Global Governance: Key Concepts and Actors
Anarchy
– The world was said to be anarchical due to the absence of a world government.
– After the Cold War and the establishment of the UN and non-state actors, the world was no longer as anarchical.
– Anarchy exists outside of states/between states, but within states, it is the ‘authority’ of a state over society.
Automation of Work
– A steady stream of reports indicates that jobs are increasingly being replaced by AI and robots.
– This has eliminated many jobs in manufacturing.
– Lower-paying jobs are likely to survive since they are not well-paid, and the cost of replacing them would be too high.
– Causes wealth to go towards the wealthier.
– Contributes to income inequality (especially in developed countries).
Capital Control
– States can impose capital controls on the movement of capital, as established during the Bretton Woods negotiations.
– Measures taken by a government to regulate the flow of capital in and out of its economy.
– Transactional taxes or exchange controls put limits on purchasing and selling currency.
CONS: Hard to enforce, bad for domestic firms and investors.
City of London
– In the 1960s, a new financial market emerged in the City of London.
– A loophole in the financial regulations in the UK.
– Unregulated international ledger: became known as the Euromarket.
– The UK government allowed it to flourish as they got a lot of capital into its economy.
– Regulated domestic ledger.
Corporate Codes of Conduct
– Regards matters such as minimal occupational health and security standards.
– Establish standards in states where there are no standards.
– Knock-on effect on smaller local firms when larger ones implement CCCs.
– Don’t have to rely on ratification and implementation by states.
CONS:
– Rely on self-regulation, no external monitoring or enforcement.
– Designed to suit the interests of corporations (often don’t reference ILO’s CLS).
– Applied unevenly: tend to be applied in the most advanced and organized sectors.
Credit Rating Agencies
– Carry out ratings of debt.
– Big three agencies control 95% of ratings.
Cryptocurrencies
– Latest challenge to financial regulators.
– Medium of exchange where the value of the units of exchange is established by a single public ledger.
– Maintained by a network of users via nodes.
– Values are not shaped or guaranteed by a central bank.
– Medium for criminal activity.
Debt/Derivative/Equity Security
– Securities – financial assets that can be traded or exchanged.
– Debt securities – purchaser can expect repayment plus interest.
– Equity securities – equity or share in the ownership of a company.
– Derivative security – Promise whose market value depends on the strength of ability and value of asset (limit and or manage risk of potential loss).
Democracy and Communications
– The field of communications lends itself well to global governance.
– Understood to encompass a vast range of methods by which people connect with one another.
– Communication innovations challenge existing forms of governance.
– Constant tension between wanting to increase/employ communications and wanting to restrict them.
– More sources of information but little variety in terms of opinions expressed.
– Media is largely controlled by big businesses and tries to attract large audiences.
– Dumb down content as there’s no point in exposing different viewpoints.
– ‘NEW MEDIA’ (blogs, online sites, and social media) expanded the number of news sources.
– Citizen journalism.
PROBLEM:
– People gravitate towards sources they agree with instead of trusting the same sources.
– Poorer quality of journalism.
– Internet vigilantism.
Dependency Theory
– Influenced by imperialism.
– Against modernization theory.
– Underdevelopment is not the result of traditional culture.
– Underdevelopment is the result of exploitative and unequal economic relationships between rich and poor states.
– Underdevelopment is generated by unequal trading relationships or terms of trade.
– Poor countries sell their materials for low prices, and core countries develop them into finished products, profiting.
– Net transfer of wealth to core countries.
CRITICISMS:
– Not all countries can be categorized into core and periphery so easily.
– Peripheral countries in the past have been able to develop their economies by participating in the global economy, and vice versa.
Developed Countries
– Countries that have achieved a significant amount of economic growth.
– Can ensure the well-being of their citizens.
Doha Round
– Conflict between the Global North (wealthy countries) and the Global South (poorer, developing countries).
– Lower trade barriers and revised trade rules.
– Fundamental objective – improve trading prospects of developing countries.
– Currently at a standstill (poorer countries refused to go along with further liberalization).
– G77: endanger domestic industries.
– G77 countries are dependent on revenue from agriculture but cannot compete with products from the Global North.
– Agricultural subsidies – Global North products are more inexpensive.
– Global North still relies on tariffs.
Embedded Liberalism
– Era where the economy was embedded in the needs of society (social welfare, full employment, etc.).
– Set up to support a combination of free trade with the freedom for states to enhance their welfare/reduce unemployment.
– Ended by the 1973 oil crisis (increased prices led to inflation and economic stagnation).
Feminization of Work
– ‘Women are more passive, flexible, and nimble.’
– Women were ‘thought not to require conventional wages’ since their time in the workforce is temporary.
– Explosion in the number of domestic workers around the globe (carried out within the home/residence, etc.).
Flexibilization of Work
– Global supply chains demand a more flexible workforce.
– Decrease in work, wage, and livelihood security.
– More temporary contracts.
– Greater reliance on migrant labor.
– Contributed to the decrease of labor standards.
Financialization
– Development of financial capitalism during the 1980s until 2010.
– Increasing role of financial motives, financial markets, and actors in domestic and international economies.
– Growth of the financial sector with regards to the rest of the economy.
– Led to growing political and economic power.
General Agreement on Tariffs and Trade
– Wants the reduction of tariffs and the removal/minimizing of other trade barriers.
– Mutually advantageous basis.
– Evolved unevenly and was limited in its pursuit of eliminating trade barriers.
Global Governance
– In 1995, the UN created the CGG (Commission on Global Governance) and announced that a new world order was emerging.
– The ways that public and private individuals/institutions manage their common affairs.
– Public – states and international institutions (UN).
– Private – all non-state actors (MNCs and NGOs).
– Conflicting/diverse interests.
– Includes formal institutions as well as informal arrangements.
– Areal (from the air) vs hierarchical (global>regional>national>provincial>city/local).
Global Non-State Governance
– Controversial to exclude states.
– Even when states are not included, they are still influential = provide legal and physical infrastructure.
– IETF.
– PROS: flexible and cost-effective.
– CONS: very little accountability.
no formal enforcement mechanism.
Great Depression
– Caused by the 1929 stock market crash.
– Countries had to devalue their currencies to make products cheaper to boost exports.
– Raised tariffs (keeps foreign products out).
– During the Second World War, countries began negotiations to prevent these crises and limit their spread.
Hegemony
– Exercise of power through consent and ideas.
– Making less powerful states conform with the interests of the more powerful states without the use of force.
Informal Empire
– Put in place by the US after winning the 2nd World War to promote:
– economic stability.
– established the Bretton Woods Institutions (IMF and World Bank).
– free trade with the establishment of the GATT (General Agreement on Tariffs and Trade) in 1947.
Informal Work
– Work ‘under the table’.
– Huge in developing countries but still present in developed countries.
Informalization of Work
– Any economic activity that is not regulated/taxed and recorded by the government.
– Often integrated into formal sector supply chains.
– Difficult to govern and enforce labor standards.
International Labour Organization (ILO)
– Institution responsible for regulating labor internationally.
– Created in 1919: part of the League of Nations and integrated into the UN.
– Tripartite: THE STATE, LABOR, EMPLOYERS.
– Goal is to promote decent work and the economic and working conditions that result in lasting peace and progress.
– Depend on member countries to implement its conventions (Cannot force them to).
– They are often also unenforced.
– Relies on ‘shaming’ countries to implement their conventions.
International Monetary Fund (IMF)
– Set up to provide short-term loans to stem short-term cashflow problems (World Bank dealt with long-term loans).
– Decline in sovereignty of states.
– Created at the same time as the World Bank.
– Monitor international currency regime.
International Telecommunication Union (ITU)
– Established in 1865.
– Regulates telecommunications, internet, radio, and satellite technology.
– Reinforce communications infrastructure and technical standards.
Internet Engineering Task Force (IETF)
– Responsible for formulating and promoting standards with respect to internet protocols (how data is to be transmitted across destinations).
– Membership is voluntary.
– Standards enforced through informal mechanisms (social networks).
Investment/Commercial Banks
– Commercial bank – Provide loans to individuals or companies.
– Investment banks – invest in and interact with financial markets (purchase and sell securities).
Invisible Hand
– The opening up of markets between states and minimizing government intervention should:
– increase the freedom within the market, letting it flourish.
– Creates a stable and efficient economy.
– Free trade leads to a more peaceful world order due to increased mutual dependencies.
Liberalism
– Global Governance is consistent with the liberalist worldview.
– Immanuel Kant – Famous liberalist, father of global governance.
– Peace could be achieved internationally through reason.
– War is the result of base human instinct.
– Rational for states to cooperate with one another.
– Harmony/cooperation can exist at a global level.
– States are not the only significant actor in the international system.
– Countries that trade with each other do not go to war, also democracies do not go to war with each other.
– Interdependence – Mutual dependence between states, etc.
– Market is self-regulating.
Marxism
– Believe (with liberals) that global governance is becoming a reality.
– Believe that global governance is a product of powerful (HEGEMONIC) states.
– Appears to benefit the interests of all states but actually serves the interests of powerful states.
– Only revolution and overthrow of capitalism can bring development to the developing world.
Mercantilism
– Wealth is a means through which to create military strength and to project political influence.
– Dominated the world/economic relations until the end of the Second World War.
– Trade Surpluses = states export more than they import.
– There was little incentive to create governance mechanisms considering the imperial rivalry between European powers.
Modernization Theory
– Alternative to Marxism theory, developed by the US.
– Replacement for colonialism in the relationship between the North and South.
– Tried to correct deficiencies in the characteristics of underdeveloped countries.
– Boosting economic growth.
– Helping developing countries with aid and knowledge.
5 stages of modernization: (cannot be skipped / linear)
– Traditional society (hunting and gathering, etc.).
-Preconditions for takeoff (mining and agriculture).
– Take off (industry becomes the central sector of the economy).
– Drive to maturity (application of technology to economic sectors).
– Mass consumption (consumer goods).
– EDUCATION IS an impediment to development.
CRITICISMS:
– Racist – up to civilized Western countries to teach poorer the values necessary for development.
– Assumes Western mass consumption is desirable.
– Historically, development is not linear.
Multi-Stakeholder Governance
– Governance structures that incorporate states as well as non-state actors.
– Non-state actors are reduced to being consulted and just participating in specialized meetings.
PROS: includes different types of actors > enrich information inputs and viewpoints / broader and immediate buy-ins from different actors.
CONS: decreases the democratic nature of the decisions that are taken.
actors are not accountable to any citizens.
difficulty in reaching consensus because of the number of different interests.
Neoliberalism
– Economic ideology that represents a return to economic policies free from government intervention (regulations/tariffs, etc.).
– Promotes free trade, privatization, etc.
– Predominant ideology past 1980s of IMF, WB, GATT.
– Lead to progressive deregulation of financial sectors.
Populism
– Logic where groups who feel excluded from power mobilize against the elite to reestablish a new political order.
Realism
– Counterpoint theory to liberalism = much more skeptical of the viability of global governance.
– The ultimate goal of states is still survival.
– States are the most important actors in international politics (have militaries).
– Cooperation is difficult given the persistence of international anarchy.
– States create governance mechanisms to suit their needs and stop participating once they don’t need them anymore.
Securitization
– Process where several types of financial assets are combined into one and sold to investors (OFTEN DEBT).
– Moves risk to other sectors of the economy and not finance.
– Creates capital out of bad debt.
Structural Adjustment Program
– Bretton Woods Institutions came up with SAP.
– Designed to increase the ability of countries to pay off their debts.
– Help foster economic development.
– Modeled on policies of wealthy countries.
POLICIES:
– Trade liberalization.
– Privatization of public assets.
– Budget cutbacks.
– More export goods.
– Had negative consequences for development.
Subsidy
– A form of financial aid or support with the aim of promoting economic and social policy.
Supply Chains
– Have become multinational and fragmented.
– Different processes involved in the production and distribution of a commodity (product).
– Takes advantage of the benefits of each location.
– Made production more complex.
– Global supply chains demand a more flexible workforce.
Tariff
– Taxes on imports and other measures.
– Protect domestic industry.
Traditional Inter-State Governance
– State-driven organizations where membership and decision-making are centered on states.
– Governed according to national jurisdictions to fully respect state sovereignty.
Advantage: describes accountability for decision-making and implementation.
Disadvantage: excludes other important actors such as NGOs and MNCs.
can be easily surpassed by communication technologies (they are increasingly deterritorialized).
Universal Postal Union (UPU)
– Postage of physical goods coordination.
4 principles:
– Uniform flat rate to mail a letter anywhere in the world.
– Give equal treatment to foreign and domestic mail.
– Countries should retain all money it has collected for international postage.
World Bank
– International Bank for Reconstruction and Development.
– Provides long-term credit to countries to facilitate their development.
– Encouraged countries to use their loans to build up their infrastructures.
World Trade Organization
– Created in 1995 as part of negotiations of the Uruguay Round.
– Widened regulatory framework.
– More aggressive governance when it comes to trade liberalization.
– Strict timelines when it comes to deciding cases.
– Encourages trade liberalization.
– Special favors should be non-existent (all WTO members should be treated equally).
World Wide Web Consortium
– Less hierarchical membership structure.
– Responsible for developing standards for the web (HTML/CSS and CGI).
– Decision-making is bottom-up.
– Proposals must gain consensus among members before being implemented.