Governance in a Global Economy: Political Authority in Transition

C debate over globalization casts its political effects as both revolutionary and contradictory. Globalization, it is claimed, drains political authority from nation-states, long the dominant form of political organization in world politics. The state’s monopoly of familiar governance functions erodes as authority migrates down to newly empowered regions, provinces, and municipalities; up to supranational organizations; and laterally to such private fi rms and transnational nongovernmental organizations (NGOs) that acquire previously “public” responsibilities. Skeptics contest these alleged effects of globalization. National governments jealously guard many traditional spheres of governance, particularly defense, criminal justice, and immigration. Rather than a beleaguered and ineffectual fossil, the nation-state enjoys enduring popularity at the dawn of the new millennium. The enhanced authority of private actors is partially or wholly offset by new public activism in areas such as environmental or consumer protection. In their protests against a deregulated and integrated global market, transnational political movements often rely on national governments for policy change rather than reformed and transformed international institutions. Sorting through these contradictory claims requires careful defi nition of governance and a theoretical frame for examining more systematically the links between globalization and governance. In this essay, we summarize and refl ect upon a larger, collaborative study recently published under the same title (Kahler and Lake 2003). That collective effort found that the effects of globalization on governance at all levels are more complex and contingent than many observers claim. Globalization exerts a profound impact on economic and political life. Important shifts in the locus of authority have occurred, sometimes in the predicted directions, but these trends are neither universal nor uniform. To explain this diversity, we outline a political model of authority migration based explicitly on actors, their preferences, and their strategic interaction. Rather than the familiar portrait of globalization as an inexorable and impersonal set of market forces that compels passive states to comply with its dictates, we emphasize globalization’s effects on governance through political actors. Globalization changes the policy preferences of some actors, increases the bargaining power of others, and opens new institutional options for still others. In this way, we reintroduce agency and choice into the story of globalization and governance.