Comparing and Contrasting Neo-Realism and Neo-Liberalism


1. Introduction provides a brief outline of the paper as well as introduces the researched topic. Neo-realism and neo-liberalism have a number of issues that make them quite different with respect to their impact on international affairs, yet the debate is highly exaggerated and fails to focus on the inherently contrasting points diverting attention from truly topical issues worth studying for their subsequent empirical use.

2. Main body
2.1. Neo-realism subsection presents a brief overview of the neo-realistic school of thought and emphasizes some of its key premises.
2.2. Neo-liberalism subsection presents a brief overview of the neo-liberal school of thought and emphasizes some of its key ideas focusing on the problem relating to the lack of a single unanimously agreed definition of the concept.
2.3. Comparing and contrasting neo-realism and neo-liberalism subsection attempts to compare and contrast neo-realism and neo-liberalism on the basis of their views concerning such key issues as anarchy, international cooperation, international institutions, relative and absolute gains, economy and security, capabilities, intentions, and perceptions.
2.4. Key issues in the debate between neo-realism and neo-liberalism subsection provides description of some key issues present in the debate between supporters of neo-realism and neo-liberalism.
3. Conclusion is a final section that ends the discussion of neo-realism and neo-liberalism and determines whether the two schools of thought are really different and whether they are suitable for the analysis of the current geopolitical situation.

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Neo-realism and neo-liberalism have been the main ideological philosophies in the developed world over the past several decades. They have also dictated the policies of international affairs. They are often considered to be revised versions of realism and liberalism, respectively, which have been adjusted to contemporary reality. Neo-realism is also often referred to as structural realism, while neo-liberalism is called liberal institutionalism by some scholars. These two ideological schools have their supporters and critics that have been waging a heated debate for several decades trying to convince their opponents of the imperfection and unsuitability of their chosen theories. However, this debate has not produced any single productive outcome, instead giving rise to the allegation that it only contributes to further confusion. Anyway, different countries seem to ground their international policies on either neo-realism or neo-liberalism. At least, scholars and researchers who analyze their policies claim so. Hence, the overwhelming majority of Western countries, in particular the US and the UK, are said to rely on neo-liberalism nowadays, which has led to the spread of globalization and international business. It has also resulted in the creation of various international institutions that often propagate the establishment of capitalism and democracy in developing and third-world countries. In turn, some scholars suppose that neo-realism has been more helpful and useful when analyzing the current geopolitical arena and since the times of the Cold War. Furthermore, they emphasize that China, Russia and some other countries that want to play a significant role in the international affairs follow the ideology that is more consistent with neo-realism than neo-liberalism. There is also a third group of scholars who claim that neo-realism and neo-liberalism are not as different as they are portrayed, and, thus, have a similar underlying foundation. Hence, the current paper is aimed at comparing and contrasting neo-realism and neo-liberalism by finding out whether they are really as different as opponents claim. Besides, the paper is going to highlight several most controversial and confusing issues in the debate between supporters of the two ideological schools. Prior to conducting the research on the raised topic, the paper hypothesizes that neo-realism and neo-liberalism have a number of issues that make them quite different with respect to their impact on international affairs. Yet, the debate is highly exaggerated and fails to focus on the inherently contrasting points diverting attention from truly topical issues worth studying for their subsequent empirical use.

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Neo-realism, also referred to as structural realism, is considered to be a relatively modern variation of classic realism, since it derives its fundamental ideas, albeit in a revised and adjusted form, from this old school of thought (University of Massachusetts, n. d.). For the first time, a serious paper on neo-realism and its underlying foundation, which has become a fundamental work referenced by the overwhelming majority of neo-realists and respectively criticized by neo-liberalists, is the book entitled Theory of International Politics by Kenneth Waltz (Jakobsen, 2013). This scholar has revised methodological and ontological foundations of the realist school and has shaped a theory that is now known as neo-realism. His primary goal was to make neo-realism more scientific and theoretically justified, since, in his opinion, the existing realist school of through lacked those features and was therefore not suitable for the analysis of international relations. Hence, neo-realism emphasizes significance of the structure of international affairs and a system of international affairs, as well as the position of peculiar states within this system (University of Massachusetts, n. d.). Therefore, the theory often ignores internal events and features of states and considers internal affairs to be unimportant for the explanation of the state’s foreign policy and finding of causes of potential and occurring wars, since distribution of power on the international geopolitical arena matters (University of Massachusetts, n. d.).

Summing up key neo-realistic ideas, this school of thought is evidently focused on anarchy and distribution of power. In general, supporters of neo-realism state that is “the bedrock theory of international relations” that is highly important and suitable for understanding and forecasting the behavior and interaction of major international relations actors, i.e. states, under different circumstances and in the constantly changing environment (Jakobsen, 2013). However, neo-realists acknowledge the limitations of their theory and do not strive to predict and explain everything that happens in the world, instead claiming that neo-realism serves as a starting point for a truly all-encompassing analysis of international relations (Jakobsen, 2013). Neo-realism is said to focus only on the so-called biggest issues relating to international affairs, including war, war avoidance, states, power, security issues, etc. At the same time, neo-realists admit that their theory cannot explain and predict details and peculiarities of the abovementioned issues. Instead, it provides a general framework within which the analysis of particular situations has to be carried out with the use of other empirical and theoretical tools and approaches.

Hence, the primary idea of neo-realism is that the global system is ordered in the form of anarchy, i.e. there is no suprastate government that can rule the entire world and bring separate states to be accountable for their actions (Jakobsen, 2013). Therefore, the result of anarchy is the existence of the international system that “is essentially a self-help system consisting of states that are autonomous, functionally undifferentiated actors each of which must always be prepared to fend for itself” (Jakobsen, 2013). Another key belief of the school of thought under consideration concerns the distribution of power, or capabilities, among the states that are the primary actors in the international system. These competences significantly differ among states in terms of their volume and importance, which is why states are differentiated on the basis of how much power they possess on the international geopolitical arena. As a result of this differentiation, “variations in power yield variations in the types and magnitude of structural constraints that states face, thereby effectuating variation in how states behave (or should behave)” (Jakobsen, 2013). Moreover, neo-realists pay little attention to international institutions and do not consider them to be decisive for the international relations. Besides, the history of international institutions is not important for the understanding of their current activities and policies within the domain of international affairs. According to neo-realists, it is extremely difficult to achieve and maintain international cooperation, which is why its role in the upkeep of global and local peace is not prominent. In line with the theory of neo-realism, when making foreign policies and defining the place of some particular state within the framework of international cooperation, decision-makers and policy-makers focus on relative gains. Besides, neo-realism focuses on the capabilities of states and foreign policy makers with respect to international affairs. This approach is consistent with their view that all foreign policy decisions are rational and have solid justification.

Neo-realism is often criticized by representatives of other schools of thought, especially neo-liberalists. They point out that neo-realism considers international cooperation to be not very significant, since neo-realists do not agree with a statement that peace can be maintained only through the cooperation of states. Some claim that this school of thought is excessively theoretical and they would prefer “a more empirical and quantitative approach to the study of international relations” (University of Massachusetts, n. d.). Moreover, they are dissatisfied with the fact that neo-realism does not make conclusions from empirical observations of events and the verified data, even though neo-realists themselves do not agree with this critical comment (University of Massachusetts, n. d.). Neo-realism is also said to be “too one-dimensional”, as it emphasizes the distribution of power between states, while virtually ignoring non-state actors like NGOs, international organizations, and international business corporations (University of Massachusetts, n. d.). In addition to some critical statements against neo-realism, it is claimed to be too rational, as it supposes that all decisions in the domain of international affairs are taken in a rational and logical way. However, the critics of this approach suppose that foreign policy decisions may be irrational and not subject to rational explanation, hence being unpredictable when applying this particular theory.


Neo-liberalism, or neoliberal institutionalism, has become a rather popular and wide-spread school of thought in the contemporary world that is even sometimes referred to as “the dominant ideology shaping our world today” (Thorsen & Lie, 2000). This theory is said to be a revised and revived version of liberalism which pays huge attention to free market capitalism. Although neo-liberalism is often mentioned in various scientific papers and researchers, there is a problem with finding one accurate definition for the notion that would account for versatile ideas bundled within the framework of this ideology (Boas & Gans-Morse, 2009). Although neo-liberalism is considered a relatively recent phenomenon that has gained particular popularity over the two past decades, the first mention of the concept dates back to the 19th century. A French economist Charles Gide wrote that it marked a return to classical liberal economic theories of Adam Smith and his followers (Boas & Gans-Morse, 2009). Subsequently, the notion has revived and increased in popularity in the late 20th century.
Withal, based on the analysis of recent academic journals, it has been revealed that neo-liberalism is used primarily in four ways: as “a set of economic reform policies”, “a development model”, “a normative ideology” and “an academic paradigm” (Boas & Gans-Morse, 2009). Such lack of consistency in the use of the notion is a huge shortcoming with respect to the application of the school of thought, since it has become too vague and broad. Therefore, the supporters of neo-liberalism advocate for development of a more comprehensive definition, which would also facilitate its use and deprive critics of a major argument relating to its inapplicability.

One of the most frequently mentioned and referenced definitions of neo-liberalism has been given within the domain of economics by Harvey (2005):

Neoliberalism is in the first instance a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets and free trade. The role of the state is to create and preserve an institutional framework appropriate to such practices…It must also set up those military, defence, police and legal structures and functions required to secure private property rights and to guarantee, by force if need be, the proper functioning of markers (Harvey, 2005).

Within the framework of international relations, however, there is no single agreed definition of neo-liberalism. Therefore, scholars often refer to the above explanation, since the theory is based on the models borrowed from economics. Neo-liberalists suppose that the international order is anarchy in a sense that there is and can be no single global government that would hold power over governments of all states. However, they also claim that “in an interdependent world, states will seek efficiency in managing collective problems presented by international anarchy” (Kay, 2006). In this respect, neo-liberalism emphasizes the importance of international cooperation of the institutions that can be efficient in ensuring peace and war avoidance. Taking into consideration this importance of international institutions, neo-liberalists attempt to find out how they can influence states in an effective way. Besides, they suppose that the decision-makers in international affairs are not always rational and rely more on intentions and perceptions rather than capabilities. International cooperation can be reached and maintained, according to this school of thought. This cooperation is based not on security issues and distribution of power, but rather on political economy and free markets.

In fact, neo-liberalists are supporters of capitalism, deregulation, money accumulation, and “withdrawal of the state from many areas of social provision” (Harvey, 2005). It has dominated the policy-making of the US and the UK in the recent past and has been imposed on many other countries through such international institutions as World Bank and International Monetary Fund (Kotz, 2002). However, nowadays, there is a new idea that is gaining popularity. It states that neo-liberalism should be the ideology of choice in the world in the future both in economics and international affairs, since “the world capitalism faces a future of stagnation, instability, and even eventual social breakdown” and globalization based on the premises of neo-liberalism will have a detrimental impact on the whole world (Kotz, 2002). The EU and its success in terms of integration of many states is supposed to be a test of the theory of neo-liberalism and its suitability in the contemporary world (Harvey, 2005). The following subsection provides a brief comparison of neo-liberalism and neo-realism based on the discussion of these schools of thought in the present and previous subsections.

Comparing and Contrasting Neo-Realism and Neo-Liberalism

Based on the above discussion of the two schools of thought, it may be concluded that they share a range of similar founding principles, but differ in their respective conclusions. Hence, both neo-realism and neo-liberalism agree that the global order is in the state of anarchy. However, their interpretations of anarchy and its results for states as well as ways of its mitigation differ. According to neo-realists, anarchy means that states can do virtually anything they want, yet taking into consideration the distribution of power, i.e. capabilities they possess and can use to influence other international actors. In turn, it gives rise to concerns about security, war avoidance, and arms races. Neo-liberalists, on the contrary, suppose that anarchy can be effectively mitigated and managed with the help of international cooperation of various institutions. Besides, they do not view anarchy as a reason for accumulating military powers and starting confrontations with other states for even more power. Thus, they place more emphasis on economy, in particular free market capitalism, as a basis of international cooperation and peace preservation. Hence, while neo-liberalists consider international cooperation to be quite easily attainable and effective, neo-realists think that it is very difficult to reach and maintain, as well as to prevent wars. Moreover, neo-realism does not value international institutions much, while neo-liberalism views them as valuable instruments for the mitigation of anarchy within the international system.

With respect to relative and absolute gains that states can get within the system of international affairs and cooperation, neo-realists value the former and neo-liberalists prefer the latter. Of course, it would be erroneous to state that supporters of the two theories emphasize only one kind of gains completely ignoring the other one, yet there are some differences in this respect. Neo-realism supposes that states do not care much about absolute gains that they can get from participation in some project aimed at fostering international cooperation as about relative gains, i.e. whether they will get more or less than others. Thus, “if an expected gain is to be divided, say, in the ration of two to one, one state may use its disproportionate gain to implement a policy intended to damage or destroy the other” (Baldwin, 1993). Even a promise of substantial absolute gains for all parties involved will not promote their cooperation if all of them are concerned that others may use these gains to harm them (Baldwin, 1993). On the contrary, neo-liberalists emphasize that absolute gains should be the primary goal of states deciding to opt in favor of international cooperation. Therefore, they suppose that cooperating states prioritize common absolute gains and seek ways how to increase them. However, some representatives of both theories admit that “the distinction between relative and absolute gains is not so clear-cut as it might seem” (Baldwin, 1993). Besides, neo-liberalists acknowledge that they have more than once underestimated the potential impact and significance of relative gains (Baldwin, 1993).

The two schools also differ in their views of the process of decision-making within the domain of international affairs. Hence, neo-realists emphasize rationality and account for the capabilities as the primary factors of decision-making. In turn, neo-liberalists suppose that not all foreign policy decisions are rational and that they are more frequently based not on the consideration of capabilities of a particular state, but rather on its perceptions of its own capabilities and those of other actors, as well as on intentions of all parties involved. Finally, neo-liberalists and neo-realists differ in terms of the priority of state goals such as economic welfare and national security. Thus, these both issues are important, but they are prioritized differently by representatives of different schools of thought with neo-realists focusing more on national security and neo-liberalists prioritizing economic welfare (Baldwin, 1993). This prioritization is logical and justified, as neo-realists found their theory on the studies of war, war avoidance and national security. In turn, neo-liberalists largely base their theory on political economy and the way international affairs may contribute to the development of free market capitalism and economic globalization. All these differences have given rise to a heated debate raging between neo-liberalists and neo-realists for at least past two decades. Moreover, numerous studies have been aimed at finding out whether these two schools of thought are really so different with respect to their underlying foundations.

Key Issues in the Debate between Neo-Realism and Neo-Liberalism

Participants of the so-called neo-neo debate may be subdivided into three main groups: convicted supporters of either of the two schools of thought and the more recent and smaller group of scholars who suppose that neo-realism and neo-liberalism are quite similar. Representatives of the latter group claim that “the two competing theories are actually variants of a single, underlying model” (Thies, 2004). This conclusion is based on their internal consistency “with respect to the cultures of anarchy they predict”, even though there are some differences that call for their use under different circumstances (Thies, 2004).

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Nonetheless, the overwhelming majority of scholars support either neo-liberalism or neo-realism and point out their differences mentioned in the previous subsection. Initially, this debate was productive and contributed to a better and more detailed elaboration of ideas typical for the two schools of thought. However, recently this debate has changed and turned into polemics based on repetitive articulation of the same points. Hence, there is a supposition that “the two approaches and the debate between them have failed to contribute as much as they might have to international relations theory” (Powell, 1994). According to Powell (1994), there are three key issues in the neo-neo debate, including the meaning of anarchy and its implications, the issue of relative and absolute gains, and the “tension between coordination and distribution”. Thus, the researcher supposes that proponents of both theories often confuse causes with effects and are not clear in addressing the three issues, which in turn complicates comprehension of the respective schools of thought. Besides, the debate has not always served to clarify different points of neo-liberalism and neo-realism, thereby confusing and obscuring underlying concepts and ideas. Nevertheless, “this debate has forced us to examine the foundations of some of our most influential theories of international politics more carefully”, which will be beneficial for the future (Powell, 1994). Therefore, Powell (1994) believes that it is only necessary to steer the debate in the right direction, since it can help clarify complicated points of the two theories. In turn, Baldwin (1993) supposes that the neo-liberalism – neo-realism debate is based on six key points, including anarchy, its nature and consequences; international cooperation; relative and absolute gains; priority of state goals; intentions and capabilities; institutions and regimes. Of course, these six focal points are not the only issues that the supporters of the two theories cannot agree on, but they constitute the basis of the ongoing debate. In any case, the debate between neo-liberalists and neo-realists is still continuing and both groups offer credible and convincing arguments. The parties also provide empirical evidence for the superiority of their theory over the other one in terms of current international events occurring within the domain of international affairs and global geopolitical arena.


The primary goal of the present paper has been to compare and contrast neo-realism and neo-liberalism by finding out whether they are really different and mutually exclusive. It seems that these two theories of international affairs have a number of issues that they diverge on in terms of their respective views, which make them quite different. Some of such issues include views on international cooperation, distribution of power, relative and absolute gains, prioritization of security and economy, as well as the focus on capabilities, intentions and perceptions in the process of foreign policy decision-making. However, at the same time, neo-liberalism and neo-realism share some underlying founding principles, thus differing only with respect to the prioritization of issues. For instance, both theories acknowledge that the order of the international system is anarchy and that both economic warfare and national security are essential for any state. Accounting for these similarities and differences, it may be assumed that the debate raging between neo-realists and neo-liberalists is somewhat exaggerated and fails to really contribute to the elaboration and comprehension of the two theories, instead diverting attention from study of truly topical issues currently present within the domain of international relations.

With respect to the applicability and the use of the two theories in the contemporary world, it seems that different countries support different theories when drafting and implementing their foreign policies. Thus, when applying neo-realism, it is evident that the USA may be viewed as a world superpower and hegemon in the unipolar world order established after the end of the Cold War, the fall of the USSR, and the destruction of the bipolar world order. At the same time, Russia and even more China accumulate power and capabilities and aspire to become international superpowers, thereby restoring the bipolar world order. It is to be seen whether they succeed and how the USA will react to their aspirations. Applying neo-liberalism to the analysis of the current geopolitical situation, it is obvious that primarily the USA and other Western countries are convinced supporters of this theory, at least with respect to such issues as free market capitalism, international cooperation, and international institutions. The European Union is the most prominent example of neo-liberal interstate cooperation through the establishment of a common political, economic, and social environment. However, it remains to be seen whether the integration of several states will be successful and effective. Overall, both theories have their strengths and shortcomings, which makes it more reasonable to apply both approaches when analyzing and forecasting international relations.

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