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Globalization and the changing logic of collective action

  • Philip G. Cerny (a1)

Globalization transforms collective action in domestic and international politics. As the scale of markets widens and as economic organization becomes more complex, the institutional scale of political structures can become insufficient for the provision of an appropriate range of public goods. A process of this sort occurred prior to the emergence of the modern nation-state, which itself constituted a paradigmatic response to this predicament. Today, however, a complex process of globalization of goods and assets is undermining the effectiveness of state-based collective action. Overlapping “playing fields” are developing, made up of increasingly heterogeneous—transnational, local, and intermediate—arenas. The residual state retains great cultural force, and innovative projects for reinventing government are being tried. Nevertheless, the state's effectiveness as a civil association has eroded significantly, and this may lead to a crisis of legitimacy.

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1. Cerny, P. G., “Plurilateralism: Structural Differentiation and Functional Conflict in the Post–Cold War World Order,” Millennium: Journal of International Studies 22 (Spring 1993), pp. 2751.

2. The notion that transnational interpenetration is not homogeneous is essential to the concept of complex interdependence as developed in Keohane, Robert O. and Nye, Joseph S. Jr, Power and Interdependence (Boston: Little, Brown, 1977). The implications of the growing heterogeneity of specific so-called transnational structures for domestic and international politics are more thoroughly explored in Strange, Susan, States and Markets: An Introduction to International Political Economy (London and New York: Pinter and Basil Blackwell, 1988). For a consideration of some definitional problems with the term “globalization,” see Brown, Robin, “The New Realities: Globalization, Culture, and International Relations,” paper presented at the annual meeting of the British International Studies Association, University of Swansea, Wales, 14–16 12 1992.

3. Aristotle, , Politics, ed. trans. Barker, Ernest (New York: Oxford University Press, 1962), p. 1.

4. See Auspitz, Josiah Lee, “Individuality, Civility, and Theory: The Philosophical Imagination of Michael Oakeshott,” Political Theory 4 (08 1976), pp. 261352; and Michael Oakeshott, “On Misunderstanding Human Conduct: A Reply to my Critics,” in ibid., pp. 353–67.

5. These issues are examined at more length in Cerny, P. G., The Changing Architecture of Politics: Structure, Agency, and the Future of the State (London: Sage Publications, 1990), especially chap. 4.

6. For an extensive discussion of the concept of structure (and of structural differentiation), see Cerny, The Changing Architecture of Politics.

7. Crozier, Michel and Friedberg, Erhard, L'acteur et le système: Les contraintes de l'action collective (The actor and the system: Constraints on collective action) (Paris: Éditions du Seuil, 1977).

8. On public and private goods, see Olson, Mancur, The Logic of Collective Action (Cambridge, Mass.: Harvard University Press, 1971). On specific and nonspecific assets, see Williamson, Oliver E., Markets and Hierarchies (New York: Free Press, 1975); and Williamson, Oliver E., The Economic Institutions of Capitalism (New York: Free Press, 1985).

9. For an effective interpretive synthesis, see Spruyt, Hendrik, “Institutional Selection in International Relations: State Anarchy as Order,” International Organization 48 (Autumn 1994), pp. 527–57.

10. For the main synthesizing work on economies of scale (and economies of scope, which we will not deal with separately here), see Chandler, Alfred D. Jr, Scale and Scope: The Dynamics of Industrial Capitalism (Cambridge, Mass.: Harvard University Press, 1990).

11. Cerny, The Changing Architecture of Politics, especially chap. 3.

12. Olson, The Logic of Collective Action. In between the two main categories, and deriving from the interaction of these polar types, stands a range of crucial intermediate categories of semipublic or quasi-private (mixed) goods.

13. See Williamson, Markets and Hierarchies; and Williamson, The Economic Institutions of Capitalism.

14. Hall, Peter A., Governing the Economy: The Politics of State Intervention in Britain and France (New York: Oxford University Press; London: Polity Press, 1986), chap. 1. Compare Cerny, The Changing Architecture of Politics.

15. For a classic statement of the predicament of how stability and effectiveness in democratic systems may depend on authoritarian institutions and processes, see Eckstein, Harry, “A Theory of Stable Democracy,” research monograph no. 10, Princeton University, 1961, reprinted in Eckstein, Division and Cohesion in Democracy: A Study of Norway (Princeton: Princeton University Press, 1966). See also Sartori, Giovanni, Democratic Theory (New York: Praeger, 1965).

16. Hirsch, Fred, Social Limits to Growth (London: Routledge and Kegan Paul, 1976).

17. Spruyt, “Institutional Selection in International Relations.”

18. Blau, Peter M., ed., Approaches to the Study of Social Structure (New York and London: Free Press and Open Books, 1975).

19. Cohen, Raymond and Service, Elman R., eds., Origins of the State: The Anthropology of Political Evolution (Philadelphia, Penn.: Institute for the Study of Human Issues, 1985).

20. See especially North, Douglass C., Structure and Change in Economic History (New York: Norton, 1981), especially chap. 3. Compare Anderson, Perry, Lineages of the Absolutist State (London: New Left Books, 1974); and Spruyt, “Institutional Selection in International Relations.”

21. Levi, Margaret, “The Predatory Theory of Rule,” Politics and Society, vol. 10, no. 4, 1981, pp. 431–65.

22. A similar analysis, although expressed in less social-theoretical language, is developed in Kennedy, Paul, The Rise and Fall of the Great Powers: Economic Change and Military Conflict From 1500 to 2000 (London: Unwin Hyman, 1988), chaps. 1–3.

23. This complex process—combining structural differentiation and interdependence (i.e., the increasing integration of more and more complex structures)—is essentially the same as Durkheim's conception of how “organic solidarity” develops out of a more complex division of labor (replacing “mechanical solidarity”). See Durkheim, Emile, The Division of Labor in Society, trans. Simpson, G. (New York: Free Press, 1933; original French edition, 1893). For different interpretations of how Durkheim should be applied to international relations, see Waltz, Kenneth, Theory of International Politics (Reading, Mass.: Addison-Wesley, 1979); Ruggie, John Gerard, “Continuity and Transformation in the World Polity: Toward a Neorealist Synthesis,” World Politics 35 (01 1983), pp. 261–85; Waltz, Kenneth, “Reflections on Theory of International Politics: A Reply to My Critics,” in Keohane, Robert O., ed., Neorealism and Its Critics (New York: Columbia University Press, 1986), pp. 322–5; and Cerny, “Plurilateralism.”

24. See Kennedy, , The Rise and Fall of the Great Powers, especially pp. 1630; and Cerny, The Changing Architecture of Politics, chaps. 1 and 4.

25. See Cerny, P. G., “Money and Power: The American Financial System from Free Banking to Global Competition,” in Thompson, Grahame, ed., Markets, vol. 2 of The United States in the Twentieth Century (London: Hodder and Stoughton, 1994), pp. 175213; and Chernow, Ron, The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance (New York: Simon and Schuster, 1990).

26. Chandler, Scale and Scope. Also see Reich, Robert B., The Next American Frontier (New York: Times Books, 1983), part 2.

27. On Marx's beliefs, see Jessop, Bob, The Capitalist State: Marxist Theory and Methods (Oxford: Martin Robertson, 1982). For Weber's, see Weber, Max, Economy and Society, 2 vols., eds. Roth, Guenther and Wittich, Claus (Berkeley: University of California Press, 1978).

28. Hobsbawm, Eric J., Industry and Empire (Harmondsworth, England: Penguin, 1969). Chandler refers to the continuation of “personal capitalism” in Britain. See his Scale and Scope, part 3.

29. Polanyi, Karl, The Great Transformation: The Political and Economic Origins of Our Time (New York: Rinehart, 1944).

30. This general loss of control was perhaps even more significant than the loss of leadership addressed by Kindleberger (which was a key symptom of the broader phenomenon, nonetheless). See Kindleberger, Charles P., The World in Depression, 1929–1939 (London: Allen Lane the Penguin Press, 1973).

31. A now classic analysis of the history of U.S. foreign policy in terms of the open-door approach can be found in Williams, William Appleman, The Tragedy of American Diplomacy, 2d ed. (New York: Dell, 1972).

32. On diplomacy during the Roosevelt administration, see Gardner, Lloyd C., Economic Aspects of New Deal Diplomacy (Boston: Beacon Press, 1971). On the later effects of internationalism, see Penrose, E. F., Economic Planning for the Peace (Princeton, N.J.: Princeton University Press, 1953).

33. Cerny, P. G., The Politics of Grandeur: Ideological Aspects of de Gaulle's Foreign Policy (Cambridge: Cambridge University Press, 1980), especially chaps. 7–9.

34. Galbraith, John Kenneth, The New Industrial State (Harmondsworth, England: Penguin, 1967).

35. On regimes, see Krasner, Stephen, ed., International Regimes (Ithaca, N.Y.: Cornell University Press, 1983). The concept of circuits of power, and their increasing fragmentation in the contemporary world, was developed by Foucault. See Foucault, Michel, Power / Knowledge: Selected Interviews and Other Writings 1972–1977, ed. Gordon, Colin (New York: Pantheon Books, 1980).

36. See Osborne, David and Gaebler, Ted, Reinventing Government: How the Entrepreneurial Spirit is Transforming the Public Sector, from Schoolhouse to Statehouse, City Hall to the Pentagon (Reading, Mass.: Addison-Wesley, 1992). This book has had an enormous impact on both right and left in the United States and elsewhere.

37. The classic statement of the neocorporatist approach is that in Schmitter, Philippe C., “Still the Century of Corporatism?” in Pike, Frederick and Stritch, Thomas, eds., The New Corporatism (Notre Dame, Ind.: Notre Dame University Press, 1974), pp. 85131.

38. See V. I. Lenin, Imperialism, the Highest Stage of Capitalism (1917; reprint, Moscow: Progress Publishers, 1978); and V. I. Lenin, State and Revolution (1918; reprint, New York: International Publishers, 1932).

39. I am here borrowing freely from Theodore Lowi's three categories of public policy: distributive, regulatory, and redistributive. See his works American Business, Public Policy, Case Studies, and Political Theory,” World Politics 16 (07 1964), pp. 677715, and The End of Liberalism: Ideology, Polity, and the Crisis of Public Authority (New York: Norton, 1969).

40. See Nivola, Pietro S., Regulating Unfair Trade (Washington, D.C.: Brookings Institution, 1993).

41. Cerny, P. G., “The Dynamics of Financial Globalization: Technology, Market Structure, and Policy Response,” Policy Sciences 27 (11 1994), pp. 319342.

42. For an analysis of regulatory arbitrage in the financial sector, see Cerny, P. G., ed., Finance and World Politics: Markets, Regimes and States in the Post-hegemonic Era (Cheltenham, England: Edward Elgar, 1993), especially chaps. 3 and 6.

43. Graham, Edward M. and Krugman, Paul R., Foreign Direct Investment in the United States (Washington, D.C.: Institute for International Economics, 1989), chap. 5.

44. See Harris, Nigel, The End of the Third World (Harmondsworth, England: Penguin, 1986); and Haggard, Stephan, Pathways from the Periphery: The Politics of Growth in the Newly Industrializing Countries (Ithaca, N.Y.: Cornell University Press, 1990).

45. Cerny, P. G., “State Capitalism in France and Britain and the International Economic Order,” in Cerny, P. G. and Schain, M. A., eds., Socialism, the State, and Public Policy in France (London and New York: Pinter and Methuen, 1985), chap. 10.

46. McKenzie, Richard B. and Lee, Dwight R., Quicksilver Capital: How the Rapid Movement of Wealth Has Changed the World (New York: Free Press, 1991).

47. Probably the best known protagonist in this field is Reich. See Reich, Robert B., The Work of Nations: Preparing Ourselves for Twenty-first-Century Capitalism (New York: Knopf, 1991).

48. Ibid.

49. Cerny, The Changing Architecture of Politics, especially chap. 8.

50. See Reich, The Work of Nations; and Hayward, Sally, “Labor Markets: A Case for Inclusion in International Political Economy,” paper presented to a colloquium on Technology, Change, and the Global Political Economy, Nottingham Trent University, Nottingham, England, 4–6 05 1994.

51. Liberatore, Angela, “Problems of Transnational Policymaking: Environmental Policy in the European Community,” in Cerny, P. G., ed., The Politics of Transnational Regulation: Deregulation or Reregulation, special issue of the European Journal of Political Research 19 (03/04 1991), pp. 281305.

52. Garrett, Geoffrey and Lange, Peter, “Political Responses to Interdependence: What's ‘Left’ for the Left?International Organization 45 (Autumn 1991), pp. 539–64. Garrett and Lange's conclusions may be limited by the fact that they have data only through 1987. Compare Cerny, The Changing Architecture of Politics, especially chap. 8 and the epilogue. See also Allen, Roy E., Financial Crises and Recession in the Global Economy (Aldershot, England, and Brookfield, Vt.: Edward Elgar, 1994).

53. Zysman, John, Political Strategies for Industrial Order: Market, State, and Industry in France (Berkeley: University of California Press, 1977).

54. See Reich, The Next American Frontier; and Miller, S. M. and Tomaskovic-Devey, Donald, Recapitalizing America: Alternatives to the Corporate Distortion of National Policy (Boston: Routledge and Kegan Paul, 1983).

55. Zysman, John and Tyson, Laura d'Andrea, eds., American Industry in International Competition (Ithaca, N.Y.: Cornell University Press, 1983).

56. Piore, Michael J. and Sabel, Charles F., The Second Industrial Divide: Possibilities for Prosperity (New York: Basic Books, 1984).

57. See in particular Amin, Ash, ed., Post-Fordism: A Reader (Oxford: Basil Blackwell, 1994), especially the editor's introductory essay.

58. Chorofas, Dimitris N., The New Technology of Financial Management: Artificial Intelligence, Expert Systems, Intelligent Networks, Knowledge Engineering (New York: John Wiley and Sons, 1992).

59. For a more extensive treatment of the political implications of financial globilization, see Cerny, Finance and World Politics.

60. Allen, Financial Crises and Recession in the Global Economy.

61. Crawford, Richard D. and Sihler, William W., The Troubled Money Business: The Death of an Old Order and the Rise of a New Order (New York: HarperBusiness, 1991).

62. The implications of technological change in the financial services industry are examined in Strange, Susan, “Finance, Information, and Power,” Review of International Studies 16 (07 1990), pp. 259–74.

63. A more complex and sophisticated analysis of multinational corporations—how they work, how they interact with each other, and how they interact with states—can be found in Stopford, John and Strange, Susan (with Henley, John S.), Rival States, Rival Firms: Competition for World Market Shares (Cambridge: Cambridge University Press, 1991).

64. On collective action, see Kratochwil, Friedrich and Mansfield, Edward D., eds., International Organization: A Reader (New York: HarperCollins, 1994).

65. See, for example, Filipovic, Miroslava, “Governments, Banks, and Global Capital: The Emergence of the Global Capital Market and the Politics of its Regulation,” Ph.D. diss., City University, London, 1994.

66. For a consideration of the problem of state autonomy and the different approaches taken to it in the neo-Marxist, neo-Weberian, and neo-pluralist debates of the 1980s, see Cerny, The Changing Architecture of Politics, especially chap. 4.

67. This is Almond and Verba's more familiar version of what they also call “system affect.” See Almond, Gabriel A. and Verba, Sidney, The Civic Culture: Political Attitudes and Democracy in Five Nations (Princeton, N.J.: Princeton University Press, 1963).

68. Reich, The Work of Nations.

69. The question of foreign or domestic ownership is highly problematic here. Reich argues that ownership is far less important than the ability to attract capital. See Reich, The Work of Nations.

70. Andrews, David M., “Capital Mobility and State Autonomy: Toward a Structural Theory of International Monetary Relations,” International Studies Quarterly 38 (06 1994), p. 201.

71. Strange, States and Markets.

72. Spruyt, “Institutional Selection in International Relations.”

73. Latham, Andrew, “New Manufacturing Techniques and the Evolution of ‘Military-Postfordism’,” paper presented at the annual meeting of the International Studies Association, Washington, D.C., 28 March–1 04 1994.

74. Economies of scale recently have become more important in international trade theory, in contrast to traditional concerns with comparative advantage. See Helpman, Elhanan and Krugman, Paul R., Market Structure and Foreign Trade: Increasing Returns, Imperfect Competition, and the International Economy (Brighton, England: Harvester Press, 1985).

75. Kobrin, Stephen J., “Strategic Alliances and State Control of Economic Actors,” paper presented at the annual meeting of the International Studies Association, Chicago, 21–25 02 1995.

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