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December 6, 2007
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| All Politics Is Global: Explaining International Regulatory Regimes |
Jonathan Bach(reviewer)
At a time when many international relations scholars are qualifying their
premature predictions of the withering of the state, Daniel Drezner's new book,
All Politics Is Global, makes a compelling case for the continued
centrality of the state in the process of globalization, and contributes fresh
theoretical insights and empirical evidence on how states act when faced with
global challenges.
Drezner's main argument is that when it comes to the regulation of the global
economy, great powers still call the shots because they alone can mobilize
sufficient incentives and disincentives to implement their preferences at a
global level. His argument is a variation of neoliberal institutionalism rather
than structural realism: Power is a function of internal market size and
diversity—the larger and more varied the market for consumption, the greater the
power. There are currently only two truly great powers by this definition: the
United States and the European Union, the second of which he justifiably treats
as a unitary actor in the global economy. When the United States and the EU
(with an aggregate market size in excess of $10 trillion each and which together
account for 41 percent of all world imports) agree on a regulatory issue, just
about nothing can prevent them from implementing their preferences globally.
"The presence of a bargaining core among the great powers," Drezner writes,
"is a necessary and sufficient condition for effective global governance" (p.
86). This does not mean everyone follows willingly, as Drezner shows with the
example of largely successful U.S. and EU efforts to set intellectual property
rights standards that conflict with developing countries' preferences. When
great powers disagree, however, one can expect either a stalemate with competing
standards in their respective spheres of economic influence, as with the
regulation of genetically modified organisms (GMOs), or vague, unenforceable
standards that might satisfy various political constituencies but are
effectively meaningless when it comes to regulation—what Drezner calls "sham
standards," such as the regulation of Internet content.
Of course, international governmental organizations (IGOs) and
nongovernmental organizations (NGOs) play a role in global economic governance,
but to give them pride of place, as many scholars and pundits do, contradicts
Drezner's empirical analysis: No IGO or NGO coalition has ever successfully
promoted or prevented a case of global regulation that did not also meet the
condition of a bargaining core between the two great powers. This is not for
want of trying by nonstate actors to set the agenda, which they have done with
some success on such issues as land mines and HIV/AIDS. In response, however,
states become increasingly creative in their successful efforts to control
global governance. Through case studies of Internet governance, international
finance, genetically modified organisms, and trade-related intellectual property
rights and AIDS/HIV drugs, Drezner illustrates how the United States and the EU
have become adept at delegating controversial roles to IGOs or NGOs when it is
convenient and marginalizing them when it is not; shifting negotiations on hot
topics to friendly settings through "forum shopping" to prevent hostile
coalitions; and, when cornered, resorting to forming "clubs" with enough clout
to convince or coerce the rest of the world to adopt their standards. Global
civil society may have a long-term effect on norm formation, Drezner concedes,
but he finds that their influence over state behavior has been exaggerated.
The preferences of great powers, however, are hardly either internally
consistent or always convergent. Because preferences are not, contra realism,
derived from the structure of the international system but rather from domestic
interests, local politics has an undue influence on global regulation: Great
powers impose their preferences for global regulation, but these preferences are
formed domestically. Domestic industries might be expected to support global
regulation that eases cross-border trade and service provision, but if it proves
too costly to adjust to new standards, then firms tend to resist. Outsourcing
grabs the headlines as the most visible form of resistance, but the real
challenge to global regulation comes from firms with non-tradable (such as
certain services) or fixed assets (such as agriculture) for whom outsourcing is
not an option and compliance is not desirable.
The only remaining option for these domestic actors is to use their
"voice"—the withdrawal of political support or backing of rival parties—which
imposes more costs on a government than if they "exit" through outsourcing or
reinvention. Thus emerges a tension: On the international level, the ability of
great powers to act in concert is improving the chances for more and better
regulation at a time when this is increasingly central to the functioning of the
global economy. Yet on the state level, those domestic actors who perceive the
costs as too high work against great power convergence. For global regulation,
Drezner concludes, it is the best and the worst of times. The seductive rewards
of cooperation actively entice the great powers to strengthen their
interdependence, despite the fickleness of domestic politics. Since this
concerns only the United States and the EU, this small number of great powers
increases the likelihood of policy convergence, or, at worst, limited rival
standards within the bipolar framework of the two great powers. With echoes of
Kenneth Waltz writing in a very different context, Drezner contends that
bipolarity appears as the most stable form for a global regulatory regime.
Yet the bipolar regulatory world Drezner describes is impermanent, and the
inevitable approach of multipolarity means an increased likelihood of policy
divergence. As the number of economic great powers (read China and India)
increases, the chances for agreement on common preferences that enable effective
regulation declines. Drezner foresees growing contention between the current
great powers and the developing world set against the background of growth
versus "quality of life" debates. While Drezner does not engage the accompanying
ethical issues, one comes away with a sense of foreboding about the coming shift
to multipolarity, accompanied by a sharpened sense of the trade-off between
efficiency and equity and questions about the limits of tolerance, compassion,
and collective action among populations under pressure.
The game theoretic model that Drezner develops is succinct and useful,
though, by his own admission, it is constrained by some straightforward
limitations. While it clearly shows that market power is determinative in
forcing coordination based on the desires of great powers, and that great power
conflict leads to stalemates, this is based both on a small sample and a small
amount of evidence. Since, by his definition, the situation he analyzes has only
existed for twenty or thirty years, large-scale correlations of regulatory
outcomes and negotiations are difficult, and the introduction of more actors
into the model would make it exponentially complex. Also, given that all the
cases he looks at are still evolving, there will certainly be interpretive
differences concerning outcomes and the ability to generalize at this stage.
Nonetheless, for scholars and students analyzing contemporary regulatory debates
it will be impossible to ignore Drezner's model of how states adapt creatively
to globalization. Regulation is the grammar of the global economy, and Drezner's
All Politics Is Global eloquently explores its formation and
transformation at a crucial historical moment.
—JONATHAN BACH
The New School
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