Liberal Theory of International Politics 519 Societal pressures transmitted by representative institutions and practices alter"state preferences."This term designates an ordering among underlying substantive out- comes that may result from international political interaction.Here it is essential- particularly given the inconsistency of common usage-to avoid conceptual confu- sion by keeping state“preferences”distinct from national“strategies,.”“tactics,” and "policies,"that is,the particular transient bargaining positions,negotiating de- mands,or policy goals that constitute the everyday currency of foreign policy.State preferences,as the concept is employed here,comprise a set of fundamental interests defined across "states of the world."Preferences are by definition causally indepen- dent of the strategies of other actors and,therefore,prior to specific interstate politi- cal interactions,including external threats,incentives,manipulation of information, or other tactics.By contrast,strategies and tactics-sometimes also termed "prefer- ences"in game-theoretical analyses-are policy options defined across intermediate political aims,as when governments declare an "interest"in "maintaining the bal- ance of power,,”“containing'or“appeasing'an adversary,.or exercising“global leadership."12 Liberal theory focuses on the consequences for state behavior of shifts in fundamental preferences,not shifts in the strategic circumstances under which states pursue them. Representative institutions and practices determine not merely which social coali- tions are represented in foreign policy,but how they are represented.Two distinc- tions are critical.First,states may act in either a unitary or "disaggregated"way.In many traditional areas of foreign policy,"politics stops at the water's edge,"and there is strong coordination among national officials and politicians.In other areas, the state may be"disaggregated,"with different elements-executives,courts,cen- tral banks,regulatory bureaucracies,and ruling parties,for example-conducting semiautonomous foreign policies in the service of disparate societal interests.13 Sec- ond,domestic decision making may be structured so as to generate state preferences that satisfy a strong rationality condition,such as transitivity or strict expected utility maximization,or so as to satisfy only the weaker rationality criterion of seeking efficient means.Recently,formal theorists have derived specific conditions under which nonunitary state behavior can be analyzed"as if"it were unitary and rational, implying that much superficially "nonrational"or "nonunitary"behavior should actually be understood in terms of shifting state preferences.4 Taken together,assumptions 1 and 2 imply that states do not automatically maxi- mize fixed,homogeneous conceptions of security,sovereignty,or wealth per se,as realists and institutionalists tend to assume.Instead they are,in Waltzian terms,"func- tionally differentiated";that is,they pursue particular interpretations and combina- tions of security,welfare,and sovereignty preferred by powerful domestic groups 12.The phrase "country A changed its preferences in response to an action by country B"is thus a misuse of the term as defined here,implying less than consistently rational behavior;see Sebenius 1991, 207. 13.See Slaughter 1995;and Keohane and Nye 1971. 14.Achen1995.Liberal Theory of International Politics 519 Societal pressures transmitted by representative institutions and practices alter "state preferences." This term designates an ordering among underlying substantive out￾comes that may result from international political interaction. Here it is essential￾particularly given the inconsistency of common usage-to avoid conceptual confu￾sion by keeping state "preferences" distinct from national "strategies," "tactics," and "policies," that is, the particular transient bargaining positions, negotiating de￾mands, or policy goals that constitute the everyday currency of foreign policy. State preferences, as the concept is employed here, comprise a set of fundamental interests defined across "states of the world." Preferences are by definition causally indepen￾dent of the strategies of other actors and, therefore, prior to specific interstate politi￾cal interactions, including external threats, incentives, manipulation of information, or other tactics. By contrast, strategies and tactics-sometimes also termed "prefer￾ences" in game-theoretical analyses-are policy options defined across intermediate political aims, as when governments declare an "interest" in "maintaining the bal￾ance of power," "containing" or "appeasing" an adversary, or exercising "global leadership."12 Liberal theory focuses on the consequences for state behavior of shifts in fundamental preferences, not shifts in the strategic circumstances under which states pursue them. Representative institutions and practices determine not merely which social coali￾tions are represented in foreign policy, but how they are represented. Two distinc￾tions are critical. First, states may act in either a unitary or "disaggregated" way. In many traditional areas of foreign policy, "politics stops at the water's edge," and there is strong coordination among national officials and politicians. In other areas, the state may be "disaggregated," with different elements-executives, courts, cen￾tral banks, regulatory bureaucracies, and ruling parties, for example-conducting semiautonomous foreign policies in the service of disparate societal interests.I3 Sec￾ond, domestic decision making may be structured so as to generate state preferences that satisfy a strong rationality condition, such as transitivity or strict expected utility maximization, or so as to satisfy only the weaker rationality criterion of seeking efficient means. Recently, formal theorists have derived specific conditions under which nonunitary state behavior can be analyzed "as if" it were unitary and rational, implying that much superficially "nonrational" or "nonunitary" behavior should actually be understood in terms of shifting state preferences. l4 Taken together, assumptions 1 and 2 imply that states do not automatically maxi￾mize fixed, homogeneous conceptions of security, sovereignty, or wealth per se, as realists and institutionalists tend to assume. Instead they are, in Waltzian terms, "func￾tionally differentiated"; that is, they pursue particular interpretations and combina￾tions of security, welfare, and sovereignty preferred by powerful domestic groups 12. The phrase "country A changed its preferences in response to an action by country B" is thus a misuse of the term as defined here, implying less than consistently rational behavior; see Sebenius 1991, 207. 13. See Slaughter 1995; and Keohane and Nye 1971. 14. Achen 1995