Responsive Governance in a Globalizing World
by Wolfgang Bücherl, Center for Applied Policy Research, Munich
Globalization is often perceived as a comprehensive and global process that
inevitably transfers power and decision-making competence away from the
democratic nation-state and its citizens to merely a few obscure institutions
in transnational business and politics.
Globalization does indeed promise to tremendously alter the perspective and
scope of political and economic action. Despite this recognition there
remains room for differing interpretations:
1. Globalization is not global, it is regional:
Globalization basically affects only three regions of the world: North America,
Western Europe and East Asia. It is in the economies of these regions where
exchange
in
trade
and
most
particularly
in
investments
grows
disproportionately. Moreover, the increasing economic and financial
cross-border activities take place mainly within regional associations, such as
the European Union, the North American Free Trade Agreement area or the
Association of East Asian States. It can be shown that in the case of the EU,
the most progressed regional association, the export of goods between
members states has almost doubled since the early 1960s from 13% to
24% of GDP (in 1995) while exports outside the Union have only grown
from 6% to 8%.
Given the assumption that since the 1980s globalization has been due to
rising foreign investment rather than to increasing trade the picture remains
similar. The rise in foreign investment from outside the EU from 6 bn ECU to
26 bn ECU is considerable, but still greatly outnumbered by the figures for
investment from other EU Member States: Foreign investment originating
from other EU Member States multiplied sixfold from approximately 12 bn
ECU in 1985 to approximately 72 bn ECU in 1996.1
2. Globalization is not comprehensive it is sectoral:
Looking at globalization from the micro-level of economics reveals that
globalization is a phenomenon which takes place predominantly inside firms.
An increasing proportion of trade and investments are concluded inside
multinational
firms.
Recent
mergers
in
the
automobile
and
telecommunications industries are apparent indicators of this trend. Still,
other private sectors and firms remain unaffected by these developments.
Hence, one may conclude that globalization still affects not all economic and
industrial actors.
3. Globalization is not global, it is local:
The growth in transnational economic and political activity leads one to
discover the significance of local actors. When it comes to selling products
and services across national boundaries, enterprises must take into account
local tastes and traditions. In the political sphere the case is often similar,
because local actors themselves discover the opportunity to confer with their
counterparts from other countries and attempt to influence decision-making
on transnational levels of government. Inside the EU the installation of a
committee of the regions reflects this development. Representatives from
local communities and districts can use this body to coordinate their local
policies and make policy recommendations to the European Union
Institutions.
What all three above mentioned characteristics of globalization have in
common is that the democratic national state has to a considerable extent
lost its determining role in the decision-making process.
The prevailing actors are transnational firms, international or supranational
organizations and local actors. Europe is a striking example for the transfer
of internal sovereignty and decision-making power from national to
1
Figures taken from graphs and tables presented by John Morley, European Commission,
DG
at the conference "Globalization and Social Governance in Europe and the US" on 19
November 1998.
supranational bodies. Thus globalization challenges the traditional domain of
the democratic nation state, the exclusive ability to exert sovereignty
internally. To offset this loss and to secure an effective form of government,
we would have to develop new forms of governance which involve the new
actors and at the same time grant the democratic legitimacy derived from
democratic nation states.
1. Strengthen regional integration.
The EU is an example that states can choose some form of cooperation to
make up for the losses in internal sovereignty. Given the fact that thusfar
economic globalization has mostly taken part inside regional frameworks,
states can internalize these activities by establishing a larger umbrella, i.e. a
regional regime. By this means they can partially compensate for the loss in
internal sovereignty.
2. Cooperation between states and private sector actors
The loss of internal sovereignty is most apparent in those sectors where
globalization actually takes place. An established form of cooperation among
states and the actors from these private sectors combined with a concept of
a global public policy can offer new insights. Although the state may not
actually regain internal sovereignty by cooperating with the respective private
sectoral actors it could at least act as an interlocutor and counterbalance
private sector influence in society. Above all through such established forms
of cooperation private sector expertise would be become accessible to the
solution of problems in state and society.
3. Empowerment of local communities
Through an empowerment of local communities alongside the principle of
subsidiarity the effects of globalization could be used to the benefit of
improved citizens' participation. The (nation) state will not regain sovereignty
by empowering local communities, but it could bring sovereignty back to the
basic levels of society and to the citizens. In order to do so effectively,
communities and local actors should not only be consulted, but they should
also have a certain degree of decision-making power on national and
supranational levels in fields of their direct competence.
Through the initiatives outlined above the nation state will be able to pool
internal sovereignty with other actors. The involvement of the relevant actors
holding a stake in the outcome of a political problem (be it nation states,
enterprises, inter- or supranational institutions, communities or citizens)
ensures that all actors can contribute their respective share of influence and
responsibility to the policy making process.
Such an exchange along trans-national, functional, trans-regional and
"trans-local lines" could prove more efficient than state monopolies in
policy-making. Such an exchange is, however, not intended to dismantle the
democratic state. In fact,
democratic nation states seem to be the apt
institutions to coordinate such an involvement of "stakeholders" because
they have the overall competence, experience and the democratic legitimacy
to coordinate politics for the common good. Hence, new forms of governance
will have to be developed which will allow new decision-making procedures
to borrow legitimacy as well as coordinative competence from the democratic
nation state.