As the financial crises in Greece and Spain now threaten to unravel the European Union, observers wonder why the experiences of 2008 did not help us avoid repeating history. Four years ago, we learned how instability in one area—at that time it was the debilitating gangrene of failing American mortgage instruments—can spread quickly to institutions around the world. Earnest leaders of the Group of 20 promised to build a tighter web of international standards that would raise the regulatory baseline. And yet it seems that movement in this direction has been modest, again disappointing those who see robust global governance as the requisite response to challenges ranging from human trafficking to virulent pandemics.
So it is striking that political scientists are paying more attention to “global governance” than ever. The New Global Rulers by Tim Büthe and Walter Mattli and Who Governs the Globe? edited by Deborah Avant, Martha Finnemore and Susan Sell, add to this literature, filling in details on some transnational governance bodies that often escape thorough examination, while proposing new ways to think about the dynamics of global governance. Both books point out that the casual view that global governance is a nonissue is based on a faulty set of expectations regarding its nature. The science-fiction image of a world assembly wrestling with singular threats to our collective existence (like, say, an alien invasion) is misguided. Rather, global governance consists of a wide array of institutions, some formal organizations and some networks of cooperating entities, that develop rules and solutions in circumscribed issue arenas.
Both books probe the dynamics of global governance, peering under the hood to understand how international organizations work and why outcomes vary from arena to arena. Büthe and Mattli focus on three standard-setting bodies, whereas Avant, Finnemore, and Sell have selected contributions for their volume that deal with quite varied governance efforts, from the administration of international criminal justice to the creation and pursuit of Millennium Development Goals at the International Monetary Fund. Like many edited volumes on global governance, this one thus examines phenomena that are very different in terms of scope, purpose, and structure. So while the 13 chapters are unified by an interest in the relationship between governors and the governed and relations among the governors, it is difficult for the editors to draw specific transcendent hypotheses, let alone conclusions.
In contrast, Büthe and Mattli are interested in organizations that are quite similar: The International Organization for Standardization (ISO), the International Accounting Standards Board (IASB), and the International Electrotechnical Commission (IEC) craft and promulgate standards that are used by industry and, in many cases, incorporated into international, national, and local codes. The authors hypothesize that differential outcomes of rulemaking processes—specifically the relative influence of members—are best explained by the structure of domestic participants in international organizations. (Büthe contributed a chapter on the IEC to the edited volume, which also includes a chapter on the ISO).
Both books make clear that global governance is not an exclusively governmental activity. Across all the cases, nonstate actors play critical roles in the exercise of transnational power. Indeed, Büthe and Mattli advance a typology that differentiates rulemaking bodies by sector, underscoring the idea that sector in and of itself does not dictate activities. They suggest sorting two dimensions: 1) whether the rule-producing setting is “public” or “private,” and 2) whether the selection mechanism for rules is market based or nonmarket based (by which the authors attempt to capture whether there is a competitive marketplace for rules or a dominant rule maker that is not contested) (pp. 18–19). The three entities with which they are concerned are placed in the private, nonmarket-based cell of the resulting table.
This way of understanding the landscape focuses on certain distinctions among organizations. The claim of similarity sets up the test of the hypothesis that variation in the structure of domestic interest groups explains their observations. But the distinctions Büthe and Mattli make in their sorting are perhaps murkier than their account suggests. Like many, they use public/private as a synonym for governmental/nongovernmental, but organizations, even those they are concerned with, do not neatly conform to this understanding. For example, the ISO is indeed a nongovernmental entity, but many of the members of this body are unambiguously governmental, and even those that are not, such as ANSI (the American National Standards Institute, which the authors discuss), are designated as the national representative to the body by the national government (K. T. Hallström, Organizing International Standardization: Iso and the Iasc in Quest of Authority, 2004; J.G.S. Koppell, World Rule: Accountability, Legitimacy, and the Design of Global Governance, 2010). Moreover, the entire organization is structured around nation-states, thus conforming to a state-centric model of global governance. The IASB is “purer” in this regard; it is governed—or, more accurately, its parent entity is governed—by a self-perpetuating board. But even this entity is informally linked with states, and its board membership reveals a concern for representativeness on geographic and national dimensions (Koppell, 2010). These subtleties matter because they explain the power of nonstate actors to maintain “focal point” status and their competitive advantage over rivals.
And this subtlety gets to the second dimension of the Büthe/Mattli typology; sorting the governance entities on the competitiveness of their market is an interesting and important step forward. It highlights one of the most interesting aspects of international governance, that it is a competitive field with multiple players vying for preeminence. This is a critical divergence from the standard domestic model. The fact that the ISO is dominant today (in many spheres) does not reduce the importance of this underlying feature of the context in explaining its behavior, just as the behavior of a dominant player in another market will reflect the possibility of competition. Aseem Prakash and Matthew Potoski, Chapter 3 in the edited volume, highlight the competitive landscape around the ISO's 14000 series.
More broadly, one might view all global governance arrangements as inherently “competing with” the absence of any such arrangement whatsoever. In each realm described in both books, there is a null condition: a world without transnational institutions. This is consistent with the argument of Avant, Finnemore, and Sell for a dynamic take on global governance and a great virtue of their approach. At any time, transnational institutions can collapse without thoughtful care and nurturing.
This, of course, invites the question: What keeps an international regime robust? Why is supranational authority ever accepted? Both books take a crack at these questions. Legitimacy can be a reason for acceptance but “[a]s students of authoritarian regimes understand well, there are many reasons why the governed may defer or comply with dictates of an authority” (Who Governs? p. 360). Aside from legitimacy, the editors suggest other reasons for acceptance, including “trust.” Still, their contributors generally link trust to “democraticness” and accountability, leading back to things we typically associate with Western conceptions of legitimacy.
The less abstract explanation for rule acceptance goes back to the example of authoritarian regimes. The editors say that coercion does not explain global regimes—because that is generally missing from the toolbox of international organizations. But rule acceptance driven by a desire to stay out of prison or remain alive is just an example of interest-driven behavior. We can and should generalize from the coercion idea to focus on what we can call “interest satisfaction.” The ability of a global regime to satisfy the interests of its adherents is the key to its resilience. Indeed, economic or political interest in accepting the rule of a governing body can explain adherence even when the rule maker fails to satisfy normative expectations of democratic legitimacy.
This fairly intuitive observation is often made confusing by the common assertion that the acceptance of a governing institution is an indicator or evidence of its legitimacy. Given the normative valence of legitimacy in common usage—it connotes appropriateness or justness of a regime, not merely its persistence or irresistibility—a better way to describe such interest-driven acceptance would be to say that an institution has gained authority, which the editors define as the ability to “induce deference in others” (Who Governs? p. 9).
Once one accepts the not-terribly-controversial idea that international organizations gain acceptance more through satisfaction of interests than through satisfaction of abstract prescriptions for just governance, there are numerous implications.
Most importantly, interests are not all created equally. How do global governance regimes reflect the imbalance in power among constituencies who are the would-be governed? The easy answer is to say that they give the powerful what they want. But the realist take does not get you very far. First, it cannot explain the balancing of multiple powerful interests. Second, from realm to realm the dominant players that seem to get what they want vary. Any credible explanation must account for these situations.
Büthe and Mattli push the understanding of global governance in an important new direction by considering domestic arrangements as an explanatory factor in outcomes at the global level. Specifically, they argue that Americans are better organized to influence the IASB than are their European counterparts because their participation is channeled through the highly centralized Financial Accounting Standards Board (FASB). In contrast, they argue, United States participation in the IEC and ISO is disorganized and uneven compared with Europeans whose formidable national standard-setting bodies, like the German Deutsches Institut für Normung (DIN), have much more sway.
This is an interesting argument and one that expands the discussion of global governance in an important way. (And the authors do so by drawing upon a unique survey that allows for a grounded, novel representation of the participation in each arena.) It is uncertain, however, whether the institutional variation is the driver or a mediating variable that reflects the underlying heterogeneity of the concerned interest communities. Might the observed patterns be viewed as extensions of corporatism (or lack thereof) in certain sectors? So, for instance, the institutional power of European standards bodies reflects the centralization of industry in Europe, unlike in the United States, which does not feature peak association in the continental mold. It is interesting to view the financial sector as an exception by virtue of its quasi-public accounting-standards bodies. This does not undermine the Büthe and Mattli argument per se; it simply restates it with an emphasis on the structure of the interest community, rather than on institutional governance.
An interesting addendum to this discussion concerns the relative lack of powerful transnational interest groups. In Who Governs the Globe? Clifford Bob (Chapter 7) considers the role of transnational groups and networks in the international governance of small-arms trade. His chapter seeks to explain what “might have been,” a global regime that does not exist, a highly unusual proposition in the literature. The outcome seems to hinge on the interplay of domestic interest groups and governmental entities. In general, the lack of powerful transnational interest groups is common across issue areas.
There is another way to interpret the different dynamics around the IASB and ISO, however. By the time Büthe and Mattli focus on the organization, European markets had essentially accepted the International Financial Reporting Standards (IFRS, or their predecessor International Accounting Standards) as their baseline. Their primary competitor in the market for accounting standards are the Generally Accepted Accounting Principles (GAAP), which are overseen by the FASB. American acceptance of the IFRS was far from guaranteed, giving the FASB leverage with the IASB as long as the international body was interested in securing American participation. No viable exit strategy for Europeans existed by then and so they did not have the same influence.
In the construction of international regimes, this administrative realpolitik helps explain design decisions. Entities with the ability to resist inclusion in a transnational regime will not put themselves in jeopardy of undermining their position. They build in what I refer to as safety valves (Koppell, 2010). Prakash and Potoski make the same points in the edited volume, arguing that safeguards are needed to maintain clubs. Their point can be refined in a few ways. First, clubs with highly restricted membership need fewer safety valves precisely because they exercise control at the front door. If you can get past the velvet rope to enter the club, we are all less concerned that you will misbehave once you are there (Koppell, 2010). Second, if you are not terribly concerned that the organizations' actions will harm you, there is less need for safeguards. In Chapter 2 of the edited volume Allison Danner and Erik Voeten (p. 70), for instance, argue that international tribunals gain support because “none of the ICT's powerful supporters expected to be directly subjected to their rulings,” a very important observation when one wants to understand global governance regimes that do potentially impinge on powerful players.
What makes global governance interesting is that these accommodations to imbalances of power and the need to satisfy the interests of key players must be made while also satisfying some core expectations of democratic legitimacy to which these regimes are subject by virtue of their function. Indeed, perhaps the most telling characteristic is that cuts across transnational governance organizations is common eagerness to frame their rulemaking as technocratic.
Materials describing the activities of global governance organizations frequently frame their work as “technical,” implicitly differentiating themselves from more “political” legislatures or domestic regulatory bodies. This is no accident. Organizations assert their technicality as a means of shaping expectations, specifically normative demands regarding the nature of the processes used to create rules. They are seeking the flexibility necessary to navigate the complex dynamic of global governance.
Both books make a contribution to the literature by pushing more deeply into the inner workings of transnational organizations, explaining the development and maintenance of varied regimes. Büthe and Mattli, in particular, illuminate a generally underdeveloped dimension, the domestic environment and its connection to international outcomes.
