Stefan A. Schirm

Leaders in need of followers: Emerging powers in global governance

In the last decade, policy-makers, the media and academic research have been increasingly discussing the new role of emerging powers in the world economy and in global governance. Countries such as Brazil, China, India and South Africa as well as Germany, Japan and Russia have been assigned a greater influence in economic as well as political matters in their regions and in world politics. Often labelled as ‘regional powers’, ‘middle powers’ or ‘would-be great powers’ (Hurrell 2006; Nolte 2006), ‘uncertain powers’ (Maull 2006: 281), and ‘new titans’ (The Economist 2006), these countries are today widely perceived as pivotal states in international relations. The reasons for the assignment of a new role and often of increased power to these states are their demographic and geographic size, their economic and military capacities and their political aspirations. The countries defined here under the rubric of ‘emerging powers’ dominate their neighbours in terms of power over resources, that is, population, territory, military capacity and gross domestic product. In addition, they articulate a wish to change the distribution of power in the international system and to assume leadership roles in global governance.

Ideas and interests in global financial governance: comparing German and US preference formation

Financial crises underline the necessity for more effective global governance. Despite the creation of the Basel II Accord, no agreement has been reached on the reform of the International Monetary Fund (IMF). Why do governments only selectively agree to reform global governance? I argue that convergence and divergence of governmental positions cannot be explained solely by the logic of the international system, institutions or globalization. Instead, they strongly reflect domestic ideas and interests. Furthermore, the ability of governments to compromise internationally is influenced by the different impact of domestic ideas and interests. With regard to their prevalence in domestic preference formation, ideas prevail when governance affects lobby groups diffusely and poses fundamental questions on the role of politics in governing the economy. Interests prevail when lobby groups are affected directly and new governance concerns a specific distribution of costs. These arguments are tested on the preference formation of the United States and German governments on the IMF and Basel II.

Varieties of Strategies: Societal Influences on British and German Responses to the Global Economic Crisis

The current global financial and economic crisis has led to widespread calls for multilateral policy co-ordination. However, national strategies towards financial market regulation and domestic stimulus programmes considerably diverge in cross-country comparison. Why do policy reactions to the crisis differ? Following a societal approach to preference formation, I argue that national strategies are strongly shaped by value-based ideas and by sectoral interests. While ideas on the role of politics in governing the economy can, for example, lean more towards trust in market forces or instead favour governmental regulation, interests may influence governmental positions according to the economic relevance of the respective sector. An analysis of the discourse and the measures regarding stimulus packages and financial market regulation in Britain and Germany supports this argument and shows that ideas as expectations, institutionalised ideas and material interests reinforced one another in influencing governmental strategies.

Domestic ideas, institutions or interests? Explaining governmental preferences towards global economic governance

Controversies in global economic governance are strongly shaped by domestic societal forces. In some instances, however, governmental positions reflect domestic interests, while ideas influence positions in other instances. Under which conditions do ideas prevail over interests and vice versa? How do they interact with each other and with domestic institutions? I argue that governmental positions predominantly follow interests if the governance issue at stake impacts the cost–benefit calculations of specific sectors, while ideas dominate when sectoral interests are affected in a diffuse way and fundamental questions on the role of politics in steering the economy are at stake. Furthermore, governmental positions tend to be consistent with national institutions, when the global governance issue concerned refers to questions related to domestic patterns of socio-economic regulation. In enhancing the societal approach to international political economy (IPE), the article exemplifies the relevance of these arguments in case studies on the G20 and the International Monetary Fund.

The Divergence of Global Economic Governance Strategies

The globalization of the world economy since the 1970s is increasingly integrating national economies and blurring the distinction between internal and external economic developments. This process has promoted growth and competition, but was overshadowed by severe financial crises such as in Asia and Mexico, which led to recessions in the directly affected countries and were contagious to the respective regions, to world trade and stock markets. These crises suggest the need for an improved political management of the world economy as existing mechanisms seem not to perform adequately. Thus, global economic governance (GEG), defined as the multilateral, rule-based management of the world economy by public and private actors, is both a subject for empirical analysis and a normative, prescriptive debate on the future of the political management of globalization.

Societal foundations of governmental preference formation in the Eurozone crisis

ABSTRACT Why is the management of the Eurozone crisis marked by persistently diverging preferences among members of the European Monetary Union (EMU) despite decades of European integration, institution building, and commitments to joint action? While some EMU member countries favour fiscal restraint and strict conditions for financial help to crisis-ridden countries, others advocate discretionary fiscal policies and lax conditions for aid. The latter group demands the creation of Eurobonds, while the former group rejects these demands since Eurobonds would communitarise public debt without a common economic policy. These divergences rest on differences in competitiveness and solvency, but also point to ideational differences regarding the role of politics in steering the economy such as in deficit-spending and public debt. Hence, controversies seem to express differences in material interests as well as ideational positions. Thus, I argue that diverging preferences in European financial governance are shaped by value based societal ideas and material interests dominant in the domestic politics of EMU members. Following the societal approach to governmental preference formation, this argument is analysed in cross-country comparisons of the domestic variables and governmental positions in the Eurocrisis.

Domestic Politics-Theorien und Societal Approach

Theorien der endogenen Praferenzformation wie etwa Domestic-Politics-Ansatze und die Weiterentwicklung im Societal Approach zielen auf die gesellschaftsorientierte Erklarung von Regierungspolitik in der Internationalen Politischen Okonomie. Forschungsfragen betreffen aktuell beispielsweise die Kontroversen in der G20 uber die Steuerung der Weltwirtschaft, die unterschiedlichen Reaktionen von Regierungen gegenuber der Weltfinanzkrise sowie die Varianz von Regierungspositionen bei der Reform internationaler Organisationen.

The Domestic Politics of European Preferences Towards Global Economic Governance

Abstract Why is global economic governance often marked by controversies among EU member states despite their commitment to joint action? European members of the G20 diverge over public debt to stimulate growth and over global trade imbalances. These issues express differences in economic interests, such as competitiveness, as well as ideational divergences regarding deficit spending and the role of the government in steering the economy. Therefore, domestic politics theories seem to constitute a necessary complement to integration theories in explaining European governments’ preferences. In applying the societal approach, I argue that domestic value-based ideas and material interests shape governmental preferences in international political economy. In doing so, ideas prevail when fundamental economic policy issues such as public debt are at stake, while interests prevail, when governance directly affects the costs and benefits of specific economic sectors. These arguments are analysed by comparing the domestic politics of British, French, German and Italian positions towards two policy debates in the G20.

Societal Foundations of European Policy Divergence in Financial Governance

EU member states frequently disagree over the management of financial crises, both regionally in the Eurozone and globally in the G20 despite decades of European integration, institution-building, and commitments to joint action. Mainstream integration theories of neofunctional institutionalism and liberal intergovernmentalism cannot sufficiently explain this puzzle of persistent European policy divergence on financial governance. I argue that the policy divergences can only be understood by analysing the societal foundations of governmental positions with the societal approach to governmental preference formation. The societal approach focusses on domestic societal ideas and material interests as explanatory variables for governmental positions. Regarding European policy divergence, I argue that both the coordination problems in the Eurozone and the European policy divergence in the G20 reflect the heterogeneity of domestic societal influences on member state governments. These arguments are empirically evidenced in case studies on the management of the Eurozone crisis and on Europe’s role in the governance of the global financial crisis in the G20.

Modelle der internationalen Ordnung

Das Thema internationale Ordnung ist derart umfassend, dass sich dieser Beitrag nur in Form eines einleitenden „Brainstormings“ mit einigen Facetten denkbarer Dimensionen des internationalen Systems befassen kann. Relevant erscheint das Thema gleich in mehrfacher Hinsicht auf Grund neuer und neu zu „ordnender“ Entwicklungen, die sich dem Zugriff eines einzelnen Nationalstaates zunehmend entziehen und somit eine internationale Ordnung erfordern: Globalisierung und “Neue Kriege“.