Ever since the USSR disintegration the debate between the factions of neo-realism and neo-liberalism has heated up. The issues of conflict and co-operation in the international relations among the post-Cold War states are the focus of this debate.

Kenneth Waltz put forward the theory of neo-realism in his book Theory of International Politics in 1979 He asserted that anarchy is the guiding principle in international relations with each state working for its own advantage and subsistence, without recourse to another. Dumbrell and Barett (1997) further add that “Power is all, and balances of power the only way to make order out of chaos” (p.12). It follows that the competitive survival tactics, force the states to develop aggressive military capabilities in order to amplify their power among other states. There are differences in the capabilities among the units and although each state wants the same things, they differ in the manner in which they attain them. So some states appear more dominant, and compete with each other for a balance of power. Domestic economic growth and military build-up of strengths is evident. Sometimes there is the formation of external alliances with similar states as a security against the more dominantly powerful state or group of states. Neo-realists maintain that the result of the survival syndrome intrinsic to such states is war and it cannot be avoided.

Robert Keohane and Joseph Nye (1977) in their book: Power and Interdependence proposed the theory of Neo-liberalism. Governmental organizations and institutions for the backbone of the neoliberal movement and these bodies are seen as the negotiators of international co-operation. While acceding that states are anarchic by nature, they regard absolute gains to be more important than relative gains and there is a common corroboration between political democracy and freer markets (Dumbrell & Barett 1997) with influences such as democratic governance, public opinion, mass education, free trade, liberal commercial enterprise, international law and organisation, arms control and disarmament, collective security, multilateral diplomacy, and ethically inspired statecraft can improve life on our planet.” (Charles W. Kegley, 2009, pg 37).

What is this debate about? Martha Finnemore summarizes the debate between these schools as “… the degree to which states pursue economic versus military power or absolute gains versus relative gains, and the nature of anarchy they inhabit” (1996, p9). Cutler (2004) claims that this debate between neo-liberalism and neo-realism was generated to explain the international economic policy of the Soviet-bloc states that espouse neo-realism and through neo-liberalism to comprehend of the economic and foreign policies of regions like the EU, UK, and the USA.

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