implications of the analysis for the internal cohesion and performance of regional groupings as well as for the external relations among them.

Charles A. Kupchan, Council on Foreign Relations, New York

Regionalism is all the rage. The proliferation of regional groupings of states is perhaps the most notable and consequential feature of the international landscape to take shape since the Cold War's end. Although bipolarity has yet to be replaced by a defining geopolitical structure, the prospering of the European Union (EU), the North American Free Trade Area (NAFTA), and the forum for Asia Pacific Economic Cooperation (APEC) suggests an emerging international order organized around three centers of power. If current trends continue, relations within and between institutionalized regional groupings in Europe, America, and East Asia are likely to be the defining elements of the international system in the twenty-first century.

Because of the novelty and the potential importance of these regional bodies, both the scholarly and the policy-making communities need to develop a better understanding of their origins and likely trajectories. ₁ Three sets of questions are of paramount importance. First, what is the main causal engine driving the formation and deepening of institutionalized regional groupings? How can their formation as well as their impact on the international landscape best be understood? Second, what factors will determine their internal cohesion and their ability to promote the prosperity and security of their members? How much integration is desirable? It is possible to specify the key elements of an equilibrium resting point? Third, what factors will determine the relationship among these three geographic concentrations of power? Is there a tradeoff between regional and global integration or are the two compatible, if not mutually reinforcing?

Although scholars have already devoted considerable effort to answering these questions, they have made only limited progress in finding satisfactory answers. ₂ Part of the problem is the absence of reliable data. NAFTA and APEC have been in existence only since 1994 and 1989, respectively. Furthermore, contemporary regional groupings represent an international formation for which there are few historical precedents. The EU has existed -- in various incarnations -- for decades. But for most of its history, a powerful external threat helped Europe pursue its agenda of economic and political integration. Only recently has the EU entered the uncharted waters of attempting to deepen and widen in the absence of a common enemy. And as both intuition and scholarly research suggest, the pursuit of political integration and the liberalization of trade outside the context of alliance will be governed by a new set of considerations and dynamics. ₃

The most important constraint on developing a better understanding of contemporary regional formations, however, is not the absence of data or historical precedent, but limitations on the theoretical and analytic perspectives that scholars bring to the study of regionalism. The formation and functioning of regional groups have been analyzed primarily through the literature on international institutions and their effect on trade. This analytic entry point is quite understandable; the EU, NAFTA, and APEC are first and foremost institutions for managing the international flow of capital, goods, and services. The relevant insights and assumptions from the fields of international political economy and economics accordingly provide an appropriate starting point for analysis -- but only a starting point.

I argue in this essay that the regional bodies taking shape in Europe, North America, and the Asia Pacific are best understood as modern imperial formations. In contrast to an institutionalist perspective, which views the objectives and implications of today's regionalism largely in terms of trade and welfare gains, an imperial perspective focuses more broadly on security and stability and the order-related goals of regional arrangements. Whereas an institutionalist approach identifies the market as the primary arena of regional activity, an imperial approach views the market as only one component of a multifacted system of regional order and governance. Institutionalists view regional governance as the product of converging expectations of reciprocity and the horizontal diffusion of power across member states. From an imperial perspective, governance stems from the concentration of power in a geographic core and the erection and legitimation of a hub-spoke, hierarchical pattern of power relations in which the core uses a mix of inducement and coercion to draw a surrounding periphery into its sphere of influence.

In the next section, I demonstrate that thinking about regionalism as a process of empire formation opens important analytic perspectives and sheds new light on why and how contemporary regional institutions are taking shape. ₄ I begin by outlining the inadequacies of conventional approaches to the study of regionalism, and then show both that concerns about imperial management informed the construction of the EU, NAFTA, and APEC and that these formations possess the basic attributes and structures of empires. ₅ I also contend, however, that they differ from traditional empires in that they are based primarily on consensus rather than on coercion. During the era of classical empire, the metropole imposed its will on the periphery. During the era of modern empire, the core and periphery strike a bargain. The core binds itself and agrees to subject the exercise of its preponderant power to a set of rules and norms arrived at through multilateral negotiation. In return, the periphery agrees to enter willfully into the core's zone of imperial influence. The thrust of my argument is that the international system is witnessing the return of imperial spheres of influence, but that these empires are modern and consensual -- they have been updated to be consistent with reigning norms about sovereignty and legitimate forms of governance.

After developing a model of consensual empire, I discuss the extent to which the model can be aplied to the EU, NAFTA, and APEC. I contend that the EU and NAFTA both fit the model well, but that it is less applicable and analytically useful in the case of APEC, in large part because political and economic integration in East Asia are still in a nascent phase. In the case of APEC, the notion of consensual empire provides a road-map for its potential evolution more than a description of its current phase of development. In the final section of the essay, I discuss the prescriptive implications of my analysis for the internal cohesion and performance of regional groupings as well as for the external relations among them.

The Limits of Institutionalism

Although scholars have drawn on many theoretical traditions to examine regionalism, institutionalism has been the dominant approach. ₆ Institutionalism has two main variants: functionalism and neo-liberal institutionalism. Functionalists view regional institutions as emerging incrementally from concrete acts of transnational cooperation. As they become aware of the benefits, national states increasingly resort to cooperative solutions to shared problems. Integration proceeds apace. Regional institutions ultimately emerge to manage these new flows of goods, services, and labor. Elites and masses alike develop vested interests in regional interdependence and more cosmopolitan and less nationalistic attitudes, contributing to the creation of a transnational political space. As institutions develop their scope of authority, build a professional bureaucracy, and form relationships with political and economic agents in member states, they take on a life of their own and become an independent force seeking further regional integration. A region ultimately comes to consist not just of its member states and the transactions among them, but of semi-autonomous institutions that become agents of the region in their own right. ₇

Neo-liberal institutionalists view regional formations as more intermediary bodies, erected by member states primarily to solve collective action problems. Regional institutions are crafted by egoistic states looking to liberalize the market and benefit from the joint gains associated with trade creation. Institutions facilitate cooperation and liberalization through building more stable expectations of reciprocity, increasing transparency and lowering information costs, and setting up mechanisms to resolve disputes and enforce agreements. Institutions do not, however, change the identity and interests of the state nor do they alter its essential functions and competencies. Instead, neo-liberal institutionalism rests on micro-economic foundations and a state-centric, rationalist approach to behavior. In part because of its reliance on classical trade theory and more recent work on public goods and strategic bargaining, neo-liberal institutionalists assign institutions less importance than do functionalists; in effect, regional institutions operate at the margins to generate incremental increases in trade and wealth that would otherwise go unrealized.

Taken together, functionalism and neo-liberal institutionalism offer considerable explanatory power and track well with the evolution of the EU, NAFTA, and APEC. Consistent with both approaches, substantial increases in intra-regional trade preceded the formation of regional institutions in Europe, North America, and the Pacific. These increases were principally market-driven and facilitated by proximity, historical and cultural ties, and other non-institutional factors. Institutions emerged as greater interdependence created a need for them. The gradual proliferation of the EU's institutional infrastructure and its autonomous and supranational character best fit a functionalist account. The institutions of the EU have taken on a life of their own, surpassing members states in the ambition of their agenda for integration. The European Commission continues to be one of the main engines behind the deepening of the union, pressing for more integration on many fronts. NAFTA and APEC fit better the neoliberal approach. Both bodies have focused primarily on reducing barriers to trade and investment and function principally as an intergovernmental forum for the negotiation and implementation of the relevant agreements. As they mature, however, NAFTA and APEC may follow in the footsteps of the EU and gradually acquire more developed institutional structures and broader competencies.

Functionalism and neo-liberal institutionalism thus provide important insights into why regional bodies form and how they evolve. Their account of regionalism is, however, incomplete. Institutionalism in its various guises has directed generations of scholars to examine the European Union and now regional formations in North America and the Asia Pacific largely in economic terms. This focus is understandable; after all, these institutions in design and function were created to promote economic integration. But missing from the study of these groupings has been broader consideration of their geopolitical consequence and their effect on security matters. Scholars have given some attention to the spillover effects of economic integration in the security realm and they have examined the potential peace-causing effects of interdependence. ₈ But they have failed to address in a more direct and systematic manner the implications of regional formations (other than alliances and groupings explicitly formed to address military matters) for questions of power politics and grand strategy.

There are three reasons for presuming from the outset that an alternative approach to regionalism promises to be worth the investment. First, even a cursory look at the policies and politics behind contemporary regionalism reveals a potent geopolitical agenda. To be sure, the primary activities of the EU, NAFTA, and APEC are in the realm of trade, and politicians generally build public support for these regional formations by touting their beneficial economic effects. But geopolitical considerations are ever present, even if national politicians give them less public attention.

Consider monetary union within the EU. Politicians and analysts alike make the case for a single currency in terms of its economic benefits. And EMU, as promised, will lower transaction costs and remove the market disturbances associated with exchange rate fluctuations. The primary impetus behind EMU, however, is coming not from ministries of finance or firms doing business in Europe, but from politicians concerned about the geopolitical structure of Europe. Lodging responsibility for monetary policy in a supranational authority and replacing national currencies with a single European one is to ensure that the national state -- and especially the German national state -- remains permanently embedded in broader European structures. EMU is first and foremost about preventing the return of national rivalries, not about wealth creation. As Chancellor Kohl himself has stated, "European integration is in reality a question of war and peace in the twenty-first century."

Similar arguments apply to NAFTA. The prospect of boosting cross-border trade and investment played a major role in building support for NAFTA and publics in all three member states were repeatedly apprised of the beneficial effects of the agreement on employment and growth. But other objectives also provided impetus. The United States was seeking to improve economic conditions in Mexico as a way of dampening the northward flow of migrants. NAFTA was also to help the Salinas government lock in political reforms which would promote long-term stability in Mexico. So too was the United States enhancing its bargaining leverage in Europe and East Asia by demonstrating its willingness to pursue regional approaches to trade liberalization. In turn, Mexico and Canada were seeking an important goal of their own: to rein in American power by subjecting U.S. policy to the moderating influence of a multilateral framework. ₉

The second reason for taking seriously the supposition that today's regional formations have geopolitical intent and consequence stems from the timing of their appearance. With the exception of the EU, regionalism was generally confined to the developing world during the Cold War. In the industrialized world, there was neither room nor need for regionalism; order was provided by the strategic divide between East and West, and trade flows followed. ₁₀ It is no coincidence that the spread of regionalism to the industrialized world comes on the heels of the end of the Cold War. Although NAFTA and APEC are far behing the EU in their level of development, these bodies represent the emergence of an alternative set of organizing principles for areas no longer defined by bipolar competition.

Data on trade flows bolster the assertion that the impetus behind regionalism goes beyond trade creation. Market forces and unilateral liberalization account for much of the increases in intra-regional trade and investment that North America and East Asia have enjoyed in recent decades. NAFTA and APEC were formed after significant liberalization and trade creation had already taken place. They promise to further liberalize trade among their members, but the welfare gains will be relatively limited because barriers are already low, especially in North America. ₁₁ The most significant unrealized gains are at the inter-regional level and it is among the large economies of the triad that institutionalized liberalization would have the greatest economic payoffs. The World Trade Organization notwithstanding, it is therefore curious that the main push toward institutionalized multilateralism remains at the intra-regional level - where it is less needed if need is measured in terms of trade creation. This conundrum reinforces the notion that the objectives and consequences of regionalism go well beyond promoting exchange.

The third hint that institutionalism provides too limited an account of contemporary regionalism stems from its failure to capture the strong community-building and identity-building components of regional projects. The institutionalist literature examines the tradeoffs between inclusion and exclusion in economic terms: whether the trade created through regional arrangements outweighs the trade diverted and whether regional groupings can benefit those included without discriminating against those excluded. But the exclusionary effects of regional bodies also operate at the level of community and identity. The EU, NAFTA, and APEC, to varying degrees and in different ways, are social formations. They constitute exclusionary in-groups and generate associated effects. The case of the EU is again instructive. The new democracies of Central Europe are keen to join the union not just to gain full access to Western Europe's market. At least as powerful is the desire for symbolic entry into the West and the sense of belonging and community that comes with it. In a similar but opposite effect, Switzerland and Norway remain outside the EU in part for economic reasons, but also because of identity politics and concern about preserving separation from a Europe that threatens their autonomy and distinctiveness.

Even though NAFTA and APEC are far behind the EU in terms of developing a regional identity, questions of community and cultural cohesion are already under debate. Whether called the "Asianization" of Asia or the development of an "Asian way," members of APEC are struggling to forge a sense of community among states still harboring suspicions and historical antagonisms. ₁₂ NAFTA has triggered its own bout of identity politics. Canadians, for example, already sensitive to the United States' cultural and political domination of North America, wondered whether NAFTA, in both symbolic and practical terms, might create too much community.

Regional formations are thus about power and identity as much as about exchange. Understanding regionalism requires a theoretical construct that is consistent with institutionalism and its focus on trade, but also captures the other important motivations behind and implications of regional groupings. Many students of regionalism have noted these other aspects of the phenomenon, but only in passing. Missing is a more systematic treatment of the geopolitics of regionalism. In the next section, I develop the notion of consensual empire to fill this conceptual gap.

Consensual Empire

Imperial formations possess four attributes that distinguish them from other types of international structures: 1) an assymetrical distribution of power reflected in a geographically-bounded center and a weaker periphery; 2) a hub-spoke structure of governance radiating outward from the power center to the periphery; 3) a pattern of evolution in which trade and investment precede the extension of strategic commitments; 4) a system of governance that includes a socializing, identity-building component aimed at facilitating the integration of core and periphery into a common, transnational political space.

A geographical core is the anchor of empire. A power center is the starting point for constructing a hierarchical system of order; it grounds authority in the resource asymmetries that distinguish metropole from periphery. The core must enjoy uncontested preponderance. If not, competition among rival power centers is likely to give rise to a balance-of-power setting rather than an imperial formation. The periphery is peripheral precisely because of its inferior resources. It bandwagons with the core because balancing is not an option.

Imperial cores exercise influence over their peripheries by erecting structures of governance that radiate outward in a hub-spoke pattern. Influence is wielded through both inducement and coercion. On the one hand, the core acts as a magnet, drawing the periphery toward the center through the prospect of gains in wealth and security. On the other hand, the core's preponderance enables it to threaten punishment in response to challenges to its authority. The degree of control that the metropole exercises over the periphery varies widely. Formal empire entails the periphery's complete loss of sovereignty to the core. In an informal empire, the core exercises considerable influence over foreign and domestic policy in the periphery, but peripheral agents maintain some degree of autonomy. Dependence is different from informal empire in that it refers to an isolated relationship between the metropole and a peripheral state. Dependence develops into informal empire when the core builds patterned, regularized relationships of asymmetrical influence over multiple peripheral states - that is, when individual core-periphery contacts are replicated and cohere into an institutionalized hierarchical order. ₁₃

The third attribute of an imperial formation is that it be, or at least appear to be, a paying proposition for the metropole. The prospect of economic gain provides the initial impetus for a power center to construct an empire. Strategic interests indeed play a powerful role, but they take their cue from economic interests; the flag follows trade rather than vice versa. This causal chain is what distinguishes imperial formations from alliances. ₁₄ NATO, for example, possessed many attributes of empire during the Cold War. But it was formed as a collective defense organization; economic interests were by no means absent, but they evolved in the context of an alliance framework. Trade followed the flag. ₁₅ The distinction between alliance and empire is consequential. Empires are inherently less cohesive than alliances because they do not enjoy the degree of integration engendered by a common external threat. Empires are also more cost-sensitive; unable to rely on their potent protective functions to justify public sacrifice, elites must rely more on economic arguments.

The fourth attribute of an imperial formation is its social character. The construction of an empire entails the nurturing of a sense of community and common identity between core and periphery and among peripheral states themselves. An empire is not just a hierarchical international order, it is also a hierarchical international society, even if in only nascent form. A shared sense of identity and the construction of a common political and economic space make imperial cohesion and governance easier. Imperial structures that enjoy a certain legitimacy need to rely less on explicit inducement or coercion. The nurturing of a sense of community usually involves the core's co-optation of elites in the periphery and, via these elites, the penetration of peripheral society through markets and administrative structures. Metropolitan emissaries and coopted elites together become purveyors of imperial values and identity at the local level.

It is the social character of an empire that distinguishes it from the formation resulting from mere conquest and occupation. A power center that forcibly occupies a periphery and extracts its resources does not constitute an empire; it lacks the requisite political structures and sense (or pretense) of community. At the same time, the social character of an imperial formation can only go so far; empire is bounded at the other end of the spectrum by the metropole's need to maintain its assymetrical relationship with the periphery. The political community engendered by an imperial formation thus differs from a federation or confederation in that the core remains preponderant and devolves only limited powers to the periphery. In addition, empires usually span social attributes that Ernest Gellner aptly calls "entropy-resistant" - physical, linguistic, and cultural differences that prevent the construction of a common identity powerful enough to transfer primary political loyalties to a supranational political space. ₁₆

Modern Imperial Formations

Classical empires enjoyed their heyday during the long era in which formal metropolitan subjugation of the periphery was legitimate and consistent with prevailing practice; self-determination had not yet become a widely recognized international norm. So too did the constituents of state power lend themselves to the construction of formal empire. Direct control of the periphery made good sense when the land, labor, and raw materials that could be extracted from imperial possessions enhanced the metropole's strength.

If the notion of empire is to be relevant to contemporary international politics, it must be updated. While preserving the four principal attributes of empire, the concept needs to be refined to reflect changes in prevailing norms and in the constituent elements of state power. Formal empire has been delegitimated; the overt coercion and intrusion it entails now run against the grain of widely accepted norms. And formal empire no longer brings the economic benefits that it used to.

The consensual nature of modern imperial formations represents the most significant break with the past. Unlike during the era of classical empire, today's imperial structures rest on a willful bargain between core and periphery. The metropole agrees to bind itself and subject its behavior and the exercise of its power to the constraints of a multilateral framework arrived at through negotiation with the periphery. In return, the periphery voluntarily enters into the metropole's zone of imperial influence.

Several factors make this bargain appealing and necessary. Elites in both core and periphery win legitimacy for the regional order they construct by ensuring that it is -- or at least appears to be -- consistent with principles of democratic governance and self-determination. This bargain does limit the core's room for maneuver, but the payoffs are worth the investment; the metropole is able to erect regional arrangements that, because they are based on consensus rather than coercion, are cheaper and less likely to trigger resistance than the order associated with traditional empire. At the same time, the core remains the dominant partner and is thus able to shape an imperial formation consistent with its interests.

From the periphery's perspective, exposing the core to the moderating constraints of a multilateral framework offers a means of containing its power. The core's willingness to engage in self-binding reassures peripheral states about its intentions and increases the likelihood that metropolitan influence is exercised in a benign manner. Peripheral states recognize that they will be subject to the core's preponderant power regardless of their strategy. Making a consensual deal with the metropole gives peripheral states at least some influence over the core as well as input into the nature of the regional order that emerges.

The second key difference between classical and modern imperial formations stems from the fact that contemporary states are more sensitive to the costs and benefits of empire than were states during earlier eras. Because modern empires are based on a consensual bargain, exit becomes an option for the periphery. If the periphery senses that it is no longer reaping benefits or that the core is not honoring its commitment to self-binding, it can opt out. The consensual character of modern empire thus cuts both ways. It enhances the stability of imperial formations because peripheries participate willfully. But that willful bargain also provides them the option of exit and thus encourages them to be more sensitive to costs and benefits.

Metropolitan centers too will be much more cost-sensitive than in the past. Whether formal empire once paid or its alleged benefits to the metropole were only a myth, powerful states now tend to see foreign commitments more as liabilities than as assets. Recent history has played an important role in bringing about this reevaluation of the benefits of empire. The great colonial empires of the early twentieth century collapsed in part because metropolitan centers became unable to support the wide range of commitments they had acquired. ₁₇ So too were the two great powers of the late twentieth century chastened by costly and futile attempts to maintain order in their respective peripheries. ₁₈ Shifting perceptions of the benefits of empire have also been brought about by a changing evaluation of the components of state power. Technology, efficiency, and productivity have replaced land and labor as the key determinants of power, making trade and investment far more effective tools of statecraft than territorial conquest. ₁₉

The increasing cost-sensitivity of the metropole in practice means that imperial formations are likely to suffer from too little metropolitan engagement, not too much. Rather than unraveling because cores exercise too much control over their peripheries -- as they did in the past -- consensual imperial formations are likely to fall prey to the indifference of cores, their self-binding, and their unwillingness to make the sacrifices needed to maintain order in their peripheries. The recent history of the Balkans bears out these generalizations. At the turn of the last century, Europe's great powers raced to carve up the collapsing Ottoman and Hapsburg empires, often decreasing their own security through excessive engagement. At the end of this century, Europe's powers have done all they can to stay out of the Balkans, decreasing their own security through too little engagement. In today's consensual empires, isolationism will be a far more potent risk than overcommitment.

The final difference between classical and modern empires follows logically. Unlike during the era of classical empire, when metropoles often extended their reach over far-flung possessions of dubious economic or strategic value, modern imperial formations are more likely to exclude the have-nots. If imperial formations are to be paying propositions, they will likely tie industrialized nations to each other and to their developing peripheries, but not to areas of the globe that offer little prospect of economic gain or threaten to burden the metropole with distant strategic commitments. Because of the trade advantages and more direct security interests associated with proximity, these formations are likely to be regionally based and contiguous. The participation in these formations of states that are far afield will be the exception, not the rule.

These observations have two implications for the stability of modern imperial formations. First, modern empires will be groupings of the wealthy and soon-to-be wealthy. There will be less income disparity than in traditional empires and more complementarity among the national economies of participating states. These features constitute good news for states that become members of the club, but bad news for the least developed areas of the globe -- which are likely to be ignored. Second, the absence of far-flung appendages decreases the likelihood of geopolitical competition among imperial cores. If metropolitan centers tend to erect zones of influence in their own backyard rather than in each other's, one important element of past imperial rivalry will be eliminated.

Distinguishing Consensual Empire from the Conceptual Competition

Comparing consensual empire with four competing concepts -- regimes, hegemony, empire by invitation, and security community -- clarifies the notion's distinctiveness and analytic utility.

Regimes. Regimes appear to share considerable conceptual ground with consensual empire. At the heart of both notions is a set of rules and practices that endow the international system with order. This order emerges through a process of negotiation. Parties to the bargain abide by the rules they agree upon because doing so furthers their wealth and security. The similarities stop here, however. Beneath the surface, regimes and consensual empire differ as to their starting assumptions about the key units in international politics, the mechanisms through which order emerges, and the prescriptive implications that follow.

Regimes are predicated upon a state-centric view of the international arena. The structure of the international system and hence the dynamics within it are a function of the distribution of power among states. Consensual empire takes regional concentrations of power to be the key units in the international arena. These regional concentrations define the structure of the international system, and the dynamics of the system are a function of power relations both within and among these regional formations.

Regimes mitigate international anarchy by increasing the ability of states to pursue their interests through cooperative behavior. State interests and the identites they devolve from remain unchanged, as does the international structure in which states operate. Instead, regimes increase the penalties for defection and the rewards for cooperation, using the prospect of joint gains to induce states to abide by a network of shared norms and procedures. The European Union, for example, has effectively removed national rivalry among its members by providing rules of the road, increasing transparency, and fulfilling other functions that diminish fear of exploitation. ₂₀

Consensual empire functions at a more fundamental level. It promotes cooperation by altering international structure and redefining the geopolitical environment in which states operate. It provides order by manipulating state identity and interests, not just by changing payoffs. Anarchy at the intra-regional level is mitigated as state units are submerged into a hierarchical regional order. Anarchy at the inter-regional level is mitigated by the self-binding nature of consensual imperial formations. From this perspective, the European Union has removed rivalry among its members principally by endowing Europe with a unipolar rather than a multipolar structure. EU member states cooperate with each other not because of increased transparency or lower transaction costs, but because they no longer conceive of themselves as operating in a competitive, multipolar environment. Germany and France calculate their interests not as hard, egoistic national states, but as a coalition that serves as Europe's collective core. In similar fashion, smaller states attach themselves to this core because they see it as central to a political construction that renders benign the continent's power center. Profound changes in state identity both make possible and follow from this reformulation of Europe's geopolitical structure.

Finally, the notions of regime and consensual empire differ as to their prescriptive implications. If, as institutionalists would claim, regimes are the key to international cooperation, constructing order entails the proliferation and deepening of international institutions. Extending the shadow of the future, increasing transparency, enhancing expectations of reciprocity -- these are the essential antidotes to anarchy.

This approach to mitigating anarchy constitutes a sideshow from the perspective of consensual empire. Of far more importance is the transformation of international structure through willful agency. A multipolar Europe becomes a unipolar Europe when its key agents conceive of, construct, and embed themselves within an imperial formation. They key challenges for policy makers are therefore effecting the coherence of a pluralistic core and a surrounding periphery, sustaining the core's capacity to engage in self-binding, and bringing about changes in state identity that permit this structural transformation and enhance its durability.

Hegemony. According to hegemonic stability theory, "order in world politics is typically created by a single dominant power." A power is considered hegemonic when it enjoys effective control over raw materials, sources of capital, and markets, and has competitive advantages in the production of highly valued goods. ₂₁ The notion of hegemony shares considerable ground with that of consensual empire. Both posit that preponderant centers of power are the anchors of international order. The order that emerges is managed through informal governance structures, not through direct control or coercion. Material incentives and the prospect of joint gains are the principal inducements behind cooperation and the willingness of states to conform to a rule-based order.

But hegemony and consensual empire differ in two critical respects. First, they are based on different logics. Hegemonic stability theory operates according to the logic of public goods. A hegemon constructs an international order conducive to its interests and provides the public goods necessary to sustain it. Smaller powers submit to this order either because they benefit by free riding on the hegemon (the benign version of the theory) or because they are forced to submit (the coercive version). Declining preponderance weakens hegemonic order because of the hegemon's diminishing ability to supply the public goods in question. ₂₂

Consensual empire emerges not from the hegemon's imposition of order, but through negotiation between the core and its surrounding periphery. The result is a hierarchical order that is more multilateral in spirit and practice than that envisaged in hegemonic stability theory. Furthermore, the formation serves to check and moderate the influence of the hegemon more than to maximize its power. Indeed, smaller states enter the formation because the bargain they strike entails the core's self-binding, not because they are free riding or coerced into participation. In this sense, and contrary to hegemonic stability theory, a weaker and pluralistic core may well lead to a more cohesive and durable imperial formation than a stronger, amalgamated one. The less preponderant the core, the more it needs to rely on bargains to establish order and the less fearful smaller states are of exploitation due to gross power asymmetries.

Daniel Deudney's concept of negarchy provides further insight into the competing logics that distinguish hegemonic stability from consensual empire. ₂₃ Hegemony relies on a conventional notion of hierarchy. A core overcomes anarchy by relying on its preponderant power to establish a hierarchical order. Consensual empire overcomes anarchy by mixing traditional hierarchy with elements of negarchy -- order that emerges through self-binding, through the constraint and moderation of power rather than its unfettered exercise. Like the U.S. constitution, which uses "particular configurations of negatives" and an "elaborate system of power-constraint devices" to establish domestic order, consensual empire relies on a system of negotiated checks and balances to establish international order. This mix of empowerment and disempowerment, of hierarchy and negarchy, is at the heart of the logical distinction between consensual empire and hegemony.

The two notions also differ in terms of the discrete mechanisms through which they sustain order. Hegemonic powers concern themselves exclusively with the foreign policies of the states over which they hold sway. In contrast, imperial control extends as well to the domestic policy of peripheral states. ₂₄ The engagement of imperial formations in domestic politics is in part what endows them with their social character.

During the era of classical empire, the metropole usually took control of domestic affairs in peripheral states simply by posting its agents in the periphery and tasking them with governance. Because such blatant wresting of sovereignty is no longer consistent with prevailing international practice, modern empires influence domestic politics through more subtle mechanisms. The experiences of the EU, NAFTA, and APEC point to at least five mechanisms through which consensual imperial formations penetrate the domestic sphere.

First, by creating external pressure to liberalize foreign economic policy, regional formations strengthen liberal, outward-oriented domestic coalitions. ₂₅ The prospect of entry into a trade regime creates a domestic demand for elites favoring integration into the international economy. Successful entry also provides them with political payoffs when integration leads to improvements in national economic performance and living standards. This form of domestic influence is particularly important in states in the midst of transition -- such as in Eastern Europe -- where liberal coalitions seeking to implement political and economic reform face stiff challenges from conservative nationalists of various stripes.

Second, modern imperial formations strengthen the hand of liberalizing coalitions by locking in through agreement with other states their plans for domestic reform. Liberalizing elites can respond to criticism at home by arguing that their hands are tied; external obligations necessitate domestic reform. Mexican President Salinas, for example, saw NAFTA as a vehicle for providing him this type of domestic bargaining power. ₂₆

Third, because modern imperial formations tend to make participation contingent on a state's willingness to uphold certain standards of domestic behavior, they constitute a mechanism for inducing elites to comply with international norms of conduct. The more advanced the imperial formation, the more domestic convergence is expected. The European Union, for example, has made clear to prospective members in Central Europe that democratic governance and the protection of minority rights are necessary conditions for entry. Local elites have become accountable not just to their electorates but to monitors in Brussels. This conditionality appears to have been effective in encouraging leaders in Central Europe to protect minorities and to avoid playing the nationalist card. ₂₇

Fourth, the bargain that lies at the heart of consensual empire provides cover for more blatant episodes of domestic intervention. When viewed as part of a broader multilateral deal, such episodes do not appear as explicit usurpations of sovereignty -- as they might if taken in isolation. Consider Europe's decision to introduce a single currency. The Deutsch Mark has for decades been Europe's dominant currency. On the surface, introducing the Euro diminishes Germany's preponderant monetary power and invests a supranational body with authority over the EU's monetary affairs. In effect, however, EMU enhances German leverage. To qualify for participation in the single currency, states must adhere to monetary and fiscal policies that parallel Germany's own. EMU thus masks rather than diminishes German power and requires prospective members to refashion their political economies in Germany's image. But because it comes at the behest of the EU, not of Germany, and symbolically ends the Mark's reign, it enjoys the support of European governments. ₂₈

Finally, imperial formations affect domestic politics in member states by nurturing an entrepreneurial middle class with vested interests in liberalization and economic integration. This middle class effectively takes on the role of the collaborator in classical empire; it provides local agents whose personal interests coincide with the interests of the imperial formation. These agents are different from classical collaborators in two respects. First, they are coopted by the market rather than by imperial examination and appointment. Second, the metropolitan emissaries with whom they deal are for the most part employed by multinational corporations rather than by the metropolitan government. Nevertheless, they prosper through their position as intermediaries and tend to become an important base of support for the liberalizing coalitions that favor integration. ₂₉ In this respect, the eastern enlargement of the EU should help nurture and broaden a moderating and stabilizing middle class in post-communist societies. Similar aspirations for countries such as Mexico and China figured into U.S. support for both NAFTA and APEC.

Security Community. Consensual empire also parts company with the notion of security community developed by Karl Deutsch. ₃₀ A security community is a grouping of states among which war has become unthinkable. Through prolonged and repeated contact along many dimensions, states develop a sense of commonality and community that eventually removes armed conflict as a tool of statecraft. The emergence of a shared "we-ness" sublimates the self/other distinctions that fuel rivalry and war.

Consensual empire differs in two respects. First, security communities take shape as an uninteded consequence of inter-state contact. The development of a non-war grouping of states is a bottom-up phenomenon that entails progressive cognitive evolution. In contrast, consensual empires are the result of top-down efforts to construct order. They are less about cognitive change and the development of a common identity and more about material power and how to manage it. Second, security communities are far more evolved international formations than are consensual empires. Unlike security communities, imperial formations can consist of states that still harbor animosities toward each other. These states agree to set aside their differences in order to realize joint gains. Their relationship may develop a social character emerging from participation in a common political space. But conflict among them is not unthinkable. Rather, other tools of statecraft have become more effective in resolving disputes. Over time, the states that comprise a consensual empire may eventually attain a level of common identity consistent with a security community. But that degree of we-ness would constitute a bonus, an added dimension of cohesion, and not an essential ingredient of the imperial formation.

Empire by Invitation. Geir Lundestad introduced the concept of empire by invitaiton to characterize America's relationship with Europe during the Cold war. ₃₁ In contrast to classical empire, in which the metropole imposes its will over a periphery that has little say in the matter, the pax Americana of the post-World War II era emerged at the behest of a threatened Western Europe in search of a protector against the Soviet Union. Consensual empire emerges neither from the metropolitan coercion associated with classical empire nor from the peripheral need associated with empire by invitation. Instead, both parties stand to gain from participation in an imperial formation, but both are also reluctant to accept the commitments and constraints associated with that formation. Hence the ambivalence exhibited by both core and periphery and the slow, evolutionary process of empire formation that has characterized the construction of the EU, NAFTA, and APEC. Precisely because the bargain that lies at the heart of these regional formations emanates from neither the core nor the periphery, but from negotiation between the two, consensual empire represents a novel and modern imperial form.

The EU, NAFTA, and APEC as Consensual Empires

Having developed the notion of consensual empire, I now examine the extent to which the EU, NAFTA, and APEC fit the model. I argue that the EU and NAFTA, in both their design and their function, constitute modern imperial formations. In the case of APEC, the model represents a desirable trajectory for its future more than a description of its past or present.

The EU

The EU has all four of the main characteristics of a classical empire. First, it has a geographically bounded power center: the Franco-German coalition. Since the early post-World War II years, France and Germany have forged an ever closer partnership, merging their influence as well as their resources to guide the evolution of the EU. Because the EU's power center consists of two states, it has a pluralistic as opposed to an amalgamated core. This power center enjoys material prepondence within the union. Its GDP is roughly three times larger than that of any other single member of the EU. Indeed, its GDP is 80% of all other EU members combined. The core's military preponderance is less pronounced than its economic preponderance, in large part because the legacy of World War II induces Germany to continue to maintain a relatively small military establishment given the size of its population and economy. France-German defense spending represents roughly 83% of that of all other EU members combined. ₃₂

The material preponderance of the Franco-German core is reflected in the EU's structure of governance. Despite formal institutions that seek to diffuse authority across member states, most decisions within the EU arise from agreements struck between France and Germany. The union's major initiatives -- the single market, EMU, institutional reform, enlargment -- have emanated from Paris and Bonn, not from other European capitals or from Brussels. Indeed, if EMU proceeds as planned, what has been a de facto core will become a de jure core: France, Germany, and a handful of smaller states will form a privileged group within a multitiered union.

The extent to which the EU's structures of governance radiate outward from a wealtheir core to a poorer periphery will also become more explicit with the introduction of a single currency. From the outset, the centrifugal force drawing the periphery toward the core has been provided through both inducement (the rewards of inclusion) and threat (the punishment of exclusion). In economic terms, participation in the EU has entailed access to the single market as well as the benefit of direct side-payments from wealthier to poorer members. In political terms, participation provides members a voice and a place in the construction of Europe, with its associated implications for common defense and other aspects of integration that go beyond economic exchange. Exclusion, on the other hand, entails not just foregoing the economic gains, but remaining outside the dominant political formation and ordering structure in Europe.

Trade concerns led the way in the construction of the EU, conforming of the model of classical empire. The flag of Europe followed trade and investment flows, rather than vice versa. Although the original architects of Europe believed that economic integration would have peace-causing effects, the prospect of material gain has been the engine and the main selling point behind the steady advance from economic community, to single market, to single currency. To be sure, economic integration has had important security externalities. At the informal level, years of close cooperation have transformed former adversaries into partners that enjoy unprecedented levels of trust and reciprocity. At the formal level, even though EU members continue to rely heavily on NATO, the union has made halting steps to increase its responsibilities in the realm of foreign and defense policy. Nevertheless, the EU parallels traditional empires inasmuch as it portrays itself as a paying proposition and strategic commitments take their cue from economic considerations.

The EU also has a distinct community-building and identity-building component consistent with classical imperial formations. It has the symbolic prerequisites: a flag and soon a common currency. It supports a host of programs aimed at nurturing a common identity. The SOCRATES program, for example, funds student exchanges and is meant to add a European dimension to national education systems. The proliferation of a European bureaucracy with its own career path and incentive structure parallels the powerful colonial bureaucracies of classical empire. And the European Parliament, in its existence as well as in its limited powers, is not unlike the quasi-representative bodies of the British Commonwealth or of other classical empires. At the same time, liguistic and cultural differences constitute natural barriers to European federalism, suggesting that the EU will run up against the same constraints on amalgamation faced by multicultural empires.

While possessing the main characteristics of a traditional imperial formation, the EU also has the distinguishing features of a modern, consensual empire. Embedded in the successive treaties aimed primarily at liberalizing trade is a central bargain far more profound in its implications for Europe than the free exchange of goods. Europe's core has agreed to bind itself and subject its power to the constraints of a multilateral structure in return for the periphery's willing entry into that structure. From its origins as a coal and steel community, the ECSC was to put under joint control the war-making resources of Europe's main states, thereby neutralizing German power and melding it with that of France. Europe's smaller states benefit not just because they reap the rewards of more vibrant trade and, in some cases, side-payments, but because the deal reassures them that German power will manifest itself in benign ways -- for the good of Europe, not just for the good of Germany. German foreign policy since the 1950s, in close linkage with that of France, has been to deepen and extend this central bargain. By embedding its power in a structure larger than the national state and making clear its willingness and ability to enter into self-limiting deals, Europe's most powerful state made possible the successive bargains that are the essence of consensual imperial formations.

These bargains have taken many forms during the course of the EU's evolution. Two contemporary initiatives are illustrative. Germany now supports the extension of qualified majority voting to a larger number of issues, including foreign policy. In doing so, Germany is deliberately limiting its own power and could find itself being outvoted on a range of issues. In return for this self-binding and loss of autonomy, however, Germany ends up strengthening and deepening the consensual imperial formation that is essentially of its own making. German support for monetary union and the establishment of a European Central Bank follow the same logic. On paper, Germany will hand over control of its monetary policy to a supranational authority that governs through consensus and that is politically independent. Other European states will have greater input into monetary issues and the Euro, not the Mark, will be Europe's dominant currency. In reality, however, Europe's core will end up with economic policies crafted in Germany's image. Indeed, the criteria for participation in the single currency are leading to a broad convergence on both monetary and fiscal policy -- along the lines of the German model. Germany thus gives up a degree of autonomy, but ends up with a political construction in Europe consistent with its interests. Smaller powers play along both because they benefit materially and because they enter into a structure that moderates and renders more benign the behavior of Europe's power center.

The EU also exhibits the second main feature of modern imperial formations: that the metropole is more cost-sensitive and more restrained in taking on foreign commitments than during the era of classical empire. Germany's constitution continues to put limits on how and where its forces are used. A political battle was required to win the Bundestag's support for even the limited task of providing logistical support to NATO forces in the Balkans. The inability of the EU to make progress in forging a common foreign policy -- the WEU remains in a nascent phase of development and the EU failed decisively when it sought to address on its own the war in Bosnia -- illustrates that the union suffers more from the underprovision of engagement and leadership than from the overprovision and overcommitment characteristic of classical empire. Germany's support for the enlargement of NATO constitutes the single exception to its general reluctance to assume new defense responsibilities. But its position on NATO stems less from a willingness to broaden its external commitments than from a desire to ensure that it is not left on its own to consolidate a zone of stability to its east.

The incorporation of France as part of a pluralistic European power center facilitates Germany's ability to be an underprovider of security. Germany and France have arrived at a division of labor in which Bonn serves as the engine behind economic integration while Paris focuses more on political-military issues. France's force projection capabilities, its willingness to use them, and its nuclear weapons make it well suited to this role. Nevertheless, France's inclination toward leadership and force projection does not fully compensate for Germany's lack thereof. Indeed, Germany's cautious predisposition usually trumps France's more active leanings. In addition, much of Paris' appetite for intervention is directed toward former colonies in Africa, not toward Europe's immediate periphery. On balance, the EU's power center promises to continue its strategic stinginess and to remain reluctant to take on increased commitments.

The third feature of consensual empire is also present in the EU -- that membership is extended principally to wealthier, contiguous states. Europe has gone through several waves of enlargement since its initial six members formed the ECSC. Enlargement has gone most smoothly when the new members already possess a level of economic development close to that of existing members -- such as the accession of three EFTA countries in 1994. The entry of poorer countries in Europe's south proceeded more slowly and the EU continues to push into the future its plans for bringing in the new democracies of Central Europe. Furthermore, although the EU has formalized its economic relationship with Turkey and has developed a set of informal ties with states in North Africa and the Middle East, these states are not likely candidates for membership. Full membership promises to remain restricted both to Europe and to the haves, excluding the poorer states in Europe's periphery.

NAFTA

Despite its recent formation and its rudimentary institutional infrastructure, NAFTA possesses the four main attributes of a classical imperial formation. It has a preponderant power center. American GDP is five times that of Canada and Mexico combined, while U.S. military expenditure is twenty-seven times that of its neighbors. ₃₃ The preponderance of the core is accentuated by the fact that, unlike the EU's pluralistic core of Germany and France, NAFTA's core is amalgamated -- it exists of a unitary state that combines both economic and military superiority. Amalgamated cores, because they are free of the checks and balances and division of labor associated with pluralistic cores, are able to wield their power resources with fewer constraints.

The hub-spoke pattern of governance embodied in NAFTA lacks the formality and institutionalization that characterizes core-periphery relations in the EU. Except for a limited number of specific issues identified in the formal agreement (such as dispute resolution and environmental regulation) that are dealt with through an established procedure, the centrifugal relationship between core and periphery results primarily from patterns of behavior that have evolved naturally as a result of power asymmetries. The U.S. market, because of its sheer size, acts like a vortex, drawing inward both Mexico and Canada. These two peripheral states, for example, send some 70% of their exports to the United States, while the United States sends to its two neighbors only 25% of its exports. ₃₄ Geography and the operation of the market expose Mexico and Canada to America's preponderant power. NAFTA represents the periphery's decision to structure and control these asymmetries by design, rather than to let them operate by default.

Canada and Mexico have not always dealth with U.S. preponderance by willfully submitting to American power and seeking to modify its conduct. During the Cold War, in part because U.S. attention and power were concentrated elsewhere, Canada in particular attempted to balance against and diffuse U.S. power by developing linkages to extra-regional states and multilateral fora. NAFTA represents a considered shift to a policy of bandwagoning, in which both Canada and Mexico have decided to enter willingly an imperial formation centered around the United States, thereby obtaining some leverage over, as opposed to resisting, U.S. power. ₃₅

As in classical empires, economic considerations were the engine behind and paved the way for NAFTA. In contrast to the EU, where political institutions played an important role in shaping market forces, regionalism in North America was largely market-driven, with institutions following from and not preceding high levels of economic integration. ₃₆ Taking the next step to institutionalize a free trade zone had clear economic benefits for all parties -- and the agreement was sold to the necessary domestic constituencies on that basis. In addition, the United States was using the prospect of hemispheric regionalism as a veiled threat to encourage Japan and Europe to move forward on the Uruguay Round. ₃₇

Under the cover of economic liberalization and joint welfare gains, however, loomed broader strategic objectives. The United States was seeking not just reciprocal market access, but also a framework for dealing with a host of other issues. NAFTA was to lock in political and economic reforms in Mexico, making America's southern neighbor a more stable and predictable partner. Stability and economic growth would help stem the tide of immigration and provide better conditions for fighting drug trafficking. The agreement also contained measures for environmental clean-up and protection. Looking outward from the core, NAFTA thus represented much more than a trade agreement. As Andrew Hurrell remarks, regionalism in North America is "part of a broader rethinking of relations with the USA which has important strategic and geopolitical implications and whose institutional consolidation would amount to the creation of a new hemispheric order." ₃₈

Building community and a shared identity plays a more subtle and complicated role in NAFTA than in the EU. NAFTA has none of the trappings of supranationality generated by the EU -- no flag, no standing bureaucracy or parliament, no ambitious educational exchanges, and no explicit effort to nurture a common political identity. Part of the reason is that NAFTA members do not share the interest of many EU members in moving from inter-governmental to supranational regionalism. But the difference is also due to the fact that American power and culture so dominate North America that Canada and Mexico have a "love-hate" relationship with the United States. Canada is drawn to the United States by virtue of a similar history, culture, and phase of economic development. The United States also exerts in Mexico a powerful economic and cultural magnetism. And NAFTA represents Mexico's decision to pursue a developmental path that will bring it closer to the North American model.

At the same time, however, both Canada and Mexico sense a need to protect their cultural autonomy and independence. One of the most contentious areas of dispute between the United States and Canada concerns Ottowa's efforts to limit the broadcast of American programs on Canadian television stations. ₃₉ So too do Canadians when they travel abroad go to great lengths to make clear they are Canadians, and not Americans. Mexico has its own brand of anti-American sentiment associated with decades of U.S. meddling in the internal affairs of Mexico and their southern neighbors.

NAFTA possesses not just the features of an imperial formation, but also one that is consensual. Its foundation is a central bargain between a preponderant core looking to draw its periphery into a regional order and a periphery looking to tame and moderate the behavior of the core. Canada and Mexico could do nothing to change the asymmetries in their relationship with the United States, but they could make a deal to restrict U.S. unilateralism and embed U.S. power in an institutional framework with clear procedures for impartial settlement of disputes. As Haggard and Fishlow put it, NAFTA reflected the "the efforts by weaker countries to bind the United States to clear rules." NAFTA was not about the unadorned exercise of American hegemony. ₄₀ That the original idea for and impetus behind the agreement came from Mexico underscores the consensual nature of the deal being struck.

NAFTA also exhibits the second feature of consensual empire -- a core that is reluctant to take on foreign commitments and is looking for less expensive and less intrusive ways to exercise influence in its periphery. America's military intervention in Haiti in 1994 notwithstanding, the end of the Cold War and isolationist strains in U.S. domestic politics raise questions about the willingness of Americans to put their lives on the line to maintain order in their periphery. At a minimum, NAFTA makes clear that the United States is developing a portfolio of policy instruments for intervening in the domestic affairs of its neighbors through other than military means. The Clinton administration eventually took steps to rescue the plunging peso in 1995, but not without making a deal that gave the United States considerable control over Mexican finances. NAFTA itself was intended to have powerful domestic effects in Mexico. It was to lock in Salinas's political and economic reforms, strengthen the power of liberal political forces by widening the middle class, and attract foreign capital to Mexico, which would in turn bolster the economy and liberal political forces. ₄₁ NAFTA was to a considerable extent a vehicle for recasting Mexico's political economy in America's image -- without resorting to coercion or the more intrusive forms of intervention associated with classical empire.

Finally, NAFTA constitutes a modern imperial formation inasmuch as it is a grouping of haves rather than have-nots. The door may eventually open to other members, but only after the economic benefits are apparent. For now, the club is restricted to the larger, more developed economies of North America. NAFTA promises to remain a contiguous regional grouping and to shun the more extensive -- and less profitable -- bouts of imperial expansion associated with classical empire.

APEC

APEC is still in a very formative stage. Its members hold annual meetings at the ministerial level and have agreed in principle to work toward the elimination of trade barriers by 2020. But they have deliberately avoided the formality and the institutionalization that characterize the EU and, to a lesser extent, NAFTA. Because APEC is so loosely configured and in such an early stage of development, it would be premature to characterize it as an imperial formation. Accordingly I will argue in this section that APEC has the makings of an imperial formation, although it falls short in several important respects. The notion of consensual empire thus serves a prescriptive as well as a descriptive purpose, outlining a desirable trajectory for APEC and suggesting how it might most usefully develop in the years ahead. took steps to rescue the plunging peso in 1995, bu

APEC's power center is located in northeast Asia. It consists of Japan and, increasingly over time, of China, a country that is coming on line as a major power in Asia. ₄₂ APEC's core bears some resemblance to the EU's. It is pluralistic rather than amalgamated. And it involves a division of labor between its two constituent states. Like Germany, Japan defines itself as a civil and economic power and its constitution limits the scope of its defense responsibilities. ₄₃ Like France, China is a nuclear power and does not shy away from relying on military capabilities as a manifestation of national strength.

An important difference, however, distinguishes the European core from its Asian counterpart. In contrast to Germany and France, which enjoy close relations and high levels of integration, Japan and China represent a pluralistic core that has not yet cohered. While the reconstruction of Germany entailed its integration into Europe as well as into the Atlantic community, Japan's reconstruction entailed primarily its extra-regional integration. As a result, Japan's relations with many of its neighbors, including China, remain strained and distant. Japan and China have yet to agree on the broad outlines of an acceptable regional order. Far more than the Franco-German coalition, APEC's core relies on an American presence to keep in check residual suspicions and animosities that might otherwise rise to the surface and trigger competitive balancing between its two constituent states.

A Sino-Japanese core, to the extent it exists, enjoys an uncontested preponderance of power in East Asia. The core's combined GDP is 3.8 times the GDP of all other Asian members of APEC combined. Defense expenditures in Japan and China amount to 1.6 times what other regional states combined spend on defense. ₄₄ In the context of political cleavages and residual animosities that are far more pronounced than in Europe or North America, such asymmetries have to some extent stood in the way of regional integration. ASEAN members, for example, resisted both the establishment of APEC and its institutionalization because of fear that their autonomy would be lost and their concerns ignored in a regional formation that includes such a preponderant core. The combined GNP of all ASEAN members, for example, is only 10% of Japan's. Without greater assurance that the core will exercise its influence in a benign manner, East Asia's smaller states continue to oscillate between balancing against and bandwagoning with the region's center of power.

A hub-spoke pattern of governance has emerged among the Asian members of APEC, but it operates informally and without the institutions of the EU or the rules and procedures of NAFTA. The absence of more developed structures of governance results not just from the desire of APEC members to keep the body loose and informal. The legacy of World War II stunted regional integration, both because of mistrust of Japan and because U.S. policy drew Japan into the global economy at the expense of its regional ties. ₄₅ It was not until the marked appreciation of the Yen in the mid-1980s that Japan began to invest in and trade heavily with its Asian neighbors.

Scholars continue to debate the causes and implications of the intra-regional trade and investment flows that have emerged in East Asia during the past decade. Some argue that Japan has deliberately sought to establish itself as a "regional economic hegemon." ₄₆ Others argue that market forces -- the outward flow of Japanese FDI and rapid growth in the region's developing economies -- naturally produced a regional economy with Japan at its center. ₄₇ There is general agreement, however, that Japanese investment and the economic expansion and trade flows it has triggered have led to a hierarchical economic order within the region. Industrial and corporate structures in developing Asian countries are emerging along the Japanese model. ₄₈ Capital flows have facilitated technology transfer, enabling the rising economies of the region to produce manufactured goods as Japanese firms move on to compete in areas of increased technological sophistication. This move toward deeper regional integration has not come at the expense of East Asia's extra-regional ties; the United States remains an important trading partner and source of capital. ₄₉ But Japan has incrementally established patterns of interdependence and influence in the region that resemble the core-periphery hierarchy of an imperial formation.

Trade has clearly been leading the way in the formation of APEC. Increased trade and capital flows have been driven by the market and proximity; the demand for a system of management followed from rather than preceded de facto integration. The formal establishment of a regional forum was meant not only to provide a vehicle for managing increased interdependence, but also to extend the benefits of integration into areas other than trade -- such as security. ₅₀ APEC has met with quite limited success in these respects. Apart from generic agreement to liberalize trade down the road, the reduction of barriers has occurred primarily through either unilateral or multilateral initiative. Efforts to put security matters on APEC's agenda have thus far been futile. For now, trade is not just APEC's leading edge, it defines the limits of its competence.

A sense of community and shared identity within East Asia is in similarly nascent form. Discussion of an "Asian way" and communal identity is notable not because of the progress that has been made in promoting these ideas, but simply because the issue is now part of the elite dialogue. Between the ideological rifts of the Cold War and the powerful memories of Japan's pathological attempt to create a Greater East Asian Coprosperity Sphere, community-building has for decades been absent from the regional agenda. It is now returning, but without the heavy-handedness of Japan's aspirations toward classical empire. Instead, the Asian way consists of a unique perspective on, among other issues, the priority assigned to economic growth versus to political liberalization, the relationship between human rights and political stability, and the relationship of the individual to the firm, society, and the state. ₅₁ If this debate moves forward and efforts to promote a regional identity advance, APEC will increasingly exhibit the social linkages characteristic of an imperial formation.

That this imperial formation will take modern forms is made clear by APEC's continuing reliance on consensus as a precondition for action. The central bargain between core and periphery is far less explicit and legalistic than in the case of the EU and NAFTA. A hub-spoke pattern of governance has emerged, but only slowly and primarily through the market-driven spread of asymmetrical patterns of trade and investment, not through direct negotiation between core and periphery. This quiet, steady process of construction is to the liking of all parties. Like Germany, Japan's preoccupation with self-binding is a legacy of World War II. Neither Japan nor its neighbors would be comfortable with more overt efforts to erect a regional order or more pronounced levels of economic dependence. ₅₂ China as well is not prepared to take the lead in forging a regional order. Its behavior is less a product of self-binding than preoccupation with promoting internal stability and managing the political implications of rapid economic growth. ASEAN members as well prefer an incremental, step-by-step approach to regional integration to avoid being overshadowed by APEC. ₅₃ These preferences explain APEC's lack of institutionalization and its reliance on ad hoc working groups rather than on a standing bureaucracy. ₅₄

APEC also exhibits the strategic stinginess characteristic of modern imperial formations. Japan, like Germany, continues to avoid new defense commitments and resists becoming a regional gendarme. Although the trajectory of China's defense policy is uncertain, its ability to project force remains limited and its attention concentrated on its immediate periphery, especially Taiwan. ASEAN was formed primarily as a defense grouping, but its members have neither the intent nor the ability to take responsibility for managing regional security. America's military presence in East Asia to a large extent fills this vacuum, but it does so largely by holding in abeyance the formation of a more defined regional order. In this sense, America's presence is buying time for regional integration to proceed along its economic and political dimensions -- just as NATO provided cover for the EC to make progress on its more narrow agenda during the early Cold War years. By taking the more contentious security issues off the agenda for now, the United States is providing the breathing room needed for the process of regional integration to gain momentum.

Regional integration in East Asia does entail intervention in the domestic affairs of the states involved, but that intervention is occurring through the subtle mechanisms associated with consensual empire. FDI, not military force, is the main policy instrument. Capital flows and the extent to which economic growth in the region depends on foreign investment have had several important effects. Corporate and industrial structures have converged and become more complementary, deepening interdependence through a self-reinforcing pattern of intra-regional investment and trade. ₅₅ To attract foreign capital, states have had to deregulate and liberalize their economies, promoting the restructuring and competition conducive to growth and increased regional trade. These changes in the domestic economy have spillover effects in the political arena. They create a constituency for and help strengthen coalitions that favor internationalist rather than nationalist economic strategies. Such coalitions are also more likely than their nationalist counterparts to govern in a liberal and open manner. ₅₆ Finally, FDI and the trade it produces help nature a middle class in the developing countries of East Asia, providing a moderating influence and a powerful constituency in favor of domestic stability and economic openess.

APEC seemingly parts company with the EU and NAFTA along the third dimension of consensual empire: its geographic scope. APEC includes members from both sides of the Pacific and thus does not share the contiguity of its counterparts in Europe and North America. APEC is also more inclusive in that its members are at quite different points along the path of economic development. Japan's per capita income is 6.5 times that of Indonesia. In contrast, per capita income in the United States is three times that of Mexico and German per capita income is 2.5 times that of Greece. ₅₇ APEC's doors are thus somewhat more open to the have-nots.

These anomalies, however, are less a reflection of a unique brand of regionalism than they are an indication of the unique tasks involved in promoting traditional forms of regionalism in East Asia. The United States is a member of APEC not just because of the high levels of trade and investment that cross the Pacific. American participation in APEC paradoxically makes possible a much higher degree of regional integration in East Asia than would otherwise occur. Fear of Japan's economic domination in the region is to some extent neutralized by American engagement. ₅₈ Under cover of American supervision, Japan is more comfortable acting as a metropole and its smaller neighbors more comfortable with being the periphery. So too does a U.S. presence decrease the potential for intra-regional balancing against China's military might. U.S. engagement is essential to dampening the competitive jockeying and arms racing that would otherwise reverse the gains that have already been made in regional integration.

Similarly, the economic diversity of APEC's members reflects more the economic diversity of Asia's developing economies than it does its members' willingness to reach out to the more needy states in the region. Indonesia, after all, is an oil-producing state with considerable economic promise. Like the EU and NAFTA, APEC is emerging as a club for the wealthy or soon-to-be wealthy, offering little to those poised to be left behind.

The Internal Cohesion of Consensual Imperial Formations

If regional formations continue to deepen in each of the three areas of the globe in which military and economic power are concentrated, these formations may soon become defining elements of the international system. The international system of the next century would then be characterized by a tri-polar structure, with poles defined by regional concentrations of power, not by states. Promoting international stability would entail, first and foremost, figuring out how to promote cooperative relations among these imperial formations.

Before thinking through how to manage relations among these three regional groupings, however, it is necessary to address relations within them and ask what variables will determine whether they are passing phenomena or more enduring features of the landscape. What factors will affect whether the EU, NAFTA, and APEC enjoy greater coherence and cohesion in coming years? What are the major stumbling blocks on the horizon and how can they be avoided? What level of integration is desirable and politically feasible? An imperial perspective offers an alternative to institutionalism not just in terms of understanding regionalism, but also in terms of addressing these important prescriptive questions.

The Cohesion of Pluralistic Cores

The behavior and cohesion of metropolitan power centers will be the most important determinant of the evolution of regional formations. Imperial formations rely on their power centers to establish hierarchy and establish rules and patterns of governance. A coherent core provides a locus of authority and the magnet that draws the periphery toward the center.

NAFTA is in the best shape in this regard. It has an amalgamated core -- the United States -- with a long history of exercising leadership in its periphery. Proximity coupled with predominant economic and military strength makes the United States, whether or not it wants the role, a de facto imperial core in North America. Even oscillations in U.S. behavior between unilateralist and multilateralist extremes do not alter the hierarchical order that has taken shape; stark power asymmetries speak for themselves. ₅₉

Changes in U.S. policy and uncertainty about the appetite of the United States for foreign engagement paradoxically have far greater implications for the EU and APEC than they do for NAFTA. Indeed, the retraction of American power from Europe and Asia would likely jeopardize regional integration in both areas. The EU would be faced with security responsibilities for which it is not yet ready, possibly undermining the significant level of integration already achieved. The EU has made such significant progress on economic and political integration in part because it was able to rely on the United States to manage regional security. The prospect of an American withdrawal would be unlikely to precipitate an immediate rift in the Franco-German coalition, but it would reopen the unsettling question of German rearmament and the possibility of German acquisition of nuclear weapons. An American retreat from Asia would have even more profound effects, probably making impossible the coalescence of a Sino-Japanese core. In light of the mutual suspicions and political cleavages that remain in the region, the absence of an extra-regional balancer would likely trigger traditional security competition.

Assuming the United States maintains its strategic position in Europe, the Franco-German coalition will face three main challenges in coming years. First, a new generation of elites will soon assume power in both France and Germany. They will not have lived through the formative experiences of World War II and of forging an integrated Europe, and therefore might be less committed to the EU than their predecessors. Especially in Germany, which has served as the engine behind integration, the next generation of elites will not share the visceral aversion to the national state felt by Chancellor Kohl and the current leadership. Indeed, younger Bundestag members -- even those from the Chancellor's own party -- have already begun to question the vision of a supranational union long championed by Kohl. German and French leaders must therefore join with their younger counterparts to forge an new ideological foundation for Europe -- one rooted in the 1990s rather than the 1930s.

Second, the essential bargain between the welfare state and its citizens is being renegotiated in both France and Germany. Confronted with aging populations and social policies that constrain the competitiveness of their economies, virtually all European governments will have to renege on the promises they have made to their societies over the past several decades. The resulting problems of governability and the possibility that politicians will blame "Europe" for the imposed austerity could lead to fundamental strains in the Franco-German relationship. French and German elites must agree to resist political opportunism and take steps to prevent economic hardship from splitting the coalition.

Third, even if they agree on how to address many of the near-term challenges facing the EU, France and Germany in fact have incompatible visions of where the union is ultimately headed. Europe remains for Germany a construct for binding, moderating, and managing power, for ensuring that the Continent never again falls prey to the destructive forces of national rivalry. As a legacy of the past, Germans fear having too much power. France, on the other hand, views the enterprise of building Europe as an exercise in amassing and projecting power, aggregating Europe's military and economic resources. The EU is to do for Europe what the national state can no longer do for France: make it a global power. As a legacy of their past, the French fear having too little power.

The tension between these competing visions has not yet fully surfaced, mainly because the EU is still finding its way in a Europe absent the Soviet Union and because the American presence prevents France and Germany from having to address on their own how to manage continental security and how to formulate Europe's role in extra-European affairs. Nevertheless, they must forge a common vision if their coalition is to remain intact as the EU matures. Doing so will require compromise by both parties. Germans will need to provide leadership on political as well as economic matters and become comfortable with a Europe that is more engaged and active in global affairs. Frenchmen will have to stop laboring under the illusion that pursuing an independent course constitutes leadership, instead expending energy to forge a common position with Germany. Britain, especially if a Labour government moves the country closer to Europe, has a special role to play in helping to forge this compromise. The British have tended to view the EU as an instrument for binding and managing power while appreciating the importance of projecting influence beyond Europe. They may therefore be able to help define a middle road acceptable to both the Germans and the French.

Effecting the coherence of the Sino-Japanese core is a far more formidable task, even if the United States maintains its presence in East Asia. China does not share Japan's commitment to democratic governance, increasing the obstacles to forging a common vision of a regional order. The key challenge will be adjusting the Sino-Japanese relationship and emerging regional structures to China's rise as a major economic and military power. APEC provides a vehicle for doing so. APEC members need to strike the same deal with China that EU members struck with Germany: increasing say in shaping the nature of a regional order in return for self-binding and China's willingness to play by the rules of multilateralism. Drawing China into the core of an imperial formation, even if Beijing's intentions are still somewhat uncertain, promises to expose China to the same processes of moderation and liberalization that other developing economies face as they enter the global market. The gradual and cautious embracing of China in the system of governance and order emerging in East Asia will by no means ensure that China exercises its growing power in a benign manner. But it will facilitate the restructuring of industry, the strengthening of liberalizing coalitions, and the nurturing of a middle class conducive to China's peaceful ascendance as an Asian power.

Sustaining the Bargain between Core and Periphery

Modern imperial formations rely on a sustained consensus between core and periphery, not just on an initial bargain. Each side must hold up its end of this bargain and remain satisfied with the other's performance. Core, periphery, or both can otherwise exit. What are the main challenges to the sustainability of this bargain? What are the most likely scenarios leading to its unraveling?

The durability of self-binding. During the era of classical empire, the metropole essentially wielded unfettered power and influence. Peripheral states acquiesced because they had little choice. Consequently, these imperial formations often foundered as a result of revolts from a periphery seeking greater autonomy and independence of action. Consensual empires, in contrast, are far more likely to fall prey to revolts from the core than from the periphery. It is now the metropole that accepts limits on its behavior by engaging in self-binding and subjecting itself to the constraints of a multilateral framework. The periphery is effectively empowered, both because of core self-binding and because it gains some influence over metropolitan behavior in return for agreeing to participate in an imperial formation.

This logic suggests that modern imperial formations will be threatened by a new phenomenon: the defection of the core due to too much self-binding and reliance on multilateral consensus. Self-binding can only go so far before the metropole will calculate that the gains of sustaining an imperial formation no longer outweigh the costs of diminished autonomy. Consider the case of the EU. What will happen if qualified majority voting is extended to a wide range of issues, and France and Germany suddenly find themselves outvoted on matters of central concern? It is hard to imagine that they would as a matter of course submit to the will of their smaller neighbors. NAFTA requires the United States to tame its unilateralist urges and to settle trade disputes through established procedures. But more restrictive forms of self-binding would likely cause a backlash and a reassertion of American unilateralism. Modern empires thus have an equilibrium point along the spectrum of integration and consensus formation past which core states are likely to revolt. This insight calls into question the conventional wisdom, often cited in Europe, that integration must keep moving forward if regional formations such as the EU are to enjoy cohesion. If it goes too far, self-binding will be perceived by the core as capitulation rather than as a strategy of empowerment.

Material Incentives. Regional formations, whether viewed as trade groupings or modern empires, are meant to be paying propositions, formed because they advance the material welfare of their members. Sustaining the bargain between core and periphery thus entails delivering welfare gains to both parties. Three problems loom on the horizon, all of which suggest that the EU faces the most serious challenges in terms of maintaining the material incentives essential to core-periphery cohesion.

First, whereas NAFTA and APEC have premised their value to members on their ability to promote trade, the EU has sweetened the pot by promising side-payments to the periphery. Expectations have been raised accordingly. The willingness and ability of Europe's richer nations to transfer resources to its poorer neighbors are, however, diminishing. The costs of onerous social welfare policies and of structural adjustment promise to turn the largesse of the core into stinginess. As their populations age and their government's bargains with their own citizens are called into question, neither France nor Germany will want to pay the bill for upholding their bargain with the poorer periphery. The periphery will protest that its original deal with the EU has been violated, especially as new members from Central Europe join the union and compete with existing members for a share of the shrinking assistance budget. Enlargement to the east also requires reform of the Common Agricultural Policy, a move that will alienate farmers in France and further strain core-periphery relations. The lession is clear: regional formations should base their appeal to the periphery more on the market than on bribes.

Second, consistent with the supposition that material incentives drive forward regionalism, the historical record confirms that regional integration moves forward during periods of economic upturn and holds steady or backslides during downturns. ₆₀ East Asia and North America are poised to enjoy robust growth rates in the near term, while Europe faces the prospect of continued recession. APEC and NAFTA are therefore better positioned to enjoy internal cohesion than is the EU. Europe's relative decline may incite its leaders and citizens to tackle more effectively the structural rigidities that continue to dampen growth. But lagging behind Asia and America might also induce Europe to protect itself against external competition, especially as Western Europe faces an influx of goods from new EU members.

Third, the flexibility of national industrial and political structures will be an important determinant of the degree to which regional integration produces joint welfare gains. The sustainability of joint gains depends in part on the ability of separate national economies to adapt and reap the benefits of changing patterns of regional trade and investment. The EU, NAFTA, and APEC all entail the coupling of economies that are both competitive (such as U.S.-Canada) and complementary (such as U.S.-Mexico).

From this perspective too, the EU is least well suited to sustain joint gains in a rapidly changing market. ₆₁ The European industrial model is not particularly adaptive. Industry and capital have formed tight partnerships that dampen competition. Insufficient venture capital and equity financing foster excessive dependence on a cautious banking sector, resulting in a shortage of entreprenurialism. Expensive social policies keep the costs of labor high and constrict labor mobility.

East Asia is better off in this regard. Its industrial and financial structures are considerably more flexible and adaptive. Extraordinary savings and investment rates (fifty percent higher than in Europe) finance infrastructure and innovation in both the public and private sectors. Constraints are more likely to come from governments fearful of the political implications of liberalization than from a sluggish or top-heavy corporate structure. ₆₂ North America is best placed in terms of flexibility and adaptive industrial structures to be able to sustain joint gains and the internal cohesion that comes with it. Because of its brand of laissez-faire economics and politics, the United States is well positioned to generate economic dynamism within NAFTA.

Building Community and Shared Identity. Supplementary sources of cohesion are especially important to modern imperial formations because of their consensual and cost-sensitive character. A sense of community and a shared identity provide one such boost. The search for the binding glue of community is one of the main reasons the EU puts such emphasis on nurturing a European identity. This search also explains the sudden interest in promoting a sense of communal identity in East Asia. The history of classical empire is replete with examples of how ideational convergence can contribute to core-periphery cohesion. ₆₃

Constructing a common identity that spans core and periphery will in some respects be harder than during the era of classical empire. Direct rule afforded the metropole the ability to penetrate peripheral society far more deeply and overtly than in modern formations. Peripheral states now retain their own languages as opposed to adopting the metropole's tongue for official business. Education systems and government bureaucracies will no longer be recreated in the metropole's image. Nor will the metropole maintain a formal outpost in its peripheral territories, replete with a colonial governor and administration.

But modern empire will benefit from compensating developments. Technology and mass communication allow a much wider dissemination of information than during previous eras, perhaps overwhelming even more effectively than direct rule cultural and political barriers between core and periphery. The penetration afforded by the market is far more pervasive than the penetration afforded by colonial administration. The metropole's collaborators become the middle class, not just a small group of local agents coopted by colonial officials. The private sector has also taken over the task of posting metropolitan emissaries in the periphery, sending legions of managers, accountants, engineers, and analysts. In return, the periphery sends its share of workers and travelers to the metropole, increasing the level of interaction between the core and periphery.

Finally, modern empires enjoy a normative advantage over classical ones in nurturing a common identity. Because the transnational space contemporary empires represent is based on consensual rather than coercive participation, it is more likely that individuals in the periphery will view it as a legitimate arena of politics, one that competes with the national state for loyalty and allegiance. The European Parliament, for example, may have quite limited legislative powers, but it does help symbolize the existence of a representative Europe that stands alongside, if not above, the nation-state. The consensual nature of modern empire thus not only makes building a common identity more important, but also provides new pathways for doing so.

Security. During the era of classical empire, imperial formations fell prey to the metropole's excessive concern about security in the periphery. Metropoles weakened themselves by spending too much blood and treasure on defending their territories. By being too overbearing, they also triggered resistance in their peripheries. In contrast, consensual empires will fall prey to the metropole's insufficient concern about security in the periphery. Because elites and electorates alike tend to view regional formations as instruments for promoting trade and wealth rather than security and order, cost-sensitivity will limit the metropole's willingness to address threats in the periphery. So too will norms of non-intervention create a predisposition against using force to preserve imperial cohesion. Unless the security of the metropole is directly threatened, imperial cores will remain reluctant to put lives on the line in their peripheries.

The EU's unwillingness to engage more readily and deeply in Yugoslavia is a case in point. Although Bosnia is not a member of the EU, the effort of the EU's leading states to cordon themselves off from a major war on their doorstop does not augur well for the readiness of imperial formations to cope with threats in their peripheries. Other states in Central Europe are at present clamoring to enter NATO precisely because they doubt the EU's willingness and ability to meet their security needs. There is one clear exception to this emerging pattern: Russia continues to deploy forces in its periphery and engage in local conflicts that do not pose a direct threat to its security. This exception, however, confirms the thrust of my argument. Russia continues to view its periphery as part of a traditional imperial formation. Its forces are defending Russia's right to maintain effective control over its former republics, not preserving trade ties or cohesion within a consensual imperial formation.

Whether the EU, NAFTA, and APEC eventually suffer serious setbacks because of the metropole's underprovision of security depends on the evolution of strategic thinking within each of these region's power centers. Three main pathways exist through which the metropole could, over time, adopt a more expansive definition of its security interests. First, economic interdependence between core and periphery could reach levels sufficient to induce cores to make deeper sacrifices in meeting strategic challenges in the periphery. During the 1994-1995 peso crisis in Mexico, for example, the United States pursued extraordinary economic measures to prevent a more widespread financial crisis. In this respect, it is not unimaginable that economic interests would be strong enough to warrant U.S. military intervention should Mexico's government and financial stability be threatened by revolt or internal chaos. Increasing levels of international trade and investment as well as considerable sensitivity among the globe's main financial markets will put increasing pressure on cores to run the risks associated with maintaining economic stability in their respective imperial zones.

Second, as imperial formations mature and metropoles sink further costs into their development, order-related interests may come to play a more dominant role in motivating metropolitan behavior. If, as I envisage in this essay, regional formations evolve from trade groupings into hierarchical structures that provide international order, their leading members will have a greater interest in making the sacrifices necessary to maintain them. NATO members, for example, eventually found the will to intervene in Bosnia with sufficient force not because the intrinsic costs of the conflict grew intolerable, but largely because they feared that continued paralysis would have corrosive effects on NATO and the future of a Western security order. Over time, similar concerns may increase the sacrifices core states are willing to make to sustain the EU, NAFTA, and APEC.

Finally, the process of community-building could lead to a sense of shared identity sufficient to blur the distinction between self and other in considering security threats. Deutsch used the concept of security community to refer to a grouping of states among which war has become unthinkable. But it could also refer to a grouping among which shared identity elements are strong enough that members come to each other's assistance for emotive and cognitive reasons, not because of the prospect of material loss. During the 1930s, for example, Frenchmen came to view the loss of certain imperial possessions as tantamount to losing metropolitan territory. It was emotive attachment, however, not the intrinsic strategic value of the possessions, that shaped these attitudes. ₆₄ So might elites and publics in today's consensual empires develop extra-territorial allegiances sufficient to endow imperial formations with more cohesion and durability than predicted by a narrow calculation of material costs and benefits.

Concentric Circles or Concentric Barriers. A central assumptions of consensual empire is that regional power centers act like magnets, pulling peripheral states inward. This centrifugal force operates because smaller powers choose to bandwagon with, as opposed to balance against, the metropole. Bandwagoning predominates because of the allure of affiliating with preponderant power and reaping the associated benefits and because the core's self-binding alleviates concern in the periphery about being subjected to metropolitan exploitation.

Based on this logic, the EU is now embarking on the construction of a multitiered Europe organized in concentric circles around the Franco-German core. The establishment of a single currency constitutes a new phase of development in which de jure equality of its members will give way to de jure differentiation. Whether such differentiation will produce concentric circles or concentric barriers, however, remains unclear.

The creation of first-class and second-class membership will bring with it a set of political barriers to core-periphery cohesion. States relegated to the second tier will suffer a setback in status, creating space for anti-EU voices that may sap enthusiasm for efforts to work toward inclusion in the inner circle. Indeed, de jure differentiation risks making balancing against the core a more attractive strategy for peripheral states not included in the inner circle. Exclusion from this privileged grouping could raise relative gains concerns that have thus far been sublimated by de jure equality. Even if the benefits of participation in the EU remain strong in absolute terms, new dividing lines might both make states more sensitive to their relative position and lead to relative losses in the periphery as the inner circle exclusively reaps the benefits of a single currency. De jure differentiation could also exacerbate intra-regional rivalries as neighbors compete with each other to cross the threshold for participation and avoid being left behind.

The EU's plans for establishing an inner core to drive forward union-wide integration have the potential to backfire, improving the welfare of Europe's wealthy center, but at the expense of its poorer periphery. At a minimum, the EU needs to think through these issues before it goes ahead with a multitiered construction only to find that an inner circle, far from serving as the engine behind deeper integration, begins to delineate new fault lines in Europe.

Relations Among Consensual Imperial Formations

Analysis of the relationship among the EU, NAFTA, and APEC has focused almost exclusively on the question of whether regional trade agreements hinder, advance, or have little effect on global trade agreements. Research has provided no definitive answer. Strong deductive arguments exist on both sides of the ledger. ₆₅ The historical evidence is sparse. The short track record that exists - the successful conclusion of the Uruguay Round following on the heels of the formation of NAFTA and APEC - suggests that the two pathways to liberalization are not at odds, and may even reinforce each other. The best answer to the puzzle is that the effects of regionalism on global multilateralism depend on a host of variables - many of them unrelated to trade - that shape the relationship among regional groupings, and particularly among the three power centers that form the cores of the EU, NAFTA, and APEC. I now examine these variables and draw on the notion of consensual empire to explore inter-regional relations.

Inter-regional governance. With regionalism the preoccupation of scholars and policy makers alike, the governance of inter-regional relations has received insufficient attention. Bodies such as the G-7, the UN Security Council, and the World Trade Organization provide a potential forum for addressing an inter-regional agenda, but focus on resolving short-term disputes tends to displace consideration of long-term issues. So too do bilateral contacts usually stick to a narrower agenda, such as reducing trade imbalances. Missing is explicit consideration of how to ensure cooperative relations among the world's three centers of power at the same time that metropoles devote increasing attention to the deepening and maturation of regional formations. Developing a set of rules of the road and a common vision of how regional groupings will fit into global structures increases the likelihood of cooperative inter-regional relations.

Ensuring that the EU, NAFTA, and APEC share at least one common member is one way to proceed. In light of the fact that the United States is a member of both NAFTA and APEC, a formal American affiliation with the EU would increase transparency and decrease the chances of the EU's drift from the global economy. ₆₆ Alternatively, a directorate of core countries could meet on a regular basis - and might even replace the G-7. This directorate would consist of the United States, France, Germany, Japan, China, and, perhaps, Russia (for reasons discussed below). The agenda would include the following items.

Economic strains and the allure of protectionism. That intra-regional formations are running far ahead of inter-regional arrangements increases the risk that economic downturns will lead to regional protectionism. National economies regularly face periods of stress and lagging performance. The business cycle or unforeseen shocks stemming from a widespread drop in equity markets, currency fluctuations, or a rise in energy prices also have the potential to weaken national economic performance. Europe faces the prospect of an especially prolonged period of austerity as it tackles structural adjustment and the revamping of the welfare state. Under all these circumstances, protectionism will offer states a short-term fix for stimulating growth. When it does, they are likely to choose intra-regional cohesion over inter-regional ties, especially if they have already codified regional trade agreements and have high levels of interdependence with their neighbors.

The experience of the 1930s provides ample evidence of the allure of retreating into imperial trading zones in response to external economic shock. Following the devaluation of the Franc in the early 1930s, France's trade with other metropolitan centers declined and its reliance on trade with its overseas territories increased. ₆₇ Britain as well retreated into empire, furthering the collapse of trade between metropolitan centers and the formation of imperial trade blocs.

The members of the EU, NAFTA, and APEC must resist the urge to turn inward if and when they fall prey to recession or market-generated disturbances. The EU in particular will face pressure to protect against non-EU imports as goods from Central Europe begin to flow freely into Western Europe. The existence of regional trade groupings - like the imperial formations of the 1930s - will increase the temptation and decrease the short-term costs of responding to periods of economic stress by retreating into closed trade blocs. Awareness of this risk, foresight, and preventive measures should help regional formations resist this temptation.

Power management versus power accretion. Modern imperial formations, at least in their current phases of development, function primarily as structures for managing power, not maximizing it. Indeed, the normative appeal of consensual empire is rooted in its moderating effects. History, however, is littered with examples of empires that sought power, not security and stability. Japan's Greater East Asia Co-prosperity Sphere was a twisted search for autarky based on a strategy of predatory extraction, not a plan for integrating East Asia. The results were catastrophic.

Contemporary imperial formations must accordingly guard against their purposeful or unwitting transformation into systems of power accretion. In this respect, France's vision of transposing its identity as a great power from the national state to Europe is not only misguided, but also dangerous. The emergence of geopolitical rivalry among powerful imperial formations would likely result. Core states must therefore forge a consensus - both among themselves and with their peripheral partners - about the long-term objectives of the imperial formations they head, laying out rules of the road and shaping common expectations to ensure that cooperation, not competition, characterizes inter-regional relations.

The geopolitics of exclusion. A major weakness of an international order based on three regional formations is its effect on excluded actors. Consensual empires are clubs for successful states, not failed or poor ones. As a result, they exclude those areas of the globe that are most in need of integration into global markets and councils and that could ultimately pose the greatest threats to peace. Assuming that China and Russia both move, however haltingly, toward stable democracy, all the great powers of the day will have been domesticated and the chances of war among them will be low. Revisionist states in the developing world, especially those armed with weapons of mass destruction and those whose size and population make them locally dominant powers, will emerge as the principal challengers to the status quo. ₆₈ And failed states, even if small and possessing little military power, will produce chaos, suffering, and refugee flows that the industrialized world will find difficult and uncomfortable to ignore.

Cordoning off privileged imperial formations from rogue states and from the effects of collapsing states will be ineffective and may well backfire. Exclusion tends to reinforce the sense of isolation that fuels revisionist regimes and their claims of encirclement. ₆₉ Instead, imperial formations should seek to include such states in their respective zones of influence, seeking to draw them into the international community through the same centrifugal force that pulls the periphery toward the center. ₇₀ Formal membership need not be on the agenda, at least at the outset. Rather, the opening of a dialogue and of markets is a sufficient starting point. A regional division of labor makes the most sense, with the EU focusing on the Middle East and North Africa, NAFTA on Central and South America, and APEC on South Asia.

The potentially negative consequences of exclusion also apply to Russia, which is falling into a geopolitical no-man's-land. To its east is a rising China and a Pacific Rim economy that grows increasingly dynamic and integrated. To its west is an Atlantic community that is expanding to Russia's borders. Western leaders are seeking to placate Moscow through various types of compensation, such as a NATO-Russia charter. But the rhetoric of a united Europe notwithstanding, current plans for EU and NATO enlargement promise to leave Russia isolated and alone.

Two options deserve consideration. First, Russia could be encouraged to form its own regional formation, incorporating its former republics in some form of economic and political union. This formation, however, is unlikely to be consensual. Indeed, Russia may well construct a union aimed at power accretion rather than power management because it would be flanked on its east and west by preponderant concentrations of power. Moscow is likely to show little interest in self-binding if confronted with a sense of isolation or encirclement.

Alternatively, the EU and NATO could eventually open their doors to Russia and seek to incorporate the former Soviet Union into a broader Europe. Especially because Russia is neither interested in joining nor would be accepted into an Asian community, Russia's westward integration holds the most promise for avoiding its isolation. Neither the EU nor NATO, however, are keen to extend their reach beyond Central Europe. Both institutions fear the dilution and dimishing effectiveness that accompany large membership. Culture and religion also play a role; Europeans envisage a dividing line at Poland's eastern border, where Western Christiandom gives way to Orthodoxy. Furthermore, a Europe that includes Russia would find itself with two non-contiguous power centers - a Franco-German coalition and Russia. At least on deductive grounds, this formation could trigger inter-core balancing as opposed to cooperation. ₇₁ Thinking through the pros and cons of these options - and generating alternatives - should be a central item on the agenda as metropolitan centers seek to address and redress the geopolitics of exclusion.

U.S. engagement and off-shore balancing. Continued American engagement in Europe and East Asia is central to inter-regional relations as well as to intra-regional cohesion. U.S. membership in APEC and the foothold in Europe provided by NATO enables Washington to nudge the EU, NAFTA, and APEC in a common direction. Should the United States decide to curtail its foreign commitments and dramatically reduce or end its military presence in both regions, American leadership and its role as a catalyst of multilateralism would be lost. In addition, sustaining the coherence of pluralistic cores in both Europe and Asia would be a far more complicated task. Fearful of Franco-German and Sino-Japanese competition, European and Asian states would be so preoccupied with maintaining regional cohesion that inter-regional issues would receive little attention. Only when the integrity of pluralistic cores is assured can the United States countenance withdrawal. Another decade or two should be sufficient to test the Franco-German coalition in Europe. And if the history of integration in Europe holds lessons for Asia, it will be at least a half-century before Asian integration is deep and stable enough to function without the presence of an off-shore balancer.

Conclusion

This essay is intended to be speculative and to provoke fresh thinking on both analytic and prescriptive fronts. In analytic terms, I have sought to reevaluate the origins and implications of regionalism by developing the notion of consensual empire. An imperial perspective improves upon more conventional institutionalist analysis both because it captures more fully the dynamics shaping regional formations and because it opens up new ways of thinking about their geopolitical consequence.

On the prescriptive front, I have sought to enrich debate about grand strategy in the post-Cold War era. A fluid international landscape and the opportunity it affords to fashion a new order have not generated the outpouring of creative thinking that one might expect. Contentious exchanges over the "end of history," the "clash of civilizations" and the "West against the rest" notwithstanding, debate about the nature of the emerging international system has been disappointingly thin.

The notion of consensual empire substantially moves this debate forward. Regionally based, consensually formed imperial zones hold considerable promise for promoting a stable international order for three main reasons. First, order based on benign imperial zones rests on an inherent and compelling geopolitical logic. The most powerful states in each region will continue to seek to generate order and establish rules of conduct in their immediate peripheries. If these orders emerge through consensus rather than coercion, they will be more durable and more likely to conform to liberal international principles. In this sense, consensual imperial formations provide a means of constructing an international order sensitive to both ideals and power realities.

Second, because consensual empire rests on a bargain in which the core engages in a process of self-binding, the exercise of preponderant power will be moderated and the likelihood of unfettered competition among power centers reduced. A core's willingness to bind itself in a multilateral framework will be noticed not just by its immediate periphery, but by other cores as well. Cooperation both within and between regions should be easier to achieve.

Finally, the construction of benign imperial spheres holds out the best hope that the have-nots in the international system will gradually be drawn into international markets and institutions. Altruism will not suffice to elicit the help of industrialized nations in coping with the challenges faced by underdeveloped regions. The order-related interests and the shared identity that accompany an expanding imperial zone, on the other hand, do have the potential to elicit the engagement of more powerful states that otherwise will be likely only to cordon themselves off from instability in their peripheries.

Empires were the staple of international order for centuries. It may well be that their days are not past. If imperial formations are adapted to current power realities and prevailing norms, they may well remain the staple of international order for centuries to come.

Notes

Note 1: Regional groupings are not new phenomena. With the exception of the EU, however, they formed primarily in the developing world and thus did not have a major impact on the structure and functioning of the international system. Their emergence among advanced industrialized countries is a recent phenomenon. The spread of regional formations to areas of the globe in which economic and military power are concentrated will magnify their importance to and impact on the international system. Back.

Note 2: A large literature exists on regionalism. Recent books on the topic include: Edward Mansfield and Helen Milner, eds., The Political Economy of Regionalism (New York: Columbia University Press, forthcoming); David Lake and Patrick Morgan, eds., Regional Orders: Building Security in a New World (University Park, PA: Penn State Press, forthcoming); Jeffrey Frankel and Miles Kahler, eds., Regionalism and Rivalry: Japan and the United States in Pacific Asia (Chicago: University of Chicago Press, 1993); Louise Fawcett and Andrew Hurrell, eds., Regionalism in World Politics: Regional Organization and International Order (Oxford: Oxford University Press, 1995). Back.

Note 3: Rachel Bronson and Edward Mansfield, for example, have shown that trade groups formed among members that are also allies more effectively enhance trade than groupings formed among states that are not also allies. See "The Political Economy of Commercial Regionalism: An Empirical Analysis" in Mansfield and Milner, The Political Economy of Regionalism. Back.

Note 4: It is important to note that I am making an argument about contemporary forms of regionalism. I do not presume that the logic of empires can be usefully applied to regionalism more generically. Back.

Note 5: The limitations of the current scholarship on regionalism stem in part from the disciplinary walls that still stand between international political economy and security studies. Because the most visible and politically salient functions of the EU, NAFTA, and APEC lie in the realm of trade, these groupings are studied primarily by economists and political economists. Security specialists tend to focus on NATO, OSCE, ASEAN and other multilateral and bilateral fora that more explicitly address military issues. A limited degree fo cross-fertilization has occurred as disciplinary barriers come down. Theoretical perspectives traditionally reserved for the study of economic bodies are being used to study security bodies. See, for example, John Duffield, "Explaining the Long Peace in Europe: The Contributions of Regional Security Regimes," Review of International Studies, vol. 20, n0. 4 (Oct. 1994), pp. 369-399; and Celeste Wallander and Robert Keohane, "An Institutional Approach to Alliance Theory," unpublished manuscript, Center for International Affairs, Harvard University, April 1995). At the same time, theoretical perspectives traditionally reserved for the study of geopolitics and security are being applied to groupings such as the EU. See, for example, Ole Waever's work on European integration, in particular, "Europe's Three Empires: A Watsonian Interpretation of Post-Wall European Security," in Rick Fawn and Jeremy Larkins, eds., International Society after the Cold War (New York: St. Martin's Press, 1996), pp. 220-260. I am indebted to Waever for initially inspiring me to apply the logic of empires to the EU and, consequently, to other regional bodies. Back.

Note 6: For an excellent summary of the different approaches to the study of regionalism, see Andrew Hurrell, "Regionalism in Theoretical Perspective," in Fawcett and Hurrell, eds., Regionalism in World Politics. Back.

Note 7: David Mitrany is generally considered to be the founding father of functionalism. For a description of the evolution of his thinking and an anthology of his writings, see David Mitrany, The Functional Theory of Politics (New York: St. Martin's Press, 1976). Neofunctionalism differs from functionalism in its emphasis on the importance of politicization and spill-over from one issue to another in driving forward integration. Neofunctionalists also envisage a robust supranationalism while functionalists envisage robust transnational links among states that retain the principal elements of sovereignty. The main neofunctionalist works are Ernest Haas, The Uniting of Europe (Stanford: Stanford University Press, 1958); and Ernest Haas, Beyond the Nation-State (Stanford: Stanford University Press, 1964). Back.

Note 8: See, for example, Robert Keohane and Joseph Nye, Power and Independence (Boston: Little, Brown and Co., 1977); Edward Mansfield, Power, Trade & War (Princeton: Princeton University Press, 1994); and Joanne Gowa and Edward Mansfield, "Power Politics and International Trade," American Political Science Review, vol. 8 (1993). Back.

Note 9: For a concise summary of the evolution of NAFTA, see Andrew Hurrell, "Regionalism in the Americas," in Fawcett and Hurrell, Regionalism in World Politics, esp. pp. 269-273. Back.

Note 10: Inasmuch as the EU took shape inside a strategic bloc, it conforms to the general model of strategic formations providing the organizing principles for economic formations. Back.

Note 11: Confirm. Get data. Back.

Note 12: See, for example, Yoichi Funabashi, "The Asianization of Asia," Foreign Affairs, Nov./Dec. 1993, vol 72, no. 5, pp. 75-85. Back.

Note 13: For an excellent discussion of how to define empire and a review of the relevant literature see Michael Doyle, Empires (Ithaca: Cornell University Press, 1986). Doyle defines dependence as a relationship of constraint or unequal influence, while reserving informal empire for relationships of control (see pp. 43-44). I prefer to draw the line between isolated relationships and replicated, patterned ones because this definition captures the sense that empire involves the purposeful erection of a system of management. A relationship of dependence can evolve merely as the result of asymmetries without willful action on behalf of either the metropole or the periphery. Back.

Note 14: I acknowledge that metropolitan centers have often engaged in bouts of imperial expansion for reasons of prestige and have expended considerable effort to annex or defend territories that offer little promise of economic gain. For the most part, however, these episodes follow on from prior imperial activities carried out under the assumption that expansion will contribute to the wealth of the metropole. Back.

Note 15: Revisionist historians would not accept this assertion, arguing instead that economic concerns dominated U.S. policy and that NATO represented an effort to carve out a zone for U.S. trade and investment. See, for example, Joyce and Gabriel Kolko, The Limits of Power: The World and United States Foreign Policy, 1945-1954 (New York: Harper & Row, 1972); and William Appleman Williams, The Tragedy of American Diplomacy (New York: Norton, 1988). Back.

Note 16: Ernest Gellner, Nations and Nationalism (Ithaca: Cornell University Press, 1983), pp. 64-73. Back.

Note 17: See Paul Kennedy, The Rise and Fall of the Great Powers (New York: Random House, 1989); and Charles Kupchan, The Vulnerability of Empire (Ithaca: Cornell University Press, 1994). Back.

Note 18: America's experience in Vietnam and Russian involvement in Afghanistan are cases in point. Back.

Note 19: See, for example, Richard Rosecrance, The Rise of the Trading State (New York: Basic Books, 1986); and Stephen Van Evera, "Primed for Peace: Europe After the Cold War," International Security, vol. 15, no. 3 (Winter 1990/91), pp. 14-16. For a contrary view arguing that conquest still pays in the contemporary era, see Peter Liberman, "The Spoils of Conquest," International Security, vol. 18, no. 2 (Fall 1993), pp. 125-153. Other scholars have offered alternative explanations for changing attitudes toward conquest and war-making. John Mueller, for example, argues that war has become immoral. See Retreat from Doomsday: The Obsolescence of Major War (New York: Basic Books, 1989). Edward Luttwak blames declining birthrates and the resultant reluctance to lose children in battle as a major factor changing attitudes toward war. See "Where are the Great Powers," Foreign Affairs, vol. 73, no. 4 (July/August 1994). Back.

Note 20: For a concise treatment of the concept of regimes, see Robert Keohane, After Hegemony (Princeton: Princeton University Press, 1984), pp. 49-132. Back.

Note 21: See Ibid., pp. 31-32. Back.

Note 22: Some scholars maintain that hegemonic decline need not erode the prevailing order. See Duncan Snidal, "The Limits of Hegemonic Stability Theory," International Organization, vol. 39, no. ?, pp. 579-614. Back.

Note 23: Daniel Deudney, "The Philadelphian System: Sovereignty, Arms Control, and Balance of Power in the American States-Union, circa 1787-1861," International Organization, vol. 49, no. 2 (Spring 1995), pp. 191-228. Back.

Note 24: For further discussion of this important distinction between hegemony and empire, see Doyle, Empires, p. 40. Back.

Note 25: My argument is the reverse of the "inside-out" argument made by Etel Solingen in "Democracy, Economic Reform, and Regional Cooperation," Journal of Theoretical Politics, vol. 8, no. 1 (January 1996). Solingen writes that "coalitions strongly committed to economic liberalization are expected to be more likely to undertake regional cooperative postures" (p. 79). I am arguing that the pursuit of cooperative regional postures strengthens liberalizing coalitions; the causal flow is "outside-in." Back.

Note 26: Hurrell, "Regionalism in the Americas," p. 271. Back.

Note 27: The prospect of joining both the EU and NATO have played a role in inducing Hungary, Romania, and Slovakia to settle disputes over minority issues. See "The Hungary-Romania Pact Agreed," Financial Times, August 15, 1996, p. 2. Back.

Note 28: In similar fashion, the U.S. bail-out of Mexico following the 1994-1995 peso crisis resulted in an extraordinary degree of American intervention in the Mexican economy. In return for U.S. and IMF assistance, Mexico had to allow its oil export revenue to be deposited at the Federal Reserve Bank of New York and to introduce a stabilization plan that covered fiscal and monetary policy, banking reform, and social programs. American assistance may have been forthcoming even in the absence of NAFTA. But the formal creation of an interdependent economic space and the political capital expended in doing so increased the stakes for both the United States and Mexico and helped moderate the fall-out associated with the rescue. Back.

Note 29: The Israeli elections in 1996 provide an example of this phenomenon. Much of Shimon Peres' support came from the sector of Israeli society that most benefited from the peace process and Israel's consequent integration into global markets. Benjamin Natanyahu's support came largely from sectors left behind by the improving national economy. Furthermore, Prime Minister Natanyahu's policies during his early months in office appear to have been moderated by Israeli financial markets and the drop in equity prices associated with concern that his election would reverse Israel's integration into global markets and impair the health of the national economy. Back.

Note 30: Karl Deutsch, et al., Political Community and the North Atlantic Area (Princeton: Princeton University Press, 1957). Back.

Note 31: Cite needed. Back.

Note 32: International Institute for Strategic Studies, The Military Balance, 1995-1996 (Oxford: Oxford University Press, 1995), pp. 39-97. Back.

Note 33: Ibid., pp. 23, 41, 220. Back.

Note 34: Andrew Wyatt-Walter, "Regionalism Globalization, and World Economic Order," in Fawcett and Hurrell, Regionalism in World Politics, p. 101. Back.

Note 35: Andrew Hurrell, "Regionalism in the Americas," in ibid., pp. 269-273. Back.

Note 36: Albert Fishlow and Stephan Haggard, "The United States and the Regionalization of the World Economy" (Paris: OECD, 1992), pp. 17, 32. Back.

Note 37: Wyatt-Walter, "REgionalism," p. 85. Back.

Note 38: Hurrell, "Regionalism in the Americas," p. 272. Back.

Note 39: Kirk Lapointe, "CRTC Proposes Canadian Content Boost," Billboard, vol. 102, no. 9 (March 3, 1990), p. 66. Karen Murray, "Broadcasters Seek Survival Plan," Variety, vol. 345, no. 8 (December 2, 1991), pp. 72-82. Back.

Note 40: Fishlow and Haggard, "The United States and the Regionalization of the World Economy," pp. 8, 23. Back.

Note 41: Hurrell, "Regionalism in the Americas," pp. 270-272. Back.

Note 42: China is not on par with Japan in terms of the influence it wields in East Asia. China's recent efforts to flex its muscles -- as exemplified in its threatening military exercises off Taiwan and its tough stance on trade -- coupled with its greater interest in multilateral fora suggest that it is heading toward seeking a greater regional role. My discussion of China's inclusion in an East Asian power center is thus suggestive of likely developments more than reflective of current realities. Back.

Note 43: Thomas Berger, "From Sword to Chrysanthemum: Japan's Culture of Anti-militarims," International Security, vol. 17 (Spring 1993), pp. 119-150. Back.

Note 44: Although the United States, Canada, Mexico, and Chile are members of APEC, I am not including them in these comparisons of core-periphery power balances in East Asia. The United States serves as an extra-regional, off-shore balancer in Asia, much as it does in Europe. This arrangement paradoxically enables regional integration in East Asia to proceed much further than if the United States were not involved, a point I discuss below. Although American participation in APEC appears to dilute regionalism in East Asia, it actually strengthens integration in the region. Data from The Military Balance, 1995-1996, pp. 266, 181, 192. Back.

Note 45: Wyatt-Walter, "Regionalism," p. 117; and Peter Petri, "The East Asian Trading Bloc: An Analytic History," in Frankel and Kahler, Regionalism and Rivalry, p. 22. Back.

Note 46: See, for example, Peter Katzenstein and Martin Rouse, "Japan as a Regional Power in Asia," in Frankel and Kahler, Regionalism and Rivalry, p. 226. Back.

Note 47: See, for example, Shafiqul Islam, "Foreign Aid and Burdensharing: Is Japan Free Riding to a Coprosperity Sphere in Pacific Asia?" in ibid, pp. 367-368. Back.

Note 48: Richard Doner, "Japanese Foreign Investment and the Creation of a Pacific Asian Region," in ibid., 173-174. Back.

Note 49: Increases in intra-regional trade were more the product of substantial economic growth in the region than of the diversion of extra-regional trade. Between 1970 and 1990, for example, East Asia's share of world trade doubled while its intra-regional trade grew from 30% to 41% of its total trade. See Peter Petri, "The East Asian Trading Bloc: An Analytic History," in Frankel and Kahler, Regionalism and Rivalry, p. 42. Furthermore, intra-regional trade has been increasing in Europe, North America, and East Asia since the 1980s, though at a faster rate in East Asia. See Masami Yoshida, Ichiro Akimune, Masayuki Nohara, Kimitoshi Sato, "Regional Economic Integration in East Asia: Special Features and Policy Implications," in Cable and Henderson, Trade Blocs, pp. 62-63. Back.

Note 50: Hadi Soesastro, "The Institutional Framework for APEC: An ASEAN Perspective," in Chia Siow Yue, ed., APEC: Challenges and Opportunities, (Singapore: Institute of Southeast Asian Studies, 1994), p. 36. Back.

Note 51: See, for example, Yoichi Funabashi, "The Asianization of Asia." Back.

Note 52: Fishlow and Haggard, "The United States and the Regionalization of the World Economy," pp. 29-33. Back.

Note 53: Soesastro, "The Institutional Framework for APEC," pp. 46-47. Back.

Note 54: For a description of how APEC functions, see Yoichi Funabashi, Asia Pacific Fusion: Japan's Role in APEC (Washington, D.C.: Institute for International Economics, 1995). Back.

Note 55: Ariff, "APEC and ASEAN," p. 164; and Frankel and Kahler, Regionalism and Rivalry, pp. 4-5. Back.

Note 56: Chia Siow Yue, "Asia-Pacific Foreign Direct Investment: An APEC Investment Code?" in Chia Siow Yue, APEC, p. 148; and Frankel and Kahler, Regionalism and Rivalry, p. 13. Back.

Note 57: The Military Balance, 1995-1996, pp. 179, 181, 23, 220, 48, 50. Back.

Note 58: Fishlow and Haggard, "The United States and the Regionalization of the World Economy," p.33. Back.

Note 59: It is important to note that an amalgamated core means only that the imperial formation in question is led by a unitary government, not that the formation as a whole will be more cohesive or more deeply institutionalized. On the contrary, pluralistic cores, precisely because power resources and authority are divided between two (or more) separate states, may need to rely more heavily on deal-making with the periphery to establish order. In addition, peripheral states may be less likely to balance against a core whose resources are not concentrated in a unitary state. Both factors could render imperial formations with pluralistic cores more cohesive and durable than those with amalgamated cores. Back.

Note 60: Ahmed Aghrout and Keith Sutton, "Regional Economic Integration in the Maghreb," Journal of Modern African Studies, vol. 28, no. 1 (March 1990), pp. 115-139; Ippei Wamazawa, "On Pacific Economic Integration," Economic Journal, vol. 102, no. 415 (November, 1992), pp. 1519-1529; U.S. Department of State, "Fact Sheet: Europe's Multilateral Organizations," U.S. Department of State Dispatch, vol. 3, no. 26 (June 29, 1992), pp. 531-534. Back.

Note 61: See David Soskice, "Openness and Diversity: Thinking About Transatlantic Economic Relations," in Barry Eichengreen, Transatlantic Economic Relations in the Post-Cold War Era (forthcoming, 1997); and "Le Defi Americain, again," The Economist, July 13, 1996, pp. 21-23. Back.

Note 62: Katzenstein and Rouse, "Japan as a Regional Power in Asia," p. 218. Back.

Note 63: See John Ikenberry and Charles Kupchan, "Socialization and Hegemonic Power, International Organization, vol. 44, no. 2 (Summer 1990). Back.

Note 64: Kupchan, The Vulnerability of Empire, p. 258. Back.

Note 65: The following is an illustrative example. On the one hand, regional trade arrangements facilitate global liberalization because it is easier to reach agreement among a small grouping of states first, and then move on to the global level. On the other hand, locking in a regional agreement first may tie the hands of regional representatives when negotiating at the global level, reducing the chances of a broad multilateral agreement. Back.

Note 66: For elaboration of this idea, see Charles A. Kupchan, "Reviving the West," Foreign Affairs, May/June, 1996. Back.

Note 67: See Jacques Marseille, Empire Colonial et Capitalisme Francais: Histoire d'un Divorce (Paris: Albin Michel, 1984). Back.

Note 68: See Robert Chase, Emily Hill, and Paul Kennedy, "Pivotal States and U.S. Grand Strategy," Foreign Affairs, vol. 75, no. 1 (Jan./Feb.), 1996. Back.

Note 69: On the foreign policies of revolutionary states and how outside powers should deal with them, see Stephen Walt, Revolution and War (Ithaca: Cornell University Press, 1996). Back.

Note 70: Isolating revisionist states may be appropriate in certain cases, especially when the state in question is deliberately attempting to export instability through terrorism or overt acts of aggression against its neighbors. As recent experiences with Iran, Iraq, Libya, and Cuba demonstrate, however, isolation and economic sanctions have not proved effective in bringing about regime change. Back.

Note 71: On deductive grounds, a pluralistic core of contiguous states should be more stable than one of noncontiguous states. Contiguity forces powerful states to extremes either to move in lock-step to avoid competition or to be rivals in a search for superiority. Core states that are separated by an expanse of land are more likely to have mixed relations. They will likely compete for dominance in the area between them. But this expanse of land also serves as a buffer, making it unnecessary for the parties to choose between close partnership and open rivalry. From this perspective, Russia's inclusion in the EU would not lead to the union's unraveling, but it would impair its coherence by diluting its core. Back.