Mobile Capital, Democratic Institutions, and the Public Economy in Advanced Industrial Societies

This article addresses the following questions. Is international capital mobility systematically related to reductions in the size of the public economy, as globalization theory suggests? Alternatively, do democratic institutions and processes shape the ways in which internationalization affects national policies? Specifically, I argue that the effects of capital mobility on the scope of the public economy should be conditioned by the institutional forms of societal interest representation and the formal organization of decision-making authority within the polity. Utilizing econometric analysis of 1964–1993 data from 16 nations, I find that international capital mobility has few direct effects on the scope of the public economy. However, configurations of democratic institutions fundamentally shape the domestic policy impacts of capital mobility. Where social corporatism and inclusive electoral institutions are strong and where decision-making authority within the polity is concentrated, international capital mobility is either unrelated to the scope of the public economy or positively associated with total public spending, social transfers, and public consumption. In institutional contexts of pluralist interest and exclusive electoral representation, and in polities where decision-making is dispersed, rises in capital mobility are systematically associated with rollbacks of the public sector.     

A Concurrent Analysis of Three Institutions that Transform Health Technology‐Based Ventures: Economic Policy,Capital Investment,and Market Approval

Drawing on institutional theory, this article articulates qualitative insights from a program of research on Canadian health technology‐based ventures to examine the rules that characterize economic policy, capital investment, and regulatory approval as well as the way these institutions enable and constrain the development of ventures at an early stage. Our findings clarify how economic policy integrates these ventures into the entrepreneurial domain, how capital investment configures them for economic value extraction, and how regulatory approval fully releases their market value. These findings help to revisit current policy modernization initiatives by calling attention to the convergence among the three institutions. Rather than operating solely as a source of constraints, these institutions provide a highly integrated market‐oriented space for health technology‐based entrepreneurial activities to unfold.     

Democratization,International Knowledge Institutions,and Global Governance

The central problem of democracy has long been theorized as how to place appropriate constraints on the responsible exercise of power. Today, this problem is most acute in global governance. This article examines the rapid rise in the creation of international knowledge institutions, arguing that these institutions reflect a growing effort by nations and publics to assert democratic constraints on the on the global exercise of power through their ability to structure processes of reasoning and deliberation in global society. Specifically, the article argues for the need to attend carefully to processes of knowledge‐making in international institutions, including the roles of international institutions in setting standards for the exercise of reasoning, their contributions to the making of global kinds through their work in classifying and reclassifying the objects of international discourse, and through their roles in opening up and constraining participation in international deliberation. The article concludes that the construction and deployment of policy‐relevant knowledge are a significant source of power in their own right in global governance that need to be subject to their own democratic critique.     

Nothing Succeeds Like Access? NGO Strategies Towards Multilateral Institutions

Despite a large literature on international nongovernmental organizations (NGOs), we still know relatively little about their nature as strategic actors. This article addresses this gap, arguing that a key determinant of NGOs' strategies towards multilateral institutions in particular is their level of formalization. NGOs' choices over both organizational structure and strategy towards multilateral institutions reflect their level of commitment to being a social movement organization. Some NGOs bureaucratize their organizations and seek insider access to (and influence in) multilateral institutions, while others reject formalization as betraying the social movement network ethos and inviting co-option. Drawing on an original database, this article demonstrates that NGOs adopting formal bureaucratic structures are more likely to engage in insider strategies—i.e. lobby and seek accreditation at multilateral institutions—than those maintaining informal coalitional structures, regardless of these NGOs' budgets, age, or ideology. This finding gives us new insight into the divisions within global civil society and the limited prospects for cooperation between two sets of actors central to emerging forms of global governance.     

‘Land grabbing’ or harnessing of development potential in agriculture? East Asia's land-based investments in Africa

Abstract

Large-scale foreign investment in Africa's abundant but largely underutilized arable land has been criticised by international NGOs and social movements as ‘land grabbing’, which limits access of smallholder farmers to land, deprives local people of their livelihoods and threatens local and national food security across the continent. By way of contrast, many host governments and some leading international development agencies regard land-based investments as beneficial for development in terms of providing the necessary capital and technological know-how for modernising the region's neglected agriculture including take-off in agribusiness and agro-industrialisation, which is vital to much needed economic diversification in many African countries. East Asia's participation in the global land rush on Africa is examined from the standpoint of these two different perspectives: while China's growing presence and involvement in trade and investment in mining, energy and infrastructure in Africa is well known, less recognised is its involvement and those of other East Asian countries such as South Korea, Malaysia, Singapore and Vietnam in agriculture through large-scale land acquisitions. The development consequences and policy implications of these foreign land-based investments are analysed from a political economy perspective, which identifies motives, interests and benefits of the different actors and addresses the question of governance in terms of transparency and appropriate institutional arrangements to safeguard land rights and food security. In the bigger picture, the paper argues that the negative consequences of land grab has to be seen alongside the benefits flowing to Africa from growing economic relations with China and other dynamic East Asian economies and learning from the development experiences of those countries. African countries however need to re-assess the current approach and relationship with foreign land-based investors and decide how best this trend can be used to forward their economic and social agendas.     

The Credit Rating Agencies and Their Contribution to the Financial Crisis

The credit rating agencies that dominated the ratings of mortgage‐backed securities were Moody's and Standard & Poor's. The two agencies rated some 4.3 trillion dollars of bonds as triple AAA, yet within a period of 18 months these same rating agencies downgraded these bonds to below investment grade. This paper seeks to show that the ratings agencies business model, the issuer pays approach, led to major conflicts of interest with both the ratings agencies unable to walk away from a rating. The evidence given by analysts to Congressional Inquiries confirms a cultural revolution within the rating agencies, with analysts feeling unable to question the quality of a rating. Analysts who were described as being awkward by issuers were removed from the rating process. In the meantime, the income for the rating agencies increased from 3 billion dollars to 6 billion dollars, with the CEOs of the rating agencies receiving incomes comparable to the incomes to the CEOs of investment banks.     

Lander Governance in a Global Era: The Case of Hesse

Subnational governments in federal systems are among the institutionsbeing buffeted by economic trends and institutional developmentsassociated with globalization. While the national governments'ability to maintain policy autonomy in a global age is frequentlyexamined, less attention has been devoted to the subnationalleaders' capacity for responding to global circumstances whilestill preserving the traditions and priorities of their jurisdictions.This article explores the responses of a single German Land,Hesse, to international events between 1982 and 1999. The analysisconcentrates first on changes in governmental structure andprocedure that reflect developments in Hesse's global environment,and then on changes in economic and environmental policy, apolicy domain central to Hessian politics throughout the period.Hesse's political leadership has not been able to insulate theLand from global pressures, but by acknowledging their distinctcircumstances, they have shaped institutions and policies inways that have enhanced their ability to derive significantadvantage from trends originating outside their borders.     

How did international economic regulation survive the last period of deglobalization?

As trade wars and protectionism again present severe challenges and obstructions to international economic regulatory organizations (IEROs), it is timely to ask how their predecessors survived the last deep deglobalization of the interwar years. This article presents a fresh neo-Durkheimian institutional explanation. It highlights contrasting pathways to survival and bequest of IEROs in three fields of regulation – international infrastructure, capital and labor, and commodities. Our explanation shows that functional imperatives and short-term market pressures in these different areas of regulation facilitated specific forms of social organization within IEROs (such as hierarchy or individualistic brokering). These contrasting forms of social organization cultivated distinct regulatory styles during deglobalization and cultivated capacities for contrasting survival and bequest strategies. Our approach is thus able to account for variation in pathways to survival in a way that other possible explanations, such as theories of regulatory capture or bureaucratic autonomy, cannot.     

Towards an International Antitrust Authority? Key Factors in the Internationalization of Competition Policy

Negotiated access to markets through the internationalization of business framework rules is of increasing importance. The article examines the political-economic factors that are contributing to, but also setting limits on, the greater internationalization of one such aspect of policy—competition policy. It analyzes whether internationalizing forces are likely to transform existing international arrangements in competition policy matters from those of a loose regime to that of a fully fledged international institutional system. The latter could be represented by recent proposals for an International Antitrust Authority. The four factors examined are: conflicting ideas about competition policy; the exercise of political power by nation states and business; the roles and stances of international agencies; and democratic concerns about the accountability, representativeness, and transparency of competition policy institutions.
The analysis concludes that future forms of institution-building at the international level of competition policy are important. This is so because, if lejt totally as a set of international regimes, competition policy may be arranged to an excessive degree in the interests of business power or in the interests of one or more dominant countries.     

Rapid knowledge: ‘Bridging research and policy’ at the Overseas Development Institute

Numerous organizations advocate the need to ‘bridge research and policy’. Philanthropic foundations, national social science funding regimes and international organizations have sought to improve knowledge utilization. Similarly, research consumers such as NGOs and government departments complain of research irrelevance for policy purposes. The concern of this article is with ‘evidence informed policy’ within the field of international development in which the Overseas Development Institute (ODI), a London‐based think tank, forms the case study. Most think tanks are driven by the need to influence immediate political agendas but ODI has also developed organizational strategies of policy entrepreneurship that extend to longer term influence through creating human capital, building networks and engaging policy communities. Copyright © 2009 John Wiley & Sons, Ltd.     

Contesting the Governance of Capital Flows at the IMF

Financial crises can trigger different actors to reassess their ideas, interests, and policies, and sometimes change them. The Global Financial Crisis triggered a reassessment at the International Monetary Fund (IMF) regarding the utility of capital account liberalization and the management of capital flows. In 2010, the IMF embarked upon an official reassessment of these issues and in 2012 published an official “institutional view” on capital account liberalization and managing capital flows that gives more caution toward capital account liberalization and endorses the use of capital controls in certain circumstances. This article traces the political process that yielded the IMF's new view and draws out lessons for thinking about policy change in global economic governance institutions.     

What Drives Reforms in International Organizations? External Pressure and Bureaucratic Entrepreneurs in the UN Response to AIDS

This article explores organizational dynamics that go with the design and implementation of public administration reforms within the United Nations (UN) system. It focuses on management reforms carried out in the UNAIDS Programme, which brings together 10 UN agencies to combat the worldwide HIV/AIDS epidemic. The article suggests that understanding these reforms requires questioning the exposure of UN administrations to pressures emanating from their environment and at the same time, investigating the intentions of bureaucratic entrepreneurs who promote and drive reforms within the UN system. The empirical development demonstrates that the swift incorporation of the external pressure into a reform process in the mid‐2000s cannot be dissociated from the active support of some UN agencies who have had a common interest in shifting institutional arrangements inside UNAIDS to expand their bureaucratic authority. In conclusion, the article suggests analyzing reforms within international administrations as social processes driven by both coercion and opportunities.     

Rule-takers,rule-makers,or rule-promoters? Turkey and Mexico's role as rising middle powers in global economic governance

Rising middle powers play increasingly active international roles, yet so far we lack systematic analyses of their aspirations and impact on global economic governance. This paper addresses this gap. I argue that the role that rising middle powers assume in global economic governance depends on the degree of alignment of their regulatory preferences with those of established powers, and on the strength of their regulatory institutions. If their preferences are aligned and they develop high regulatory capacity in an issue area, they will aspire to promote existing global rules in their own region. They will engage in regional rule-promotion because of growing economic ties to their region, and also because their regulatory agencies are socialized into these rules within transgovernmental networks. I explore these arguments empirically through case studies of two rising middle powers, Turkey and Mexico, in the global governance of competition law and policy.     

In the Name of Human Rights: Global Organizations and Participating Citizens

As a contribution to the growing literature on citizenship and advanced liberal governance, this paper focuses on how citizens—especially the poor—are brought into new policy platforms and new social relationships of responsibility, accountability, and participation. In making specific empirical reference to a range of global organizations and their poverty reduction initiatives, the analysis emphasizes the diverse ways in which individuals are governed as certain kinds of “free” persons through particular administrative practices. In this analysis, we underline how some organizations encourage citizens to participate in global practices, markets, and institutions, and train them to act in ways that are aligned with the principles and expectations imposed on them by advanced liberal governmental agendas. We argue that global organizations that are formally or informally linked to other organizations, agencies, and governments around the world, such as the United Nations and the World Bank, view citizens' participation in rights claiming and budgetary design practices as a crucial part of their responsibility to improve their well-being. We also analyse how specific global organizations promote citizens to become consumers of global financial services as a way of solving global poverty. In assessing programmes designed to encourage poor people to participate in global markets and institutions, we contend that these programmes are founded on governing practices that aim to make citizens, non-governmental organizations, and nation-states adhere to advanced liberal principles. We question whether these programmes improve the well-being of poor people. We suggest that future research needs to focus on how global organizations cultivate different discourses of freedom and liberty which serve to govern citizens as responsible consumers and participants.     

The Differential Empowering Effects of Europeanization on the Autonomy of National Agencies

This article examines the influence of Europeanization on the relationship between ministries and agencies at the national level. The core argument is that the differentiated nature of the international environment (with policy development often transferred to the international level and policy implementation left at the national level) transforms national agencies into policy‐developing actors that shape policies without being directly influenced by their national political principals. The increasingly common involvement of national agencies in European policymaking processes thereby increases these agencies' policy‐development autonomy but does not change their role in policy implementation. We examine this argument by testing an innovative hypothesis—the differentiation hypothesis—on a combined data set of German and Dutch national agencies. Our empirical findings support the hypothesis in both countries, suggesting that similar effects can be expected in other contexts in which semiautonomous agencies are involved in transnational policymaking.     

Habermas,market‐friendly human rights,and the revisibility of economic globalization

This article examines the impacts, on citizenship rights, democratic practice and public policy, of the constitution‐like regimes for the protection of investor rights embedded within contemporary international investment treaties. It argues that a central objective of these investment treaties is to remove specific governmental functions from the stock of policy instruments available to national governments and to democratic polities. Drawing upon Habermas' discourse‐theoretic approach to law and democracy, the article argues that national states have the room to deviate, if not withdraw from the current configuration of economic rights advanced and enforced through international investment treaties. A robust proceduralist approach to rights and democracy would subject these agreements to critical democratic practice and open space to revise and roll back some of the rules and institutions associated with economic globalization.     

Funding the Welfare State: Globalization and the Taxation of Business in Advanced Market Economies

Theorists assert that international capital mobility creates substantial pressure for all democratically elected governments to decrease tax burdens on business. I explicate and critique the general version of this theory and offer an alternative view. Empirically, I explore whether or not the globalization of capital markets has resulted in decreases in business social security, payroll, and profit taxes. I also investigate whether or not capital mobility has intensified government responsiveness to domestic investment and profitability. Evidence suggests that business tax burdens have not been reduced in the face of rises in capital mobility nor is tax responsiveness to profitability and domestic investment intensified by more open capital markets. To the contrary, analyses indicate that business taxation has become subject to new 'market conforming' policy rules that developed in tandem with liberalization of markets. These new policy orientations reduce the economic management roles of business taxation while leaving the revenue-generating roles intact. In conclusion, I discuss the implications of the findings for questions concerning the structural power of internationally mobile capital, redistributive policies, and the autonomy of democratically elected governments in a global economy.     

Repairing Civil Society and Experimenting with Power: A Genealogy of Social Capital

In this article my principal aims are to explain why the concept of social capital has proven so popular among policy makers and to develop a critical response to it. In order to do so I bring together macro- and micro-level analyses that focus, on the one hand, on broad structural changes associated with globalisation and, on the other, on specific attempts at increasing social capital within the everyday lives of communities. To develop my macro-level analysis I suggest that the conjunction of economic volatility and demographic mobility that has affected the West since the 1970s has made building social capital an attractive option within a more general experiment with new forms of power. My claim here is that building social capital is among a clutch of recent policy initiatives designed to repair the ideological resources of contemporary liberal states, where it is the tearing as well as the weakening of the social fabric that is at stake. I focus on the British case because building social capital has been explicitly highlighted by the UK government as a vehicle for civic renewal. The micro-analysis proceeds by analysing recent surveys and policies undertaken by Camden Council. Micro refers here to local symptoms of global change; to the micro-powers being developed in response and to the local authorities where social capital policies are being operationalised. I associate these with biopolitical and ideological interventions into the very building blocks of the social. Overall, the genealogy of social capital explores how the concept's discursive significance has shifted as it moves from the democratisation literature into the policy arena and becomes entangled in relations of power. In the latter context it examines the impact of concerns about segregation that justify intrusive policies associated with social capital building.     

TILTING TOWARD MARKETIZATION: Reform of the Canadian Pension Plan

Public concern about the earnings‐related Canada Pension Plan has forced the Canadian government to move toward fuller funding, a new investment policy, and changes to benefits and administration. Together, the three initiatives, and particularly the first two, amount to a modest degree of marketization. The assumption behind the reform is that the Canada Pension Plan will remain public and mandatory but the change will create a board and an investment policy which are more sensitive to market pressures and less amendable to government interference. The Canada Pension Plan is one of three tiers of support for the elderly in retirement. It is a contributory social insurance scheme which protects against loss of income. The other two are a social allowance (Old Age Security) as well as an income tested benefit (Guaranteed Income Supplement) which provide basic income support and employment based retirement pension plans as well as group and individual registered retirement savings plans which supplement the other two tiers on a voluntary basis. This article examines the reform of the Canada Pension Plan. After a brief examination of Canada's retirement benefits in an international context, the article summarizes recent debates in Canada, government policies to develop fuller funding and new investment strategies, and reflections on possible developments in the future.     

National financial structures,capital mobility,and international economic rules: The normative consequences of East Asian,European, and American distinctiveness

In addressing the relationship between the structures of national financial markets, capital mobility, and the rules governing international trade and investment, this article combines theory and policy. Focusing mainly on the United States, Germany, and Japan, it first draws together themes and suggestive evidence from diverse bodies of research on international capital mobility and national financial structures. On this basis, it argues that, notwithstanding the increasing mobility of capital, asymmetries in those structures persist and have important consequences for the rules of the international economic game as they are now evolving. The article then looks more deeply at East Asia, the region that appears to be presenting the clearest challenge to existing international rules. In its conclusion, and in light of that challenge, the article discusses the agenda that confronts researchers and policy-makers as they attempt to assess and re-calibrate rules to govern the more complex international economy of the 1990s and beyond.