This draft is the copyright material of the author Matthew Sparke. All rights are reserved.
Governance:
Study Guide for Chapter 7 of Introducing Globalization
Prepared by Matthew Sparke for students using
Introducing Globalization: Ties, Tensions, and Uneven Integration, Oxford: Wiley-Blackwell, 2013.
Learning objectives:
After completing this chapter, you should be able to:
1)
2)
3)
4)
5)
6)
describe the five main enduring forms of national-state sovereignty;
understand how national-state sovereignty serves to authorize market rule;
trace the ties between United States global hegemony and global capitalism;
explain how the IMF & World Bank became global enforcers of neoliberalism;
analyze how NGOs have become involved in local government globally;
evaluate how much risk ratings and rankings enforce personal discipline.
Main arguments:
Governance is a name for all the different ways in which societies are governed and
regulated. It includes the enduring role played by modern nation-states in
government, but it also extends both “up” to global institutions such as the World
Bank and World Health Organization, and “down” to institutions and relations that
shape our personal behavior. Religion, education, and even dating and sex guides can
be understood thus as comprising personal aspects of governance, and from the most
macro and global down to these most micro and personal relations, governance has
been significantly transformed by globalization. Contrary to the myths about
Globalization, though, this does not mean that the nation-state has come to an end.
Instead, as Chapter 7 explains in detail, national governments, along with intergovernmental organizations (IGOs), and non-governmental organizations (NGOs),
have increasingly been put to new ends or goals amidst market-led globalization. In
short, they have all been used in one way or another to authorize, enforce, enable,
and expand some of the neoliberal norms of market rule.
The top 10 neoliberal policy norms
1)
2)
3)
4)
5)
6)
Free trade
Privatization
Deregulation
Tax cuts
Austerity
Increase foreign
1
investment
7) Reduce union power
8) Increase trade over aid
9) Reduce inflation
10)Increase property rights
 MATTHEW SPARKE
To understand how national sovereignty is used to expand neoliberalism, it
is necessary to review its five main forms. They are:
i) Westphalian sovereignty (the principle that one state should not interfere within
the territory of another);
ii) recognition sovereignty (the principle that nation-states recognize one another as
representatives of populations in international negotiations and activities);
iii) border sovereignty (the principle that nation-states control their territorial
borders, including the flow of commodities, capital, and people across them);
iv) administrative sovereignty (the principle that a nation-state is the chief
administrative authority enforcing laws for and on its national population); and
v) resistance sovereignty (the principle that the interests of dispossessed
populations can be represented with new appeals to sovereignty).
The first section of the first part of chapter 7 (Section 7.1.1) explains how each of
these old forms of national sovereignty endures, but also increasingly serves to
expand and entrench neoliberal norms of governance. The second section (Section
7.1.2) in turn explains how national governmental authority is also often used today
to authorize and implement neoliberal policies. And the third section (Section 7.1.3)
examines next the ways in which the especially influential global power of US
national government continues to play a unique role around the world in using force
to open up new markets, impose market rule, and maintain the market supply of
resources (such as oil) for global capitalism. In all three sections, then, the first part
of chapter 7 shows how key facts about contemporary governance both contradict
the myths of Globalization and support global neoliberalization at the same time.
Contrary to the newness myth, old forms of national sovereignty endure and thus
assist in expanding neoliberal policies; contrary to the inevitability myth, continuing
kinds of national authority are vitally important in authorizing neoliberal norms of
government; and contrary to the leveling myth, the asymmetric “hegemonic power”
of the US is repeatedly used to extend free markets and market rule globally.
Part 2 of Chapter 7 turns to examine inter-governmental organizations, many
of which are also often involved today in either directly supporting (e.g. the G8 and
APEC) or compensating for (e.g. the WHO and UNICEF) pro-market governance
globally. Among these IGOs, the two most important are the international finance
institutions (IFIs) born at Bretton Woods: namely the International Monetary Fund
(IMF) and the World Bank. Both of these institutions have become especially
powerful enforcers of neoliberal rule because their power to govern globally derives
2
 MATTHEW SPARKE
from the way in which they mediate global financial ties. To explain why, the
chapter historically traces how the conditions of their creation led the Bank and
Fund to be established on banking principles with Wall Street interests very much
encoded in their institutional DNA. These same US banking interests, connected by
the axis between Wall Street and Washington DC, also explain why the so-called
Washington Consensus became a synonym for the way in which the IMF and World
Bank went about imposing neoliberal conditionalities on the indebted countries of
the Global South from the 1980s onwards. It was a consensus on a particular
approach to development for sure, but it remained nonetheless a bankers’
consensus on using market metrics, market norms, and market goals as the
becnhmarks of “good governance.” As a result, the conditionalities delivered in the
form of the Fund’s stabilization programs and the Bank’s structural adjustment
plans turned the financial pressures of debt into pro-market governmental
pressures. They thereby transformed the economic force of debt into the political
enforcement of neoliberal governance, and the result has been a remarkably
consistent top down global application of the one-size-fits-all neoliberal policy
norms.
Another lesson of examining the Bank and Fund as financial market
intermediaries is that it further opens analysis onto the ways in which nongovernmental organizations also leverage market forces (either intentionally or not)
in ways that have profound governmental effects. This is one of the main arguments
of the third section of Chapter 7: namely that other global market intermediaries
and practices – ranging from the risk ratings of countries to the FICO scores of
individuals – are also now increasingly capturing some of the global governance
capacities once assigned to the Bank and the Fund. The rulings that come with credit
ratings and rankings also come with enormously consequential implications for how
we live our lives. Ultimately, this is because the power of credit ratings is deeply
material. Compliance is ensured because without good credit ratings, credit goes
away. It is not just a matter of representation, rhetoric or the reality-framing quality
of a competitive ranking based on financial risk, although superficial market
“opinion” measures can certainly trigger herd-like behavior from investors. It is
because deeper down market rankings also make a material difference by regulating
access to resources, and enabling or eroding the capacity of both institutions and
individuals to control their destinies. In this respect, while the nation-state is not
dead, and while NGOs complicate the patchwork pattern of neoliberal global
governance, the invisible force of the market rules like no other non-governmental
organization ever seen. Of course, the global neoliberalization of governance
remains dependent in its enforcement on agencies ranging from national-state
governments, to global financial institutions, to NGOs and individuals operating on
the basis of free market ideals and incentives. But it also remains impressively
global in its scope and enduring in its influence. Even the global financial market
crises of 2008–2012 did not shake the broadly held neoliberal orthodoxy that
markets should be liberalized, respected, and used by all governing agencies. Thus,
while it does so unevenly, incompletely, and with the visible helping hands of
3
 MATTHEW SPARKE
diverse state sponsors and NGOs, the invisible hand of “the market” increasingly
rules.
Key conclusions:
1)
Claims about the “end of the nation-state” obscure a more complex reality in
which national governments enforce global market discipline through neoliberal
policies.
2)
The US has exceptional global influence as a nation-state amidst globalization,
yet uses it most often to force other governments to conform with market discipline.
3)
Enforcement of pro-market governance globally has been further expanded
by inter-governmental institutions (IGOs), including the IMF and World Bank.
4)
Non-governmental organizations (NGOs) are developing governmental
capacity amidst the roll-back of the state, and the entrenchment of neoliberalism.
5)
NGO networks are part of a patchwork of global governance also structured
by the non-governmental but organizing effects of market forces on personal
behavior.
Further reading:
i) Governmental authority and globalization
Bret Benjamin (2007) Invested Interests: Capital, Culture and the World Bank.
Minneapolis: University of Minnesota Press.
Leo Panitch and Sam Gindin (2012) The Making of Global Capitalism: The
Political Economy of American Empire. Brooklyn, NY: Verso.
Naomi Klein (2007) The Shock Doctrine: The Rise of Disaster Capitalism. New
York: Metropolitan Books.
Saskia Sassen (2006) Territory, Authority, Rights: From Medieval to Global
Assemblages. Princeton, NJ: Princeton University Press.
ii) Governmentality and globalization
David Roberts (2010) Global Governance and Biopolitics: Regulating Human
Security. New York: Zed Press.
Marieke de Goode (2005) Virtue, Fortune and Faith: A Genealogy of Finance.
Minneapolis: University of Minnesota Press.
4
 MATTHEW SPARKE
Michel Foucault (1991) “Governmentality,” in Graham Burchell, Colin Gordon
and Peter Miller (eds), The Foucault Effect: Studies in Governmentality, pp. 87–
104. Chicago: University of Chicago Press.
Nikolas Rose, Pat O’Malley, and Mariana Valverde (2006) “Governmentality,”
Annual Review of Law and Social Science 2: 83–104.
5
 MATTHEW SPARKE