THE DEFINITION OF GLOBAL GOVERNANCE Abstracts from Wolfgang Reinicke, 2000 WEF, and Millennium Charter
GLOBAL PUBLIC POLICYWolfgang H. Reinicke pp.127-138
Foreign Affairs, Vol. 76. No. 6, Nov/Dec 1997JVNote: in order to discuss sovereignty, it has to be redefined in order to fit with globalization there now is an internal sovereignty - versus external sovereignty!!!! Corporations are the culprits in being the glue to weld countries together by way of public private partnerships!!!!
Essentially, interdependence and globalization are used interchangeably. This creates a paradox: the same term that is understood as a mere quantitative rise in a trend going back to the 1960s is also used to refer to a fundamental qualitative change in the international system, predicting perhaps the end of the nation-state. 127
If the former is true, there is little need for governments to reassess their role or that of the institutions and principles that have governed the world economy since the end of WWII. If the latter holds, it becomes necessary to draw a distinction between economic interdependence and globalization, a distinction that provides a basis for reassessing the role of government and governance in an emerging global economy. 127
Interdependence narrowed the distance between sovereign states and caused closer macroeocnomic cooperation.
Globalization is a microeconomic phenomenon. Globalization represents the integration of a cross- national dimension into the very nature of the organizational structure and strategic behavior of individual companies. The cross border movement of intangible capital such as finance, technology, and information, allows companies to enhance their competitiveness. 127
Today About 70% of world trade is intra-industry or intra-firm. Globalization is resulting in the emergence of a single integrated economy shaped by corporate networks and their financial relationships. Interdependence was an imporant precursor of globalization. Itg led to the creation of the GATT [WTO] and the IMF and it was an important causal factor in encouraging globalization.
Like technological innovation, the deregulation and liberalization of cross-border economic activity fostered an environment that not only permitted but compelled companies to adopt global strategies. 129
GLOBALIZATION
Globalization challenges sovereignty, but so did interdependence. Neither interdependence nor globalization can challenge the legal sovereignty of a stateonly other states can. If anything, these forces challenge the operational sovereignty of a government, that is, its ability to exercise sovereignty in the daily affairs of politics. Sovereignty has two dimensions, internal and external. The internal dimension is the relationship between the state and civil society. 129
Following Max Weber, a government is internally sovereign if it enjoys a monopoly of the legitimate power over a range of social activities, including economic ones, within a given territory. That power is embodied in the domestic, legal, administrative, and political structures that guide public policies. With respect to the economy, internal sovereignty takes effect when governments collect taxes or regulate private sector activities. 129
The EXTERNAL DIMENSION of sovereignty refers to relationships among states in the international system. These relationships are defined by the absence of a central authority. As Thomas Hobbes put it, anarchy is the rule of the international system. External economic sovereignty comes into play when countries collect tariffs and alter their exchange rates. Economic interdependence challenges this dimension of state sovereignty. Governments have responded by following the principles of liberal economic internationalism, endorsing the gradual reduction of their external economic sovereignty by lowering tariffs and capital controls. 130
Public-private partnerships -
Global corporate networks challenge a state's internal sovereignty by altering the relationship between the private and public sectors. By inducing corporations to fuse national markets, globalization creates and economic geography that subsumes multiple political geographies. While globalization integrates markets, it fragments politics. 130
Persistent weakness in internal sovereignty will cast doubt on democratic institutions. It is an important factor in the declining trust in democratic institutions of governance and one to which governments must respond.
DEFENSIVE INTERVENTION: economic measures such as tariffs, nontariff barriers and capital controls, forcing companies to reorganize along national lines.
When policymakers intervene OFFENSIVELY with the use of subsidies or competitive deregulation, they set themselves up to become global competitors instead of enticing corporations to set up shop within their territory. 130
The use of offensive intervention has increased as policymakers attempt to broaden the reach of internal sovereignty to match the economic reach of corporate networks. Examples: Helms-Burton Act.
Redefining political geography through partition only gives the appearance of greater control of policy. Partitioning a country focuses exclusively on the external dimension of sovereignty 131.
All these responses emphasize territoriality as an ordering principle of international relations, a condition that integration has tried to overcome and that the end of the Cold War appeared to have secured. 131
Any alternative strategy must avoid the pitfalls of territoriality. FORMING A GLOBAL GOVERNMENT IS ONE RESPONSE, BUT UNREALISTIC. IT WOULD REQUIRE STATES TO ABDICATE THEIR SOVEREIGNTY NOT ONLY IN DAILY AFFAIRS BUT IN A FORMAL SENSE AS WELL. A MORE PROMISING STRATEGY DIFFERENTIATES GOVERNANCE AND GOVERNMENT.
GOVERNANCE, A SOCIAL FUNCTION CRUCIAL FO THE OPERATION OF ANY MARKET ECONOMY DOES NOT HAVE TO BE EQUATED WITH GOVERNMENT. ACCORDINGLY, GLOBAL PUBLIC POLICY UNCOUPLES GOVERNANCE FROM THE NATION-STATE AND GOVERNMENT.
132
TO IMPLEMENT SUCH A STRATEGY, POLICYMAKERS WOULD DELEGATE TASKS TO OTHER ACTORS AND INSTITUTIONS THAT ARE IN A BETTER POSITION TO IMPLEMENT GLOBAL PUBLIC POLICIESNOT ONLY TO PUBLIC SECTOR AGENCIES LIKE THE WORLD BANK AND IMF, BUT ALSO TO BUSINESS, LABOR, AND NGO'S. SUCH PUBLIC PRIVATE PARTNERSHIPS WOULD INCREASE THE LEGITIMACY OF GLOBAL PUBLIC POLICY AND PRODUCE A MORE EFFICIENT AND EFFECTIVE POLICY PROCESS. WHETHER GRAPPLING WITH GLOBAL FINANCIAL REGULATION, ENVIRONMENTAL PROTECTION, TRANSNATIONAL LAW ENFORCEMENT, THE CONTROL OF DUAL-USE TECHNOLOGY OR OTHER ISSUES, PUBLIC PRIVATE PARTNERSHIPS COULD PROVIDE THE FOUNDATION FOR GLOBAL PUBLIC POLICY.
P. 132
First greater transparency is necessary. Strict principles of disclosure and guaranteed access for interested parties would raise public confidence. SECOND, Corporations must facilitate public-private partnerships by improving their own internal control and management structure. Independent audits and incentives are examples. The better these controls, the lower the risk of market failure and need for outside regulation. Those with doubts about public-private partnerships and global public policy should consider the danger of the alternatives. P.132
Whether grappling with global financial regulation, environmental protection, transnational law enforcement, the control of dual use technology, or other issues, public-private partnerships could provide the foundation for global public policy. 132
In North-South relations, the co-existence of interdependence and globalization is reflected in the changing mandate of international organizations such as the WTO which no longer focuses exclusively on free trade but has been pressed to pursue free trade with environmental protection and minimum labor standards.
At the same time, industralized countries through the IMF, the WTO, and the OECD, are encouraging developing nations to deregulate and liberalize their financial markets, they are attempting to establish global public policies that can respond to the consequences of the deregulation and liberalization of their own financial services industries. 133
At minimum, the institutions of interdependence such as the IMF, and of globalization such as the [BIS - Tripartite] Joint Forum which brings together regulators from the banking, securities, and insurance industries should cooperate more closely. 134
Security & NATO
As for the security ramifications of the now largely interdependent and rapidly globalizing world, it will not longer suffice for the architects of international security to view international relations along traditional lines. The co-existence of interdependence and globalization places new demands on international security. Combining external and internal sovereignty in a constructive way will be a significant challenge. 134
The shifting demands on international security will also transform the domestic politics of security policy. ///// As globalization reaches more countries, international institutions charged with security management will have to expand their ability to handle issues of internal sovereignty. 134 The need or inclusiveness extends beyond NATO enlargement.
Data shows globalization not even
The data on foreign direct investment and corporate alliances demonstrates that large parts of the world economy remain excluded from globalization.
IMF/World Bank - shifting focus to internal sovereignty
With international sovereignty becoming an issue of international relations, this suggests a strategic vision that places the international financial institutions, such as the IMF and World Bank, and regional development organizations at the center of future international security. The World Bank has already begun to sift its attention to aspects of internal sovereignty, including good governance, poverty reduction, and conflict prevention.
The IMF has begun to focus on matters as global financial system regulation, money laundering, tax collection, and corruption. The future of these institutions lies in the management of globalization and global public policy. 135
TOWARDS A GLOBAL PUBLIC POLICY
Global public policy requires the willingness of private and NGO actors especially in the global corporate community to cooperate closely and share responsibility in implementing public policy while ensuring democratic principles.
THE WORLD ECONOMY CONSISTS OF A GROWING NUMBER OF GLOBAL CORPORATE NETWORKS (WHAT IS A CORPORATE NETWORK?). The current state of global governance resembles at best a cross-national policy patchwork [which has missing links] . If global public policy is going to work, it must ensure that these patchworks evolve into networks of governance. The first step: COMMISSION A GLOBAL GOVERNANCE AUDIT THAT WOULD MAP GLOBAL OBLIGATIONS AND RESPONSIBILITIES ALONG DIFFERENT DIMENSIONS: FUNCTIONAL, FINANCIAL, INSTITUTION, AND STRUCTURAL. The New York based Center on International Cooperation has recently initiated an effort along those lines. The December 1996 agreement on collaboration between the IMF and WTO is a welcome start.
Unless governments and international organizations create and use cross-national structures of public interest, global public policy cannot emerge. In policy areas such as environmental protection, humanitarian assistance, and financial regulation, support for such structures has grown. Cross-national social networks will signal the foundation of a global civil society and be vital to the legitimacy and accountability of global public policy. 137
Outsourcing anarchy to the international system, as Hobbes did, will no longer guarantee internal sovereignty at home. This change deprives external sovereignty of its functional value. 137
The nation-state as an externally sovereign actor in the international system will become a thing of the past. But this will only happen if internal sovereignty is realized through global public policies.
The administration of sovereignty has changed many times over the centuries; the nation-state is a relatively recent form of governance and it has no claim to perpetuity. 138
CHARTER 99
Representatives to the Millennium Assembly
website: http://www.charter99.org/charter.html
Internet 2/24/2000
"This charter is addressed to the UN Millennium Assembly and all the government and peoples of the world they represent. It is a demand for global democracy.
Throughout the century now coming to an end there have been well meaning and sometimes eloquent calls for world government. Sometimes with a sign, sometimes with contempt, these calls have been dismissed as impractical. But during the 1990s, demands for international government have taken on a new energy and precision.
The commission on Global Governance, the Earth Summit in Rio, Agenda 21, The Earth Charter, Earth Action's Call for a Safer World, the One Planet Initiative, etc. are uniting people's efforts for global democracy and sustainable development.
The Inter-Parliamentary Union adopted the Universal Declaration of Democracy endorsed by most parliaments in the world. After fifty years of campaigning, a statute to create an International Criminal Court was adopted in Rome in 1998.
The International Chamber of Commerce, World Business Council for Sustainable Development and others are promoting higher standards in international business.
The Human Development Report 1999 recommended an agenda for action including a more coherent and more democratic architecture for global governance in the 21st centuyr.
There are now detailed, practical measures which set out an ambitious agenda for democracy in international decision-making, now increasingly know as "global governance."
It is that in many ways we now have world government. It is not to be found at the United Nations, Rather, the UN has been sidelines, while the real business of world government is done elsewhere. Global policies are discussed and decided behind closed doors by exclusive groups:
The Group of Eight
OECD
Bank of International Settlements
the World Bank
the International Monetary Fund
the world Trade Organizations
These are reinforced by informal networks of high officials and powerful alliances. Together they have created what can be seen as dominant and exclusive institutions of world government. Too often they are influenced by transnational corporations which pursue their own world strategies.
THESE AGENCIES OF ACTUAL WORLD GOVERNMENT MUST BE MADE ACCOUNTABLE. IF THERE ARE TO BE GLOBAL POLICIES, LET THEM BE ANSWERABLE TO THE PEOPLES OF THE WORLD.
We call on you to start the new century by initiating the process of democratic global governance by:
openness and accountability
environmental sustain-ability
security and peace
equality and justice
First: make the already existing processes of world administration and governance accountability
we want the decision takers to know they are answerable to the public in every country
We want all decisions to be compatible with public criteria of environmental sustainability
we Want the UN to ensure that its core mandate "to save succeeding generations from the scourge of war" applies equally to all the peoples of this world
we want global governance to be compatible with the principles of equality, human rights and justice, including social and economic justice
WHAT WE WANT FROM THE MILLENNIUM ASSEMBLY AND MEMBER STATES IS DECISIVE ACTIONS TO PUT THESE PRINCIPLES INTO ACTION:
Create effective mechanisms to hold every agency of actual world government accountable:
International economic alliances
military alliances
central banking system
agencies for environmental, financial, social, sporting or other activity
The United Nations is inadequate but we should start there. Many reforms are needed the following are our twelve points.
As an urgent first step we call on you to set in motion a rigorous process to hold all agencies of global governance to account and democratize international decision-making according to the principles set out in this letter.