From rule-taker to rule-promoting regulatory state: South Korea in the nearly-global competition regime

When rapid economic growth catapults a country within a few years from the margins of the global economy to middle power status, does global regulatory governance need to brace for a challenge to the status quo? To answer this question, we extend the power transition theory of global economic governance to middle powers: A rising middle power should be expected to challenge the international regulatory status quo only if increasing issue-specific strength of its regulatory state coincides with preferences that diverge from the preferences of the established powers, which are enshrined in the status quo. We examine this argument empirically, focusing on South Korea in the realm of competition law and policy. We find that South Korea, a non-participant in the international competition regime until the 1980s, developed in the 1990s substantial regulatory capacity and capability and thus “spoiler potential.” At the same time, however, its policy preferences converged upon the norms and practices established by the United States and the European Union, albeit with some distinct elements. Under these conditions, we expect a transition from rule-taker to rule-promoter. We find that South Korea has indeed in recent years begun to actively promote well-established competition law and policy norms and practices – supplemented by its distinct elements – through technical assistance programs, as well as various bilateral channels and multilateral institutions. The findings suggest that the power transition theory of global economic governance is usefully applicable to middle powers, too.     

Power transitions and global trade governance: The impact of a rising China on the export credit regime

The existing liberal international economic order was constructed during the era of American hegemony and has been heavily shaped by US power. How is the rise of China affecting global economic governance? This article analyzes the case of export credit, which has long been considered a highly effective international regulatory regime and an important component of global trade governance. I show that the rise of China is profoundly altering the landscape of export credit and undermining its governance arrangements. State-backed export credit is a key tool of China's development strategy, yet I argue that an explosion in China's use of export credit is eroding the efficacy of existing international rules intended to prevent a competitive spiral of state subsidization via export credit. The case of export credit highlights a fundamental tension between liberal institutions of global governance and the development objectives of emerging powers.     

G20 institutional transition and global tax governance

The G20 is in transition from a short-term crisis institution to long-term steering institution, adopting a new ‘G20 + established international organization’ governance approach. In this approach, the main role of the G20 is to set the agenda and build political consensus for global economic governance. The established international organization provides the technical support and facilitates proposal implementation, while the precondition for the G20 institutional transition is that the emerging economies need to participate on an equal footing with the advanced economies. The case of global tax governance is among the few success stories of the G20's institutional transition. Within the ‘G20 + OECD’ governance architecture, the G20 builds the political consensus that the profits should be taxed where they are performed, while the OECD proposes the technical Base Erosion and Profit Shifting Action Plan. In this way, the G20's political leadership and the OECD's technical advantage complement each other, making a giant leap in global tax governance.     

China's economic slowdown: implications for Beijing's institutional power and global governance role

China's spectacular economic growth over the past decades has given rise to a more confident and proactive China in global governance. China is now an institution-builder, with new Chinese-led institutions such as the Asian Infrastructure Investment Bank designed to cement Beijing's central role in global economic governance. What, then, are the potential implications of a slowing economy for China's institutional power and global governance role? This article locates China's economic growth and slowdown in broader discussions about China's global position and questions about responsibility, order and governance. It argues that China's economic slowdown will not result in a drastic impact on Beijing's institutional power as there are key material, historical and ideational drivers at play here. Unless China is confronted with the prospect of an economic collapse, it will continue to pursue an active institutional role, speak the rhetoric of South–South solidarity with emerging economies and seek a leadership role in reforming global economic governance, even with a slowing economy, because this is intrinsically tied to its identity and how China now positions itself in an evolving global order.     

Power transitions and the rise of the regulatory state: Global market governance in flux

This special issue examines the consequences of the ongoing power transition in the world economy for global regulatory regimes, especially the variation in rising powers' transition from rule-takers to rule-makers in global markets. This introductory article presents the analytical framework for better understanding those consequences, the Power Transition Theory of Global Economic Governance (PTT-GEG), which extends the scope of traditional power transition theory to conflict and cooperation in the international political economy and global regulatory governance. PTT-GEG emphasizes variation in the institutional strength of the regulatory state as the key conduit through which the growing market size of the emergent economies gives their governments leverage in global regulatory regimes. Whether or not a particular rising power, for a particular regulatory issue, invests its resources in building a strong regulatory state, however, is a political choice, requiring an analysis of the interplay of domestic and international politics that fuels or inhibits the creation of regulatory capacity and capability. PTT-GEG further emphasizes variation in the extent to which rising powers' substantive, policy-specific preferences diverge from the established powers' preferences as enshrined in the regulatory status quo. Divergence should not be assumed as given. Distinct combinations of these two variables yield, for each regulatory regime, distinct theoretical expectations about how the power transition in the world economy will affect global economic governance, helping us identify the conditions under which rule-takers will become regime-transforming rule-makers, regime-undermining rule-breakers, resentful rule-fakers, or regime-strengthening rule-promoters, as well as the conditions under which they remain weakly regime-supporting rule-takers.     

Beyond ‘kawaii’ pop culture: Japan’s normative soft power as global trouble-shooter

Abstract

Many studies of Japan’s soft power are premised on the ‘affective’ dimensions of its kawaii pop culture that generate liking or interest. While entirely warranted, emphasising cultural attraction does not do sufficient justice to the multi-faceted foundations of Japanese soft power. Neither does it recognise other components of Joseph Nye’s soft power framework stressing the ‘normative’ appeal of policies that reflect global norms. This article investigates the ‘normative’ dimensions of Japan’s soft power on climate change, and whether it translates into international influence, as Nye predicted. The first section examines the Cabinet’s 2010 New Growth Strategy, identifying a potential source of ‘normative’ soft power in its self-proclaimed desire to reinvent Japan as a ‘trouble-shooting nation on global issues’, specifically environmental challenges. Next, it analyses how Japanese entities (government, corporations, and NGOs) can transmit ‘normative’ soft power, and obstacles encountered. These transmission mechanisms include ‘Cool Earth Partnership’ programmes, the ‘Future City Initiative’ and the values-based Satoyama Initiative. The final section addresses conceptual implications that arise, and assesses whether Japan’s ‘normative’ soft power has paid dividends. Drawing from literature on pioneer states and external reviews of Japan’s alignment with key climate norms, the paper suggests that Japan’s normative soft power is lacking in driving agendas at global climate forums. At a pragmatic problem-solving level, however, Japan is increasingly perceived as an attractive source of transferable solutions, reflecting climate norms such as developing eco-friendly technologies and providing assistance to help vulnerable countries mitigate climate change     

Softening the surface but hardening the core? Governing renewable energy in the EU

Abstract

Soft law and governance captured the attention of scholars in the 2000s, and new policy challenges and the novel introduction of ‘harder’ elements now drive a (re)turn to these discussions. This article explores the extent to which dynamics leading towards ‘harder soft governance’ (HSG) appear in the EU’s renewable energy governance by comparing the 2020 and 2030 Renewable Energy Directives. Document analysis and interviews reveal a surface-level softening because the new 2030 directive contains no binding national targets for the Member States. An entrepreneurial Commission has been seeking to introduce ‘harder elements’ at the core by focusing on implementation, allowing for potentially deeper influence on the national energy mixes though the Energy Union. Two main factors drive these changes: the evolving international context of climate change governance, as well as re-configurations of the actors in the EU. Future research should explore the effectiveness of emerging HSG in detail.     

The US,Japan, and trade liberalization: from bilateralism to regional multilateralism to regionalism+

Abstract

Amid growing alarm over the rising atmospheric concentration of greenhouse gases, increasing attention is being given to ‘geo-engineering’ technologies that could counteract some of the impacts of global warming by either reducing absorption of solar energy (solar radiation management (SRM)) or removing carbon dioxide from the atmosphere. Geo-engineering has the potential to dramatically alter the dynamics of global climate change negotiations because it might cool the climate without constraining fossil fuel use. Some scholars have expressed concern that certain states may be tempted to act unilaterally. This paper assesses the approach that China is likely to adopt towards governance of SRM and the implications this holds for broader international climate negotiations. We survey Chinese public discourse, examine the policy factors that will influence China's position, and assess the likelihood of certain future scenarios. While Chinese climate scientists are keenly aware of the potential benefits of geo-engineering as well as its risks, we find that no significant constituency is currently promoting unilateral implementation of SRM. China will probably play a broadly cooperative role in negotiations toward a multilaterally governed geo-engineering programme but will seek to promote a distinctive developing world perspective that reflects concerns over sovereignty, Western imperialism and maintenance of a strict interpretation of the norm of common but differentiated responsibility.     

Postsovereign Governance in a Globalizing and Fragmenting World: The Case of Mexico

Globalization and “global governance” have become the buzzwords at the turn of the century in order to name and explain the emerging post-Cold War international order. The first one makes reference to the technological revolution that is modifying our notions of space, time, and production, while the latter attempts to illustrate how power and its regulatory practices are being transformed among polities. We discuss these two notions in the first part of this essay to argue that, in fact, the emerging “global” order will be different from that grounded on state-centered notions of territory and sovereignty. Our arguments focus on the Mexican case to highlight how this country is moving from an inward-looking, state-centered, authoritarian machinery of governance, to a postsovereign, principle-based, multilayered governance structure. This transition has mainly manifested in the governance mechanisms of corporate and human rights. This does not mean that policy tools of the “ancient regime” have completely disappeared. State-centered structures of governance will remain important during this stage of economic and political change. Areas moving into postsovereign and principled regulatory practices will overlap with those that remain under the monopoly of national bureaucracies. Though Mexico's economic and political change could be explained as a reactive movement against the collapse of the state-centered authoritarian model, an important conclusion of this essay is that the emerging pattern of postsovereign and principled bureaucratic governance will play a major role in shaping the future of those changes.     

China’s “Radicalism at the Center”: Regime Legitimation through Climate Politics and Climate Governance

The article examines whether there is reciprocity between the legitimating effects of China’s regime at home and abroad and how global governance and legitimacy interact in the case of China. This is done through an analysis of Chinese climate politics and China’s engagement in international climate negotiations and governance, especially its behavior during and after the Copenhagen Climate Summit in December 2009 and the Chinese regime’s efforts to legitimate this behavior. While China’s role in international climate governance was disputed at the Copenhagen Summit, China contributed constructively to brokering a deal with significant implications for a new climate governance architecture suiting China’s preferences and being aligned with China’s core interests. China defended the procedural logic of the current global climate governance framework and managed to contain institutional change. Based on Anthony Giddens’ proposition about “radicalism at the centre”, it is argued that China’s national and international discourse on and actions associated with climate change and the international negotiations about the new climate governance architecture seem to be able to reinforce each other and may well have a mutual legitimacy augmenting effect for the ‘radicals at the centre’ of the Chinese regime, provided that they ensure consequential logic through targeted reduction of GHG emissions and a “green transformation” of the economy.     

Norm diffusion and the limits to forestry governance reform in Southeast Asia's new democracies

Abstract

The return of the World Bank Group (WBG) to Burma after some 25 years’ absence, along with other international financial organizations, follows a series of extraordinary political reforms that have taken place in the country since 2010. Burma has made a transition from 50 years of authoritarian rule to what its leaders call ‘disciplined democracy’. This paper examines the likely consequences of the Bank's return for the forestry sector in Burma and the potential outcomes in forestry governance given the evolution of its development agenda over the past 25 years. While measures to address deforestation have been applied in Southeast Asia, the success of forestry governance reforms depends to a large extent on their endorsement and adoption by local power structures and political figures, as well as on the nature of the political regime itself. The record on forestry governance in Southeast Asia is particularly poor and international financial organizations continue to neglect the local political economy of deforestation. Comparatively, few studies have attempted to investigate the relationship between types of political regimes and rates of deforestation. The paper examines two other new democracies in Southeast Asia (Indonesia and Cambodia), and the impact that governance reforms have had on their deforestation trends and land use, in order to contextualize the potential impact of the WBG's return to Burma. In Southeast Asia, powerful vested interests continue to outweigh the support inside governments or civil society for the forestry governance norms promoted by international organizations. The cases of Indonesia, Cambodia and Burma illustrate that deep patrimonial interests operate within the region and that local politics cannot be ignored by international organizations designing policy reforms. The WBG should effectively engage wherever possible with the local communities and a broad range of civil society groups before developing further initiatives.     

Global Governance: Prospects and Problems

The 50th anniversary of the UN in 1995 occasioned a widespread international discussion of 'global governance'. This term is understood to denote not just conventional bodies of international security and economic management but the overlapping and interlocking of institutions found in all issues and regions, and the increasing body of non-state actors, broadly termed 'international civil society'. This article discusses the functions and reform of global governance, and then examines these in the light of five central issues of the 1990s: the role of the great powers, peace-keeping, economic nationalism, a crisis of NGOs, and global values. It argues that advocacy of global governance must be matched by political realism on the one hand, and the recognition of the need for difficult ethical choices on the other.     

Renewable energy and East Asia's new developmentalism: towards a low carbon future?

Abstract

East Asia's renewable energy (RE) sector has grown faster than any other region's since the mid-2000s. It is argued that renewables formed an integral part of the region's new industrial policies and new developmentalism, which are founded on new configured forms of state capacity shaped in response to various challenges, primarily climate change, energy security, globalisation and global neo-liberalism. By studying the recent progress of East Asia's RE sector, we gain useful insights into these key developments in East Asia's political economy and the region's prospects for transition towards low carbon development. This analysis considers how and why different approaches to RE policy emerged in East Asia, to what extent the promotion and expansion of East Asia's RE sector is part of a new industrial policy paradigm and new developmentalism, and what the study of East Asian policies on promoting renewable energy can tell us about the region's broader approach to low carbon development. Although the promotion of renewable energy has been a fundamental part of East Asia's recent macro-development plans and new developmentalism generally, these same plans suggest that East Asian states will simultaneously continue to significantly promote high carbon and ecologically damaging industrial activities, thus undermining the low carbon credentials of East Asia's new developmentalism. The path to meaningful low carbon development will be very long and will take many decades to achieve. However, it is contended that by maintaining and improving their various forms of state capacity over time, the East Asian states will be well positioned to sustain the significant growth of their renewable energy sectors and thereby further strengthen the low carbon development orientation of their new industrial policies, macro-development plans and strategic economic thinking.     

The Role of “Parallel Institutions” in China’s Growing Participation in Global Economic Governance

China is creating or co-creating new international economic institutions in areas such as trade, development finance, currency settlement and credit rating that parallel those that arose out of the Bretton Woods conference of 1944 or are tied to the interests of rich, developed countries. What are its reasons for doing this? What are the characteristics of the new institutions? How do the new institutions relate to the old institutions? Will China’s initiatives lead to better global economic governance? This paper attempts to answer these questions. Its main conclusions are that China is trying to create a new international economic order in which its political power is more commensurate with its economic power, its creation of new international institutions is an important part of this strategy, the institutions that China is creating are meant to be open and inclusive and to introduce “better practices”, and it is possible – though not necessarily probable – that China can make a major contribution to global economic governance provided it can overcome operational challenges, skepticism about its intentions and too narrow a view of its national interest.     

A Response to Giorgios Kallis’ Notions of Socialism and Growth

ABSTRACT

Kallis’ discussion of degrowth in a transition to socialism is misleading and substantially detached from the current context, especially with recurring cataclysms due to climate change and the requirements to implement a programme to prevent even worse outcomes while there is a narrowing window of opportunity to do so. The fallacies of Kallis’ arguments originate in his misinformed account of economic and physical growth relative to thermodynamics and ecological processes, his feeble grasp of capitalist relations, and his gross misrepresentation of socialist, and specifically ecosocialist, thought.     

‘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.     

Malaysia's new economic policy and the global economy: The evolution of ethnic accommodation

Abstract

Developing countries commonly must deal not only with issues of economic development, but also with the problems associated with a multi‐ethnic population. Most analyses of ethnic programs, however, focus on the domestic political economy and fail to appreciate the importance of international factors. In this essay, I note that Malaysia's New Economic Policy (NEP) and its successors have been affected not only by the domestic ethnic situation but also by the global economy. Furthermore, I argue that current international pressures and constraints have forced a re‐evaluation of the NEP in the past decade. While a concern for ethnic factors is by no means absent from the policy‐making process today, ethnic concerns are now overshadowed by the realities of the international economic order and the government's realization that ethnic accommodation can only be successful within the confines of an outward‐looking, expanding economy.     

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.     

A Response to "Building Administrative Capacity for the Age of Rapid Globalization: A Modest Prescription for the Twenty-First Century"

Professor Ali Farazmand's thought-provoking article advances the argument that the "administrative capacity to manage" governance and economic systems in the new age of "rapid change, hyper-complexity, and globalization" needs to be designed at both the macro and the micro levels. There is no doubt that traditional models of governance and public administration are no match for the challenges of the new chaotic environment, particularly in the aftermath of the outbreak of the global financial crisis that has largely discredited a world economic order founded on Anglo-American financial capitalism. Building administrative capacity worldwide is an imperative of our time.     

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.