Schneider
PO920
Frederick
First Essay, 2050 words
Discuss the notion that global economic governance can
be understood as a governance through regimes of
cooperation
University of Kent
1
“The end of the cold war triggered a moment of euphoria during which it seemed that
the emergence of a new world order was at hand and that the promise of the United
Nations as an intergovernmental mechanism for solving problems of international
governance would finally be realized.”1 As well average citizens as political leaders
and scholars thought that the existence of equilibrium in world politics was not
necessary anymore. This was the idea according to which the cold war bipolar world
order would be replaced by a unipolar harmonic system (not understood as dominated
by the USA, but driven by a common set of values and principles such as democracy
and market economy).
At the same time, the impression that we live in an interdependent world rose.
Governments have been undermined by globalisation and interdependence.2 Different
kinds of transnational networks appeared, the rapid development of new technologies
resulted in facilitated communication and transportation.
These two ideas led to the assumptions that we have, or rather that we should develop,
a global governance.
What is this idea of global governance on the economic flat? Can it be
understood as governance through regimes of cooperation?
As the concepts of global governance and of international regimes are
complex and should be defined precisely, we didn’t explain them in the introduction
and we will devote to it a substantial section of this work. Actually, the lack of precise
and consensual definitions led to many misunderstandings between different schools
of thought in the debate about global governance. We will then present the view of
realists on this topic. As the neoliberal school of thought appeared as a reaction to
realism, we will present it in a final section.
1) Economic Global Governance
1
Young, Oran R.. 1999. Governance in World Affairs, Ithaca, New York: Cornell University Press, p.1.
2
Rosenau, James N., Governance, Order, and Change in world Politics, in Rosenau, James N. 1992.
Governance without Government (Washington: George Washington University), p.3.
2
International regimes represent mechanisms for solving problems in world politics
among different actors. There are two approaches to identify and understand
international regimes. “Contractarians assume the prior existence of actors with a
clear sense of their identities and the interests flowing from their identities.”3
According to them, regimes are created by self-interested actors to solve collective
action problems. On the contrary, the constitutive perspective stresses that institutions
have a huge influence on the conception that participants have about their own
interests.4
As we will see later, there are some disputes about the definition of international
regimes, but in general terms we can say that that are sets of rules “that give rise to
social practices, assign roles to the participants in these practices, and govern their
interactions.”5 There are many variables that make that there are many sorts of
regimes. They can vary in the geographic importance and functional scope. They can
have a regulatory, procedural, generative or programmatic role. But what is common
to all the regimes is that they tackle with specific problems. It is important to stress
that whereas regimes are institutions, they are not always administrated by an
organisation.6 Regimes are institutional arrangements whose members are states.
The idea of global governance is frequently related to this of “governance without
government”. You can’t speak of one organisation which is responsible for global
governance because there is no “world government”. Moreover, the concept of
government pertains to activities backed by formal authority, whereas governance is
just backed by shared goals of the participants.
However, no confusion should be done between international regimes and global
governance. Regimes refer just to a single sphere and governance is general.
Governance tries to tackle all the major world problems. Some could argue that
regimes and governance are two different subcategories of international institutions.7
3
Young, Oran R.. 1999. Governance in World Affairs, Ithaca, New York: Cornell University Press, p.4.
4
Ibidem.
Idem, p.5.
6
Hasenclever, Andreas, Mayer, Peter and Rittberger, Volker.1997. Theories of International Regimes,
Cambridge: Cambridge: Cambridge University Press, p.10-11.
5
7
Rosenau, James N., Governance, Order, and Change in world Politics, in Rosenau, James N. 1992.
Governance without Government (Washington: George Washington University), p.8-9.
3
Economic Governance occurs on five levels. The first one is this of the Triad (USEU-Japan). These entities try to find agreements to stabilize exchange rates and to
coordinate monetary and fiscal policies. The second level is this in which a large
number of countries create regulatory agencies such as the WTO. The third refers to
large economic blocs such as the EU or NAFTA. The national level policies provide
the key inputs such as R&D. The final, regional level is to cope with the competition
with different other regions around the world enabled/caused by globalisation.8
Global government is often associated with the idea of global civil society. The
assumption of the existence of such an entity is the result of the reasoning according
to which the world is like a large size state. In a state, the civil society plays a major
role in decision-making. It has a control role. Therefore, It is argued that global NGOs
should have an influence on the decision taken on a world scale. However, it should
be stressed that global civil society is not perceived as an actor in international
regimes.9
2) According to realists, the notion of international regimes is much more
restricted and the idea of Global Governance is idealistic
To understand the views of realists on international regimes, we must first present
briefly the general assumptions of this school of thought. Realists focus on power
relationships. They claim that international relations have always been and will
always be based on equilibrium between different powers.10 There are five main
realists assumptions. First, international relations is driven by anarchy, which means
that there is no central authority above states. Second, all the states have an offensive
military capacity. Third, they are never certain about the intentions of other countries.
Fourth, the survival instinct is their most basic motive. Fifth, states have a strategy as
they think about how to survive. Three major patterns of behaviour result from that:
8
Hirst, Paul and Thompson, Grahame 1996. Globalization in Question, London: Blackwell, p.191-192.
9
Young, Oran R.. 1999. Governance in World Affairs, Ithaca, New York: Cornell University Press,
p.10.
10
Hasenclever, Andreas, Mayer, Peter and Rittberger, Volker.1997. Theories of International Regimes,
Cambridge: Cambridge: Cambridge University Press, p.1.
4
states fear each other, their goal is to guarantee their own survival and they try to
maximise their relative gains.11
Therefore, realism is mainly focused on security issues. It considers economy as
marginal. Compromises are difficult to be met as each country doesn’t take care just
about absolute gains, but about relative gains on the cost of other states. The power is
not absolute, it is relative: you must be powerful in comparison with your potential
enemies.
Realists define institutions as “set of rules that stipulate the ways in which states
should cooperate and compete with each other”12. They insist on the fact that
institutions are not really a remedy to avoid conflicts, but a means used by the states
to implement an already existing will.13 In other words, institutions don’t really create
benefit, they are just the expression of an agreement and it will not contribute to new
compromises.
As we have stressed above, there are different definitions of international regimes
and this is certainly one of the causes of the disputes between realists and neoliberals.
A consensus definition by Stephen Krasner emerged in 1982: “Implicit or explicit
principles, norms, rules, and decision-making procedures around which the actors’
expectations converge in a given area of international relations.”14 Principles are
understood as beliefs of fact. Norms determine rights and duties. Rules refer to
prescriptions and proscriptions in specific situations. Realists try to emphasize the
relativity of power ability as a crucial variable and insist on the sensitivity of states’ to
the aspects linked with distribution of international regimes and cooperation.15
So, we see a deep scepticism towards cooperation in the realist views. They
explain their scepticism by two reasons: relative gains considerations and concern
about cheating. If a country has an absolute gain but a relative loose (other
participants will win more than it will), it will be less likely to accept the agreement.
Realists don’t believe in the applicability of the prisoner’s dilemma in international
11
Mearscheimer, John. 1995. The False Promise of International Institutions, International Security 19
(3), 1995, 5-49.
12
Idem, p.10.
Jervis, Robert. 1999. Realism, Neoliberalism and Cooperation: Understanding the Debate.
International Security 24 (1), 42-63.
13
14
Hasenclever, Andreas, Mayer, Peter and Rittberger, Volker.1997. Theories of International Regimes,
Cambridge: Cambridge: Cambridge University Press, p.9.
15
Ibidem.
5
relations, they claim that states will always be encouraged to cheat.16 Therefore, the
idea of global economic governance is absent in their way of thinking. A simple
cooperation is already difficult in the realist world, no discussion about governance is
possible. Moreover, they don’t perceive IPE as an important factor of peace in
international relations.
3) According to neoliberal institutionalists, Global economic Governance can be
understood as governance through regimes of cooperation
We had a dilemma in whether to start with realism or neoliberal institutionalism.
On the one hand, it would be logical to start with the arguments pro and to present the
counter-arguments afterwards, but, on the other hand, neoliberal institutionalism
appeared as a supposed synthesis of liberalism and realism and the critic of Krasner’s
definition of international regimes made by Young and Keohane would not be
understood if we would not present it first.
Neoliberalism has much in common with realism. It is also state-centric. However,
it focuses much more on the analyses on the constellations of different interests.17 It
sees more potential in increase of cooperation as states don’t only think about their
relative gains and don’t tend just to be the most powerful.
Neoliberals have a different definition of institutions. They see them as “practices
consisting of recognized roles linked together by clusters of rules or conventions
governing relations among the occupants of these roles”.18 They believe that
institutions have a life of their own, whereas realists don’t think that institutions
produce anything. Neoliberalism distinguishes three kinds of institutions. First,
alliances and trade agreements which are crucial for them. They find the binding
character more important than realists. Second, they see some kind of innovative tools,
16
Mearscheimer, John. 1995. The False Promise of International Institutions, International Security 19
(3), 1995, 5-49, p.14.
17
Hasenclever, Andreas, Mayer, Peter and Rittberger, Volker.1997. Theories of International Regimes,
Cambridge: Cambridge: Cambridge University Press, p. 1.
18
Idem, p. 14.
6
which are unused yet, but which could be useful in the future. Third, they see some
institutions as causes of changes in preferences over outcomes.19
According to liberal institutionalism, economic institutions matter. It argues
that world politics can be divided into two different realms which are political
economy and security. These two realms are related because economic cooperation
(which is increased by economic institutions) is supposed to lead to international
stability. Generally, neoliberals believe that rules can lead to four major changes. First,
it can increase the number of transactions. Second, they can be extended to other issue
areas. Third, there can be an increased amount of information. Fourth, it can lead to a
reduction of transaction costs.20
Young has criticized Krasner’s definition of international regime. He says that
this definition is a list of elements which are hard to be differentiated conceptually.
Robert Keohane formulates another definition of international regimes. “Regimes are
institutions with explicit rules, agreed upon by governments, that pertain to particular
sets of issues in international relations.”21 He simplifies the complex and
incomprehensible apparatus of norms, rules, procedures, and principles replacing it by
“rules”. He also rejects the idea that implicit rules can be included. Neoliberalism
emphasizes the role of regimes in encouraging different states to realise common
interests. However, it warns people from having overestimated expectations towards
regimes. It recognizes that they have limited ability to alter the behaviour within
societies.
So, neoliberalism can certainly be seen as the school of thought which sees
global economic governance as governance through regimes of cooperation. It gives a
major role to economy. It believes in common interests that countries try to reach.
Regimes of cooperation are seen as a set of institutions which should lead to a global
governance.
However, governance is often seen as based on three different pillars, which
are: states, international organizations and global civil society. Neoliberalism
19
Jervis, Robert. 1999. Realism, Neoliberalism and Cooperation: Understanding the Debate.
International Security 24 (1), 42-63.
20
Mearscheimer, John. 1995. The False Promise of International Institutions, International Security 19
(3), 1995, 5-49, p.19.
21
Hasenclever, Andreas, Mayer, Peter and Rittberger, Volker.1997. Theories of International Regimes,
Cambridge: Cambridge: Cambridge University Press, p. 12.
7
recognizes the importance of international organization and the existence of global
civil actors, but it still has its heritage taken from realism which consists on remaining
state-centric. Actually, its definition of international regimes is very state-centric.
Therefore, we could wonder whether there isn’t a certain contradiction between their
idea of regimes and the generally agreed idea of governance. Neoliberalism sees
NGOs as influential actors, but actors, which are outside the regimes.
So, we see that realism and neoliberalism are two antagonistic visions of
global economic governance, even if neoliberalism has its roots in realism. They don’t
have the same assumptions and they don’t focus on the same elements. Realism sees
the world of states as an anarchy, in which there is no possible governance, no
possible leadership. International regimes exist, but their potential expansion is very
limited.
On the contrary, neoliberal institutionalists believe that institutions have a
huge influence on world politics. States are not egoistic entities that just think about
their own relative interests and about the increase of their power. Power is not the
only one means to avoid external threats. It can be also avoided through cooperation
and especially through international regimes. And international regimes are seen as a
means to reach global economic governance.
Bibliography:
Hasenclever, Andreas, Mayer, Peter and Rittberger, Volker.1997. Theories of
International Regimes, Cambridge: Cambridge: Cambridge University Press.
Hirst, Paul and Thompson, Grahame 1996. Globalization in Question, London:
Blackwell.
Jervis, Robert. 1999. Realism, Neoliberalism and Cooperation: Understanding the
Debate. International Security 24 (1), 42-63.
Mearscheimer, John. 1995. The False Promise of International Institutions,
International Security 19 (3), 1995, 5-49.
Rosenau, James N., Governance, Order, and Change in world Politics, in Rosenau,
James N. 1992. Governance without Government (Washington: George Washington
University).
Young, Oran R.. 1999. Governance in World Affairs, Ithaca, New York: Cornell
University Press.
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