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Perspectives on Globalization

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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, 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

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