Thinking rationally about hierarchy and global governance

Recent scholarship on globalization has conflated methodological critiques of rationalism with ontological arguments. American rationalist paradigms of IPE, it is argued, are too state-centred and utilitarian to offer convincing explanations for emerging non-state forms of global governance. In response, this essay argues that rationalist theories do provide important theoretical tools to understand the political economy of globalization, even in its hierarchical forms. An examination of the changing forms of contractual relations between international organizations and non-governmental organizations, the functions of international credit rating agencies, and the growth of offshore tax havens, shows that underlying utilitarian incentives for political behaviour can be uncovered and explicated, even within these non-state forms of contemporary global governance. Consequently, the appropriateness of any given IPE method should depend upon the research question asked, not pre-existing assumptions about the inherent advantages of either rationalist or non-rationalist approaches.