The Clash of Globalizations
184 Pages
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The Clash of Globalizations


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184 Pages


Bringing together a series of essays on the political economy of trade and development policy, this book explores the factors that have led to twenty-first-century trade politics being characterized as a “clash of globalizations.”

Collecting and synthesizing a series of essays on the political economy of trade and development policy, this book explores the following research questions: to what extent is the global trading regime reducing the ability of nation-states to pursue policies for financial stability and economic growth; and what political factors explain such changes in policy space over time, across different types of trade treaties and across nations? Gallagher presents intriguing findings on the policy constraints on the Uruguay Round, as well as the significant restrictions that the USA places upon the ability of developing nations to deploy a range of development strategies for stability and growth. 

Analyzing the factors that have led to twenty-first-century trade politics being characterized by a “clash of globalizations,” this volume explores the role of economic power, institutional structure, domestic politics, currency fluctuations and ideas about globalization in effecting changes to global trade policies.

Preface and Acknowledgments; List of Tables, Figures and Boxes; Chapter 1: Introducing the Clash of Globalizations; Chapter 2: Losing Control: Policy Space to Regulate Cross-Border Financial Flows; Chapter 3: The New Vulture Culture: Sovereign Debt Restructuring and International Investment Rules; Chapter 4: Whither the Developmental State? Industrial Policy and Development Sovereignty; Chapter 5: Understanding Developing Country Resistance to the Doha Round; Chapter 6: Trading Away the Ladder? Trade Politics and Economic Development in the Americas; Chapter 7: Putting Development First: Trade Policy for the Twenty-first Century; References; Index



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Published 15 July 2013
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The Clash of Globalizations
TheAnthem Frontiers of Global Political Economyseries seeks to trigger and attract new thinking in global political economy, with particular reference to the prospects of emerging markets and developing countries. Written by renowned scholars from different parts of the world, books in this series provide historical, analytical and empirical perspectives on national economic strategies and processes, the implications of global and regional economic integration, the changing nature of the development project, and the diverse globaltolocal forces that drive change. Scholars featured in the series extend earlier economic insights to provide fresh interpretations that allow new understandings of contemporary economic processes.
Series Editors
Kevin Gallagher – Boston University, USA Jayati Ghosh – Jawaharlal Nehru University, India
Editorial Board
Stephanie Blankenburg – School of Oriental and African Studies (SOAS), UK HaJoon Chang – University of Cambridge, UK WanWen Chu – RCHSS, Academia Sinica, Taiwan Léonce Ndikumana – University of MassachusettsAmherst, USA Alica Puyana Mutis – Facultad Latinoamericana de Ciencias Sociales (FLASCOMéxico), Mexico Matías Vernengo – Banco Central de la República Argentina, Argentina Robert Wade – London School of Economics and Political Science (LSE), UK Yu Yongding – Chinese Academy of Social Sciences (CASS), China
The Clash of Globalizations
Essays on the Political Economy of Trade and Development Policy
Kevin P. Gallagher
Anthem Press An imprint of Wimbledon Publishing Company
This edition first published in UK and USA 2013 by ANTHEM PRESS 75–76 Blackfriars Road, London SE1 8HA, UK or PO Box 9779, London SW19 7ZG, UK and 244 Madison Ave #116, New York, NY 10016, USA
Copyright © Kevin P. Gallagher 2013
The author asserts the moral right to be identified as the author of this work.
All rights reserved. Without limiting the rights under copyright reserved above, no part of this publication may be reproduced, stored or introduced into a retrieval system, or transmitted, in any form or by any means (electronic, mechanical, photocopying, recording or otherwise), without the prior written permission of both the copyright owner and the above publisher of this book.
British Library CataloguinginPublication Data A catalogue record for this book is available from the British Library.
Library of Congress CataloginginPublication Data Gallagher, Kevin, 1968 The clash of globalizations : essays on the political economy of trade and development policy / Kevin P. Gallagher. pages cm Includes bibliographical references and index. ISBN13: 9780857283276 (hardback : alk. paper) ISBN10: 0857283278 (hardback : alk. paper) 1. International trade. 2. Economic development. 3. Development economics. 4. Globalization. 5. Developing countries–Economic policy. I. Title. HF1379.G347 2013 382.01–dc23 2013012695
ISBN13: 978 0 85728 327 6 (Hbk) ISBN10: 0 85728 327 8 (Hbk)
Cover photograph © Agência Brasil, licensed under Creative Commons.
This title is also available as an eBook.
This book is dedicated to Alice Amsden
Preface and AcknowledgmentsList of Tables, Figures and Boxes
Chapter 1 Introducing the Clash of Globalizations Chapter 2 Losing Control: Policy Space to Regulate CrossBorder Financial Flows Chapter 3 The New Vulture Culture: Sovereign Debt Restructuring and International Investment Rules Chapter 4 Whither the Developmental State? Industrial Policy and Development Sovereignty Chapter 5 Understanding Developing Country Resistance to the Doha Round Chapter 6 Trading Away the Ladder? Trade Politics and Economic Development in the Americas Chapter 7 Putting Development First: Trade Policy for the Twentyfirst Century
ix xiii
151 165
Fifteen years ago I had the privilege of being a student of the late Alice Amsden. We were reading her working manuscript for what was to become her opus book,the Rest: Challenges to the West from Late IndustrializingThe Rise of Economies. That book showed how, borrowing from the West, the most successful developing countries mixed government policy with market forces to transform their economies from rural ones to global export powerhouses. Her book echoed and was echoed by superscholars such as Peter Evans, Dani Rodrik and Robert Wade to name but a few. I dedicate this book to Alice’s memory. She passed away, too early, while the manuscript was under preparation. At the time of Amsden’s class I was writing a dissertation on the United States’ trade policy, looking specifically at the North American Free Trade Agreement (NAFTA). Week after week as we analyzed scholarship about these policies that were so successful in East Asia and beyond I kept saying to myself, “Hey, you couldn’t do that under NAFTA.” Over the course of the first decade of the new century then, while working on a different core research agenda I slowly chipped away conducting indepth analyses examining the extent to which emerging market and developing nations could use specific policies that had been used by others. At first, such analyses were often engagements with the legal literature, pinpointing policies and examining whether new laws and codes would still permit them. Chapters 2, 3 and 4 of this book are updated versions of those attempts to make sense of the seemingly conflicting regimes of national development policy and the trading system. I also edited a book in 2005 titledPutting Development First: The Need for Policy Space in the WTO and International Financial Institutions. As this work started to gain attention, in both policy and academic circles, I started to encounter the following question: if these policies are so bad then why are nations signing on to them? This set of questions led to an engagement with the literature in international political economy. Robert Wade, who contributed a landmark article to that 2005 book, put me in touch with Kenneth Shadlen, also at the London School of Economics.
Ken’s scholarship sparked the thinking that went into Chapters 5 and 6 of this volume. Chapter 5 examines the politics of the WTO around these issues, and Chapter 6 confronts that question head on and explains why some nations have signed trade agreements that run counter to their longrun economic interests. The chapters in this book then are revised and slightly updated versions of articles written during the first decade of this century – and they examine the political economy of trade and development policy at the turn of the century. In addition to thanking the scholars just mentioned for their inspiration, curiosity and guidance, I also thank the following journals and institutes for publishing work that at the time seemed out of the ordinary. Earlier versions of this work have been published inInternational Political EconomyReview of ,New Political Economy,Global Policyand theInternational Law and PolicyDenver Journal of . In addition, the International Centre for Trade and Sustainable Development in Geneva and also published versions of some of these chapters as discussion papers. I am particularly indebted to Rachel Denae Thrasher, who coauthored what is now Chapter 4 with me. Rachel is a lawyer and teaming up with her helped me really understand trade law and its application. What I learned from her helped guide me through other topics later on. As time went by, with the encouragement of others I came to realize that these articles and studies added up to a bigger picture. That is what has led to collecting them all in this book. Chapter 1 pulls all the books findings and political economy insights into a whole and envelops the volume. The next three chapters are analyses that examine the extent to which nations have surrendered policy space for various development policies through their trade commitments. Chapter 2 examines the ability to regulate crossborder finance, Chapter 3 discusses sovereign debt restructuring and Chapter 4 (with Rachel) examines industrial policy. Chapters 5 and 6 look at the political economy dynamics that led to those outcomes. Chapter 7 looks to the future and presents the elements of a more developmentfriendly trading system. I have already thanked Alice Amsden, Peter Evans, Dani Rodrik and Robert Wade for their early work that inspired mine, and Kenneth Shadlen and Rachel Thrasher for helping me think about and analyze that earlier work in a twenty firstcentury context. There are many more who I have known, worked with and learned from on these issues, including Nagesh Kumar, HaJoon Chang, Alisa DiCaprio, Ricardo MelendezOrtiz, Werner Corrales, Martin Khor, Joel Trachtman, Lori Wallach, Sarah Anderson and many others. Much of this work was supported by the Global Development and Environment (GDAE) institute from grants by the Rockefeller Brothers Fund and the C. S. Mott Foundation. Frank Ackerman and Timothy Wise at GDAE