Almost everyone is sure that international economic integration has powerful effects on political and economic affairs, but there is little agreement on what those effects might be. These two books attempt, in very different ways, to illuminate a variety of “globalization and …” relationships.

Quan Li and Rafael Reuveny, in Democracy and Economic Openness in an Interconnected System, bring a wealth of data and an array of statistical analyses to the question. In nine methodically presented chapters, they assess the interactions among economic integration, democracy, equality, development, conflict, and the environment. This is an exhaustive catalog of potential relationships, but the authors evaluate the evidence clearly and systematically. In fact, the book is self-consciously written for a nonspecialist readership. Most of the statistical details are relegated to chapter appendices, and the central chapter text is generally at a level that should be accessible to a bright undergraduate.

Li and Reuveny are explicit about attempting to explore the impact of their six factors (economic integration, democracy, equality, development, conflict, and the environment) on one another. They go about this daunting task by dividing the investigation into three parts: the relationship between democracy, on the one hand, and their economic variables (openness, inequality, and development), on the other; the relationship between conflict, on the one hand, and democracy and openness, on the other; and the relationship between the environment, on the one hand, and democracy, openness, and conflict, on the other. In all instances, they entertain the possibility of causal relationships in both directions and of interactions among the variables under consideration. They also try to use several different measures for the factors considered, looking, for example, at trade, foreign direct investment, and portfolio investment as indicators of economic integration.

With so expansive a range, it is hard to summarize the authors' conclusions. This is especially the case because in many instances, their empirical results include large numbers of interactions among variables. For example, the conclusions of the chapter on democracy and economic openness are so complicated and contingent that they are extremely hard to follow—and perhaps just as hard to credit. In the authors' telling, trade openness is associated with lower levels of democracy, as is portfolio investment; the latter's impact strengthens over time, while the former's is stable. Foreign direct investment is associated with more democracy, but this effect gets weaker with time. It is difficult to know what to make of such mixed results, especially as there appears to be little or no theoretical explanation for their variety. As another example, the authors explore the relationship between democracy and development with a system of simultaneous equations. They find, in this instance, that economic development is associated with democracy, but that democracy reduces the pace of economic development. The complicated nature of the findings is amplified by their attempts to disaggregate: Rather than look solely at the impact of trade on interstate conflict, for example, they distinguish between imports and exports, and among trade in several different categories of goods.

Li and Reuveny also explore a relatively new dimension of international politics, relating to the environment. They are interested in the implications for the environment of democracy (mostly good) and of economic integration (mostly good in authoritarian regimes, mostly bad in democracies). They also look at the impact of interstate conflicts on the environment (from mixed to not much).

The book considers an extraordinary range of potential causes and effects, across a very large number of countries and a relatively long time period. Readers interested in how political and economic factors interact in today's global environment—and that would include a lot of people—will get a wealth of information from Li and Reuveny.

The book's findings are complicated and difficult to summarize. And this is, ultimately, the principal weakness of the enterprise. Li and Reuveny are scrupulously fair and inclusive of any possible arguments about the relationships among their variables. In looking at the impact of globalization on democracy, for example, by my count they present seven arguments for a positive impact (i.e., globalization encourages more democracy), seven arguments for a negative impact, and three for a neutral impact. This is even before taking into account issues of reverse causation and interactions. When an empirical exercise is introduced with 17 reasonable and potentially valid arguments about just one of the topics under investigation, the reader is left wondering what could possibly be learned by any empirical finding. Even if the results are so iron-clad that they cannot be called into question—itself a fantasy—any relationship that appears to be uncovered is bound to be of limited analytical value.

Surely it is important to explore the evidence pertaining to the impact of globalization on democracy, democracy on globalization, and all the other relationships examined in Democracy and Economic Openness. But the empirical conclusions drawn are, finally, of interest largely to the extent that they clarify our theoretically grounded understanding of international affairs. A simple correlation between democracy and economic integration is interesting, but it is not a fully rounded contribution to our understanding of international and domestic political economy. For this, we would need a much better developed theoretical apparatus, one which goes beyond a simple catalog and allows us to explicate, identify, and examine the causal mechanisms implicit in the arguments made. Li and Reuveny largely restrict themselves to presenting and evaluating relationships among a very extensive list of variables. This allows them to present interesting empirical results, but it does not allow us to draw broader theoretical and analytical conclusions.

Jude Hays is also interested in how economic openness affects democratic politics, but in Globalization and the New Politics of Embedded Liberalism, he pursues an entirely different strategy from that of Li and Reuveny. He focuses explicitly on only a few implications of globalization, but explores them rigorously and in great detail. Hays' treatment is much more theoretically grounded than is Li and Reuveny's, and his empirical investigation thus has much greater depth.

Hays's analysis emphasizes the differences between two broad types of political economies in the advanced industrial nations: majoritarian competitive-market systems and consensus corporatist systems. His argument proceeds clearly, beginning with the different economic impacts of globalization. Hays first shows that those more exposed to foreign competition are more hostile to globalization, but that government social policies can mitigate this hostility. He then assesses the extent to which citizens in the different kinds of political economies are, in fact, exposed to globalization-related costs. He argues that in countries with competitive labor markets, globalization increases wage and employment volatility, while it has little or no such effect in countries with corporatist labor relations. Putting these points together leads him to the conclusion that the need for compensating government policies is greatest in the liberal market economies.

Hays argues, however, that the majoritarian political systems of most such political economies hamper their ability to confront the challenges of globalization. In his view, the majoritarian political systems are biased toward high levels of taxation on capital; the consensual (typically proportional-representation) corporatist political systems have low levels of capital taxes. But globalization makes it more difficult to tax increasingly footlose capital, which has a particularly negative impact on the majoritarian regimes (which start with a high capital tax rate). The implication is that such majoritarian regimes will find it more difficult than consensual corporatist regimes to increase social spending to compensate for the costs of globalization.

The structure of the argument, then, mixes both economic and political factors. The more competitive labor markets of the liberal market economies increase the social impact of globalization, hence, the demands for social policies to address these costs. But the majoritarian political systems of these political economies limit their ability to respond to these demands. Meanwhile, labor markets in the consensual corporatist systems are less affected by globalization, and their ability to fund social policies is less negatively affected.

Hays develops these arguments theoretically and evaluates their component parts empirically. His theoretical discussion includes both a formal presentation and some relatively straightforward narrative. The empirical work in the book uses a wide variety of information, including individual-level surveys and cross-national comparisons. The theoretical presentation is clear, and the empirical evidence presented is quite convincing. Globalization and the New Politics of Embedded Liberalism makes important points about the tensions in today's integrated economies, as well as how they may play out politically.

Hays's explicit and careful attention to the logical consistency of his arguments, and his focus on very specific economic and political relationships, make his work particularly trenchant. They also, however, suggest specific questions that might be asked about the argument. For example, Hays argues that competitive labor markets impose more volatility on workers, hence, raising the demand for social insurance. But it could be argued that the costs of this increased volatility are counterbalanced by greater efficiency and higher productivity, which translate into higher wages and living standards. Perhaps workers in the majoritarian liberal market economies are willing to suffer more volatile wages and employment without demanding more social programs because they make up the difference in easily found replacement jobs and relatively higher wages. This is not necessarily to challenge his argument, only to point out that precisely because it is so carefully presented, there are many points at which amendments or objections could be suggested.

Li and Reuveny, as well as Hays, approach the political economy of globalization in very different ways. Li and Reuveny undertake a sweeping, almost all-encompassing statistical analysis of many features of the international political economy in a way that is theoretically eclectic; they do not formulate or evaluate any particular theoretical perspective. Hays presents an explicit theoretical argument about one relatively narrow aspect of the international political economy and evaluates it from many directions. Which of the two approaches is more compelling and valuable probably depends largely on the taste of the reader: Some will find the exhaustive statistical evidence in Democracy and Economic Openness more useful, while others will favor the rigor and depth of Globalization and the New Politics of Embedded Liberalism. Together, they give a good sense of the state of current scholarship on the political implications of an open international economy.