Topic 8: Global Governance

Posted: March 27th, 2020

Topic 8: Global Governance

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Topic 8: Global Governance

The concept of global governance accentuates collaboration among international or transnational state actors towards the resolution of issues that affect numerous regions or nations. The rationale for the association has its foundation on the implications that globalization has imposed, particularly in development. Over the years, the performance of transnational institutions such as the World Bank, the International Monetary Fund, and the United Nations has received much criticism due to the increasing inequality between developed and developing countries. Regulations established by these agencies on trade seem to benefit wealthy nations over the latter group. For example, laws applied by the World Trade Organization have implemented constraints on trade that seem to favor developed countries while simultaneously attacking the developing states’ sovereignty. Similar concerns have raised debates centered on the management of issues that affect multiple regions. The discourse focuses on the similar and divergent ideas expressed by experts in the subject, specifically Joseph E. Stiglitz and Dani Rodrik, regarding the democratization of global governance. Stiglitz and Rodrik concur that there is a lack of democratic consensus among transnational actors, but they disagree on the implementation of a suitable global governance framework.

One of the convergences regarding the democratization of global governance in Stiglitz and Rodrik’s arguments involves the undemocratic disposition of transnational actors. The significance of the concept has its basis in the relationships that globalization has necessitated between countries and the evolution of global-wide problems with widespread implications on multiple regions (Stone, 2008). As an outcome, countries have resorted to the development and ratification of international oversight institutions such as the United Nations (UN), the World Trade Organization (WTO), the International Monetary Fund (IMF), and the World Bank (Dixit, 2010). However, due to the hierarchical nature of these organizations, they base their decisions regarding the welfare of countries on policies that unfavorably benefit some members over others. Stiglitz (2013) argues that international institutions approach global-scale issues with a significant level of undemocratic governance due to the divergences between political and economic globalization. Rather than facilitate democracy, transnational actors implore methods that reinforce economic advantages. For instance, the WTO faces much criticism for its bias regarding the governance of international trade due to the gains that it offers to developed member states at the cost of developing nations. 

Rodrik echoes the same thought in his understanding of the subject. Regarding the resolution of multiple regional problems, the author argues that global organizations are considerably incapable of resolving such issues effectively. The rationale for this claim is that global governance is an incomplete mechanism that can gain its strength only by a careful structure of economic globalization (Rodrik, 2012). Enhancing domestic economic and trade policies is bound to disrupt the spillover effects generated from the activities of other countries. While the idea may seem protectionist, especially for developing countries, it establishes a sturdy style of globalization. Indeed, Stiglitz and Rodrik recognize the considerable gaps between political and economic liberalization in respect to the policies and rules that transnational institutions apply. Their similarities on the democratization of global governance are also evident by the way they address the outcomes and procedures derived from democratic incapacities as far as the discussed actors are concerned (James & Soguk, 2017). Both admit that the discrepancies in policies and rules implemented by international institutions stem from the lack of systems capable of incorporating checks and balances, accountability, and transparency.

Despite these junctions in thought, Stiglitz and Rodrik seem to differ on the implementation of democratized global governance. On the one hand, Stiglitz argues that international economies should use the force of globalization as a way to enhance economic growth. Countries are bound to benefit from transnational institutions if they can develop national institutions. He also asserts that the administration of forces of globalization, such as the environment, international trade, and foreign debt can enhance the democratization of governance (Stiglitz, 2013). While Rodrik agrees that the undemocratic nature of transnational actors is the core issue, he diverges from Stiglitz’s argument by advocating for locally protectionist policies and the involvement of participatory regimes in the resolution of problems derived from globalization such as corruption. He claims that democratic state actors are the only countries that can benefit since they are capable of supplying considerable rates of growth and stability (Rodrik, 2012). Enhancing the involvement of domestic countries in economic matters may encourage the application of democratic components within global governance. 

To this end, Joseph E. Stiglitz and Dani Rodrik seem to agree on the undemocratic nature of global governance. Both academics argue that current transnational institutions employ measures and tactics that favor developed countries at the cost of the developing states’ welfare. For them, while globalization is a force with widespread implications for economic health, global agencies can manage and administer it effectively by applying democratic components that accentuate accountability, transparency, and balance. Stiglitz and Rodrik also correlate on the gap between economic and political globalization, which seems instrumental in the current deficiencies that international institutions exhibit as far as governance is concerned. Accordingly, the level of evolution between both aspects is incoherent with the former being used as a measure to benefit some countries and the latter being ignored. The illustration explains why organizations such as the WTO can implement economic policies that openly discriminate against developing member states financially. Nonetheless, the only point of divergence between the respective scholars involves the measures that are applicable to integrate democratized global governance.

References

Dixit, A. K. (2010). Lawlessness and economics: Alternative modes of governance. Princeton University Press, NJ.

James, P., & Soguk, N. (2017). Globalization and politics, vol. 1: Global, political, and legal governance. Los Angeles, CA: SAGE.

Rodrik, D. (2012). One economics, many recipes: Globalization, institutions, and economic growth. Princeton University Press, NJ.

Stiglitz, J. E. (2013). Globalization and its discontents. New York, NY: W. W. Norton & Company.

Stone, D. (2008). Global public policy: Transnational policy communities and their networks. Policy Studies Journal, 36(1), 19-38.