Regulating the Public and the Private Economy
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After about twenty years of deregulation, it appears that we are moving beyond the era of dogmatic neoliberalism into one of re-regulation; the opposition between states and markets posited by neoliberal thinking is less and less convincing. This does not imply returning to a nation-state scenario. There is increasing convergence on the idea that new regulation will take place as much, or even more on the regional scale (macro-regions: NAFTA, East-Asia, Euromed, etc.) than on the global one. Different currents of analysis are even being captured by a sort of regional infatuation, regions being seen as the optimal scale as much by transnational corporations as for a return to public regulation.
This memo is based on several works devoted to the "regional thesis," in the sense of large multinational entities, and on the political response to the challenge of corporate globalization.
A few years ago, the author, Kimon Valaskakis, former Ambassador of Canada to the OECD, had proposed three scenarios for the future of global public regulation:
the market and transnational corporations make all decisions and discredit public regulation, a setback scenario presented as the most likely;
global governance, a desirable but unlikely scenario;
regional governance, i.e. large entities of continental dimension.
For reasons of feasibility, the author prefers the latter scenario. Among these reasons are "the preservation of the interests of producers and of populations in relation to global-exchange flows, with, if needed, a more acceptable term than that of protectionism." Such autonomization, according to Valaskakis, "would make it possible to re-couple economic and political zones that have been separated by globalization." This would be step-by-step globalization, where sovereignty would be gradually transferred from the nation-states to these regional organizations, which would then negotiate intercontinental agreements. "Instead of negotiations among 200 nation-states, the number of negotiating parties would be reduced to about ten regional groups."
The regional option is supported by the analysis of the French official economic analysis council, the Conseil d’Analyse Éeconomique, according to which if on the one hand, the "club" model is less and less accepted, on the other the complexity of negotiations processes has increased its advantage in terms of efficiency, and "in practice, countries first have to be able to agree, and only then seek to enlarge the foundations of their agreement."
Another argument in favor of regional regulation is democratic legitimacy. Global institutions are "distant" from the populations, there is (not yet?) an international civil society or a true "international community." This democratic deficit can be compensated on a regional scale, as shown by the difficult but real achievements of the European Parliament; it is unlikely to be so on a global scale. From the moment that globalization is no longer the subject of consensus, the question of democratic legitimacy arises. This is the critique of the French political expert Pierre Rosanvallon regarding the democratic deficit of any global government, given the need for a "feeling of belonging". It is on this regional basis that country representation, notably for poor countries, could become a reality in global bodies.
Finally, the concept of "transnational common goods", a central concept for international-regulation analysts, can be expressed on a regional scale. For instance: sea pollution, social rights (more comparable within a same continental area because posed on a global scale as an absolute norm, they can appear as a Western war machine demolishing the comparative advantages of the poor countries), cultural heritage, etc.
Source: Department of Geography. Ecole Normale Supérieure (Paris, France)