Monetary Sovereignty: Nature,Implementation, and Implications

Monetary sovereignty is a central concept of Modern Money Theory (MMT). The paper explores the characteristics of monetary sovereignty, the means used to implement it, and some of its theoretical and policy implications. Herein, it is shown that monetary sovereignty involves a high degree of coordination between the central bank and the national treasury. The paper also argues that monetary sovereignty is not special to the United States, does not require direct monetary financing of the treasury, does not tell us anything about the optimal size of the fiscal balance, and is not dependent on the willingness of foreigners to hold the domestic currency.     

Organizational Reputations and the Observability of Public Warnings in 10 Pharmaceutical Markets

How does a regulator's reputation affect the public observability of its regulatory errors? I present a verbal model in the policy domain of drug safety that suggests that media coverage of the regulator's errors is a function of the regulator's predominant basis of reputation. Media coverage will be lowest when the regulator has a reputation for scientific expertise in preapproval drug evaluation (or when it “shadows” decisions made by regulators that have reputation for expertise) and highest when it has a reputation as a guarantor of public safety in the media. Empirical tests of the model in the United States, the United Kingdom, Germany, Canada, South Africa, Australia, New Zealand, Ireland, Israel, and Switzerland between 1975 and 2004 supports the model's prediction and therefore, undermine Carpenter's assumption that regulators cannot recover reputation losses resulting from the approval of a truly dangerous drug.     

The dynamics of federalism,subnational markets and trade policy-making in Canada and the US

Preferential trade agreements are now the dominant trend in the international trading regime. Unlike earlier ‘first generation’ agreements, the new agreements became more comprehensive in their coverage, impinging on areas that are subject to subnational jurisdiction of federal systems. Given constitutionally-prescribed competences allocated to subnational governments, the diversity of interests and sensitivities of subnational entities bring deeply entrenched regulatory practices under scrutiny. Few studies have focused on whether the combination of economic liberalization and political fragmentation will push federal and sub-federal entities to address domestic market fragmentation. We examine whether international market liberalization fosters domestic regulatory and structural reforms to cross-border barriers to trade in Canada and the United States. We show that while the political incentives and functional pressures generated by free trade agreements have fostered attempts at addressing internal market restrictions in Canada, the US has not followed the same path due to weaker mechanisms of intergovernmental coordination.     

The structure of foreign policy attitudes in transatlantic perspective: Comparing the United States,United Kingdom,France and Germany

While public opinion about foreign policy has been studied extensively in the United States, there is less systematic research of foreign policy opinions in other countries. Given that public opinion about international affairs affects who gets elected in democracies and then constrains the foreign policies available to leaders once elected, both comparative politics and international relations scholarship benefit from more systematic investigation of foreign policy attitudes outside the United States. Using new data, this article presents a common set of core constructs structuring both American and European attitudes about foreign policy. Surveys conducted in four countries (the United States, the United Kingdom, France and Germany) provide an expanded set of foreign policy‐related survey items that are analysed using exploratory structural equation modeling (ESEM). Measurement equivalence is specifically tested and a common four‐factor structure that fits the data in all four countries is found. Consequently, valid, direct comparisons of the foreign policy preferences of four world powers are made. In the process, the four‐factor model confirms and expands previous work on the structure of foreign policy attitudes. The article also demonstrates the capability of ESEM in testing the dimensionality and cross‐national equivalence of social science concepts.     

Coast guards and maritime piracy: sailing past the impediments to cooperation in Asia

Abstract

Despite the efforts of the past decade, maritime piracy remains of international concern today. Countries need to cooperate actively at both the regional and international levels to eradicate the problem effectively. In particular, the nature of the threat in the Asia-Pacific region suggests that coastal states – countries that possess sovereignty over the pirate-infested waters but lack the law-enforcement resources – have to turn to resource-rich extra-regional powers for assistance. Unfortunately, cooperation between such disparate countries has traditionally been impeded by sovereignty sensitivities, as best exemplified by Malaysia's and Indonesia's hostile responses to the United States' Regional Maritime Security Initiative in 2003. Faced with this apparent dilemma, a new phenomenon has emerged. National coast guard agencies, instead of their military naval counterparts, have become attractive alternatives for promoting international cooperation against non-traditional security threats, such as maritime piracy. Spearheaded by the Japanese Coast Guard (JCG), coast guards from various countries have imparted training expertise, conducted joint exercises, hosted low-publicity multilateral meetings, and even transferred security equipment across international borders. Together they have succeeded in promoting cooperation without arousing the sovereignty sensitivities often associated with such cooperation. This article analyzes the evolution of coast guard cooperation in Asia, highlighting in particular the Japanese Coast Guard's success in this endeavor. With the general alignment of regional and global power interests in Southeast Asia, coast guard agencies hold promise for extra-regional powers wishing to help eradicate maritime piracy in the region.     

The Sovereignty Dodge and the Responsibility to Control: Should the US Do What Pakistan Won't Do?1

The killing of Osama bin Laden in Pakistan was justified by the Obama administration as an act of self-defense. Proponents of an expanded notion of self-defense argue that sovereignty implies responsibility not only for the protection of human rights, but also for the provision of public goods more generally, including effective territorial control. States which are unable to control their territory frequently become safe havens for militants who threaten the security of other states. Pakistan is a paradigmatic case of a ‘sovereignty dodge’ who, in the eyes of the United States, has forfeited its sovereign right to non-interference because of its failure to live up to its responsibility to control. In this article I explore the legality of US strikes against militant targets in Pakistan. I conclude that while international jurisprudence continues to adhere to a conservative reading of the rules on the use of force, states themselves have interpreted the law on self-defense more broadly, evincing a desire to keep the rules as indeterminate as possible.     

The Politics of Regulation: A Comparative-Historical Study of Occupational Health and Safety Regulation in Australia and the United States

Australia and the United States adopt radically different approaches to occupational health and safety regulation, even though their ultimate objectives in this policy area are effectively the same. The US regulatory style is more centralised, legalistic and adversarial, in contrast to Australia's state-based and more consensual approach. This difference in regulatory approach dates from the 1970s: for the 100 years prior to that, workplace health and safety regulation in both countries took a similar legal, institutional and administrative form. The reasons for the contemporary regulatory divergence lie in the distinct national configurations of state and societal institutions in the two countries and the different constellation of political actors involved in regulatory design and reform.     

China's corporate credit reporting system: A comparison with the United States and Germany

Corporate credit reporting (CCR), which aims at increasing trust in corporates, constitutes an intriguing, yet understudied set of regulatory institutions as it is both a regulatory object and subject at the same time. Differences in national CCR systems pose challenges for multinational companies and have increasingly become a subject of international conflicts on regulatory standards. In this context, the case of China deserves special attention since the country pursues both institutional divergence and convergence with international examples. Hence, the characterization of China's regulatory regime remains difficult. By comparing the institutional context of CCR in China to those in the United States and Germany, this paper sheds light on a specific aspect of China's complex regulatory regime. At the same time, it provides insights into the Chinese manifestation of CCR, which are important for the international business community.     

When US Scholars Speak of 'Sovereignty', What Do They Mean?

The term 'sovereignty' figures prominently in international affairs and academic analysis. But does 'sovereignty' mean the same thing in different countries and political cultures? In this article, we examine conceptions of sovereignty as they appear in the writings of US scholars of international law and those international relations scholars who deal with international law, in order to obtain a clearer picture of what 'sovereignty' means in American academic discourse. At first glance, the US literature is dominated by two distinct conceptions of sovereignty: (1) a statist conception that privileges the territorial integrity and political independence of governments regardless of their democratic or undemocratic character; (2) a popular conception that privileges the rights of peoples rather than governments, especially when widespread human rights violations are committed by a totalitarian regime. On closer examination, what seem to be two conceptions are in fact different manifestations of a single, uniquely American conception of sovereignty which elevates the United States above other countries and protects it against outside influences while concurrently maximising its ability to intervene overseas.     

Making sense of the legal and judicial architectures of regional trade agreements worldwide

Regional trade agreements (RTAs) constitute one of the most important elements of the international economic order. Researchers have accordingly embarked on comparative analyses of their design. Yet one fundamental question remains unanswered: how have officials in different RTAs responded to the challenge of regulatory misalignments among the member states? In this article, I turn to 10 of the most established RTAs in the world and document three types of responses. Some RTAs rely on the principle of mutual recognition or references to existing international standards; the same agreements also rely on technical dispute resolution mechanisms. Other RTAs, by contrast, make use of extensive harmonization and permanent courts charged with interpreting law. Yet a third group exhibits a hybrid design. This heterogeneity in legislative and judicial design invites explanation. I show that there is a remarkable correspondence between the legal traditions of the member states (common vs. civil law) and the design of RTAs. This correspondence undermines the claims of world polity theorists about the nature of the international order, but is consistent with other strands of sociological institutionalism and certain elements of rationalist and neoliberal institutionalism. I conclude by reflecting on the implications of different RTA designs for the regulation of everyday life in the member states, the World Trade Organization as an international regulatory body, and national sovereignty and democracy.     

National styles of regulation: Child care in three countries

An analysis of child care regulations in Germany, Sweden, and the United States reveals distinctive national policy styles. A ‘social constructionist’ perspective, with its emphasis on variable problem definitions, helps to explain such differences. However, a full understanding of regulatory differences requires attention to regulatory solutions as well. By disaggregating the concept of regulation, we are able to demonstrate rather different rank-orderings of our three countries in their regulatory solutions. We attribute these differences to cultural, institutional, and political characteristics of the three countries.     

The Regulation Dilemma: Cooperation and Conflict in Environmental Governance

Across the United States and around the world, businesses have joined voluntary governmental and nongovernmental environmental regulations. Such codes often require firms to establish internal environmental management systems to improve their environmental performance and regulatory compliance. Meanwhile, governments have been offering incentives to businesses that self-police their regulatory compliance and promptly report and correct violations. This article examines how governmental regulatory enforcement can influence firms' compliance with mandatory and voluntary regulations. Cooperative regulatory enforcement—in which firms self-police their environmental operations and governments provide regulatory relief for voluntarily disclosed violations—yields optimal win–win outcomes, but only when both sides cooperate. If firms are likely to evade compliance, governments are better off adopting a deterrence approach. If governments insist on rigidly interpreting and enforcing laws, firms may have incentives to evade regulations and not voluntary codes. Cooperation is possible through credible signals between firms and government.     

A European “Equivalent” to United States Export Controls: European Law on the Control of International Trade in Dual-Use Space Technologies

This article analyzes the system developed within Europe, more precisely within the European Union through European Community law, to address the security-sensitive issues involved in the export of hardware, software, and knowledge for the purpose of space activities and major space applications. The subject is introduced with reference to the far better known export control developments within the United States, such as those concerning International Traffic in Arms Regulations, and the international understandings under the Missile Technology Control Regime and Wassenaar Arrangement. European Community Regulations for export controls provide for a complex system of balances between national sovereignty and Europe-wide harmonization. This European Community regime, though ultimately still dependent upon individual state's sovereign controls, establishes an interesting measure of international harmonization in security-sensitive export controls. Although the European Community regime is fraught with many complexities, it manages to avoid some of the pitfalls evident in the United States and international regimes, notably the confusing discussions on discerning weaponry proper from other space items with dual-use potential. This is the result mainly of an approach characterized by a primary intention to harmonize, rather than to apply strict controls per se, resulting in a transparency and consistency that are not only valuable to commercial entrepreneurs, but also to those concerned primarily with the security risks posed by the international space industry. As for the space industry in particular, it is helpful that the European Community regime specifically carves out civil space activities, for example if conducted within the context of the European Space Agency or national space agency activities.     

The boundary conditions for regulation: Welfare systems,state traditions,and the varied governance of work safety in Europe

Studies of the relationship between the welfare and regulatory state have hitherto either focused on the latter displacing the former, or presented regulation as an alternative means for achieving welfare goals. Little is known, however, about their varied mutual interactions. This article addresses that gap by examining the coevolution of workers' compensation and occupational safety regulation in Germany, France, the United Kingdom, and the Netherlands. Drawing on an extensive international analysis of primary documents, secondary literature, and interviews with regulator, insurance, business, and labor representatives, the article identifies strikingly varied but stable national preferences for: (a) the use of financial versus regulatory instruments and (b) the allocation of regulatory responsibilities between state and nonstate actors. The article presents a novel explanation of that variation as dependent on the relative coherence of interactions between the particular cost‐control logics of welfare provision and wider norms and traditions of state action in each country.     

Multilevel Governance and Shared Sovereignty: European Union, Member States, and the FCTC

The Westphalian idea of sovereignty in international relations has undergone recent transformation. "Shared sovereignty" through multilevel governance describes the responsibility of the European Union (EU) and its Member States in tobacco control policy. We examine how this has occurred on the EU level through directives and recommendations, accession rules for new members, tobacco control campaigns, and financial support for antitobacco nongovernmental organizations. In particular, the negotiation and ratification of the Framework Convention on Tobacco Control (FCTC) and the participation in the FCTC Conference of the Parties illustrates shared sovereignty. The EU Commission was the lead negotiator for Member States on issues over which it had jurisdiction, while individual Member States, through the EU presidency, could negotiate on issues on which authority was divided or remained with them. Shared sovereignty through multilevel governance has become the norm in the tobacco control policy area for EU members, including having one international organization negotiate within the context of another.     

Accountability in Accounting? The Politics of Private Rule‐Making in the Public Interest

Over recent decades governments have increasingly delegated domestic and international regulatory functions to private-sector agents. This article examines the reasons for such delegation and how private agents differ from public ones, and then analyzes the politics of regulation post delegation. It argues that the key difference between delegation to a public agent and delegation to a private one is that in the latter case a multiple-principals problem emerges that is qualitatively different from the one usually considered in the literature. An agent's action will be determined by the relative tightness of competing principal–agent relationships. This tightness is a function of the relative importance of each principal for the agent's financial and operational viability as well as its effectiveness in rule making. Further, the article posits that exogenous changes in the macro-political climate can deeply affect the nature of principal–agent relationships. The authors test their hypotheses about the politics of regulation in the postdelegation period through the study of accounting standards setting in the United States, a case of delegation of regulatory authority to a private agent that goes back to the New Deal era and has received renewed public attention in the wake of recent corporate financial scandals.     

From capacity to sovereignty: Legislative politics and differentiated integration in the European Union

The literature suggests that legislative politics among European Union Member States is characterised by economic exchanges, and constrained by the social norms of a European community of legislators. Both views draw a clear line between the legislative process and the conflicts over sovereignty that have left their mark on treaty making and European public opinion since the 1990s. This article suggests revisiting this view, based on an analysis of why Member States have opted out of legislation from the 1970s to today. It argues that differentiation, while once a response to capacity problems of relatively poor countries, has recently become driven by sovereignty concerns of the Union's wealthy and nationally oriented Members that oppose the EU's intrusion into core state powers. The article presents evidence for the impact on legislative outcomes of factors so far thought not to matter. The results indicate greater European‐level legislative responsiveness towards national sovereignty demands than previously recognised. They underline that the nature of European politics has been changing with the EU's push into core state powers.     

Hawaiian Sovereignty

The movement for national sovereignty among persons of Hawaiianancestry has burgeoned during the last several decades, withsome seeking secession of the State of Hawai'i from the AmericanUnion. The movement's roots are multiple, among which figuresprominently the overthrow of Queen Lili'uokalani in 1893 withthe connivance of the armed forces of the United States, forwhich the U. S. Congress recently apologized. Some indigenousHawaiians dismiss the annexation of Hawai'i and its subsequentstatehood as having occurred without their independent choice.The Hawaiian sovereignty movement may be roughly divided intothree categories: "Hawaiian Nation Separatists" supporting anindependent Hawai'i nation; "Nation-within-a-Nation" advocatesdesiring a status comparable to that of American Indians; andthose Hawaiians supporting the status quo but with redress inmany forms. Steps are underway to hold constitutional conventionof all Hawaiians to propose a native Hawaiian government. Whetherthe U.S. Congress can respond to the thrust of the movementwithin the constraints of the American federal system remainsproblematical.     

‘Money Does Not Make Any Difference to the Opinions That We Hold’: India,the CIA,and the Congress for Cultural Freedom, 1951–58

During the 1950s, the United States conducted both overt and covert propaganda activities in India. Prime Minister Jawaharlal Nehru opposed these activities as encroachments upon Indian sovereignty. However, domestic opposition composed primarily of members of the Praja Socialist Party worked closely with US-backed groups, in particular the Indian Committee for Cultural Freedom, to generate a political alternative to the ruling Congress party. Although receiving covert money from the Americans, these Indians did not believe that foreign money determined or shaped their opinions. On the other hand, their close association with the Americans undermined their claims to represent a legitimate domestic opposition.     

Why reregulation after the crisis is feeble: Shadow banking,offshore financial centers,and jurisdictional competition

A crucial element in the complex chain of factors that caused the recent financial crisis was the lack of regulation and oversight in the shadow banking sector, which is largely incorporated in offshore financial centers (OFCs), but instead of swift and radical regulatory reform in that sector after the crisis, we observe only incremental and ineffective measures. Why? This paper develops an explanation based on a two‐level game. On the international level, governments are engaged in competition for financial activity. On the domestic level, governments are prone to capture by financial interest groups, but also susceptible to demands for stricter regulation by the electorate. Governments try to square the circle between the conflicting demands by adopting incremental and symbolic, but largely ineffective, reforms. The explanation is put to empirical scrutiny by tracing the regulatory initiatives on shadow banks and OFCs at the international level and within the United States and the European Union, where I focus on France, Germany, and the United Kingdom.