Professional Documents
Culture Documents
Cerny
Paradoxes of the Competition State: The
Dynamics of Political Globalization
T H E TRANSFORMATION O F T H E NATION-STATE INTO A COMPETITION
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Roland Robertson, Globalization: Social Theory and Global Culture, London and
Thousand Oaks, Cal., Sage, 1992.
Ian R. Douglas, Globalization,Governanceand the Assembly of Forces:JAccuse,
paper presented to a Workshop on Globalization and Governance, Indianapolis,
Indiana, 11-13 October 1996.
On structures and political structuration,see P.G. Cerny, The Changing Architecture
of Politics: Structure, Agency and the Future of the State, London and Thousand Oaks,
Sage, 1990, chs 1-4.
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GOVERNMENTAND OPPOSITION
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I5John Gerard Ruggie, James A. Caporaso, Steve Weber and Miles Kahler,
Symposium: Multilatmalism, special section in International Organization, Vol. 46, No. 3,
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State actors have acted and reacted in feedback loop fashion to the
more complex structure of constraints and opportunities characteristic of the new environment. The outcome of the institutional
selection process - the ultimate choice as to which equilibrium is
eventually reached (if any) in attempting to cope with new pressures
- depends upon the way agents react in real time in the real world.
As international and transnational constraints limit the things that
state and market actors believe the state can do, this shift is leading
to a potential crisis of liberal democracy as we have known it - and
therefore of the things people can expect from even the best-run
government. In this context, for example, a new and potentially
undemocratic role is emerging for the state as the enforcer of
decisions and/or outcomes which emerge from world markets,
transnational private interest governments, and international
quango-like regimes.IM
The essence of the post-war national welfare state lay in the
capacity which state actors and institutions had gained, especially
since the Great Depression, to insulate certain key elements of
economic life from market forces while at the same time promoting
other aspects of the market. These mechanisms did not merely mean
protecting the poor and helpless from poverty and pursuing welfare
goals like full employment or public health, but also regulating
business in the public interest, fine tuning business cycles to
promote economic growth, nurturing strategic industries and
Is A quango, or quasi-autonomous non-governmental organization, is an
authoritative body licensed by the state to carry out public regulatory functions but
made up of appointed representatives of private sector interests. It is probably best
considered to be a variant of state corporatism.
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national champions, integrating labour movements into corporatist processes to promote wage stability and labour discipline,
reducing barriers to international trade, imposing controls on
speculative international movements of capital, and the like. The
expansion of the economic and social functions of the state was
seen to be a crucial part of the process of social, economic and
political modernization for any developed country.
But this compromise of domestic regulation and international
opening - whatJohn Ruggie famously called embedded liberali~m~
- was eroded by increasing domestic structural costs (the fiscal
crisis of the stateO) as well as the structural consequences of growing
external trade and, perhaps most important, of international
financial transactions. The crisis of the welfare states lay in their
decreasing capacity to insulate national economies from the global
economy, and the combination of stagnation and inflation which
resulted when they tried. T h e world since then has seen the
emergence of a quite different beast, the competition state. Rather
than attempt to take certain economic activities out of the market,
to decommodify them as the welfare state was organized to do,
the competition state has pursued increased marketization in order
to make economic activities located within the national territory,
or which otherwise contribute to national wealth, more competitive
in international and transnational terms. The main features of this
process have included attempts to reduce government spending in
order to minimize the crowding out of private investment by state
consumption, and the deregulation of economic activities, especially
financial markets. The result has been the rise of a new discourse
and practice of embedded financial orthodoxy, which is in turn
John Gerard Ruggie, International Regimes, Transactions, and Change:
Embedded Liberalism in the Post-War Order,International Organization, Vol. 36, No. 4,
Autumn 1982, pp. 379-415; Ruggie here also uses the word liberalismin its American
meaning.
*O James OConnor, The Fiscal Crisis ofthe State, New York, St Martins Press, 1973.
Fred L. Block, The Origins of International Economic Disorder: A Study of United
States Monetary Policy from World War 11 to the Present, Berkeley and Los Angeles,
University of California Press, 1977; Susan Strange, Casino Capitalism, Oxford,
Blackwell, 1986.
** P. G. Cerny, The Infrastructure of the Infrastructure? Toward Embedded
Financial Orthodoxy in the International Political Economy,in Ronen P. Palan and
Barry Gills, (eds), Transcending the State-Global Divide: A Neostructuralist Agenda in
International Relations, Boulder, Co., Lynne Reinner, 1994, pp. 223-49.
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models of state/economy relations or state/societal arrangementsas Zysman writes, have, then, driven changes in the global
economy.so
At another level, of course, states and state actors seek to convince,
or pressure, other states-and transnational actors such as
multinational corporations or international institutions - to adopt
measures which shift the balance of competitive advantage. Such
pressure will generally combine elements of neo-mercantilistic selfinterest, limited reciprocity, and multilateral hard bargaining whether to limit trade in sensitive sectors such as textiles,
automobiles o r semiconductors, to develop new regional initiatives
such as the European single market, to expand multilateral trade
regimes in agriculture or services, or to reach agreements in areas
such as exchange rate policy. The search for competitive advantage
in a relatively open world adds further layers and cross-cutting
cleavages to the world economy which may undermine pure
multilateralism, but which increase the complexity and density of
networks of interdependence and interpenetration. Finally,
transnational pressures can develop-whether from multinational
corporations or from nationally or locally based firms and other
interests (such as trade unions) caught in the crossfire of the search
for international competitiveness - or the establishment or
expansion of transnational regimes, transnational neocorporatist
structures of policy bargaining, transgovernmental linkages between
bureaucrats, policy-makers and policy communities, and the like.
In all of these settings, the state is no longer able to act as a
decommodifying hierarchy (i,e., taking economic activities out of
the market). It must act more and more as a collective commodifying
agent - i.e., putting activities into the market) -and even as a market
actor itself. It is financier, middleman, advocate, and even entrepreneur, in a complex economic web where not only do the frontiers
between state and market become blurred, but also where their
cross-cutting structures become closely intertwined and their
behavioural modes become less and less easy to distinguish. National
differences therefore do not so much concern the possibility of
resisting globalizing trends per se, but are best seen instead as
representing different modes of managing a complex transition in
O John Zysman, The Myth of the Global Economy: Enduring National
Foundations and Emerging Regional Realities, New Political Economy, Vol. 1, No. 1,
Summer 1996, pp. 157-84.
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Cass, 1996.
John Stopford and Susan Strange, Rival States, Rival Fim: Competitionfor World
Market Shares, Cambridge, Cambridge University Press, 1991.
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GOVERNMENTAND OPPOSITION
* Max Singer and Aaron Wildavsky, The Real World Order: Zones of Peace/Zones of
TurmoiZ, Chatham, NJ, Chatham House Publishers,1993.
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