Liberal Theory of International Politics 517 Liberal theory rests on a"bottom-up"view of politics in which the demands of individuals and societal groups are treated as analytically prior to politics.Political action is embedded in domestic and transnational civil society,understood as an aggregation of boundedly rational individuals with differentiated tastes,social com- mitments,and resource endowments.Socially differentiated individuals define their material and ideational interests independently of politics and then advance those interests through political exchange and collective action.6 Individuals and groups are assumed to act rationally in pursuit of material and ideal welfare.7 For liberals,the definition of the interests of societal actors is theoretically central. Liberal theory rejects the utopian notion that an automatic harmony of interest exists among individuals and groups in society;scarcity and differentiation introduce an inevitable measure of competition.Where social incentives for exchange and collec- tive action are perceived to exist,individuals and groups exploit them:the greater the expected benefits,the stronger the incentive to act.In pursuing these goals,individu- als are on the average risk-averse;that is,they strongly defend existing investments but remain more cautious about assuming cost and risk in pursuit of new gains.What is true about people on the average,however,is not necessarily true in every case: some individuals in any given society may be risk-acceptant or irrational. Liberal theory seeks to generalize about the social conditions under which the behavior of self-interested actors converges toward cooperation or conflict.Conflict- ual societal demands and the willingness to employ coercion in pursuit of them are associated with a number of factors,three of which are relevant to this discussion: divergent fundamental beliefs,conflict over scarce material goods,and inequalities in political power.Deep,irreconcilable differences in beliefs about the provision of public goods,such as borders,culture,fundamental political institutions,and local social practices,promote conflict,whereas complementary beliefs promote harmony and cooperation.Extreme scarcity tends to exacerbate confict over resources by increasing the willingness of social actors to assume cost and risk to obtain them. Relative abundance,by contrast,lowers the propensity for conflict by providing the opportunity to satisfy wants without inevitable conflict and giving certain individuals and groups more to defend.Finally,where inequalities in societal influence are large, conflict is more likely.Where social power is equitably distributed,the costs and benefits of actions are more likely to be internalized to individuals-for example, through the existence of complex,cross-cutting patterns of mutually beneficial inter- action or strong and legitimate domestic political institutions-and the incentive for selective or arbitrary coercion is dampened.By contrast,where power asymmetries permit groups to evade the costs of redistributing goods,incentives arise for exploit- ative,rent-seeking behavior,even if the result is inefficient for society as a whole.8 6.This does not imply a "pre-social"conception of the individual unencumbered by nation,commu- nity,family,or other collective identities but only that these identities enter the political realm when individuals and groups engage in political exchange on the basis of them;see,for example,Coleman 1990. 7.Kant1991,44. 8.Milgrom and Roberts 1990,86-87.Liberal Theory of International Politics 517 Liberal theory rests on a "bottom-up" view of politics in which the demands of individuals and societal groups are treated as analytically prior to politics. Political action is embedded in domestic and transnational civil society, understood as an aggregation of boundedly rational individuals with differentiated tastes, social com￾mitments, and resource endowments. Socially differentiated individuals define their material and ideational interests independently of politics and then advance those interests through political exchange and collective a~tion.~ Individuals and groups are assumed to act rationally in pursuit of material and ideal welfare.' For liberals, the definition of the interests of societal actors is theoretically central. Liberal theory rejects the utopian notion that an automatic harmony of interest exists among individuals and groups in society; scarcity and differentiation introduce an inevitable measure of competition. Where social incentives for exchange and collec￾tive action are perceived to exist, individuals and groups exploit them: the greater the expected benefits, the stronger the incentive to act. In pursuing these goals, individu￾als are on the average risk-averse; that is, they strongly defend existing investments but remain more cautious about assuming cost and risk in pursuit of new gains. What is true about people on the average, however, is not necessarily true in every case: some individuals in any given society may be risk-acceptant or irrational. Liberal theory seeks to generalize about the social conditions under which the behavior of self-interested actors converges toward cooperation or conflict. Conflict￾ual societal demands and the willingness to employ coercion in pursuit of them are associated with a number of factors, three of which are relevant to this discussion: divergent fundamental beliefs, conflict over scarce material goods, and inequalities in political power. Deep, irreconcilable differences in beliefs about the provision of public goods, such as borders, culture, fundamental political institutions, and local social practices, promote conflict, whereas complementary beliefs promote harmony and cooperation. Extreme scarcity tends to exacerbate conflict over resources by increasing the willingness of social actors to assume cost and risk to obtain them. Relative abundance, by contrast, lowers the propensity for conflict by providing the opportunity to satisfy wants without inevitable conflict and giving certain individuals and groups more to defend. Finally, where inequalities in societal influence are large, conflict is more likely. Where social power is equitably distributed, the costs and benefits of actions are more likely to be internalized to individuals-for example, through the existence of complex, cross-cutting patterns of mutually beneficial inter￾action or strong and legitimate domestic political institutions-and the incentive for selective or arbitrary coercion is dampened. By contrast, where power asymmetries permit groups to evade the costs of redistributing goods, incentives arise for exploit￾ative, rent-seeking behavior, even if the result is inefficient for society as a whole. 6. This does not imply a "pre-social" conception of the individual unencumbered by nation, commu￾nity, family, or other collective identities but only that these identities enter the political realm when individuals and groups engage in political exchange on the basis of them; see, for example, Coleman 1990. 7. Kant 1991,44. 8. Milgrom and Roberts 1990, 86-87