Post‐crisis reforms in banking: Regulators at the interface between domestic and international governance

Post‐crisis international standards have been agreed on in certain areas of banking regulation, namely capital, liquidity, and resolution, but not others, namely bank structure – why? We articulate a two‐step analytical framework that links the domestic and international levels of governance. In particular, we focus on the role of domestic regulators at the interface between the two levels. At the domestic level, regulators evaluate externalities and adjustment costs before engaging in cooperation at the international level. This analysis explains why regulators in the United States and the European Union act as pacesetters, foot‐draggers, or fence‐sitters in international standard setting; that is to say, why they promote, resist, or are neutral toward international financial standards. At the international level, we explain the outcome of international standard setting by considering the interaction of pacesetters and foot‐draggers.     

Failure of auditors: The lack of compliance for business combinations in China

This empirical study investigates the compliance of 344 Chinese listed companies with the Accounting Standard for Enterprises No. 20‐Business Combination, a mandatory reporting standard applicable to companies involved in business combinations. China has recently reformed its auditing sector, enabling private firms to provide auditing services. The results of the study show a low level of compliance by Chinese listed companies. While companies audited by Chinese domestic auditors have significantly lower compliance than companies audited by Big Four auditors on supplementary disclosure that is mandatory under the Chinese accounting standards, compliance remains low even after companies receive unqualified reports from these international auditors. There appears to be a lack of commitment, and possibly expertise, among Big Four auditors, in fully applying the reporting requirements of the business combination standard in a Chinese setting. This raises concerns about the independence of Chinese auditing in disclosing reliable information about business combinations. Broader theoretical contributions of the paper go beyond the Chinese context by problematizing whether well‐resourced international auditors uphold internationally expected standards or succumb to local non‐compliant practices.     

The politics of state compliance with international “soft law” in finance

Why do jurisdictions comply (or not) with international soft law in finance? This research systematically links international and domestic explanations of compliance by highlighting the “disjuncture” between the international standard‐setting process and the process of domestic compliance. Two causal mechanisms that affect compliance are identified. In the uploading stage, elected officials delegate the making of international soft law to domestic regulators; large, internationally active financial institutions mobilize extensively and, to a large extent, successfully. In the downloading stage, domestic interest groups team up with elected officials in order to resist compliance with international soft law that has negative distributional implications for domestic constituencies. These arguments are illustrated through a structured, focused comparison, and process tracing of the mixed record of compliance of the two main jurisdictions worldwide—the United States and the European Union—with the main international banking standards, the Basel Accords.     

Pedagogy of regulation: Strategies and instruments to supervise learning from adverse events

Diverse scholars have argued that standards and performance measurements are “instruments of control” that have a profound influence on the day‐to‐day lives of individuals and organizations, causing constitutive effects. Regulatory bodies increasingly use standards to oversee and monitor the regulated. This paper discusses the Dutch Health and Youth Care Inspectorate's use of both standards and a performance measurement system introduced to monitor how Dutch hospitals investigate and learn from serious adverse events. Rather than focusing on how standards affect regulated practices and organizations, our study examines how the use of these instruments affects the standard maker, that is, the Inspectorate. We explore how the Inspectorate's work practices, standards, and coupled performance measurement system influence its regulatory pedagogy, reviewing practices, and decisionmaking. We conclude that standards and performance measurement systems are not by definition “instruments of control” as their constitutive effects are (under)determined by the relationships in which they are enacted.     

Global nanotechnology regulatory governance from a network analysis perspective

Over the last decade, there has been a proliferation of nanotechnology regulatory initiatives, developed to ensure the responsible development of nanotechnology applications. This article examines the emergence and diffusion of environmental, health and safety (EHS) policies dealing with nanotechnology. Drawing on a citation network analysis of global nanotechnology regulatory governance, the article analyzes the role of key organizations at multiple levels and their interplay in initiating and diffusing occupational safety and health policies. It shows that private international standard‐setting organizations become “centers of information,” which play a strategic role as intermediaries that diffuse national policies globally. Through this process, these centers help to shape supranational policies. Such an understanding of the role of international private standard‐setting organizations sheds new light on the current debate over the privatization and internationalization of EHS governance.     

International sources of environmental policy change in China: the case of genetically modified food

Abstract

China's agricultural biotechnology policy has undergone a profound transformation over the last decade, from a strongly promotional to a more precautionary approach. From the 1980s onwards, China invested heavily in biotechnology development and in the early 1990s emerged as the leading biotech country in the developing world. In the late 1990s, however, it halted the authorization of new genetically modified crops and introduced stringent safety regulations. This paper investigates this policy shift and argues that international factors have played a central role. Two trends, in particular, are identified as key sources of the move towards greater precaution: China's ongoing international socialization, particularly in the context of the international scientific debate on biosafety and the negotiations on a biosafety treaty; and the growing globalization of agriculture and trade, which has exposed China to international competitive forces and trade restrictions in food trade. As the case of genetically modified food in China shows, political integration and economic globalization can work together to promote a strengthening of the domestic environmental policy agenda.     

国际贸易谈判的政治经济分析:一个初步的框架(6)

加入WTO将给中国的改革开放进程带来深远的影响,也将会对中国的经济管理体制改革和政府管理体制改革带来巨大的挑战。对国际政治经济学有关贸易与国内政治的研究、国际贸易理论关于贸易政策之形成的研究、国际关系理论和博弈论关于国际谈判的研究进行了评述,并从国际政治经济学的角度提出分析国际贸易谈判的一个初步的分析框架。通过强调国内政治、策略行为和国际规则的重要性,并从公民政策偏好的形成、利益集团集体行动、两国贸易谈判之间的双层博弈、国际规则的制约因素等多方面讨论了如何分析贸易谈判。     

The Evolution of a Global Labor Governance Regime

During the last decade, the approach by businesses and governments toward labor and social issues at the global level has fundamentally changed. Industrial relations are rapidly internationalizing by developing new actors and forms of governance to deal with the regulation of labor. This article looks at the evolution of self‐regulatory standards in the global labor governance debate. Key is that notwithstanding problems with the lacking legal framework of global regulation and enforceability, patterns of local self‐regulation, norm‐setting, and international codes lead not only to higher expectations of the behavior of transnationally operating firms but also to an indirect pattern of regulation. The article argues that particularly the adoption of the core labor standards by the International Labour Organization (ILO) and the setup of the Global Compact by the UN serve as points of convergence. A plethora of voluntarist initiatives that converge over time toward a shared understanding of labor standards is part of the transformation of global labor governance institutions.     

Domestic politics and the strategy of international trade

The policymaking problem in international trade is fundamentally strategic, since optimal national policy depends on what other nations choose to do. The game is not between unitary rational actors, however, but rather between players with considerable internal divisions about what policy should be. There is a rich domestic politics to international trade policymaking. Conventional wisdom holds that internal division is a liability in international interactions. This article demonstrates that if countries are divided internally between divergent interests, this will alter the outcome of strategic games between countries in, for example, setting tariffs. In particular, internal division can actually be helpful to a country, since a protectionist faction helps to make a protectionist threat more credible.     

Japan's security agenda in the post‐cold war era

The radically changed regional security environment in the post‐cold war Asia‐Pacific poses serious challenges to Japan's security policy. Tokyo must develop a new strategic view of the region to complement its tendency to emphasize security based on economic growth and interdependence. Japan's relations with the United States, Russia and China have far‐reaching, long‐term regional security implications, yet Tokyo is barely managing to respond to bilateral political and economic issues as they arise. While the waning of the cold war security threat and budgetary considerations are putting increasing constraints on Tokyo's spending for both defence and foreign economic assistance, there are conflicting international demands and fears concerning expanded Japanese international security roles. At the same time, Tokyo's desire to participate more actively in United Nations peacekeeping and to gain a permanent seat on the United Nations Security Council is hampered by the domestic constitutional debate and widespread pacifism, both legacies of the Second World War and the cold war. Tokyo must muster both domestic and international support for legitimate uses of the nation's enormous power potential.     

What can Post‐Democracy tell us about TNCs and Extraterritorial Violations of Human Rights?

This article considers the problem of extraterritorial human rights violations committed by transnational corporations (TNCs), and draws on Crouch's framework in Post‐democracy to illustrate why the issue has proved so difficult for states to regulate. I begin by examining the problem of corporate regulation more generally, and set out Crouch's analysis to show why and how corporations have become so influential. The second section considers the area of business and human rights, and explains why there is ‘a governance gap’ in relation to extraterritorial human rights violations committed by corporations. The third section describes efforts at the international and domestic levels to regulate corporations in relation to this issue. It concludes that while new international principles and innovative hybrid schemes are playing a valuable role in norm creation and standard‐setting, the enforcement of these principles remains limited. Corporations have largely succeeded to date in their lobbying efforts to remain free of any direct obligations under international law.     

Enabling global principle‐based regulation: The case of risk analysis in the Codex Alimentarius

This paper deals with the creation of global principle‐based standards. For such standards to be accepted and effective, particular conditions must be fulfilled. One such condition, little explored, is that standard‐makers and ‐takers share knowledge about the meaning of the principles, as well as the practices through which they are likely to be applied. The paper shows that this condition is fulfilled when transnational cultural systems exist, by means of which both types of actors engage in the explication and representation of their practices so that a common, standard understanding emerges of how principles may be interpreted on the ground and informs the negotiations. A transnational cultural system is a crucial governance infrastructure to set global standards, as shown by the long history of creating a risk analysis guideline by the Codex Alimentarius, the inter‐governmental body for food standards.     

The Limits of Policy Diffusion: Introducing International Norms of Anti‐Money Laundering into China's Legal System

This article examines the contribution of policy diffusion to create a regulatory system against money laundering in China. A two‐level analysis of transnational interactions and domestic law making shows how Communist Party prerogatives shape the insertion of multilateral norms into the legal system. In a contentious process of local accommodation, transnationally engaged technocratic bodies, turf‐conscious bureaucracies, and powerful party organs struggle to reconcile the goals of promoting global economic expansion, gaining international recognition, and absorbing innovative regulatory tools while preserving tight domestic control. In effect, Chinese policymakers try to utilize policy diffusion as a mechanism for negotiating and promoting the nation's global rise. Yet, when it comes to implementation, global regulatory standards are weakened or even neutralized through discretionary enforcement. The depth and robustness of normative assimilation therefore remain uncertain.     

Preferential trade agreements and power asymmetries: the case of technological protection measures in Australia

Since the 1980s states have sought to harmonise economic standards to aid the flow of goods, services and finance across borders. The founding agreements of the World Trade Organisation (WTO), for example, harmonised standards on services, intellectual property and investment. However, mutlilateral trade negotiations in the WTO have since stalled. In response, the United States (US) has engaged in forum shopping, using preferential trade agreements at the bilateral, regional and multinational level to harmonise international standards. This article argues that through forum shopping the US has been able to export standards that support the commercial interests of US-based industries more than they encourage economic exchange across borders. Furthermore, because power asymmetries are starker in preferential trade negotiations smaller and middle power states should not enter trade agreements, which include regulatory harmonisation. This is illustrated with the case of the US-Australia free trade agreement, looking specifically at a copyright standard known as technological protection measures (TPMs). It was clear before, during and after the agreement was signed that Australia’s existing standard on TPMs was more popular than the US-style standard. Nevertheless, a US-style standard is in effect domestically because of the trade agreement.     

Grounding transnational business governance: A political-strategic perspective on government responses in the Global South

Recent scholarship on transnational business governance has begun to examine public-private interactions and the active role of governments. We make two key contributions that integrate and expand this literature. First, in juxtaposition to functionalist accounts, we foreground the fundamentally political and often contentious character of these interactions. As private transnational governance schemes and standards “hit the ground,” private-public interactions, we argue, are embedded in national political arenas and tied to domestic distributional struggles among competing regulatory coalitions. Building upon multiple empirical streams of research, we develop a political-strategic framework that maps the diversity of Southern government responses (substitute, adopt, repurpose, replace, or reject) to transnational private governance. Our framework shows that government responses are a function of both strategic fit with domestic industrial capabilities and structures, and strength of developmental state capacity. Second, our proposed framework adopts the vantage point of Global South governments and industries, particularly how development challenges and strategic options within global value chains affect their understanding of, and responses to, transnational schemes and standards. This is an important corrective to a Northern bias in the private governance literature.     

Opening-up labor mobility? Rising powers' rulemaking in trade agreements

This article analyzes China's and India's role as emerging rulemakers in one of the most contested fields of international cooperation: labor mobility. It shows how both countries have seized the trade venue to negotiate labor mobility clauses that go well beyond the original preferences of established powers. Whereas India's more vocal claims have faced resistance, China's success in concluding far-reaching bilateral deals with Western countries is explained with stronger domestic regulatory capability and capacity. Maintaining a technocratic approach in trade negotiations, supported by the centralization of relevant competences in the trade ministry and consistently synchronizing external commitments with domestic reforms, China has been able to convey its market power into regulatory influence. As a result, the global standard for negotiating mobility in trade agreements has risen – notwithstanding the enduring stalemate at the multilateral level.     

Can the hidden hand of the market be an effective and legitimate regulator? The case of animal welfare under a labeling for consumer choice policy approach

In Australia, labeling for consumer choice, rather than higher government regulation, has become an important strand of the policy approach to addressing food animal welfare. This paper illustrates the usefulness of “regulatory network analysis” to uncover the potentials and limitations of market‐based governance to address contentious yet significant issues like animal welfare. We analyzed the content of newspaper articles from major Australian newspapers and official policy documents between 1990 and 2014 to show how the regulatory network influenced the framing of the regulatory problem, and the capacity and legitimacy of different regulatory actors at three “flashpoints” of decisionmaking about layer hen welfare in egg production. We suggest that the government policy of offering consumers the choice to buy cage free in the market allowed large‐scale industry to continue the egg laying business as usual with incremental innovation and adjustment. These incremental improvements only apply to the 20 percent or so of hens producing “free‐range” eggs. We conclude with a discussion of when and how labeling for consumer choice might create markets and public discourses that make possible more effective and legitimate regulation of issues such as layer hen welfare.     

‘The rock that can't be moved’: China's revised geostrategies in Myanmar

ABSTRACT

Since 2011, Myanmar has undertaken a series of domestic and foreign policy reforms, including democratisation and peacebuilding, before and after the watershed November 2015 elections in the country. These reform processes have called into question whether China, which has been Myanmar's dominant great power neighbour throughout the previous era of military government in the country formerly known as Burma, would find its strategic position eroding as Myanmar further opens to the international community. However, the concept of China ‘losing’ diplomatic ground to other actors, including the West, in Myanmar implies a zero-sum game that does not adequately address Beijing's still-formidable geostrategic presence vis-à-vis its southern neighbour. China has now started to implement a more multi-faceted, ‘resilience network’-building approach to maintaining its special status in Myanmar's foreign policy, a situation which will persist as Myanmar continues its uncertain path towards further reform.     

State Capitalism,Chinese‐Style: Strategic Value of Sectors,Sectoral Characteristics,and Globalization

Scholarship on the institutional foundations of Chinese‐style capitalism emphasizes the impact of liberal reformers and China's participation in international organizations, devolution of economic decision making and local experimentation, and the proliferation of market actors to explain their origins. This article investigates distinct patterns of sectoral variation in market governance in China today, examining the extent and scope in which dominant forms of market coordination and distribution of property rights reflect variation in national goals of economic power, security, and growth; structural sectoral attributes; and the path‐dependent effects of institutional arrangements. The reinforcement of state coordination and the dominance of state ownership and shareholding in strategic industries, such as telecommunications, and the relinquishment of state control and the dominance of market stakeholders in nonstrategic sectors, such as textiles, characterize the rise of bifurcated capitalism in the period before and after China's accession to the World Trade Organization.     

China's security agenda after the cold war

The end of the cold war has changed China's basic perception of world politics and its conception of national security. In the cold war era, Chinese leaders tended to view national security from the perspective of global balance of power and China's strategic relations with the two superpowers. It was in Beijing's security interests to maintain a comfortable position in a strategic triangular relationship with the Soviet Union and the United States. When the Soviet Empire and the East European communist regimes collapsed, the structure of the postwar international system dissolved, and the old parameters for Beijing's security strategy disappeared. The Chinese leadership suddenly found itself in a totally new world in which China needed to reorient and redefine its security strategy on a new strategic axis.

Beijing's security strategy after the cold war is redefined by its domestic priorities, growing foreign economic relations, the new security environment in Asia, and concerns over territorial disputes. In a sense, the myopic conception of security based on war and peace is fading away. Beijing's thinking on national security becomes more inclusive, diverse, and complicated. The nature and intensity of external threats has changed. China's growing economic ties with the outside world have redirected Beijing's attention to economic interests and security. The Chinese leadership realizes that its security is affected not only by the military forces of other countries, but also by political, economic, societal, and environmental factors in international relations Beijing needs to employ both traditional military defence and non‐military actions to safeguard its territorial integrity and to realize its full capacity in world affairs.

The purpose of this paper is to analyse China's security agendas after the cold war. It first examines the impact of the end of the cold war on China's thinking on national security, then discusses Beijing's threat perception and changing defence strategy. This is followed by an examination of domestic stability considerations and economic interests in Beijing's security strategy. Finally, it discusses the implications of China's growing power for regional security.