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.     

Not Sustainable: India's Trade and Current Account Deficits

India's trade balance and current account have shown persistent deficits for a major part of its post‐independence period. Since the mid‐2000s, trade deficits have increased perilously, with a sharp rise in both oil and non‐oil imports. India has relied on services exports, remittances and capital inflows to offset trade deficits and sustain the current account deficit. This article examines the sustainability of relying on capital inflows, remittances and services exports to sustain these persistent trade and current account deficits. It argues that all three sources entail elements of fragility. The recent global economic slowdown, economic recessions in the United States and Europe, slow economic recovery, low growth forecasts and possibility of a secular slowdown in the United States and Europe raise questions about whether services exports and remittances can continue to generate sufficient earnings to offset trade deficits. Relying on capital inflows also carries risks of financial fragility, with short‐term capital inflows and external commercial borrowings becoming more prominent in the Indian economy.     

Abolition and Imperial Law, 1790–1820

Historians have represented the movement for the abolition of the slave trade as a turning point in international law, either characterising the formation of mixed commissions to adjudicate slave ship captures as elements of early human rights law or interpreting the treaty regime supporting the ban on the slave trade as marking a decisive shift towards positivism in international law. A closer look at the legal history of abolition suggests that such perspectives omit an important dimension: the ties between abolition and imperial legal consolidation. In exploring such ties, the article first examines prize law and its direct and indirect influence on calls for intra-imperial regulation of the slave trade, especially its effective criminalisation. Across the empire, efforts to ban the slave trade reflected and reinforced pressures to strengthen imperial legal authority by regulating and restricting planter legal prerogatives.     

London in the European financial services industry: locational advantage and product complementarities

If its prospects were doubted in the early 1990s, London isnow the pre-eminent international financial centre. It dominatesits European rivals and is joined with New York and Tokyo ina non-stop reciprocal global embrace. Whereas some analystsapproach this topic concentrating on the nature and qualityof market relationships in London, others emphasise the rolethat government regulation has played in promoting the growthof the City of London with respect to its European rivals. Here,I elaborate the logic whereby financial products and servicesare produced at a particular point in space even if financialtrading is an increasingly ubiquitous virtual activity. I emphasisethe competitive dynamics of the financial services industry,the complementary qualities of financial products, and the placeof London in corporate global transactions systems. I mean toshow that the production of financial products has been broughtto ground (so to speak) in London for a variety of (perhapsnon-replicable) reasons. In this regard, my argument is clearlyat odds with those analysts of information and communicationtechnology who proclaim the end of geography. However, my argumentsits uncomfortably with those who insist upon the persistenceand co-existence of different national financial systems. Implicationsare drawn for the role of London in the evolving integratedEuropean market for financial services, and for the future ofcontinental European financial centres.     

Trade,culture and the European Union cultural exception

ABSTRACT

The article examines how the European Union has addressed the ‘trade and culture debate’ in its international trade agreements. From a cultural exception approach based on an attempt to detach culture from trade provisions, the European Union economic agreements seem to evolve to a broader and more holistic position aiming to promote cultural exchanges through cooperation, while still safeguarding policy space in cultural matters through its traditional cultural exception. The article provides an overview of the European positions to defend the specificity of the audio-visual services sector at the multilateral (World Trade Organization Agreements), regional and bilateral levels. It also examines how the implementation of the 2005 UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions has led the European Union to negotiate cultural cooperation provisions in parallel to some of its recent bilateral and regional trade agreements and the way this Convention may impact the understanding of the ‘trade and culture debate’.     

Export of Services of Servicing Exports?

Information and communications technology has ensured that many producer services, as well as more ‘basic’ services such as transportation or insurance, are now more tradable than ever. All the indications are that this trade will increase. This has raised the international profile of service and altered governments to their potential as sources of export revenue. This is seen as one way of enhancing national (or regional) economic performance. But should this be assumed to be a panacea for improving national economic growth and restructuring? The general pattern and structure of international trade in services is examined to show that, while valuable, the direct contribution of services to national exports is actually growing relatively slowly and the pattern of trade is highly concentrated. It may actually be important to recognize and nurture the indirect contribution of services to overall national export activity. Goods production and distribution is increasingly dependent on service knowledge and skill; its export competitiveness is a function of the expertise and intellectual knowledge (mainly services) incorporated in the products, the ‘value’ of those products to consumers, and the ways in which they reach out to their markets.     

The locus of financial regulation: home versus host

If the G's are the world's steering committee, the step from G7 to G20 deepened the democratic legitimacy of this committee. However, it also shifted influence to a group that share little else other than economic power: they have diverse experiences, challenges, cultural perspectives and starting points. This is particularly the case in the field of financial regulation, where action across these countries in recent months—despite all the language of global regulation—is increasingly local. The prospect of the new global being quite local has dismayed some. But it need not. This article challenges the dichotomy of more global versus more local. It argues that financial internationalism—greater cooperation by nations for the benefit of all—is better served by institutions that help to integrate diverse systems than those which try to enforce one‐size‐fits‐all approach to very different economies. International banks persuaded regulators of the benefits of home country regulation and a level playing field for bankers. But the benefits accrued largely to the banks in the boom and proved an avenue for contagion during the crash. Host country regulation may prove a safer way to regulate financial systems, in particular by allowing regulation to be more responsive to national economic conditions and cycles. It is likely that a shift back to host country regulation will act as a drag on international capital flows. The instinct of economists is that the cost of this is uncertain, suspect and conditional, especially when compared to the costs of financial crashes. Host country regulation does not mean there is no role for international institutions, such as the newly minted Financial Stability Board. Instead, it suggests a more nuanced role, potentially encompassing the policing of international market infrastructure, financial protectionism, information free flow between regulators and the convergence of regulatory principles and the consolidation of regulatory instruments. An informed and collegiate process of integrating different financial systems will be a more resilient system than one which tries to apply a single rule book across inherently different countries.     

Trade and culture: the United States

ABSTRACT

The US government has long held that cultural goods and services represent an economic sector like any other and should be liberalized. The American cultural and digital industries enjoy a strong competitive advantage and constitute a leading export sector. This US stance has antagonized many countries pursuing cultural policies. This has led the US government to soften its trade strategy and accept financial measures, as well as a broader array of ‘traditional’ cultural regulatory instruments. At the same time, the United States insists on the absence of restrictions in digital networks, through which cultural contents are to be increasingly distributed and accessed. Under the negative-list negotiating approach, whereby everything is liberalized save for specific exceptions, states parties to US trade agreements have secured a varying array of measures. However, only a handful, essentially industrial countries, have secured digital exceptions, the latter coupled with conditions raising questions concerning their applicability.     

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.     

Who is in control of the international monetary system?

Although the financial and economic crisis did not directly hit the international monetary system, it has lead to the rethinking of the overall architecture that underpins the world economy. Can the current system of floating currency blocs with dollar‐based trade and reserves withstand the strains of the global adjustment ahead? It is time to consider alternatives. This article argues that the existing system needs to evolve into a multicurrency one in which a number of international currencies, ideally representing the main trading areas, have the function of storing value and providing the unit of measure. A multicurrency system would respond more flexibly to the demand for liquidity and would provide a way to diversify the accumulation of reserve assets. It is also more appropriate for the increasingly multipolar world economy. The article discusses how in today's larger and more integrated world economy the dependence on the dollar as the basis of both trade flows and financial reserves has become excessive, creating some fundamental imbalances. However, while the rationale for change is clear, the current system is locked in a form of stable disequilibrium where the status quo carries the lowest risk for most players in the short‐term. Any abrupt move away from the dollar could trigger trade flow disruption and exchange value losses. Policy cooperation should keep the imbalances under control and manage the transition to a more stable system. The system will evolve, albeit gradually. Looking at the steps taken by some countries, notably China, there is the gathering impression that this decade is one of transition, rather than a ‘Bretton Woods moment’. Any reshaping will have to bring in the views of the ‘rising powers’, China in particular, and their concerns about the limitations of the existing system and the increasingly asymmetric burden of adjustment that it imposes.     

国内区域贸易、国际贸易与国家竞争力

大国国内区域贸易与国际贸易关系主要表现在两个方面:一是国内区域贸易与国际贸易存在一定程度上的相互替代的关系;二是国内区域贸易与国际贸易存在相互促进的关系,发展国内区域贸易能提升大国在国际经济中的竞争力。     

人民币国际化及其对币缘政治的影响

当今世界有两个货币现象引人注目,一个是欧元危机,另一个是人民币币缘政治影响的扩大。文章总结了扩大人民币币缘政治影响所取得的成效,探讨了进一步提升的路径。将人民币币缘政治影响的扩大总结为使用范围扩大、跨境贸易中结算额增加、与其他货币的互换额攀升、可直接交易国家增多、离岸清算中心数增加、国际地位提升、国际化指数提高7个方面;提出了进一步提升人民币币缘政治影响的6点建议：①促进经济持续稳定发展,增强我国的综合实力与国际竞争力,②积极开展国际贸易合作,③遵循周边→区域→全球的顺序有序推进,④以地缘优势共建“一带一路”倡议,⑤充分发挥香港、中国（上海）自贸区的作用,⑥借力亚投行的平台,优化国际金融格局。     

Greenland in the center: what happened when the Danish–Norwegian officials met English and Dutch whalers in Disko Bay, 1780–1820

Between 1780 and 1820 crucial changes took place in the economic and cultural relationship between Denmark–Norway and its North Atlantic dependencies. In Greenland, the state imposed a stringent set of social and economic controls, at the same time when the restrictions on trade in Iceland and Northern Norway were relaxed. In 1776 the Royal Greenlandic Trading Company was established, but during the eighteenth century the waters around Greenland were a hub of international whaling trade as Dutch, American, and British ships came into contact with the Inuit, who were legally under Danish-Norwegian social regulation. This article uses records of Danish officials in Greenland and those of incidental observers to understand the disjuncture between the law of Denmark–Norway and the realities of Disko Bay. The officials contended with better equipped foreign ships, the Inuit desire to trade with these ships, and communication problems with the capital. This period is characterized by experimentation with different methods of production, contrasting strongly with the later nineteenth century, in which Danish–Greenlandic policy became more restrictive. By the nineteenth century international whaling trade had followed the declining whale stocks westward to the Canadian and American waters, so Denmark-Norway could impose these restrictions more easily.     

British Imperialism and the Political Economy of Malayan Independence

The article focuses on Britain’s relationship with Malaya shortly before and after its independence from the British Empire. The article looks at the negotiations concerning the financial settlement prior to independence. Britain sought to keep Malaya within the sterling area at all costs, even after de jure convertibility had been achieved, due to its high dollar earning capacity, which remained important due to persistent trade deficits with the US from the end of the Second World War. The article argues that this settlement, while seemingly very generous for an independent Malaya, was still very much intended to maintain Britain’s role within the global economy, to ensure sterling’s status as an international currency and to support conditions for British economic growth.     

日本的不良债权及其政策措施

自泡沫经济崩溃后产生不良债权以来,日本金融机构的不良债权就一直是持续增加的趋势,这在90年代后期尤为明显,巨额的不良债权对金融机构和日本经济都产生了极为严重的影响,为此,日本政府通过制订有关金融法规推进金融改革,实和金融稳定和政策和金融缓和政策,加强金融监督和金融检查等有关措施,千方百计地解决不良债权问题,日本政府解决不良债权的政策措施并未能阻止不良债权的继续增加,其处理不良债权的计划一再的落空,今后也不会一帆风顺,尽管如此,有关政策措施确实是起到了一定的作用,有值得学习和借鉴之处。     

Drug Control in Afghanistan: Culture,Politics, and Power during the 1958 Prohibition of Opium in Badakhshan

This article explores the process leading to the Afghan government's decision to implement a prohibition and eradication of opium in the northeastern province of Badakhshan. It explores why Daud chose Badakhshan, the impact of the opium ban on the people of Badakhshan and the future of opium production and trade, as well as the evolution of drug control in Afghanistan under the Musahiban dynasty. Ultimately, the ban was launched because it allowed Daud to garner international praise and financial support, while enforcing eradication in an area inhabited by ethnic minorities ensured that the Afghan government's coercive strategy would not generate resistance from rural Pashtun tribes historically opposed to these types of state intervention.     

发达国家和发展中国家不同的贸易地位引发的贸易与环境问题分析

本文在对发达国家和发展中国家的贸易环境观进行比较分析的基础上,指出绿色贸易壁垒是发达国家在贸易活动中进行环境保护的主要手段。发达国家的贸易环境保护引发了一系列的环境问题,而发展中国家却遭受了许多不平等待遇。发展中国家应采取积极措施,协调贸易与环境保护问题。     

环境管制措施对区域环境与贸易的约束效应

环境管制是指各国在国际贸易中为了实现环境与贸易的协调关系,以环保为目的而采取的贸易限制措施,主要包括课征环境进口附加税、限制或禁止进出口、推行国内加工和生产方法、实行环境标志制度、政府环境补贴等5种类型。本文总结了在全球化背景下环境管制措施产生的原因及施行内容,在此基础上就其对区域环境与贸易的约束效应做了分析,旨在为我国突破"绿色壁垒"提供警示和借鉴。     

Dealing with the banks: populism and the public interest in the global financial crisis

Political protest in Europe and the problematic politics surrounding bank recapitalization in the US have raised growing concerns about the rise of populist politics. Populist politics is problematic in its search for simplistic solutions to complex problems, its disdain for institutions and its political ambiguity. Nonetheless, the rise of populist mobilization also points to genuine concerns about the functioning of democracy. The politics of financial regulation has been dominated by a narrow, utilitarian and technocratic mode of policy-making that has tried to limit public debate, favouring an expert discourse which privileges questions of efficiency over questions of distribution. This article explores the distributional issues at stake in banking recapitalization (particularly questions about the returns governments receive for their investment) and regulation (through an exploration of the financialization literature). It argues that, while populist appeals to 'the people' are too ambiguous to be helpful, given the complexity of the interests at stake in financial regulation, there is a need for a wider and more democratic debate about financial regulation that pays greater attention to distributional issues. Populist mobilization can create pressure for debate, even if it presents few solutions. As a result, we should be wary of moves to shift too much regulation to the international level where populist mobilization is less effective.     

Multipolar governance and global imbalances

The deficiency of financial regulation and the presence of large macroeconomic global imbalances should be considered complementary interpretations of the global economic and financial crisis. The risk we face is that a new expansionary phase will bring back large and growing external imbalances, which will keep world growth on an unsustainable path. At the international level there is a classical ‘collective action’ problem to address since if export growth oriented strategies are pursued by all major countries they will generate a deflationary bias in world demand. This article explores how multilateral cooperation and international institutions can become reengaged with, and provides a meaningful device for addressing, these new issues and problems. It is necessary to restore shared rules of the game for international macroeconomic adjustment. This means endorsing a strengthened surveillance regime for the IMF in order to induce more compatible macroeconomic policies. In this regard, the IMF should have enforcement rule incentives and mechanisms, otherwise we are going to repeat past negative experiences where peer pressure did not produce significant results.