This document discusses the emergence of a more technocratic approach to global financial governance. It argues that technical issues are increasingly being addressed by expert networks rather than traditional state-based institutions, focusing on cooperation over power dynamics. The analysis examines global finance regulation through a liberal internationalism theoretical lens, which emphasizes rational cooperation between states and the role of international institutions in managing interdependence. It provides context on globalization trends and conceptual frameworks for understanding governance and legitimacy at a global level before analyzing the forms and extent of contemporary financial globalization and the institutional mechanisms that govern it.
The document discusses the evolution of post-communist economic systems in Central and Eastern Europe and China over the past 25+ years. It argues that in Central and Eastern Europe, the collapse of communism led to a process of disintegration of the communist state apparatus and competition between networks seeking to grab power and assets, resulting in weak institutions, corruption and kleptocracy. In contrast, China's transition involved the communist party consciously replacing central planning with market forces to maintain control. Accession to the EU helped strengthen institutions in some Central European countries.
This document discusses the concept of polarity in international relations. It defines polarity as describing the distribution of power within the international system, which can take the form of unipolarity (dominated by a single superpower), bipolarity (with two dominant powers), or multipolarity (with power distributed among several major powers). It argues that the current international system is transitioning from a unipolar system dominated by the US to a multipolar system, with power shifting to emerging powers in Asia. A multipolar system could promote greater stability and cooperation if it leads to the formation of new economic and political institutions that benefit all states.
This document discusses using non-state centric international economic engagement to address North Korean security challenges. It proposes promoting sustainable economic exchanges between North Korean elites and foreign non-state actors to align with the elites' interests. While controversial, this approach is pragmatic given limited policy options and may encourage economic reforms by the regime to ensure its survival. The approach broadens viable policy options for North Korea without being contingent on denuclearization.
https://www.delhipolicygroup.org/publication/policy-reports/dj-vu-in-myanmar.html - Over the past two months, Myanmar has plunged into a political crisis. Myanmar’s tentative political transition towards democracy, which started in 2010 and gained momentum after the 2015 elections, has been reversed. The military (Tatmadaw) has staged a coup d’état and arrested democratically elected leaders, including President Win Myint and State Counsellor Daw Aung San Suu Kyi.
The document discusses global governance and the role of the United Nations in a changing world order. It summarizes the analysis of historians Mark Mazower and Paul Kennedy who argue that the UN model of state-centric global governance is outdated and struggling to address 21st century challenges that are transnational in nature. However, the UN and European Union still have relevant roles to play in global governance due to their ability to engage in long-term recovery operations through comprehensive approaches that address social, economic and political root causes of conflicts. While imperfect, the UN and EU remain indispensable instruments of global governance.
Waltz Anarchic Orders and Balances of PowerAmin Sadeghi
My take of Waltz's article. All written by me. A small piece of interpretation of what Waltz might have meant. Different take. From a philosophical and sociological perspective.
The document discusses the evolution of post-communist economic systems in Central and Eastern Europe and China over the past 25+ years. It argues that in Central and Eastern Europe, the collapse of communism led to a process of disintegration of the communist state apparatus and competition between networks seeking to grab power and assets, resulting in weak institutions, corruption and kleptocracy. In contrast, China's transition involved the communist party consciously replacing central planning with market forces to maintain control. Accession to the EU helped strengthen institutions in some Central European countries.
This document discusses the concept of polarity in international relations. It defines polarity as describing the distribution of power within the international system, which can take the form of unipolarity (dominated by a single superpower), bipolarity (with two dominant powers), or multipolarity (with power distributed among several major powers). It argues that the current international system is transitioning from a unipolar system dominated by the US to a multipolar system, with power shifting to emerging powers in Asia. A multipolar system could promote greater stability and cooperation if it leads to the formation of new economic and political institutions that benefit all states.
This document discusses using non-state centric international economic engagement to address North Korean security challenges. It proposes promoting sustainable economic exchanges between North Korean elites and foreign non-state actors to align with the elites' interests. While controversial, this approach is pragmatic given limited policy options and may encourage economic reforms by the regime to ensure its survival. The approach broadens viable policy options for North Korea without being contingent on denuclearization.
https://www.delhipolicygroup.org/publication/policy-reports/dj-vu-in-myanmar.html - Over the past two months, Myanmar has plunged into a political crisis. Myanmar’s tentative political transition towards democracy, which started in 2010 and gained momentum after the 2015 elections, has been reversed. The military (Tatmadaw) has staged a coup d’état and arrested democratically elected leaders, including President Win Myint and State Counsellor Daw Aung San Suu Kyi.
The document discusses global governance and the role of the United Nations in a changing world order. It summarizes the analysis of historians Mark Mazower and Paul Kennedy who argue that the UN model of state-centric global governance is outdated and struggling to address 21st century challenges that are transnational in nature. However, the UN and European Union still have relevant roles to play in global governance due to their ability to engage in long-term recovery operations through comprehensive approaches that address social, economic and political root causes of conflicts. While imperfect, the UN and EU remain indispensable instruments of global governance.
Waltz Anarchic Orders and Balances of PowerAmin Sadeghi
My take of Waltz's article. All written by me. A small piece of interpretation of what Waltz might have meant. Different take. From a philosophical and sociological perspective.
The document analyzes recent pro-democracy protests in Hong Kong using Ralf Dahrendorf's model of internal social conflict. It identifies the Chinese government and Hong Kong government as the positively dominant group, and Hong Kong citizens demanding universal suffrage as the negatively dominant group. While the protest movement lacks clear leadership and organization, they have effectively communicated using technology. The model suggests structural change is unlikely given the Chinese government's control and reluctance to negotiate, though protests will likely continue due to remaining conflicts around democracy and mobility.
This document discusses issues and problems with defining and measuring democracy, particularly in developing nations. It argues that while many definitions of democracy exist, in practice there is a dominant form - liberal democracy - that is used to evaluate developing nations. This risks oversimplifying other regime types and excluding important contextual factors. Measuring democracy is difficult due to many complex variables, so the focus should be on reducing barriers like international influence that push developing nations towards the dominant model for political and economic reasons rather than democratic progress.
Politics and Power in International Development - The potential role of Political Economy Analysis
Geert Laporte, Deputy Director, ECDPM
VIDC, Vienna, 30 January 2014
Political Science 7 – International Relations - Power Point #5John Paul Tabakian
This document provides an overview of several topics discussed in Dr. Tabakian's Political Science 7 course on modern world governments, including: liberal institutionalism and international regimes; collective security; the waning of war; peace studies; democratic peace theory; and feminist approaches to international relations. Key theorists discussed include Kant, Keohane, Nye, and Wendt. The document also summarizes perspectives on gender in war and peace, and the roles and impacts of women in international relations.
Dictatorships do not survive by repression alone. Rather, dictatorial rule is often explained as an ― authoritarian bargain by which citizens relinquish political rights for economic security. The applicability of the authoritarian bargain to decision-making in non-democratic states, however, has not been thoroughly examined. We conceptualize this bargain as a simple game between a representative citizen and an autocrat who faces the threat of insurrection, and where economic transfers and political influence are simultaneously determined. Our model yields precise implications for the empirical patterns that are expected to exist. Tests of a system of equations with panel data comprising 80 non-democratic states between 1975 and 1999 confirm the predictions of the authoritarian-bargain thesis, with some variation across different categories of dictatorship.
Concept of Political Mediation in International Conflict Managementijtsrd
Conflicts are an integral part of any society, and negotiations are regarded as the most effective tool of conflict management or conflict resolution. In situations, when it is difficult for the parties to resolve the conflict by themselves due to several factors, a third party is involved in a negotiation process. Political mediation has been an effective way in resolving disputes in international relations. In this article, the author seeks to analyze conflict management, nature of political mediation and provide important insights of political mediation, its types, strategies, role of mediators in international conflict management and mediation bias in case of 1979 Iranian hostage crisis. Mavluda Nurmetova "Concept of Political Mediation in International Conflict Management" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-4 , June 2021, URL: https://www.ijtsrd.compapers/ijtsrd42510.pdf Paper URL: https://www.ijtsrd.comhumanities-and-the-arts/political-science/42510/concept-of-political-mediation-in-international-conflict-management/mavluda-nurmetova
South Korea, Mercantlism, and Global HierarchyMax Herzog
This document provides a summary and analysis of Ha-Joon Chang's view of South Korea's economic development in relation to theories of neoliberalism and the global capitalist hierarchy. It argues that while Chang sees South Korea's use of mercantilist policies as resisting coercive neoliberal imperatives, an examination of regional history and geopolitics reveals Korea's rise was engineered by imperial and hegemonic forces and did not undermine the global hierarchy. The document defines ideological and practical neoliberalism, with the former justifying the status quo through a false narrative of history and the latter reinforcing hierarchy through political and structural means controlled by a global elite.
Peacebuilding and reconstruction ine aftermath of conflict the case of libe...Kayode Fayemi
Peacebuilding and reconstruction efforts require a holistic approach that addresses both short and long-term needs. Immediate relief efforts are important but not sufficient for sustainable peace and security. International actors should foster policy coherence, consult local communities, and consider how their actions may undermine stability, such as through arms sales or policies prioritizing macroeconomic targets over human welfare. A human security approach requires democratic governance, rule of law, development, and respect for human rights.
This document summarizes the changing nature of foreign policy communications and crisis management in modern global politics. It notes that greater globalization, new communication technologies, and the rise of non-state actors have made international relations more complex and crisis-prone. States must now manage diverse risks like natural disasters, economic instability, and terrorism. Additionally, foreign policy involves more non-governmental stakeholders and issues beyond traditional geopolitics. As a result, modern crisis communications requires coordinating public messages and adapting foreign policy processes to be more flexible, transparent and participatory.
NUJIMEM I VITALIS - BOOK REVIEW - THE ROAD TO SERFDOMVitalis I Nujimem
- Central planning leads to dictatorship because it concentrates all knowledge and power in a single entity, restricting individual freedom. While wartime planning is acceptable, peacetime planning poses serious risks.
- Central planning in the public sector requires more coercion and reduces individual autonomy compared to private sector competition. It is also practically impossible for planners to comprehend and balance all individual needs and preferences.
- Hayek argues that central planning, by opposing competition, enables the merging of socialist ideologies and ultimately undermines both economic efficiency and individual liberty. A mixed system of central planning and competition would be contradictory and unworkable.
- Most advocates of central planning do so based on misguided beliefs about its ability to achieve economic and social
This document summarizes an academic paper that analyzes the role of elite dynamics in the 2011 Tunisian uprising that removed President Ben Ali from power. It argues that the distribution of patronage, such as economic resources, within Ben Ali's ruling coalition eroded support for his regime from within. As patronage was not distributed equally to satisfy the interests of different elite groups, some withdrew support for Ben Ali, weakening the regime and leaving it vulnerable to popular protest. The document examines how militaries, security services, and public sector bureaucrats in the Middle East have traditionally received state patronage, and how economic liberalization was selectively implemented in Tunisia to maintain elite loyalty through privatization deals.
When are international organisations effective in international politicsAmougou Aristide Agbor
International organizations can be effective when their leadership is able to:
1) Consolidate the trust of member states by sustaining political commitment to shared values and curtailing the "Frankenstein syndrome" where organizations act against state interests.
2) Secure sufficient resources from member states by building efficient agency relationships and avoiding mission creep beyond their intended mandates.
3) Rely on credible policy persuasion given their limited enforcement powers compared to states.
This document provides a summary and analysis of the relationship between democracy and development. It argues that democracy can hinder development in "strong states" but not in "weak states."
The first part examines authoritarian "developmental states" like South Korea in the 1960s-1980s and finds they achieved rapid economic growth through undemocratic institutions. The second part argues "weak states" benefit more from decentralized, participatory development that promotes economic democracy. The document concludes that while democracy may hinder development in strong, centralized states, it does not necessarily do so in weaker, more decentralized states.
Thesis - Modes of Engagement- Secession and Political LegitimacyKarina Taylor
This document provides an abstract and introduction for a study examining the relationship between modes of engagement and political outcomes for secessionist movements. Specifically, it analyzes how the type of interaction between central governments and groups seeking independence (e.g. diplomatic vs. violent) affects whether the groups achieve sovereignty. The introduction discusses the problem of determining when secession is legitimate and provides context on current secessionist movements in Spain/Catalonia and the UK/Scotland. It then presents three hypotheses linking engagement modes (diplomatic, imposed diplomacy, violence) to political outcomes (failure/success in achieving sovereignty). The literature review discusses prior works analyzing factors like ethnic divisions and debates around self-determination and sovereignty.
This document provides an overview of key concepts from a political science lecture on international relations theory, including rational choice theory, realism, liberalism, and the role of state and non-state actors. It discusses how international relations theory aims to understand and prevent conflict through power management. Realism is examined in particular, noting it views states as primarily concerned with self-interest and survival in an anarchic system.
Post-conflict Pacts and Inclusive Political Settlements: Institutional Perspe...Dr Lendy Spires
This document provides a framework for analyzing the relationships between elite pacts and wider political settlements in post-conflict contexts. It draws on theories of path dependency and institutional capabilities to develop perspectives on protection and provisioning pacts. The framework is applied to Solomon Islands to illustrate how pacts, interventions, and settlements interact in complex ways over different timeframes. Three logics of post-conflict institution building in Solomon Islands are examined. The analysis shows that lining up interventions with pacts often results in unintended consequences like institutional layering, as pacts and underlying settlements operate according to various temporalities and modalities.
This document is a research proposal that will examine how the concept of national sovereignty is evolving in the face of increased globalization and multilateral cooperation. Sovereignty, which forms the basis of citizenship and identity, is being challenged by new international laws, organizations, and the ability of individuals to circumvent borders. While sovereignty is recognized as changing, there is little empirical data to show how this dynamic evolution may impact global governance structures. The proposed research aims to help understand how sovereignty is adapting without intentional guidance and what this means for international relations theory and institutions.
Political Science 2 – Comparative Politics - Power Point #5John Paul Tabakian
This document summarizes the key topics and readings for Dr. Tabakian's Political Science 2 course on modern world governments. The topics covered in the upcoming lectures include defining democracy, direct democracy, democratic transition, five generalizations about democracy, democratic peace theory, republican forms of government, and the similarities between democracy and capitalism. The reading assignments examine paradoxes of contemporary democracy and reflections on the end of history.
This document provides a summary of a study titled "Politics and Society in North Africa and the Middle East between Reform and Conflict. Trends in Development up to the Year 2010". The study analyzes political, economic, and social developments in the region, and identifies key risk factors and areas of potential conflict. It finds that governments have largely been unwilling or unable to implement reforms to modernize their economies and societies. Socioeconomic challenges like unemployment, poverty and lack of resources could trigger further conflicts. Ideological debates around cultural and religious identity have also intensified and may hinder reforms. The study concludes that without concerted long-term strategies to promote structural reform and modernization, socio-political conflicts in the region will likely continue
Soraya Ghebleh - Selected Theories in International RelationsSoraya Ghebleh
This presentation describes some of the major theories in international relations and their subsets including liberalism, realism, constructivism, and critical issues theories.
This document discusses the concept of balance of power in international relations. It explains that balance of power has long been considered a fundamental concept, with various theorists defining and highlighting its significance. The document then discusses how during the Cold War, both India and Pakistan had to rely on external alliances and factors to balance against each other due to their own limited internal resources. Forming alliances was a way for weaker states to strengthen their defense and balance against a common threat.
The document analyzes recent pro-democracy protests in Hong Kong using Ralf Dahrendorf's model of internal social conflict. It identifies the Chinese government and Hong Kong government as the positively dominant group, and Hong Kong citizens demanding universal suffrage as the negatively dominant group. While the protest movement lacks clear leadership and organization, they have effectively communicated using technology. The model suggests structural change is unlikely given the Chinese government's control and reluctance to negotiate, though protests will likely continue due to remaining conflicts around democracy and mobility.
This document discusses issues and problems with defining and measuring democracy, particularly in developing nations. It argues that while many definitions of democracy exist, in practice there is a dominant form - liberal democracy - that is used to evaluate developing nations. This risks oversimplifying other regime types and excluding important contextual factors. Measuring democracy is difficult due to many complex variables, so the focus should be on reducing barriers like international influence that push developing nations towards the dominant model for political and economic reasons rather than democratic progress.
Politics and Power in International Development - The potential role of Political Economy Analysis
Geert Laporte, Deputy Director, ECDPM
VIDC, Vienna, 30 January 2014
Political Science 7 – International Relations - Power Point #5John Paul Tabakian
This document provides an overview of several topics discussed in Dr. Tabakian's Political Science 7 course on modern world governments, including: liberal institutionalism and international regimes; collective security; the waning of war; peace studies; democratic peace theory; and feminist approaches to international relations. Key theorists discussed include Kant, Keohane, Nye, and Wendt. The document also summarizes perspectives on gender in war and peace, and the roles and impacts of women in international relations.
Dictatorships do not survive by repression alone. Rather, dictatorial rule is often explained as an ― authoritarian bargain by which citizens relinquish political rights for economic security. The applicability of the authoritarian bargain to decision-making in non-democratic states, however, has not been thoroughly examined. We conceptualize this bargain as a simple game between a representative citizen and an autocrat who faces the threat of insurrection, and where economic transfers and political influence are simultaneously determined. Our model yields precise implications for the empirical patterns that are expected to exist. Tests of a system of equations with panel data comprising 80 non-democratic states between 1975 and 1999 confirm the predictions of the authoritarian-bargain thesis, with some variation across different categories of dictatorship.
Concept of Political Mediation in International Conflict Managementijtsrd
Conflicts are an integral part of any society, and negotiations are regarded as the most effective tool of conflict management or conflict resolution. In situations, when it is difficult for the parties to resolve the conflict by themselves due to several factors, a third party is involved in a negotiation process. Political mediation has been an effective way in resolving disputes in international relations. In this article, the author seeks to analyze conflict management, nature of political mediation and provide important insights of political mediation, its types, strategies, role of mediators in international conflict management and mediation bias in case of 1979 Iranian hostage crisis. Mavluda Nurmetova "Concept of Political Mediation in International Conflict Management" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-4 , June 2021, URL: https://www.ijtsrd.compapers/ijtsrd42510.pdf Paper URL: https://www.ijtsrd.comhumanities-and-the-arts/political-science/42510/concept-of-political-mediation-in-international-conflict-management/mavluda-nurmetova
South Korea, Mercantlism, and Global HierarchyMax Herzog
This document provides a summary and analysis of Ha-Joon Chang's view of South Korea's economic development in relation to theories of neoliberalism and the global capitalist hierarchy. It argues that while Chang sees South Korea's use of mercantilist policies as resisting coercive neoliberal imperatives, an examination of regional history and geopolitics reveals Korea's rise was engineered by imperial and hegemonic forces and did not undermine the global hierarchy. The document defines ideological and practical neoliberalism, with the former justifying the status quo through a false narrative of history and the latter reinforcing hierarchy through political and structural means controlled by a global elite.
Peacebuilding and reconstruction ine aftermath of conflict the case of libe...Kayode Fayemi
Peacebuilding and reconstruction efforts require a holistic approach that addresses both short and long-term needs. Immediate relief efforts are important but not sufficient for sustainable peace and security. International actors should foster policy coherence, consult local communities, and consider how their actions may undermine stability, such as through arms sales or policies prioritizing macroeconomic targets over human welfare. A human security approach requires democratic governance, rule of law, development, and respect for human rights.
This document summarizes the changing nature of foreign policy communications and crisis management in modern global politics. It notes that greater globalization, new communication technologies, and the rise of non-state actors have made international relations more complex and crisis-prone. States must now manage diverse risks like natural disasters, economic instability, and terrorism. Additionally, foreign policy involves more non-governmental stakeholders and issues beyond traditional geopolitics. As a result, modern crisis communications requires coordinating public messages and adapting foreign policy processes to be more flexible, transparent and participatory.
NUJIMEM I VITALIS - BOOK REVIEW - THE ROAD TO SERFDOMVitalis I Nujimem
- Central planning leads to dictatorship because it concentrates all knowledge and power in a single entity, restricting individual freedom. While wartime planning is acceptable, peacetime planning poses serious risks.
- Central planning in the public sector requires more coercion and reduces individual autonomy compared to private sector competition. It is also practically impossible for planners to comprehend and balance all individual needs and preferences.
- Hayek argues that central planning, by opposing competition, enables the merging of socialist ideologies and ultimately undermines both economic efficiency and individual liberty. A mixed system of central planning and competition would be contradictory and unworkable.
- Most advocates of central planning do so based on misguided beliefs about its ability to achieve economic and social
This document summarizes an academic paper that analyzes the role of elite dynamics in the 2011 Tunisian uprising that removed President Ben Ali from power. It argues that the distribution of patronage, such as economic resources, within Ben Ali's ruling coalition eroded support for his regime from within. As patronage was not distributed equally to satisfy the interests of different elite groups, some withdrew support for Ben Ali, weakening the regime and leaving it vulnerable to popular protest. The document examines how militaries, security services, and public sector bureaucrats in the Middle East have traditionally received state patronage, and how economic liberalization was selectively implemented in Tunisia to maintain elite loyalty through privatization deals.
When are international organisations effective in international politicsAmougou Aristide Agbor
International organizations can be effective when their leadership is able to:
1) Consolidate the trust of member states by sustaining political commitment to shared values and curtailing the "Frankenstein syndrome" where organizations act against state interests.
2) Secure sufficient resources from member states by building efficient agency relationships and avoiding mission creep beyond their intended mandates.
3) Rely on credible policy persuasion given their limited enforcement powers compared to states.
This document provides a summary and analysis of the relationship between democracy and development. It argues that democracy can hinder development in "strong states" but not in "weak states."
The first part examines authoritarian "developmental states" like South Korea in the 1960s-1980s and finds they achieved rapid economic growth through undemocratic institutions. The second part argues "weak states" benefit more from decentralized, participatory development that promotes economic democracy. The document concludes that while democracy may hinder development in strong, centralized states, it does not necessarily do so in weaker, more decentralized states.
Thesis - Modes of Engagement- Secession and Political LegitimacyKarina Taylor
This document provides an abstract and introduction for a study examining the relationship between modes of engagement and political outcomes for secessionist movements. Specifically, it analyzes how the type of interaction between central governments and groups seeking independence (e.g. diplomatic vs. violent) affects whether the groups achieve sovereignty. The introduction discusses the problem of determining when secession is legitimate and provides context on current secessionist movements in Spain/Catalonia and the UK/Scotland. It then presents three hypotheses linking engagement modes (diplomatic, imposed diplomacy, violence) to political outcomes (failure/success in achieving sovereignty). The literature review discusses prior works analyzing factors like ethnic divisions and debates around self-determination and sovereignty.
This document provides an overview of key concepts from a political science lecture on international relations theory, including rational choice theory, realism, liberalism, and the role of state and non-state actors. It discusses how international relations theory aims to understand and prevent conflict through power management. Realism is examined in particular, noting it views states as primarily concerned with self-interest and survival in an anarchic system.
Post-conflict Pacts and Inclusive Political Settlements: Institutional Perspe...Dr Lendy Spires
This document provides a framework for analyzing the relationships between elite pacts and wider political settlements in post-conflict contexts. It draws on theories of path dependency and institutional capabilities to develop perspectives on protection and provisioning pacts. The framework is applied to Solomon Islands to illustrate how pacts, interventions, and settlements interact in complex ways over different timeframes. Three logics of post-conflict institution building in Solomon Islands are examined. The analysis shows that lining up interventions with pacts often results in unintended consequences like institutional layering, as pacts and underlying settlements operate according to various temporalities and modalities.
This document is a research proposal that will examine how the concept of national sovereignty is evolving in the face of increased globalization and multilateral cooperation. Sovereignty, which forms the basis of citizenship and identity, is being challenged by new international laws, organizations, and the ability of individuals to circumvent borders. While sovereignty is recognized as changing, there is little empirical data to show how this dynamic evolution may impact global governance structures. The proposed research aims to help understand how sovereignty is adapting without intentional guidance and what this means for international relations theory and institutions.
Political Science 2 – Comparative Politics - Power Point #5John Paul Tabakian
This document summarizes the key topics and readings for Dr. Tabakian's Political Science 2 course on modern world governments. The topics covered in the upcoming lectures include defining democracy, direct democracy, democratic transition, five generalizations about democracy, democratic peace theory, republican forms of government, and the similarities between democracy and capitalism. The reading assignments examine paradoxes of contemporary democracy and reflections on the end of history.
This document provides a summary of a study titled "Politics and Society in North Africa and the Middle East between Reform and Conflict. Trends in Development up to the Year 2010". The study analyzes political, economic, and social developments in the region, and identifies key risk factors and areas of potential conflict. It finds that governments have largely been unwilling or unable to implement reforms to modernize their economies and societies. Socioeconomic challenges like unemployment, poverty and lack of resources could trigger further conflicts. Ideological debates around cultural and religious identity have also intensified and may hinder reforms. The study concludes that without concerted long-term strategies to promote structural reform and modernization, socio-political conflicts in the region will likely continue
Soraya Ghebleh - Selected Theories in International RelationsSoraya Ghebleh
This presentation describes some of the major theories in international relations and their subsets including liberalism, realism, constructivism, and critical issues theories.
This document discusses the concept of balance of power in international relations. It explains that balance of power has long been considered a fundamental concept, with various theorists defining and highlighting its significance. The document then discusses how during the Cold War, both India and Pakistan had to rely on external alliances and factors to balance against each other due to their own limited internal resources. Forming alliances was a way for weaker states to strengthen their defense and balance against a common threat.
This document provides an overview of several topics covered in a Political Science lecture, including:
- Liberal theories like liberal institutionalism, international regimes, and democratic peace theory.
- Critical theories like constructivism, feminism, and peace studies.
- Concepts related to maintaining peace such as collective security and Kant's theories on republics and international trade promoting peace.
- Challenges to realism from liberal and critical perspectives.
International relations theories help explain how nation-states interact in a world without centralized authority, with realism focusing on self-interest and balancing of power between states and liberalism emphasizing international cooperation through international organizations. While theories provide frameworks, the field is complex as most concepts can be countered by other perspectives, suggesting a holistic approach is needed to understand contemporary international relations.
The document discusses key concepts in international relations including:
1) The levels of analysis in IR including the individual, state, group and system levels. It provides examples of how each level can be used to analyze international issues.
2) The structure of the international system and the three main types: uni-polar, bipolar, and multipolar systems. Examples are given like the US-led uni-polar system and Cold War bipolar system.
3) Actors in IR including state actors like countries, and non-state actors like international organizations, NGOs, and multinational corporations. While states remain important, the influence of non-state actors is growing.
Review Neoclassical Realism and Theories of Foreign Poli.docxAASTHA76
Review: Neoclassical Realism and Theories of Foreign Policy
Reviewed Work(s): The Perils of Anarchy: Contemporary Realism and International
Security by Michael E. Brown; Useful Adversaries: Grand Strategy, Domestic Mobilization,
and Sino-American Conflict, 1947-1958 by Thomas J. Christensen; Deadly Imbalances:
Tripolarity and Hitler's Strategy of World Conquest by Randall L. Schweller; The Elusive
Balance: Power and Perceptions during the Cold War by William Curti Wohlforth; From
Wealth to Power: The Unusual Origins of America's World Role by Fareed Zakaria
Review by: Gideon Rose
Source: World Politics, Vol. 51, No. 1 (Oct., 1998), pp. 144-172
Published by: Cambridge University Press
Stable URL: https://www.jstor.org/stable/25054068
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Review Article
NEOCLASSICAL REALISM AND
THEORIES OF FOREIGN POLICY
By GIDEON ROSE*
Michael E. Brown et al., eds. The Perils of Anarchy: Contemporary Realism and
International Security. Cambridge: MIT Press, 1995, 519 pp.
Thomas J. Christensen. Useful Adversaries: Grand Strategy, Domestic Mobiliza
tion, and Sino-American Conflict, 1947-1958. Princeton: Princeton Univer
sity Press, 1996, 319 pp.
Randall L. Schweller. Deadly Imbalances: Tripolarity and Hitlers Strategy of
World Conquest. New York: Columbia University Press, 1998,267 pp.
William Curti Wohlforth. The Elusive Balance: Power and Perceptions during
the Cold War. Ithaca, N.Y.: Cornell University Press, 1993, 317 pp.
Fareed Zakaria. From Wealth to Power: The Unusual Origins of Americas World
Role. Princeton: Princeton University Press, 1998,199 pp.
FOR two decades international relations theory has been dominated by the debate between neorealists and their various critics.1 Much
of the skirmishing has occurred over questions about the nature of the
international system and its effect on patterns of international out
comes such as war and peace. Thus scholars have disputed whether a
multipolar system generates more conflict than a bipolar one, or
* For support, criticisms, and suggestions regarding earlier versions of this essay I am grateful to
Richard Berts, Michael Desch, Michael Doyle, Aaron Friedberg, Philip Gordon, Ethan Kapstein, Jeff
Legro, Sean Lynn-Jones, Andrew Moravcsik, Kenne.
This document summarizes key concepts in international relations theory, comparing realist and liberal perspectives. It discusses concepts like anarchy, sovereignty, self-help, and the security dilemma from a realist viewpoint. Liberal concepts discussed include Kantian ideals of democracy, trade, and international institutions promoting cooperation. Realists are skeptical that institutions can significantly influence state behavior motivated by power and national interests in an anarchic system.
Functionalism proposes that international cooperation through non-political, technical organizations in areas like health, transportation, and economic issues can help reduce conflicts between states and lead to greater international integration and potentially an international government. It argues that addressing common problems through functional cooperation will increase interdependence and spill over into greater and deeper integration. While functionalism aims to build authority based on needs rather than politics, neo-functionalism focuses on regional integration and the momentum of integration spreading across issues over time through spill-over effects.
In this paper I examine the development effects of military coups. Whereas previous economic literature has primarily viewed coups as a form of broader political instability, less research has focused on its development consequences independent of the factors making coups more likely. Moreover, previous research tends to group coups together regardless of whether they overthrew autocratic or democratically-elected leaders. I first show that coups overthrowing democratically elected leaders imply a very different kind of event than those overthrowing autocratic leaders. These differences relate to the implementation of authoritarian institutions following a coup in a democracy, which I discuss in several case studies. Second, I address the endogeneity of coups by comparing the growth consequences of failed and successful coup as well as matching and panel data methods, which yield similar results. Although coups taking place in already autocratic countries show imprecise and sometimes positive effects on economic growth, in democracies their effects are distinctly detrimental to growth. When overthrowing democratic leaders, coups not only fail to promote economic reforms or stop the occurrence of economic crises, but they also have substantial negative effects across a number of standard growth-related outcomes including health, education, and investment.
Read more: https://www.hhs.se/site
Question 1·examine two (2) economic effects that you believe t.docxteofilapeerless
Question 1
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examine two (2) economic effects that you believe the Iranian elections have on other countries that are currently allies with this nation. Provide a rationale for your response.
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Suggest two (2) factors that make the United States, Saudi Arabia, and the European Union allies on the world stage of politics. Provide two (2) pieces of evidence to support your rationale.
Question 2
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select the theory that you believe has the explanatory and predictive power regarding the confrontation between the United States and Iran. Justify your rationale.
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Give your opinion of two (2) currently used policy prescriptions, using international relations paradigms, which you believe will impact the U.S. domestic policy over the next two years. Justify your response.
Reading:
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Theories of International Relations: Realism and Liberalism
This week we will begin by examining realism and liberalism, which are two of the major paradigms of international relations.
Realism focuses on the problems of international conflict. All realist theories share four central assumptions. First, realism places immense emphasis on the idea that international politics is anarchic. An anarchic system creates a security dilemma, where states are forced to arm themselves, but this can lead to an arms race. A second assumption of realism is that states are the central actors in international politics. Third, realists view states as unitary actors or as a single coherent entity. Fourth, realists assume that state behavior is rational.
Within the realist paradigm, it is also important to understand that the distribution of power is the most important force in international politics. Because power plays a central role in realist theories, defining and measuring power are critical. Both military power and economic power are important to any understanding of realism.
One variant of realism is balance of power theory, which suggests that power will be relatively evenly distributed in the world because states will counter each other’s attempts to dominate.
Another variant of realism is hegemonic stability theory. This theory contradicts balance of power theory because it argues that stability results not from a balance among the great powers, but from unipolarity where one dominant state ensures some degree of order in the system.
Realism is criticized for a variety of reasons. First, some believe that anarchy is simply an historical circumstance, which may now be replaced by another condition. Second, some believe that it is no longer valid to focus exclusively on the state, because nonstate actors are becoming increasingly important. A third criticism focuses on the assumption that the state is unitary and rational. Many reject this hypothesis, arguing instead that there are many different variables that influence a state’s foreign policy.
Liberalism is another major paradigm within international relations. Liberalism centers on the rights of the individual, arguing.
Political Science 7 – International Relations - Power Point #6John Paul Tabakian
This document provides an overview of lecture material from Dr. Tabakian's Political Science 7 course on modern world governments. It covers several topics within international relations theories, including:
- Liberal institutionalism and international regimes, which focus on cooperation through international organizations.
- Collective security, which calls for states to jointly oppose aggression through alliances. However, collective security faces challenges in getting states to commit to defending each other.
- Theories of democratic peace, which argue that democracies are inherently more peaceful than authoritarian states and rarely fight each other. However, critics argue external threats may better explain the peace between democracies.
- Gender theories and feminism within international relations,
Reagan's image as a likable president helped him politically. He was nicknamed the "Teflon president" as bad press did not stick to him. On domestic policy, Reagan cut taxes and regulations for businesses but faced pushback trying to cut welfare programs. His economic policies increased budget deficits. His focus was more on foreign policy where he took a hardline anti-communist stance against the Soviet Union.
Chapter 1 Global Issues Challenges of GlobalizationA GROWING .docxtiffanyd4
Chapter 1 Global Issues: Challenges of Globalization
A GROWING WORLDWIDE CONNECTEDNESS IN THE AGE OF GLOBALIZATION HAS GIVEN CITIZENS MORE OF A VOICE TO EXPRESS THEIR DISSATISFACTION. In Brazil, Protestors calling for a wide range of reforms marched toward the soccer stadium where a match would be played between Brazil and Uruguay.
Learning Objectives
1. 1.1Identify important terms in international relations
2. 1.2Report the need to adopt an interdisciplinary approach in understanding the impact of new world events
3. 1.3Examine the formation of the modern states with respect to the thirty years’ war in 1618
4. 1.4Recall the challenges to the four types of sovereignty
5. 1.5Report that the European Union was created by redefining the sovereignty of its nations for lasting peace and security
6. 1.6Recall the influence exerted by the Catholic church, transnational companies, and other NGOs in dictating world events
7. 1.7Examine how globalization has brought about greater interdependence between states
8. 1.8Record the major causes of globalization
9. 1.9Review the most important forms of globalization
10. 1.10Recount the five waves of globalization
11. 1.11Recognize reasons as to why France and the US resist globalization
12. 1.12Examine the three dominant views of the extent to which globalization exists
Revolutions in technology, finance, transportation, and communications and different ways of thinking that characterize interdependence and globalization have eroded the power and significance of nation-states and profoundly altered international relations. Countries share power with nonstate actors that have proliferated as states have failed to deal effectively with major global problems.
Many governments have subcontracted several traditional responsibilities to private companies and have created public-private partnerships in some areas. This is exemplified by the hundreds of special economic zones in China, Dubai, and elsewhere. Contracting out traditional functions of government, combined with the centralization of massive amounts of data, facilitated Edward Snowden’s ability to leak what seems to be an almost unlimited amount of information on America’s spying activities.
The connections between states and citizens, a cornerstone of international relations, have been weakened partly by global communications and migration. Social media enable people around the world to challenge governments and to participate in global governance. The prevalence of mass protests globally demonstrates growing frustration with governments’ inability to meet the demands of the people, especially the global middle class.
The growth of multiple national identities, citizenships, and passports challenges traditional international relations. States that played dominant roles in international affairs must now deal with their declining power as global power is more diffused with the rise of China, India, Brazil, and other emerging market countries. States are i.
Globalization and the future of the laws of Sovreign States.docxHussain Shah
This document discusses how globalization is transforming international law and governance through the rise of non-state actors and transnational legal regimes. It argues that state sovereignty and the state-centric international legal system are being undermined as specialized international legal regimes have emerged in areas like human rights, trade, and the environment. Additionally, the laws and regulations of international organizations and transnational corporations have grown in importance and influence. While state law remains influential, the increasing complexity of issues has necessitated more pluralistic legal perspectives that recognize multiple overlapping legal orders beyond just state law.
International Relations is an important field that helps explain how nation-states interact globally. Two prominent IR theories, liberalism and realism, both recognize the existence of anarchy and the importance of states in the international system. While realism sees anarchy as a lack of central authority, the international system also allows for some cooperation through international organizations and principles like collective security. Studying IR helps provide understanding of global political and economic issues and possible solutions.
Similar to A new, more technocratic financial governance (16)
Coupling Universal Energy Access with Financial Sustainability: the Case of L...Jacopo Pendezza
Modern energy access is an essential precondition for economic development. It is essential for poverty reduction, improvement of human health, women’s empowerment, education. With access to reliable and affordable energy services, local entrepreneurs and companies of any size can generate local jobs, income and, thereby, promote local development, in particular in rural and peri- urban areas. The major barriers toward improving rural electricity connectivity in Africa include: absence of national grid in large part of the country, high cost of delivering electricity to rural areas, high upfront investment costs; scattered settlements in the rural areas leading to long and costly distribution lines. Other challenges are harsh terrains and inaccessibility due to underdeveloped infrastructure leading to high cost of rural electrification projects; high operating costs of grids in rural areas due to low population density.
For these reasons, several experts suggest that the extension of the main grid is not the most economical viable solution to grant energy access to rural communities. In most of the case, and especially in Tanzania, the best option is the realization of renewable source powered mini-grid (both grid-connected and off-grid). This option, if carefully analyzed, allows to reach more and more rural clients and at the same time to increase the share of renewable energy production.
Experience, however, has shown that it is not enough to simply create a new mini-grid and hope for local economic activities to pick up just by themselves. Countless electrification projects have suffered from a low demand response from the commercial sector that ended up affecting plans and expectations. This usually determines two significant consequences: First, the hoped-for impact of electrification programmes on the development of local communities often struggles to materialize. Secondly, the electrification schemes suffer from a lack of new customers able to pay for their electricity connection and use the new availability of electricity for productive purposes. Such developments have undermined the entire economic viability, and thus sustainability, of many electrification programs in developing countries. This paper explores the concrete steps to be put in place in order to increase the financial sustainability of a mini-grid, in order to couple universal access to modern energy services with sound financial sustainability of the systems providing electricity. To show that, it will take in account a feasibility study that CEFA is doing the Luganga site, Tanzania.
Non-Profit/For-Profit Partnerships in SHPP: CEFA’s Experiences and Perspectiv...Jacopo Pendezza
Expanding renewable energy access for rural communities in Africa is a challenging task.
In most of the cases, government investments and donor funds have proved insufficient
to expand access to modern energy in rural areas in a sustainable manner. However, energy
production and distribution in rural areas in Tanzania is now a national priority and
a promising business opportunity, because national policy and legal framework provide
a good environment for investments and subsides from co-financing feasibility studies to
project realization. Still, there is a great need for mobilizing financial resources to expand
energy access for rural communities. A partnership between non-profit and for-profit
actors is here proposed in order to rapidly expand energy access and meet national
programmatic targets for electrification and energy production. Essentially, Non-Profit/
For-Profit Partnerships (NPFPP) occupy a fruitful “middle ground” between commercial
private sector projects, focused primarily on profit; and public/non-profit sector projects,
focused primarily on enhancing access. In a nutshell, effective NPFPP couple profit
with energy access. This article explores the concrete possibility of a NPFPP between
CEFA, an Italian NGO specialized in rural electrification, and a private partner for the
realization of a Small Hydro Power project in Ninga, Tanzania.
Small hydro power is one of the most viable
options to providing electricity to rural communities
in sub-Saharan Africa with the force of water.
Tanzania has all the geographic conditions for
scaling-up small hydro power projects to the national
level. The example of a non-profit/for-profit partnership
between CEFA, an Italian NGO addressing rural
electrification, and a private partner to realize a small
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point to expand rural energy access and meet national
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(cc) REVOLVE MAGAZINE
Non-Profit/For-Profit Partnerships in SHPP: CEFA’s Experiences and Perspectiv...Jacopo Pendezza
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1. A new, more Technocratic Financial Governance
Jacopo Pendezza
Introduction
A new trend has recently begun to emerge in intergovernmental attempts to manage and regulate
globalization. Technical issues and areas are being identified, and expert network are being fostered
as a flexible and efficient way to manage them. The approach eschews representative institutions in
which power differences among states are obvious. To cite two prominent scholars: 'any emerging
pattern of governance will have to be networked rather than hierarchical and must have minimal
rather than highly ambitious objectives' (Keohane and Nye, 2000). In other words, state-based
institutions of governance which exercise authority over all other actors are being replaced by
'network minimalism' which seeks 'to preserve national democratic process and embedded liberal
compromises while allowing the benefits of economic integration'.(ibid.)
In these arguments is clear the institutionalist and functionalist assumptions which focus on
cooperation rather than power, and on 'getting the job done' rather than on the justice or legitimacy
of the process. Network comprise participants with special technical expertise and material stake in
an issue, such as the chemical, accountancy and financial stability networks.
Where possible, such transnational corporations avoid state or interstate regulation. Instead they
create their own tier of private sector 'governance','standard setting','codes of best practice' or selfregulation (Woods, 2002). Because they are selective, these networks are cohesive, technically
sophisticated and efficient. Their legitimacy in large part depends on the quality of the outcomes
they produce, that is, if they do their job well or not. Results not process matter most, or to express
it in la language of some political scientist, the quality of the outputs matters more than the
democratic input. The present analysis examines the global finance regulation in order to stressing
its actual functionalist tendency.
The first section of the present analysis explains the theoretical approach that I adopt in order to
examine the global finance governance, in particular the presentation of the 'liberal' tradition. The
second section below identifies the form and the concept of the contemporary globalization: in
particular, I adopt Vercauteren's 'theory of three sphere'. The third section presents some useful
definition for 'governance' and 'legitimacy' in order to obtain some theoretic instruments to analyse
the global financial governance. The fourth section identifies the forms and extend of contemporary
financial globalization and reviews the various institutional mechanisms that currently serve to
govern it. Finally, the analysis ends with a conclusion that evidences the technocratic and
functionalist tendency of the global financial governance.
1
2. The Theoretical Approach
International relations theories attempt to provide a conceptual model upon which international
relations can be analyzed. Each theory is reductive and essentialist to different degrees, relying on
different sets of assumptions respectively. In order to examine the global finance governance I
adopt in this analysis the 'liberal' tradition because is considered the more useful to demonstrate its
functionalist character.
The liberal current, inspired of the thought of Emmanuel Kant, is not as well interested by the state
itself as by the objective of peace among the states and the necessary conditions for this aim. In this
perspective, the state is regarded as part of the system, with rules of behaviour allowing the
transformation of the anarchistic relations of the international system into an establishment of a
peace. Security is not the first preoccupation for states and it is not conceived in an offensive and
individualistic manner, rather in a collective perspective ensured by the states community (this is
the UN principle of 'collective security'). Contrary to the 'realism' though, the liberal approach does
not consider the state the exclusive actor of international relations, but the major actor who must
take into account the growing influence of different types of actors (multinational enterprises,
international organizations, etc.). Moreover, the liberal thought underlines the importance of the
influence of state internal factors regarding thestate foreign policies (Vercauteren, 1999).
Since conflict and war are endemic feature of a system of state in which sovereigns seek to
maximize their power (this is the 'realistic' assumption), liberalism holds that it is only through the
governance or transcendence of power politics that the necessary conditions for the promotion and
realization of global peace can be effectively achieved. This argument rests on several
presumptions, including:
1. First, that reason and rationality are necessary and sufficient requirements for the effective
conduct and management of international affairs. In essence, through the pursuit of selfinterest and rational deliberation, conflicts of interests between states can be resolved or
mediated without recourse to force of war.
2. Second, internationally cooperation is rationally, as well as ethically, preferable to conflict.
Furthermore, growing material interdependence between states and peoples promotes the
necessity for the international regulation of their common affair as well as the rational and
cognitive basis for increased cooperation.
3. Third, international institutions (in the sense of durable set of rules, roles, norms, routines,
and expectations defining appropriate behaviour, thereby encompassing everything from
formal international organizations and international law to informal international regimes)
contribute to peace and word order in two ways: they tame the powerful by creating
international norms, incentives and new patterns of multilateral politics which limit the
scope for power politics; and they also provide mechanisms for preventing or managing
interstate conflict. In brief, international organizations matter.
4. Fourth, progress is possible in world politics in so far as power politics (and thereby war) is
not regarded as an immutable property of the interstate order (as realism presumes) but on
the contrary can be mitigated, if not transcended, through the progressive reform or
domestication of international affairs (the rule of law, universal human rights,
etc.)(McGrew, 2003).
These assumptions assert that the mutually reinforcing dynamics of transnational economic
integration, the diffusion of liberal democracy and the growth of international governance creates
the conditions for an expanding liberal zone of peace in which war increasingly becomes an
irrational or unthinkable instrument of interstate politics (Russet and Oneal, 2001).
There is no singular tradition of liberal school but, on the contrary, a series of contending
approaches. One approach, directly inspired by Kant's concept of 'perpetual peace' and associated
2
3. to the US President Woodrow Wilson though , views the state in a democratic point of view.
Democratic form of government is an essential building block of a peaceful international order, so
students as Micheal Doyle see in the expansion of democracy in the world the key for the
international peace (1997).
The promoters of the 'interdependence' theory as Joseph Nye do not dispute on the central role of
the state in the international affairs: they insist on the ever-increasing impact of the (notably
economic) interdependence phenomenon on the international relations. This phenomenon is
considered to be so strong to make the war harmful to the state prosperity. The 'liberal
institutionalism' approach suggests that far from international cooperation being a product of
hegemony or an altruistic motivation on the part of states, it is a rational response to conflict
between states among whom there is considerable interdependence (Keohane, 1984). International
institutions provide important benefits for states since they facilitate the achievement of national
goals while also reducing uncertainly, enhancing trust and generally minimizing the risks of
cooperation. In this respect, international institutions, whether formal organizations such as the
WTO or looser arrangements of international regimes, such as that covering the prevention of
international terrorism or the proliferation of nuclear weapons, 'empower governments rather than
shackle them' (Keohane, 1984, p.13).
Since the original publication of Keohane's theory in After Hegemony in 1984, the world has
witness profound structural change, including the end of the Cold War, unprecedented globalization
with a concomitant deepening of international interdependence, and the global spread of liberal
democracy. In these circumstances, liberal institutionalism appears to have acquired much greater
explanatory power. Accordingly, it is the theoretical approach that I adopt in the present analysis of
the financial global governance.
Definition of Globalization
Any discussion of global governance (and of course of global finance) must start with an
understanding of the changing of international society. Woven into this are the complex processes
known as globalization. Globalization refers to a historical process which transformation the spatial
organization of social relations and transactions, generating transcontinental or interregional
networks of interaction and the exercise of power (Held et al., 1999). Different historical forms of
globalization can be identified, including the epoch of world discovery in the early modern period,
the era of European empires and the present era shaped by the neoliberal global economic project.
These different historical forms of globalization are characterized by distinctive spatio-temporal
and organizational attributes; that is, particular patterns of extensity, intensity, velocity and impact
in global relations, flows and networks, along
side different degrees of institutionalization, modes of
stratification and reproduction. Although contemporary globalisation has elements in common with
its past phases, it is distinguished by unique spatio-temporal and organizational features, creating a
world in which the extensive reach of global relations and networks is matched by their relative
high intensity, high velocity and high impact propensity across many facets of social life, from the
economic to the environmental.(Held and McGrew, 2003)
Numerous simplifying typologies have been developed in order to explain the influence of the
globalization process. Appanui asserts six types or scapes where the different actors are acting:
ethnoscape, mediascape, ideoscape, technoscape, and financescape (1996). It is from this type of
interpretation of a disaggregated international reality that James Rosenau argues the coexistence of
a state-centric system with a multi-centric system: world affairs can be conceptualized as governed
through a bifurcated system – what can be called the two world of worlds politics – one an
interstate system of states and their national governments that has long dominated the course of
events, and the other a multicentric system of diverse types of other collectivities that has lately
emerged as a rival source of authority with actors that sometimes cooperate with, often compete
with, and endless interact with the state-centric system. The dynamics of post-industrialism are
simultaneously fostering centralizing and decentralizing tendencies in global affairs, some of which
3
4. cancel each other out but many of which progressively circumscribe nation-state and the
international system that they have sustained for several centuries. Analysing the world affairs
development focusing to the guidelines of authority, hierarchy, issue agenda, and systems as they
related to the identity, conduct, and interaction of the actors who produce outcomes, Rosenau
delineates parametric changes in which a new multi-centric world is discerned as challenging,
rivalling, ignoring, and otherwise coexisting alongside – neither superordinate nor subordinate to –
the historic state-centric world. The result is a paradigm that neither circumvents nor negates the
state-centric model, but preserves it in a larger context, one that posits sovereignity-bound and
sovereignty-free actors as inhabitants of separate world that interact in such a way as to make their
coexistence possible (Rosenau, 1990). Viewed in the context of proliferating centres of authority,
the global stage is thus dense with actors, large and small, formal and informal, economic and
social, political and cultural, national and transnational, international and subnational, aggressive
and peaceful, liberal and authoritarian, who collectively form a highly complex system of global
governance.
If Appanui stresses the accent on the cultural dimension of globalization, and Rosenau where the
power is, Vercuteren proposes the theory of 'three sphere'. This theory considers global affairs
according to the three principal implications:
the security sphere is manly the field of territorial implications and about external and
internal security of the actors of the international system;
the economy sphere defines the whole process of production until exchange of goods and
services; this sphere is connected with industrial, commercial, financial activities;
the signification sphere is everything participates in the search of the meaning of existence
and the international relation. This is the sphere of the identity and philosophical, political,
religious, cultural, ethnic conceptions, including education/teaching.
The 'three sphere' theory can be used as a synthesis among the different theoretical approaches of
the international relations. The 'realistic' scholarship tends to concentrate on the security sphere, on
the external security of the states; 'liberal internationalism' and the the theory of the
interdependence are interested manly on the importance of the economic sphere and the role of
non-state actors; the 'constructivist' theory is sensible to the signification sphere, particularly to the
identity, ethnic and ideological dimensions.
In the perspective of the three sphere theory, the international relations can be analysed through
three factors:
●
the evolution observed in each sphere (e.g. the impact during the XX century of the
communist theory on the international relations),
●
the existence of interaction among the spheres (e.g. the arm trade reveals the connection
between the economic sphere and the security one),
●
the relations among the spheres: these relations can be balanced, any spheres dominate the
others, or a sphere can dominates another one. For example, the politic behaviour of
Slobodan Milosevic during the Balkan crisis emphasizes the domination of ethnic
(signification sphere) and military (security sphere) considerations over the economic
interest of Serbia.
Observing the international situation during the Cold War and the rivalry among West and East, we
could see the domination of the security sphere (e.g. the 'arm race', particularly the nuclear one)
and the signification sphere (the importance of the ideologies). Today we can sustain that
4
5. importance of the signification sphere (the renaissance of nationalism and ethnic discourses after
the Cold War) and the economic sphere.
According to the three sphere theory, the present analysis of the global financial governance insists
on the importance of the economic sphere in the international relations and according to the liberal
thought the focus here is on the role of states and non-state actors in the managing of the
international financial system.
Governance, Global Governance and Legitimacy: Some Conceptual Considerations
Globalisation poses the question of how world affairs are, and should be, governed. At issue is
whether the thickening institutional density, expanding jurisdiction, intensifying transnational
politics and deepening impact of superstate regulation denotes a qualitative – structural- shift in
how global affair and transboundary problems are governed. For many students of international
relations these development represent the evolving infrastructure of a fragile system of global
governance.
Smitter defines the concept of governance as 'the best use of limited and available resources'.
Moreover the World Bank definition suggest that governance is
the use of institutions, structures of authority and even collaboration to allocate resources and
coordinate or control activity in society or the economy.
And according to the UNDP's Regional Project on Local Governance for Latin America
'governance has been defined as the rules of the political system to solve conflicts between actors
and adopt decisions (legality). It has also been used to describe the proper functioning of
institutions and their acceptance by the public (legitimacy). And it has been used to invoke the
efficacy of government and the achievement of consensus by democratic means (participation).
With but few exception the word 'governance' is tends to be employed when it is modified by the
adjective 'global'. Otherwise, for any scale short of the global – whether local, provincial, national
or regional – 'government' is usually treated as the entity through which order is sought and goals
framed and implemented. The words 'global' and 'governance' become inextricably linked because
for a long time the world was described as increasingly interdependent, but only since the end of
Cold War have the dynamics of interdependence tended to have consequences that are global in
scope. The problem of global warming, for example, knows no boundaries and reach into every
corner of the globe. Likewise, genocidal policies and practices in Rwanda and Kosovo have been
experienced as challenges to all humankind, as have financial crises and a growing gap between the
rich and the poor in developing countries. As the advent of such situations have accelerated at a
seemingly ever more rapid rate, the notion has quickly spread that interdependence is characteristic
of the world as whole. Accordingly, persuaded that many problems cannot be allowed to fester and
endanger, the well-being of people everywhere, and eager to bring a modicum of order and
direction to the uncertainties and dislocations inherent in the vast degrees of interdependence,
analysts have quite naturally begun to talk of the need for global governance and the processes and
structures that might foster and sustain it.
Both governance and government consist of role systems, of steering mechanisms through which
authority is exercised in order to enable systems of governments can be thought of a structures,
those of governance are social functions or processes that can be performed or implemented in a
variety of ways at different times and places (or even at the same time) by a wide variety of
organizations. To govern, whether as structure or function, is thus to exercise authority. To have
authority is to be recognized as having the right to govern, to issue directives that are heeded by
those encompassed by the directives. Rule systems acquire authority in a variety of ways. These
range from steering mechanism that are structures endowed with authority through constitutions,
by laws and other formally adopted instruments of rule, to those that are processes informally
created through repeated practices that are regarded as authoritative even though they may not be
5
6. constitutionally sanctioned.
Give the absence of a world government, the concept of global governance provides a language for
describing the nexus of system of rule-making, political coordination and problem-solving which
transcend states and societies (Rosenau, 2000). It is particularly relevant to describing the structure
and the process of governing beyond the state where there exists no supreme or singular political
authority.
As analytical approach, global governance rejects the conventional state-centric conception of
world politics and world order. The principal unit of analysis is taken to be global, regional or
transnational system of authoritative rule-making and implementation. At the analytical core of the
global governance approach is a concern with understanding and explaining the political
significance of global, regional and transnational authority structures.
Accordingly, the focus is on the evolving system of (formal and informal) political coordination –
across multiple levels from local to global – among public authorities (states and IGOs) and private
agencies seeking to realize common purposes or resolve collective problems. Although this system
transcends the classic postwar form of multilateralism, it is far from a 'unified global system
underpinned by global law enforcement' (Cable, 1999). It differs dramatically from the concept of
world government in that it does not presuppose the idea of a central global public authority, which
legislates for the common affairs of the humanity. On the contrary, it is defined by diverse sources
of rule-making, political authority and power.
Several observation are made in the literature concerning the institutional architecture of global
governance:
1. It is multilayered in the sense that it is constituted by and through the structural
enmeshment of several principal infrastructures of governance: the suprastate (such as the
UN system), the regional (EU, MERCOSUR, ASEAN, etc.), the transnational (civil society,
business networks and so on), and the substate (community associations, and city
governments)
2. It is often described as polyarchic or pluralistic since there is no single locus of authority.
This is not to imply any equality of power between the participants but simply to
acknowledge that political authority is decidedly fragmented.
3. It has a variable geometry in so far as the relative political significance and regulatory
capacities of these infrastructures vary considerably around the globe and from issue to
issue.
4. The system is structurally complex, being composed of diverse agencies and network with
overlapping (functional and/or spatial) jurisdictions, not to mention differential power
resources and competencies.
5. Far from national governments being sidelined in this system, they become increasingly
crucial as strategic site for suturing together these various infrastructures of governance and
legitimizing regulation beyond the state.(Sholte, 2000)
A central characteristic of global governance is the reconfiguration of authority between the various
layer or infrastructures of governance. This idea is reinforced by what in the study of global
governance is sometimes referred to as the privatization of global regulation, that is, a redrawing of
the boundaries between public authority and private power. From technical standards to the
disbursement of humanitarian assistance and official aid through non-governmental organization
(NGOs), private agencies have become increasingly influential in the formulation and
implementation of global public policy. The International Accounting Standards Committee
establishes global accounting rules, while the major bond rating agencies make critical judgements
about the credit status of governments and public and private organizations around the globe. Much
of this privatized governance occurs in the shadow of global public authorities, but to extend to
which corporate and private interest have captured the agendas of such bodies, like those of the
WTO, the International Organization of Securities Commissions (IOSCO) and others, there is a
6
7. fusion of public and private power. The current salience of public-private partnership articulates the
expanding influence of private interest in the formulation as well as the delivery of global policies.
Contemporary global governance involves a relation of authority from public to quasi-public, and
to private, agencies.
In conclusion, for the advocates of the global governance perspective, geopolitical management of
global affairs is becoming less plausible and legitimate as the sole governing principle of world
order. In a highly interconnected world of diverse nation-state, in which non-state actors also wield
enormous influences, hierarchical forms of managing global affairs are losing their efficacy and
legitimacy.
In fact, the concept of legitimacy is the popular acceptance of a governing regime or law as an
authority. Where as authority refers to a specific position in an established government, the term
legitimacy is used when describing a system of government itself —where "government may be
generalized to mean the wider 'sphere of influence'. According to Robert Dahl, legitimacy is
considered a basic condition for ruling: without at least a minimal amount of legitimacy, a
government will lead to frequent deadlocks or collapse in the long run. This concept can be
translate into the analysis of the global governance. Also the governance must have an amount of
legitimacy and in this historical moment it is clear that the concept of governance is obtaining
more and more legitimacy in respect to the sole intergovernmental principle of world affairs
managing. Notably, legitimacy is based on two pillars: efficacy and inclusivity. Inclusivity
describes the degree to which non-dominant groups are represented in decision-making practices
by participation; efficacy describes the quality of outputs of managing of problems and needs and it
is an economic concept. It is evident that in this moment there is a crisis of the legitimacy of the
state, in particular because its lack of efficacy in different sector of policy making. In the concept
of global governance exist other actors than the state that are more efficient in achieve specific
aims. In other words, state-based institutions of governance which exercise authority over all other
actors are being replaced by 'network minimalism'. These network have more legitimacy because
their efficacy. Their legitimacy in large part depends on the quality of the outcomes they produce,
that is, if they do their job well or not. Results not process matter most and the quality of the
outputs matters more than the democratic input.
The next section identifies the forms and extend of contemporary financial globalization and
reviews the various institutional mechanisms that currently serve to govern global finance. In this
section I explain why global finance matters and, through a functionalist point of view, I explain
how the financial global governance establishes its legitimacy mainly on the efficacy than on the
inclusivity.
The Global Character of Finance
Finance is the part of an economy that links saving with investments through a variety of
instruments denominated in monetary values. Finance is the intermediating activity that makes
saving available for investments while generating income from those investments for savers. A host
of mechanisms have developed to connect saving and investments. Many take the form of deposits
in and loans from banks. Other are securities: that is, stocks and debt instruments like bonds, notes
and money market tools.
The scale of contemporary finance is quite astounding. The level of transactions often dwarf those
in the so-called 'real' economy of primary production, manufacturing, transport, communications,
etc. For example, the average volume of foreign exchange dealing rose from $15 billion per day in
1973 to $1,490 billion per day in 1998, before dropping to $1,210 billion per day in 2001 (BIS
2001). At today's level it takes wholesale foreign exchange markets just a month to trade the value
of annual world GDP, at some $30,000 billion (UNDP, 2001). In other words, international finance
is important.
Finance can transpire in diverse geographical settings. It can be a local affair, for example, with
banks that operate only within only within certain districts or provinces. However, contemporary
7
8. finance usually unfolds more in a country context, with national money forms, national institutions,
and national financial markets. Meanwhile, international finance occurs when saving and
investments are transferred between one country and another. More recently we have seen the rise
of regional finance with, for example, the creation of distinct regional currencies like the euro in
most of the European Union and the CFA franc covering fourteen countries in West and Central
Africa. Regional financial institutions like the Asian Development Bank and the Euronext
securities exchange have also appeared. Then there is global finance: namely, monetary saving and
investments that flow through world networks. The terms 'globality' and (the condition) and
'globalization' (the trend of increasing globality) mean many things to many people; however, most
will agree that, broadly speaking, 'globalness' involves social connections in a planetary realm. In
other words, global arena can be distinguished from -though it also coexist and interlinks with –
local, national, international and regional spaces. Globality has at least four interrelated aspects:
internationality, liberality, universality and supraterritoriality. With its international quality,
globality entails interaction and interdependence between countries. So global relations involve
intensive cross-border communication, investment, trade and travel. With its liberal quality,
globality is marked by a low level (or even absence) of statutory barriers to cross-border flows,
such a tariffs, foreign exchange restrictions, capital controls and visa requirements. With its
universal quality, globality prevails when objects, symbols and experiences spread to most if not all
corners of the inhabitated earth. Finally, in a feature that has mainly arisen in recent history,
globality connects people in ways that largely transcend territorial geography, for instance, in
respect of telecommunication and global ecological changes. Such supraterritorial links exist with
little if any regard to fixed territorial locations, territorial distances and territorial borders.
Globalization – that is, increasing globality – has marked contemporary finance in all four of these
ways. In terms of increased cross-border financial flows, for example, the world total of bank
deposit owned by non-residents of a given country rose from $20 billion in 1964 to $9,600 billion
in 2001 (BIS, 2001). Concurrently, outstanding balances on syndicated international commercial
bank loans rose from under $200 billion in the early 1970s to well over $8,000 billion in 2001
(BIS, 2001). New borrowings of this kind amounted to $1,465 billion in 2000, as compared with
$372 billion in 1995 and just $9 billion in 1972 (BIS, 2001). In addition, governments and
multilateral institutions like the International Monetary Fund (IMF) and the World Bank have
extended several hundred billion further dollars in official cross-border loans to medium- and lowincome countries. The capital base of the IMF has risen tenfold since the 1960s, to almost $300
billion in 1999.
Must of this increased internalization of finance has gone hand in hand with liberalization. For
example, starting with the USA in the 1974, over 150 states have now removed official restrictions
on foreign exchange movements related to the current account of the balance of payments, in
accordance with Article VII of the Articles of Agreements of the IMF. Many states have also
relaxed (though rarely completely eliminated) capital controls: that is , regulatory limitations on
transfers related to the capital account of the balance of payments (including stock, bonds, shortterm credits, derivatives, foreign direct investments, etc.). In addition, increasing number of states
have lifted restrictions on non-residents holding bank accounts or dealing in securities within their
jurisdictions, thus encouraging the increased cross-border activity mentioned above. Likewise,
more and more states now allow externally based banks, securities houses and insurance companies
to operate within their territory, sometimes on an equal footing with domestic companies.
Universality has also become a widespread feature of contemporary finance. Several national
denominations like the US dollar and the Japanese yen have become universal currencies,
circulating just about everywhere on earth. In addition, the euro and – on a much more limited
scale – the Special Drawing Right (SDR) have emerged through the EU and the IMF, respectively,
as monies with transworld use.
Supraterritoriality is arguably what makes contemporary global finance qualitatively different from
previous eras. For example, electronic transfers now permit huge sums in financial transactions to
be moved instantly between any points on earth. Telephone and computer link permit foreign
8
9. exchange trading all around the world, directly connecting dealings rooms in London, New York,
Tokyo, Milan, Zurich, Frankfurt, Hong Kong, Singapore, Paris and Sydney. Electronic payments
through the Society for Worldwide Interbank Financial Telecommunication (SWIFT), founded in
1977, averaged more than $6,000 billion per day in 2000, linking over 8,000 financial institutions
in 207 countries (www.swift.com). Electronic communications also enable securities brokers
instantly to transmit and execute orders to buy and sell stock and bonds anywhere in the world. In
addition, supraterritorality organization today enable many financial actors to operate
simultaneously across the globe. A number of commercial banks and insurance companies operate
as transworld enterprises with affiliates in dozen of countries.
As well as financial communications and financial organizations, a number of financial instruments
have acquired a supraterritorial quality that substantially delinks them from a particular locality or
country. For example,in so-called 'eurocurrency' banking, begun in the 1950s, deposits resids in
banks that are located outside the borders of the country that issues the currency the deposit is
denominated in. For example a deposit denominated in US dollar residing in a Japanese bank is a
eurocurrency deposit, or more specifically a eurodollar deposit. The eurocurrency markets is active
for the reason that they avoid domestic interest rate regulations, reserve requirements and other
barriers to the free flow of capital (Butler, 2004). The 1990s also saw the advent of American
Depository Receipts (ADRs) and Global Depository Receipts (GDRs). These instruments bundle
together share of companies in Asia, Latin America and Central and Eastern Europe for trading at
the world's main financial centres. On side of investors, a number of mutual funds, pension funds,
hedge funds and individuals hold global portfolios and trade simultaneously on finance markets
across the world. In this circumstances of supraterritorial communication, organization and
instruments, much of contemporary finance is marked by a veritable global consciousness.
Countless saver, investors, borrowers and brokers think of – and act on – the world as a single field
of financial operations.
In sum, contemporary finance has a significant global character, including substantial
supraterritorial features that were barely if at all evident before the middle of the twentieth century.
Localities, countries and regions are by no means irrelevant in today's banking, securities,
derivatives, and insurance industries: today's finance has not became purely global and notterritorial. However many financial activities are now considerably global, including in ways that
largely transcend territorial geography. As such, they also transcend the traditional scope of the
territorial state and pose considerable challenges for effective governance.
The Authorities Governing Global Finance
Global finance is obviously not 'controlled', in the sense of being ruled by a sovereign world
government on the model of a modern territorial state. Nevertheless, these activities are subject to
considerable if imperfect governance. Recent development in the regulation of global finance
largely conform to general trends in contemporary governance under the influence of globalization.
In other words, states remain key, but they have increasingly adopted strategies of multilateral
management of transworld finance, through a host of interstate, transstate, and suprastate
mechanisms. In addiction, substate actors have begun to figure in the regulation of global finance,
albeit still marginally. Also, regulatory mechanisms based in private sector agencies have gained
substantial significance in the governance of global finance. State are still, on the whole, the
primary actors in the governance of finance under conditions of contemporary globalization. Any
examination of the regulation of global finance must therefore consider the activities of national
central banks, national treasuries and ministries of finance, national securities and exchange
commissions, and national insurance supervisors. In general states have more resources (staff,
founds, technology and legitimacy) to regulate global finance than any other authorities.(Scholte,
2002)
Of course some states have figured more prominently and powerfully in the governance of global
9
10. finance than other. Thus France and the USA have exercised far greater influence than Uzbekistan
and Zambia. Indeed, limited capacity for financial regulation at national level has left many states
in a weak position vis-à-vis global finance. The government of Bolivia has been little match for the
eurobond market, and authorities in the Philippines have enjoyed little room for manoeuvre in
relation to the IMF.
Yet even the best resourced states have not been able to tackle the governance of global finance
alone. The intensely international, liberalized, universal and above all supraterritorial character of
these flows has made it impossible for even the strongest states to handle global finance by
themselves. Thus various networks of intergovernmental consultation and cooperation have
developed in tandem with the accelerated globalization of finance during recent decades. The
following paragraphs elaborate on these features in turn.
Supernational authorities and global finance
A common image of global finance is one in which a set of competitive individual states are
confronted by a vast, fluid atomized set of cross-border financial transactions. These transactions
severely undermine each state’s sovereignty by, for instance, requiring a state to cater to investors’
interests if that state does not want investors to flee or to refuse to come to the territory under its
jurisdiction. Another image modifies this one by recognizing that states vary tremendously in their
power and some states may actively promote globalization of finance since it is seem as in the
mutual interest of the state and those financial firms headquartered in its jurisdiction. Both of these
images are misleading because they underestimate the degree to which international institutions for
regulating global finance have developed over the past quarter century
.
In part this underestimation is due to the relatively informal character of many of the relevant
institutions. The most important institutions for launching regulatory initiatives are the G7, the
G20, and the various committees housed at the Bank for International Settlements in Basel,
Switzerland. None of these have their own permanent secretariats, nor articles of agreement or
other founding treaties, nor any formal internal division of labour, nor any public mechanism for
negotiating agreements. As such they are quite far from the type of organizational structure that one
conventionally would associate with public authorities. Nevertheless they all possess three features
that have allowed them to contribute much more effectively to the governance of global finance
than is often realized.
The first feature is the fact that they draw together representatives of the most powerful states and
these states can then work together to implement agreements both within their individual
jurisdictions, and internationally, as through their exercise of their overwhelming joint voting
power in the International Monetary Fund and World Bank. A second feature is that they are
heavily pragmatic and technical and this helps minimize political conflicts as well as fostering a
sense of legitimacy and effectiveness, both among member-states and among actors not included as
members in the institution. A third feature is that these various bodies are integrated in a
hierarchical fashion even if they would prefer to be seen as autonomous of one another. For
instance, in 1999, in the aftermath of the global financial crises of the previous two years, the G7
created, and is able to set the direction of, two important groupings, the G20, consisting of central
bank heads and finance ministers from the G7 and from large emerging market countries such as
China, India, Brazil, and South Africa, and the Financial Stability Forum, consisting of 21 G7
representatives along with representatives from international institutions involved in financial
regulation and four other countries (Australia, Hong Kong, the Netherlands and Singapore). The
G7 considers big strategic questions concerning global financial governance, the G20 considers a
subset of these that are especially relevant to emerging markets, and the FSF considers issues of
coordination on the more technical work of international regulatory officials. Working together,
these intersecting groupings can develop a powerful momentum for policy or regulatory initiatives
which can then be globalized, by implementing new national or extraterritorial rules within their
own jurisdictions, by interacting with other actors bilaterally or multilaterally in other international
10
11. settings, or by aligning the policies of the other institutions in which they participate with the
policy and regulatory priorities of the G7, G20 and FSF. There are other more formal and universal
organizations that play an important role in the governance of global finance as well. These include
the IMF, the WB, and the International Organization of Securities Commissions (IOSCO). The first
two have become increasingly involved in financial regulation even if this was not originally an
important part of their work. In part their role is providing technical information promoting their
preferred approach to financial regulation, but increasingly they have also incorporated
assessments of compliance with international financial standards and codes into their lending
criteria, thereby creating a powerful lever over countries to which they provide financing. The
“Reports on Observance of Standards and Codes” are surprisingly intensive audits of compliance
by national authorities, conducted by foreign regulators, and frequently made public on national
and IMF websites. IOSCO includes securities markets regulators from around the world. Its most
important committee, the Technical Committee, is like a very informal groupings including the
most important states in an informal, consensus-fostering technically-oriented arrangement.
However the Technical Committee is part of the larger, more formal, and more universal structure
of IOSCO as a whole. Another example of the practical importance of these supranational
arrangements is the current effort at the Basel Committee on Banking Supervision (BCBS), located
at the BIS, to create a new accord with internationally agreed rules on the amount of capital
international banks are required to hold relative to the financial risks they take on. The fact that this
taken so seriously, and the fact that it is taking place at the BCBS and not just in national capitals,
are indications that considerable policy making autonomy has been created at the global level.
Although the BCBS membership is restricted to regulators and central bankers from twelve of the
world’s most financially developed countries, it has been very effective at promoting global
compliance with its recommendations through its links with regional groups of bank regulators,
some of which it helped set up, by inviting selected non-member country representatives to Basel
for consultations, by having its standards incorporated into the work of the FSF, the IMF and the
WB, and by encouraging market actors to use its standards as a benchmark, thereby using market
pressures to encourage compliance.
Private Authorities and Global Finance
There are three main ways that private-sector actors contribute to the governance of global finance.
The first is advocacy, in which they seek individually or through associations to influence public
policy. A second is industry standards and self-regulation, in which industry participants
deliberately seek to create rules governing the conduct of market actors. A third is through routine
business practices in which market or intra-firm interactions, while primarily focused on individual
commercial activities, have an unintended effect on the structure and governance of the industry.
Each of these can be global: either in the source of influence, in the target of influence, or both. In
most cases, associations and other actors engage in more than one of these types of activities
simultaneously.
An example of the strengthening of the advocacy function of private authority at the global level is
the growth in capacity of the International Institute of Finance, located in Washington. The IIF was
created by 30 major commercial banks in 1983, in the midst of the debt crisis, in order to
collaborate in the assessment of sovereign risks. Its membership has expanded to 320 in 2002, and
now includes insurance and investment management firms from industrialized and emerging
markets, in addition to most of the world’s major banks. The IIF was somewhat slow to involve
itself in regulatory matters, only establishing its Working Group on Capital Adequacy in 1993, five
years after the first Basel capital accord. By 2002, in contrast, the IIF had become intensely
interested in the work of the BCBS and has become its principal private-sector interlocutor. As the
IIF noted, “given the importance of the issues raised by the reform proposals, the Institute created a
Steering Committee on Regulatory Capital composed of chief executive officers and chief risk
officers from a diverse group of banks among the Institute’s membership to guide the more detailed
11
12. technical work done by the working groups.”. The IIF had also become the primary voice of the
international banking industry on the broader question of the reform of the international financial
architecture that preoccupied policymakers in the aftermath of the global financial crises of 1997
and 1998. Much of the international advocacy work of private-sector financial actors is carried out
through more informal groupings not unlike those of regulators. For instance the main private
sector response to the problems that emerged with hedge funds in the 1990s, including the near
catastrophic collapse of the massive Long Term Capital Management Fund, was organized by the
Counterparty Risk Management Policy Group (CRMPG), formed in 1998. It included senior
executives from about ten of the world’s top banks. The private sector solution it proposed as an
alternative to regulation was better voluntary standards and best practices in risk assessment and
the solution it was advocating was accepted both by the US government and at the Financial
Stability Forum (Porter and Coleman, 2002). The Financial Leaders Group (FLG) and the more
operational-level Financial Services Working Group (FSWG), were created in 1996 to promote the
liberalization of financial services in the Uruguay Round. The FLG consists of top executives of
leading financial firms and is continuing to advance the goal of commercially meaningful
liberalization of global financial services trade including the issue of the relationship between
domestic regulation and liberalization. The FLG and FLWG have been the primary interlocutors for
the trade negotiators in their relation with the private sector.
There are two main areas in which the private-sector has been active with self regulation and with
setting and monitoring standards. The first is in securities markets, which have a long tradition of
relying on the self-regulatory capacities of stock exchanges. Some exchanges, like the New York
Stock Exchange, continue to carry out this function much as they always have, but with more
international transactions or participants than in the past. Others, like the NASDAQ or the Toronto
Stock Exchange, are organized as firms, without either the cooperative organization or the floorbased face-to-face interactions that facilitate self-regulation in more traditional exchanges and have
created separate firms that provide “regulation services”. Sometimes self - regulatory standards are
created in associations and industry segments in which most business is carried out by phone by a
relatively small number of very big firms, as is the case with the International Primary Markets
Association and the International Securities Markets Association, responsible for self-regulation in
the international bond market, and with the Emerging Markets Traders Association, responsible for
self-regulation in the market for secondary trading of bank loans to developing countries.
The second area of self-regulation and private sector standards is in standards created by third
parties, such as accounting standards or the technical standards created by the multinational firm
SGS. The International Accounting Standards Board (IASB) was formed in 1973 and consists of a
membership of 152 professional accountancy bodies representing more than 100 countries.
Formerly called the International Accounting Standards Committee (IASC), this body has been
working for a quarter century on the creation of global accounting standards. Accounting rules are
a crucial link in all aspects of the governance of global finance since they allow more accurate
monitoring of financial assets and transactions. In May 2000 it completed the International
Accounting Standards (IAS), a set of standards to be used in cross-border stock exchange listings.
The major competing standards are US Generally Accepted Accounting Principles (GAAP) which
are very influential because of their use by the many firms wishing to raise capital in the US
market.
Routine practices often have an impact on the governance and structure of global finance. An
example already mentioned is the creation of electronic exchanges that compete with traditional
floor-based exchanges. In addition to undermining the face-to-face interactions on floors that were
important in traditional self-regulation, the electronic networks also create pressures for regulatory
change by making it easier for foreigners beyond the reach of domestic law to engage in exchange
activities and by increasing competitive pressures with the accompanying demand for more
efficient regulation. More generally one can see an incessant stream of new financial instruments
which, whether they create new risks or not, require updating of regulations (Porter, 2002).
12
13. Technical Authorities and Global Finance
All the examples of supranational and private activities discussed above are carried out through
highly technical discourses. One might expect that interactions among national authorities in the
G7, the FSF, or the BCBS would be accompanied by traditional bargaining in which an
accommodation among varying interests is sought. This is not the case however—all documents,
rules and justifications are expressed as technically complex but pragmatic adjustments in search of
mutually beneficial increases in efficiency and stability. While power and political interests are
certainly in the background, these very rarely intrude into the language used publicly by those
involved. While the language used behind closed doors will be more likely to include the role of
power and political interests, the fact that these are kept behind closed doors limits their influence.
Most financial regulations require widespread compliance and a clandestine series of threats,
inducements, or ad hoc bargains, will not be very effective in bringing this compliance about.
While technical discourses are produced or reproduced by all private-sector and public sector
actors in global finance, there are numerous bodies that are engaged as their primary focus in
producing such discourses. On the public-sector side, for instance, the Organization for Economic
Cooperation and Development, while hosting some important negotiations on crossborder capital
flows and on tax matters, is primarily devoted to policy-relevant research, including many issues
central to the governance of global finance. However this research is much more than simply
interesting facts and analysis for policymakers to use at their whim. Rather OECD research permits
the simultaneous development of widespread consensus on policy directions and the development
of the standards, practices, and methodologies that are needed to implement those policy directions.
The heavily technical character of this process facilitates both the practical viability of the
proposed solutions and the emergence of shared norms around which actor expectations converge.
A similar role is played by the private-sector Group of Thirty comprised of a very high-level
collection of thirty individuals from the financial sector, the public sector, and academia, who serve
for particular terms.
Even the more micro-level activities of financial market actors involve the conversion of abstract
technical language into routine practices that structure markets. For instance an individual may
have an idea for an innovative new financial contract, but once this becomes widely used and
recognized it can quickly become a huge market that operates relatively independently of any one
actor, and to which all participants must adjust.
Conclusion
There are many examples of the strengthening of supranational, private,and technical authority in
the governance of global finance as well as a high level of integration across these type of
s
authority.
Consistent with the multi-level governance model, public authorities continue to play a leading role
in the governance of global finance but it is clear that are being replaced by 'network minimalism'.
Having utilized a liberal approach and an functionalist point of view, it is evident that in the global
financial governance there is a shift in the direction of a more technocratic financial governance.
The new network is self-consciously selective, bringing together experts from the most important
players in the international financial system, including national authorities responsible for financial
stability in significant international financial centres, international financial institutions, sectorspecific international groupings of regulators and supervisors, and committees of central bank
experts. The components of the global finance network does not represent all countries or regions
of the world. Rather its goal is to coordinate the efforts of various bodies in order to promote
international financial stability improve the functioning of markets. Its legitimacy rests on its
efficiency in achieving its states goals.
13
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