Abstract
The ‘coordinate plane of global governance’ developed in this paper describes the trade-off between static gains and dynamic losses associated with international policy harmonization. A simple model illustrates how potential gains result from producing positive international spill-overs, whereas potential losses come from restricted systems competition between national policy regimes. The solution to this model allows identifying the cut-off level between policies suitable for global harmonization and policies which should better not be centralized. An application of the concept to selected policy fields illustrates its relevance for decision-making on global governance.
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Notes
The “classic” reference in this respect is the seminal work of Oates (1972). In an international framework the concept of “global public goods” (e.g. Kaul et al. 1999, 2003; Sandler 1998, 2004, 2006) has also been used to identify policies that should be governed on a global scale. However, it should be kept in mind that the issue of global public good provision is much broader and covers many more aspects than the decision about policy harmonization we focus on.
These spill-overs result from internalized positive or negative externalities or from solved coordination problems under international policy-making.
Since we have assumed a continuum of policies, we can neglect the risk associated with individual policies and can treat aggregate productivity as deterministic.
We assume ɛ < r such that r > π(n)·ɛ for all n.
Barret (1994) objects, however, that a similar reduction of ozone depletion would probably have been achieved without any international agreement.
Moreover, optimal tax systems may differ across countries, which further conflicts with tax harmonization.
It has repeatedly been suggested that ILO standards should be enforced by trade sanctions in a similar manner as in the above-discussed debate on linking environmental and trade policy via the WTO. The drawback of such an approach is again the danger of overstretching WTO responsibilities, which would probably be rather ineffective for improving labor standards, but would endanger the stability and further development of the world trading order (Brown 2001). A superior approach could be to authorize the ILO to sue in national courts when an ILO convention is violated by a country which has signed the respective convention. It should also be recognized that the border line between legitimate global solidarity and disguised protectionism is narrow. When workers from rich countries call for extended international social and labor standards all-too often they do seem to be less concerned about the well-being of their colleagues abroad, but rather about competition from low-wage countries to their own jobs. It seems reasonable, therefore, to confine international agreements on social and labor standards to a level which is affordable also for poorer countries.
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We would like to thank two anonymous referees for their helpful comments. All errors are ours.
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Klodt, H., Lorz, O. The coordinate plane of global governance. Rev Int Org 3, 29–40 (2008). https://doi.org/10.1007/s11558-007-9016-z
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DOI: https://doi.org/10.1007/s11558-007-9016-z