Globalization And Global Governance

Over the past years, global governance and globalization and the relation between the two, has become a much discussed subject. There are various definition of global governance; its role, its nature. Likewise, there are even more definitions regarding globalization. There are several strands of expert which disagree on when the origins are traceable, ranging even thousands of years and, moreover, some differentiate a range of separate fields to identify specifically the nature of globalization during time.

Research has brought up various issues in the relation between global governance and globalization and whether or not this relation has been always even. The main question; has “globalization rendered global governance ever more essential than in the past”, is based on the metamorphosis of the state during the past decades, the economic crash and the massive progress in transport and communication.

The aim of this essay is to understand how global governance has changed and how it imposed itself differently compared to the past decades and centuries. In order to answer this query about today’s different influence of global governance over globalization, this essay will examine various theories and definition regarding globalization and global governance. As a result, the role of the state, the different kinds of globalization and governance will be examined.

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II: Globalization & Global Governance

Theory of Globalization

Globalization is a very complicated matter: nobody seems to be in charge, yet it is progressing as we research it. What is behind the idea of Globalization? What do we mean when we talk about it? The term itself was introduced just recently. Globalization lacks in fact a main definition still today. McCrew’s shortest definition given is:

“Globalization can be defined as the intensification of worldwide social relations which link distant localities in such a way that local happenings are shaped by events occurring many miles away and vice versa” (A.McCrew, pp.60)

The term Globalization as a matter of fact, includes a wide variety of theories and view of what is essentially reality; another definition could also be “Globalization is a global movement which aim is integration, whether economic or financial or in communication.” Another broad definition could be Dirk Messner view over globalization:

“Globalization denotes a process in the course of which the volume and intensity of transboundry transportation, communication, and trade relations are rapidly increasing” (Dirk Messner, pp.29)

However it has been agreed that Globalization has, is and will, without doubt, massively increase speed of global interconnections in most aspect of life. This includes culture, which spreads from a country to another throughout television and internet; or finance, which throughout a wider connection over the world, finds different markets. Technological progress rushed globalization in a world that from day to night has given new perspective to virtually anything.

Even though Globalization might be a recent topic, its nature is traceable to pre-modern history. Clearly traveling very short distance, by settling in other areas, people would bring along their culture and traditions as well as their products and technologies. Globalization starts as a mixing and adaptation of culture, knowledge and also languages of outside influences which interconnect with local population. A.McCrew, in fact, redefines his previous definition by saying that:

“Globalization can usefully be conceived as a process (or set of processes) which embodies a transformation in the spatial organization of social relations and transactions, generating transcontinental or interregional flows and networks of activity, interaction and power.” (Mc Crew, pp.43)

However, as McCrew realizes later:

“Globalization today is different from the globalization of the 19th century, when European imperialism provided much of its political structure and higher transport and communication. Cost meant fewer people were directly involved.” (A.McCrew, pp.77)

In fact, globalization today, yet again according to Mc Crew, must reflect four general characteristics: it must “involve social, political and economic activities across political boundaries, regions and continents”; a strong intensification of “interconnectedness and flows of trade, investment, finance, migration, culture etc.”; these connections are related to a speeding up of communication and transport which carries ideas, people and goods; the interconnection and interaction globally are so intense that “the effects of a distant event can be highly significant elsewhere and even the most local development may come to have enormous global consequences.”

However, Joseph Stiglitz describes globalization differently, as an:

“[…] international flow of ideas and knowledge, the sharing of cultures, global civil society and the global environmental movement.”(J.Stiglitz, pp.4)

Therefore from Stiglitz point of view, Globalization can be divided in to various branches: Economic Globalization, so covering international flow, trade, foreign assistance; Social Globalization, caused by the interconnection of more societies and cultures; and Environmental Globalization, where the challenge is global warming. This differentiation turns out to be very useful to understand how globalization affect or is affected by global governance, specifically from an economic point of view

The Three visions of Globalization

There are three different points of view regarding the contemporary nature and meaning of globalization: the Hyper globalist, the Skeptical and the Transformationalist.

The first stand for a world which is increasingly global, and where political and economic processes and pressure have changed the state. To them the nation-state is deteriorating shown by the fact that the state decision making has vanished and national representative’s powers are weaker.

The second, skeptical, have a total opposite view to the Hyper globalist; they claim in recent times the states have actually acquire even more power even though there has been some major swift in the international scene.

The third, the Transformationalist accept globalization as an actor which has indirectly created new economic and political scenario but that even so, this scenario has actually come in handy to states range of powers. Moreover, Transformationalist, despite arguing a major predominance of the state, declares that politics must overlap the nation-state concept.

All of these contemporary points of view can be considered to some extent confused: the hyperglobalist do not realized the new position the states are assuming in global governance, skeptical possibly still live in the Cold War and declare globalization a new form of imperialism, and finally Transformationalist, who totally forget about the traditional force.

These are some of the critics put in place by the Constitutive, a fourth point of view: Constitutive consider globalization as product of millions of factors and therefore couldn’t emerge by applying one of the three traditional aspects. Possibly one of reason between many, above all, is the fall of USSR and the US reorganization of the global architecture.

Theory of Global Governance

Before explaining Global Governance, it is fair to split “Global” from “Governance”. Therefore, what is Governance? According to Vayrynen, Governance is:

“[…] is the sum of the many ways individuals and institutions, public and private, manage their common affairs.” (Vayrynen, P.25)

Governance, as the word itself suggest, is the act itself of governing, the process or power of governing. These processes are normally exercised by a government. Essentially, Governance is the result of the government. However, governance is different to politics, which is the process in which different group of people with different opinion, meet to reach a compromise. The process of Governance normally doesn’t spark from a group with different opinions but still uses the same means. Accordingly, Global Governance refers to the:

“[…] collective actions to establish international institutions and norms to cope with the causes and consequences of adverse supranational, transnational of national problems.” (Vayrynen, p.25)

Global Governance’s collective decisions are aimed to shape and define a goal or goals at the global level. Global Governance forms a series of rules which purpose is to work globally no matter what the national laws are. This global level characteristic is the reason why it is frequently associated to Globalization, as the two influences one another as much as they are associated.

However where and when did really Global Governance started to matter it is not certain. Possibly at the beginning of the 19th century. What is certain is that after the “belle époque”, the world started to crash. A new era of highly interrelated global interdependence had begun and the world’s answer had been international institutions. The first and most important post World War I institutions was the League of Nations, which was supposed to maintain peace but miserably failed giving us World War II. The second attempt shows much more success with the United Nations. Between WWI and WWII, we have the first modern economic crash and the Great Depression. On the same wave of new international institutions, IMF and WB are born for a higher economic protection. However, this time round, the economic institutions have failed: nations which have followed IMF had economic crisis, the WB is mainly divulgating American economics and yet today, developing countries (which in some cases thanks to the combination of over speeded up globalization and bad governance) have even worsen their situation and still have little representation. Finally, the Cold war.

According to the commission on Global Governance, after the Cold war, global governance was the new beginning of a new era, supposedly of peace and international political progress:

“[…] international developments had created a unique opportunity for strengthening global co-operation to meet the challenge of securing peace, achieving sustainable development, and universalizing democracy” (Commission on Global Governance, 1995)

The Nation-State

The peace of Westphalia is the origin of the a system of nation-states. These then evolved in the 19th century as the main actor of territorial policies and subsequently passed to the welfare state. Before the massive expansion of political, economical and social benefits and issues around the world had started due to globalization, and before the progress in transport and communication had opened markets to the world, the Nation-State was the center of everything. Certainly, because of globalization, States have been weakened due to the fact that some of their actions have either been diverged to international institution or have become of international interest. While the State would act in favor and interest of the Nation, now a more collective action is requested and national issues are shared between numerous populations, converting therefore to a global level.

As a result, on one hand, Nation-States today comprehend how their actions may concern numerous other nations and population, in fact:

“state will come to function less as all-purpose providers of governance and more as the authors and legitimators of an international ‘quasi polity’; the central functions of the nation state will become those of providing legitimacy for an ensuring the accountability of supranational and subnational governance mechanism which exercise various forms of private authority” (P.Hirst, p219-220)

However, on the other hand, there is yet no real international actor, no global level democratic institution, which is supposed to take care of the national and international issues, spread and caused by globalization. In effect, quoting yet again Hirst:

“while the capacities of the states for governance have changed in some respects, and many states have lost the ability to act independently, they remain pivotal institutions, especially in terms of creating the conditions for effective international governance” (P.Hirst, p219)

Under a more national point of view, the States still today have full authority over its own territory, an viceversa:

“Globalization is deterriorialization.” (Mc Crew, p86)

Therefore, the state is somehow going back to the middle ages, searching for a monopoly of power over people living on the national territory. People are in fact less mobile than money, goods and ideas, which thanks to globalization are easily transportable and therefore they remain nationalized. Yet today they are dependent on visa and passport:

“This role gives the nation the exclusive legitimacy of regulating its territory and the population which lives within it and internationally.” (P.Hirst, p221)

In any case, the Nation-State still exercise its power over military power. Many have argued how from the 15th century to today, the main power defining a state, was the capacity of declaring war. The last glimmer of this capacity had been kept alive by the Cold War, even though, because of massive progress in military technologies, it wasn’t really the power of declaring a war but rather the power to threaten one and the capacity and possibility of destroying a nation, if not the globe. Therefore military power and the capacity to declare war of the modern states, has become so destructive that it is almost impossible to really exercise it. Anyways:

“Armed forces will not cease to exist but they no longer decide matters between advanced states.” (P.Hirst, p227)

Furthermore, the state exercises and important role over economy, even though globalization has massively enlarged the markets. Still today, markets and companies possibly can’t exist without a state or public power protecting them. The States guarantee for most of the national credit. The government still regulates banking over the national territory.

The effects of Global Governance over Globalization.

First of all we can say that the processes of globalization are conceived as only capable of being worldwide and therefore in relation to Globalization, Global Governance must do the same. Second, it is recognized that globalization is likely to be the bases around which the course of events are organized and therefore it is virtually a relentless process and must be taken care of by Global Governance as if there was no other choice. Third, globalization is now out of control and the only tool which can regulate it is governance. Global governance and globalization are in fact clearly highly related between each other.

It is easy to think global governance is another way of saying global government, but in fact it couldn’t be further from the truth. Global governance is not a global government and does not even consider a world government or even some sort of dominant power or authority, meant to regulate issues to a global level. There is no global government which promotes international standards to all nations. In fact, global governance acts by itself. But then who is holding the reins of governance?

Power today is in economy: Globalization of the international financial market, which started after the fall of Bretton Woods, has significantly speeded up the formation of a global economy, which likely to the European Union, has become a point of reference of the world’s economy search for development.

The liberalization of worldwide trade is a main element of globalization or at least of economic globalization and it is mainly regulated by global governance. International trade has created a major period of growth but its liberalization has had some issue over the global level. The intensification of world trade has required a new institution, the WTO, which clearly, by regulating trade, plays a major role in global governance. Actually, WTO is the only institution regulating worldwide trade which in fact promotes worldwide trading system helping to raise economic efficiency and decrease costs by major principles established by the themselves: non-discrimination, transparency, increased certainty in trade, reduction of corruption and of poor governance. The WTO could be an example of good governance which perfectly relates to a globalizing world. However, because there is no central global power, talks like the Doha round are failing.

Also liberalization of capital flow has had major issues due to massive speculation and volatility in currency and financial markets. The IMF, a major actor of global economic governance, managed to liberalize capital by simply removing restrictions on transactions while the liberalization of world trade was more of a consequence of globalization. This shows how Globalization and governance can work together, but also completely separately, not considering the effects on one another. In fact, globalization transforms economy from national to global and therefore any national economy is at least affecting global economy if not directly part of it. Therefore, national economies act as actors of global governance, indirectly by relating themselves to dynamics of globalization and consequently affecting directly global governance.

States are no longer seen as actors of a system of states, as nation-states, but more as a system of markets. From this perspective, transnational companies become the States entities. As said in I4, globalization has weakened the state; in economic globalization, the State’s economic policies and the weight of them over national and international level, has been also weakened. The mobility of capitals and international trade has changed the national market. States have in fact realized they singularly could achieve much less than by unifying in international financial systems in order to renew their power over economy.

However, according to Dirk Messner:

“Economic globalization is strengthening decentralization processes in nation-states and regional cooperation in the world regions: In the context of world economy central governments are coming under pressure from their regions, which are keen to promote their profiles in global competition.” (Dirk Messner, pp39)

In fact, globalization has actually created a strong current of localization, even though it is a mutual reinforcement. In a world of world markets, local or location specific advantage gain value, while in the meantime seeking transboundary partnership there for entering economy to a global level. Transnational economic spaces and communities have clearly increased due to the globalized markets.

Concordantly, under a more political point of view, cooperation between globalization and governance must be very intense in order to achieve a global goal. According to P.Hirst:

“Governing powers cannot simply proliferate and compete. The different levels and functions of governance need to be tied together in a division of control that sustains the division of labor. [..] The governing powers need to be ‘sutured’ together into a relatively integrated system. If this is not the case then gaps will lead to the corrosion of the governance at every level” (P.Hirst, p 234)

Global governance has also recently shown, under a political point of view and in a globalization context, a trend towards unilateralism. Clearly this model strongly weakens multilateralism necessary to make globalization work. However, even though nation-states tend to have a trend towards monopoly of power and unilateralism (which is typical in western countries) they are still very necessary since they are the only connection between national and supranational level and are of course the main actors of global governance architecture. This last role, in a direct point of view, has however changed because of the increasing discard of nation-states as direct problem solvers. Today Nation-states act indirectly via institutions and agencies, thus keeping their interest a priority. However, no singular nation-state could be considered to give a response to globalization because this egoistic trend used by most western states is virtually doomed.

The “national” translates to international , due to a significant global impact that, associated with the openness of today’s markets, are creating and affecting the future of globalization. Global politics is possibly failing because of the stubborn, but motivated decision of giving the least possible weight to developing countries, either because there is a massive fear of a power turnover from the South or to pursue the agreed combined western national interest in developing countries. Therefore, effectively, globalization has some effect on global governance but the opposite is more likely. Global governance has a wider effect on globalization even thought at the same time the processes and dynamics of globalization are controllable only to some extent , yet the different speed of propagation is the real challenge

An answer to the challenge

Ultra globalists have proposed to unify globalization and global governance by creating a massive central government, a global government. Obviously this is absolutely impossible or desirable; it is enough to imagine how a global election and president could be strongly interested in everything but global issues.

As said, globalization has encouraged regional organization and localization: these could easily function as organizations aimed on national awareness and protection while acting globally. In finding new solution to a new problem such as globalization and global governance it is important to realize the greatness of the project: cooperation and collective decision making thanks to international organizations via States is surely complicated at the least.

What has changed today, that open a new door to a future solution, is the different level of cooperation between governmental and non-governmental organizations and therefore between public and private, necessary in a rapidly globalizing world. In fact, yesterday’s nation-states have stopped doing what they simply wanted; today, even though their authoritative power are still strong, they are at least taking decision on global scale as a global actor and are influenced by social groups which have some success in changing national policies that eventually may have global effects.

However, is global governance really keeping up with globalization? Today, one country’s domestic policy is permanently constrained by external situations. National government can no longer ignore the international impact; international coordination is needed to solve these issues. It is true, sometimes national government enter international coordination just for profit or solving domestic policies because, with no doubt, the interdependence between states is now mandatory due to globalization which has increased this trend to a world wide scale. Therefore, even though global governance massively effects globalization, the second is faster than the first.

Globalization is a huge new challenge to deal with; it has surely brought massive growth but has also exposed the poorer countries which were already unable of meeting western standards and that today, because of globalization, have further increased their gap between rich and poor. There are in fact today countries which used to be very poor and have enormously improved their market and may be considered rich, but are however populated by poor. Globalization has opened the world to new markets, markets such as poor countries which were maybe not even reachable or in war and are now used to produce at a very low cost. They are surely progressing economically but at what cost?

At the moment there is no answer to this challenge but just a series of future solution, one of which is reorganizing the world economy, which how we have seen in recent crisis, keeps on making basic world economy errors on how to coordinate domestic economy without causing massive ruptures on a global scale.

Conclusion

Has globalization rendered global governance ever more essential than in the past? The short answer is yes, absolutely. Globalization is heavily influenced by global governance and is still a work in progress, however it is possible to see how global governance is molding and creating a future architecture that will surely change the world of politics, international organizations and the role of the nation-state.

Compared to the past, there is a clear gap between the weight of economic governance and political governance. States have lost most of their political power outside their boundaries while still exercising national interest and more and more frequently yield some of their authorities to non-state actors in exchange for control of the economy by direct influence. There is in fact a predominance to economic power since the 1990’s.

Moreover, unfortunately globalization has created winner and losers. Since the 1980s most of the world countries have integrated themselves in the new world economy, but some have done so maybe too early and thanks to the thrust of globalization, have caused major disparities between rich (exploiter of the new economic context) and poor (exploited by the system). Multinational firms have seen a new way of producing goods at very low cost in countries which had been specifically configured to be exploited, realizing the upcoming benefits of globalization. Here the major blame is to be given to global governance, which is today a more responsible process but only due to pressures.

To conclude, the answer to the question posed in this essay will always be affirmative. Furthermore, future globalization will be in the rise of developing countries but only if western countries will cede ground in the big arena of global governance. Realistically this will happen only if forced by the situation, but once developing countries will sort out their political and social issues, they will eventually have all their papers in order to enter the decision making arena inevitably dominated by western countries.