Australia–Indonesia relations: not a game?
27 Feb 2015|
Congklak, a traditional Indonesian game.

It’s interesting to think about the Australia–Indonesia relationship in terms of game theory, as Peter Jennings, Peter McCawley and Rod Lyon have done in this blog recently. And I even got a few hundred words into a piece of my own suggesting that the idea of a Nash equilibrium might explain Rod’s observation that cooperation hasn’t broken out for any appreciable length of time in the 60+ years of the relationship.

My basic idea (well, Nash’s brilliant insight applied to this case by me) was that it’s possible for players to get locked into a position where neither of them can gain by changing only their strategy. For example, both can rationally opt for the strategy that gives a middling outcome, avoiding the worst case but also falling short of the best case outcome that cooperation could provide. That’s essentially what Rod described. His thesis is strengthened by the observation from psychology of ‘loss aversion‘, in that people prefer to avoid losses, even at the expense of eschewing the possibility of greater wins. But the more I thought about it and tried to get the ideas on paper, the less I was convinced that we’re thinking about this the right way.

A simple Google search on game theory and international relations provides a plethora of hits, including many scholarly articles—all suggesting this is an attractive way of thinking about international relations. Now I’m originally a physicist by trade, so I’m drawn to the use of simple mathematical models to describe the drivers of complex behaviour—that’s why I like Lanchester’s equations, and every time I encounter a ‘phantom traffic jam‘ I balance my frustration with a geeky satisfaction that there’s maths at work here. But I also know that there are many real-world systems where simple models don’t adequately describe even the key drivers, let alone the detailed behaviour or emergent phenomena that complex systems routinely throw up. And I know that people are intrinsically bad at game theory.

So this time I’m going for a social science explanation. (I might have to have a cup of tea, a Bex and good lie down after this.) Any scientist worth their salt knows that the first recourse should be Occam’s razor—the principle that, in the absence of evidence to the contrary, the simplest explanation should be preferred. In the case of Australia–Indonesia relations, instead of reaching for the textbook on game theory and wondering how we got enmeshed in a dilemma from which escape is beyond our collective power, I wonder if it’s as simple as observing that consistent cooperation hasn’t broken out simply because the two countries’ interests don’t overlap that much. In this view, we aren’t so much locked together in a struggle for advantage by probability and its calculable (or at least estimable) outcomes, as we’re randomly walking our own paths, cooperating when they converge in a positive direction and bickering—even coming to blows, or at least a tense stand-off—when they don’t.

In other words, we aren’t players in the same game all that often, and when we’re sometimes on the same side (tsunami relief, counter-terrorism operations after the Bali bombings) and sometimes not (Konfrontasi, East Timor in 1999). Our history explains why: Australia has always been actively on the side of the major Western naval power of the day and post-colonial Indonesia hasn’t been on anyone’s side—and resolutely tries to keep it that way, with ‘a million friends and zero enemies‘. The prevailing pattern—of indifference punctuated intermittently by cooperation and non-cooperation—follows naturally from that. In those instances when the two countries bump together—which is sometimes inevitable because of proximity—then the potential benefits and pain can be considerable. In those cases, the approach of game theory might be a useful lens for analysing the situation, as the previous authors in this series have done.

For me the interesting question is how the world, and the two countries’ paths through it, might change in the future. Australia will almost certainly retain its Western-leaning stance. So realistically we’re talking about a shift in Indonesia’s approach to its international relations. It would require a significant shock to achieve that. For example, significant maritime/territorial pressure from China could force Indonesia either to acquiesce or to make a greater commitment to Australia’s ‘side’. In any case, if externalities act to align Australian and Indonesian interests much more closely, then cooperation should become the order of the day—and only if it doesn’t should we start to look for esoteric game-theory explanations.

Andrew Davies is senior analyst for defence capability and director of research at ASPI. Image courtesy of Flickr user fitri agung.