Small States and Shelter Theory

Iceland's External Affairs

Baldur Thorhallsson

• Publisher: Routledge
• Year: 2018
• ISBN:
  9780429871801
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

Small states are dependent on the economic, political, and societal shelter provided by larger states and international organizations to survive and prosper.

Iceland provides an ideal case study for shelter theory, due both to its smallness as compared with its larger neighbouring states, as well as its status as both an entity and then as a state. That Iceland has historically been so isolated, relative to other small European states, also makes it easier to trace the country's interactions with other actors, since the impact of each interaction can be measured more definitively thus broadening the theory's validity and offering new insights into its operations. The contributors to this volume focus on the extent of Iceland's external engagement with other states and the domestic consequences of this interaction. Societal shelter, in terms of transfer of norms and values, is as of much importance as economic and political shelter. By unpacking the structure of Iceland's external relations, this book demonstrates both the size-related disadvantages and the unique needs of small states to evaluate, explain, and predict small state behaviour.

This book will be of interest to all scholars in international relations, especially those interested in small state behaviour.

Part I

Small states and shelter theory

1 The small state in international relations

Baldur Thorhallsson, Sverrir Steinsson and Thorsteinn Kristinsson

Introduction

There has been a marked increase in research on the challenges and opportunities for small states in the international system. Much of this research, however, focuses on the actions of small states within narrow policy areas and geographical areas or specific institutions, or the foreign policies of individual small states. This means that we lack the tools and frameworks to comprehensively explain, evaluate and predict small state behaviour. The limited and relatively outdated international relations (IR) theoretical literature on small state behaviour, which is largely predicated on the assumption that small states operate according to the same logic as great powers (e.g. Waltz 1979; Walt 1987; Rosenau 1966; Jervis 1978; Schweller 1992; Handel 1981), insufficiently captures small state behaviour (see also discussions in Neumann and Gstöhl 2006, and a collection of small state literature in Ingebritsen et al., 2006). Elman’s (1995, 172) complaint that IR theory largely ignores the study of small states still holds true. In a world where the majority of states are small, and more small states are likely to emerge in the future, this is an unsatisfying state of affairs.

While there are studies which purport to explain small state successes in international relations, these are usually limited to specific instances or successes within a particular organization or issue area. They rarely encapsulate in a comprehensive manner both the size-related disadvantages and needs of small states, which are necessary to evaluate, explain, and predict small state behaviour. Therefore, a fully comprehensive theory of small state foreign policy behaviour and success is lacking. This book presents a new theory to fill this gap: shelter theory. Shelter theory builds upon and synthesizes much of the aforementioned research in the field of small states studies, but it also applies relevant yet underutilized research from other disciplines in order to propose a comprehensive theory of small state behaviour.

The remaining sections of this chapter will examine the concept of smallness in international relations and small state studies; provide an overview of how IR theories have failed to capitalize on “the small state”; explain how the theory of shelter diverges from the traditional theories; and finally discuss the pros and cons of applying shelter theory to the past as well as to the present.

Smallness in international relations and small state studies

There are many ways to conceptualize smallness. A common feature in most definitions is a focus on a relative or absolute shortage in capabilities which adversely affects the state’s ability to influence domestic and external outcomes. The traditional quantifiable definitions usually set a firm threshold for small states: states which fail to meet a certain size of population, territory, economy, and military are considered small. Population is the single most common factor for defining smallness, as it significantly impacts the potential size of the economy and military, and tends to correlate with territorial size. It is therefore a simple and convenient shorthand. For population size, the threshold ranges from one million to 30 million, with the most common threshold at ten million (e.g. Kuznets 1960; Vital 1967; Easterly and Kraay 2000; Armstrong and Read 2000; Katzenstein 1984, 1985). With a population of approximately 350,000 (Statistics Iceland 2018), a GDP of approximately US$20 billion (World Bank 2018), no military forces and a tiny foreign service (compared to e.g. the other Nordic states, see Chapter 4), Iceland is a small state by every traditional criteria.

Other definitions of smallness focus more on relative and subjective estimates of size. For Neumann and De Carvalho (2015, 7–8), Handel (1981) and Morgenthau (1972, 129–130), small states are simply states which are not considered great powers or middle powers, nor are they able to act like great powers. According to Keohane (1969), small states are system-ineffectual, defined by their relative inability to affect outcomes in the international system, as compared to states that are considered system-affecting (middle powers), system-influencing (secondary powers) and system-determining (great powers). Annette Baker Fox (1959) argues that small states, unlike large states, are unable to successfully apply power or resist the will of other states. Keohane (1969) and Rothstein (1968) argue that small states cannot make a significant impact upon the system or even maintain their own security without the cooperation of other states. Mouritzen and Wivel (2005) argue that small state studies should transition to a relational definition, shifting the focus from the power that states possess to the power that they exercise. A small state may be weak in one context but simultaneously powerful in another. On the other hand, a great power can be defined as a country capable of affecting all policy areas (e.g. Germany and France in the EU) (Wivel, Bailes and Archer 2014). As is shown in subsequent chapters, Iceland is widely perceived to be small and system-ineffectual both by domestic and foreign actors.

Multifactorial definitions consider both objective and subjective measures of size (e.g. Thorhallsson and Wivel 2006). For instance, in order to introduce core elements from the small state literature into a comprehensive analytic system, Thorhallsson’s (2006) conceptual framework combines fixed size (population and territory); sovereignty size (the degree to which a state controls its internal affairs and external borders, as well as being recognized); political size (military and administrative capabilities, domestic cohesion and foreign policy consensus); economic size (GDP, market size and development); perceptual size (how a state is perceived by internal or external actors) and preference size (the ideas, ambitions and priorities of domestic elites regarding their role in the international system).

Suffice it to say that defining small states will consequently be an imprecise and subjective endeavour, particularly when the framework is applied to various time periods and incorporates different types of political units. Shelter theory does not exclusively consider small states, but all small political units. Political units within nation-states or federations can also reflect the logic of shelter theory in that their choice of remaining attached to or leaving the state to which they belong will reflect whether they are receiving sufficient shelter. For instance, the majority of Scottish voters decided that they had better political, economic, and societal shelter as a part of the United Kingdom than if they were to form an independent state. If Scotland were to become an independent state, it would continue to seek shelter from the United Kingdom (UK), the European Union, NATO, and the United States. However, uncertainty about the willingness of Westminster and the EU to continue to provide comprehensive shelter may have made voters reluctant to take the risk and thus they voted against independence (Thorhallsson and Bailes 2017). Greenland and the Faroe Islands are also provided with shelter by the Danish Kingdom. One of the main reasons why they have not sought full independence is their reliance on Danish economic assistance (Thorhallsson and Bailes 2017).

Another complication in conceptualizing small states is that economic prowess, resource wealth, and strategic importance may inflate the power of some small states to a level where the constraints of a small population are not as apparent as they would otherwise be. For instance, city-republics survived and thrived due to favourable land and sea arrangements that allowed them to trade more freely and made them less militarily vulnerable (Deudney 2007). However, the smaller the size of a state, in economic, territorial, population and military terms, the more shelter theory becomes viable in explaining behaviour, since small state vulnerabilities become more severe. An additional complication is that size can also be highly relational. States which are considered large by absolute standards may face several of the same vulnerabilities of small states, if they happen to find themselves surrounded by vastly more powerful states. Historically, buffer states have been uniquely vulnerable to state death (Fazal 2004).

In the late 1950s, the international relations literature started to tackle the new world order which was increasingly characterized by small states (Baker Fox 1959). Generally, scholars claimed that small countries either needed to find a protecting power or join an alliance in order to be economically and politically sustainable (Baker Fox 1959; Keohane 1969; Handel 1981; Archer and Nugent 2002; Steinmetz and Wivel 2010). Crucially, small states did not possess the resources to guarantee their own defences (Vital 1967). Their small domestic markets, and concentrated production (dependence on a few export products) also made them more dependent on international trade than the larger states. Hence, their economies tended to be more volatile than larger economies, and international economic crises could hit them with greater force than other states (Katzenstein 1984, 1985). The vulnerability of small states and their lack of capabilities (Neumann and Gstöhl 2006) were observed in the dependent relationships that many small states had with the two superpowers during the Cold War, which were further highlighted in the de-colonization process. Geographical location was also seen by scholars as being of great importance. For example, consideration was given as to whether or not a small country was territorially based in a conflict zone or near a more powerful state. The structure of the international system was also of prime importance due to the ability of small states to prosper during both peacetime (Handel 1981) and in a free trade-based system (Katzenstein 1984, 1985), as compared with times of war and restricted international trade.

Lately, in the wake of the financial crisis of 2007–2008 and its devastating consequences for many “prosperous” small states, the scholarly literature turned its focus back to the vulnerabilities of small states (see, for instance, Schwartz 2011; Thorhallsson 2011; Thorhallsson and Kattel 2013). This comes after a period in which many small European countries were described by scholars as successful and better capable of achieving economic growth than larger states (e.g. Katzenstein 1984, 1985; Briguglio et al. 2006; Cooper and Shaw 2009). Hence, the lessons of the classic small states literature, namely those on the importance for small countries of securing assistance from larger powers, still ring true.

Small states can make domestic arrangements to protect against their external vulnerabilities; they can essentially “buffer from within”. This can take the form of good economic management and administrative competence, as well as the more obvious political efforts for unity and resilience (Thorhallsson 2012). Katzenstein’s theory of democratic corporatism is one of the best developed frameworks for explaining how small European states have created a domestic cushion to shield themselves from the fluctuating international economy. Domestic features, such as good economic management and administrative competence, have proven to be vital in determining how small European states have been affected by and responded to the latest financial crisis (for instance, see Thorhallsson and Kirby 2012). However, there are clear limits to what can be done at the domestic level to alleviate the challenges of small size. Katzenstein’s theory does not account for small states’ external arrangements and how they combine domestic buffering with the external shelter provided by their larger neighbouring states and international organizations.

International relations theories and “smallness”

Existing IR theories do not provide the appropriate frameworks for explaining small state behaviour. Shelter theory differs from realism on several fronts. Shelter theory considers small states as unique actors; autonomy is not a sole or primary goal of small state foreign policy; the theory can shed light on secessionism; and there are far greater possibilities for cooperation between states. On the first point, realists assume that the same logic which guides the behaviour of great powers, also guides that of small states. We do not accept this assumption, given that it contradicts the extensive literature on the unique disadvantages and distinctive needs of small states. Thus, they act differently than their larger counterparts. Small states are therefore not “functionally undifferentiated” units facing the same tasks in the international system, as prominent neorealists have argued (Waltz 1979, 97). While Waltz does differentiate states by their capabilities (one way in which size can be defined), the organizing principle of anarchy forces all states to function as similar social units. Therefore, Waltz (1979, 107) argues that “each unit’s incentive is to put itself in a position to take care of itself since no one else can be counted on to do so”.

Moreover, small states do not solely seek security protection to safeguard their autonomy and territorial integrity, as realists argue. Small states also seek to alleviate the structural weaknesses that come with small size in domestic political, economic, and societal affairs. To obtain the means to withstand both external coercion and isolation, and to not only survive but to prosper, small states are far more willing to voluntarily cede their sovereignty than large states. This voluntary ceding of sovereignty is inconsistent with realism, which holds that the core aim of states is to always protect their sovereignty (Grieco 1997, 184–186). Small states have surrendered their sovereignty in part by subordinating themselves to large states and organizations (e.g. Ikenberry 2001; Lake 2009), and in full by joining federations and merging into larger nation-states (e.g. Ziblatt 2008; Deudney 2007; Parent 2011). Small states are not solely or primarily motivated by security concerns, as the realists purport, but have broader concerns. Shelter theory claims that small states need political, economic, and societal shelter not only to survive but to thrive.

For the purposes of our theory, we do not necessarily see states as coherent units. Up to a point it is helpful to consider states as coherent units, but shelter theory can also shed light on the dynamics within states. Shelter theory can be helpful in analysing the choices faced by political units within states. It can help determine whether an entity should remain a part of the central state or secede from it, by conceptualizing this choice in terms of whether the political unit receives sufficient shelter from the state to which it belongs (e.g. Thorhallsson and Bailes 2017 on Scotland, Greenland and the Faroe Islands). Once the costs of such shelter appear to outweigh the benefits, those political units will attempt to secede. That said, the theory also works on small states as coherent units. This means that a small state, even though it contains diverse preferences, will exhibit shelter-seeking behaviour, and that the nature of the shelter determines the small state’s prospects for survival and prosperity. It is in that sense that we consider small states coherent units.

We also see greater opportunities for cooperation than realists do. One reason for this is that the same fears and distrust that drive behaviour between large states do not necessarily motivate behaviour between large and small states. The various problems associated with relative gains are largely non-existent in relations between large and sma...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• List of illustrations
• Notes on contributors
• Series editor’s preface
• Foreword and acknowledgements
• Introduction
• PART I: Small states and shelter theory
• PART II: Iceland’s external affairs from the British and American occupations to the present
• PART III: Opportunities and challenges for small states in the twenty-first century
• Index