New Political Economy

Published by Taylor & Francis (Routledge)
Online ISSN: 1469-9923
Print ISSN: 1356-3467
Publications
Some Important Aspects of the Taxation of Shareholders in Selected Industrialized Countries, 2000.
Inward and outward FDI flows as a percentage of gross fixed capital formation average 1994--1999  
makes it difficult for Swedish ownership to assert
Since unification, the debate about Germany's poor economic performance has focused on supply-side weaknesses, and the associated reform agenda sought to make low-skill labour markets more flexible. We question this diagnosis using three lines of argument. First, effective restructuring of the supply side in the core advanced industries was carried out by the private sector using institutions of the coordinated economy, including unions, works councils and blockholder owners. Second, the implementation of orthodox labour market and welfare state reforms created a flexible labour market at the lower end. Third, low growth and high unemployment are largely accounted for by the persistent weakness of domestic aggregate demand, rather than by the failure to reform the supply side. Strong growth in recent years reflects the successful restructuring of the core economy. To explain these developments, we identify the external pressures on companies in the context of increased global competition, the continuing value of the institutions of the coordinated market economy to the private sector and the constraints imposed on the use of stabilizing macroeconomic policy by these institutions. We also suggest how changes in political coalitions allowed orthodox labour market reforms to be implemented in a consensus political system.
 
This paper adds to the empirical work against which such broad claims can be assessed, using the example of Jamaican telecommunications. Providing and regulating telecommunications has traditionally one of the defining activities of the modern state (Grande 1994). More recently, due to economic and technological developments, telecommunications has become even more important for national economies, as well as being a policy domain in which global factors are arguably most pervasive. Jamaica has undergone a decade of regulatory reform of its telecommunications sector, culminating in a new Telecommunications Act in 2000. The case is used to clarify the ways effects attributed to `globalisation' alter the ability of a small developing state to establish regulatory autonomy in one significant policy domain, telecommunications. There is a spectrum of views the concerning relative autonomy of Caribbean countries seen in the wider political context. Sutton (1988) stresses the consequences of 'living in the shadow' of the US, which has resorted policies of destabilisation, assassination or even outright invasion. Others, such as Maingot (1994) offer more pluralist `complex interdependence' interpretations of this relationship. Nonetheless, different analyses tend to converge around the view that national policy-making in the Caribbean is substantially constrained by international politics. In the telecommunications sector in the Caribbean, this has led to claims of `tele-colonial domination by metropolitan telecommunications carriers and suppliers' and `cultural (economic) imperialism' (Noguera 1997: 189). More moderately Skinner (1997: 194) interprets regulatory reform of Caribbean telecommunications as a `control revolution' characterised by `dependent incorporation which all...
 
The Stern Review on the economics of climate change (hereafter ‘Stern’) has received much attention regarding its potential political impact.1 It has also been extensively discussed among academic economists because its conclusions are more radical, in terms of action to mitigate climate change, than previous orthodox economic analyses. This paper aims to contribute to the debate by critically assessing three key features of climate change CBA, with particular reference to Stern: monetary valuation of human life, discounting, and the treatment of risk and uncertainty. This assessment reveals some common themes, which are examined in the final section. They concern the tensions which emerge in climate change CBA between ethical arguments, market-based preferences, and the claims of CBA to scientific objectivity.
 
As China's economy grows and matures, is it developing institutional patterns that resemble those of other wealthy countries? By examining the origins of modern capitalist institutions among wealthy countries, and how interests structured them, I draw implications for China. Specifically, I find that China resembles continental European capitalism far more than Anglo-American capitalism, and that it is likely to remain this way for the foreseeable future.
 
In the roughly four decades between the end of WWII and German unification, West German society gave rise to a distinctive kind of capitalist economy, governed by nationally specific social institutions that made for high international competitiveness at high wages and, at the same time, low inequality of incomes and living standards. Already by the late 1980s, when the differences in performance and social organization between the West Germany economy and its main competitiors came to be widely noticed, the continued economic viability of the 'German model' began to appear doubtful to many. Shortly thereafter, the survival of the German version of advanced capitalism became tied to its successful extension to the former East Germany. With the 1992 completion of the European Internal Market, it became in addition dependent on the compatibility of German economic institutions with the emerging regime of the integrated European economy.
 
The approaches and opinions of economists often dominate public policy discussion. Economists have gained this privileged position partly (or perhaps mainly) because of the obvious relevance of their subject matter, but also because of the unified methodology (neo-classical economics) that the vast majority of modern economists bring to their analysis of policy problems and proposed solutions. The idea of Pareto efficiency and its potential trade-off with equity is a central idea that is understood by all economists and this common language provides the economics profession with a powerful voice in public affairs. The purpose of this paper is to review and reflect upon the way in which economists find themselves analysing and providing suggestions for social improvements and how this role has changed over roughly the last 60 years. We focus on the fundamental split in the public economics tradition between those that adhere to public finance and those that adhere to public choice. A pure public finance perspective views failures in society as failures of the market. The solutions are technical, as might be enacted by a benevolent dictator. The pure public choice view accepts (sometimes grudgingly) that markets may fail, but so, it insists, does politics. This signals institutional reforms to constrain the potential for political failure. Certain policy recommendations may be viewed as compatible with both traditions, but other policy proposals will be the opposite of that proposed within the other tradition. In recent years a political economics synthesis emerged. This accepts that institutions are very important and governments require constraints, but that some degree of benevolence on the part of policy makers should not be assumed non-existent. The implications for public policy from this approach are, however, much less clear and perhaps more piecemeal. We also discuss analyses of systematic failure, not so much on the part of markets or politicians, but by vot
 
This article examines the effectiveness of private transnational regulation of labour standards/rights in the clothing industry. It adopts three objectives. First, the study focuses on national states in developing countries, explaining their lack of enforcement of labour law and the suppression of labour rights. Second, the article examines the effectiveness of transnational regulatory networks (TRNs) in raising labour standards/rights in producer countries. We conclude that, in a fragmented and highly competitive global industry, existing TRNs cannot ensure labour decent standards/rights. Third, we investigate the reasons for their limited effectiveness. We empirically investigate the conditions and rights of labour in the clothing industries of China and Turkey. In the case of Turkey, we are able to explain the lack of effectiveness of TRNs by drawing on interviews with a variety of actors in firms and networks.
 
The United Nations Conference on Trade and Development (UNCTAD) was formed in 1964 to 'create a forum in which the more prosperous member countries [of the United Nations] would come under pressure to agree to measures benefiting the less-developed countries'. More specifically, its formation was 'a deliberate effort to use international bureaucracy and conference diplomacy to alter current norms affecting trade and development'. UNCTAD's founding reflected the growth in membership of the United Nations of newly independent states. A large number of the e´lites of these new entities keenly felt the iniquity of the world order which had ushered in their formal statehood. UNCTAD and the later call for a 'New International Economic Order' (NIEO) therefore were rejoinders to problems encountered by developing countries as a result of the creation and operation of the Bretton Woods system.
 
(The question) is one … of seeing whether 'what ought to be' is arbitrary or necessary; whether it is concrete will on the one hand or idle fancy, yearning, daydream on the other. The active politician is a creator, an initiator; but he neither creates from nothing nor does he move in the turbid void of his own desires and dreams. He bases himself on effective reality, but what is this effective reality? Is it something static and immobile, or is it not rather a relation of forces in continuous motion and shift of equilibrium?1 A common error in historico-political analysis consists in an inability to find the correct relation between what is organic and what is conjunctural … (I)f (such) error is serious in historiography, it becomes still more serious in the art of politics, when it is not the reconstruction of past history but the construction of present and future history which is at stake. One's own baser and more immediate desires and passions are the cause of error, in that they take the place of an objective and impartial analysis-and this happens not as a conscious 'means' to stimulate to action, but as self-deception.2
 
This paper offers a rethinking of the global coffee crisis from 1998 to 2002. In seeking to account for the crisis, most official international institutions and non-governmental organisations have focused on the dynamics of the coffee market, its volatility and unpredictability, in the wake of the decline of the International Coffee Agreements in 1989. The result has been a dominant consensus around the ‘market’ as the cause of underdevelopment and its potential solution, with the ‘state’ receding ever further into the background. As an alternative to this consensus, this paper argues that the state and the market are inseparable and, more specifically, that coffee statecraft, both good and bad, has been and continues to be central to the everyday operations of the coffee industry. Drawing specifically on the role of the Vietnamese state, it argues that coffee statecraft played a key role in the crisis – typically portrayed as primarily market-driven – and proposes greater attention be paid to the geopolitical actions of southern states, the role of the state during times when it seems most benign or invisible, and the centrality of coffee statecraft in steering development outcomes.
 
FROM THE ARTICLE: . . . what many critics of the war on terror or US imperialism have so far failed to appreciate is how this project would be impossible without the capitalisation of the state. In this article, I therefore want to suggest that Marx’s re-theorisation of the concept of primitive accumulation, combined with a non-Marxist theorisation of state power offered by Jonathan Nitzan and Shimshon Bichler, can help us account for the intimate connection between ongoing primitive accumulation and the capitalisation of the US government. . . . I try to show that we can accept their novel theory of capital as a capitalised and commodified form of power, but argue that the concept of primitive accumulation still has considerable analytical value for theorising the extension and depth of capitalist social property relations within and across political jurisdictions.
 
The argument is that London and the South East is an economic 'mega-region', larger than any existing administrative region in England. Drawing on research in South East Asia, the hypothesis is that this mega-region, while itself encapsulating a range of political and territorial tensions, should hold an intrinsic position of power in national policy making. While core central-state institutions, including HM Treasury, the Department for Trade and Industry and the Bank of England, do not explicitly prioritise the mega-regional economy, their concern for national economic compititiveness may mean that fiscal, interest rate and competition policies are attentive to the economic priorities of London and the South East. The proposotion that a prosperous London and South East economy is a necessary prerequisite for a viable national economy is an idea that remains influencial in central government circles. Indeed, the lack of a strong and coordinated voice that can articulate a regional perspictive for London and the South East serves paradoxically to inhance the perceived importance of this part of the economy in national policy development.
 
We proceed by briefly outlining the key parameters of the financial globalisation/policy convergence debate. Then, a model of situated institutional behaviour is developed, first in the abstract and then as illustrated by the Australian empirics. Given the substantial degree of central bank independence from government in this case, the main empirical focus is on the behaviour of central bank authorities at the Reserve Bank of Australia. By tracing the history of Australia's relatively expansionary monetary policy, with its comparatively strong emphasis on striking a balance between acceptable levels of inflation and economic growth, the article turns to the task of explaining the logic and dynamics of such a stance and the degree of policy discretion it evinces. At the level of domestic institutions, the theoretical focus is on how institutionally situated and interpretive actors navigate their way with a degree of discretion through the institutional, ideational and structural terrains they confront. The argument concludes with a brief comparison with the much more strongly convergent New Zealand case. Even here, however, attention to the choices of situated actors reveals choices framed more by domestic ideological and political factors than by external constraints or pressures. Finally, we discuss what the analysis of these cases suggests about the policy convergence thesis and wider debates about globalisation.
 
Firm finance: Loans, private equity, bonds, shares 2000-2003
Trade union density and M&As, 1980–2005 
The decline of manufacturing jobs 
The goal of this article is to provide a comprehensive evaluation of the impacts of finance and corporate governance reforms on organised labour since 1980. The argument is made that contemporary institutional and ‘Varieties of Capitalism’ as well as ‘Varieties of Unionism’ perspectives on labour market reform have overstated the power of states, institutions and organised interests in deflecting global economic pressures. Drawing on a range of recent Organisation for Economic Cooperation and Development (OECD) statistics and qualitative studies, it is claimed that current developments in finance and corporate governance mark a fundamental break with post-war developments. Capital has reasserted its power over organised labour and labour markets not only in the US and UK, but throughout Western Europe as well. In assessing how far this reversal has gone, the article focuses on three key political economic changes: i) the rise in finance and adoption of corporate ‘shareholder’ systems; ii) the expansion of mergers and acquisitions and their negative effects on unionisation and manufacturing jobs; and iii) the effects of financial pressures and corporate reform on collective bargaining and wages. This is the first study to report on comparative changes and qualitative reforms to both finance and labour in 13 OECD countries between 1980 and 2005.
 
Since 2003, the West and Central African (WCA) cotton initiative in the World Trade Organization has stood as an ambitious case of Africa's desire to be integrated into the trading system and yet also receive reparations for past injuries. This article seeks to explore how and why the initiative debuted through close attention to the interdependence between power and language in diplomatic practice. It takes the concept of cognitive framing to explore the relationship between political legitimacy and mobilisation capacities. The genesis of cotton as 'an issue' is critically examined, focusing on how the WCA countries constructed a novel 'competitive victim' frame to define themselves and the problem. While this opening move was effective, it also featured tensions that were exploited by Northern actors who were threatened by the campaign. I argue that what followed was the introduction of a politically driven 'counter-frame', which divided the problem into a 'trade-related' component and a 'development-related' component. It is important to understand why and how this distinction was constructed and monitored. By scrutinising the relationship between framing and institutional power, I suggest that the counterframe won over the original frame, leading to a re-positioning of the demanders and a re-calibration of their expectations.
 
Recent analysis on New Regionalism has, for Björn Hettne, raised important ontological questions over ‘what we study when we study regionalism’. The paper contributes to this debate by focusing on the shared beliefs, norms and rituals that hold a region together. Working between the New Regionalism literature and thinking on international regimes, this paper – to paraphrase Friedrich Kratochwil and John Ruggie – outlines the ‘inescapable inter-subjective quality’ of a region. This focus on inter-subjectivity seeks to improve on existing approaches that consider shared social structures as already fixed, and/or as autonomous constructs operating over and above regional actors. In order to appreciate how inter-subjective structures and regional agents interact with each other, the paper explores the social construction of Latin America. Specifically, it examines the politics of regionness – understood here in relation to identity, space and agents – to demonstrate how various regional actors operate within, and reconstruct, shared meaning. In so doing, it interrogates the practices that govern and continually produce the region.
 
The abrupt end of the Suharto regime in Indonesia is but the most dramatic manifestation of a more generalised process of change that has recently swept through the countries of Southeast and Northeast Asia. In a remarkably short period the former miracle economies have become synonymous with economic mismanagement, corruption and cronyism. It is argued that a key dynamic in the current crisis is internal to markets themselves and has little to do with political and economic realities within individual nations. The implications of the crisis are considered at both a general regional level, and in more detail in the case of Indonesia.
 
This article asks what would really be needed to put the UK on to a high skills, high wage growth trajectory, and how far New Labour policies are helping or impeding movement in such a direction. In the first section, we draw upon a radical political economy approach, outlined in a previous paper,7 to identify the roots of Britain's skill problems, the kind of reforms needed to address them, and the internal constraints within UK capitalism that make such a reform programme extremely problematic. We argue that there is a good deal of symmetry between many of the more critical commentators on the UK VET debate and radical writers,8 operating from within a broader political science tradition, as to where the real problem lies. By integrating insights from both, we are able to arrive at a more complete understanding of what a high skills project in the UK involves and the broader issues this raises in relation to the role of the state, agency and strategy. We argue that the high skills project in the UK requires radical economic and social modernisation, along with major changes in the institutional and industrial policy framework, as well as a shift in the balance of power between capital and labour at the level of both the workplace and state policy. In the second section, we use this analytical framework to assess the effectiveness of the current Labour government's policy approach for realising a high skills economy in the UK. Three areas are discussed: industrial policy, initiatives to encourage the spread of high skill workplaces and mechanisms to strengthen the position of labour. Having found New Labour's policies wanting, section three evaluates the extent and nature of two possible constraints that stand in the way of an inclusive high skills project in the UK within the current political conjuncture-New Labour's politics and 'globalisation'. We argue that such a project remains feasible, though not without its own contradictions. Nevertheless, the current UK skills debate fails to grapple effectively with the extent and nature of the kind of strategies that would be required to implement it. We suggest that, unless an alternative economic and social project can be defined in the UK and moved on to the political agenda, the prospect of real progress remains bleak.
 
Foreign assets and liabilities as share of GDP. Note: Ratio of sum of foreign assets and liabilities to GDP, 1970–2004. Source: Lane and G.M. Milesi-Ferretti (2006).  
(a) AND (b). Financial flows between major economies 1999 and 2007. Note: Includes total value of cross-border investments in equity and debt securities, lending and deposits, and foreign direct investment. Source: McKinsey Global Institute (2008: Figure 11, p. 24).
Bank write-downs during the crisis (US$bn). Source: IMF (2008: Figure 1.3, p. 23).  
Do we have a genuine global financial system? This article challenges the strong notion that the recent financial crisis was global in scope. It argues the international financial system is quite differentiated, being made up of domestic-national, supranational regional and international aspects. The system is characterised by contagion, however, and the article goes on to consider the role of this in generating spill-overs into the wider economic mechanism. Given this characterisation of the financial system the implications for how to organise a regulatory response are pursued. Here the argument is that the principle of 'distributed preparedness for resilience' should guide this response not a new set of top-down global rules and norms organised once again by the institutions of global economic governance.
 
Explanations of cross-national variations in the level of small business and entrepreneurial activity have typically not distinguished between different industry sectors and have tended to focus on general framework conditions affecting small business including macroeconomic variables and regulatory and cultural factors. However, sectoral patterns of small business and entrepreneurial activity also vary cross-nationally and require further explanation. This paper develops a framework for analysis of the conditions of small firms in knowledge intensive sectors that takes into account the stock of knowledge and competence in the economy, the capacity to generate and commercialise new ideas and the strength of regional systems of innovation. An analysis of the Australian and Swedish context shows that macroeconomic, regulatory and cultural factors explain a general bias in the Australian economy towards small business and entrepreneurship. However, the paper draws attention to the very different pattern that emerges with respect to small business and entrepreneurial activity in knowledge sectors. The stock of knowledge and competence, capacity to generate and commercialise ideas and strength of regional innovation systems seems to explain Sweden’s superior performance in small business and entrepreneurial activity in knowledge intensive activities.
 
The paper is a reply to David Marsh and Chris Lewis' response to our paper ‘The Structural Power of Business and the Power of Ideas: The Strange Case of the Australian Mining Tax’. In this paper, we respond to the points their arguments raise about our theoretical framework and empirical case-study.
 
In 2010 the Australian federal government fought and lost an intense and very public battle with the country's mining industry over the introduction of a new ‘super-profits’ tax. The proposed tax was withdrawn and the Prime Minister, Kevin Rudd, was removed from office. Why did the government lose this battle and what can this episode tell us about the nature and determinants of business power? We argue that business power is not an objective condition but is shaped subjectively and inter-subjectively. What counts in the power equation is not whether business investment is essential for growth or whether business will disinvest if a new tax is imposed, but whether actors believe this to be the case. One reason why the structural power of business varies is because actors’ normative and causal ideas about the value and determinants of business investment vary. In the Australian case ministers did not believe that the introduction of a new tax would jeopardise investment. Ministers did however come to believe that the mining industry had successfully persuaded a large number of voters that the introduction of a new tax would jeopardise investment, employment and growth. This is why the tax was eventually abandoned.
 
There has been a recent resurgence of interest in debates about the power of business (Culpepper 20116. Culpepper, P. (2011). Quiet Politics and Business Power: Corporate Control in Europe and Japan, Cambridge: Cambridge University Press.View all references; Bell 20123. Bell, S. (2012). The Power of Ideas: The Ideational Mediation of the Structural Power of Business. International Studies Quarterly, 56(4), 661–73. doi: 10.1111/j.1468-2478.2012.00743.x[CrossRef], [Web of Science ®]View all references) and Bell and Hindmoor (20134. Bell, S., Hindmoor, A. (2013). The Structural Power of Business and the Power of Ideas: The Strange Case of the Australian Mining Tax. New Political Economy, ,forthcoming. Available from: http://dx.doi.org/10.1080/13563467.2013.796452 [19 (3), pp. 470–486, cross-references updated]View all references) make an important, theoretically informed, but empirically rooted, contribution to that debate. In this response, we address both aspects of their contribution, arguing that their treatment of Lindblom is partial and, consequently, so is their explanation of the case. As such, we largely rely on their narrative of the evolution of the Australian mining tax, focusing first on critically examining Bell and Hindmoor's theoretical position, before turning to their analysis of the case.
 
In September 2010 world leaders will meet in New York to discuss progress in meeting the UN Millennium Development Goals (MDGs), which include the promise of halving ‘extreme poverty’ between 1990 and 2015. The paper begins with a brief history of how the MDGs came into being (See Table 1 for a list and other details), noting that they were primarily a product of the rich world, before looking at the progress made in achieving them and the degree to which the rich countries have lived up to the promises they made as part of Goal 8. The final section draws lessons from the MDG process to feed into the debate concerning what will take their place in 2015 when they come to an end.
 
Human induced climate change has become a prominent political issue, at both national and international levels, leading to the search for regulatory ‘solutions’. Emission trading has risen in popularity to become the most broadly favoured government strategy. Carbon permits have then quickly been developed as a serious financial instrument in markets turning over billions of dollars a year. In this paper, I show how the reality of permit market operation is far removed from the assumptions of economic theory and the promise of saving resources by efficiently allocating emission reductions. The pervasiveness of Greenhouse Gas emissions, strong uncertainty and complexity combine to prevent economists from substantiating their theoretical claims of cost effectiveness. Corporate power is shown to be a major force affecting emissions market operation and design. The potential for manipulation to achieve financial gain, while showing little regard for environmental or social consequences, is evident as markets have extended internationally and via trading offsets. At the individual level, there is the potential for emissions trading to have undesirable ethical and psychological impacts and to crowd out voluntary actions. I conclude that the focus on such markets is creating a distraction from the need for changing human behaviour, institutions and infrastructure.
 
The article is about implementing obligations under Article 27.3(b) of the Agreement on Trade Related Aspects of Intellectual Property (TRIPS). However, concerned with the fragmentation of international law in a globalised world, the article uses Kenya as a case study to interrogate the apparent choice and latitude in Article 27.3(b). At the TRIPS Council, Kenya has sought to locate Article 27.3(b) within a wider frame by adroitly norm-borrowing, and it canvassed for integrating norms and principles from other multilateral agreements into TRIPS. Yet, when introducing plant breeders' rights into domestic law, Kenya fails to either explore the apparent latitude or deliver on its rhetoric in Geneva. I explain this decoupling between Geneva rhetoric (ritual) and domestic law (behaviour) as another symptom of what Steinberg [(2002), ‘In the Shadow of Law or Power? Consensus-Based Bargaining and Outcomes in the GATT/WTO’, International Organization, 56 (2), pp. 339–74)] characterises as ‘organised hypocrisy’ of the World Trade Organisation. In demonstrating that fragmentation in global legal architecture may not automatically emerge in domestic law, the article draws out the significance of attending to a domestic political economy of law-making.
 
This article argues that the lead role of West Germany in the transition from fixed to floating exchange rates sits uneasily with accounts that conceptualise the breakdown of Bretton Woods in terms of hegemonic power politics, the influence of global economic interests or a neoliberal paradigm shift. Short of a convincing explanation, the German currency float seems to be a prime example of states surrendering to financial markets. The article offers an alternative interpretation that focuses on the nexus between state agency and capital accumulation. German authorities were indeed confronted with a destabilising influx of dollars that undermined their available policy options. But as they realised that these inflationary flows emanated from the same export-oriented forces in whose interest they had sought to hold on to an undervalued currency, they chose floating in order to regain command over liquidity and create an anti-inflationary programme that was at the heart of Germany's subsequent ability to better manage the 1970s crisis than its partners. Attention to the particular circumstances and consequences of these ‘structured choices’, I conclude, may offer a more compelling account of financial globalisation as a state-led project than those which generalise from the US context.
 
This article looks at how economic policy credibility is constructed in the contemporary period (1997-2003) and goes on to analyse the degree of enduring fiscal policy autonomy in two advanced industrial economies-Britain and France. Our selection of the British and French cases illustrates the different policy autonomy implications of choosing fixed or floating exchange rates. The article is divided into three sections. The first sets out, and critiques, the prevailing orthodoxy regarding capital mobility and economic policy autonomy, namely, the 'strong' version of the Capital Mobility Hypothesis (CMH). The second establishes the ideational and institutional context within which financial credibility is constructed with reference to the International Monetary Fund (IMF), bond-rating agencies, and the euro and its Stability and Growth Pact (SGP). The third section explores fiscal policy-making autonomy, and the constraints thereupon, in the context of increased capital mobility in Britain and France since the early 1990s.
 
As a result of a long-running internal debate there have been notable incremental changes to how the International Monetary Fund (IMF) treats capital controls, particularly those directed at inflows. These changes combine new acceptance of these policy instruments with an older emphasis on their negative consequences and on the desirability of free movement of capital. Policy change of this sort is puzzling from the standpoint of the existing literature on international organisations (IOs), which has thus far paid little attention to transformative incremental change associated with long-term contestation. This article departs from this tendency by drawing on insights from principal–agent theory, constructivism and historical institutionalism to identify the conditions under which such change may originate. I argue that actors within IOs are likely to pursue incremental change by layering new policies on to old ones as a way to build coalitions and to respond to external organisational insecurity imperatives and diverse member state preferences and to internal path-dependent organisational cultural features. Over time the incremental shifts brought by layering can induce transformative rather than reproductive change because they fit with consequentialist and appropriateness behavioural logics. I illustrate this argument by investigating recent changes in IMF policy on capital controls.
 
Sub-National Movements in the EU and NAFTA Political orientation
This article contributes to the growing comparative scholarship on regional trade agreements (RTAs) and the dynamics they engender in national and local life. An objective of that scholarship is to identify patterns across RTAs. We investigate the following question: how have RTAs helped separatist and autonomous movements in their ambitions? We propose that both the left- and right-leaning movements have successfully appropriated, in positive and negative language, RTAs in their rhetoric to articulate not only their goals against their nation states but also their claims against those who oppose them. We identify four factors that might explain the observable differences in rhetorical approaches. The empirical evidence concerns the Quebecois nationalists in Canada, Convergència i Unió in Spain, the Zapatistas in Mexico and the Lega Nord in Italy. We conclude by reflecting on the possible local and regional impact of the observed rhetorical leveraging across RTAs.
 
In recent years European countries have begun to reform their pension systems favouring funded to pay-as-you-go (PAYG) social security systems and supporting the creation of more 2nd and 3rd pillar funded retirement schemes. Though funded pensions remain small in most European countries, they are growing significantly and may limit the persistence of strong 'varieties of capitalism' by providing an endogenous source of change to economic organisation and corporate governance. To explore this scenario this article examines recent developments in France, in particular the creation and the functional organisation of the French sovereign wealth fund the Fonds de réserve pour les retraites (FRR) and the new public sector pension fund the Etablissement de retraite additionnelle de la fonction publique (ERAFP). In terms of institutional design the FRR has the same functional scope, capacity and asset mix as sophisticated global pension funds. The ERAFP, on the other hand, is subject by statute to a conservative asset allocation, manifesting the tension between adopting the scope and practices of other sophisticated global, i.e. Anglo-American, financial institutions. Though as the ERAFP grows in size, it is arguable whether or not it will continue to be constrained. Ultimately, the development of pension funds in France and the creation of a global institutional investor at the heart of the French state portend to increased engagement with global finance and the French political economy.
 
The current and future costs of meeting climate change mitigation needs in the global South vastly exceed levels of available funding from public sources in the North. As a possible solution to this problem, policy-makers and various observers have pushed increasingly for the adoption of market-based carbon financing strategies, with the United Nations Clean Development Mechanism (CDM) representing the most consistent application of this approach to date. Nevertheless, market-based carbon finance remains highly volatile given its heavy dependence on conditions in the broader global carbon market which remains in the throes of a devastating crisis, earning carbon the distinction of 2011s worst performing global commodity. By demonstrating that it is through carbon's market price that finance-generating investment in the CDM is largely derived, and which also determines the ex post value of CDM projects, this paper argues for the decoupling of climate change finance from carbon's market value. The need to do so is particularly pressing since, it is argued, the current crisis in the global carbon market reflects an embedded crisis tendency in that market, born in part from the political machinations through which it was born and which leaves it prone to persisting crises of oversupply.
 
This paper examines warehouse workers' experiences of the labour process and employment relations in an ambient food distribution depot governed by a labour management system described as lean logistics. Lean logistics is seen by the sector as an aid to, and necessary development of, the globalisation of the sector's supply chain (global commodity chain). The focus is on how the restructuring of work as a result of lean logistics and the consequent imposition of a supermarket Taylorist work culture led to the demise of an industrial workplace culture and a dramatic deterioration in pay and working conditions. The latter included an increase in the scope and intensity of management control of labour.
 
Marx and Polanyi both held that socialism, in one form or another, was a preferable and possible alternative to capitalism. Their ideas are seen to offer theoretical tools to understand the tensions and contradictions of capitalism, and to inform ways to overcome them. This paper discusses Polanyi's work from a Marxist perspective in order to illuminate his strengths and weaknesses. Its main focus is to discuss Polanyi's juxtaposing of commodification against exploitation, in diagnosing the problems of capitalist expansion. We suggest that by juxtaposing these two moments, Polanyi not only misses out on a crucial arena of capitalist activity (exploitation), but also undermines his own explication of processes of commodification. This has deleterious consequences for his understanding of the prevalence of poverty under capitalism. It also means that his vision of social transformation and of socialism is profoundly different, and potentially antithetical, to that of Marx. We suggest that for Polanyi's conception of de-commodification to gain greater traction it needs to be combined with Marx's analysis of exploitation and class struggle.
 
Overview of the cases Domain of transnational regulation 
Scholarship on private authority in the transnational realm has commonly focused on the influence or power private actors are able to exert. This paper argues, however, that what often is at stake is not so much the strength or not of private authority, but the private or public character of the institutions through which it is exercise. Politico-economic processes are always pervaded by private interests and authority, regardless of their private or public form. Therefore, this paper concentrates on the institutions itself and asks under which conditions transnational rule setting will be effected through private or public institutions – whether they will be inside the domain of the state and inter-national organizations, or formally controlled by private actors. Focusing on transnational business regulation, the paper presents several related arguments: First, in many cases transnational private regulation can be understood as a means firms dominating a transnational market segment employ to stabilize their grip on this segment and ‘keep potential competitors out’. Second, transnational private regulation is only likely to emerge if a stable ‘conception of control’ has emerged among the ‘incumbent firms’ in a market segment. Third, transnational public governance is likely to emerge if producer firms ‘draw the state back in’ in order to fend off competitive threats. The article illustrates these arguments with three empirical cases studies from financial services and business services – Eurobond underwriting, auditing, and trading services for listed derivatives.
 
Review essay of Baruch Kimmerling’s “The Invention and Decline of Israeliness”, Jonathan Nitzan and Shimshon Bichler’s “The Global Political Economy of Israel” and Gershon Shafir and Yoav Peled’s “Being Israeli”.
 
This article is about the contested world of European pensions and the tensions between continuity (with the past) and convergence (with respect to the Anglo-American model). 13 One goal of the article is to show how and why European pensions are an important topic for the social sciences. In doing so, I argue that resolution of seemingly adverse European demographic trends and imperatives may be found in European Union (EU) policies designed to foster the development of the 'new economy' in Europe over the twenty-first century. A second goal of the article is to show that the principles of social solidarity remain very important in European debate over national systems of retirement income and finance. A third goal is to articulate the connection between the markets while retaining characteristics consistent with the principles of social solidarity. By this logic, it is probably better to suppose that pension reform will be a form of accommodation with the Anglo-American model rather than significant convergence to its dominant features.
 
International financial flows and fixed investment (% of world GDP) Source: UNCTAD (2012b: 21).  
This article offers a political economy review of the literatures and the empirical evidence concerning the ‘Rise of the South’. The study focuses on global convergence (in the long-term, in the last 30 years, and in the aftermath of the 2008 global crisis), economic decoupling between developing and advanced economies, and the economic strategies which may help catching-up, especially the ‘flying geese’ paradigm and industrial policies supporting manufacturing sector growth. It shows that the mainstream literature suffers from significant weaknesses; that empirical claims concerning convergence and decoupling have been exaggerated, and that flying geese-type strategies are severely limited. Examination of the drivers of growth in the South and the policies implemented in key converging countries support the claim that political economy approaches can offer valuable policy insights to countries grappling with the challenges of long-term growth and development.
 
This article argues that the high levels of corruption and rent-seeking typically observed in resource-rich countries are often caused by a sub-optimal separation of powers amongst state regulators responsible for firm licensing. To establish this point, I develop a transaction cost account of corruption and rent-seeking in mining-sector licensing systems, showing that due to transaction costs different allocations of institutional mandates give rise to differential incentives for corruption and rent-seeking. By critically assessing and elaborating the World Bank's thinking on mining-sector reform, I generate normative prescriptions to optimise the separation of powers in licensing regimes. I also treat this model of corruption and rent-seeking positively and I test it through an empirical case study of Kosovo. In the newly independent Balkan country, recent legal reforms have introduced a sub-optimal allocation of regulatory competences. The structure of transaction costs that resulted explains the growing emergence of rentierism. Crucially, these regressive reforms are shown to have retarded the growth of the country's mining sector.
 
Media and policy discourses on the subprime crisis and the ensuing credit crunch have been dominated by historical analogies, whereby a sense of how bad things have been since the autumn of 2007 arises from comparing the situation directly to other notable moments of financial meltdown. Typical of this approach is the measured insistence of the Chair of the US Federal Reserve, Ben Bernanke, that the spiral of illiquidity which engulfed the banking sector in September 2008 provided the most serious threat of systematic bank collapses since the Great Depression. Such constructions are clearly not without justification. Commercial banks have been nationalised at a rate unprecedented in recent memory; the once seemingly omnipresent giant US investment banks have failed to survive in their extant form; the UK has witnessed its first genuine run-on-the-bank dynamics since the middle of the nineteenth century; the interest rate spread between inter-bank lending and government bonds has reached record highs almost worldwide; and the drying up of mortgage lending has led to record annual falls in house prices in many countries. However, as an explanatory device, inference by historical analogy alone places unnecessary and unhelpful restrictions on attempts to understand how events surrounding the sub-prime crisis and its associated credit crunch have unfolded.
 
Sovereign Wealth Funds (SWFs) are the subject of intense debate. While these financial institutions are hard to define in precise terms, all agree they are government-owned investment funds operating in private financial markets. Their relevance to the evolving economic, political and financial landscape cannot be overstated, as they challenge the received notions of practice and governance embodied in traditional, Western financial institutions. This has resulted in distrust-more accurately labeled as illegitimacy-by Western policymakers about SWF intentions. Indeed, several countries are considering new, protectionist policies designed to minimize perceived SWF threats. In this article, I seek to evaluate the SWF phenomenon by making three contributions: clarifying what a SWF is and is not; analyzing the concerns of policymakers; and examining the role of governance in these concerns. This paper's theoretical contribution is a conceptualization of the interplay between organizational legitimacy and institutional governance. This is done through an interrogation of available literatures, reference to close-dialogue interviews with elites, and two brief case studies.
 
Robinson raises a series of questions about the Government''s priorities, challenging the key policies of target-setting and raising average achievement. (The Times). This report, which attracted much media coverage, examines many of the commonly held assumptions about educational standards in Britain.
 
Top-cited authors
Björn Hettne
  • University of Gothenburg
Fredrik Söderbaum
  • University of Gothenburg
Stephen Gill
  • York University
Isabella Bakker
  • York University
Andrew Baker
  • The University of Sheffield