Deliberative equality and the transgovernmental politics of the global financial architecture

Global Governance

Volumn 15, Issue 2, 2009, Pages 195-218

  Baker, Andrew ^a  

^a QUEEN'S UNIVERSITY BELFAST   (United Kingdom)

Author keywords

Deliberation; G 20; G7; Global financial architecture; Transgovernmental politics

Indexed keywords

EID: 68749105699     PISSN: 10752846     EISSN: None     Source Type: Journal    
DOI: 10.1163/19426720-01502005     Document Type: Article

References (47)

1. Robert Keohane and Joseph Nye, "Transgovernmental Relations and International Organizations," World Politics 27, no. 1 (1974): 39-62.
2. I use global financial architecture as shorthand for the collection of key decisionmaking processes and deliberative spaces that seek to organize the global financial system (hereafter, GFA).
3. Layna Mosley, "Privatizing Global Governance? Dilemmas in International Financial Regulation," paper presented at the first annual GARNET conference, "Global Financial and Monetary Governance, the EU, and Emerging Market Economies," held at De Nederlandsche Bank (Dutch Central Bank), Amsterdam, 27-29 September 2006.
4. Thorsten Benner, Wolfgang Reinicke, and Jan Martin Witte, "Global Public Policy Networks: Lessons Learned and Challenges Ahead," Brookings Review 21, no. 2 (2003): 18-21; Robert O'Brien, Anne Marie Goetz, Jan Aart Scholte, and Marc Williams, Contesting Global Governance: Multilateral Economic Institutions and Global Social Movements (Cambridge: Cambridge University Press, 2000).
5. Ann Marie Slaughter, A New World Order (Princeton: Princeton University Press, 2004).
6. Tony Porter, "The Democratic Deficit in the Institutional Arrangements for Regulating Global Finance, Global Governance 7, no. 4 (2001): 327-339.
7. Anthony McGrew and Paolo Robotti, "Why Adapting? Just Adopt It! The Role of Deliberation in the Governance of International Accounting Standards," paper presented at the ISA convention, San Diego, 22-25 March 2006.
8. Christian Joerges, "Deliberative Supranationalism: Two Defences," European Law Journal 8, no. 1 (2002): 131-151; James Bohman, "International Regimes and Democratic Governance: Political Equality and Influence in Global Institutions," International Affairs 75, no. 3 (1999): 499-514; Loren King, "Deliberation, Legitimacy and Multilateral Democracy," Governance 16, no. 1 (2003): 23-50.
9. King, "Deliberation, Legitimacy and Multilateral Democracy," p. 24.
10. Bohman, "International Regimes and Democratic Governance."
11. Thomas Risse, "Let's Argue! Communicative Action in World Politics," International Organization 54, no. 1 (Winter 2000).
12. Randall Germain, "Globalizing Accountability Within the International Organization of Credit: Financial Governance and the Public Sphere," Global Society 18, no. 3: 217-242.
13. Robert Keohane and Joseph Nye, "Transgovernmental Relations and International Organizations," World Politics 27, no. 1 (1974): 39-62.
14. Cass Sunstein, "The Law of Group Polarization," Journal of Political Philosophy 10, no. 2 (2002): 175-195.
15. Robert Russell, "Transgovernmental Interaction in the International Monetary System, 1960-1972," International Organization 27, no. 3 (1973): 431-64.
16. For an argument that the global financial architectural debates in the late 1990s assumed a normative tone, see Jacquiline Best, "From the Top Down: The New Financial Architecture and the Re-Embedding of Global Finance," New Political Economy 8, no. 3 (2003): 363-384.
17. Group of Seven Finance Ministers, "Halifax Communiqué Background Document: Institutions Section 5: Promoting Financial Stability in a Globalized Economy," 1995, available at www.g7.utoronto.ca/summit/ 1995halifax/financial/index.html; Group of Seven Finance Ministers and Central Bank Governors' Statement, Bonn, 20 February 1999, available at www.g7.utoronto.ca/finance/fm022099.htm. The G-20 was a permanent extension of the earlier G-22, with a slightly adjusted membership. Notably, Malaysia was dropped from the original G-22, probably because of the use of stringent capital controls. This would certainly indicate that the G7 intention was to consult with a group of officials who were sympathetic to neoliberal modes of thinking.
18. Andrew Baker, The Group of Seven: Finance Ministries, Central Banks and Global Financial Governance (London: Routledge, 2006).
19. February 1998 Point made in confidential interview by finance ministry official, February 1998; David Dodge interview with the governor of the Bank of Canada, conducted by Candia Tamar Paltiel, G8 Research Group, Ottawa, 18 November 2001, available at www.g7.utoronto.ca/oralhistory/.
20. Joseph Stiglitz, Globalization and Its Discontents (London: Penguin, 2002); Baker, The Group of Seven. At the time of the architectural review exercise, of the fourteen national officials constituting the G7 deputies group, eight were PhD economists. The remaining six had a postgraduate qualification (master's level) in economics, finance, or business. In all G-20 emerging markets, with the exception of Russia, either the central bank governor or the finance minister has training in economics or a finance-related discipline in the United States or the United Kingdom at the master's or PhD level.
21. Juliet Johnson, "Post Communist Central Banks: A Democratic Deficit?" Journal of Democracy 17, no. 1 (January 2006): 97. I would not suggest that all finance ministries and central banks have identical preferences, merely that there is a certain common ground based on a prioritization of the objectives of sound money and open capital markets, and intellectual sympathies with neoclassical economics.
22. Benjamin Cohen, "Capital Controls: The Neglected Option," in G. Underhill and X. Zhang, eds., International Financial Governance Under Stress: Global Structures Versus Domestic Imperatives (Cambridge: Cambridge University Press, 2003), pp. 60-76; Sylvia Maxfield, "Bankers Alliances and Economic Policy Patterns: Evidence from Mexico and Brazil," Comparative Political Studies 23, no. 4 (1991): 419-458; Adam Posen, "Declarations Are Not Enough: Financial Sector Sources of Central Bank Independence," NEBR Macroeconomics Annual (Cambridge: MIT Press, 1995).
23. Baker, The Group of Seven.
24. Andrew Baker, "Global Monitor: The Group of Seven," New Political Economy 13, no. 1 (2008): 103-116.
25. Duncan Wood, Governing Global Banking: The Basel Committee and the Politics of Financial Globalization (Aldershot: Ashgate, 2004).
26. Geoffrey Underhill, "Keeping Governments Out of Politics: Transnational Securities Regulation and Political Legitimacy," Review of International Studies 21, no. 3 (1995): 251-278.
27. Tony Porter, "Technical Collaboration and Political Conflict in the Emerging Regime for International Financial Regulation," Review of International Political Economy 10, no. 3 (2003): 520-551.
28. Confidential interview with official, July 1997.
29. Leslie Elliot Armijo, "The Political Geography of Financial Reform," Global Governance 7, no. 4 (2001): 379-396.I am in disagreement with Armijo in relation to Japan sitting outside the transparency coalition. Japan participated fully in deliberations and expressed satisfaction with outcomes based on greater transparency while remaining supportive of capital account liberalization. See Eisuke Sakaibara (vice-minister for international affairs, Ministry of Finance), "Reform of the International Financial Architecture: Main Elements of the G-7 Report on the Architecture," presented at the symposium "Building the Financial System of the 21st Century," Kyoto, 25 June 1999.
30. Mark Blyth, "The Political Power of Financial Ideas: Transparency, Risk and Distribution in Global Finance," in J. Kirshner, ed., Monetary Orders: Ambiguous Economics, Ubiquitous Politics (Ithaca: Cornell University Press, 2003), pp. 239-259.
31. Best, "From the Top Down."
32. Ben Thirkell-White, "The International Financial Architecture and the Limits to Neoliberal Hegemony," New Political Economy 12, no. 1 (March 2007): 19-41.
33. Roy Culpeper, "Systemic Reform at a Standstill: A Flock of 'Gs' in Search of Global Financial Stability," University of Toronto G8 paper series, 2000, available at www.library.utoronto.ca/g7/scholar/culpeper2000/ index.html.
34. Porter, "Technical Collaboration and Political Conflict."
35. Yomiuri Shimbum, 26 November, 1999.
36. Slaughter, A New World Order, p. 29.
37. Michael Ignatieff, Human Rights as Politics and Idolatry (Princeton: Princeton University Press. 2001).
38. Germain, "Globalizing Accountability."
39. Slaughter, A New World Order; Randall Germain, "Global Financial Governance and the Problem of Inclusion," Global Governance 7, no. 4 (2001): 411-426. Representation and inclusion has been undoubtedly enhanced by the recent initiative of the summit of the G-20 leaders, because this does allow for wider perspectives and steps outside the narrow confines of the finance ministers' and central bankers' process.
40. Germain, "Globalizing Accountability."
41. Sunstein, "The Law of Group Polarization," p. 192.
42. Dani Rodrick and Arvind Subramanian, "Why Did Financial Globalization Disappoint?" manuscript, March 2008.
43. United Nations "Towards a New International Financial Architecture," report of the task force of the Executive Committee on Economic and Social Affairs of the United Nations, New York, 21 January 1999.
44. Dani Rodrick, for example; see ibid.
45. Ironically, Keynes argued that the Fund should only deal with finance ministries and central banks, making deliberations technical and preventing them from becoming politicized. Yet the restriction of national voice in the IMF to finance ministries and central banks has been an important factor in allowing the limited argument pool of neoliberal orthodoxy to take hold and displace Keynes's own economic theories. Empirical evidence on IMF recruitment patterns suggests that this has also reinforced the dominance of neoliberal orthodoxy. Bessma Momani, "Recruiting and Diversifying IMF Technocrats," Global Society 19, no. 2 (April 2005): 167-187.
46. Sunstein, "The Law of Group Polarization," p. 193; James Bohman, "Deliberative Democracy and the Epistemic Benefits of Diversity," Episteme 3, no 3 (2006): 175-190.
47. Philip Cerny, "The Infrastructure of the Infrastructure? Towards Embedded Financial Orthodoxy in the International Political Economy," in Ronen Palan and Barry Gills, eds., Transcending the State-Global Divide: A Neo-Structuralist Agenda in International Relations (Boulder: Lynne Rienner, 1994), pp. 223-249.