Professor Richard Higgott University of Warwick Democracy, European Governance and Social Science

1. ‘Understanding the Theory and Practice of Global and Regional Governance: Implications for C21st Europe’ Professor Richard Higgott University of Warwick Democracy, European Governance and Social Science Paris January 10-12, 2007

2. ‘Global Governance, Regionalism and Regulation: The Role of the EU’ Acronym: GARNETwww.garnet-eu.org Outline of Presentation • Part 1: Brief description of the Rationale for, and activities of, GARNET • Part 2: Two examples of research—big picture • The Theory and Practice of Global Governance: From Multilateralism to Network Governance • The Comparative Analysis of Regionalism: Europe and Asia Compared • Conclusion: Some Implications for our Understanding of the European Project in the 21st Century

3. Part 1: Garnet Profile • 43 partners in 17 countries; Coordinator University of Warwick • Budget: €6 million (EU 5.4m; UK ESRC 0.3m; Warwick 0.4m) housekeeper\Update April 2005\Final Presentation\30 Materials.ppt

4. GARNET WORKPACKAGES housekeeper\Update April 2005\Final Presentation\30 Materials.ppt

5. Research Themes • Regionalism and Regionalisation • Europe as a Model of Regional Governance? • Comparative, thematic and issue-specific analysis of Regionalism and Inter-Regionalism: Eastern Europe, Asia, Africa and the Americas • Europe and the Regulatory Framework of Global Governance • Normative Issues in Regional and Global Governance • International Law, Sovereignty and Global Governance • The UN, EU and Multilateral Governance: • Non State Actors (Networks & Civil Society) and the Global Regulatory Framework • Key Policy Issues in Global Governance: Europe’s Role • Global Economic Governance (especially WTO & IMF) • Governance of the Global Environment • Security Threats and Institutional Responses • Gender and the International Political Economy • The Governance of Infectious Diseases • North-South Development Issues and the Global Regulatory Framework

6. Part 2: The Demand for Global Governance • Growing non manageability of policy problems at the national level. • Growing dissatisfaction with state-based models of public policy—end of methodological nationalism. • Growing interest in portability of ideas and cross border policy transfer—search for best practice • Increasing role of multi-level governance structures in key policy areas: enhanced by the role and functions of issue-specific and regional specialised agencies—EU in the vanguard here • Changing understanding of international law and sovereignty: an increasingly relative and relational rather than absolute principle. • ‘Governance’ now a hosting metaphor to identify non traditional, non-state actors (NGOs, networks, social movements etc) that function as mobilising agents in addition to the traditional, exclusivist international activities of states and their agents.

7. Three Assumptions for the 21st Century • The growth of market forces increases aggregate economic wealth but in the absence of a functioning ‘global polity’ it spawns accompanying political resentment with which international institutions cannot cope under conditions of ‘contested globalisation’. • We are witnessing: • Change in mission of the international (economic) institutions and the policies of the USA as the key actor towards them. • A contest in the domain of international (economic) governance between ‘rule makers’ and ‘rule takers’ under conditions of globalisation is growing. • These processes have negative implications for the prospects of consensus-based global governance norms and institutional structures. We must expect weaker institutions not stronger ones.

8. Global Governance: Four Theoretical Questions Casting Big Policy Shadows in the 21st Century • What do we understand by ‘global governance’ and the role of multilateralism within it in the 21st Century? • How do we judge the health of the international institutions as they key institutions of multilateral global governance? • UN in the political sphere • IMF, World Bank and the WTO in the economic sphere? • What are the implications for multilateralism, as a principled institutional form of behaviour? • Focus on the ‘legitimacy question’ and the linkage between global governance as a theoretical/ normative exercise and the reform of the international economic institutions as a practical policy project? • What is the significance of the role and behaviour of the dominant actors – the USA especially – to the reform process in general and the future of multilateralism in particular? • What to do about G1 in the 21st century? • Growing importance of the BRICS

9. The Concept of (Global ) Governance • Governance: A process of interaction between different societal, economic and political actors and the growing interdependence between them as societies and institutions become more diverse and interactive. • Note: Government is but one aspect of governance. • Global Governance 1:Economic Governance? • The enhancement of effectiveness and efficiency in the delivery of (global) public goods via collective action problem solving • Global Governance 2:Political Governance • The demand for transparency, accountability and representation in extra territorial decision making—enhanced global democracy • But is this a false dichotomy?

10. Institutions in Theory and Practice: • Institutional Principles developed in the 20th century • Institutions lower transactions costs by the provision and sharing of information • Institutions reduce uncertainty • Institutions help make promises credible • Institutions facilitate deal-making • Institutions enhance compliance • Institutions shape expectations and identities • Post World War 2 era reflected an ‘institutional bargain’ between USA and Europe, underwritten by a combination of US power and resources, enlightened self-interest and liberal values • Institutional principles are in danger of being unlearned in the 21st Century; especially in the international arena. • Alarming willingness to question the very utility of institutions as ways or organising international behaviour.

11. Globalisation and the Fall of Multilateralism • The end of Cold War Disciplines/ Growth of Globalisation • Blurring of the domestic and international policy processes under globalisation challenges understandings of ‘national’ interest.  • Multilateralism, for sections of US policy community especially, implies free ride on US material support/ unwantedentanglements.  • Trans-national decision-making—climate change or the application of international law (US attitudes towards the ICC)—often clashes with US domestic law and US conception of national security. • US policy towards the institutions hardened since the backlash against neo-liberal globalisation began in the 1990s. The Bush Administration may have accelerated this process. But the turning point took place well before it came to office. • Are global networks replacing state hierarchiesas sites for the conduct of global policy debate. • Key Question: Has the institutional bargain come undone in the post-Cold War era?

12. From Hierarchy to Networks: The Role of Networks in the 21st Century • Product of globalisation and communications revolution • Agents of Agenda and Standards setting • Semi-privatised domains of public authority and decision making • Location for pooling of authority and exchange/allocation of resources • Venue for policy entrepreneurship and innovation • One Mode of co-ordination and policy implementation • Vehicles for delivery of global public goods • Creating and deepening markets • Vehicles for consensus-building and closing the participatory gap

13. Public Policy Networks ‘alliances of government agencies, international organisations, corporations and elements of civil society that join together to achieve what none can accomplish alone … and give once ignored groups a greater voice in international decision making’ (Reinicke, 1999/2000) Network Species 1. Global Public Policy Networks 2. Transnational Advocacy Networks 3. Transnational Executive Networks 4. Knowledge Networks: non-state technocratic agencies

14. Transnational Executive Networks (TENs) • Is the state unbundling into separate, functionally distinct parts? • Governance rather than government. Emergence of issue specific networks between ‘high level officials directly responsive to the national political process – the ministerial level – as well as between lower level national (public and private) regulators’ • officials/regulators/ specialists with dual domestic-international role • Predominantly horizontal, not vertical. • Emphasis on Functional Coordination • Not foreign policy in the traditional sense; nor multilateral organisations; no founding treaties; no binding regulation • Examples: • International Association of Insurance Supervisors—responsible for standards setting in the multi-billion $ Insurance industry • Financial Action Task Force (FATF)—financial regulators responsible for stemming money laundering; increasingly active post 9/11 • Basel Committee—forum for cooperation on banking supervisory matters and standard setting.

15. Transnational Advocacy Networks (TANs) • Plead the causes of others or defend propositions • Amnesty International, Greenpeace • Norm based, issue focused, advocacy oriented social movements • Emerge around value-laden debates and differently situated individuals developed similar world views • ‘Nice’ TANS: anti-slavery advocates; human rights groups; ‘Blood Diamonds’ • ‘Nasty’ TANs: pedophile Networks, neo-Nazi groups; trans-national gangs • TANS, in contrast to TENs, are outsiders to the formal policy process

16. The Importance of Networks • Emerging informal governance under conditions of globalisation and the weakening of the multilateral institutions • Soft regulation • Major growth industry • Semi-private or private sector activity • Little public awareness of their influence • Along with other non state actors they represent elite form of global governance • ratings agencies such as Moodys, Standard and Poors) • private regimes (such as ICANN and BIS) • Global Foundations (GATES, SOROS) • Think Tanks Industry: from CFR and CEP to Focus on Global South and Third World Network • Davos versus Global Social Forum

17. The Rise of the Global Network Society: of elites by elites for elites? • A New Domain of democratic practice and accountability? Two Competing Views • Positive: • consensual; open-ended decision-making; non-bureaucratic; responsive/flexible; spontaneous; collective/communal; inclusionary • Negative: • closed/secretive; self-serving/interested; clique/cartel; exclusionary; illicit, elitist; non-public; gate-keeping.

18. Part 3: The Importance of Comparative Regional Analysis under Conditions of Globalisation • Major element of GARNET research concerns large comparative studies of regionalism which embed European experience in wider empirical and theoretical contexts. • For too long regionalism has only been conceptualised with comparative reference to Europe. Garnet moving beyond this. • The time lag between European developments and the construction of regional orders elsewhere has meant that region-building elites have had the opportunity to learn from the European experience.  • As often as not this has led to a desire for avoidance of, rather than the emulation of, the ‘Brussels model’.  • There will be more, not less, regionalism in C21st. But Europe’s regional past is not Asia and Latin America’s regional future. • Should ‘progress’ in regional organisation be defined in terms of EU-style institutionalisation?  

19. Early Regionalism: The European Experience • Institutional regionalism proceeding through inter-governmental dialogue and continual treaty revision at the heart of the classic model of economic integration   Four Stages • Free Trade Area—removal of trade restrictions between member states • Customs Union—Common external trade policy towards non members • Common Market—Free movement of factors of production between member states • Economic Union—Harmonisation of economic policies under supranational control

20. Europe and Asia Compared • Just as Europe is questioning the status of the institutions and practices that characterised the European project in the opening decades of the C21st so too is Asia, especially since the financial crises of 1996-7. • So, what does the ‘European project’ as a vehicle for transcending sovereignty and advancing supranationalism tell us about the prospects for regional transformation in East Asia? • The interesting policy question is not whether East Asia will become more institutionalised rather than what form that institutionalisation might take. • The interesting scholarly question is what are the key drivers that might assist or impede that process of regional institutionalisation? • The normative advocacy of institutionalism in East Asia would appear to be strengthening at the very time when limits of this process in Europe, in the wake of the defeat of the constitution, are being questioned more strongly than at any time in the last 25 years. • Europe’s past is not Asia’s future

21. The Rise of Regulatory Regionalism: Europe is not the model! • Regulatory regionalism: Key assumptions: • Response to globalisation (offensive not defensive) • Instrumental, market-led, quasi institutional cooperation • Compatibility of state sovereignty and regionalism. • Accommodation of nationalism and regional cooperation. Compromise inevitable if tension in East Asia not to impede cooperative endeavour. Instrumental regionalism. • Meso-level risk management: regional organisations as mediating layers of governance between the nation-state and global institutions. • increasingly less passive acceptance of purely Western ideologies, preferences and economic models bound up with the philosophies and actions of the IFIs

22. Examples of Regulatory Regionalism in East Asia • Increasingly dense network of cross border cooperation, collaboration and even formalized institutional integration • Meshing of multilevel process of regulation reinforce connections between international institutions (IMF, World Bank) and regional institutions (ADB and emerging instruments of regional regulation such as the ASEAN regional surveillance process (ASP) and the regularised meetings of regional central bankers (EMEAP). • Transmission of internationally agreed codes, from best practice of international institutions, help enforce standards. • Financial stability more important than trade liberalisation • Multiple voices of region based on instrumental considerations become increasingly salient • Southeast Asian, East Asia (ASEAN + 3), Asia Pacific etc • Preferential FTAs as sovereignty building, political actions

23. Conclusion: The Evolution of Global Governance • Garnet Research—rich empirical exercises from which general conclusions emerge: 1. We are witnessing the end of 20th century style multilateralism? 2. We are seeing the Rise of New Actors: • Non State Actors, Networks and the trend towards • Private Global Governance • Diffuse networked understandings of power, with loosely institutionalised regulatory actions providing a modus operandi for cooperation are increasingly attractive. 3. The limits of the Europe regional project as a global model • Regionalism in East Asia in the 21st century has little European intellectual pedigree. • Development of institutions involving the transfer of elements of state sovereignty to regional institutions unrealistic. • Rather it is a ‘regulatory regionalism’ that links national and global understandings of regulation via the intermediary regional level. 

24. Conclusion: The Evolution of Global Governance 4. The positive evolution of consensus based governance structures at the global level are not inevitable. Indeed, for a number of reasons they are not likely. • At the global domain it makes no sense to separate economic governance (GG1) from political governance (GG2). • The distinction—one made in the very structure of this conference with separate sessions on political and economic governance—is flawed. • A heuristic separation maybe. A practical separation never • A failure of the social sciences • GG1 will not work without GG2 and, as can be seen in the current Multilateral Trade Negotiations (the Doha Round) we will make no progress until we abandon it. • Garnet’s research tries not to make this unsustainable distinction.