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C H A P T E R O N E Bringing the Great Powers Back In GLOBALIZATION IS RESPONSIBLE for a lot of bad international relations theory. The poor state of theorizing is not because economic globalization is irrelevant . The reduction of traditional barriers to exchange, such as tariffs and capital controls, has introduced a bevy of new conflicts over the residual impediments to global economic integration—the differences among domestic rules and regulatory standards. The affected issue areas include but are not limited to labor standards, environmental protection, financial supervision, consumer health and safety, competition policy, intellectual property rights, and Internet protocols. These differences matter: the Organization for Economic Cooperation and Development (OECD) estimates that these standards and regulations affect approximately $4 trillion in traded goods. At the start of the new millennium, these issues have been important enough to trigger an increase in the foreign affairs budgets for U.S. regulatory agencies even as the State Department’s budget declined.1 Regulatory issues are important in and of themselves. They matter in world politics because of the way they affect the distribution of resources as well. Fundamentally, however, international regulatory regimes strike a political chord because they symbolize a shift in the locus of politics. The title of this book is a play on Tip O’Neill’s well-known aphorism that “all politics is local.”2 In the current era, this statement is at least open to question. For many issues that comprise the daily substance of our lives—how to treat workers, how much to pollute, what can go into our food, what can be accessed on the Internet, how much medicine will cost—the politics have gone global. The proliferation of new global issue areas has increased scholarly attention on how the global economy is regulated in an era of globalization. However, the theoretical debates on this topic leave much to be desired; Miles Kahler and David Lake recently concluded, “Contemporary scholarship . . . has 1 OECD data from Walter Mattli, “The Politics and Economics of International Institutional Standard Setting: An Introduction,” Journal of European Public Policy special issue 8 (2001): 329; Budget data from Anne-Marie Slaughter, A New World Order (Princeton, NJ: Princeton University Press, 2004), 36–37. 2 Tip O’Neill with Gary Hymel, All Politics Is Local and Other Rules of the Game (New York: Times Books, 1994). 4 • Chapter One yielded only a partial, unsystematic, and ultimately inconclusive body of theorizing on the relationship between globalization and governance.”3 Most strands of research on this topic share a common assumption—the decline of state autonomy relative to other factors and actors. Globalization undercuts state sovereignty, weakening a government’s ability to effectively regulate its domestic affairs. Global market forces are powerful enough to deprive governments of their autonomy and agency. As Thomas Friedman phrases it, globalization binds states into the “Golden Straitjacket,” forcing them to choose between “free market vanilla and North Korea.”4 Prominent pundits, policymakers, and scholars echo the assertion that globalization drastically reduces the state’s ability to govern.5 At the same time that state autonomy is in decline, other theorists argue that globalization empowers a web of nonstate actors, including multinational corporations, nongovernmental organizations (NGOs), and transnational activist networks.6 Some theorists go so far as to assert that globalization requires a wholesale rejection of existing theoretical paradigms.7 The trouble with this belief is the lack of variation in the independent variable and the presence of variation in the dependent variable. According to these narratives, globalization increases the number and power of factors and actors that inexorably promote policy convergence, forcing states into agreement on regulatory matters. The problem with this scenario is that there are a number of regulatory issue areas—data privacy, stem cell research, global warming, genetically modified foods—where regulatory convergence has been 3 Miles Kahler and David Lake, “Globalization and Governance,” in Governance in a Global Economy: Political Authority in Transition, ed. Kahler and Lake, 15–16 (Princeton, NJ: Princeton University Press, 2003). 4 Thomas Friedman, The Lexus and the Olive Tree (New York: Farrar, Strauss, and Giroux, 1999), 86. 5 Richard Falk, “State of Seige: Will Globalization Win Out?” International Affairs 73 (January 1997): 123–36; Arthur Schlesinger Jr., “Has Democracy a Future?” Foreign Affairs (September/ October 1997): 7–8; Susan Strange, The Retreat of the State: The Diffusion of Power in the World Economy (Cambridge: Cambridge University Press, 1996); Dani Rodrik, Has Globalization Gone Too Far? (Washington...

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