Simon Reich

National Structures and Multinational Corporate Behavior: Enduring Differences in the Age of Globalization

Liberal and critical theorists alike claim that the world political economy is becoming globalized. If they are right, leading corporations should gradually be losing their national characters and converging in their fundamental strategies and operations. Multinational corporations (MNCs) should be the harbingers of deep global integration. In fact, recent evidence shows little blurring or convergence at the cores of firms based in Germany, Japan, or the United States.

No Place to Hide: Refugees, Displaced Persons, and the Recruitment of Child Soldiers

The global number of child soldiers has grown significantly in the last two decades despite a series of protocols designed to curb this trend. They are generally employed in wars where belligerents spend more time attacking civilian populations than fighting professional armies. Used by both governments and rebel groups, child soldiers epitomize many of the problems associated with states at risk: intergenerational violence, poverty, and the failure of efforts to instill the rule of war. Both scholars in security studies and policymakers have largely regarded child soldier recruitment as a humanitarian issue. But recent events have linked child soldiering to insurgency and terrorism, suggesting that this issue is also developing a security dimension. This article examines contrasting arguments about the causes of child soldiering. Using data drawn from nineteen African conflicts, the authors argue that the major explanation for the significant variation in the percentage of child soldiers recruited is the degree of protection against abduction provided by governments and external actors to camps housing internally displaced persons and refugees.

The Four Faces of Institutionalism: Public Policy and a Pluralistic Perspective

Contending conceptions of the “new” institutionalism claim to offer approaches that can develop generalizable social scientific theories of behavior. This article challenges that proposition, arguing that contingencies exist in which specific forms of institutionalism are best suited to addressing particular types of questions. Viewed through the prism of public policy, it develops the argument that “policy dictates politics.” It suggests that four variants of institutionalism (historical, new economic, normative, and billiard ball) are each systematically most appropriate to examine the issues in the policy domains of redistribution, regulation, modernization, and liberalization, respectively. “New institutionalism” has become a catchphrase concerning an approach to the study of social science. Yet the term conceals a number of distinct approaches that compete with one another as explanations of political behavior. Some proponents of variants of institutionalism assert that they are trying to develop general theories of behavior. Some of the contributors to this issue of the journal represent efforts drawn from these different traditions. In this article I offer a contrasting perspective, one embedded in the notion that theories of institutions have identifiable and delineated contours that make them most appropriate for explanations of specific kinds of problems. This argument is based more on intuition than on science. It is one that is explored neither as exhaustively nor as deliberately as I would like, but that reflects my current state of thinking. It is presented in the form of a “think piece” which I believe is suitable for a forum of the type offered by a “special edition” symposium. I propose that there are four forms of “new” institutionalism. Each has specific features that suggest they are systematically best suited to the study of particular forms of public policy by virtue of the distinct character of politics in that domain. Reorienting and extending the seminal work of Theodore J. Lowi, I outline a resulting contingent argument challenging the claim that any one form of institutionalism is most suited to developing a general theory. Rather, each policy domain has a particular set of characteristics that capture a particular dimension of politics, and no one

Roads to follow: regulating direct foreign investment

The United States faces a formidable and growing economic challenge from Japan. Over the last decade, the American state has characteristically responded to the loss of domestic market dominance in the manufacturing sector to foreign firms by invoking the principles of free and fair trade in order to delegitimate this foreign competition and legitimate the imposition of trade barriers designed to encourage the investment of multinational corporations (MNCs) in the United States. These tactics have largely succeeded in attracting investment and thus aided domestic employment and the balance of trade. The short-term benefits, however, have been achieved at long-term, unforeseen, undesirable economic and political costs in terms of both the balance of payments and state autonomy. Alternative state responses to the threat posed by Japanese MNCs, while consistent with principles of free trade, challenge the traditional liberal conception of the scope and domain of state behavior and provide more effective policies in achieving both short- and long-term objectives. This article draws on data relating to the treatment of subsidiaries of American automobile manufacturers by European governments with competing indigenous producers in specifying two variables critical to identifying policy alternatives: first, the degree of access granted by the state to foreign firms (limited or unlimited access) and, second, the type of support provided by the state to domestic firms (discriminatory or nondiscriminatory intervention). The analysis suggests that there are four possible policy combinations, which generally reflect the four different postwar state policies pursued by West Germany, France, Britain, and the United States. Of these four, the combination employed by West Germany has proved most effective in pursuing policies consistent with liberal trade principles while reconciling short-term employment and fiscal goals with the broader long-term objectives of sustaining state autonomy and balance-of-payments surpluses in the face of foreign competition. British policies, which have consistently proved the most ineffective, have sacrificed long-term objectives for short-term ones. As a result of structural changes during the 1970s, the American states chosen policy combination was altered and now replicates the traditional British formula. The United States therefore risks comparable economic and political consequences.

Ideology, interests, and the American executive: toward a theory of foreign competition and manufacturing trade policy

Faced with a formidable competitiveness problem, the American government chief executive appeared to offer a series of ad hoc responses in the 1980s. Contrarily, this article suggests that executive responses to foreign economic challenges follow a predictable pattern. Pointing to the interactive effects of ideology and interest, this article argues that both the degree and type of executive response, be it in the form of market-opening strategies, of temporary or permanent forms of protectionism, or of adopting a laissez-faire approach, can be predicted based on two factors: whether a sector is characterized as “high tech” and whether it is considered to be competitive. A major implication of this argument is that the U.S. chief executive has used trade policy as a surrogate for industrial policy; but in so doing, the strategic considerations associated with industrial policies have been bypassed. The major effect is that the executive fails to intervene only in the realm of an “infant industry” policy—the area most likely to generate a dynamic economy. The product of this combiantion of protectionist policies is a stagnant economy that we term “compromise protectionism.”

American and Chinese leadership during the global financial crisis: Testing Kindleberger’s stabilization functions

Heavily reliant on the work of Charles P Kindleberger, theories of hegemony and power transition have been built on the largely unchallenged assumption that the United States acts as a global economic stabilizer in time of crisis. However, there has been no attempt systematically to delineate, operationalize and test whether the United States performs this role utilizing Kindleberger’s five functions. Proponents of these theories have, in contrast, characterized China as either a free-rider or a predator waiting to challenge American leadership in times of crisis. In evaluating these characterizations, we test two hypotheses that examine the extent to which the United States and China have performed these stabilizing functions with regard to three major economic crises (the 1997 Asian economic crisis, the 2001 “DotCom” crisis and the Great Recession of 2007–2009). Our findings suggest that Kindleberger’s functions are more evenly shared than conventional scholarship would predict and that China has played a supportive, stabilizing role. Without evidence of explicit collaboration between the two countries, these functions were shared. Furthermore, China played an increasingly important role in supporting the global economic system over time and the trend line suggests they will continue to do so in the future. If Kindleberger’s criteria are correct, the assumption of a single country, the United States, acting as a stabilizer is therefore empirically mistaken. If his criteria are flawed, major IR theories that have assumed the criteria to be true and/or have assumed that the United States plays this unique role in the global economy are in need of critical reassessment.

The contemporary power of memory: The Dilemmas for German foreign policy

Collective memory matters in the formulation and implementation of any countrys foreign policy. This is a fortiori the case in todays Germany where policy makers and the public confront an array of collective memories which are mutually antagonistic, often contradictory and still highly contentious. After presenting an argument for the validity of collective memory as a decisive factor in the creation and choice of policy, the article then describes the present “memory map” of Germany and concludes with some speculative thoughts on how persistent collective memories might influence the speed and direction of European development.

Southeast Asian prospects and realities: American hopes and fears

Abstract We present and consider five alternative scenarios of development — past, present and future — for Southeast Asia. Longitudinal data on foreign direct investment, trade, and currency valuation provide our basis for understanding the relations among the countries in this region as well as their relations with major external powers, especially the United States, Japan, and China. Our analysis suggests regional diversity rather than uniformity, with considerable flux and heterogeneity in the external economic ties of the countries resident in this area. Moreover, we argue that it would be overly simplistic to view changes in these ties only in bilateral terms of US or Japanese gains or losses. Instead, the Southeast Asian themselves, the other newly‐industrializing countries, and the constituent parts of Greater China are all increasingly making their presence felt.

Modell Deutschland and the New Europe

Although the end of 1992 will mark the beginning of the European Internal Market, 1989 might well be considered the year of Europe. In an earlier age it might even have been called an annus mirabilis. Not only did it see a fundamental reorganization in existing power relations in state and society, a change in elites, the redefinition of public and private, and the introduction of a new economic order in Eastern Europe, it also restored Western Europe to its former contours if not its former borders. It was the year of Germany, which saw the long awaited unification of both the divided capital and state mat was the most conspicuous expression of the Cold War and a divided Europe.

Germany: hegemonic power and economic gain?

German economic power in Europe is uncontested. What is contested are its effects on Germanys neighbors. Accompanying the obvious benefits that accrue to Europe from German economic might are also potential disadvantages, particularly that of dependence. Data on Germanys relationship with countries in both East and West Europe shed light on this issue. This study suggests that the benefits outweigh any associated costs, thus rendering Germany a benign hegemon.