The Fall of Interdependence Theory and The Rise of Norm Building


The Fall of Interdependence Theory and The Rise of Norm Building/ Port of Los Angels

Economic interdependence between former rivals expanded swiftly at the end of the Cold War. States that were once bitter enemies opened doors for trade. Proponents of neoliberalism viewed this as a mechanism to reduce the chances of war and supported economic interdependence which further pushed globalization (Drezner, 2023). Theoretically speaking this notion makes sense. Why would rational actors risk giving up mutually profitable relationships to engage in conflicts that are costly in terms of capital, lives, and investments? A few decades after championing this theory, however, observers are now having second thoughts.

Policymakers now seem to have given up on the premise that trade between two or more countries will result in peace simply because the theory no longer holds water. Various instances where economic interdependences between states were exploited and broken under difficult circumstances exposed the weakness of the economic interdependence theory. Instead, a more popular approach to building ties in international relations where state behaviors are dictated by norms and identity has been on the rise since the Cold War era and is becoming increasingly apparent. This is aligned with constructivism, a theory that considers the world as we know it to be socially constructed and state behavior stems from state identity and social norms. In short, states will no longer behave to achieve peace and economic gains but will act in accordance with identity, norms, and attempts to build them.

Theoretical approach

According to Behravesh (2011) constructivism as opposed to rational theories posits that interactions between states are shaped by their identities and norms that are constantly changing. Constructivists claim that actors’ interests and goals are shaped by social structures wherein norms are created by shared knowledge, material resources, social discourse, and interactions between states. 

Identity is also a major concept within constructivism. Much like norms, identities are socially constructed and subject to change. These identities reveal how actors understand themselves. Thus, constructivists believe that it is possible to predict state behavior once its identity is understood. 

Finally, Theys (2018) adds that constructivists believe that anarchy by itself does not produce predetermined interactions among states. Rather, under anarchy, different social structures can be produced based on the actors’ identities. Thus, as Wendt famously said, “Anarchy is what states make of it.”

Weakness and failures of the interdependence theory

The number of instances where the economic interdependence theory disappointed its champions is now too large to ignore. Simply put, trade relations are just not strong enough and cannot maintain peace. China used to be the largest importer of Australian coal. However, as the Australian government called for an investigation into China’s handling of the COVID-19 outbreak, China quickly banned Australian coal imports, creating losses for both parties. The Philippines too have a similar experience with China. Former Filipino President Duterte’s efforts to build economic ties with China were quickly diminished after a change in administration that upheld sovereignty above its ties to China. This prompted the Philippine Navy and Coast Guard to be mobilized to contend with China’s overlapping claims and security forces in the West Philippine Sea. The same can be said with India and China, despite being held together by BRICS and other trade agreements, skirmishes between each other armies in the Himalayas are a regular occurrence.

Other than failing to maintain peace, interdependent relations are also often co-opted in a single-sided manner to deprive the other party of resources, pressuring them to achieve strategic interests. This argument was well articulated by Newman and Farrell’s (2019) op-ed “Weaponized Interdependence.” Russia limiting its natural gas supply to Western European states when it condemned its military campaign in Ukraine is a prime example of weaponized interdependence. This isn’t particularly a new practice either, Saudi Arabia has done the same by limiting its oil supply to the US to prevent it from selling weapons to Israel in the 70s. More modern iterations of weaponized interdependence involve the US limiting American technology to China to suppress its microchip productions and depriving Indonesia of preferential trade treatments when the government enacted a policy that required Mastercard and Visa to link with a local partner before making transactions, shaving off their profit margins. 

One final mistake that proponents of economic interdependence made is that they assumed all states uphold peace and economic gains as the highest priority. The truth of the matter is that states are far more complex and will seek out more than just stability and growth, especially if their survival is more or less guaranteed. The US is primarily concerned with extending its influence on every continent in the world, China on the other hand is focused on its “national rejuvenation.” Finally, Bhutan opts for an isolationist foreign policy thus only recognizing 53 states. For states to achieve these goals and ideals they might have to sacrifice peace and economic gains, but time after time these states proved that they were willing to do so. 

Increasing trend of building norms

Building and acting in accordance with norms and identity articulated through social interactions is not a new occurrence. One might claim that European Union states are driven by a desire for peace and economic gains. While this might be true, the social interactions that led up to this norm and identity cannot be dismissed. Having been through two separate wars, Germany was compelled to replace its militaristic identity with that of pacifism and abandon its “uniting the German people” rhetoric. The rest of Europe too became more flexible in upholding its sovereignty allowing a norm that prioritizes economic growth but sacrifices national integrity to take over.

The dynamics of the Middle East too are heavily affected by identities and norms. Iran and Saudi Arabia’s strained relationship stems from the Shia-Sunni divide. The disconnect between the two worsened after Iran’s Islamic revolution which prompted the now theocratic republic of Iran to export its revolutionary ideals to other states in the Middle East. Saudi Arabia on the other hand which saw itself as the ultimate status quo contended Iran’s efforts. This constant violent interaction between each other created a norm of competition and interfering in smaller states’ affairs. 

Efforts to build new norms through social interactions and discourse are most apparent in the Indo-Pacific. Take Southeast Asia for example, a region where its constituents built themselves a new norm, identity, and even a goal over the course of decades through interactions. ASEAN (The Association of Southeast Asian Nations) prides itself on articulating its own fashion of diplomacy marked by non-interference in domestic affairs and placing decision-making based on consensus above all dubbed the ASEAN way. With ASEAN’s strength being its ability to convene various surrounding powers for discourse, statesmen and academicians pushed for ASEAN to achieve ASEAN centrality and ASEAN outlook on the Indo-Pacific by extension. It is noteworthy that these goals and ideals were articulated without intervention from foreign powers. Not to be outdone, other Indo-Pacific states such as QUAD members, Japan, the US, Australia, and India, too rallied together under their own perspective and strategy for the Indo-Pacific which they call the “Free and open Indo-Pacific”. These QUAD members are eager to remind observers of their strategy to shape discourse in high-level summits and forums with the most recent case being India and Japan bringing it up during the G7 summit. 

China too embarked on its own attempt to shape norms in the Indo-Pacific to fit its national interests by pushing rhetoric and overtly contending with Western-led structures and institutions. A prime example of this was seen in China claiming ownership and sovereignty over 80% of the South China Sea and enforcing its authority while using historical claims as justification. Wanting to maintain its economic presence the norm, it has established the Asian Infrastructure Investment Bank and President Xi warned the West against decoupling from China’s trade networks. All of this was done in the name of the Chinese dream, a goal set by China to never be humiliated again after surviving embarrassing interactions with European states in the 19th century.

These case studies from region to region produced vastly different outcomes in terms of how states within the region interact with each other. It proves that anarchy is not a predetermining factor but what states make of it.


The failures and loopholes within economic interdependence are now excessively evident. As seen from cases involving China’s trade relations trade relations simply were not strong enough and even failed to maintain peace. Furthermore, interdependent relations are often co-opted to pressure adversaries by depriving them of resources, technology, or even lower tariffs as seen from cases between Russia to Western Europe and US to China and Indonesia.

International relations of various regions have been marked by social norms and state identities that were shaped by decades if not centuries of interactions and discourse among its constituents.  This is noticeable in Western Europe, and the Middle East and conspicuous in the Indo-Pacific. Rhetoric articulated from identities and social interactions is constantly pushed within the Indo-Pacific in an attempt to shape the norm to benefit themselves even if it might sacrifice peace and potential economic gains. All of this is not to say that states should give up on economic cooperation but simply that trade and investment alone cannot be expected to foster lasting peace which will also be vulnerable to change. 


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