Category Archives: Trade, Aid, Business, Finance

Posts about international political economy topics

Climate Change is the BIG issue in IR

COP_12_MAVThe most important issue in IR today, climate change, is receiving little scholarly attention in our discipline. To help address this gap, I am hereby winding down much of my work on war, retiring from my IR textbook, and will make climate change my main area of work. Thirty years ago I set out to understand war because it was the overriding moral issue of our time and the greatest threat to humanity. Today that issue is climate change.

Climate matters not only for practical reasons but because it cuts to the heart of IR as a field. IR is all about the governance of an “anarchic” system with weak central authority, in which power resides primarily in sovereign states whose individually rational decisions lead to bad outcomes for all. We call it the collective goods problem (public goods, collective actions, Prisoners’ Dilemma, etc.). It’s the central, pervasive theme of my IR textbook, shaping subfields from war to trade to international development. But the biggest example, the most difficult dilemma, and the case with the greatest impact is climate change.

Each actor’s economy benefits from burning fossil fuels, no single actor can affect the overall outcome alone, yet all will suffer catastrophic consequences as a result. The global governance mechanisms have proven very weak – the Kyoto treaty basically failed, targets are not being met, some leading economies are backsliding, and nobody has a workable plan for how to change our trajectory. Year by year, for our global institutions it’s “talk, baby, talk” while in the real world it’s “drill, baby, drill” from the melting Arctic to the American shale fields to the Persian Gulf.

The basic structural challenges to reaching agreement are amplified by several additional problems. Today’s generation would have to pay costs for the benefit of future generations – a hard sell whether in a democracy or an autocracy. Rich country would have to pay for the benefit of poor countries. And specific constituencies and regions will feel different costs and impacts:  multinational oil companies versus farmers in Bangladesh, for example. On top of it all, there is widespread public confusion about the issue, notably in its categorization as an “environmental” problem as though it will impact cute animals not cities.

This then is a prime area for IR scholarship in general and IR theory in particular.  The guru of IR theory, Robert Keohane, thinks so. But he writes, “In view of the magnitude of climate change, it is distressing to observe the slow response from political science as a discipline.” That’s an understatement. Consider the current issues of our leading IR journals. Let’s count the number of climate change articles and the total number of articles:

  • International Studies Quarterly, 0 for 16
  • Am. Political Science Review, 0 for 10
  • International Organization, 0 for 11
  • World Politics, 0 for 5
  • Journal of Conflict Resolution, 0 for 7
  • Journal of Peace Research, 2 for 8

Across these six journals, we have 2 climate-related articles out of 57. Both of those are about possible effects of shifting weather patterns on something we do study – armed conflicts. Not a single article deals with the challenge of an international system trying to come to terms with a massive collective goods problem that threatens civilization. This in a year when the world will gather in Paris to try for a new global agreement to grapple with the problem. Debra Javeline calls climate change “the most important topic political scientists are not studying.”

Climate change is not an environmental issue. It’s an existential issue – the slow-motion equivalent of an asteroid heading for earth. We have no effective global mechanism to develop and launch a mission to knock that asteroid off its trajectory. Yet every day it gets closer and harder to shift off its course. How would the world respond to that scenario?  Would a hegemon take the reins and implement a solution?  The G20?  The United Nations?  Would all countries have to contribute to an expensive solution?  Would competing programs by different states step on each other’s toes?  Would private companies abandon the profit motive to develop technologies to save us? These are the kinds of questions we should be asking about climate change in IR. Now would be a good time to start. The asteroid is not waiting.


[Photo credit:  COP 12 MAV by agenciaandes. Licensed under CC BY-SA 2.0 via Wikimedia Commons]

Philippines Storm and Climate Change

Super typhoon Haiyan: survivors walk past a ship that lies on top of damaged homesThanks to the BBC (again), we can watch in near-real time as desperate masses of Filipinos struggle to stay alive without water, food, or health care. The “super-typhoon” that hit them is possibly the biggest storm ever recorded.

On the other side of the world, in Poland, an international conference got underway to try to negotiate about precursors to a possible agreement to someday set targets to reduce the growth of the rate at which we are adding carbon to the atmosphere. The Philippine delegate cut through all that with an emotional speech that electrified the room, linking the devastation in the Philippines to the world’s failure to prevent climate change. “We can fix this. We can stop this madness,” he pleaded. He began fasting until the conference takes effective action.

The media coverage of this storm and other recent weather destruction always warns us that no particular weather disaster can be attributed to climate change. This is technically true, but misleading. If you are sitting on the beach while the tide is rising, you will notice that some waves come up much higher on the beach than others, unpredictably, and with no relation to the tide. But over time, for certain, your picnic is going to get soaked. Same thing with planet Earth – our picnic is for certain going to be completely soaked if we continue on our current path.

People wonder if the recent weather disasters will be the “new normal.” The answer is definitely no. The new normal will be far, far worse. The trends that will play out over the next few decades have only just begun. This is just a little taste of a future that will be truly catastrophic, barring a major change in the direction of human civilization.

The massive denial about climate change that now pervades our collective consciousness is reminiscent of the “nuclear numbing” of the public during the Cold War. We were aware of such matters as nuclear war planning, but their logical consequences were too horrible to look at. So we delegated the uncomfortable core issues to experts and policy makers, who could treat the issues surgically, with acronyms and euphemisms. The nuclear freeze movement upended that arrangement, and I wish the same would happen for climate change. The experts and policy makers are not solving it. The international governance institutions are not up to the job. And, embarrassingly, my own dear United States is on the wrong side of the issue, emitting way more than its share of carbon and failing to lead the push for change, indeed even undermining the world’s feeble efforts such as the Kyoto Protocol (unratified by the USA).

Climate change is the overriding moral issue of our time. So when I say the USA is on the wrong side of the issue, I mean the wrong side of history.

[Donations to help the people in the Philippines can be made through one of these groups.]

Jobs in Nongovernmental Organizations

Part three for those of you whose New Year’s resolution is to get a job in International Relations… I’m posting the “Careers in IR” section from my textbook (Joshua S. Goldstein and Jon C. Pevehouse, International Relations, 10th ed. 2012-2013 Update).  This is the third of four parts:  Government and Diplomacy; International Business; Nongovernmental Organizations; and Education and Research.

afp redcross vladimir valishviliSUMMARY
Jobs in NGOs provide personally rewarding experiences for those willing to work hard for a cause, but pay poorly and are hard to obtain.

BENEFITS AND COSTS
Nearly 30,000 NGOs exist, and that number grows daily. Thousands of individuals are interested in working in these organizations. Although all NGOs are different, many perform multiple functions: working in developing countries regarding a variety of issues; public outreach at home and abroad; lobbying governments to change their policies; designing projects to solve problems and attempting to find funding for their implementation.

Working for an NGO has many benefits. Workers often find themselves surrounded by others concerned about the same issues: improving the environment, protecting human rights, advancing economic development, or promoting better health care. The spirit of camaraderie can be exhilarating and rewarding.

While working for an NGO can be extremely rewarding personally, it is rarely rewarding financially. Most NGOs are nonprofit operations that pay workers meagerly for long hours. Moreover, many smaller NGOs engage in a constant fight for funding from governments, think tanks, private foundations, or individuals. The process of fundraising can be quite time consuming.

Despite the large number of NGOs, relatively low pay, and long hours, finding a job with an NGO can be difficult. One key is to be specific. Try to narrow down your interests in terms of substantive areas (e.g., human rights, environment) and/or geographic region. Also think about whether you want to work in your own country or abroad. Positions abroad may be more rewarding but are in lower supply and higher demand.

SKILLS TO HONE
NGOs are looking for selfstarters. Most have little time and few resources for training.  Basic office skills (e.g., computer expertise) are essential, but employees also need to cover a range of duties every day. Anything and everything is in your job description. Writing and communication skills are key, especially when fundraising is part of the job. Foreign language skills also matter since many NGOs maintain or work with field offices abroad.

Often, NGOs ask potential employees to volunteer for a period while they train, before being hired. Increasingly, some companies place workers in an NGO or volunteer opportunity for a price. By paying to work, you can gain a probationary period to develop your skills and familiarize yourself with the operation so as to become efficient before going on the payroll.

Finally, in cities where NGOs cluster (e.g., Washington, D.C.), personal networks play an important role in finding good opportunities. Workers often move from one organization to another. For this reason, many volunteer or accept jobs with NGOs not in their immediate area of interest to gain experience and contacts, which can help future career advancement.

RESOURCES

  • Sherry Mueller. Careers in Nonprofit and Educational Organizations. In Careers in International Affairs. 7th ed. Washington, D.C.: Georgetown School of Foreign Service, 2003.
  • Richard M. King. From Making a Profit to Making a Difference: How to Launch Your New Career in Nonprofits. River Forest, IL: Planning/Communications, 2000.

http://www.ngo.org/links/index.htm
http://www.idealist.org
http://www.wango.org/resources.aspx?section=ngodir

Jobs in International Business

For those of you whose New Year’s resolution is to get a job in International Relations, I’m posting the “Careers in IR” section from my textbook (Joshua S. Goldstein and Jon C. Pevehouse, International Relations, 10th ed. 2012-2013 Update).  This is the second of four parts:  Government and Diplomacy; International Business; Nongovernmental Organizations; and Education and Research.

intlbiz andersen-ros brandx gettySUMMARY
Jobs in international business offer high pay, interesting work, and demanding hours for those with language and cultural skills.

BENEFITS AND COSTS
As the pace and scope of globalization have accelerated, opportunities to work in international business have blossomed. For many large companies, the domestic/global distinction has ceased to exist. This new context provides opportunities and challenges for potential employees.

Careers in international business offer many advantages. Business jobs can pay substantially more than those in governments or NGOs and can open opportunities to travel extensively and network globally. Foreign-based jobs mean relocation to another country to work and immerse oneself in another culture.

However, such a career choice also has potential costs. Many jobs require extensive hours, grueling travel, and frequent relocation. As with any job, promotion and advancement may fall victim to external circumstances such as global business cycles. And these jobs can be especially hard on families.

International opportunities arise in many business sectors. Banking, marketing (public relations), sales, and computing/telecommunications have seen tremendous growth in recent years. These jobs fall into three broad categories: (1) those located domestically, yet involving significant interactions with firms abroad; (2) domestic jobs working for foreign-based companies; and (3) those based abroad, for foreign or domestic firms.

SKILLS TO HONE
One key to landing in the international business world is to develop two families of skills: those related to international relations and those related to business operations. Traditional MBA (Masters in Business Administration) and business school programs will be helpful for all three types of jobs, yet for jobs based abroad, employers often also look for a broader set of skills taught in economics, political science, and communications. Thus, not only  traditional business skills, but language and cultural skills, are essential. Employers look for those who have knowledge of a country’s human and economic geography as well as culture. Experience with study abroad, especially including working abroad, can help show an ability to adapt and function well in other cultures. Strong analytical and especially writing abilities also matter greatly to employers.

Research also helps in landing a job. Employers often look for knowledge of a particular industry or company, in order to make best use of an employee’s language and cultural skills. Of course, while experience in non-international business never hurts, be mindful that the practices, customs, and models of business in one country may not apply well abroad. Crosscultural skills combined with substantive business knowledge in order to translate the operational needs of companies from the business world to the global realm are highly valued.

RESOURCES

  • Edward J. Halloran. Careers in International Business. 2nd ed. NY: McGraw-Hill, 2003.
  • Deborah Penrith, ed. The Directory of Jobs and Careers Abroad. 12th ed. Oxford, UK: Vacation Work Publications, 2005.

http://www.rileyguide.com/internat.html
http://jobs.goabroad.com/
http://www.transitionsabroad.com/listings/work/careers/index.shtml

Daniel W. Drezner — Regulating Global Complexity

[By Daniel W. Drezner. Part of the series “Global Challenges in 2030”  (Goldstein & Pevehouse), January 2010.]

Outside of realists, mainstream international relations perspectives believe that the world benefits from complex interdependence. One of the biggest issues that international relations theorists will need to deal with in the coming decades, however, is dealing with the dark side of globalization.

With the end of the Cold War, the globalization phenomenon went truly global. At the same time, the number of banking and currency crises also began to mushroom. During the 1990s, the frequency of banking and currency crises rose to a level unseen since the interwar years. While most of these crises were concentrated in the developing world, with the Great Recession of 2008, instability went global as well. International markets in financial assets, food, and energy were buffeted by a series of shocks—and none of them functioned terribly well in response. This failure rattled even the most devout free market enthusiasts. Former Federal Reserve chairman Alan Greenspan made headlines when he admitted that his faith in the “intellectual edifice” of self-correcting markets had “collapsed.”

With the accelerating pace of technological innovation constantly reducing the transaction costs of cross-border trade, globalization is a fact regardless of how high governments set barriers to trade. How can the benefits of greater openness and greater interdependence be realized while minimizing the costs that come from economic crises?

“Interlocking financial markets, real-time information dissemination, and just-in-time inventory systems [have] magnified … any perturbation in the global economy.” This Hong Kong container port in 2008 hints at the complexity of these processes.

Economists have been debating the best way to answer that question since the start of the Great Recession, with little to show for it beyond some very heated rhetoric. Many commentators argued that the laissez-faire, efficient markets, self-regulation approach allowed systemic risk to bubble up. Free-marketers placed the blame on government policies that subsidized home mortgages and kept interest rates too low for too long. This debate has produced more heat than light.

Here’s a truly subversive thought—perhaps the problem with this debate is the extent to which the rest of the world listens to economists. Keynesian or monetarist, all economists preach the virtues of maximizing economic efficiency. For all economists, the be all and end all of their policy prognostications is “Pareto optimality”—a world in which no one can be made better off without making anyone worse off.

If one looks at the globalized economy through the lens of organizational theory, however, then one’s perspective begins to shift. Globalization has transformed the world economy into a complex, tightly coupled social system. A globalized economy is hideously complex, with interactions between different sectors that become clear only after the fact. For example, U.S. government officials did not anticipate the ways in which the bankruptcy of Lehman Brothers would ripple across financial markets; other governments failed to understand how Lehman’s collapse affected their own financial sectors.

A globalized economy is also a tightly coupled organism—changes in one component of the economy have immediate effects on other sectors of the economy. The proliferation of interlocking financial markets, real-time information dissemination, and just-intime inventory systems has accelerated and, at times, magnified the impact of any perturbation in the global economy. The way in which the subprime mortgage crisis spread across national economies and from financial markets to the real economy demonstrates the speed with which a minor accident can metastasize into something far more serious.

Complex, tightly coupled systems are prone to what some scholars have labeled “normal accidents”—cascading catastrophes that grow naturally in the system. These systems also tend to have actors with a vested interest in avoiding change in the status quo. Unlike loosely coupled or less complex systems, the creation of safety mechanisms to try to prevent such a catastrophe often has unanticipated or debilitating effects.

Some counterintuitive notions come from thinking of the global economy as a complex system. For example, faith in regulatory solutions might be just as misguided as faith in efficient markets. Efforts to regulate capital markets might be well intentioned, but they might also have unanticipated effects precipitating an even bigger economic crash. This does not mean that no actions should be taken—but it does mean that the potential costs of regulation have been underestimated.

Another counterintuitive point is that because of complexity, sham agreements might actually be a good thing for the global economy. The natural political instinct is to “do something” in the wake of a crisis. A normal accidents perspective,  however, would argue that periodic financial crashes are something the world must live with. Politicians do not do terribly well with a “do nothing” message—so symbolic pledges on a number of issue areas can alleviate political pressure without bollixing up the global financial system.

Debates over how to regulate a complex global economy will persist for decades. An organizational lens leads to some unconventional thoughts. In addition to maximizing economic efficiency, policy makers will also want to think about robustness as a desirable outcome. Any regulation of a complex global economy should be concentrated on making a tightly coupled system more robust to shocks. This means adding some friction to markets that react quickly, in the hopes that contagion does not spread as quickly in the future. There are limits to this strategy—the world really does benefit from financial globalization—but that’s why something like a minimal tax on international capital movements makes some sense.

 

DANIEL W. DREZNER is professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University. He is the author of All Politics Is Global (Princeton, 2007) and The Sanctions Paradox (Cambridge, 1999), and keeps a daily blog at foreignpolicy.com.

Andrew Moravcsik — Affirming Democracy in International Organizations

[By Andrew Moravcsik. Part of the series “Global Challenges in 2030”  (Goldstein & Pevehouse), January 2010.]

Are international organizations undemocratic? Many activists, politicians, and political scientists believe that globalization and global governance are reducing citizens and their elected politicians to rubber stamps. Decisions are made behind closed doors by networks of unelected diplomats, technocrats, and judges. Neither individual citizens nor national parliaments exercise meaningful oversight. Yale law professor Jed Rubenfeld has contrasted international organizations that are “bureaucratic, diplomatic, technocratic—everything but democratic” with the U.S. Constitution’s “process of popular deliberation and consent.”

In the United States, international organizations elicit complaints from left and right alike. Conservatives criticize activist lawyers, judges, and NGOs for seeking to import interventionist foreign standards—the death penalty, global warming standards, and gay rights—without running the gamut of the normal legislative process. Progressives worry about the unchecked influence of corporate interests, which appear to use multilateral organizations such as the WTO to protect profits at the expense of social, health, safety, and  environmental standards.

Many Europeans share sociologist Ralf Dahrendorf’s view that internationalization “invariably means a loss of democracy.” The European  Union’s recent and contentious effort to promulgate a “constitution” was launched in order to bring it “closer to its citizens” and provide “better  democratic scrutiny.” Yet the impression of illegitimacy was bolstered by referendum defeats in France, the Netherlands, and Ireland before a  watered-down version finally passed in 2009 as the Treaty of Lisbon.

“Even in the European Union, the world’s most ambitious international institution, around 90% of lawmaking remains under national control.” French laws mainly govern the owner, crew, and cargo of this barge passing the European Parliament building in Strasbourg.

Critics propose two remedies.  “Sovereigntists” would reassert national  sovereignty, reinforce  domestic control, and block multilateralization of  new issues. “Cosmopolitan democrats” would establish elections, parliaments, and other popular democratic institutions at the global and regional levels. While these criticisms seem intuitively plausible, closer scrutiny reveals important counterarguments.

National institutions impose tight control over international organizations. National governments decide most important questions by consensus,  affording each member government a role in either approving or blocking an action. In nearly all bodies, international officials remain weak and secretariats are small. Each government remains responsible to its population in accordance with domestic law. Citizens in democratic societies can reward or punish their governments for the decisions they take in international organizations, just as they would for any other decision. Issues such as payment of UN dues in the United States, compliance with IMF programs in Argentina, or ratification of a new EU constitution in Britain spark spirited domestic debates.

International institutions expand the scope of democratic choice. In an increasingly interdependent world, the advancement of one country’s national interest increasingly depends on policies adopted by foreign governments. If citizens wish to defend themselves against external enemies, set an effective environmental standard, or protect human rights at home, they must increasingly do so in cooperation with foreigners. International cooperation offers governments a chance to exchange unilateral policy discretion at home for expanded influence over the policies of foreign governments, thereby realizing vital domestic policy objectives that would otherwise be unachievable. A blanket refusal to delegate authority to multilateral institutions, as sovereigntists recommend, would not only be self-defeating, but would also arbitrarily restrict national democratic choice.

International institutions can improve domestic democratic processes. International institutions may be distant, but critics of multilateralism go to the opposite extreme: They idealize local democracy. National elections and other forms of political representation often contain serious biases and flaws, which international institutions can help correct. Even in European countries, where human rights standards are well established, international courts have imposed higher human rights protection in matters such as the death penalty, gay rights, and the right of asylum. Many international institutions help promote democracy. The WTO helps overcome special interest dominance of unilateral trade policy making.

Governments reserve the issues most salient to voters to themselves. Even in the European Union, the world’s most ambitious international institution, around 90 percent of lawmaking remains under national control. These include the most salient issues to citizens: taxing and spending, social welfare provision, health care, pensions, education, law enforcement, local infrastructure, and defense spending. Even at home, we often choose to delegate issues handled by international institutions—such as human rights protection, financial and regulatory policy, nuclear proliferation—to more independent and expert officials and judges. This is as it should be.

If international decisions remain under tight democratic control, why are multilateral institutions so widely perceived as “undemocratic”? In part, this perception reflects the relative unfamiliarity of such institutions and the latent nationalism of publics. But also, many criticisms of “undemocratic” international organizations are advanced by those who are seeking a rhetorical edge in domestic debates about the content of specific decisions. At least critics seem equally divided. The fact that such criticisms appear to come equally from both the left and the right suggests that international organizations are doing something right.

 

ANDREW MORAVCSIK is Professor of Politics and International Affairs, and Director of the European Union Program, at Princeton University’s Woodrow Wilson School. He has authored over 100 academic publications on European integration, transatlantic relations, international organizations, global human rights, international relations theory, and Asian regionalism. He is Non-Resident Senior Fellow of the Brookings Institution, Contributing Editor of Newsweek magazine, and Book Review Editor (Europe) of Foreign Affairs magazine. His policy experience includes service as an international trade negotiator for the U.S. Department of Commerce, special assistant to the Deputy Prime Minister of the Republic of Korea, and assistant in the press office of the European Commission.

Charli Carpenter — Securing the Seas

[By Charli Carpenter. Part of the series “Global Challenges in 2030”  (Goldstein & Pevehouse), January 2010.]

Forget Johnny Depp. Real-life maritime piracy is no laughing matter. According to the International Maritime Bureau (IMB), 78 vessels were boarded and 39 hijacked worldwide in the first half of 2009—an increase of nearly double from the previous year. Unlike the pirates of yore, today’s sea bandits use satellite technology to track their prey; sneak up alongside ships in speedboats; are armed with machine guns, rocket launchers, and grenades; and board vessels with grappling irons. Once aboard, pirates plunder or ransom cargo and terrorize crews.

All kinds of ships—yachts, freighters, cruise ships, supertankers—fall victim to attack. In 2008, a Ukrainian cargo ship laden with Russian tanks, ammunition, and other military equipment was captured by pirates and later ransomed for $3.2 million. Humanitarian shipments to famine-ravaged lands are favorite targets off the Horn of Africa, meaning piracy is not just bad news for maritime crews and arms merchants but also for hungry civilians—not to mention the entire system of international trade, since 90 percent of what consumers use travels by water. And there are significant concerns about the connections between piracy and international terrorism.

“Ultimately, action at the global level is necessary to protect shipping lanes and empower legitimate international actors to stamp out piracy.” Here, Turkish commandos in 2009 arrest pirates off the coast of Somalia.

Commentators have different views as to what drives this problem: grinding poverty that makes piracy look like easy money, technological changes that make it easy for non-state actors to take on states and corporations, the collapse of state governance in many parts of the world. But an important contributing factor is the simple lack of global coordination to address the problem. States are responsible for policing their coastlines, but much piracy occurs on the high seas—outside of any one state’s jurisdiction. Because the  oceans are a radically transnational, ungoverned space, no one state has the power or authority to quell piracy on its own.

Governments acting in concert in specific contexts have shown that maritime piracy can be controlled. Four years ago, the Straits of Malacca were the most dangerous shipping lanes in the world. Then a coordination regime between Indonesia, Malaysia, and Singapore reduced piracy markedly. But piracy hotspots move. At the same time that piracy declined in South Asia, it spiked off the Horn of Africa as marauders sought a more lawless region to ply their
trade. A coalition of 45 nations is now policing East Africa. But Somalia is not the only hotspot today: piracy remains a problem in South Asia and off the
coast of Nigeria.

Ultimately, as with other global problems, a global response is required. Unfortunately, no international organization exists whose responsibility is to protect shipping lanes globally or punish offenders once caught. The UN has no global police force, and was primarily designed to prevent territorial aggression among middle powers, not solve transnational security threats. In fact, the UN Charter is part of the problem: ships on the high seas cannot  legally pursue pirate boats into the territorial waters of sovereign countries. On a case-by-case basis, the UN Security Council can authorize exceptions to this rule, but this approach has not worked well in Somalia, partly because governments also need to be required to do the actual policing. And Security Council resolutions regarding Somalia cannot be transplanted to other  contexts.

The international community is also missing global rules about how to punish or deter piracy. As a crime of universal jurisdiction, piracy on the high seas is in theory punishable by any state that captures a pirate. But such trials are rare: no country wants to set a precedent for trying pirates in domestic courts, and be faced with a backlog from others bringing their own captured pirates to its jurisdiction. The International Criminal Court offers a potential venue for trying and punishing pirates, but at present its jurisdiction includes only the other universal jurisdiction crimes—genocide, crimes against humanity, and war crimes.

Given this political and legal vacuum, shippers are fending for themselves these days with acoustic weapons and private security personnel, in some cases arming merchant crews in their own self-defense. But these remain band-aid solutions—and they create additional risks to human life and  maritime security. Ultimately, action at the global level is necessary to protect shipping lanes and empower legitimate international actors to stamp out  piracy.

International institutions have been created to solve other global problems: nuclear proliferation, ozone depletion, pandemic disease. What might a “regime” for combating piracy look like? Whatever the means chosen, governments will need to seriously rethink the governance of the ocean over the next two decades if they are to stem the rising tide of high seas brigandry.

 

CHARLI CARPENTER teaches international relations at the University of  Massachusetts-Amherst, and blogs about war law and human security issues at Duck of Minerva and Current Intelligence. She is the author of Innocent Women and Children: Gender, Norms and the Protection of Civilians (Ashgate  Publishing, 2006).

John Gerard Ruggie — Governing Transnational Corporations

John Ruggie photo[By John Gerard Ruggie. Part of the series “Global Challenges in 2030”  (Goldstein & Pevehouse), January 2010.]

The international community is still in the early stages of adapting the human rights regime to provide more effective protection to individuals and communities against corporate-related human rights abuses—sweatshop conditions in factories supplying branded global firms; communities forcibly displaced for the benefit of oil and mining companies’ installations; food and beverage firms found with seven-year-old children toiling on their plantations; or collaboration with paramilitary forces accused of killing labor organizers.

Business is the major source of investment and job creation, and markets can be highly efficient means for allocating scarce resources. They constitute powerful forces capable of generating economic growth, reducing poverty, and increasing demand for the rule of law, thereby contributing to the realization of a broad spectrum of human rights. But markets work optimally only if they are embedded within rules, customs, and institutions. Indeed, history teaches us that markets pose the greatest risks—to society and business itself—when their scope and power far exceed the reach of the institutional underpinnings that allow them to function smoothly and ensure their political sustainability. This is such a time, and escalating charges of corporate-related human rights abuses are the canary in the coal mine signaling that all is not well.

Cocoa plantation photo

“The governance gaps created by globalization . . . provide the permissive conditions for wrongful acts by companies of all kinds.” This 14-year-old from Mali works on a cocoa plantation in Ivory Coast in 2001, providing cheap labor to multinational corporations selling chocolate globally.

The root cause of the business and human rights predicament today lies in the governance gaps— between the scope and impact of economic forces and actors, and the capacity of societies to manage their adverse consequences—created by globalization. These governance gaps provide the permissive conditions for wrongful acts by companies of all kinds without adequate sanctioning or reparation.

Thus, the legal rights of transnational corporations have been expanded significantly over the past generation. This has encouraged investment and trade flows, but it has also created instances of imbalances between firms and states that may be detrimental to human rights. The more than 3,000 bilateral investment treaties currently in effect are a case in point. While providing legitimate protection to foreign investors, these treaties also permit those investors to take host states to binding international arbitration, including for alleged financial damages resulting from the implementation of legislation to improve domestic, social, and environmental standards—even when the legislation applies uniformly to all businesses, foreign and domestic. A European mining company operating in South Africa recently challenged that country’s black economic empowerment laws on these grounds.

At the same time, the legal framework regulating transnational corporations operates much as it did long before the recent wave of globalization. A parent company and its subsidiaries continue to be construed as distinct legal entities. Therefore, the parent company is generally not liable for wrongs committed by a subsidiary, even where it is the sole shareholder, unless the subsidiary is under such close operational control by the parent that it can be seen as its mere agent. Furthermore, despite the transformative changes in the global economic landscape generated by offshore sourcing, purchasing goods and services even from sole suppliers remains an unrelated party transaction in which the buyer is not legally liable for acts conducted by the supplier. Factors such as these make it exceedingly difficult to hold the extended enterprise accountable for human rights harm.

Each legally distinct corporate entity is subject to the laws of the countries in which it is based and operates. Yet states, particularly some developing countries, may lack the institutional capacity to enforce national laws and regulations against transnational firms doing business in their territory even when the will is there, or they may feel constrained from doing so by having to
compete internationally for investment. Home states of transnational firms may be reluctant to regulate against overseas harm by these firms because the permissible scope of national regulation with extraterritorial effect remains poorly understood, or out of concern that those firms might lose investment opportunities or relocate their headquarters. To attract investments and promote exports, governments may exempt national firms from certain legal and regulatory requirements or fail to adopt such standards in the first place.

And what is the result? A study I have conducted surveyed allegations of the worst cases of corporaterelated human rights harm. They occurred, predictably, where governance challenges were greatest: disproportionately in low-income countries; in countries that often had just emerged from or still were in conflict; and in countries where the rule of law was weak and levels of corruption high.

How to narrow and ultimately bridge these global and national governance gaps in relation to human rights is a fundamental governance challenge for the 21st century.

 

JOHN GERARD RUGGIE is the Berthold Beitz Professor in Human Rights and International Affairs at Harvard’s Kennedy School of Government; Affiliated Professor in International Legal Studies, Harvard Law School; and Special Representative of the United Nations Secretary-General for Business and Human Rights.

Beth A. Simmons — Institutionalizing Human Rights

[By Beth A. Simmons. Part of the series “Global Challenges in 2030”  (Goldstein & Pevehouse), January 2010.]

International human rights have become a central feature of the international legal system. Governments have formally agreed to a bewildering array of treaties, resolutions, and reporting procedures that make them ever more responsible to each other for the way they treat their own people. They have also participated in the creation of a slew of non-binding “standards” and “understandings” about the nature of their human rights agreements. Some even allow their citizens to complain to specific international “oversight bodies” if they feel there has been a violation of the rights guaranteed by treaty. Figure 1 shows the proliferation of these regimes since World War II. Occasionally, some governments even take the views of these bodies seriously.

There is something puzzling about this state of affairs. Why should governments agree among themselves to respect the rights of their own citizens? For much of the 20th century, citizens’ rights were simply considered a domestic problem, beyond the competence of the international community to inquire. This is certainly no longer the case. Formal international rights accountability is probably stronger now than it has ever been at any other moment in history.

The challenge for the future will be to bring actual practices more in line with the promises outlined in international treaties. Despite the fact that the Universal Declaration of Human Rights says that every person is “entitled to realization . . . of the economic, social and cultural rights indispensible for his dignity . . . ,” about 3 billion people worldwide live on less than $2.50 per day. Despite the fact that 165 countries have ratified the International Covenant on Civil and Political Rights, which provides a right “to vote and to be elected at genuine periodic elections . . . guaranteeing the will of the electors,” probably no more than half the world’s population can really exercise such a right. Even though 186 countries have ratified the Convention on the Elimination of Discrimination Against Women (CEDAW), guaranteeing  nondiscrimination in employment, on average the women of the world earn only 60–70 percent of what men earn for equivalent work.

None of this means that international law has failed. In fact, some research shows that many of the most important treaties, including those discussed above, have made important contributions to better rights practices in the countries that have ratified them. But it does mean that there is no automatic correspondence between principles and practice. How can governments be encouraged to take human rights—and their obligations—more seriously?

One possibility is to strengthen international enforcement of these norms. One could start by making the United Nations a more credible body in this regard. The main forum for handling rights abuses at the United Nations has been the Human Rights Commission, but it was rightly criticized as terribly political and staffed by representatives from countries that had terrible rights records. Some improvements have been made with the new Human Rights Council, but do states really have incentives to be their brother’s keepers?

Some think that countries with a real commitment to human rights should take enforcement into their own hands by imposing economic conditionality. To a certain extent, this is already happening. The U.S. Congress, for example, can withhold foreign assistance if rights practices are unsatisfactory. The European Union conditions membership on acceptance of high rights standards, and even tries to extend its influence to trading partners outside the region through its so-called “democracy clauses” attached to trade agreements. While these kinds of sanctions can be applied to the smaller states, it is hard to imagine  applying such a strategy to China. Furthermore, imposing economic sanctions can hurt the people you are trying to help, sometimes as much as the repressive government does itself.

Perhaps human rights cannot be enforced from the outside. Perhaps people around the world should simply be encouraged to use international norms to fight their own domestic rights battles, in ways they see as appropriate, and according to their own priorities. This approach has already led to important improvements in rights practices for countries that have had some experience with or are transitioning to accountable government, but it may offer little hope for those living in the most oppressive regimes in the world. The unfortunate truth of the matter is that in some countries, to demand your rights is to invite a crushing reaction from a ruthless regime.

Addressing human rights violations worldwide is a long-term project. It probably cannot be solved in isolation from the other major human endeavors of the last century: finding a way to curb poverty, ending widespread civil and international violence, and implementing stable and accountable systems of governance. But none of these projects will be complete without the recognition that individuals have inviolable rights that must be recognized, protected, and even promoted by their governments.

 

BETH SIMMONS is Clarence Dillon Professor of International Affairs and Director of the Weatherhead Center for International Affairs at Harvard University. Her new book is entitled Mobilizing for Human Rights: International Law in Domestic Politics (Cambridge University Press, 2009). Simmons was elected in April 2009 to the American Academy of Arts and Sciences.

Joseph S. Nye, Jr. — Diversifying American Power

Joseph Nye photo[By Joseph S. Nye, Jr. Part of the series “Global Challenges in 2030”  (Goldstein & Pevehouse), January 2010.]

The American National Intelligence Council projects that American dominance will be “much diminished,” by 2025. Many foreign leaders also suggest that American power has passed its mid-day. How would you know if these predictions are correct or not?

First, beware of misleading metaphors of organic decline. Nations are not like humans, with predictable life spans. For example, after Britain lost its American colonies at the end of the 18th century, Horace Walpole lamented Britain’s reduction to “as insignificant a country as Denmark or Sardinia.” He failed to foresee that the Industrial Revolution would give Britain a second century of even greater ascendency. Rome remained dominant for more than three centuries after the apogee of Roman power. Even then, Rome did not succumb to the rise of another state, but died a death of a thousand cuts inflicted by various barbarian tribes. Indeed for all the fashionable predictions of China, India, or Brazil surpassing the United States in the next decades, the greater threats to all states may come from modern barbarians and non-state actors. The classical transition of power among great states may be less of a problem than the rise of non-state actors. In an information-based world of cyberinsecurity, power diffusion may be a greater threat than power transition.

da Silva, Obama, Hu photo

“On many transnational issues, empowering others can help us to accomplish our own goals.” Here, in 2009, the leaders of Brazil, the United States, and China work together, with others, to coordinate actions for global economic recovery.

At an even more basic level, what resources will produce power in the next two decades? In the 16th century, control of colonies and gold bullion gave Spain
the edge; 17th-century Netherlands profited from trade and finance; 18th-century France gained from its larger population and armies; while 19th-century British power rested on its primacy in the Industrial Revolution and its navy. Conventional wisdom has always held
that the state with the largest military prevails, but in an information age it may be that the state (or nonstate) with the best story will win. Soft or attractive
power becomes as important as hard military or economic power. Secretary of State Hillary Clinton has said, “We must use what has been called ‘smart power,’ the full range of tools at our disposal.” Smart power means the combination of the hard power of command and the soft power of attraction.

In today’s world, power resources are distributed in a pattern that resembles a complex, three-dimensional chess game. On the top chessboard, military power is largely unipolar and the United States is likely to remain the only superpower for some time. But on the middle chessboard, economic power has already been multipolar for more than a decade, with the United States, Europe, Japan, and China as the major players, and others gaining in importance.

The bottom chessboard is the realm of transnational relations that cross borders outside of government control, and it includes non-state actors as diverse as bankers electronically transferring sums larger than most national budgets at one extreme, and terrorists transferring weapons or hackers threatening cyber-security at the other. It also includes new challenges like pandemics and climate change. On this bottom board, power is widely dispersed, and it makes no sense to speak of unipolarity, multipolarity, hegemony. The soft power to attract and organize cooperation will be essential for dealing with transnational issues.

The problem for American power in the 21st century is that there are more and more things outside the control of even the most powerful state. Although
the United States does well on military measures, there is increasingly more going on in the world that those measures fail to capture. For example,  international financial stability is vital to the prosperity of Americans, but the United States needs the cooperation of others to ensure it. Global climate change too will affect the quality of life, but the United States cannot manage the problem alone. And in a world where borders are becoming more porous than ever to everything from drugs to infectious diseases to terrorism, America must help build international coalitions and build institutions to address shared threats and challenges. In this sense, power becomes a positive sum game. It is not enough to think in terms of power over others. One must also think in terms of power to accomplish goals. On many transnational issues, empowering others can help us to accomplish our own goals. In this world, networks and connectedness become an important source of relevant power. The problem of American power is less one of decline, than realizing that even the largest country cannot achieve its aims without the help of others.

 

JOSEPH S. NYE, JR. is University Distinguished Service Professor at Harvard and former dean of Harvard’s Kennedy School of Government. He is the author of The Powers to Lead and Soft Power: The Means to Success in World Politics.