Markets beyond politics? The state and the internationalisation of financial markets

Abstract. The role of politics is particularly difficult to discern in the domain of international financial markets, where the state's capacity to control or direct capital flows, without incurring considerable opportunity (and political) costs, appears so limited. In addressing this question, this paper argues that the process of internationalisation is first and foremost the consequence of political decision-making (to create open markets) and that many domestic interests linked to the international market have promoted internationalisation both through their policy preferences and economic activity. The paper will then go on to argue that the threat of financial instability and crisis, a consequence of the increased volatility of relatively unregulated capital flows, has prompted political demands for more concerted inter-state co-operation to maintain stability. Much of this takes place through transnational agreements among state agencies, such as the central banks, and much through 'reregulation' in the guise of 'harmonisation' of regulatory and prudential supervisory policies.
Some of this process has received considerable publicity, such as the harmonisation of EEC regulations to facilitate freer trade in banking and financial services as part of the preparation for the Single European Market in 1992. Likewise, the current Uruguay Round of GATT trade talks has the liberalisation of trade in financial services on its agenda. Other aspects of the process have been carried on quietly, far from public view, in such forums as the Bank for International Settlements. Such is the case of a recent agreement to harmonise minimum capital adequacy requirements for banks operating in international markets. The paper uses these three cases to support the argument about the role of politics and the state in international finance.     

Legitimacy beyond the state: institutional purposes and contextual constraints

ABSTRACT

The essays collected in this special issue explore what legitimacy means for actors and institutions that do not function like traditional states but nevertheless wield significant power in the global realm. They are connected by the idea that the specific purposes of non-state actors and the contexts in which they operate shape what it means for them to be legitimate and so shape the standards of justification that they have to meet. In this introduction, we develop this guiding methodology further and show how the special issue’s individual contributions apply it to their cases. In the first section, we provide a sketch of our purpose-dependent theory of legitimacy beyond the state. We then highlight two features of the institutional context beyond the state that set it apart from the domestic case: problems of feasibility and the structure of international law.     

American citizenship and expatriatism: identity and politics outside the state

This article seeks to interrogate the concept of global citizenship through the disruptive lens of the American expatriate. The goal of this inquiry is to use empirical research done on American expatriates, including the results of a survey conducted by the authors, to better understand issues of citizenship and politics amongst American expatriates. The theoretical literature on citizenship and transnationalism argues that immigrants and expatriates help challenge the hegemony of the nation-state, a claim that can be tested by investigating how expatriates view their own experiences. By juxtaposing the empirical work of researchers focused on American expats with the theoretical work of citizenship and globalization theorists, we find that political affinity and national identity continue to matter for those living outside the USA, but within a larger global context. Thus, if the path envisioned by those who embrace globalization is to be followed, how might concepts of citizenship and national policy towards their citizens need to change?     

The theory of the state and politics: a central paradox of Marxism

It is commonplace to observe that while Marx saw the withering away of the state as necessary for communism, the state in ‘Communist’ societies has done anything but wither away. This seems to indicate a paradox in the Marxian theory, whose resolution would probably tend to undermine the theory itself. It is, however, argued that the expansion of the state in ‘Communist’ societies is only apparently contradictory to the Marxian theory, and that the theory in fact provides the basis for a most adequate account of this phenomenon. But the theory does have a genuinely paradoxical quality which lies in the tension between the political and its social basis, in the socialist movement. The fundamental component of the Marxian theory is its demonstration of the dependence of the state and politics on society; the problem then is the very status of ‘the political’ as a category, and especially the meaning of a ‘marxist politics’. Marxism itself demonstrates that the very existence of ‘politics in the direct and narrow sense of the word’ is the product of an alienated society, and yet it posits a politics which necessarily exists partly in this very sense. This paper considers the Marxian theory and the problems it tries to deal with, and attempts to show that the solution to its paradox lies in resolving the real tension between the social movement and its political expression. It will be argued that terms of the dilemma are being modified by changes in the relations between the state and society. These changes make a political solution of social contradictions more possible, precisely because they reduce the abstraction of politics from society.     

Congressional distributive politics and state economic performance

States that were represented by very senior Democratic congressmen grew more quickly during the 1953–1990 period than states that were represented by more junior congressional delegations. States with a large fraction of politically competitive House districts also grew faster than average. The first finding is consistent with traditional legislator-based models of distributive politics, the second with partisan models. We cannot detect any substantively important association between seniority, state political competition, and the geographic distribution of federal funds, so higher district- specific federal spending does not appear to be the source of the link between state economic growth and congressional representation.     

Recalibrating social protection: Electoral competition and the new partisan politics of the welfare state

This article investigates the new party politics of welfare states with a particular focus on electoral competition. The argument is that welfare state politics are no longer just about more or less, but involve trade-offs among ‘new’ versus ‘old’ social rights, and hence social investment versus social consumption. However, party priorities on these issues are highly dependent upon their electoral situation. As electoral competition becomes more intense, parties focus more on vote maximisation than on their traditional policy goals. For left parties, this means focusing more on social investment, which appeals to their growing constituency of progressive sociocultural professionals, and less on defending the traditional income maintenance programmes favoured by their core blue-collar voters. Centre-right parties, on the other hand, should hesitate to retrench old social rights when electoral competition intensifies because they need to prioritise their appeal to culturally conservative working-class voters over their traditional fiscally conservative policy profiles. Using a new dataset and a recently published measure of electoral competitiveness, the article shows that as electoral competition intensifies, left governments are willing to prioritise social investment by reducing pension rights generosity in order to expand programmes for new social risks, while centre-right governments by contrast avoid retrenchment of pension rights and pension expenditures. The findings demonstrate that this relationship is moderated by the presence of a credible radical right challenger, which increases the electoral risk of welfare state recalibration.     

‘Going beyond the Troika’: Power and discourse in Portuguese austerity politics

This article analyses the margin of manoeuvre of Portuguese executives after the onset of the sovereign debt crisis in 2010–2015. To obtain a full understanding of what happened behind the closed doors of international meetings, different types of data are triangulated: face‐to‐face interviews; investigations by journalists; and International Monetary Fund and European Union official documents. The findings are compared to the public discourse of Prime Ministers José Sócrates and Pedro Passos‐Coelho. It is shown that while the sovereign debt crisis and the bail‐out limited the executive's autonomy, they also made them stronger in relation to other domestic actors. The perceived need for ‘credibility’ in order to avoid a ‘negative’ reaction from the markets – later associated with the conditions of the bail‐out – concurrently gave the executives a legitimate justification to concentrate power in their hands and a strong argument to counter the opponents of their proposed reforms. Consequently, when Portuguese ministers favoured policies that were in congruence with those supported by international actors, they were able to use the crisis to advance their own agenda. Disagreement with Troika representatives implied the start of a negotiation process between the ministers and international lenders, the final outcome of which depended on the actors’ bargaining powers. These strategies, it is argued, constitute a tactic of depoliticisation in which both the material constraints and the discourse used to frame them are employed to construct imperatives around a narrow selection of policy alternatives.     

The computer as mediator: Law of the sea and beyond

Occasionally, analytic models have found their way into complex policy negotiations. This article scrutinizes four such cases. When they appear independent and credible, models can play a variety of traditional mediating roles: They can foster learning, help define the negotiating agenda, stimulate communication, and suggest joint gains. These constructs can also offer artificial common ground for proposals to be tested, disputants' differences to be dovetailed, and adversaries “convinced” to move from entrenched positions without “conceding” to bargaining opponents. Yet, where the negotiators' basic values or ideologies actively clash, the special kind of rationality provided by models may prove to be irrelevant.     

Incorporating immigrants as foreigners: multicultural politics in Japan

With the growth of immigrant population over the past couple of decades, a ‘multicultural’ discourse has emerged in Japan. A notable point is that immigrants are expected to be incorporated into the host society primarily as foreigners rather than as Japanese nationals with full citizenship rights. The purpose of this article is to understand this prevailing mode of immigrant incorporation and to consider the comparative implications. By examining the discursive aspects of claims-making on behalf of both old-timer and newcomer immigrants, I argue that the underlying opportunity structures have been reproduced in each phase of immigration-related development in Japan, facilitating the use of the ‘foreigner’ category in advocacy efforts. Official recognition of the category has also helped to further institutionalize it as the main target of immigrant policy. In comparative perspective, ‘incorporation as foreigners’ can be understood as a variant of the ethnic model of immigration regimes in that it tends to reinforce the dominant ethnocultural conception of Japanese nationhood.     

Economic crisis,domestic politics and welfare state changes

Abstract

This essay re-examines the debate over the relationship between economic crises and welfare system changes and the role of domestic political factors which may refract the wave of influence from economic crisis. While acknowledging the inherent weakness of research design in a single case study, this study cautiously contends that an examination of the Korean case reveals that domestic factors continue to play an important role in welfare policy-making, even when decisive global economic forces are at work. Theoretically, this study argues not only for the continued theoretical relevance of the state-centered theory, but also in favor of a more integrated and configurational approach.     

Constructing a global commons in,against and beyond the state

The “commons” is emerging as one of the progressive political key words of our time. Against a backdrop of continuing neoliberal governance of the global economy, there is interest in a “translocal” global commons as an alternative that transcends both state and capitalist forms of appropriation. In this paper, I offer a constructive critique of the global commons. While sympathetic to arguments about the deficiencies of state-centric forms of socialist projects for emancipation, I nevertheless argue that realizing the commons vision of a more democratic politics means continuing engagement with the state, particularly for connecting up and scaling up local autonomous projects to achieve more transformative social change.     

An overview of the state of research on women and politics in Spain

Abstract. This article is an overview of quantitative and qualitative research on women and political decision-making in Spain. Ten parts of the literature are examined including: government and legislative; public administration; political parties; employers' organizations; unions; pressure groups and lobbies; social movements and NGOs and womens' policy machinery. The future prospects of filling the enormous gaps in the research are negative, given the weak institutionalization of gender studies in Spain.     

Mediating between state and citizens: the significance of the informal politics of third-party representation in the global south

This article argues that we should take more seriously the role of intermediaries in relationships between states and citizens in the global south. More specifically it holds that the practice of mediation, the third party representation of citizens to states and vice versa, is a widespread and important political practice in this context. Largely distinct from the contentious politics and popular mobilisation of social movements, mediation is more a politics of negotiation and bargaining by representatives. Developed as an emergent analysis from multiple case studies, mediation is a broad concept that includes practices that at other times might be described as lobbying, clientelism and coercion, but that we conceptualise in terms of claiming legitimacy to speak for the poor and marginalised, and theorise in terms of a democratic deficit between formal political institutions and these groups. In addition to identifying different kinds of mediators, the article categorises mediation in terms of the orientation and nature of various mediatory practices. Lastly, the article identifies at least three explanations for mediation including the endurance of pre-democratic political relations and practices, new forms of social exclusion in post-colonial democracies and the erosion of state authority brought about by neo-liberal policies and globalisation.