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Can small states exert agency in their foreign policies?

Up until the end of the Cold War much of the focus on foreign policy was directed towards the

actions of the great powers. However, after 1989, and with the dissolution of the Soviet Union

and the emergence of smaller, more distinct nation states – most notably in Eastern Europe and

the Balkans – there was an increased focus on the role of small states in the international

community, and their ability to help shape regional, and indeed geopolitics. In an increasingly

globalised world, smaller states are able to have a far greater impact than ever before, and the

international institutionalisation has been able to amplify their voices. Yet the extent to which

they are able to control their wider environments and promote policies that favour their own

situations is a topic of great debate. This essay will argue that small states are able to exert a

degree of agency in their foreign policies, however they do not wield the same levels of

influence that the great powers enjoy, and therefore their ability to control their own fate is at

least somewhat dependent on greater forces than themselves. Whilst there are a number of tools

that small states can use to add weight to their opinions, the real power and agency in our

international system lies with great powers. In order to make this argument, this essay is divided

into three sections. The first shall examine the debate around the definitions of a small state

and attempt to provide a practical framework for the analysis of the levels of agency of small

states. The second section will outline the tools that small states can use to exert agency in their

foreign policies; namely international institutions, alliances, force multiplying weapons, and

the selectivity of issues they choose to involve themselves in. The final section of this essay

will outline the weaknesses of small states and demonstrate that real agency in the international

system lies with great powers.

What is a small state?

If we are to consider whether a small state is able to exert agency in their foreign policies, it is

important to first define what a small state is. However, this is more difficult than it may first

appear because it is often only in the most extreme examples that a small state is easily

distinguishable (Barston, 1973). The real difficulty lies in establishing boundaries between

what should be considered a small state and what should be classified as a medium state.

Robert Rothstein, in his book entitled ‘Alliances and Small Powers’ (1968: 1), states that

“Small Powers are something more than or different from Great Powers writ small”. This

implies that there is a unique category of states that are characterised by different patterns of

behaviour, and that not all states act in the same manner. It is not sufficient to characterise

small states as being weaker than larger states, because their individual circumstances force

them to behave in distinct and separate manners (Rothstein, 1968). He goes on to argue that

small powers can be distinguished by their need to rely on other states and international

institutions for their security, and that they must acknowledge, alongside other states, that their

individual capabilities are not sufficient to guarantee security on their own (Rothstein, 1968).

Rothstein (1968) outlines three key aspects of a small state: they require external assistance,

they have a small margin of error and little time to correct their mistakes, and the leaders of a

small state must see their weaknesses as unalterable. However, using these three indicators, it

would seem only the United States, Russia, and China can be considered to be ‘not small’

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(Keohane, 1969), and in an age characterised by global interdependence even these states

struggle to distinguish themselves. If we take the example of China, it relies heavily on the

importation of raw materials and other base products to ensure the continued survival of its

manufacturing sector – without which China surely wouldn’t have the same economic clout it

enjoys today, thereby implying that it too requires external assistance. Rothstein fails to define

what constitutes ‘external assistance’ and in doing so, leaves much to be desired in his

classifications; for example, it would be hard to classify the United Kingdom, or Germany as

a small state. Furthermore, a definition based on the ability to obtain security cannot be valid

during a time when the threat of nuclear weapons is all pervasive and constant (Keohane, 1969).

Instead of relying on a definition based on the ability to provide one’s own security, population

can be used to classify a small state. Vital (1967) divides states into three sectors: great, middle,

and small states. His definition also recognises that levels of development have to be

considered, thus a small state is one with a population of between ten and fifteen million if they

have an advanced economy, and between twenty and thirty million if they are economically

underdeveloped (Vital, 1967). But, as with most definitions of small states, this is subjective.

Vital’s definition also does not include countries such as Sweden which had a population of

9.696 million in 2014 and can certainly be considered economically developed (World Bank,

2014). Vital also attempts to classify small states by including a degree of isolationism – a

small state is a “state which can rely least on outside help and which, by virtue of its situation,

is compelled to make its own decisions on the basis of its own understanding of that situation

and such resources as are available to it” (Vital, 1971). Alternatively, David East in his analysis

of small states, considered all countries with a population of less than 23.7 million to be ‘small’

regardless of their levels of development, and all others to be ‘large states’ (East, 1973). Using

East’s definitions, Peru would not be considered a small state, with a population of 31.4 million

in 2015, and thus in the same bracket as the United States and China (United Nations, 2015).

Similarly, using population to determine the boundaries between a small state and any other

category of state can be problematic because population is not a constant, although it can

provide easily quantifiable data that is suitable for comparison within and between categories

(Barston, 1973). Barston himself aims to provide a more holistic definition that incorporates

resources, economic development, military capability, and the successes of foreign policies,

but he does not set out to define the boundaries between small states and other categories

(Barston, 1973).

However, this essay is dealing with the ability of a state to exert agency in its foreign policy,

or in other words, its power. Whilst more objective definitions of size are useful for comparison

and analysis, they are inevitably open to continual discussion over the validity of the objective

criteria set. With this in mind, it is more valuable (for this essay) to consider the ability of a

state to influence the international system, and indeed, it may be more accurate in this instance

to classify small states as ‘small powers’. Influence in the international system heavily relies

upon the perceived notions of how powerful a state is, and how powerful a state believes itself

to be, and so a psychological dimension must be incorporated alongside power if the ability to

exert agency is to be categorised more precisely (Keohane, 1969). A “Small Power is not

defined by specific qualities it possesses (or lacks), but rather by a position it occupies in its

own and other eyes” (Rothstein, 1968:7). There is no objective reality in international politics.

The United Kingdom was not automatically prescribed to be more powerful than the

Democratic Republic of Congo (DRC), instead the UK’s perception of power relies on

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circumstance, historical relationships, and a perception that it is indeed more influential than

the DRC. There are four categories that we can classify states into that relate to the systemic

role that leaders see their countries playing (Keohane, 1969). The first is ‘system determining

states’ which play vital roles in shaping the international system, and have leaders that believe

that their country can alone exercise large or even decisive impacts on the system – countries

such as the United States (Keohane, 1969). The second category is ‘system influencing states’

(Keohane, 1969). These countries recognise that they cannot dominate international society,

but individually they may be able to significantly influence it through unilateral or multilateral

action - countries such as the UK, France and Japan. The Third category is ‘system affecting

states’ which possess the ability to exert agency through small groups or alliances and regional

organizations, but not alone (Keohane, 1969). Examples of ‘system affecting states’ include

Canada, Brazil, and Pakistan – countries with a high GDP that can perform expert roles

(Keohane, 1969). The fourth and final category is ‘system ineffectual states’, and they

recognise that they can do very little to exert power over international society except through

groups of states – within which they are often ‘drowned out’ by more powerful states (Keohane,

1969). This final category includes states with a lack of resources, which often have to adapt

their foreign policy to ‘reality’, rather than attempting to adapt ‘reality’ itself. Small states can

fall anywhere within the final two categories. For this essay, Keohane’s (1969) categorisation,

based on influence, is the most appropriate and consequently small states shall instead be

referred to as small powers.

Tools for small powers to exert agency

One of the primary tools used by small powers to exert agency in their foreign policies is

membership of international and regional institutions, an argument supported by Joenniemi

(1968: 62): “in an international system where the very idea of sovereignty itself is under

challenge and large multinational institutions … are assuming greater importance, small states

could become more influential”. Through such organisations, small powers can gain

international support for their policies in a wider arena than they could otherwise expect to

achieve, and promote values and norms favourable to their continued survival (Barston, 1973;

Keohane, 1969). This works especially well in institutions such as the United Nations or the

European Union, in which states are treated as equals, and are each given a single vote – rather

than in institutions that prefer more proportional representation based on factors like

population, or financial interest, as is the case in the International Monetary Fund (Bernhardt,

1983). Rothstein argues that a key function of international organisations, from the perspective

of a small power, is to allow small powers to act collectively and help shape international

attitudes and codes of conduct (Rothstein, 1968). An additional function of international

institutions is to provide legitimacy to small powers, especially to those newly created under

controversial circumstances (Claude, 1966). On occasion, small powers are able to exercise

disproportionate influence through these institutions (Fawcett, 1962). An example of a small

power being able to apply influence beyond its expected means can be seen in the ‘Northern

Dimension Initiative’ (NDI) launched by Finland through the European Union (EU). On the

15th September 1977, the Finnish Prime Minister, Paavo Lipponea, launched the NDI at an

international conference on the Barents region and successfully managed to get his proposal

onto the agenda for the EU summit in Luxembourg for December later that year (Arter, 2000).

Following this, the European Council asked the European Commission to produce a report on

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the NDI, which was then presented in December 1998, and formally adopted as an EU policy

with an action plan calling for the initiative to be complete by June 2000 (Arter, 2000). This

marked Finland’s first political initiative since it joined the EU as a member state in 1995

(European Commission, 2011). The NDI contained a significant Finnish national interest

component centred around agricultural and energy policy. The long harsh winters and short

growing seasons experienced in Finland create difficult farming conditions, so the NDI

successfully sought to exempt Finland and other Scandinavian countries from the EU’s

Common Agricultural Policy, and to increase their share of EU structural funding subsidies

(Arter, 2000). The NDI also allowed for greater co-operation between Finland and Russia with

regards to oil supply lines and the forest goods sector (Arter, 2000). This example clearly

demonstrates that within international organisations, such as the EU, small powers like Finland

are able to propose and implement their foreign policies, and raise awareness of their specific

needs. However, international institutions do not always benefit small powers. Indeed, looking

at the permanent five members of the United Nations Security Council (the US, UK, Russia,

China, and France which is one of the most powerful determinants of the success of some

foreign policy objectives), there is no small power representation, and so they can have their

ideas and policies fatally hindered at the bequest of a greater power than themselves, if one

should choose to use their power of veto. Nevertheless, there are many regional organisations

that intentionally exclude great powers, out of fear that they will dominate or excessively

interfere, such as the Organisation of the Petroleum Exporting Countries (Singer, 1972).

Overall, whilst membership of international institutions provides certain benefits for small

powers, they are also heavily influenced by great powers, indicating that real agency and

influence lies with the latter.

A second tool small powers can use to exert agency, is the use of alliances. This can come in

the forms of balance of power and strategic hedging. Balance of power theory argues that states

forge alliances to protect themselves against the hegemony of another more powerful state than

themselves which threatens their existence (Walt, 1987; Claude, 1962; David, 1991). Thus

neutrality or non-alignment can be a dangerous policy for small powers (Vital, 1967). A good

example for this can be seen in the foreign policy choices of some European states during the

Cold War, many of which were forced to side with either the US, or the Soviet Union in order

to gain access to their nuclear umbrellas and benefit from deterrence theory to ensure their

security in the face of threat from the ‘other side’. If a small power is seen by a great power to

be in a strategically important location, this can increase the small power’s bargaining position

by demanding the completion of certain foreign policy objectives in return for great power

influence in the strategically important area, although naturally this is most effective if there is

another great power vying for similar levels of influence (Barston, 1973). Thus, in these

situations, small powers enjoy a certain degree of manoeuvrability with respect to which ‘side’

they balance against, and therefore enhanced ability to exert agency in their foreign policy

objectives (Keohane, 1969). However, these situations can increase the risk to a small power

if they end up choosing the losing side. If the balance of power between the great powers is

fluid, then small states must maintain flexibility in order to prosper and guarantee their security

(Keohane, 1969). Yet the levels of influence that a small state can obtain in balance of power

situations depends on the stability of said balance of power. In stable situations, unlike the

fluid and competitive scenario mentioned above, alignment with one ‘side’ over another can

increase the security of the small power yet reduce their influence because their geographic

location is unlikely to be strategically important, and thus great powers will have no incentive

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to bargain with them. An alternative to balance of power theory is strategic hedging. This

describes a situation in which a small state occupies the middle ground between two powers

(Tessman, 2012). It also allows them to offset risks generated by one power and improve their

relations with the other power, whilst avoiding major confrontation (Guzansky, 2015). For

example, the Gulf Co-Operation Council (GCC) pursues this policy because the relations

between Saudi Arabia and Iran are problematic for the smaller states in the region, and so they

need to be able to balance against Iran, whilst simultaneously resisting Saudi domination

(Guzansky, 2015; Cause, 2009). However, strategic hedging can limit the effectiveness of the

balancing process, because the power is aware that the small state has not fully committed, and

the requirement of sending resources in ‘both directions’ is costly, especially considering the

fact that there is no guarantee that this insurance policy will pay off (Guzansky, 2015). Whilst

alliances can certainly aid the ability of small powers to exert agency in their foreign policies,

they are unable to determine the environment that they are operating in (which is completely

dependent on the relations between great powers) and so once again the real influence lies with

the larger states.

The pursuit of force multiplying weapons such as chemical, biological or nuclear weapons, is

a third tool that small powers can use to exert agency, particularly if they lack the necessary

resources to maintain a large standing army. The possession of a modern military and the latest

military equipment, for many small powers, are seen as accoutrements of statehood and can act

as important indicators of prestige, and a normative symbol of a state’s identity, whilst allowing

them to use the threat of the application of these weapons as bargaining power to help

implement their foreign policies (Singer, 1972; Sagan, 1996/1997; Cha, 2002). One of the most

prominent examples of using force multiplying weapons in a contemporary setting, is that of

North Korea. The communist regime, now under the leadership of Kim Jong-Un, regularly

engineers crises using the threat of nuclear weapons, or even the testing of such weapons, to

extract international aid in return for de-escalation of tensions (Habib, 2011). Currently,

Pyongyang has made no meaningful concessions that would limit or reverse the trajectory of

the development of North Korea’s nuclear weapons programme, thereby allowing it to continue

to use nuclear weapons as a bargaining tool to receive much needed international aid (Habib,

2011). However, this tool can be constrained by great powers through political condemnation,

the denial of nuclear equipment, the denial of military and/or economic assistance, the

termination of alliances, and the threat/use of military action (Quester, 1977). Furthermore, the

economic cost of acquiring force multiplying weapons, particularly nuclear weapons, can put

them out of reach of small states meaning that they are only accessible to the great powers, or

that small states must rely on great powers if they wish to achieve successful nuclearization

(Young-sun, 1978; Singer, 1972). Therefore, force multiplying weapons can help small powers

to exert agency in their foreign policy, but they are often at the mercy of great powers if they

wish to acquire them, meaning that ultimate influence in the international system lies with great

powers.

The final tool that will be looked at in this essay, is the careful selection of foreign policies to

try and promote. Small states are unable to exert influence in all areas of their foreign policy,

but if they carefully pick and choose the issues they wish to champion, they can achieve results;

as seen in the example of the Cod Wars between Iceland and the UK. The Cod Wars were a set

of four militarised disputes between the UK and Iceland, and on each occasion, Iceland was

able to implement its foreign policy (Steinsson, 2016). Between 1952 and 1976, Iceland

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unilaterally extended its fishery limits from four nautical miles to 200 nautical miles from its

coastline (Jóhannesson, 2006). Despite the Royal Navy’s involvement, and the imposition of

economic sanctions on Iceland by Britain, the UK was forced to accept these amendment

(Jóhannesson, 2007). This boundary dispute was driven by Iceland’s economic dependence on

the fishing industry which had been in decline following the Second World War, but they were

able to wield disproportionate power through threatening to withdraw from NATO, and

removing the US military presence in Iceland (Jóhannesson, 2006). Iceland is a strategically

important location for NATO because it acts as a stepping stone between the US and Europe,

and played a crucial role during the Cold War in monitoring Soviet submarine activity

(Ingimundarsson, 1996; Ingimundarsson, 2002). It is certainly true that Iceland is unable to

exert this level of influence over the UK in all areas of foreign policy, but by carefully selecting

the issues to dispute, Iceland was able to exert agency. In this example, it can clearly be seen

that small powers can exercise influence, but one of the main factors in the success of Icelandic

policy in this case, was pressure on the UK from the US to act in the interests of NATO.

Therefore, without the great power involvement of the US, Iceland would not have had the

influence it did, and so this further supports the argument that the countries most able to exert

agency in their foreign policies are the great powers.

Where does agency really lie?

As this essay has argued, the real agency in the international system lies with the great powers,

and this can be demonstrated through looking at the limitations of small states in their ability

to implement foreign policy. Unlike great powers, small states are not able to exercise extensive

international involvement and thus most of their primary interests have to remain regional, as

demonstrated by the example of the Cod Wars (Barston, 1973). This means that it is the only

the great powers that can influence all areas of international policy. Small states only have a

few means of implementing their foreign policy, and are vulnerable to external pressure (Vital,

1967). Conversely, great powers have a number of tools in their tool box, and are less

vulnerable to external pressure. Small powers have only a slim margin of error, and must

therefore carefully manage their external relations in order to minimise the risks of failed

foreign policy (Bartson, 1973). Larger states on the other hand can afford to fail because they

often have more resources at their disposal than small powers. Furthermore, the foreign

ministries of small states tend to be limited in geographic scope and personnel, and so are

unable to keep abreast of events to the same extent that the great powers are (Zartman, 1966).

Alternatively, larger states are able to maintain diplomatic ties globally, which enables them to

promote their foreign policies more effectively than small powers and therefore enjoy greater

agency. And finally, small states are often limited by their ties to their former colonial rulers

(often great powers) through financial loans, trade agreements, and the need for technical

assistance (Okumu, 1971). Great powers are not limited in their foreign policies to the same

extent, and so they wield the real power in the international system, allowing them to exert

greater agency in their foreign policy than small powers.

Conclusion

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Although there is considerable debate around how to define a small state, this essay suggests

that, for the purposes of examining their ability to exert agency in their foreign policy, a

definition should be based on power and the psychological element of how powerful a state

believes itself to be. The classification used by Keohane (1969) into system determining,

system influencing, system affecting and system ineffectual states best serves this purpose,

although for other levels of analysis, factors including the ability to obtain security and

population size may be more applicable. This essay has considered four tools to exert agency

in foreign policy that are available to small powers (international institutions, alliances, force

multiplying weapons, and the careful selection of issues to champion) and concluded that even

these tools are to some extent dependent on the actions of larger states, because small powers

are not able to control the wider geopolitical environment. Many of the tools outlined require

great power authorisation or support which means that the great powers are able to control the

degrees of agency that small states are able to exercise. Ultimately, the real influence in the

international system lies with the great powers because they are not constrained in the same

way as small states. This is unlikely to change in the near future without substantial (and as of

yet, uncalled for) reform of the international system.

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