Keywords

Mainstream international relations (IR) theories—neorealism, institutionalism, and social constructivism—have different analytical foci on international security institutions. Neorealists argue that international institutions reflect a hierarchical order in the international politics of the day and that states strategically establish institutions to manage the balance of power (Mearsheimer, 1994/1995; Waltz, 1979). Essentially, these institutions are ephemeral because in an anarchic world where states are the primary actors and there is no world government that can enforce international rules and norms, institutions can only exist through their shared security interests, which are altered by a shift in the balance of power (Mearsheimer, 1994/1995). Furthermore, among many international institutions, great-power-led institutions matter most because they have the material capabilities to shape international politics (Mearsheimer, 1994/1995).

Institutionalists focus on intra-member political dynamics and international cooperation generated by institutions. While sharing the same assumptions with neorealists, institutionalists argue that international institutions help egoistic states cooperate and collaborate with each other even under an anarchic system. This is because international institutions are instrumentally useful for protecting or pursuing member states’ interests as they provide functional benefits such as reduced transaction costs, creation of regulatory norms and rules, and provision of monitoring and punishment, albeit imperfectly. These institutional functions increase the probability of cooperation among member states (Keohane & Martin, 1995).

Social constructivists discuss both the creation and outcomes of constitutive norms that shape member states’ identities and worldviews. Through a “structuration” process, by which agents and the structure simultaneously interact, agents play a role in shaping the social structure. They do this by disseminating ideas and creating new norms, and institutions become the essential tool for agents to internalize the norms through repetitive practice (Giddens, 1984; Johnston, 2002). In doing so, agents take the norms for granted and believe that they need to follow the norms as it is “appropriate” to do so. Beyond intra-institutional interactions, institutions also help diffuse norms to external actors and make these norms part of their identity (Acharya, 2009).

While these theoretical insights have significantly advanced our understanding of international institutions, existing IR literature rarely discusses the evolving strategic utility of security institutions, let alone institutional strategy. This is because literature on institutional strategy and change is scarce, and these topics have been undertheorized (Cottrell, 2016; Holsti, 1998; Keohane, 2011; Koga, 2017; Wan, 2018). One of the few studies that attempted to explain institutional strategic utility was conducted by Wallander and Keohane (1999). They sought a nuanced understanding of evolving institutional raison d'être by conceptualizing two types of institutional objectives—counter-threat and counter-risk—and explaining the shift between the two (Wallander & Keohane, 1999, p. 23). However, as the institutionalist tradition demonstrates, this analytical framework is confined to explaining intra-member dynamics of the security institution and its institutional sustainability, instead of focusing on institutional strategy toward the external environment. Further, their use of NATO’s experience as the sole empirical case is not necessarily applicable to other regional security institutions (RSIs) led by non-great powers (Koga, 2017, pp. 9–10; Wallander & Keohane, 1999, pp. 25, 33–34).

In this context, Ikenberry (2001) expanded the scope of the study on institutional functionality, focusing on the strategic utility of international institutions, such as the United Nations, the International Monetary Fund, and the World Bank. Employing the concept of historical institutionalism, he argues that institutions can “lock in” the existing international order led by a hegemon or great powers. This is because great powers can impose favorable rules and norms through institutions, but these rules and norms also constrain their behavior, giving smaller states an opportunity to diplomatically influence great powers’ behavior. Generating mutually beneficial interests for both great and small powers, institutions contribute to sustaining hegemonic stability or the domination of great powers. Treating the United States as the current global hegemon, Ikenberry argues that US behavior has been constrained by norms and rules created through these international institutions, yet at the same time these norms and rules have been built on US liberal values and have been diffused to the world through institutions such as the United Nations. In doing so, the United States has been able to embed its value system in the international community and sustain its global leadership. Whereas insightful, this argument also neglects the agency of RSIs. It centers solely on great powers’ use of international institutions and does not analyze how RSIs led by non-great powers have been utilized strategically.

There is another academic attempt to deepen our understanding of international institutions by employing historical institutionalism. Fioretos (2017), for instance, employs the major concepts of historical institutionalism, such as path dependence and critical juncture, to analyze persistence and change in international politics and the proliferation of international institutions in the post-World War II era. Nevertheless, the research defines international institutions too broadly to analyze the strategic role of RSIs. Admittedly, this broad definition of international institutions may be necessary to understand the general characteristics of institutional continuity and change. However, the definition becomes too general, losing analytical edge in generating a theoretical model of international institutions, let alone institutional strategy. In this sense, existing IR studies still face a severe lack of conceptual and theoretical frameworks on institutional strategy.

On the other hand, branching off from the neorealist school of thought, some IR scholars have begun to explore the strategic role of international institutions based on the balance-of-power theory. Most notably, “institutional balancing” has gained currency in the literature on international institutions. Building on the “soft balancing” theory, which suggests that states can engage in a tacit balancing act to limit target states’ strategic options without engaging military means, He (2008) argues that an institution can be used as a tool for soft balancing under the condition that states have high economic interdependence. Institutional balancing can be either inclusive or exclusive. The former refers to “binding the target states in the institution” through regulatory norms and rules, and the latter means to “consolidate [member states’] political and economic unity to resist pressures from outsiders” (He, 2008, p. 493). States engage in institutional balancing when they have a high degree of economic interdependence with target states, because conventional military balancing is “not a sensible strategy” and is of a “less friendly nature” (He, 2008, p. 494). The third type of institutional balancing—inter-institutional balancing—aims to “counterbalance the pressure from the institution that excludes the state” by “support[ing] another or initiating a similar institution” (He & Feng, 2019, pp. 159–160).

However, this analytical framework faces five theoretical and empirical weaknesses. First, it is unclear whether economic interdependence is truly a necessary condition for institutional balancing. Even without economic interdependence, it is entirely possible for secondary powers to subtly conduct institutional balancing against a great power, which is less provocative than military balancing because secondary powers constantly fear the potential diplomatic, military, and economic retaliation.

Second, the primary intention of inclusive institutional balancing is not always about “balancing.” Regional institutions have multiple strategic motivations to be inclusive. For example, norms and rules created through the ASEAN Regional Forum (ARF) aim to not only constrain member states’ behavior but also enable them to cooperate with each other. If the ARF’s objective was to constrain the behavior of great powers such as the United States and China with pre-existing ASEAN norms and rules, its consultative role in norm- and rule-making would not have to be inclusive, and ASEAN could have fewer discussions on how to nurture cooperative norms with ARF member states. While there were strategic motivations among several member states that were eager to include the United States and China for constraining their behavior, the establishment of the ARF was not driven purely by the member states’ strategic motivation for institutional balancing. This example illustrates the difficulty in clarifying whether an RSI aims to balance against, hedge against, or bandwagon with great powers.

Third, it is also difficult to clarify the sustainability of institutional balancing. For example, according to He (2019, p. 215), the Trans-Pacific Partnership (TPP) is defined as an exclusive institutional balancing against China under the Obama administration. While this is true, it does not capture the evolving strategic role of the TPP. The TPP grouping was originally formulated in 2005 by small powers in Asia–Pacific, such as Brunei and Singapore, and the United States joined in 2008. The original members had needed the United States to boost the political and economic relevance of the TPP; thus, TPP as a group was bandwagoning with the United States rather than balancing against China. The original members might not have expected the evolution of the TPP into a strategic tool to counterbalance China’s economic influence, let alone the Trump administration’s withdrawal from the institution in 2017. Therefore, it becomes unclear to what extent such an institutional strategy can persist over time.

Fourth, there is little discussion on the internal political dynamics in formulating institutional balancing. Compared with state strategy, institutional balancing is generally more difficult to conduct because decisions need to be made in agreement among sovereign states, and there is no legal hierarchy in their decision-making process unlike in the domestic arena. This is particularly true for RSIs led by secondary powers where there is no dominant player with sufficient material and political power to impose normative preferences on other member states. In this sense, institutional balancing assumes member states’ consensus on such an institutional strategy. However, this is not always the case in reality. The failure to adopt a joint communiqué in 2012 for the first time in the history of the ASEAN Foreign Ministers’ Meeting (AMM) shows, for instance, that member states’ strategic interests are not always congruent, and institutional balancing is not automatically operationalized by exogenous conditions. Rather, the 2012 AMM failure implies that differing interests among member states make it difficult, if not impossible, to quickly alter its institutional posture and strategy. The existing literature on institutional balancing fails to grasp these political dynamics.

Fifth, institutional balancing also assumes that there is a coherent and coordinated institutional strategy even in multiple institutional frameworks. For example, ASEAN has established different ASEAN-led institutions, such as the ARF, the APT, and the East Asia Summit (EAS), since the 1990s, and their strategic foci are not the same. While the APT focuses on economic and financial cooperation, the ARF is centered on security, and the EAS has broader strategic foci. Without carefully examining the responses of these institutions to particular events and crises, we face the danger of oversimplification which creates a misunderstanding of the nature of each ASEAN-led institution.

With these limitations in the existing literature on the role of international security institutions and institutional balancing, the concept and logic of institutional strategy require significant refinement. More specifically, a broader conceptualization and theorization of institutional strategy is necessary by incorporating the entire spectrum of strategy, from balancing to hedging to bandwagoning. To this end, this book constructs an analytical model based on two underlying assumptions regarding the basic functions of security institutions. First, the primary objective of a security institution is to ensure the security of its member states (Jervis, 1982, p. 357). Given the anarchic international environment, security is considered a scarce commodity, and thus member states of a security institution value the institution’s security utility. Second, because both the concept of “security” and the degree to which it is satisfactorily ensured depend on the actors’ subjective judgment, an institution’s sustainability is also subject to the member states’ belief in its institutional credibility (Baldwin, 1997; Koga, 2017). Accordingly, if this belief weakens or collapses, member states will consider either initiating an institutional change or discarding the institution altogether (Koga & Nordin, 2020).

Also, in the light of the plasticity of institutional strategy, it is important to analyze RSIs’ institutional history and design which create a common belief in institutional utility among the member states. Ahistorical theories are likely to miss the evolutionary process of institutional raison d'être and strategic functionalities. In this sense, a theory that incorporates strategic calculations and history becomes necessary.

2.1 Theoretical Approach: Agent-Centered Historical Institutionalism

In constructing an analytical model to capture the evolving nature of institutional strategy, historical institutionalism offers useful concepts: path dependence, critical junctures, and lock-in effects. “Path dependence” refers to the period during which a limited degree of freedom constrains “the range of current possibilities and/or options in institutional innovation” (Nielsen et al., 1995, p. 6). This explains how “the strategies induced by a given institutional setting” may “ossify over time into a world view” (Hall & Taylor, 1996, p. 940). Unlike the ahistorical nature of major IR theories, this concept emphasizes the relevance of history which generates the patterns of institutional reproduction (Capoccia & Kelemen, 2007; Streeck & Thelen, 2005, pp. 6–9).

“Critical junctures” refer to “relatively short periods of time during which there is a substantially heightened probability that agents’ choices will affect the outcome of interest” (Capoccia & Kelemen, 2007, p. 348; Collier & Collier, 1991; Thelen & Steinmo, 1992, p. 27). Such a situation can be triggered by an exogenous shock that causes an institutional crisis or dysfunction, resulting in new institutional arrangements (Krasner, 1984). In contrast to path dependence, this concept embodies change. It is “critical” because the change affects the long-term consequences of institutional arrangements. Critical junctures generally span a relatively short period of time because institutions are typically stable for longer periods of time (Hall & Taylor, 1996; Pierson, 1996; Thelen, 1999, 2004; Thelen & Steinmo, 1992). After a critical juncture, the lock-in period emerges, consolidating the status quo and representing the initial period of stasis—path dependence—within the institution (Fioretos, 2011, p. 377). With these three concepts, historical institutionalism aims to strike an “effective and satisfying balance” between understanding the general logic of institutional change and the specific characteristics of each institution (Capoccia, 2016, p. 1096; Pierson, 2004, 178).

The most popular criticism against historical institutionalism, however, is that it overemphasizes institutional continuity instead of change. Given its assumption that institutions are generally considered “sticky,” they are likely to remain the same unless a crisis or an exogenous shock takes place (Bell, 2011, p. 886; Hay & Wincott, 1998, pp. 951–957; Olsen, 2009, p. 3). This deterministic logic invites a well-known critique of historical institutionalism: “[institutions] explain everything until they explain nothing” (Thelen & Steinmo, 1992, p. 15). Critics have also argued that historical institutionalism ignores the notion that an agent’s idea, and not the institutional setting, produces and reformulates preference sets leading to institutional change (Hay, 2008, 64). To avoid this criticism, the concept of endogenous institutional change—coalition-building, norm defection, and norm reinterpretation—is introduced (e.g. Mahoney & Thelen, 2010). Still, even with these new foci, the questions of how institutions produce constraints and how empowering effects on actors break such institutional constraints tend to be unanswered. Rather, such concepts render institutions “plastic” and unstable as endogenous changes driven by agents are overemphasized in the analysis of how and when structural factors affect agents’ choices (Capoccia, 2016, p. 1096).

In this context, Bell proposes an agent-centered historical institutionalism (Bell, 2011, pp. 888–889). This theoretical approach focuses on “active agency within institutional setting[s] and sees the agents in question as being shaped (though not wholly determined) by their institutional environments” and argues that institutions shape agents’ behavior, thought, and function as both constraints and empowerment (Bell, 2011, p. 889). At the same time, while institutions are “ontologically prior to agency,” the theory emphasizes that agency is “a prime mover in institutional change processes” (Bell, 2011, p. 891; 2012, p. 716). Accordingly, it does not give complete precedence to agents over institutions or the environment. Agents do not act on a tabula rasa when there is an environmental change; rather, they act strategically under the influence of previous and existing institutional rules and norms. In this way, the approach clarifies the roles of both institutions and agents in institutional change (Bell, 2011, p. 892; Thelen & Steinmo, 1992, p. 17). The role of the agent is limited by institutional constraints, but because institutions only provide ambiguous principles, rules, and norms that are subject to reinterpretation, the agent can continue to utilize this space to empower itself (Mahoney & Thelen, 2010, p. 10; Schmidt, 2012, p. 709). Therefore, agent-centered historical institutionalism goes beyond the conventional institutional “change v. stasis” dichotomy and refuses to give particular primacy to agents or structure (Bell, 2012, p. 717; Streeck & Thelen, 2005, p. 8).

As such, agent-centered historical institutionalism avoids overemphasizing exogenous factors. Exogenous factors, or external shocks, certainly create change in the existing equilibrium, enabling agents to come up with new ideas and affording them the opportunity to implement the ideas in the existing institution, thus promoting change. Yet, the initial phase of a new institutional setting, including norms and strategy, is never optimal and agents continually finetune the ideas as the source of new institutional norms and strategies. Once this period of fine-tuning ends, the ideas “fade into the background and relatively [sic] obscurity until something provokes a reevaluation of the policy” (Goertz, 2003, p. 51). It becomes costly for agents to break the new institutional setting, and the ideas then become the standard operating procedure. Agent-centered historical institutionalism thus focuses on the process of institutional change by explaining the dynamic transition between equilibrium and disequilibrium. Although the concept of exogenous shocks must be clarified, this comprehensive approach enhances its explanatory power regarding institutional change beyond what is offered by the structure- or agent-focused approaches alone.

Using the historical institutionalist approach, the next section discusses the concept and typology of institutional strategy as well as strategy shift.

2.2 Conceptual and Theoretical Framework of Institutional Strategy

Institutional strategy is embedded in institutional design. In the traditional-security field, states construct a security institution such as a military alliance and/or diplomatic coalition to formulate a political strategy that shapes the balance of power in their favor. Institutional strategy thus refers to a set of collective security policies that member states of a security institution pursue under the belief that such policies can enhance their short- or long-term security. There are four main types of institutional strategy: institutional balancing, bandwagoning, hedging, and co-option (e.g., He, 2008; Khong, 2004; Koga, 2018; Pape, 2005; Posen, 2013).

Institutional balancing refers to the collective action by members of a security institution which aims to neutralize or at least minimize the current and expected power differences against rival states, including a hegemon and/or rising power. This concept is similar to the realists’ idea of “external balancing” whereby a security institution mobilizes its political, economic, and military resources to balance against a target state(s) (Liff, 2016; Mearsheimer, 2001, pp. 156–157; Waltz, 1979, pp. 126, 168). However, because of their limited military capabilities, medium- or small-power-led RSIs such as ASEAN generally use political means to conduct balancing. This strategy can send a political signal not only to the target state(s), but also to the international community, that the target state is behaving “illegitimately” or “unjustly.” In doing so, member states aim to attract international diplomatic or possibly military support, including that of external great powers. Such a signal may increase the possibility of the international community raising concerns, internationalizing the issue, and imposing material punishment on the target states, which can function as a threat. ASEAN’s unified criticism of Vietnam’s invasion of Cambodia in 1979 through a joint statement is a case in point.

Institutional bandwagoning refers to the collective alignment with a great power(s), including the source of a threat, to gain benefits and/or to ensure security at the expense of opportunities to cooperate with other great powers. Institutionally, member states attempt to adopt a common stance toward a target state(s), or at least not to object to such a stance, thus enhancing military, economic, and political cooperation. Member states also incorporate a target state(s) into the institution, providing an opportunity to lead the institution so that the members can mitigate the threat from the target and benefit from the target’s greater military, economic, and political resources. An example of this is the TPP, which originated from a 2005 economic agreement entered into by four small powers in Asia–Pacific—Brunei, Chile, New Zealand, and Singapore. In 2008, the TPP included the United States, thus increasing the framework’s security, economic, and political influence in Asia–Pacific and beyond.Footnote 1

Institutional hedging attempts to maintain strategic ambiguity to reduce or avoid risks associated with the negative consequences of failed institutional balancing or bandwagoning. On the one hand, failed institutional balancing can lead balancing institutions to experience severe punishment by the target state(s), because such actions provoke them. On the other hand, failed bandwagoning can lead bandwagoning institutions to confront the targeted actors’ domination and face a potential loss of autonomy and security. Both strategies also risk facing a lack of commitment from the ally or bandwagoned state. In order to mitigate such risks, institutions make the most of its “institutional power,” which aims to “exercise [control] indirectly over others through diffuse relations of interaction,” with the mobilization of material, symbolic, or normative resources (Barnett & Duvall, 2005, pp. 43, 50). To operationalize this power, a security institution incorporates a target state(s) into the institution as a member state, attempting to constrain that state’s behavior by creating or consolidating its own institutional norms and rules. An example of this is ASEAN’s inclusion of great powers into an ASEAN-led institution to constrain them through the “ASEAN Way,” which consists of norms such as non-interference and consensus decision-making. Since inclusion would risk members being dominated by the target powers, member states create additional normative mechanisms such as “ASEAN centrality” in ASEAN-led institutions, which gives ASEAN the privileges of agenda-setting and chairpersonship (Koga, 2021, pp. 94–95).

Institutional co-option nurtures cooperative norms and rules by incorporating a target state(s) in the hope of changing its preference. As with institutional hedging, this strategy is conducted by incorporating a target state(s) as a member(s) and providing opportunities for members to interact with each other more frequently. Of course, it is entirely possible that this strategy is motivated toward creating security norms and principles that are advantageous to core member states. However, unlike institutional hedging, it does not aim to immediately constrain the behavior of the target state by imposing regulative norms. Rather, it expands channels of communication, facilitates cooperation in non-contested areas, and increases the possibility of nurturing mutually acceptable cooperative norms and rules. An example of institutional co-option is a “cooperative security” arrangement that emphasizes the importance of confidence-building measures through diplomatic interactions and policy discussions toward potential cooperation. At the same time, such an arrangement also gives target states leeway to shape institutional norms and rules, which is an incentive for them to join.

According to agent-based historical institutionalism, institutional strategy is not static. The strategy can shift in times of environmental change, yet such a shift needs to be carefully examined by taking into consideration both intra-institutional politics among member states as well as the external strategic environment. Indeed, the timing of the change generally depends on both external and internal factors, and agent-centered historical institutionalism offers a clue to understanding how these two factors interact with each other.

In the conventional realist logic, the distribution of power shapes state behavior and a shift in the strategic landscape determines institutional change. However, RSIs require intra-institutional political processes to decide the type of institutional strategy that they need to respond to environmental change. Therefore, a change in the distribution of power serves as a trigger, not a determinant, in shifting institutional strategy, and it is ultimately member states’ implicit and explicit agreement that changes the strategy. To be sure, institutional strategy is relatively inflexible. This is due to the collective action problem among sovereign states: Changing institutional strategy is more difficult than changing state strategy as it is difficult for member states to achieve consensus quickly. In fact, a change in institutional strategy may alter the institutional design and format, which makes member states highly cautious of such a move. For example, a cooperative security institution based on institutional co-option will find it difficult to transform itself into a collective self-defense system based on institutional balancing unless there is a radical shift in the strategic environment.

In this context, some changes in institutional strategy are relatively easier than others, and there are two types of institutional strategy shift—radical and moderate—as illustrated in Fig. 2.1. The diagram shows more moderate changes than radical ones. There is only one type of radical change: a shift from institutional balancing to bandwagoning, and vice versa. In a shift from institutional balancing to bandwagoning, an RSI abruptly includes a target state that the institution was balancing against and gives it an opportunity to lead the institution. In a shift from institutional bandwagoning to balancing, an RSI excludes a target state from the institution that it was bandwagoning with. These radical shifts in institutional strategy are usually inconceivable; they require a radical change in the strategic environment, such as war or the collapse of a great power. On the other hand, an RSI can take various moderate changes. A moderate shift occurs when the institution faces either an abrupt or a gradual change in the strategic environment. Under a gradually changing environment, institutions are likely to avoid a radical strategy shift because it would invite political and military confrontation; instead, they gradually modify their institutional strategy from bandwagoning or balancing to hedging or co-option, or lean toward bandwagoning or balancing from hedging or co-option. At the same time, RSIs may conduct institutional hedging and co-option simultaneously as these strategies do not require substantial change to the institutional design and format.

Fig. 2.1
A flow diagram of the institutional changes. It has bi-directional moderate changes between institutional hedging, institutional balancing, institutional co-option, and institutional bandwagoning. A radical change is indicated between institutional balancing and bandwagoning. Institutional adjustment between co-option and hedging.

Radical and moderate change in institutional strategy

Full size image

Again, a strategic environmental change is not a determinant of strategy shift because the latter ultimately occurs from within, by agents. As agent-centered historical institutionalism suggests, an environmental change provides only a window of opportunity for a change in institutional strategy. In addition, given the importance of agents, member states need to recognize such a change in the regional balance of power in order to shift institutional strategy. Therefore, an environmental change should be either actual or perceptual, and this could be the emergence of a power vacuum or a change in a major power’s foreign policy. Once member states recognize that the existing institutional strategy may need changes to adequately respond to the changing environment, they will discuss a potential strategy shift. Specifically, with the existing utility of institutional strategy as a reference point, members reassess the institution’s utility vis-à-vis the changing strategic environment and decide whether they will enact an institutional strategy shift.

2.3 Methodology

Using such a theoretical framework, this book focuses on ASEAN’s management of great powers vis-à-vis the SCS disputes from 1990 to 2020. The SCS issue is one of the most important cases to be examined for East Asian security and ASEAN institutional strategies for four reasons. First, Brunei, Indonesia, Malaysia, the Philippines, China, and Taiwan have contested maritime borders, islands, and islets, and there have been naval and para-military clashes and standoffs between claimant states in the contemporary period, particularly in 1974, 1988, 1995, and 2012. These have been a source of instability in East Asia.

Second, the SCS stability is vital for East Asia’s economic prosperity. The sea lines of communication (SLOCs) through the SCS are geo-economically important. According to the US Energy Information Administration, approximately 11 billion barrels of oil and 190 trillion cubic feet of liquefied natural gas passed through the SCS in 2012 (USEIA, 2013). It was also estimated that USD 3.37 trillion worth of shipping (China Power Team, 2017) and 4.7 trillion cubic feet of liquefied natural gas passed through the sea in 2016 (USEIA, 2017), while 15 million barrels of oil did so per day in 2017 (USEIA, 2018). The SCS is at a strategically important location that connects the Pacific and the Indian oceans through several choke points.

Third, the SCS disputes are a rare and prominent security issue that ASEAN has attempted to manage since the 1992 ASEAN Declaration on the SCS. The issue presents not only traditional, but also non-traditional, security aspects including piracy, transnational crimes, maritime environment, and maritime safety. Although ASEAN has a track record of avoiding in-depth discussion of territorial disputes such as North Borneo, Pedra Branca, and the Preah Vihear Temple, the SCS issue has consistently been on its agenda since the end of the Cold War. Therefore, the issue serves as a test case for the future strategic behavior of ASEAN.

Fourth, regional great powers, particularly China and the United States, have been involved in the SCS disputes. While China is one of the claimant states, other regional major powers, including Australia, Japan, and the United States, are committed to stability in the seas primarily because of the importance of SLOCs as well as their strategic allies and partners such as the Philippines. ASEAN has attempted to manage not only the disputes among claimant states, but also tensions involving external great powers, aiming to prevent an escalation into full-blown conflict. In this sense, the SCS issue is the most useful case for analyzing ASEAN’s ability to manage great-power politics.

For the time frame, this book examines ASEAN’s institutional strategies in the post-Cold War era from 1990 to 2020. The end of the Cold War led to significant changes in the regional balance of power because of the demise of the Soviet Union and weakening US military presence in the region (Baker, 1991; Betts, 1993; Friedberg, 1993; Katzenstein, 2005; Koga, 2011; Stuart & Tow, 1995; Tow, 1991). The 1997 Asian Financial Crisis also caused a temporary decline in Asian economies as well as Asia’s skepticism regarding US political commitment to ensuring regional economic stability, while 9/11 generated US unilateral action in the Middle East, resulting in the lack of diplomatic attention in Asia (Acharya, 1999; Alagappa, 2003; Bowles, 2002; Christensen, 1999; Posen & Ross, 1996; Zheng, 2005). The 2008 Global Financial Crisis sparked public, academic, and policy debates over the relative decline of the United States and the rise of other powers, particularly China (Brooks et al., 2013; Layne, 2008; Mearsheimer & Walt, 2016; Nye, 2010; Posen, 2013; Wu, 2010; Zakaria, 2008). The 2016 SCS Arbitral Tribunal’s award, which ruled overwhelmingly in favor of the Philippines, provided the Philippines and ASEAN with a legal means to resolve the territorial disputes. Although China rejected the ruling entirely, the denial heavily affected the regional states’ perception of China’s strategic posture as it challenged the existing international legal order, and this would have a long-term implication for the political balance of power in Southeast Asia and beyond (Davenport, 2016; Koga, 2016; Zhang, 2017).

The frequency of these changes in the regional strategic environment is partly related to the development of material capabilities in a larger strategic landscape. The United States still possesses the largest military force in the world, yet China has gradually narrowed the gap (Fig. 2.2). There was a drastic increase in US military expenditure between 2001 and 2009, but this was mainly caused by US military involvement in the Middle East, particularly in Afghanistan and Iraq, after the 9/11 terrorist attacks in 2001. From 2010, after the 2008 Global Financial Crisis, the United States steadily cut down its defense spending; by 2016, it had returned to the level of expenditure in 2000, although military expenditure began to gradually increase again from 2017. Whereas the gap between the United States and China has been consistently shrinking, the gap between China and Southeast Asian states has been exponentially widening since 1999. More remarkably, China made this possible without drastically increasing its share of GDP for military expenditure—there was, in fact, a decrease in its share of GDP for military expenditure from 2.5 percent in 1990 to 1.9 percent in 2019.Footnote 2 The dramatic increase in military expenditure is therefore attributed to China’s strong economic growth in the post-Cold War period. According to the World Development Indicator, China’s economic growth has remained well above six percent since 1991. Its growth rate hovered at approximately 10 percent from the 1990s to 2000s and at seven percent in the 2010s (The World Bank, 2020). The economic gap between the United States and China has been steadily shrinking since 1992, while Southeast Asian states could not match China’s economic might (Fig. 2.3).

Fig. 2.2
A graph of the U S dollar in million versus years. The U S starts from the value of 680000 and ends at 800000 on the y-axis. The U S-China gap starts at 650000 and ends at 500000 on the y-axis. China starts at 25000 and ends at 250000. ASEAN starts from 20000 and ends at 30000. Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, and Thailand are 0. Values are approximate.

(Source SIPRI, 2021)

Growth of military expenditure in East Asia, 1989–2020

Full size image
Fig. 2.3
A graph of the G D P in U S dollar versus years. The U S line starts at 9 E plus 12 and ends at 1 point 6 E plus 13. The U S-China gap line starts at 8 e plus 12 and ends at 6 E plus 12. China starts at 1 E plus 12 and ends at 1 E plus 13. ASEAN starts from 1 e plus 12 and ends at 2 E plus 12. Brunei, Cambodia, Vietnam, and Singapore are 0. Values are approximated.

(Source World Development Indicator, 2020)

GDP growth in East Asia, 1989–2020

Full size image

Admittedly, military expenditure and GDP growth alone do not adequately account for a shift in the distribution of capabilities. Other factors such as the geographical allocation of military assets, quality of military, existence of alliances, and the degree of security commitment significantly influence the configuration of the balance of power. Nonetheless, given these trends of changing material resources and China’s geographical location in East Asia, China’s military and economic commitment to the region has remained stable, and its strategic influence in the region and beyond has increased. If we take a realist standpoint, ASEAN member states need to militarily align with the United States or other regional great powers to counterbalance the rise of China. Yet, this is not the case. The Philippines and Thailand are still the only two Southeast Asian states that have a formal defense treaty with the United States, and they constantly face the alliance dilemma: entrapment or abandonment. Other ASEAN member states need to find alternative ways to manage this power shift in East Asia. This constant change in material capabilities in East Asia illustrates the gradual change in the regional distribution of power.

Based on the theoretical model of agent-centered historical institutionalism, it is important to understand how ASEAN member states have perceived this general trend, and this requires a closer examination of the subregional trend for the SCS situation. To this end, this book examines the 30 years in the post-Cold War era by dividing it into four phases—1990–2002, 2003–2012, 2013–2016, and 2017–2020—in accordance with major changes in the regional strategic environment and with events such as ASEAN’s critical declaration on the SCS and other major maritime incidents. More specifically, the first phase, from 1990 to 2002, was when ASEAN and China concluded the Declaration on the Conduct of Parties in the South China Sea (DOC) after experiencing several tensions among the claimant states. The second, from 2003 to 2012, was when the Scarborough Shoal naval standoff between the Philippines and China led to ASEAN disunity despite institutional efforts to maintain the SCS stability in the 2000s. The incident resulted in the AMM's failure to issue its joint communiqué for the first time in its history. The third, from 2013 to 2016, was when the Philippines took legal action against China at the SCS Arbitral Tribunal, which eventually issued the award largely in favor of the Philippines. The fourth, from 2017 to 2020, was when the SCS code of conduct discussion became active and was seriously considered by China and ASEAN.

This book mainly uses official documents including ASEAN’s joint communiqués and declarations, while examining media reports such as newspapers and magazines to understand the nuances in those documents. Given ASEAN’s strict consensus decision-making mechanism, the documents reflect ASEAN’s institutional stance and strategy. This is because ASEAN-led institutions will not issue any formal institutional document if there is a clear disagreement by any member state, although ASEAN can utilize peer pressure to create a unified political stance (Tan, 2013).

In addition, the book focuses not only on ASEAN’s security institutions such as the ARF and the ASEAN Defence Ministers’ Meeting Plus (ADMM-Plus), but also on political ones including the AMM and ASEAN–China dialogues. This is because ASEAN as a whole had already become a security-oriented institution in the post-Cold War era. Most notably, from 1992, the association formally included political and security agendas and proliferated ASEAN-led institutions. Since its establishment in 1994, the ARF has played a significant role in updating the SCS situation yearly in one way or another, drawing much scholarly attention. Other ASEAN institutions also discussed or were beginning to discuss the SCS issue. The AMM issued a joint communiqué mentioning the SCS disputes every year except for 2012. The ASEAN Summit has also consistently addressed the SCS situation since 2010 and issued joint statements, while many affiliated institutions, such as the ASEAN Post Ministerial Conference (ASEAN-PMC), EAS, ADMM, and ADMM-Plus, did the same (see Chapter 1). As such, it was not only ASEAN’s security institutions, but also other ASEAN-led institutions, that attempted to address the issue. Confining strategic issues to only ASEAN security institutions therefore significantly limits a broader understanding of the strategic utility of ASEAN.

Also, with the proliferation of ASEAN-led institutions, member states have been able to opt for “forum shopping,” whereby they intensively engage particular institutions to ensure their own interests (Chou et al., 2016, pp. 54–55; Murphy & Kellow, 2013).Footnote 3 As a result, each ASEAN and ASEAN-led institution gradually assumed different roles in managing the SCS disputes. For example, the APT does not touch on the SCS issue, while the AMM is generally more assertive in that regard. Additionally, while many ASEAN-led institutions review the situation, the joint statements and press releases on the SCS disputes have been issued predominantly by the AMM and ASEAN–China dialogues, including the Summit, PMC, and Senior Officials’ Meetings (SOM) (Table 2.1). This indicates the implicit institutional division of labor among ASEAN and ASEAN-led institutions.

Table 2.1 ASEAN documents on the SCS, 1992–2020
Full size table

Accordingly, this book analyzes six major institutions in ASEAN relating to the SCS issue: AMM, ASEAN Summit, ASEAN–China dialogues, ARF, EAS, and ADMM/ADMM-Plus. The first four institutions are examined from 1990 to 2020, while the EAS and the ADMM/ADMM-Plus are analyzed from Phase 2 because they were established after 2002 (Table 2.2). The APT and the ASEAN-PMC are excluded. The APT has not touched on the SCS issue since its inception except for the 2002 summit and the 2014 Foreign Ministers’ Meeting; even then, there were only brief statements issued.Footnote 4 The APT has focused more on socioeconomic cooperation and long avoided traditional-security issues. Admittedly, there is still a possibility that the APT would table the SCS issue as a regular agenda in the future, but given that there has yet to be a serious discussion, the APT is considered irrelevant for examining the SCS disputes. On the other hand, the ASEAN-PMC has actively discussed the SCS issue since the 2010s. However, the most important meetings are the ASEAN–China dialogues, which have existed since the mid-1990s. Therefore, the book focuses on ASEAN–China dialogues rather than the other ASEAN+1 institutions.

Table 2.2 Establishment of ASEAN and ASEAN-led institutions and the four phases
Full size table

The next chapter provides an overview of the historical development of the SCS situation through each of the four phases.