1. Perspectives on Globalization
Causes, consequences and strategies
(Economics and Politics)
Lars Niklasson, Political Science, Linköping University

2. Course requirements (MIER 7,5 hp, Swedish master 15 hp)
Active participation in the seminars
Three mixed groups
MIER: Seminar on challenges
MIER: Take-home exam
Swedish master: More seminars & short paper

3. The idea of the course 1. How politics impacts on the economy/firms
Regulation, Institutions, Governance etc.
2. How economics (firms) impacts on politics
Structural change, globalization, lobbying etc.
General theories (IR)
Political Economy (often motives, explanations)
Comparisons
It is all about Globalization!

4. What is globalization? Economic integration of the globe:
We can buy cheap things
Jobs get outsourced
The third world wins or looses?
Pollution or greener technologies?
Power shifts to global firms?
Power shifts from the US to China?
Europe needs to change a lot?

5. Topics of the debate: Is everything you hear true?
Inevitable (?) change through technology and the integration of markets (What more?)
Leads to increased competition but also new markets
Financial imbalance: Western governments have deficits and loans from China. Firms have money.
Countries need lower taxes? and investments in skills
Firms need to understand new customers, brands, good location and flexibility/networking
(Energy shortage?)

6. The critique, I
The International Forum on Globalization: Alternatives to Economic Globalization, 2002:
Against corporate globalization: ”big firms get too much power and ruin the resources of the planet”
Local economies better than exports and integration
Cultural and economic diversity is needed
Local and national political power, democracy
= similar to the progressive movement in the 1890s?
= other values? Other economic theories?

7. The critique, II ”It’s too neoliberal”:
Too much deregulation, too much belief in the market
But some strategies are the opposite of liberalism:
State support to make firms competitive
Neo-mercantilism (i.e. too little liberalism? A bad mix?)
= What is the manifest strategy/-ies?
What works in theory? In practice?
What are our core values? How can they be promoted?

8. Aims and ambitions
Understanding key issues in the global economy & politics
Production, finance, trade, development, environment
Government and business
Politics shapes the economy (firms): institutions
The economy (firms) has an impact on politics
A variety of perspectives
Economics, Politics, IR/CP, Sociology
Combine and contrast, to bring out assumptions
Ravenhill, Schmidt, K&L, MLD&KSA

9. Questions What is globalization? (production, trade, finance)
What is global regulation? (WTO, Kyoto etc)
How is national politics relevant?
How is policy/regulation/institutions relevant?
State support for businesss
(Will globalization change the models?)
Why are the Nordic countries doing well?
What is private and transnational regulation? How does it have an impact? (ideas)

10. Perspectives on globalization
Globalization is (in brief) an ongoing transformation and integration of the economy, with implications for politics
Inevitable? Uniform? What are the drivers/causes?
Can it be ”controlled” by politics? Can we make it “good”?
A threat or an opportunity? More good than bad?
”Intended” effects: More wealth in more countries; win-win, short-term problems (flexibility)
Unintended effects: Poverty, environmental, big profits, degradation of industry
We need to understand it better: the drivers

11. Criteria for evaluating globalization
Growth
More opportunities or more restrictions?
Less government support for business?
Quality of life
Welfare, living standards (developing countries?)
Democracy
Accountability? Leadership?
Unintended consequences?

12. What is globalization? (Ravenhill 2011: intro)
Economic integration: FDI and TNCs
International/Global
From mercantilism to integration
Bretton Woods 1944
American hegemony
From embedded liberalism to neoliberalism?
The crisis : what does it show?
Why crisis? Why rescue packages?
(IPE as a new subfield)
See also McGrew (2011) table 9.3

13. How can we study globalization?
Several research paradigms (Watson 2011)
Different kinds of causality (McGrew 2011)
My solution:
A list of factors, from structural to cultural
Additive, successive factors: all are relevant, but in different ways
Untangle the mess of causal factors! Set them in relation to each other.
(Lichbach & Zuckerman 1998: Comparative Politics)

14. A list of successive factors
Structures: Economy, technology
Institutions: International regulation
International politics and Paths
Domestic politics
National patterns: variety of regulation
Ideas: scientific and normative
Fashions: follow the trends

15. Factors and literature
Structures
Institutions
Politics and Paths
Domestic politics
National patterns
Ideas
Fashions
Ravenhill
Schmidt, K&L
Schmidt, MLD&KSA
MLD&KSA

16. Research paradigms (Watson 2011)
International Relations
Realism (states as short-term rational actors)
Liberalism (states as long-term rational actors with a motive to cooperate)
Marxism (normative critique of capitalism)
International/Global Political Economy
Liberalism (Smith) vs Mercantilism/Nationalism (List)
See also: ”Comparative advantage” (Hiscox box 4.8)
(Comparative Politics)
Rationalism/interests, structures, ideas: combinations
(American vs British School in IR)

17. Four ways to study globalization
Source: Watson table 2.2
International Relations:
Focus on states
International/Global Political Economy: focus on economic actors (or politics)
American School , ”IO”
Abstract and driven by methods = similar to Economics. (Assumptions for convenience and math, not accuracy; Hay)
Realism, statism,
Rational choice
(Liberalism)
Neoliberalism, Nationalism/mercantilism
British School:
Wider perspectives and normative =similar to Sociology
Structuralism
Poststructuralism
(Constructivism)
Marxism/critical

18. Causes and effects (Hay 2011)
Hyperglobalization too strong: Economists’ assumptions
Perfect integration of markets, esp.capital? Exit costless?
Cheap labor best? Welfare always a cost?
(Financial capital vs. industrialists/investors)
The state a source of competitiveness? (Neomercantilism)
Convergence? LME/CME respond differently
Globalized problems difficult to handle: free riders
Effect: Retrenchment? Other drivers of policy change
Cause: Globalization? Difficult to measure (Regionalization?)
Why no convergence of interest rates? (Should they converge?)

19. Logics of globalization (McGrew 2011)
Economy or multidimensional processes?
De-territorialization, difficult to separate domestic from international, global division of labor
Rescaling, regions
Increasing trade, within TNCs
Specialization and competition
Finance, investments, production
Deindustrialization of the north
Labor migration from south to north
But: ”Beijing consensus” = state capitalism

20. The causes of globalization
Source: McGrew, table 9.2
Causal mechanism
Focus
”Forces”
Structural
Too strong: Shaped by other factors
Determinism
Path-dependence?
Why and How
Technology
Economy
Hegemony
Conjunctural (Conditional)
”Could have been different”
Circumstances, timing
Tendencies
How, When and What form
Institutions (regulation)
Paths
Constructivist
(A subset of conjunctural?)
Ideas shape interests
When and What form
(Schmidt 2002!)
Ideas
(Politics)

21. We need to study policy, politics and practice (Schmidt 2002)
Policy without politics: assumes interests and paths, overlooks alternatives and culture
Practices without policy/politics: economic determinism and paths
Politics without policy/practice: ideas without economic factors, institutions and interests
= economic background factors + politics (ideas)
Push and pull
(IR too abstract and theoretical, not empirical, p 60f)

22. 1. Structures
Is globalization driven by background forces such as technology and economy? IT
China, India, BRICs etc.
Outsourcing of production (Thun)
New markets
(Because of deregulation?)
Are all countries affected in the same way?
Firms (and governments) do different things

23. The globalising firm (Thun 2011)
Production: outsourcing, value chains
Why now? Trade liberalization, developmental states in Asia/relocation of American firms
Hierarchies or markets and networks. Captive?
Upgrading of the subcontractors? Competition?
Nation states too small and too big?
China: local diversity, slow development of cars
Also sales: new markets, new values
Variety? Are all firms similar?
Good or bad?

24. China, India etc. ”We” see cheap labor, competitors
They get higher living standards, education etc.
Large increase in living standards in China and India
Energy consumption goes up
They buy more European goods
How do they organize their economies and societies?
From suppliers to new firms?
Foxcon at the Pearl River Delta = Iphone
Compare Wales, Ireland, Mexico etc.

25. Implications for globalization
Inevitable causes, uniform effects?
Resistance is meaningless?

26. 2. Institutions (global regulation)
Regulatory frameworks (rules, organisations) shape some of the effects of globalization. What rules? Enough rules?
Trade (Winham 2011, Ravenhill 2011)
Money and finance (Helleiner 2011, Pauly 2011)
Environment (Dauvergne 2011)
Development (Wade 2011, Phillips 2011)
Transnational regulation (MLD&KSA 2006)
Soft regulation (Mörth 2006)
How did the rules develop? (part 3)
International politics, paths, ideas etc.

27. The global trade regime (Winham 2011)
Repeal of the Corn Laws 1848: new majority
Protectionism in the 1870s.
USA 1930 (Smoot-Hawley) vs 1934 (RTAA)
GATT 1947 (No ITO 1948)
Non-discrimination, ”Most favored nation”
”Safeguards” as limits
Environmental concerns are barriers
Fair to developing countries?
Several rounds, increased scope (table 5.1)
WTO 1994, ministerial conferences, DSU

28. Regional Trade Agreements, RTAs (Ravenhill 2011)
EU, Nafta, Asean etc. (table 6.1)
Logic: FTA, Customs union, Common market, EMU
Political motives: confidence, security, joint power, lock-in reforms, satisfy voters, easier implementation
Economic motives: protecting sectors, deeper integration, better than unilaterism (scale)
But: third parties may be cheaper (”trade diversion”)
Conflicts with WTO, ACP-countries /Lomé

29. RTAs, continued Nested with security, neoliberal ideas, contagion
Winners and losers, Strategic trade theory
Deeper integration because of its own momentum (neofunctionalism) or intergovernmental bargaining?
Increased trade because of RTAs?
Stepping stone (easier) och stumbling block (complexity) for global negotiations?

30. Money and finance (Helleiner 2011)
The gold standard=fixed exchange rate, breakdown 1930
International causes: change of hegemon
Domestic causes: interventionist policies, speculation
Bretton Woods and the dollar: IMF, IBRD, (GATT)
Motives: reduced risks, national autonomy
Why globalization: diversification, efficiency
Risks: unstable, ”impossible trinity” (autonomy, openness, stable exchange rates)
Distrbutive consequences

31. Money and finance, continued
The strong dollar allowed the US to finance deficits
Loss of benefits for the US, loss of stability?
Managed exchange rates 1982Plaza, 1987 Louvre
Manipulating competitiveness?
China buying dollars to keep their currency low?
EMU and the Euro
(Why has it failed? Is it still needed? What can be done?)

32. Global financial crises (Pauly 2011)
Allocates resources where needed? Unstable?
Lender of last resort vs Moral hazard -> regulation
More difficult to interpret information: uncertainty
Coordinated policies or discipline by the market?
Loss of political sovereignty
Bank regulation: systemic risk, public and private
BIS, Basel Committee etc. (box 8.3)
Illiquidity or insolvency? (Firms and countries)
The crisis 2008: solved, but more systemic risk, high costs

33. Environment (Dauvergne 2011)
Stockholm, Rio, Kyoto, Johannesburg, Copenhagen
Growth to reduce poverty? Kuznets curve
Trade for efficiency, standards, technologies
Unequal consumption etc.
Distance from effects, pollution havens
GEF: Assistance to the south benefits the north
Regimes are Common: Weak implementation?
Ozon (CFC substitutes) vs Climate change and Forests

34. Development (Wade 2011)
China and India grow fast. 38% of world population
Better with more globalization? Trade?
Inequality
Government failure worse than market failure?
Industrial/military policies for growth (mercantilism) even in the US

35. Development (Phillips 2011)
Modernization and catching up vs dependency
East Asia: due to the market or the state? Export
Import-substituting industrialization, ISI
The Washington Consensus: one size fits all
Governance, state capacity, ownership etc.
”The poor are excluded from globalization” or ”globalized markets impose obstacles to development”

36. Transnational regulation (MLD & KSA 2006)
A process of re-ordering regulation beyond the state
”Transnational” is more humble than ”global”
More actors, soft modes of regulation and sanction
What: Governance without/with government, networks
Regulatory states, regulation as distrust
By whom? Epistemic communities (Politics below)
Institutional frames, fields, homogenization, ideas, forces
Ideas travel: translation, hybridization, institutionalization
Multi-level interaction

37. Transnational regulation: ”private regulation”
Law firms in competiton regulation (Morgan 2006)
Transnational social space, actors, institutions
EU and US competition regulation, need for advice from transnational law firms
Standard-setting in accounting (Botzem & Quack 06)
Globalization of financial reporting and auditing
OECD, EU, UK alternative models. IASC
Shift to financial market regulation

38. Soft law: a new kind of regulation
Soft regulation: ”suggestions”? (Mörth 2006)
Governance: soft law, public/private, networks
Collaboration = Deliberative democracy beyond the state?
Dahl, Held, Dryzek, Hirst
Compare EU: Open Method of Coordination (=no mandate)
Dynamics of soft law (Jacobsson & Sahlin-Andersson 2006)
Diversification and convergence
Non-state organizations interrelate with states
Rule-setting, monitoring, agenda-settings (interrelated)
Authority by organizing, expertise, association. Webs.

39. Implications for globalisation?
International regulation has an impact on the structural forces of globalization (technology and economy) by setting limits to public and private action.
International organizations are an important arena for work on globalization?
Private organisations are less visible.
Not enough? Not the right policies? Etc.

40. 3. International politics and paths
International organizations: operations (and design)
IMF, World Bank, WTO (frozen ideas?)
A motive for states to collaborate
From Realism/Nationalism to Liberalism. Marxism (Watson)
Theoretical or Normative positions?
Cooperation (Aggarwal & Dupont)
International negotiations
Rational, Rules of the game, Ideas.
Who is in power?
Path dependence, difficult to change
Unintended consequences
(Transnational ideas)

41. International organizations as arena for international politics
What are they?
RTAs: EU, ASEAN, NAFTA etc.
Bretton Woods: IMF, IBRD, WTO
Environmental agreements: Rio, Kyoto etc.
Financial regulation: BIS, Basle Committee etc.
Transnational organizations

42. International organizations, continued
How do they operate?
Membership, stringency, scope, delegation, centralization: Because of type of problem? (Aggarwal & Dupont, table 3.1 Below)
States as members? Delegated powers?
Suprantional? Intergovernmental? Private?
Politics? Civil servants? Accountability? Democracy?
What role for civil society, NGOs etc?

43. Motives for states to cooperate (Aggarwal & Dupont 2011)
Interdependence: economic gains in the long run but political motives in the short run to ”free ride”
Prisoners’ Dilemma (dominant strategy to cheat)
”Inhibiting fear” (mistakes): Assurance Game
Where to meet”: Battle of the Sexes
Mixed games, repeated games
Solutions: Insulation, corporatism, international regimes and organizations (enforcement, information, fairness)
Why? Hegemonic power (realism), demand, paths, nesting, linkages (liberalism), ideas (constr.)

44. Institutional solutions
Source: Aggarwal & Dupont table 3.1
Free riding temptation
Inhibiting fear
Where to meet
Strategic game
Prisoners’ Dilemma
Stag Hunt
Battle of the sexes
Illustrations
Trade liberalization
Debt rescheduling
Financial integration
Trade specialization
Managing adjustments
Multilateral negotiations
Role(s) of institutions
Enforce contracts
Enhancers of cooperation
Providers of solutions
Examples of international solutions
Monitoring
Sanctions
Quota systems
Knowledge
Capacity
Negotiation forum
Agenda setting

45. International negotiations
Intergovernmentalism = focus on negotiations by states (especially in the EU)
Why these positions? Look inside the state:
Interests = domestic politics (below)
= governmens help their exporting industry (the winners)
Ideas = a convincing framing, discourse (below)
= a new economic theory, such as monetarism
Bargaining strategies: interdependence, within rules
Game theory (above), nested games

46. Path-dependence Politics continues along a path
Some actions are easier than other becasue of previous choices
International and national politics
Schmidt on UK, Germany, France below
It is a logic of the situation (time and place: history)
Also unintended consequences: new paths
Example: Rulings by the European Court of Justice on ”mutual recognition” (implicit in the Rome Treaty?)
Neofunctionalism: crises lead to action, a self-moving process

47. A kind of path: regulatory fields (Jacobsson 2006)
International organizations make rules, evaluations
Embedded states (and agencies): Europeanization
States need to respond = recreates the state
Rule-followers more than rule-makers?
(=the logic of the field? A kind of path?)
Scripts, translation, such as the Employment Strategy
Fragmentation (epistemic communties)
De-coupling

48. Transnational regulation driven by networks of agencies
International competition network (Djelic & Kleiner)
From positive to negative views on trust
1890 Sherman Antitrust Act led to more mergers
Europe: Cartels better than the chaos of competition
American influence after WWII: Germany, EEC
1990: EU, end of communism, globalization
Inconsistent and conflicting regulation->coordination
Experts (OECD), statism (WTO) or community (ICN)

49. Three possible scenarios for transnational governance (table 14.2)
Source: Djelic & Kleiner 2006
Experts
(OECD)
Statist
(WTO)
Community (ICN)
Rule makers vs rule followers
Separate
Combined
Product of governance process
Standards
Binding rules
Beliefs
Mode, logic of rule making
Expert driven
Political negotiations
Negotiations,
Expert input
Mode, logic of rule monitoring
”Expert awe”
Coercion, constraints
Socialization
+/-
Presupposes legitimacy
Efficient
Easy to start

50. Transnational regulation by epistemic communities
Networks of central bankers (Marcussen 2006)
Central banks and their governors
An epistemic community, a network
Where do they meet? BIS, IMF etc.
Networks produce standards, knowledge and identity

51. Institutional dynamics (MLD & KSA 2006)
A self-reinforcing governance spiral: distrust, control
Competition, a market for regulation
Distrust by scientization, marketization, deliberative democracy (Institutional forces, meta-rules, undetected)
Responsibility becomes unclear
Control achieved through rival regulation
Incremental change, complex but similar processes
Anti-globalists reinforce these patterns, a stabilizing order
Spaces, actors, relations. Efficiency based on power
First-mover advantage for the US (=entrepreneur)

52. Why CO₂-emissions trading? (Engels 2006)
”Markets for pollution” to create property rights
Pollution = negative externality
Quasi-market: Commensuration is difficult
Sociologists: states organize markets
Supranational and national regulatory process
An international process after Kyoto
Three spaces: BP, UN and EU
Transnational actors

53. Why certification of forestry? (McNichol 2006)
Independent certification: A green premium. Market or state? Complement or threat to existing regulation?
At the intersection of producers and consumers
Can change over time, by entrepreneurs
FSC, Forest Stewardship Council 1993
Consensus and cooperation, universal criteria/local variation, several dimensions of sustainability
Success and uncertainties, conflicts
An articulated para-regulatory advocacy coalition: FSC initiated by retailers, moderate NGOs, eco-entrepreneurs
Four strategic action fields, competitors, states as allies

54. 4. Domestic politics Winners and losers
Institutions again (the regulation of politics determines/shapes the outcome of politics)
Ideas? Discourses (Schmidt below)
Epistemic communities?
Impact of globalization
Developed countries (Hay 2011, above)
Developing countries (Wade 2011, Dauvergne 2011, above)

55. Winners and losers? (Hiscox 2011)
Interests are based on material position: holders of abundant vs scarce resources (?)
Unions and their firms on the same side
The repeal of the Corn Laws 1848: new majority
Heckscher-Ohlin, Stolper-Samuelson
But: Why import cars from other countries?
Also immigration, investment and exchange rates

56. Institutions/constitutions lead to different politics
Institutions: elections, legislatures, agencies etc.
Proportional voting, strong parties=more trade
Delegating power to the president. Reality more complex: ”bootleggers & baptists”, nested games, framing/ideas
Rational choice institutionalism: rational action within the rules (institutions/constitutions)
”Economic analysis of political rules”
Example: bargaining outcomes in bicameral legislatures

57. Lectures 3-4

58. 5. National patterns: countries are different
A variety of patterns, no convergence?
Institutions: LME and CME (Schmidt, K&L, L&R)
Institutions are equilibria?
Self-enforcing, but how?
Institutions shape the economy?
Patterns of specialization
Or: the economy shapes the institutions?
Firms, entrepreneurs
Nordic model or models (K&L)
Political institutions determine economies? (L&R)

59. European Capitalism (Schmidt 2002)
What is the impact of globalization on France, Germany, UK? (Sweden?) Different reactions
Challenges, policies, adjustment, discourses
Britain (liberalism) changed early, anticipated EU policies, a transformative discourse
Germany (corporatism) changed lately, late change of post-war discourse
France (statism) tremendous policy adjustments without a legitimating discourse

60. Policy, Politcs, Practice (Schmidt 2002)
Historical institutionalism (+interests, norms) + ideas, discourses
Policy without politics: assumes interests and paths, overlooks alternatives and culture
Practices without policy/politics: economic determinism and paths
Politics without policy/practice: ideas without economic factors, institutions and interests
= economic background factors + politics (ideas)
Push and pull
IR too abstract and theoretical, not empirical (p 60f)

61. Autonomy and control: losses and gains (Schmidt 2002)
Loss of national autonomy: monetary policy, tariffs, subsidies, nationalization, benefits. Still variety
Loss of national control: MNCs more independent but still ties to home countries (identity, legal), exit costs
Gains in supranational autonomy and control (EU, WTO, IMF) but also networks and private regulation
Europeanization (and different views of the EU)
EU as a shield, creating new risks: EMU (national wage bargaining without national monetary policy)

62. National policy adjustments (Schmidt 2002)
Mediating factors, mechanics of adjustment explain responses to pressures (table 2.1):
Economic vulnerability: Competitiveness
Political institutional capacity: veto-points
Policy legacies: fit/misfit with paths
Policy preferenes: openness to the new
Discourse: new perceptions change preferences
Sequence of change: monetary, industrial, social
EU pressures vary: specified (highly/less), suggested, no specification (competition, mututal recognition) table 2.2
Outcomes: inertia, absorption, transformation (figure 2.2)

63. Three ideal-types of Capitalism (Schmidt 2002)
Source: Schmidt 2002, table 3.1
Market cap
(US, UK)
Managed cap.
(D, NL, S)
State cap.
(F, I)
Business rel.
Market-driven
Non-market
State organized
- interfirm
Competitive
Networks
State-mediated
- firm/finance
Distant
Close
Investment
Short-term
Long-term
Medium-term
Government rel
Arm’s length
Negotiated
State-directed
State
Liberal, arbiter
Enabling, facilitator
Interventionist, leader
Labor rel.
Adversarial
Cooperative
- Wage barg.
Market-reliant
Coordinated
State-controlled
- State reg.
Bystander
Co-equal or bystander
State imposes

64. Convergence? (Schmidt 2002)
Evolution rather than convergence
Differing impacts of financial markets, differing roles of the state, differences in production profile
Comparative advantages and disadvantages of the three models
Still three models
Table 3.6, Figure 3.1
Ch 4 on the dynamics of adjustment in UK, D, F

65. The Nordic models (Kristensen & Lilja 2011)
Varieties of Capitalism and how they react to globalization
Nordic capitalism unexpectedly successful
Firms’ (subsidiaries) strategies in local context
Social inventions leading to experimenting firms
Liberalization + new forms of corporatism
Nordic welfare: bad shape 80s, reform 90s
Enabling welfare state and individualized services
Strong in Chandlerian innovation (Germany crafts-based)
Networking firms: need for skills, more than R&D

66. Supportive welfare? (Kristensen & Lilja 2011)
The Nordic countries
Different in types of industry, R&D
Similar in learning work organization
Welfare systems support learning organizations
Flexicurity
Public sector experiments (private providers)

67. Four countries (Kristensen & Lilja 2011)
Finland: Flagship-driven + subsidiaries
Denmark: More SMEs, 20% change job every year
Norway: Natural resources, international, learning
Sweden: MNCs, knowledge-driven?
BUT: Is Sweden similar to Denmark? Flexicurity?
Lessons: Beyond Keynesianism and Neoliberalism
Different kinds of risk-sharing/risk-taking
Enabling welfare states

68. Implications: What can be done to stimulate firms?
”Medicine for Sweden” (Arvidsson et al 2006)
Leading firms in pharmaceuticals and medtech
Big investments in medical research
Public health care was an important intermediary
User, developer of products
Now companies work with US hospitals
What can be done?
Smarter regulation (”neomercantilism”)
Are there risks with the government?
What else is important? Entrepreneurship? Deregulation?

69. What drives firms? (and politics?) Economists vs. Sociologists
Rational utility-maximizers
Rational risk-minimizers
Entrepreneurs see opportunities
Schumpeter: Creative destruction, structural change
Muddling through: wait and see
Complex regulation leads to de-coupling
Copy what others do, follow the trends
Trends and ideas can come ”from the side”

70. How are firms regulated? (Engwall 2006)
Complex corporate governance
Owners and managers: reciprocal relationship
Owners, governments, media, civil society
Handle uncertainty through boundary-spanning units
Internal gate-keepers to handle relations
External intermediaries: consultants, NGOs (CIO)

71. Regulation of universities (Hedmo, Sahlin-Andersson, Wedlin)
New ”products”/ideas from the US:
Management education, MBA, on the margin
Accreditation, ranking: soft regulation, competing
By media and professional organizations
Demand from business schools
Field = interlinked system
Regulation unintended/uncoordinated consequences?
Isomorphism: coercive, mimetic and normative
Effects: Americanization? Homogenization?

72. 6. The importance of ideas
Are all actors ”rational”?
Why does politics change?
Dominant idea: ”Comparative advantage” (Hiscox box 4.8)
New discourses (Schmidt)
(Merkel et al on what governments can do)

73. Discourses (Schmidt 2002) How governments manage to gain agreement
Explains change
Ideational dimension (contents):
Cognitive (necessary) and normative (appropriate) content
Change in policy discourse and programme (table 5.3)
Crisis, contradictions, lack of coherence
Interactive dimension (process):
Coordinative and communicative stages (fig )
Epistemic communities, ”norm cascade” etc.
Context (single-/multi-actor systems), causal influence

74. The role of discourses (Schmidt 2002)
Britain: constructing a transformative discourse
France: in search of a legitimizing discourse
Germany: recasting the traditional discourse
Synthesis: fig 7.1
When practices no longer work
And policies no longer facilitate
And ideas no longer explain:
(Depending on mediating factors)
New ideas generate/legitimize…
New policies which facilitate…
New practices, which work

75. The room for manouvre (Merkel et al)

76. Lecture 5

77. 7. Fashions Beyond rational self-interest
It is ”rational” to do what others do (Hayek!)
Governments and firms
”Muddling through”
Do the appropriate vs calculate what is best
New ideas spread quickly, Follow the fashion
Deep ideas: scientization, rationalization

78. Deep ideas: structures of the mind?
Scientific rationalization (Drori & Meyer 2006)
Handle risks, organizing/rationalizing
Why science? It works? Power? Modern religion?
Marketization (Djelic 2006)
Why? Modernization? Diffusion of ideas?
Smith and Menger vs mercantilism and historicism
Keynes vs Monetarism (Chicago, Austria, Freiburg)
Better ideas or spread by politicians and IMF etc.?
Routines, networks, symbols, imitation, structuration

79. Deep ideas, continued Organizing (Ahrne & Brunsson 2006)
Culture and organization. Standardization
Meta-organizations
Rationalization of virtue (Boli 2006)
Awards, certification etc.
Rationalization of universities (Ramirez 2006)
Expansion, socially useful, flexible, exports
European regulation of universities (Hedmo, KSA, Wedlin 2006, above)

80. Conclusions 1. The impact of politics on firms
Regulatory frameworks, ideas
2. The impact of firms on politics
Lobbying, ideas
All factors are relevant, but when and how?
Simplification needed?

81. Additional readings Lindvall & Rothstein Arvidsson et al
Lichbach & Zuckerman
Merkel et al on governments