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. 8