Cao: Convergence, Divergence, and Networks in the Age of Globalization

Cao, X. 2006. Convergence, Divergence, and Networks in the Age of Globalization: A Social Network Analysis Approach to IPE.

"Convergence denotes a process wherein distinctive domestic institutions and economic policies fade away over time, giving away to common economic structures whose efficiency and universality produce super strength in the market...Divergence, on the other hand, refers to persistent and maybe increasing diversity of national policies and institutions among which the efficiency-mandated minimalism is only one of the many varieties" (1).

"Empirical studies following this fashion unsuprisingly leave us with confusion by revealing a mixed picture of convergence-divergence caused by economic forces of globalization...We still have to ask why and how convergence has happened in some countries, in some policy areas (but to different extents), but not others?" (2).

The author explores the convergence-divergence debate by exploring the relationship different countries have with regard to the international system; how are different countries engaged with the global system?

"The empirical findings indicate that proximity in IGO [inter-governmental organizations; number of shared memberships, closer countries are in the 'web' of inter-governmental connections (12)] networks ahs the most consistent converging effect on domestic economic policies. We also find that network position similarly induces convergence through the network of transnational portfolio investment. Trade, the most intensively studied network in international political economy, has no consistent effects on convergence in domestic economic policies. Given the fact that most of the works on convergence-divergence to date use some measure of trade exposure to capture the extent a country is subject to the pressure of globalization, the finding of this research on trade reminds us that the research in this area might have to target some new sources of globalization pressure" (22).