Introduction

The aim of this special issue of International Affairs is to address the changing dynamics in the international economic system from an interdisciplinary standpoint, in order to unpack some of the emerging processes of globalization and to investigate the relationship between power and rule‐setting. The idea is to bridge the gap between the traditional realist accounts of the international system that place the nation‐state at the centre of the analysis, and the liberal, market‐driven approach that focuses on the problems of an increasingly integrated global economy and fragmented political authority. The framing question is how the global order (governance) has to change in order to accommodate the enlargement of the playing field and in particular the emergence of fast‐growing developing economies. How is this shift going to affect the distribution of power, both among nations and between state and non‐state actors? Is this shift going to drive a fundamental rethinking of the rules governing relations between countries—and regions—and institutions? The thread that links the articles in this special issue is the rather benign view of globalization, leaning towards ‘liberal ingenuity’ that sees governance as a way to accommodate conflicting interests through institutions in such a way as to minimize the potential for conflict.     

One world? Many worlds? The place of regions in the study of international society

This article is a revised version of the 2006 Martin Wight Memorial Lecture and examines the placeof regional states‐systems or regional international societies within understandings of contemporary international society as whole. It addresses the relationship between the one world and the many worlds‐on one side, the one world of globalizing capitalism, of global security dynamics, of a global political system that, for many, revolves a single hegemonic power, of global institutions and global governance, and of the drive to develop and embed a global cosmopolitan ethic; and, on the other side, the extent to which regions and the regional level of practice and of analysis havebecome more firmly established as important elements of the architecture of world politics; and the extent to which a multiregional system of international relations may be emerging. The first section considers explanations of the place of regionalism in contemporary international society and the various ways in which the one world aff ects the many. The second section deals with how regionalism might best be studied. The final section analyses four ways in which regionalism may contribute to international order and global governance.     

What Does the Somali Experience Teach Us about the Social Contract and the State?

Since 1991 the international system has struggled and failed to recreate a state on the territory of the former Somalia. Proto‐state systems have been formed by Somalis themselves in Somaliland and Puntland and alternative forms of governance and order exist in other parts of Somalia, but none enjoys international recognition. The polities of Somalia offer important lessons concerning our general theories about social contract, the role that states play in creating wealth, indigenous systems of governance, and the failure of existing international approaches to state reconstruction. Contemporary Somali politics is re‐explored here to extract these lessons. The article explores the assumptions embedded in the works of the classic Western social contract theorists in the light of Somali experience in order to show that the underlying conceptual structure of international state reconstruction work needs to be rethought. We conclude that it frequently is better to allow for bottom‐up, organic, disjointed negotiation of indigenous governance solutions (even though they probably will not conform to Western ideas of liberal democracy) than for the international system to impose top‐down answers. The former more closely tracks the history of state formation in Europe and the latter is troubled by the inconsistent and not necessarily benign interests of the international actors involved. Indigenous, local political systems are changed by the stresses of violent conflict, so prompt action to employ them in a post‐conflict situation is indicated.     

Setting the rules: private power,political underpinnings,and legitimacy in global monetary and financial governance

The role of private market agents in global monetary and financial governance has increased as globalization has proceeded. This shift in both markets and patterns of governance has often been encouraged by states themselves in pursuit of liberalization policies. Much of the literature views these developments in a positive light, yet there are other aspects of these developments that also merit attention. This article supports its central propositions with two cases of emerging global financial governance processes: the Basel II capital adequacy standards for international banking supervision and the International Organization of Securities Commissions‐based transnational regulatory processes underpinning the functioning of cross‐border securities markets. Based on the case findings, the article argues first that private sector self‐regulation and/or public‐private partnership in governance processes can leave public authorities vulnerable to dependence on the information and expertise provided by private agents in a fast‐moving market environment. Policy in the vital domain of financial regulation has been increasingly aligned to private sector preferences to a degree that should raise fears of bureaucratic capture. Second, the article contends that the overall outcome in terms of global financial system efficiency and stability has been mixed, bringing a range of important benefits but also instability and crisis for many societies to a degree that has led to challenges to global governance itself. The case material indicates that the input, output and accountability phases of legitimacy in global monetary and financial governance are highly problematic, and much of the problem relates to the way in which private market agents are integrated into the decision‐making process. Third, the article posits that a better consideration of these three ‘phases’ of legitimacy and their interrelationships is likely to enhance the political underpinnings and legitimacy of global financial and monetary order.     

The OECD and the Reconfiguration of the State in Emerging Economies: Manufacturing ‘Regulatory Capacity’

This article explores attempts to construct ‘regulatory capacity’ in developing countries, focusing on the work of the Organisation for Economic Co‐operation and Development (OECD) and its role as an international standard‐setting institution in regulatory governance. The article explores how the construction of specific forms of regulatory capacity, and attempts to orchestrate the adoption of regulatory reform agendas in emerging economies, reflect broader processes of political‐policy transfer that impact state capacity and the ability of developing states to manage economic development. By analysing the OECD's engagement practices with third party organizations such as APEC (Asia‐Pacific Economic Cooperation organization) and ASEAN (the Association of Southeast Asian Nations) and its specific engagement with emerging economies through country ‘reviews’ and ‘audits’, the author explores the implications for state capacity in terms of the adoption of regulatory systems of governance.     

Remaking the architecture: the emerging powers,self‐insuring and regional insulation

This article examines the interaction between the emerging and traditional powers in global governance reform, and asks whether we are heading towards an international financial system that is more fragmented, where power is more diffused and national and regional arrangements play a more prominent role, at the expense of global multilateral institutions. It begins with a brief discussion of the global systemic and country‐specific factors that motivate Brazil, China and other emerging countries to accumulate large currency reserves. We find that national arrangements for managing financial and currency crises will continue to hold sway for emerging countries in the wake of the global crisis. However, the actual capacity of regional arrangements in managing future financial crises is uncertain, and the significance of regional alternatives in the emerging architecture should not be overstated. The real capacity of East Asian regional arrangements to manage financial crises, payments problems or currency attacks is still untested, and key thresholds in multilateralization still lie ahead. In South America, multilateral lender‐of‐last‐resort support inside the region is largely confined to the sub‐regional level and is limited by Brazil's reticence. Enduring reliance on bilateral measures for financial crisis management is noted. Where there has been progress in regional solutions, since the global crisis, has been in the role of regional development banks in providing financing for developing countries to enact counter‐cyclical policies. Such support also provides insulation for states in the region against the contagion effects of international financial crisis. We are in the midst of transitioning to a more diverse and multi‐tiered global financial and monetary system. A reformed IMF could have a role to play in addressing global imbalances and encouraging a shift from national reserves to collective insurance, however, it would be preconditioned by significant shifts in the policy, lending operations, and internal governance of the Fund, and willingness among the G20 to strike a new consensus on how to deal with imbalances, and new accommodation on acceptable reserve levels.     

Between national sovereignty and international power: what external voice for the euro?

Does the creation of the euro imply that the European Union is now speaking with one voice in international monetary matters? Is the EU therefore likely to challenge the hegemony of the United States on the world stage, at least in the realm of international financial diplomacy? This article analyses the current state of external representation of the common currency and asks why the issue of the euro’s single voice has not yet been resolved. Comparing other areas of common policy–making that have an external dimension, such as trade, the authors explore the specificities of monetary and financial affairs that make the conflict between national sovereignty and international efficiency so difficult to settle. In particular, the authors focus on a set of international institutional arrangements regarding economic policy–making within the EU, and external arrangements within international fora (the IMF and the G7), which have so far impeded the ability of the EU to play a coherent role on the international monetary stage. The authors argue that the fact of the euro means there needs to exist a clear system of political representation in the area of monetary and financial governance in the EU, and they explore various options for who the external voice of the euro could be. Finally, the implications of creating the euro’s external voice for transatlantic relations, for EU enlargements, and for the debate about the ‘democratic deficit’ in Europe are analysed.     

Tropical forests in the global states system

The purpose of this article is to point to an inherent ambivalence within international society related to tropical forests. As peripheral and often relatively insulated terrestrial spaces, tropical forests have been subject to enduring attempts by state structures to consolidate political authority and their connection to nodes of economic power. However, as they have come to be increasingly degraded and cleared, policy reform agendas have been enacted to promote their conservation. Involving a range of state and non‐state actors at a national and international level, forest policy reform agendas have sought to create a structure of economic incentives aimed at their ‘sustainable management’ and thus their preservation as forests. Paradoxically, a key impact of these evolving agendas has been to further the extension of state power. Arguing that this points to a deep‐seated tension within international society related to the governance of peripheral spaces, it will be suggested that state‐making ambitions have tended to shape and ultimately negate international tropical forest conservation initiatives.     

State strength and capitalist weakness: Manufacturing capital and the Tariff Board's attack on McEwenism, 1967–74

In order to test a number of propositions drawn from recent theories of the state, this paper examines power relationships between manufacturing capital and the state at the federal level of Australian politics during a period of tariff policy reformism between 1967 and 1974. The paper finds limitations to the ‘privileged position of business’ argument of Lindblom, but affirms a more historically dynamic model of state‐capital relations developed independently in the work of Block and Vogel. The paper also affirms the general perspective developed by recent neo‐Weberian theorists regarding the potential for independent state initiative. It is argued that such a perspective is consistent with important aspects of neo‐Marxist ‘relative autonomy’ of the state arguments. Indeed, an important facet of this paper is designed to show, through historical analysis, the conditions under which states within capitalist societies may come to have the autonomy and the capacity to resist important sectors of capital during efforts to restructure the economy.     

Beyond Hybridity to the Politics of Scale: International Intervention and ‘Local’ Politics

The evident failures of international peacebuilding and statebuilding interventions (PSBIs) have recently prompted a focus on the interaction between interventions and target societies and states. Especially popular has been the ‘hybridity’ approach, which understands forms of peace and governance emerging through the mixing of local and international agendas and institutions. This article argues that hybridity is a highly problematic optic. Despite contrary claims, hybridity scholarship falsely dichotomizes ‘local’ and ‘international’ ideal‐typical assemblages, and incorrectly presents outcomes as stemming from conflict and accommodation between them. Scholarship in political geography and state theory provides better tools for explaining PSBIs’ outcomes as reflecting socio‐political contestation over power and resources. We theorize PSBIs as involving a politics of scale, where different social forces promote and resist alternative scales and modes of governance, depending on their interests and agendas. Contestation between these forces, which may be located at different scales and involved in complex, tactical, multi‐scalar alliances, explains the uneven outcomes of international intervention. We demonstrate this using a case study of East Timor, focusing on decentralization and land policy.     

The arc of autonomy in Georgia's Ajara

Drawing on the case study of Georgia's Ajara region, this paper makes the argument for foregrounding autonomy as a strategy used by states for managing diverse territories. Particularly salient to the concept of autonomy is its flexibility as a spatial fix, one which can be variously deployed depending on the form of political relations between center and periphery. Empirically, we draw from a set of 22 interviews conducted in Tbilisi and Ajara's capital of Batumi to trace the arc of autonomy in the republic through its Soviet and post-Soviet history. Established on cultural grounds, the form of Ajara's autonomy has subsequently been institutional, instrumental, and nominal. The republic today maintains its autonomous status, though its competences are delimited from Tbilisi; rather, this status serves as a model for the future—albeit unlikely—reincorporation of South Ossetia and Abkhazia into the Georgian state. In conclusion, the paper endorses greater engagement with autonomies that fall short of conflict and separatism but nonetheless provide valuable insights into the suite of strategies that states employ in the management of territory. Autonomies are possibly entering a new, more unstable period of centralizing pressures that will challenge their original purpose and perhaps also regional peace and stability.     

The intimate dance of diplomacy: in praise of practice

Those who study international relations pay little attention to those who practise them. But the terms of scholarly explanation—the great abstractions of state, interest, power and so on—are always embodied in human representatives, and their interactions mediated through human relationships. The daily experience, lived and felt, of diplomats thus offers a valuable perspective on how international relations work. Two recent studies by Iver Neumann capture this world through an anthropology of the diplomatic tribe. They illuminate the highly distinctive conventions, rituals and symbols of this world, showing how diplomats are recruited and socialized, where and how they perform their roles and how they communicate —and how these practices evolve in the face of social and technological change. Diplomats emerge as indispensable specialists in creating, asserting and agreeing meaning, and diplomatic conduct as a critical variable in explaining international outcomes. Taking the perspective of practice seriously can build a better political science of international relations, balancing first‐person understanding with third‐person explanation, impersonal forces with human stories, and contextual facts with their rhetorical construction. It can also help bridge the gap between theory and practice. This points to an exciting agenda for future research.     

Capitalism and the emergent world order

The two‐centuries‐old hegemony of the West is coming to an end. The ‘revolutions of modernity’ that fuelled the rise of the West are now accessible to all states. As a consequence, the power gap that developed during the nineteenth century and which served as the foundation for a core–periphery international order is closing. The result is a shift from a world of ‘centred globalism’ to one of ‘decentred globalism’. At the same time, as power is becoming more diffuse, the degree of ideological difference among the leading powers is shrinking. Indeed, because all Great Powers in the contemporary world are in some form capitalist, the ideological bandwidth of the emerging international order is narrower than it has been for a century. The question is whether this relative ideological homogeneity will generate geo‐economic or geopolitical competition among the four main modes of capitalist governance: liberal democratic, social democratic, competitive authoritarian and state bureaucratic. This article assesses the strengths and weaknesses of these four modes of capitalist governance, and probes the main contours of inter‐capitalist competition. Will the political differences between democratic and authoritarian capitalists override their shared interests or be mediated by them? Will there be conflicting capitalisms as there were in the early part of the twentieth century? Or will the contemporary world see the development of some kind of concert of capitalist powers? A world of politically differentiated capitalisms is likely to be with us for some time. As such, a central task facing policy‐makers is to ensure that geo‐economic competition takes place without generating geopolitical conflict.     

The Political Economy of Industrialization: A Comparison of Latin American and East Asian Newly Industrializing Countries

ABSTRACT The paper analyses the industrial performance of two East Asian (South Korea and Taiwan) and three Latin American (Argentina, Brazil and Mexico) newly industrializing countries. It argues that the better performance in East Asia is not due simply to differences in trade orientation or the degree of state intervention, but rather to the effectiveness of intervention. This is explained in terms of the relative autonomy of the state and the structuring of the state apparatus in the two regions. The historically determined class structure and the international context led to much greater state autonomy in East Asia than in Latin America. The last part of the paper shows a number of ways in which this greater relative autonomy has contributed to rapid industrial growth in East Asia in comparison with Latin America.     

The Response to HIV/AIDS and the Construction of National Legitimacy: Lessons from Uganda

Uganda faces continual challenges as a low‐income nation reliant on international donors and non‐state actors. It was also one of the first countries to face a population‐wide HIV epidemic, a disease that can strain state capacity to its limits. One would expect that such a combination would weaken the governance structures in a developing country; yet, if anything, the Ugandan state has emerged from its HIV crisis with its legitimacy bolstered. This article reviews the Ugandan response to HIV/AIDS, analysing the ways in which the epidemic has provided a new arena for the Ugandan state to engage with international actors.     

National Minority Rights vs. State Sovereignty in Europe: Changing Norms in International Relations?

Abstract. The 1990s debate on minority rights clearly indicates that minority issues are among the most controversial subjects of international relations. Questions concerning national minorities gained new prominence in international relations, especially in East Central Europe, following the end of the Cold War. Between 1990 and 1995 the formulation of international standards regulating state conduct towards national minorities was a priority for European organisations. This standard setting episode raises several important questions. Why did national minorities reappear on the international agenda after 1989? How were they responded to? Why did state sovereignty continue to take precedence over minority rights?     

Europe and the new balance of global order

The European Union has become an important shaping factor in international relations, but how and under what conditions it can exercise influence and contribute constructively to global order are still not well analysed. In fact, the EU's contribution may resemble more that of a force in physics than of a great power in the traditional sense of international relations (which the EU is not, and will not become in the near future), and its influence depends probably more on what the EU represents and how well it manages its own realm, rather than on what it can do externally. In this sense, European influence in international relations presently benefits from past achievements, and may therefore have peaked if the twin challenges of enlargement and national structural deficiencies are not addressed effectively. But even if the European Union does master those challenges successfully, and thus manages to sustain and perhaps even enhance its influence as a force in international relations, it will still have to proceed cautiously and clearly focus its attempts on shaping its external environment and contributing to a ‘concrete’ or ‘civilized’ global order. In a global setting that, despite appearances to the contrary, seems characterized by a diffusion rather than a concentration of power and by strong tendencies towards entropy rather than order, the EU can and will probably not remain America's principal ally in sustaining Pax Americana. Nor does it seem likely to become an equal partner in a constructive, balanced transatlantic relationship, let alone a great power capable of challenging, perhaps together with others, America's apparent pre‐eminence. The most plausible assumption for the EU's future role in the new balance of global order is that of a ‘civilian force’ with a regional focus. It may best be able to contribute to global order by managing its own realm well, promoting the normative and institutional infrastructure for civilized international relations, not least in the sense of functioning statehood, and working towards effective multilateralism.     

The political requisites of an open international economic system: United States balance of payments policies during the 1960s

This paper explores the political context of an increasingly familiar phenomenon: unilateral interference with international trade and payments. The particular case examined is that of US balance of payments policy between 1960 and 1971, during which time the country which had been the world's foremost advocate of an open world economy attempted to separate the US and international capital markets. The policy is explained at two levels: systemic political imperatives to explain the overall structure of policy choices, and domestic bureaucratic politics to explain the changing sources and objectives of policy. The Bretton Woods system linked US political power to the international monetary system in such a way as to leave the US no choices but those of capital export controls or the destruction of the entire system, as the US balance of payments moved into deficit. The domestic policy process reacting to these international strains followed a pattern of progressive politicisation, which lifted the issue out of the hands of the Treasury and into the White House. Finally, it is suggested that an examination of the political structures which led to restrictive policies in the monetary sphere may shed some light on the current trends toward protectionism in the trade area.     

Shifts in the Global Capitalist Economy and the National Economic Domain

The greater part of regional development theory and thinking focuses most attention either upon spatial structure within nation states or upon inherent tendencies/free market forces within capitalist social formations/domestic economies. The great significance that is attached to the nation state is entirely understandable in terms of the historical specificity of the re-emergence of regional development studies in the post-war era. It is, however, no longer a sufficiently adequate basis for analysis Rather, it is necessary to commence analyses with a consideration of shifts in the global capitalist economy. Whilst the significance of the impacts of the growth in the internationalisation of production have been noted, more attention needs to be devoted to shifts from public to private economic power and from order to disorder in international finance markets. These shifts are not accidental They can be traced to internal weaknesses and inconsistencies in the Bretton Woods arrangements which eroded their ultimate foundation, that of monetary stability. As one consequence, the unregulated growth of private economic power, endemic instability and extreme volatility in international finance markets have all directly and indirectly undermined and eroded the extent of control over domestic economic policy on the part of the nation state