The Consequences of Institutional Proliferation

Let me respond to two points made in recent posts. First, Ann’s argument that no one knows what China will become, and that China is undergoing dramatic political and social as well economic change, is surely correct. I have no great knowledge of China and am the first to admit it. My only point was that when it comes to the role and significance of global civil society, China’s current practices suggest a markedly different approach than that of the West. In assessing the future of global governance, therefore, we need to take that difference into account, even if China may shift its preferences over the long term.

Point two concerns international institutions. Earlier Dan wrote about a possible “Gresham’s law” of institutions. Gresham originally wrote about money, and posited that bad money — i.e., inflated or debased money — would drive out good money. Analogizing from this prediction, Dan suggests that the proliferation of global institutions leads to more “choice” for states and possibly to the debasing of the currency, as it were, of cooperation.

He is absolutely right to point to the proliferation of international institutions as an important and relatively understudied factor in world politics. In earlier work with David Victor of Stanford I noted this phenomenon, and we hypothesized about what such agglomerations of international treaty regimes (in our jargon, “regime complexes”) might mean for global cooperation.

One of our key arguments was that forum shopping would become much more important. States who did not like the rules promulgated in a particular forum — say, the WTO — could now more easily look to other venues to raise analogous issues. For instance, rules about trade in genetically-modified organisms exist in a host of UN and non-UN organizations. As a result the legal framework is uncertain, or at least inconsistent. In fact, we suggested that this inconsistency was often deliberate, and that some states used “strategic inconsistency” as a political maneuver. By creating conflicting legal rules these states could argue that they too were following international law and acting in a multilateral fashion. And they could take advantage of the propensity of international tribunals to look at international law holistically, in order to push tribunals toward compromise solutions in particular disputes.

The rising density of international institutions is certain to prove significant. The harder question, as Dan notes, is whether this trend will lead to a Gresham effect — in which global institutions increasingly weaken as a welter of rules drives out the good institutions and creates a legal morass — or whether we will see competition among international institutions leading to stronger and better rules: what economists might call a Tiebout effect.

Also from this issue

Lead Essay

  • 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

  • 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.”

  • Jeremy A. Rabkin, professor of law at George Mason, writes, “one can accept almost everything [Drezner] 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.” The collapse of communism and the discrediting of socialism has led to a world in which “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.” Though the U.S. can in principle block international rules contrary to its overall interests, domestic interests jump at the chance to push their narrow agendas, it is often easier to go along than to fight, and some marginal changes occur simply through neglect. But “marginal changes can add up to sizable effects in the aggregate.”

  • “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.”