All Politics is Global is a more than just a welcome contribution to current international relations scholarship. Daniel Drezner confronts a growing literature on global governance that proclaims the death of state authority and the surge and dominance of private actors in world politics. He offers a ‘revisionist’ realist perspective on global regulatory regimes in times of growing interdependence. The book's strength is the development of a simple and elegant theoretical argument for explaining regulatory regimes. Drezner blends realist and liberal thinking and argues that the outcomes can be explained by the interest constellation of great powers. He postulates that ‘great power concert is a necessary and sufficient condition for effective global governance’ (p. 5).
Drezner takes a fresh look at the role of the powerful states in governing the world economy. Using simple game-theory, he provides a convincing explanation for why the great powers (the US and the EU) have not lost their influential role. In doing so, the book makes a strong case against a growing literature in international relations that attributes a significant degree of agency to international organizations or transnational private actors in shaping international regulatory outcomes. The message is simple: it's not the power of transnational firms, the campaigns of civil society groups, or the consensus of epistemic communities that matters, but the power of states as defined by their market size.
As to national preferences, Drezner presents an original twist to the pluralist story by focusing on the adjustment costs of domestic actors and using Hirschman's famous typology of exit and voice to discuss interest aggregation. On the latter, he posits that voice is more powerful than exit. In other words, those actors without a credible exit option (e.g. immobile and mature sectors within the domestic setting) will lobby extensively for the status quo if adjustment costs are tangible. This leads to a situation where ‘ironically, the least globalized elements of great power polities exert the strongest effects on the likelihood of global regulatory coordination’ (p. 5).
In Drezner's model, all other actors (multinational companies, international organizations, epistemic communities, or civil society movements) function as intervening variables at best. He attributes to them influence on agenda-setting and in procedural terms, but not on outcomes. In particular, the possibilities for great powers to engage in forum-shopping cannot be matched by other actors and ‘while all states will attempt to select fora amenable to their interests, great powers will have the greatest success employing this tactic’ (p. 64).
His revisionist theory is contrasted to other leading (mostly middle-range) theories, including world polity approaches, new hegemonic theories, explanations stressing agency, and liberal institutionalist approaches. Following in the footsteps of Stephen Krasner, he makes the criticism that liberal institutionalist explanations have overemphasized the nature of cooperation and commitment problems and have downplayed state preferences and power. While Drezner acknowledges that globalization has increased the potential rewards of cooperation, he argues that the institutionalist research programme has not sufficiently focused on adjustment costs. Moreover, the narrow focus on specific international organizations ignores a thicker institutional environment (known as regime complexity) that offers more strategic leverage to powerful states than to any other actor in the system.
The first part of the book concludes with a typology for various regime outcomes presented in a two-by-two table based on the interest constellation (convergence/divergence) of great powers and their interests in relation to other international actors. Hence, four different regulatory coordination types are predicted: harmonized standards (e.g. ISO standards), rival standards (e.g. international whaling regime), sham standards (e.g. labour standards), or club standards (e.g. OECD anti-bribery convention).
In the second part of the book, Drezner presents a number of case studies covering various regulatory areas to test his arguments. Cases are carefully chosen to pre-empt criticism as to the case selection design. He focuses on cases where structural pressure from globalization is present, private actors have been widely attributed important status, and the nation-state is said to be in retreat (internet governance, regulation of financial markets). On internet governance (in particular in the discussion on technical protocols) his findings suggest that the US has determined the outcomes even though it has delegated powers to private actors for regulating the domain. In the case of financial market regulation in the wake of the Asian financial crises, Drezner presents strong evidence that highlights powerful states' (successful) forum-shopping attempts. The shift towards using clubs for governing financial markets has significantly weakened the role of multilateral financial institutions.
In his two other empirical case studies on genetically modified organisms (GMOs) and on the Doha Declaration on TRIPS and Public Health he challenges the dominating arguments that attribute a strong role to civil society groups and other non-state actors. On the transatlantic divide over GMOs, Drezner focuses on the creation of rival standards as a result of interest divergence and the manifest instrumentalization of competing regulatory venues. By contrast, the TRIPS and Public Health case is presented as a semi-deviant case. While Drezner acknowledges the influence of non-state actors in this case, he argues that big powers have limited the potential effects of the Doha Ministerial Declaration. The policy shift was controlled by resorting to bilateral trade agreements to contain the application of the WTO opt-out clause. In addition, national security concerns after the anthrax scare in the autumn of 2001 (the US pushed for a licence for the manufacture of a generic antibiotic produced by a foreign chemical firm) explained a temporal prioritization of public health concerns over intellectual property rights in the US.
The factual evidence presented in the cases is impressive. The discussion on engaging in forum-shopping is refreshing. Reading the case studies and reflecting on the theoretical framework, I had four (institutionalist coloured) reactions. First, the theoretical argument to explain the influence of domestic actors relies largely on an assessment of adjustment costs by voice and exit players. But reading the case studies, there were occasions where non-economic motives played a key role in explaining state preferences. Security concerns (e.g. TRIPS and Public Health, financial stability), moral issues (e.g. GM technology), or culture and ideologies (e.g. freedom of expression in internet governance) are hard to capture with a market-dominated exit-voice framework. In other words, under some conditions state regulators will follow broadly defined societal preferences and find ways to buffer against regulatory capture by economic interest groups.
Second, following on from the above, the state is not always an obedient agent as assumed by the theoretical framework. Politicians and civil servants may have discretion to act and influence the balance between different interest groups. In his reasoning about regulators and bureaucratic agencies, Drezner acknowledges that civil servants who are ‘accustomed to the status quo and reluctant to change training procedures, can devise a number of ways to resist politically directed change from above’ (p. 46). In some of the case studies he refers to the European Commission as sometimes taking puzzling decisions (internet governance, p. 116) or having a strong role. On GMOs he writes of a ‘history of strong environmental protection at the European Commission level’ and that ‘the biotechnology sector in Europe was disorganized … allowing the European Commission to have its way on the issue’ (p. 155). While in his empirical analysis these facts are not further investigated, my reading of the GMO case suggests that the adjustment costs for non-mobile sectors (farmers) cannot sufficiently explain the aggregated European preferences and call for bringing the interests/ideas of the regulators into the picture.
Third, Drezner's analysis does not offer comfort to those believing in the virtue of multilateralism. In his analysis, international organizations reflect big powers' interests that are hostage to the strong voices at home. While institutionalists would largely agree on the big power interest assumption, they would offer empirical evidence where international organizations have assisted in the containment of voice-veto players. In the context of the GATT/WTO system, the single-package approach can help overcome potential decision-making traps due to prohibitively high adjustment costs at home. As a result of the Uruguay Round negotiations, we have witnessed the phasing out of the Multifibre Arrangement on textile and clothing, the US acceptance of a highly legalized dispute settlement system, and the renouncement of using the most aggressive forms for opening foreign markets. At the same time, leading exit voices in the US and EU have clearly shaped the outcome of the Uruguay Round negotiations.
Fourth, importing Hirschman's third element (loyalty) might lead to more attention to non-material concerns. The degree of loyalty influences actors' preferences vis-à-vis organizations, not least impacting on the overall balances between voice and exit. If we take the case of the EU's long-term interest in the multilateral trading regime, loyalty is part of the equation. The multilateralism-first approach advocated under Trade Commissioner Pascal Lamy does not easily read like a voice/exit story only, but as one where the EU attempts to export its own model, strives to act as a leader in multilateralism, and finds an umbrella strategy for its diverse membership. The existence of some type of loyalty to international organizations or to multilateralism makes the EU look more like a constrained superpower than the one Drezner pictures.
In any case, Drezner's book has the potential to become a classic. It has already provoked a lively debate among scholars of international relations and international political economy. His stimulating book will certainly travel well into other disciplines and wider policy communities interested in the regulation of the world economy.
