While “Great States” Sleep

Having seen some of Daniel Drezner’s earlier work, I start with a lot of respect for his abilities. He is a sharp-eyed observer of international trends. He is not intimidated by academic fashions. Nor is he the sort of crank who becomes obsessed with his own pet theories. I haven’t had the chance to read his new book but the overview of the arguments which he offers here has certainly whetted my appetite to get to the book very soon.

Apart from admiring the intellectual qualities of the author, moreover, I’m in sympathy with the overall thrust of the argument. State authority is not withering away any time soon. Neither market forces nor the countering efforts of international organizations or “global civil society” will prevent states from asserting their own priorities — and often imposing their priorities on others.

One of Drezner’s main points — that regulatory competition does not always force a “race to the bottom” — was demonstrated with much force, I think, by David Vogel’s Trading Up, published more than a decade ago. Within the United Sttaes, as Vogel showed, a large state like California can impose higher environmental and safety standards without driving business out of the state, because producers are not willing to give up on such a large market. Instead, California standards often become de facto national standards.

On the other hand, Clifford Bob’s recent study of international non-governmental organizations, Marketing Rebellion, documents the extent to which, even when it comes to protests over the most extreme human rights abuses, advocacy groups tailor their presentations to what, from past experience, they find can work: they have the most influence when pushing on open doors. The very fact that NGO’s keep having to say they are “non-governmental” tells us something important about their need for some sort of state sponsorship or at least engagement in the background with their projects.

To the extent that talk of “globalization” has encouraged exaggerated ideas about how much the world has changed, Drezner is offering very apt cautions. What I want to offer, then, is not criticism, let alone rebuttal, in relation the basic argument. But Drezner devotes so much of his essay to puncturing inflated expectations, that it may be useful to remind readers that important changes have occurred — even if the scale of change is not quite so dramatic as some may fear and others may hope.

I don’t think Drezner will disagree with my own cautions here. I certainly don’t see that his argument requires him to disagree. But I want to remind readers, in any case, that one can accept almost everything he says in his essay and still think the challenges we face now are different, in important ways, from the patterns we had become accustomed to in the past.

Start with the collapse of communism as an international force and the discrediting of socialism as a viable domestic policy. Almost everyone now sees that a centrally planned economy won’t create wealth. Yet even the most power-oriented governments see that wealth is essential to sustaining state power. True, states that earn sufficient wealth by selling oil and natural gas, like Russia or Saudi Arabia, can constrain internal markets to a considerable extent. But even they depend on market economies to generate the purchasing power that brings such high prices for their exports. So almost all countries now have a stake in a world where goods and services — and capital — flow relatively freely across boundaries. And that is a very big background fact about our world.

It doesn’t follow that all nations share the same aims or the same priorities. But it does seem to follow that there are more intractable constraints on state policies — at least regarding peace time activities — than was once believed. Governments can’t simply ignore market forces. States may still seek competitive advantage. But they are competing, among other things, for trade and investment — which means they have to reassure traders and investors that their currencies will remain sound, their tax policies moderated and so on. Anything we say about any particular regulatory regime assumes — or should assume — a background of larger constraints in which regulatory policy operates. One indication of this change is that the World Trade Organization, which started (as GATT in 1947) with only 22 western states, now embraces almost all countries in the world.

Drezner’s point is that a lot of maneuvering room remains. Within this zone of policy discretion, states will try to insist on policies they favor — and more powerful states won’t be easily constrained by international regulatory regimes. I agree with the general point. But one can put it a bit differently. States now are so entangled in international regimes — because so entangled in international exchange — that the accepted rules of international economic conduct are now recognized to be very important.

I agree that recognizing the importance of international rules does not make states into altruists — any more than it makes lawyers into disinterested good citizens in the domestic legal system. But lawyers have (or are supposed to have) only one client at a time in a particular dispute. Governments serve lots of constituencies, which often pull in different directions. The “state” is often distracted. And a world of rules makes it easier to get distracted — or to give way to pleas to “go along” with a deal that, on many grounds, looks like a bad one for the home country.

To put it concretely, I agree with the thrust of Drezner’s argument: the World Trade Organization, for example, won’t be able to override a specific American policy if the United States is insistent on it. The judges of the WTO’s Appellate Body are well aware of that fact and imposes limits on their initiative (or, to use the domestic analogy, their “judicial activism”). But, in fact, every time the United States has been judged in violation of WTO standards, it has meekly amended its supposedly offending policies. It turns out that we are rarely so committed to our pre-existing policies — and domestic interests often jump at the chance to force adaptations in line with their own priorities.

James Q. Wilson’s book, Bureaucracy, emphasized this point in relation to domestic regulation. Every now and then, public opinion is aroused by some bureaucratic excess — as it was in the late 1970s, for example, against the ignition-interlock regulation, a mandated safety device preventing drivers from starting their cars if they did not have their seat belts fastened. In such cases, Congress will insist on giving the public what it demands (as it did in this case by suspending the interlock system). But bureaucratic disputes don’t often rise to this level of public attention. It is silly to pretend that, because the Congress retains the ultimate capacity to say no, what all those domestic regulatory bureaucracies do serve up must be more or less what the public wants, or would want, if it knew about them.

At the international level, we are starting to let standards negotiated in international forums become guides to domestic policy even when there is no direct cross-border spillover problem. The Bush administration, for example, is now negotiating trade agreements which pledge conformity to standards of the International Labor Organization — including some standards the United States itself has not directly ratified. Labor unions and other advocates for greater regulation of domestic labor markets will argue that we must conform more fully to international standards lest we risk compromising new trade ventures. Perhaps there is a limit to how far this can go, but a lot can happen before we reach that limit. Most change is on the margin but marginal changes can add up to sizable effects in the aggregate.

Meanwhile, to speak of “great powers,” as Drezner does, is to abstract from a big change in the configuration of “power.” The world’s largest trading “power” is the European Union. It is not a “power” in the way that Britain and Germany were in the first part of the Twentieth Century or in the way the United States and China are today. The EU has no army or navy. It does not even have a police force of its own. When bargaining with the United States or Japan, say, over international regulatory standards, it has enormous bargaining power because it has regulatory reach over the markets of Europe. But when it comes to facing down military challenges, it cannot even speak, reliably, for the limited forces available to the EU’s member states — some of which, as we’ve seen, are more disposed to act with the United States and some much less so.

The incentives for the EU, therefore, are to submerge as many issues as possible into regulatory or at least economic issues — where the EU can have a direct say. Want to constrain China? Try to entangle it in more international regulatory ventures. Then reassure China — and European states — that the United States will also be constrained. Drezner’s point is that this can’t go very far before China — and the United States — begin to push back from their own self-interest. True enough — at the end of the day. But the day can be long and full of distracting episodes, particularly when it is warm and those who should be watching get drowsy or distracted.

What happens in the meantime is worth noticing. A lot that happens is not well explained by Drezner’s version of the big picture. Why is it, for example, that the Bush administration has now endorsed a law of the sea treaty under which China claims access to American ocean exploration technology and the U.S. agrees to subject its naval seizures on the high seas to an international tribunal based in Hamburg?

Jeremy A. Rabkin is professor of law at George Mason University and author of Law without Nations? Why Constitutional Government Requires Sovereign States.

Also from This Issue

Lead Essay

  • The Persistent Power of the State in the Global Economy by Daniel W. Drezner

    Drawing from his recent book, All Politics is Global: Explaining International Regulatory Regimes, Tufts University’s Daniel Drezner explains that “for many issues that comprise the daily substance of our lives … the politics have gone global.” However, he argues, the intellectual response to this development has been out of proportion to its real extent. When great powers coordinate on regulatory standards, that may be enough to shift the rest of the globe. But, as Drezner illustrates from examples ranging from the Internet to genetically modified foods, when the costs of adjustment are too high for states with economic heft, global regulatory coordination tends not to be forthcoming. In the end, we get neither a “race to the bottom,” nor liberation from the state through jurisdictional competition. “Globalization is not irrelevant to global governance,” Drezner concludes, “but it is not transformative either.”

Response Essays

  • Globalization Is Transformative by Ann Florini

    Ann Florini, director of the Centre on Asia and Globalisation at the National University of Singapore and senior fellow at the Brookings Institutions disagrees with Daniel Drezner’s claim that global governance remains dominated by a few great state powers. “We’re heading for a multi-polar system where very different kinds of states, at very different levels of development, will matter,” Florini argues. And, she maintains, “ ‘regulation’ is no longer done only by governments.” For example, corporations, not states, put international protection of intellectual property rights on the table, but it was small states and pressure from civil society groups that eventually determined effective policy. Florini suggests Drezner’s analysis is confused by an over-simple idea of the interests of great states. “How states define what their interests are is one of the most important ways globalization is affecting outcomes in global rule-making.”

  • Globalization and Global Governance by Kal Raustiala

    “In the main [Drezner’s] argument is persuasive,” writes Kal Raustiala, director of UCLA’s Ronald W. Burkle Center for International Relations. However, the continued preeminence of states on the world stage “is a bit more ambiguous and complex than Drezner suggests.” Raustiala argues that critics of globalization increasingly “expect more openness, more transparency, more accountability; in other words, a process more like domestic governance.” Raustiala contends that can learn something important by looking to domestic politics: powerful lobbyists and special interests did not emerge because the state was getting weaker. “The rise of interdependence and NGOs in American society didn’t signal the end of the state; it signaled the growth of the state.”

The Conversation