PG Cerny, “Globalization and the changing logic of collective action,” Theory and Structure in International Political Economy: An International Organization Reader 49, no. 4 (1999): 595-625.
Globalization has changed the way that rational decisions are made. No longer is the state the unitary locus of collective action problems. There are not a plurality of structural drivers of decision making.
"Globalization is defined here as a set of economic and political structures and processes deriving from the changing character of the goods and assets that comprise the base of the international political economy--in particular, the increasing structural differentiation of those goods and assets" (596).
"In particular, I argue that the more that the scale of goods and assets produced, exchanged and/or used in a particular economic sector or activity diverges from the structural scale of the national state--both from above (the global scale) and from below (the local scale)--and the more that those divergences feed back into each other in complex ways, then the more that the authority, legitimacy, policymaking capacity, and policy-implementing effectiveness of states will be challenged from both without and within. A critical threshold may be crossed when the cumulative effect of globalization in strategically decisive issue-areas undermines the general capacity of the state to pursue the common good or the capacity of the state to be a true civil association; even if this threshold is not crossed, however, it is arguable that the role of the state both as playing field and as unit becomes structurally problematic" (597).
Collective action problems are typically addressed from the level-of-analysis of the agent. Cerny argues that this may not be helpful and instead deploys a structural account of decision making capacity: "Choices are always made within specific 'structured fields of action'" (597).
While all assets are goods and all goods are assets, the distinction made in this piece is between those things meant to be kept for their value, including means of production, and those things intended for exchange. Similar distinctions have been made by others between industry and trade or use value and exchange value.
The history of political-economies of scale is analyzed. This I did not document.
10 hypotheses are put forward that are quite interesting, and rely on a nuanced understanding of system, structure and equilibrium. From the final hypothesis: "Finally, under these conditions the state will lose its structural primacy and autonomy as a unitary actor in the international system. The anarchy of the international system will no longer be one of states competing for power but one of nonfeudal rivalries and asymmetric cooperation among a range of interests and collective agents reflecting differentiated economic activities with diverse goods/assets structures..The main question that remains to be asked is whether such a system will tend toward chaos or toward a certain stability of a plurilateral kind" (625).
Showing posts with label Collective Action Problems. Show all posts
Showing posts with label Collective Action Problems. Show all posts
Monday, December 15, 2008
Thursday, December 4, 2008
Kindleberger: The Rise of Free Trade in Western Europe
CP Kindleberger, The Rise of Free Trade in Western Europe, 1820-1875 (MIT, 1974).
The piece begins by exploring exactly what the effects of an imposed tariff on trade are for a given country. There are ten, but not all of these need to be taken into consideration for this study ("...on price, trade, production..., consumption, revenue, terms of trade, internal income distribution, monopoly, employment and the balance of payments" (20)).
A tariff increases domestic prices above world prices. This reduces domestic demand, spurns domestic production and reduces domestic consumption.
As a note on collective action: "That diffuse interests are less well served than concentrated ones in the legislative process is widely accepted in the theory of tariff formation in comparing producers and final consumers. Households count for little in tariff-making since the interest of any one is too small to stir it to the political effort and financial cost necessary to achieve results" (22).
There are a variety of explanations for why free trade took hold when it did. Some claim that it was promoted by vested interests. Others claim it was a result of increasing democratization. Kindleberger tells the story in great detail on a case-study basis, of which, I skimmed.
"My first conclusion reached from this survey was that free trade in Europe in the period from 1820 to 1875 had many different causes. Whereas after 1879, various countries reacted quite differently to the single stimulus of the fall in the price of wheat...before that the countries of Europe all responded to different stimuli in the same way. Free trade was a part of a general response to the breakdown of the manor and guild system" (49-50).
The piece begins by exploring exactly what the effects of an imposed tariff on trade are for a given country. There are ten, but not all of these need to be taken into consideration for this study ("...on price, trade, production..., consumption, revenue, terms of trade, internal income distribution, monopoly, employment and the balance of payments" (20)).
A tariff increases domestic prices above world prices. This reduces domestic demand, spurns domestic production and reduces domestic consumption.
As a note on collective action: "That diffuse interests are less well served than concentrated ones in the legislative process is widely accepted in the theory of tariff formation in comparing producers and final consumers. Households count for little in tariff-making since the interest of any one is too small to stir it to the political effort and financial cost necessary to achieve results" (22).
There are a variety of explanations for why free trade took hold when it did. Some claim that it was promoted by vested interests. Others claim it was a result of increasing democratization. Kindleberger tells the story in great detail on a case-study basis, of which, I skimmed.
"My first conclusion reached from this survey was that free trade in Europe in the period from 1820 to 1875 had many different causes. Whereas after 1879, various countries reacted quite differently to the single stimulus of the fall in the price of wheat...before that the countries of Europe all responded to different stimuli in the same way. Free trade was a part of a general response to the breakdown of the manor and guild system" (49-50).
Wednesday, October 29, 2008
Olson: The Rise and Deline of Nations
Olson, M., 1982. The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities, Yale University Press.
The author begins by arguing that there has been a consistent historical pattern of previously insignificant groups becoming more significant, and previously powerful and mighty groups falling to the way side. Olson does not want to write broad based histories of these accounts, but simply wants to provide a theoretical framework for helping understand how these shifts in history could occur. He claims that some of the underlying trends of these power shifts are poorly understood.
In the same way that the rise and fall of many civilizations has not been adequately explained, many large economic events have also had inadequate explanations. For example, the rise of the common European market in 1957 and the subsequent growth of Italy, France, West Germany and Benelux vis-à-vis other nations that one would have expected to grow more quickly (the UK, US, for example) provides a case of an economic phenomena that has not been adequately explained. Additionally, general economic phenomena have not been fully given accord by some of the major economic schools of thought. For example, while Keynes presents a good macro-level account of unemployment, it lacks on the micro level. Neo-classical/rationalist models, on the other hand, claim that all unemployment is voluntary. Olsen attempts to put forward a theory that provides an adequate account of unemployment while still using rational maximizing individuals.
Another question put forth to explore: “Why are some modern societies to some degree ungovernable? That is, Why has it seemed that governments in some countries did not govern or control their societies as well as they had in the past?” (8).
Olson warns against ad hoc explanations for economic phenomena, though some of it may be right. It tends to be not-falsifiable, and hindsight tends to be such that conclusions can be drawn that would have been specious with foresight. Theories must be evaluated on the degree and precision of their explanations.
Ch. 2:
This chapter begins by exploring the differences between the actions of large groups and the actions of small groups. “The paradox, then, is that (in the absence of special arrangements or circumstances to which we shall turn later) large groups, at least if they are composed of rational individuals, will not act in their group interest” (18).
In a footnote, Olsen claims, “Rational need not imply self-interested. The argument in the text can hold even where there is altruistic behavior, although, if particular types of altruistic behavior are strong enough it will not hold” (19).
Incentives can be either negative or positive, and small groups experience these more acutely than large groups. Homogenous groups are more easy to organize. Large groups can experience many who remain rationally ignorant. “In particular, when the costs of individual contributions to collective action are very small, the individual has little incentive to investigate whether or not to make a contribution or even to exercise initiation. If the individual knows the costs of a contribution to collective action in the interest of a group of which he is a part are trivially small, he may rationally not take the trouble to consider whether the gains are smaller still” (28).
“…the larger the number of individuals or firms that would benefit from a collective good, the smaller the share of the gains from action in the group interest that will accrue to the individual or firm that undertakes the action. Thus, in the absence of selective incentives, the incentive for group action diminishes as group size increases, so that large groups are less able to act in their common interest than small ones” (31).
“The argument in this chapter predicts that those groups that have access to selective incentives will be more likely to act collectively to obtain collective goods than those that do not, and that smaller groups will have a greater likelihood of engaging in collective action than larger ones” (34).
The author begins by arguing that there has been a consistent historical pattern of previously insignificant groups becoming more significant, and previously powerful and mighty groups falling to the way side. Olson does not want to write broad based histories of these accounts, but simply wants to provide a theoretical framework for helping understand how these shifts in history could occur. He claims that some of the underlying trends of these power shifts are poorly understood.
In the same way that the rise and fall of many civilizations has not been adequately explained, many large economic events have also had inadequate explanations. For example, the rise of the common European market in 1957 and the subsequent growth of Italy, France, West Germany and Benelux vis-à-vis other nations that one would have expected to grow more quickly (the UK, US, for example) provides a case of an economic phenomena that has not been adequately explained. Additionally, general economic phenomena have not been fully given accord by some of the major economic schools of thought. For example, while Keynes presents a good macro-level account of unemployment, it lacks on the micro level. Neo-classical/rationalist models, on the other hand, claim that all unemployment is voluntary. Olsen attempts to put forward a theory that provides an adequate account of unemployment while still using rational maximizing individuals.
Another question put forth to explore: “Why are some modern societies to some degree ungovernable? That is, Why has it seemed that governments in some countries did not govern or control their societies as well as they had in the past?” (8).
Olson warns against ad hoc explanations for economic phenomena, though some of it may be right. It tends to be not-falsifiable, and hindsight tends to be such that conclusions can be drawn that would have been specious with foresight. Theories must be evaluated on the degree and precision of their explanations.
Ch. 2:
This chapter begins by exploring the differences between the actions of large groups and the actions of small groups. “The paradox, then, is that (in the absence of special arrangements or circumstances to which we shall turn later) large groups, at least if they are composed of rational individuals, will not act in their group interest” (18).
In a footnote, Olsen claims, “Rational need not imply self-interested. The argument in the text can hold even where there is altruistic behavior, although, if particular types of altruistic behavior are strong enough it will not hold” (19).
Incentives can be either negative or positive, and small groups experience these more acutely than large groups. Homogenous groups are more easy to organize. Large groups can experience many who remain rationally ignorant. “In particular, when the costs of individual contributions to collective action are very small, the individual has little incentive to investigate whether or not to make a contribution or even to exercise initiation. If the individual knows the costs of a contribution to collective action in the interest of a group of which he is a part are trivially small, he may rationally not take the trouble to consider whether the gains are smaller still” (28).
“…the larger the number of individuals or firms that would benefit from a collective good, the smaller the share of the gains from action in the group interest that will accrue to the individual or firm that undertakes the action. Thus, in the absence of selective incentives, the incentive for group action diminishes as group size increases, so that large groups are less able to act in their common interest than small ones” (31).
“The argument in this chapter predicts that those groups that have access to selective incentives will be more likely to act collectively to obtain collective goods than those that do not, and that smaller groups will have a greater likelihood of engaging in collective action than larger ones” (34).
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