16.11.2008
The Limits of Rational Choice
№4 2008 October/December
Timofey V. Bordachev

Ph.D. (Political Science)
National Research University–Higher School of Economics (HSE), Moscow, Russia, 
Faculty of World Economy and International Affairs,
Associate Professor;
Centre for Comprehensive European and International Studies (CCEIS)
Academic Supervisor

Аffiliation

SPIN RSCI: 6872-5326
ORCID: 0000-0003-3267-0335
ResearcherID: E-9365-2014
Scopus AuthorID: 56322540000

Contacts

Tel: +7(495) 772-9590 *22186
E-mail: [email protected]
Address: Office 427, Bldg.1, Malaya Ordynka Str. 17, Moscow 119017, Russia

The unification of Russia with the rest of Europe is a condition
for the structural stability of Eurasia that has been unheard of
since the time of the Reformation and the appearance of Russia in
the European political arena.

The establishment of a system of sovereign states in the
territory stretching from the Atlantic Ocean to the Volga and
beyond to the Pacific Ocean in the 16th-17th centuries laid the
groundwork for a succession of political conflicts and wars
interlaced with periods of peace.

The last such period began in 1945 and helped create an
association which was personified in the European Union. Yet it
notably lacks Russia, which is as an important European policy
player as Germany and France are.

An attempt to fashion a strategic stability zone from the
Atlantic Ocean to Vladivostok was made in the last few years of the
Soviet Union and in the first years of the existence of the new
Russia. It misfired, due to many reasons, not the least of which
was Russia’s inability to act as an independent sovereign state and
formulate its own national interests.

The speculations regarding the possibility of Russia uniting
with the part of Europe which is now the European Union ended in
1994. At that time, Moscow and the EU signed the Agreement on
Partnership and Cooperation, and the European states approved of
NATO’s eastward expansion by allowing former members of the Warsaw
Pact to join the alliance. Instead of rapid rapprochement, quite
feasible in the opinion of such politicians as Francois Mitterrand,
Ruud Lubbers, and Mikheil Gorbachev, Russia and Europe decided to
live behind dividing lines.

The high conflict potential of this situation has become
increasingly obvious as the vestiges of the Iron Curtain erode
further, as countries develop economic and cultural ties and as
their national interests increasingly clash. It is important that
one of the partners (Europe) has had these interests in the state
of constant coordination, while the other (Russia) only began to
formulate its interests in the first half of the current
decade.

As a result, Russia and the EU have been trying to find a magic
formula for stable relations for more than 15 years. The necessary
elements are the highest meeting of national interests and equal
advantages for the partners. Moscow and European countries have
come to understand that stable relations will facilitate their
development, international competitiveness, and resistance to
modern challenges and threats.

The latter has particular urgency in a world that is rapidly
changing. Due to objective factors, the role of the Old World in
world politics and the economy has been diminishing, as the poles
of economic might have shifted toward the Asia-Pacific region
(which may similarly affect military-political setups).

The process appears inevitable to many in the United States,
India and China, but it will take many years, and possibly decades,
of instability. The main sign of the already shaped multipolar
world, or, to put it simply, of the global disorder is the
continuing growth of global uncertainties. This creates the
background for the desire of each participant in the international
system to build up its military might.

A rational choice in conditions of global disorder is not
openness and orientation toward multi-party regimes, but building
strong walls, setting up areas of influence behind them, and making
periodic forays into “enemy territory.” All this has become part
and parcel of both European and Russian politics in recent
years.

POLITICS OF RATIONAL CHOICE

Such behavior, quite natural for any sovereign state, succeeds
or fails depending on the availability of additional opportunities.
For the 27 EU member-states, these opportunities are provided
through the collective “stick and carrot” in the agent of the
European Commission. That is why the European Union, though it
remains a rather loose alliance, has been increasingly assertive in
the international arena – within the scope of affordable
instruments, such as making former Soviet republics its economic
satellites and limiting the influence and interests of its
non-integrating neighbor – Russia.

Consequently, the striving by European “grandees” to achieve
mutual understanding with Russia on key economic and strategic
issues has had little success so far. Such attempts on the part of
Paris or Berlin have encountered a tough response from Moscow to
Brussels’s actions, even though these actions are motivated by the
current economic and political interests of Germany, France and
their EU allies, as the Kosovo example shows.

From a rational point of view, the Russian-European dialogue
should be broader than Moscow-Brussels relations. However, it is
impossible to circumvent the European Commission in practice:
functioning at the pan-European level, it can achieve what even the
largest countries – the co-owners of the United Europe – have been
unable to accomplish on their own. These are the countries that
have a majority stake in Western politics and that are pulling the
strings to control the moves of the notorious Brussels
bureaucracy.

Calls for peace combined with active “hostilities” are a
full-fledged feature of the Russian policy, too, especially in
sectors where Russia still has the competitive advantage: power
generation, large international security agencies and in the
territory of the former Soviet Union. Logically, it would be
expedient for Moscow now to exploit these fields by putting
competitive pressure on Europe.
The means that make Europe stronger include the use of
international organizations and arrangements to secure a bilateral
regime with key players. At present, the EU is trying to launch
independent (from the United States) relations with China and
India. Other partners, such as Ukraine or countries in the southern
Mediterranean, are offered free trade zones.

In the zone of direct Russian interests – former Soviet
republics – the rational choice dictates that Europe work
consistently on expanding its influence. But practical
implementation of this goal is limited by Russian interests and
opportunities, which entails acute conflicts with Moscow. For its
part, Russia has no one to lean on in the former Soviet territory,
the United Nations or, as a future possibility, in the World Trade
Organization. Therefore, some observers are rightly puzzled by the
emphasis that Russian foreign policy puts on the importance of
multilateral mechanisms.

However, the logic of rational choice challenges the need for
Russia to draw up a new agreement with the European Union.
According to the classic principles of foreign policy and
international relations, countries whose opportunities and
potential are on the rise are not interested in international
treaties. Commitments taken within the framework of agreements fix
the balance of forces at the moment of signing. As long as Russia
grows economically and politically, any treaty with the EU will be
disadvantageous. Yet Moscow is unable to transfer to the system of
ad hoc relations with the EU – the mutual dependence is too
great.

MUTUAL DEPENDENCE AND STRATEGIC LONELINESS

Mutual dependence is the most important element in forming
conditions for rational choices in relations between Russia and the
European Union. According to the classic definition by Robert
Keohane and Joseph Nye, a breakup in such relations leads to
unacceptable damage for one or both partners.

The axiom of Russian-European interdependence remains – for the
civilized part of the elites – the biggest straw to hold on to in
order not to slip into confrontation, but there is also room for
negative trends. Mutual dependence is what it is – dependence that
puts limits on sovereign rights and opportunities, which a person
or a state would seek to get rid of in one way or another.

The main factor to decrease dependence is the availability of an
alternative; namely, the ability to attract other players, whose
collective action would ensure the promotion of national interests
of a certain state. And here Europe and Russia are not faring too
well.

Sober-minded Europeans are right in saying that Moscow’s major
problem is its strategic loneliness. A lack of real support on the
part of formal allies over independence for Abkhazia and South
Ossetia in August-September 2008 was yet another indication of a
kind of vacuum around Moscow.

Russia has no reliable and constant allies. If one is to believe
opinion polls, China and Third World countries have a quite
positive opinion of Russia. But this fact by itself is not the
reason for creating a union or a system of alliances in which
Moscow would play the leading role, or at least would be on par
with another leader, as happened in relations between France and
Germany in the early 1960s.

Economic and political cooperation in the territory of the
former Soviet Union has certain prospects, perhaps, within the
framework of the popular idea to boost the Eurasian Economic
Community. However, Russia and a number of CIS countries have
conflicting interests in energy: Moscow is not ready to set certain
regimes on a soft military-financial leash. In addition, it has to
overcome the resistance of third countries, regardless of how
infinitesimal their presence in Russian backwaters is. So Moscow,
by using its CIS influence, can improve its position at talks with
really promising partners rather than forge long-term
alliances.

A lack of allies also means an exponential increase in
competitive pressure in the economic sector and problems with
access to technologies. It is not just a matter of “catching up” by
purchasing the newest technologies from the West or the East. In
the modern world, a country aspiring toward innovative development
should not only have the financial opportunities, but also the
political resources for setting up technological centers on its
territory to act as the integrator of large international projects.
As a vital requirement, one needs reliable allies among those who
have the power to block the establishment of such centers.

Europe, from the point of view of alliances and allies, is in a
far better position.

First, the very fact of the existence of the
European Union and NATO vindicates their claims that they have
reliable allies.

Second, Europe remains one of the most
capacious and stable consumer markets, while the European way of
life, with its legal protection of its citizens and welfare
policies, is a coveted goal for many, including Russians. Europe’s
lifestyle deserves to be put among the priorities in Russian
economic and social modernization.

But Europe as a market, or Europe as a place where its citizens
do not regard the police as the most dangerous group of civil
servants is one thing; and Europe as a reliable political partner
and sometimes protector is another. Emerging from the shadow of
U.S. protectorship, the Old World has to stick to the tough rules
of political and economic competition.

So the question of Europe’s potential would be relevant: How
attractive is it politically and militarily beyond the still
unabsorbed fragments of the Soviet Union and the Balkans? The
Euro-Mediterranean conference on July 13, 2008 in Paris showed that
Europe is encountering more and more problems with its own
attractiveness.

Of course, all the invitees from Maghreb and Levant arrived in
Paris, except for Libya’s Muammar Kaddafi and King Mohammed VI of
Morocco. But first, in a surprise move for Europe, they made a
proposal to their northern neighbors not to invite Israel and,
second, to conduct the dialogue in the EU-Arab League format. To
avoid complications, France dramatically reduced the number of EU
agencies participating in the event, making the forum an
inter-state meeting, not mentioning the fact that the human rights
issue, traditional for the EU foreign policy, was taken off the
agenda of the Mediterranean Union.

It is unclear what price Europe should (and has to) pay for the
luxury of being surrounded by satellite states. As such countries
as Georgia, Serbia or Ukraine develop, the EU will have to choose
between their actual upkeep – and the cost may depend on the
political and financial appetites of local elites – and accession
of this “troika” to the European Union, which will wrap up the
history of European federalism.

If we look beyond the immediate European perspective, Europe’s
political relations have not been smooth not only with China and
India (which tend to prefer a realistic and forceful way of
thinking and acting), but even with the “visa free” countries of
Latin America. Awkward attempts to combine moderate protectionism
and stronger borders with an expansion of political influence
sometimes result in ironic twists. For example, the lifting of
sanctions against Cuba, lobbied by Spain and the European
Commission, coincided with a statement by Mercosur leaders, who
called a June decision by the EU Council on migration “uncivilized
legalized barbarism.”

The U.S. is making Europe face the need to adopt increasingly
complex decisions, as well. As the failed hegemon loses its
absolute superiority, it is making increasingly sharp moves for the
sake of keeping control over key countries and regions. In
response, Europe is trying to become more and more prominent in the
role of a “soft” but real alternative to the United States in
crises in the Middle East and in former Soviet territory.

Meanwhile, we are seeing the further disintegration of the
fragments of the phenomenon which idealistic scientists of the
disarmament era termed “the international community” – an integral
body of advanced states that succeeded during their evolution in
overcoming competitive motives of behavior. Some Russian experts
believe that Russia should have joined their ranks.

The stabilization role played by the U.S. in European policy is
decreasing so noticeably that even the most politically ethical
Western capitals can no longer ignore it. Washington has shifted
its focus toward East and Southeast Asia. The need to “tame” China
may push Washington to the most revolutionary geostrategic
initiatives.

The so-called ‘Broader Middle East’ has been an important
direction ever since 2001 and a source of a direct threat to the
United States. Russia and Europe apparently rank third in terms of
significance, if not further down the list. The intellectual
resources of the U.S. elite were redistributed accordingly, which
is shown by the limited number of enthusiasts involved in the
discussion about U.S.-EU relations, not to mention U.S.-Russia
relations.

Having stopped being a stabilizing factor in Europe, Washington
is beginning (purposefully or otherwise) to act destructively. Such
pivotal decisions as the fielding of missile defense facilities in
the Czech Republic and Poland could have any motives behind them
except for the strengthening of political stability in Europe. The
same applies to the persistent promotion of the project to enlarge
NATO to include Ukraine. If implemented, it will dismantle not only
the European defense identity, but also create a constant hotbed of
tensions between Russia and the European Union.

Judging by statements from the U.S. presidential hopefuls, there
are no indications that peace in Eurasia will become any more
stable in the next few years. Europe does not seem to have the
foreign policy and defense opportunities to play a game of its own
in this situation. One cannot even see any prerequisites that would
lend coherence to this game.

The task of working out an effective European policy, including
the EU’s ability to be a responsible partner of Russia, encounters
an insurmountable obstacle – the need to look for compromise
solutions for 27 participants in the process, with many EU members
deliberately resisting a rapprochement with Moscow. The need to
maintain a semblance of European solidarity and unity of the
alliance, fashioned at one point by Europeans to suit their needs,
forces even Paris and Berlin to look for averaged solutions. As
French President Nicolas Sarkozy has already felt, the European
political milieu today, unlike the times when integration was
flourishing in the 1950s or the 1980s, does not contribute to the
promotion of revolutionary ideas.

CONDITIONS FOR A BIG DEAL

Meanwhile, history is really only made by big ideas and big
deals. It is only a “big deal” – energy in exchange for full-scale
common institutions – that can make relations between Russia and
Europe stable for a long time. It is only the establishment of a
new Community, functioning according to its own laws, addressing
problems common to all participants, governed by its own
bureaucracy and lobbied by its own lobbyists, that would ensure
political and economic rapprochement.

Any other form of relations would leave the main political
problem unsolved, namely, a lack of trust and a negative mutual
perception. This problem exacerbates the competition between Russia
and Europe, contributes to their instrumental use by outside forces
and, ultimately, prevents the strengthening of security in the
common space.

In light of historical experience, the following conditions are
necessary to make such a deal a success:

— The partners must have the ability to make comparable material
contributions to the common cause;

— There have to be common transborder challenges for the
participants in the transaction; meeting these challenges would be
the project’s objective. The awareness of such challenges will
determine a rational choice in favor of unification and will shape
the political will of the parties;

— There must be public support, above all on the part of
economic players. It is only the extended participation of
interested non-government players that can help Russia and Europe
to remove, or at least smooth out, the essential differences
between their political, social and administrative cultures.

Despite the generally accepted explanation for European
integration as a gradual process based on regular technical
rapprochement, this process was based on a “big deal,” i.e., a
decision by the founding nations to place the main levers of
governance over major war resources – coal and steel – under the
partial control of a supranational body. According to Europe
architect Jean Monnet, this body should be in direct contact with
enterprises.

Today, oil and gas are the main resources that ensure national
security. Russia is rich in oil and gas, and simply by virtue of
its geographical position, is the least vulnerable source of
resources for major threats to international security. Sovereignty
over this natural wealth is worth a lot.

Unlike the six-nation European Coal and Steel Community, where
each member state could make an equal contribution, today’s Europe
actually has nothing to contribute. With rare exceptions, European
Union countries have no oil or gas reserves that could be jointly
managed by common Russian-EU institutions. Neither has it military
resources that could secure it protection from potential threats
from the South and – theoretically – from the East.  But this
does not mean that Russia should treat Europe with arrogance. A
functional union with it would be very useful.

First, the European Union can contribute to the
common cause its mechanism of collective protection for its
interests on the global market and the political levers for using
it.

Second, the investment and technological
possibilities of European companies are still optimal for
Russia.

And third, Europe can offer stable economy
management systems, including systems for managing energy
companies, although these are not considered perfect by liberal
economists. All these resources could compensate for Russia’s
“losses” from its renunciation of a monopoly and become a major
contribution to political and social stability from the Atlantic to
Vladivostok. But would possible compensation be enough for each of
the partners?

ARTICLE OF BARGAIN

Let us be frank: any compensation would seem inadequate to those
– both in Russia and the EU – who hope to get the most as freebies.
And the question here is when will the partners realize that in
economic relations freeloading just won’t work? And even if it
does, the resultant format of relations turns then into a minefield
of hidden grievances and political instability.

One should also not forget that the fundamentals of the
relationship format that bring the maximum benefits to only one of
the partners can be brutally revised when the political regime of
the other partner changes. Developments in Latin America and some
Middle Eastern countries are convincing proof of that.

In this regard, the disposition toward “zero-sum games,”
consistently displayed by Russia and the European Union in the last
few years, will not be effective in the long term, although it may
seem rational and beneficial from the point of view of the current
political struggle.

Staking on building up one’s relative advantages in any case is
based on mutual suspicion. Here the problem of perceptions comes
into the foreground. The solution of this problem, albeit
imperfect, can be found in Europe’s recent history. After all,
there are people who remember perfectly well that Western Europe
used to be a no less chaotic space for competition than the world
beyond the European Union today.  

It is generally believed – and it is difficult to contest this
statement – that the problem of confidence is a major obstacle to
stable relations between Russia and Europe. Russia and the EU are
now in a state of the classical prisoner’s dilemma. According to
public opinion polls, a majority of EU citizens fear the
development of truly reciprocal economic integration with
Russia.

The reason for such a perception is apparently not only in
Russia’s current policy and it is definitely not in the empiric
knowledge of European elites and citizens. Fears about the
political use of foreign investment are not based on the experience
of some past crisis. Russia does not have such an experience,
either, although, according to public opinion polls, a majority of
Russians believe that Europe’s only goal is to seize Russian
resources. What is the main reason then?

Such a perception is based on a deep-rooted view of the
historical alienness of the partner. This view may be softer or
stronger, depending on a country’s national experience of
relations. But in each case this perception is based on mutual
phobias, which can only be eradicated by jointly addressing
problems over decades.

However, it is still an open question whether the parties need
to change their perception of each other before they build a
“common energy home.” And does this form of unification require the
harmonization of values and legislation?

The answer to this question requires an unbiased look at
relations between the six founding nations 50 years ago. Despite
the cultural closeness of these successors to Charlemagne’s empire,
the centuries of wars and confrontation, which followed the breakup
of his state, cultivated in Western Europeans a strong feeling of
apprehension and mistrust toward each other. Even today, cultural
differences between Northern and Southern Europe, as well as
between former sovereigns and vassals, have not entirely vanished.
The foreign policies of a majority of European countries, including
Russia, toward each other are marked by a noticeable tint of
arrogance. It was only the tragedy of World War II that shook, to
some degree, this arrogance for Western Europeans.

NEW RATIONAL CHOICE

A big deal – a strategic union between Russia and the rest of
Europe – is possible only if the parties try to achieve a common
goal or find answers to challenges equally important for both
partners. The main challenge is the need for a serious revamping of
relations between the state and business.

Meeting this challenge is crucial for solving the problems –
usually attributed to globalization – that face Europe and Russia
today. They include, above all, the competitiveness of goods on the
domestic and foreign markets, the legitimacy of the state and its
sovereignty, the scale and forms of state interference in the
economy for increasing innovation competitiveness, and public and
national security.

Independent attempts by Russia and European countries to meet
these challenges are already becoming a major obstacle to their
rapprochement. The growth of state interference in private sector
activities and paternalistic tendencies in Russia, as well as the
strengthening of intergovernmental forms of cooperation in the
European Union, objectively prevent a search for a common language
in the political and technical domains.

For example, apprehensions of the state in Russia and Europe,
caused by the need to meet public demand for the regulation of
massive foreign investment, have already affected bilateral
relations. Even inside Europe, this new field of activity for
bureaucrats brings about absurd situations when, for example, a
bill on the regulation of investment in Germany has almost blocked
the free movement of capital within the EU. The administrative
apparatuses were not ready to fulfill their tasks under new
conditions. Hence the recent statements by Russian and European
policymakers that obviously violate the principles of a free market
economy.

In a situation where the world is dangerous in a different way
every new day, society tends to support the most risky measures of
protection against unfair competition, while the state is torn
between liberalization and support for national champions. Foreign
partners are viewed either as potential predators or potential
prey. Meanwhile, society does not fully realize that its partners
face the same challenges and must fulfill tasks that are similar in
content, if not in scope.

The rise of sovereignty – a political phenomenon that a decade
ago was advocated only by the most desperate antiglobalists – has
now become a historical fact. History teaches us that a country’s
sovereignty drive weakens after a painful defeat at home or in its
foreign policy – as was the case with Western Europe from 1945-1957
or Russia from 1991-2000.

It is already obvious that the consequences of sovereign
decisions dictated solely by political considerations can not only
delay for an indefinite time rapprochement between Russia and
Europe, but also undermine the foundation of European integration.
Meanwhile, this integration serves as an example for the whole
world of peaceful and mutually advantageous solutions to political
and economic problems. Do we really need to wait for more serious
consequences?

Therefore, the activities of common Russian-EU institutions,
should they be established, must aim at improving mechanisms of
state governance over the economy, bring this governance in line
with the requirements of the modern world, and ensure the
implementation of the state’s main function – namely, the
protection of the individual’s rights inside society and the
elimination of external threats.

These efforts must be started with the energy sector, which
supplies electricity and heat to voters’ homes and whose
uninterrupted functioning is vital to the population. Importantly,
energy prices and the availability of energy is now the only issue
that really interests voters and political quarters in Russia and
the EU.

It is not accidental that this problem has been in the focus
lately of heated debates within the framework of the political and
economic dialogue between the two parties. This is why the main
challenge and threat to good-neighborly relations between Russia
and Europe must be made their strategic target, which the majority
of observers say the parties lack.

CONFIDENCE-BUILDING MEASURES

The scope of challenges faced by the modern world is so great
and diverse that both Russia and the EU objectively need support
from a special moderator. There is no such moderator at present.
Furthermore, there is no international legal instrument that would
guarantee mutually accepted rules of the game in the energy sphere.
The Energy Charter, once designed for this purpose, can no longer
be viewed as a legal foundation of the energy community.

The European Commission, EU main executive body which used to
function as “an honest broker,” has lost a significant part of its
capabilities to act efficiently in the last years. The crisis faced
by the EU in 2005-2007 forced Brussels to simultaneously strengthen
its own image and protect the diverse interests of EU
member-states.

Despite the aforementioned difficulties, the European Commission
performs – more or less successfully – the functions of a moderator
at the EU level. And it is very important for Moscow whether EU
countries can delegate controlled powers to Brussels to represent
their interests in a new joint EU-Russian institution.

In Russia-EU relations, the task of building a common energy
market would be addressed more effectively if the bulk of joint
efforts were made via an agency that would be as independent as
possible from national governments – for example, a Standing Energy
Commission. Interaction with Russian and EU companies must be a
major aspect of this commission’s work.

There is a factor that can unite public and private interests in
building long-term and stable relations between Russia and Europe.
This factor is the broadest possible involvement of businesses and
agencies representing their interests in a common environment.

The infrastructure for representing private interests, taken
separately in Russia and the EU, is already well-developed,
although even in Europe it largely influences the national
positions of EU members. The representation of interests at the
pan-European level plays a somewhat auxiliary role, despite the
efforts of business associations and European agencies which view
the associations as an alternative source of information and
expertise. It will take some time before European lobbyism acquires
the quality and effectiveness of national lobbyism. As regards
Russian-EU relations, representatives of private and public
interests have a very long way to go yet toward each other.

It is strategically important to readjust the system and the
philosophy of state regulation of the economy. This task will be
much simpler to implement if the dialogue and practical daily
interaction between businesses and the state are ensured at the
international legislative level. This level must guarantee the
rights and obligations of the participants in the public-private
dialogue within the framework of a joint Russian-EU project. This
dialogue will inevitably change the quality of the public-private
partnership and increase mutual understanding at the transborder
level, including such major aspects as public opinion and mutual
perception.

Naturally, when starting to “gather stones” even on their own
continent, Russia and Europe must be sure that they will not be
attacked by those who still want to throw stones. Already now,
traditional allies (who are new to Russia) are trying to weaken
both partners and impair their mutual relations.

One should not expect changes in the positions of the United
States and China. The foreign-policy behavior of these players is
predictable as they attempt to consolidate their power,
irrespective of the predicted consequences for other participants
in international relations. It is not likely that Russia and Europe
will receive help from them – except, perhaps, as an incentive to
improve their own competitiveness. Close coordination between
Russia and the EU and their joint energy policy can be a major
instrument here.

As we can see, the main obstacles to a breakthrough in
Russian-EU relations are, at the same time, opportunities. In a
recent conversation with the head of the Russian office of a German
political foundation, I proposed exchanging solutions concerning
swapping full-scale access for European companies to Russian energy
resources for Russia’s full-scale membership in the European Union.
My own solution is obvious to those who have read this article. My
vis-?-vis thought about it for a long time and then suggested
having another beer and discussing the issue in more detail. OK,
let’s discuss it. But let’s not take too long.