International Relations and Rationality: A Theoretical Test of Rational Choice and Cognitive Limits
Abstract: Are states rational actors? If so, why do states in the Asia-Pacific make different security strategies despite the relatively equal security setting? This paper seeks to test two theories: Rational Choice Theory (RCT) and the Cognitive Limits Theory (CLT) in the Asia-Pacific. In the said region, pro-American middle powers neighbour the People's Republic of China (PRC), a rising power. RCT argues that states consist of individual rational actors who behave according to their preferences. CLT, on the other hand, suggests that human cognitive limits influence the preferences of individuals. Despite the external pressure that prompts these states to address almost the same security issues, their approaches significantly differ. It is not only due to a mere lack of capacity; flawed logic also sees to it that foreign policy decisions fail.
Problem statement: What is the reasoning for the different approaches of the Republic of Korea and Japan towards the People's Republic of China and the Democratic People's Republic of Korea despite similarities in their goals and their geopolitical and diplomatic settings in the last decades?
Bottom-line-up-front: Seoul and Tokyo (both formal allies of the United States in the Asia-Pacific) present policy differences despite possessing nearly identical geopolitical situations. The decision makers of both states aim to make rational choices based on available resources. Yet behaviours like path dependence, groupthink, polythink and belief system hinder their policy output from being optimal. Conclusively and for better context, one needs to consider the cognitive limits that the leadership faces when trying to understand the dynamics of foreign policy.
So what?: A state faces various constraints in drafting and performing a seemingly appropriate security policy. For that reason, it may take a while for leaders to process the information updates they receive to decide on the most utility-maximising output. For the powers that be, it suggests that they should minimise the influence of the cognitive limits on rational decision-making to maximise the output. As stakes become explicit and more drastic, the likelihood of meeting the utility-maximising behaviour on the decision maker’s part grows. Put differently, state survival is any state leader's interest.
States as Rational Actors?
Are states rational actors? If they are, why do states fail to draft optimal policies? If rationality cannot explain the behaviour of states alone, what else must one need to consider? The Republic of Korea (ROK) and Japan are two formal allies of the United States (US) in the Asia-Pacific region. Japan maintains strong ties with Washington's security interests and consistency in its political stance toward the People's Republic of China (PRC) and the Democratic People's Republic of Korea (DPRK). Meanwhile, the ROK seeks to enhance its relations with the PRC and the DPRK, even when its diplomatic pursuit contradicts American strategic interests. Why does the ROK make a different choice from Japan if all states are rational?
If rationality cannot explain the behaviour of states alone, what else must one need to consider?
This paper lays forth two possible explanations for the policy difference between Seoul and Tokyo. The Rational Choice Theory (RCT) posits that states are rational actors, and their decision makers consider all possible options to reach an optimal decision. In that sense, failure occurs from the state's inability to realize the optimal choice. John Mearsheimer, James Fearon, Bruce Bueno de Mesquita, Graham Allison, and Stephen Quackenbush are some authors who argue for the RCT school of thought. The Cognitive Limits Theory (CLT) argues that cognitive biases obstruct a state's rationality. As in, states may try to make the optimal decision, but factors such as party politics, path dependence, groupthink, individual preferences, or worldviews hinder them by flawing logic. Proponents of this theory include Robert Jervis, Janice Stein, and Alex Mintz, among others.
Rational Choice Theory (RCT)
RCT is based on the assumption that individuals are rational. Therefore, a person acts to maximise their utility. The utility value is not objective, it differs individually based on one's preferences. The preference ranking must be consistent: if one prefers A over B and B over C, one must also favour A over C.
The term rationality does not render an individual capable of making objectively rational behaviours all the time. Supportingly, RCT agrees that individuals are under various constraints while also asserting that rationality stands for their ability to make the best possible option for their utility from a given limited set of options. Often, an individual cannot locate the absolute answer to one's decision and cannot invest unlimited resources in finding one. Hence, RCT admits that there are limits to individual rationality and considers it sufficient when one can rank preference with consistency from the given options.
Even if one makes a wrong decision, it is not irrational but an error as long as it follows a rational process because the consideration lies in possibilities, not objective and perfect predictions. Seemingly illogical policy actions are frequently not the products of irrational processes but of a lack of information, which requires the decision maker to rely on uncertainties in choosing the ultimate option.
Rational actors draw on the most available information from various evidence to avoid uncertainties as much as possible, such as historical analogy and signals from other actors. This information does not always result in the same conclusion, given that decision-makers have preferences which vary. Nevertheless, even conflicting decisions are logical as long as they follow a rational process.
Rational actors draw on the most available information from various evidence to avoid uncertainties as much as possible, such as historical analogy and signals from other actors.
RCT depends on individual actors, distinguishing it from neorealism, which contends for unitary state rationality. Each individual that is part of a group, institution, and state, seeks their authentic utility-maximising behaviour. The state decision comes only after competition between individual utility-maximising choices, which may or may not differ from a state's rational choice.
According to RCT, a state's failure to meet maximum utility does not indicate that it was irrational since non-quantifiable individual preferences decide the individual-level behaviours, collectively producing a state activity. Such ranks internalise the cost of action, suggesting a path dependence in which the existing structure may forbid the state from conducting a utility-maximising behaviour. It is rational for one not to do so regardless of the absolute benefit it brings if the cost of the challenge to the constraints is higher than the expected gains. Political climate and institutional environment are examples of structural constraints that influence a state's utility calculation. It may cause path dependence, making the decision maker prefer the status quo over potentially costly action.
Cognitive Limits Theory (CLT)
CLT questions the rationalist assumption that states are rational and that other factors constrain rationality. Not all human decisions arise from intentional consideration, some come from random neural reactions. As put forward by RCT, individuals do not have unlimited resources – including time –, to consider every possible option with the same weight. Instead, humans institute a belief system and use it as an operational code to ease the process of calculation.
One problem with using the belief system is that the first impression matters more, as individuals value earlier evidence over later information. A decision maker with a pre-decided conclusion tends to unfairly require more credibility than the existing logic by undervaluing counter-examples. Likewise, humans tend to maintain their already-established belief systems unless proven entirely and unsustainably wrong and thus dislike changes. Accordingly, decision makers tend to overvalue loss and undervalue gain, preferring the status quo. Because they value what is more visible, they prefer short-term benefits over long-term gains.
A decision maker with a pre-decided conclusion tends to unfairly require more credibility than the existing logic by undervaluing counter-examples.
Individuals also frequently exaggerate the causal relations between evidence and their interpretations. Because the selection of evidence and historical analogy depends on the intentions of the individual, two different people may present two contradicting historical analogies against the same event. It shows that individuals prefer supportive pieces of evidence to their belief system and dislike counter-examples.
Emotions are also factors that RCT does not shed much light on. Sensations such as nationalism also influence decision-makers and the public. A leader may presuppose that the cost to the decision maker is high enough for them to forego the option if it fails to bandwagon with strong public emotions. Hence, emotions play a visible role in decision-making, possibly initiating path dependence.
A state's decision-making body often consists of a limited number of individuals with similar backgrounds. Consequently, the group frequently shares cognitive characteristics and belief systems. Individuals often seek unanimous decisions in a group, sometimes using peer pressure to change opinions and leading to groupthink. The opposite may occur in a group when one's opposition can virtually ban the policy formulation, called polythink. It prevents optimal decision-making by dividing opinions and blocking actions, resulting in sub-optimal decisions with minimal consensus.
Individuals often seek unanimous decisions in a group, sometimes using peer pressure to change opinions and leading to groupthink. The opposite may occur in a group when one's opposition can virtually ban the policy formulation, called polythink.
There would be no reason for division regarding national security if all actors were rational. Yet, people have different concerns other than state survival, such as individual prosperity or a party's victory. Unless there is a concise, imminent threat, other preferences may overpower the state’s security needs. The voters tend to align their foreign policy preferences with their partisan political interests unless there is a significant public interest in foreign policy.
CLT is a tool that explains the origins of preferences, unlike RCT, which does not. The latter considers how the priorities of individuals translate into policy but leaves the preference system as a personal matter. While RCT focuses on an individual's ability to consider given options, CLT asserts that the intra-personal factors predetermine whether or not a policy option goes through a rational decision-making process. The Poliheurestics Model is one attempt to produce a synthesis, it argues that there are two stages in decision-making: the first stage narrows the options through a cognitive approach, whereas the second decides upon a best through a rational process.
The Republic of Korea, Japan and the People’s Republic of China
The ROK and Japan are the most similar designs in terms of geographic location, alliance structure, culture, level of democracy and security threats. This paper references the timespan between 2008 and 2022 – a period evident of the PRC's rise to power apparent in different states. It also looks for the implications of rationality and cognitive bias through a comparative case study about the Korean and Japanese strategic documents. For context, it explores the backgrounds of the ROK and Japan's history and institutional constraints, which may be the grounds of bounded rationality that both theories assume.
Republic of Korea (ROK)
The case study reveals the following characteristics regarding the ROK's security strategy. The first is the volatility based on partisanship. Next in line is the preference for an established belief system for each political party. All the Korean security documents this paper refers to, including the NSS and the White Papers, prioritise the ROK-US Alliance and attempt to avoid confrontation against great powers at varying levels. Lastly, the ROK's foreign policy centres on its Inter-Korean policy, considering the rest to be subsidiary.
The ROK's foreign policy has close correlations with its domestic politics. A stark difference exists between conservative and progressive policy preferences. Due to the Korean War, the ROK maintained an anti-Communist identity, suppressing the nationalist left during the Cold War. After democratisation, the conservative adopted a traditional policy perspective which led to prioritising the Alliance. In contrast, and as a reaction to the military governments' pressure, the progressive grew resentful of US support for the ROK and turned to the DPRK and PRC alternatives.
Due to the Korean War, the ROK maintained an anti-Communist identity, suppressing the nationalist left during the Cold War.
In such a context, the conservative governments of Lee Myung-bak and Park Geun-hye completely restructured Roh Moo-hyun's progressive foreign policy. The new focus was on pro-Americanism and maintaining a firm stance on the DPRK. Conservative governments adopted the tit-for-tat strategy towards Pyongyang. While the Lee government agreed with the denuclearisation of the Korean Peninsula, it demanded a democratic unification, thus taking a firmer stance than Roh's focus on negotiated peace. When major provocations such as the DPRK attacking ROKS Cheonan and Yeonpyeong Island, the Lee government immediately ceased the Six-Party Talks and imposed an independent sanction. The Park government moved further, demanding that the DPRK prove its credibility before any progress in relations with Seoul. Lee focused on military cooperation with the United States, while Park sought new relations with the PRC to undermine the DPRK's diplomacy.
However, as Park's impeachment ended the conservative decade, Moon Jae-in, a former advisor of Roh, came to power with a progressive government. Moon also reviewed the conservative security strategy for possible political considerations. He decoupled the ROK's security from the United States by enhancing its self-defence posture. The process revived many aspects of the Roh's government strategy. One of the factors from the Roh Administration that the Moon government revisited was the discourse over returning the ROK's wartime command from the United States, which ceased during the conservative years. Further, unlike the previous governments that required the DPRK to change before any further negotiations, the ROK took an assertive stance by inviting it for talks and even the Olympics.
From an RCT perspective, one evidence of rationality is the maintenance of the ROK-US Alliance throughout the administrations. Although Roh came to power with the votes of Anti-American nationalist lefts, his and Moon's government never considered breaking off from the Alliance. It was possibly from considering the massive cost of breaking off from the path dependence. Conversely, the conservatives did not choose to confront the PRC, even when they acknowledged its possible threats. It is another example of seeking the ROK's national interest of maintaining favourable relations with major powers regardless of political stance. Although they considered a firm posture from time to time, no government chose to seek other ways than peaceful unification to avoid war. Not all foreign policy served well for the ROK's national interests. It still does not prevent the argument that various governments sought rational choices with available resources, which may fulfil a party or an individual’s interests over national ones.
It is another example of seeking the ROK's national interest of maintaining favourable relations with major powers regardless of political stance. Although they considered a firm posture from time to time, no government chose to seek other ways than peaceful unification to avoid war.
The CLT approach highlights the cognitive limits the ROK's foreign policy suffered. Roh's strategy reflected his constituency's beliefs. Despite a formal alliance status between the ROK and the United States, Roh's pursuit of the role as a regional balancer indicates that some antagonism towards Washington existed in his government. The constant shift between the conservative and progressive agenda is an example of polythink within the ROK leadership and the National Assembly. Yet, because the Korean constitutional structure allowed the majority party to pursue foreign policy unilaterally, polythink resulted in recurring discontinuity, not inactivity. Many of the ROK's foreign policy thoughts came from opposition to the enemy rather than careful consideration. The lack of consistency across different administrations in Seoul's stance on the issue of retrieving the wartime command of its military forces from the United States despite the American role in the ROK's security shows that consensus existed only in principle.
Arbitrary interpretation of signals and indices occurred on both sides. The Park government interpreted the DPRK's failure to send performers to the PRC as a sign of bilateral deterioration of relations that deserved mentioning in the diplomatic white paper. Believing there was a cleavage between the two which the ROK could take advantage of, Seoul approached Beijing with the self-confidence of its relative credibility and power over Pyongyang. The PRC verbally supported the ROK's Inter-Korean policy but did not stop the DPRK's further nuclear tests. It showed the leadership's cognitive limits by putting too much trust in the PRC's low-cost signal and failing to address more relevant factors such as geopolitics.
The Moon government depicted a similar cognitive limit with high expectations on low-cost signals regarding the Pyeongchang Winter Olympics. For the DPRK, which can entirely control the domestic media, the cost of verbal messages and written agreements are not as high as for other states. Previous cases in which Pyongyang breached agreements with aggressive actions existed prior to Moon. Nevertheless, the Moon government overestimated the potential output of negotiations, failing to address the DPRK's provocations, maintaining that it would comply with the agreement. Indeed, the political cost of admitting failure and changing the course is high. Therefore, there are possibilities of rational path dependence, i.e. that Moon could not shift the strategy even when he realised its failure. Yet, it is clear that the overestimation involved a cognitive belief system and potentially influenced Moon's rational decision-making. Evidence shows that psychological factors influenced the decision of options that a rational choice would have otherwise considered. Hence, the ROK's foreign policy requires cognitive considerations.
Unlike the ROK, Japan produced its National Security Strategy (NSS) only once in 2013. It requires this paper to study both the NSS and the Bluebook – the Japanese version of diplomatic white papers. The characteristics of Japan's security policy include the following. First, there is a surprising consistency between the documents, often identical word-to-word to one another regardless of the year. Second, the Japanese policy is not prone to change, even when external threats come to the authors' attention. Also, the Japanese documents have more overlaps with the American strategy than from ROK, with scepticism towards the PRC.
Institutional factors are also determinants of Japan's security policy. The US-drafted constitution prohibited Japan from having an armed force. Nevertheless, the Cold War allowed it to have a Self-Defence Force with limited mandates that disallow foreign intervention or dispatch. This constraint resulted in Japan's security dependence on the US, undermining its independent foreign policymaking. As a result, Japan's foreign policy has tended to be passive and found the status quo favourable.
The US-drafted constitution prohibited Japan from having an armed force. Nevertheless, the Cold War allowed it to have a Self-Defence Force with limited mandates that disallow foreign intervention or dispatch.
Japan's foreign policy implementation has to go through the dynamics between the Prime Minister, the Ministry of Foreign Affairs (MOFA), and the governing party, likely the Liberal Democratic Party (LDP). Politicians tend to care less about foreign policy because the public does not have it at the core of their interests than others, such as the economy and infrastructure. It makes Japan's foreign policy less political than in the ROK, and the most consequential dynamics come from the MOFA. The Prime Ministers tend to have weak authority due to the ruling party's or the Ministry's constraints and are comparatively uninterested in foreign affairs than other main policy objectives. Since high-profile public figures are not interested in the topic, the Ministry's elites tend to push policy drafts bottom-up, resulting in incremental changes due to the lack of authority to propose massive changes. It results in Ministry's tendency to pursue conservative foreign policy, favouring the status quo. Such dynamics produce the stability of Japan's foreign policy, seeking minor changes even in the face of foreign pressure. In short, Japan's foreign policy tends to see few modifications due to the anti-change institutional dynamics and the LDP's one-party dominance.
One key characteristic of Japan's foreign policy documents is that the sentences rarely change. Unlike the ROK's case, Japanese documents inherit the exact phrases from the previous version, regardless of the current government. It suggests a consistent bipartisan consensus over certain aspects of Japan's security strategy, particularly threats, that rarely requires review. Recurring concepts include the importance of the Japanese-US Alliance, the necessity for US presence in the Asia-Pacific, and the fear of the PRC's non-transparent rise. The government shift did not inflict a change over these concepts in the 2011 Bluebook during the Democratic Party of Japan government (DPJ). While each Japanese Bluebook mentions new international changes and threats that year, they rarely change Japan's foreign policy but usually work as justifications. One rare exception was in 2013, when Japan had a territorial confrontation over the Senkaku Islands in the East China Sea. The dispute has shown up in every strategic document ever since, alluding to the weight of the issue for the Government of Japan.
It could be the case that such a threat initiated Japan's first pursuit to create its NSS in 2013, separate from the US. The Japanese NSS emphasises the role of Japan's defence forces and the alliance with the US in addressing the PRC's threat; the rest is similar to the Bluebooks. It openly welcomed the American pivot to Asia.
In 2017 Japan introduced the Free and Open Indo-Pacific Strategy (FOIP). Japan argued for extended freedom of navigation on the seas for a long time, but the FOIP was an assertive shift from the traditional Stable and Open Asia-Pacific. The FOIP attempted to connect the Asia-Pacific with the Indian Ocean, assuring partnership with the US, India, and Australia. While it does not directly confront the PRC, it is not difficult to expect its collision with Beijing's expansionism. The FOIP saw popularity among the US allies and partners, and the United States extended to adopt the strategy.
Japan's high consistency supports the RCT framework and the rational and neorealist explanation that individual decision-makers strive for the best strategy for state survival. The foreign policymaking dynamics in Japan allow the MOFA and state leadership more freedom from domestic politics. The members of the MOFA rationally seek individual and group interests over policy influence. The constitutional constraints narrow the options available for decision-makers, making the rational choice more straightforward and less disputable. Given the narrow set of options, Japan's decisions are more or less consistent regardless of the ruling party. Such a trend suggests that the Japanese foreign policy is near-optimal.
The constitutional constraints narrow the options available for decision-makers, making the rational choice more straightforward and less disputable. Given the narrow set of options, Japan's decisions are more or less consistent regardless of the ruling party.
The few transformations of Japan's security policy, such as the FOIP Strategy, show rationality in the response procedure. The FOIP was initially an extension of Japan's pursuit of a stable and open Asia-Pacific toward the Indian Ocean and a reaction to the PRC's military rise. Japan found interest and value-sharing allies to expand the perspective to form the cooperative security institution it sought. Such careful implementation and development of grand strategy require rational evaluation of externalities and other states' intentions.
Still, there are visible cognitive limits in Japan's security policy documents. Japan's favour over the status quo comes from not an intentional evaluation of the situation but from institutions. While the MOFA provides stability to foreign policy, their shared backgrounds as elites from top universities open them to the possible threat of groupthink. The reluctance of the MOFA to change or accept influences from the leadership makes it difficult for them to consider all options rationally. They tend to maintain the existing belief system and change it only when it becomes clear that it is wrong. Japan's strategic documents show word-to-word continuity regardless of government or external pressure. The documents update the recent threats every year, but their role only reinforces the ongoing strategy.
Japan's strategic documents show word-to-word continuity regardless of government or external pressure.
Japan's security policy shows a different type of rationality and cognitive limits compared to the ROK. Although it is less prone to political pressure and likely to last, it also suffers from the rigidity of the MOFA bureaucracy. It is the opposite of cognitive bias, preferring the status quo and resisting change.
Are States Rational Actors?
Why does the ROK make a different choice from Japan if all states are so? If rationality cannot explain the behaviour of states alone, what else does one need to consider? Seoul and Tokyo, both formal allies of the United States in the Asia-Pacific, showed significant policy differences toward Washington, Beijing, and Pyongyang. The ROK's historical context provided the conservatives and progressives with an arena to fight over. The ROK's institutions allow the majority party to dominate the agenda, mitigating polythink's inaction and incoherent strategy. Japan enjoyed strategic stability regardless of government as the institutional factors narrowed Japan's list of options. Yet the institutional dynamics undermine the responsiveness of its security policy to external threats, producing near-identical documents every year. If both states were rational with constraints, the party and bureaucratic dynamics are not surprising, being individual utility-maximising behaviours. However, other behaviours like path dependence, groupthink, polythink and belief system analysis require the cognitive approach to explain. Thus, the RCT is insufficient for the analysis of foreign policy without considering human limits in cognition.
Seoul and Tokyo, both formal allies of the United States in the Asia-Pacific, showed significant policy differences toward Washington, Beijing, and Pyongyang.
What does the result suggest? The research shows that a state has many constraints to performing a seemingly appropriate security policy. For that reason, it may take a while for the leaders to process the information updates to decide on the utility-maximising output. On the other hand, for the decision-makers, it suggests that one should seek to minimise the influence of the cognitive limits on rational decisions to maximise the output. As the stake becomes explicit and more drastic, the likelihood of the decision-maker to meet the utility-maximising behaviour grows - the state's survival is any state leader's interest.
June Young Lee is a Research Intern at the Korea Defense Veterans Association (KDVA). He graduated with honours for his Bachelor of Arts degree (International Relations and Public Policy programs) at the University of Toronto, focusing on international security. His research interests are nuclear deterrence, grand strategy, the Indo-Pacific, diplomatic history and neorealist theory. The views contained in this article are the author's alone and neither present the views of The Defence Horizon Journal nor the Korea Defense Veterans Association.
 Graham T. Allison & Philip Zelikow, Essence of Decision (Reading: Longman, 1999), Ch. 1.
 Donald Green & Ian Shapiro, Pathologies of Rational Choice Theory (New Haven: Yale University Press, 1994), 14; John J. Mearsheimer, “Reckless States and Realism,” International Relations 23, no. 2 (June 2009): 244.
 Bruce Bueno de Mesquita, “The contribution of expected utility theory to the study of international conflict,” Journal of Interdisciplinary History 18, no. 4 (Spring 1988): 630; Green & Shapiro, 14–5.
 Bueno de Mesquita