Confusion Abounds: Globalization and GlobalGovernance

REVIEW BY RALF J. LEITERITZ

Development Studies Institute, London School of Economics

Transformative Change and Global Order: Reflections on Theory and Practice. Edited byDoris A. Fuchs and Friedrich Kratochwil. Munster: Lit Verlag, 2002. 280 pp., $24.95(ISBN: 3-8258-6374-3).

Globalization and global governance can be analyzed in two broad ways: byexploring the empirical facts about their effects in current world affairs, or byexploring the political discourse surrounding them. Transformative Change andGlobal Order, edited by Doris Fuchs and Friedrich Kratochwil, follows the latterapproach. It is concerned with the use and function of both concepts as discursiveformations within international studies.

The second wave of globalization studies, which challenges the taken-for-grantedtheories and approaches of the 1990s regarding the origins and consequences ofglobalization, provides the background for this investigation (Garrett 2000; Scholte2000; McGrew and Held 2002). Transformative Change and Global Order tries toilluminate some of the false theoretical starts as well as the empirical deadlocks thathave harmstrung the academic debate about globalization and the closely relatedbut more policy-oriented concept of global governance. The book provides a usefuloverview of the myths that characterized, and still partly shape, the study ofglobalization and its purported effects on international and domestic politics. Fuchsand Kratochwil’s principal aim is to reintroduce plain and simple politics into thedominant technocratic discourse on globalization and global governance.

In her introduction, Fuchs laments that academic accounts of globalization arebeset with differences in conceptualization, focus, and underlying ideological beliefsystems. This situation leads to assessments of the implications of global governancethat are fundamentally at odds with each other. The first part of TransformativeChange and Global Order is thus devoted to the task of inserting some order into theacademic debate. Friedrich Kratochwil addresses the major concepts andmetaphors that have been causally related to the onslaught of globalization. Incongruence with recent empirical studies (Garrett 1998; Mosley 2003), hesystematically debunks such notions as a ‘‘race to the bottom’’ with respect todomestic standards and state welfare functions in the Western world as myths orfalse predictions. His conclusion points to the essentially ‘‘ ‘ideological’ character ofthe globalization debate’’ which has exhibited ‘‘not simply wrong descriptions of thefacts at hand, that is, errors, but rather self serving errors’’ (p. 38, emphasis in theoriginal).

Especially insightful is Philipp Muller’s ‘‘Wittgensteinian therapy’’ for policy-makers trapped in the image of inevitability wrought by globalization, whichsupposedly leaves them with little autonomous choice in the face of structuralforces. Muller attempts to restore political space to the globalization discourse andthus increase the understanding, accountability, and freedom of policymakersFalaudable goal that makes eminent sense given the frequent assertion thatpractitioners are being forced into certain political actions. The therapy, in turn,consists of a four-step procedure: (1) challenging globalization dogmas; (2)

r 2003 International Studies Review.PublishedbyBlackwellPublishing,350MainStreet,Malden,MA02148,USA,and9600GarsingtonRoad,OxfordOX42DQ,UK.

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exposing the pictures standing behind them; (3) proposing alternative pictures;and (4) attempting to deflect anxiety regarding these new images. However, underpresent circumstances significant obstacles undoubtedly exist to prevent construc-tive exchanges between the academic and the policymaking worlds. Unfortunately,Muller does not discuss which enabling conditions, on either the giving or thereceiving ends of the process, must be in place for his proposed therapy to succeed.

The chapter by Richard Ned Lebow and Janice Stein has a somewhat puzzlingbeginning. It talks about global networks of terror and crime in the context ofSeptember 11 but then abruptly gives way to a sweeping counterfactual thoughtexperiment about what would have happened in international politics if the FirstWorld War had not taken place. In such an alternative world, globalization wouldsurely have existed as well, but not in its contemporary form: with US dominanceand in conjunction with the process of failed state formation in many developingcountries.

The second part of the book discusses some of the more practical implications ofglobalization and global governance, mainly with respect to international politicaleconomy. The topics covered range from the instrumentalization of the state indeveloping countries by transnational public services corporations (MatthiasFinger), the influence of international financial institutions in developed anddeveloping countries (Corneliu Dan Berari), the problems attendant to theimplementation of norms associated with international women’s rights in thedeveloped countries, focusing on Germany (Heike Brabandt), and finally aproposal to change the traditional dichotomy in international political economyfrom ‘‘states versus markets’’ to ‘‘exchange and regulation’’ using stock exchangesas an example (Markus Lederer).

The contributors to Transformative Change and Global Order emphasize thatwhether one lives in the developed or the developing part of the world makes asubstantial difference in assessing the effects of globalization. Berari, for example,claims that ‘‘the present world economy is characterized by a two-tiered structure ofeconomic governance’’ (p. 177). On the one hand, developed countries havecoordinated their economic policies in forums for international cooperation like theG-7 summits. In the developing world, on the other hand, the InternationalMonetary Fund (IMF) and the World Bank ‘‘have been able to induce substantialchanges in the economic policies and institutional structures . . . that [are]convergent with the exigencies of a world economy characterized by a liberaltrade and finance regime’’ (p. 177). However, bearing in mind the explicit warningagainst simple generalizations by Fuchs and Kratochwil, such a statement has littleempirical support if one looks at the most obvious instrument that the internationalfinancial institutions use to exert control over developing countries: loanconditionalities. The coercive power of the International Monetary Fund and theWorld Bank concerning the economic policymaking of national governmentsachieves very limited results. A recent World Bank study found that only a third ofall international loan conditionalities have been implemented by borrowingcountries (World Bank 1998). Consequently, before jumping to premature orpolitically unsustainable conclusions about the alleged power of the IMF and WorldBank in the developing world, a careful assessment of the entire array of availableinstruments for influencing domestic policymakingFincluding the ‘‘discursive orsoft power’’ of the international financial institutionsFshould be undertaken.Similarly, Finger’s contribution suffers from an overly deterministic perspective. Hedescribes how public services transnational corporations have taken advantage ofthe weakening capacity and subsequent transformation of the nation-state underthe impact of globalization. Transnational corporations have been able to pursue aglobalization strategy with respect to international rule and norm making, andsimultaneously a localization strategy in terms of ‘‘shifting decision-making powerabout operations, ownership, management, and evaluation downwards’’ (p. 155).

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In Finger’s view, the result has been a ‘‘hollowing out of the state,’’ that is, ‘‘(w)hatremains of the State at the national level is its law and order (or security) function,sometimes along with the function to promote national competitiveness’’ (p. 156).In other words, since the 1970s the transnational corporations, in closecollaboration with the World Bank in the developing world, have increasinglysucceeded in making the advancement of their interests coincide with thetransformation of the nation-state. Finger’s account of how the interests ofpublic services transnational corporations determine state policymaking withrespect to the delivery of public services does not allow for any kind of contingency.Given the firmly established material interests of the main actors, their behaviorseems to be sufficiently determined by straightforward cost-benefit calculations.However, is the instrumentalization of the state by transnational corporations reallyalways an inevitable outcome? Which potential alternatives to this process were leftby the wayside, and how did the transnational corporations’ interests win overother, competing forces in the transformation of the state? Bringing back politicsinto globalization studies should not simply reinvigorate structuralist or evenconspiratorial approaches through the backdoor.

The chapter by David Kennedy on ‘‘The Politics of the Invisible College:International Governance and the Politics of Expertise’’ somehow functions as thelink between the discourse-related and the practical analyses of globalization.Kennedy is concerned with the space for a dialogue between students (mainlylawyers) and practitioners of global governance. He criticizes the academiccommunity for wanting to remain outside the messy world of politics and forfocusing on conceptual issues rather than on the actual outcomes of globalgovernance. The most interesting part of this overly long chapter is Kennedy’ssuggestion that we need to develop a ‘‘common vernacular’’ whereby professionalknowledge can be transferred into the policymaking process. Presumably, themechanism for developing this common vernacular is ‘‘to ask rather simplequestions about the preoccupations of policy makers of whatever school ortendency’’ (p. 107) and then to make their answers visible in well-establisheddistributional terms such as exactly who or which group in society will benefit fromcertain policy decisions. According to Kennedy, essentially every aspect ofinternational legal governance is based on an underlying vernacular that can beunearthed and transformed into distributional and time-bound consequences. Inhis view, this translation effort is the critical task of the academic community. Oncecompleted, a judgment call between different policies with respect to their impacton humanitarian and progressive goals becomes feasible, although Kennedy israther skeptical about policymakers being able or willing to retreat from their long-standing habits of simplification.

In sum, Transformative Change and Global Order seeks to bridge the gap betweentheory and practice of global governance in order to return attention to politics andto identify possibilities for shaping the postglobalization discussion. It achieves thefirst goal in an admirable fashion, guiding the reader through the complexity andthe various dimensions of contemporary international affairs. The contributors areable to make the case for regaining the space for political action by going beyondthe explicit or implicit ‘‘end of history’’ notion in many first-wave accounts ofglobalization. However, they are somewhat less successful in delineating the specificways in which the clarification of theoretical concepts can travel from the academicworld to the world of policymakers, thereby reinforcing the importance of this goalif we are to improve the actual content and quality of political decisions. In addition,in looking for alternatives to the current practices of global governance,the contributors merely suggest that we disaggregate macrolevel trends and labelsin order to derive strategies for political action and intervention. Granted thatthe precise content of new governance strategies depends on the context at hand,some greater specificity as to the viable political, economic, and social alternatives

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that are available or possible would have been valuable. Ultimately, crossing thedivide from academia to the policy world will require a clear understanding of whatthe new theoretical concepts mean in terms of alternative visions and actions on thepart of beleaguered policymakers.

References

GARRETT, GEOFFREY. (1998) Partisan Politics in the Global Economy. Cambridge: Cambridge UniversityPress.

GARRETT, GEOFFREY. (2000) The Causes of Globalization. Comparative Political Studies 33:941–991.MCGREW, ANTHONY, AND DAVID HELD, eds. (2002) Governing Globalization: Power, Authority, and Global

Governance. Cambridge: Polity.MOSLEY, LAYNA. (2003) Global Capital and National Governments. Cambridge: Cambridge University

Press.SCHOLTE, JAN AART. (2000) Globalization: A Critical Introduction. New York: St. Martin’s Press.WORLD BANK. (1998) Assessing Aid: What Works, What Doesn’t, and Why. World Bank Policy Research.

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