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Governing under Stress

Governing under Stress

Marjorie Griffin Cohen | Stephen Clarkson

(2008)

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Abstract

This volume is the first work to emerge from a major international comparative research project exploring the political economy of globalization. This inter-disciplinary team of scholars is focusing on the semi-periphery of world power. Whether defined in social, cultural, economic or simply spatial terms, 'semi-peripheral' countries share two qualities: they are conscious of their subordination to the hegemonic powers at the centre of the global system - the United States and the European Union; they are also strong enough to have some ability to resist their domination. The structural position of these middle powers in global capitalism is unlike those countries at the centre that do not experience domination, and different from those Third World countries on the periphery that have no means to achieve more cultural and political autonomy, more distinctive and diversified development, or greater social equity and better income redistribution. Four countries in North America, Central America, Europe and the Antipodes - namely Canada, Mexico, Norway and Australia - have been selected in order to explore the complexities of globalization from the perspective of the semi-periphery. Opening chapters examine the international institutions, including the North America Free Trade Agreement, the World Trade Organization and the European Union, which now amount to a quasi-constitutional conditioning framework for middle powers under globalization. In the second part, contributors detail the pressures with which these countries have to cope and consider their ability to pursue policies appropriate to the needs and democratically defined goals of each. And in the concluding part, after discussing the new economic, political and social issues of 'governing under stress', they appraise the possibilities for middle powers to chart distinctive national courses in the face of globalization's constraining challenge.
Professor Stephen Clarkson is in the Department of Political Science, University of Toronto. He was awarded the Canada-USA Fulbright Scholarship in 1999-2000, the Killam Senior Research Fellowship in 1999-2001 and the Woodrow Wilson International Fellowship in 2000-2001. Marjorie Griffin Cohen is an economist who is professor of Political Science and Women's Studies at Simon Fraser University, Canada. She was Department Chair of Women's Studies from 1996-1999. She has published widely in her fields.

Table of Contents

Section Title Page Action Price
cover cover
Contents v
Tables and Figures viii
Preface x
Gordon Laxer x
A note on concepts xi
Empire and the semi-periphery xiv
Books in this series xvii
Notes xx
References xx
1 1
Introduction:States under Siege 1
Marjorie Griffin Cohen and Stephen Clarkson 1
Globalization, globalism, and global governance 1
Global governance and the semi-periphery\r 3
The contents 5
Note 11
References 11
2\r 12
Globalization and the Social Question 12
Janine Brodie 12
The erosion of a myth 14
Locating the social 16
The new constitutionalism and the power of global capital 19
Metaphors of decline 23
Paradoxes of the social 24
Conclusion 27
References 28
Part I 31
Semi-peripheral Countries: Norway, Mexico, Australia, Canada 31
3 33
Globalization in Norwegian: Peculiarities at the European Fringe 33
Øyvind Østerud 33
The coordinates of the globalization debate 34
The latency period 36
‘Globalization’ hits Norway 40
Globalization in Norwegian 42
The new internationalization 44
State, business, and the politics of oil 46
The politics of the commons 47
The peculiarities of the Norwegians: a summing-up 48
Notes 49
References 49
4\r 51
Norway, the EEA, and Neo-liberal Globalism 51
Dag Harald Claes and John Erik Fossum 51
Norway and the world around it 51
Adapting to what? The EU as a political system 54
Mechanisms: how Norway adapts 55
Legal obligation: the nature of the formal ties – the EEA agreement 56
Adaptation as changed incentives 58
The interaction of rules and incentives 59
The consequences of adaptation 61
Direction of policy change 62
Conclusion: towards neo-liberal convergence 64
Notes 67
References 68
5 70
The Rise and Fall of an 'Organized Fantasy': The Negotiation of Status as Periphery and Semi-Periphery by Mexico and Latin America\r 70
Teresa Gutiérrez-Haces 70
Latin America negotiates its position as a peripheral region 72
The role of international organizations in the economic control of Latin America 76
Mexico and the shift to neo-liberalism 78
Governability and the North American Free Trade Agreement 80
Final considerations 87
Notes 88
References 89
6 90
Mexico: Relocating the State within a New Global Regime 90
Alejandro Alvarez 90
The international economic environment during the 1980s and 1990s 91
The Mexican democratic transition in 2000 93
The unfolding of financial crises 96
Figure 6.1 Exchange rate and total exports in Mexico, 1981-2000 \r 97
Figure 6.2 Minimum wages, manufacturing industry average remunerations and employment in Mexico, 1980-2000 98
Figure 6.3 Economic deficit, service of external public debt, and health and education expenditure, 1980-2000 99
Trade openings: winners and losers 103
Conclusions 106
Notes 107
References 107
7 110
Australia: Asian Outpost or Big-time Financial Dealer? 110
Dick Bryan 110
Between Europe and Asia 110
The impact of mining 111
Figure 7.1 Australian exports, major trading countries, 2000-1\r 112
Protection of domestic industry 114
Figure 7.2 \rAustralian imports, major trading countries, 2000-1 115
Figure 7.3 Australia’s current account deficit, 1985-2000\r ($bn) 117
Globalization from one country 118
Internationalization of investment and finance 119
An international currency 121
Where does Australia stand? 123
The rise of competitiveness: implications for the labour market 123
Conclusion 127
Notes 129
References 130
8 132
Australia: Neo-liberal Globalism and the Local State 132
Ray Broomhill 132
A regulation framework 134
The rise of local neo-liberalism 136
The limits of local neo-liberalism 139
A sustainable regime of capital accumulation? 139
A sustainable regulatory framework? 142
Problems of social reproduction 144
Conclusion 149
Notes 151
References 151
9 153
Global Governance and the Semi-peripheral State: The WTO and NAFTA as Canada’s External Constitution 153
Stephen Clarkson 153
Constitutions 154
Norms 154
Limits on government 155
Rights for corporations 156
Adjudication 158
Enforcement 163
Institutions 164
Will 165
Amending the supraconstitution 166
Exercising supraconstitutional rights abroad 169
Conclusion 170
Notes 171
References 172
10 175
International Forces Driving Electricity Deregulation in the Semi-periphery: The Case of Canada 175
Marjorie Griffin Cohen 175
Changes in the electricity industry 176
Table 10.1 Fuel sources for electricity generation (% of total electricity production) 180
Table 10.2 Comparative electricity prices in North America (Canadian cents/kWh) 181
US drive for energy 182
Table 10.3 North American world electricity trade (billion kWh, 1999) 185
NAFTA and the GATS 187
Conclusions 191
Notes 192
References 193
Part II 195
Dealing with the Centre 195
11 197
Money on the (Continental) Margins: Dollarization Pressures in Canada and Mexico 197
Paul Bowles 197
Why is dollarization an issue? 198
Table 11.1 Canadian Exports, 1985-2000\r 200
Figure 11.1 US/Canadian dollar exchange rate, 1970-2001 203
Table 11.2 \rMexican exports, 1985-2000 209
Figure 11.2 US dollar/Mexican peso exchange rate, 1990-2001 211
Implications 212
Notes 215
References 216
12 218
Taking Investments Too Far: Expropriations in the Semi-periphery 218
David Schneiderman 218
NAFTA rules 221
Pope & Talbot 226
Metalclad 227
S.D. Myers 230
Conclusion 233
Notes 234
References 235
13 239
The Rule of Rules: International Agreements and the Semi‑periphery 239
Stephen McBride and John Erik Fossum 239
The international political economy as a system of power 241
Towards a post-national constellation? 244
International market-making systems: rules for efficiency 245
Rule enforcement in market-making systems: accountability/monitoring/review 247
Rule enforcement in market-making systems: adjudication 249
The EU: neo-liberal copy-cat or novel polity? 250
Beyond market-making: from Common Market to polity/political system 252
Conclusion 256
Notes 257
References 257
Part III 261
Comparing Economic Performance 261
14 263
Zonal Structure and the Trajectories of Canada, Mexico, Australia, and Norway under Neo-liberal Globalization 263
Satoshi Ikeda 263
Neo-liberal globalization and zonal structure 264
Table 14.1 Changes in zonal membership, 1980–1999 267
Figure 14.1 Zonal population share, 1980-1999\r 269
Trajectories of Canada, Mexico, Australia, and Norway under globalization 270
Table 14.2 Population and income, 2000 271
Figure 14.2 Per capita MER GNI relative to US per capita GNI\r 272
Figure 14.3 Per capita PPP GNI relative to US per capita GNI 273
Figure 14.4 Real GNI trends, Canada 275
Figure 14.5 External dependency, Canada (%) 276
Figure 14.6 Export destination concentration index 277
Figure 14.7 Real GNI trends, Mexico 279
Figure 14.8 External dependency, Mexico (%) 280
Figure 14.9 Real GNI Trends, Australia 281
Figure 14.10 External dependency, Australia (%) 282
Figure 14.11 Real GNI trends, Norway 283
Figure 14.12 Trade dependency, Norway (%) 284
Divergent semi-peripherality, vulnerability, and sustainability 285
Table 14.3 \rIncome performance, external dependency, and vulnerability 286
Notes 288
References 289
About the Contributors 291
Index 295