This chapter investigates the concepts of liberal democracy, democratization, and governance and how they relate to development. There are several critiques of liberal democracy, which mostly correspond to well-known problems for any political regime. They include the 'tyranny of the majority', élite capture, clientelism, and the threat of populist capture. Alternative models claimed by their proponents to be democratic include illiberal democracy, direct democracy, and democratic centralism. Especially for proponents of market economy, liberal democracy and economic development are seen as complementary aspects of modern society. However, it is not clear that democratization leads to development. Successful development requires a supportive institutional environment. This may occur in a liberal democracy but it is not democracy itself that matters but 'something else' — which may be called 'quality of governance', including impartiality and effectiveness.
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David Potter, Alan Thomas, and María del Pilar López-Uribe
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This chapter addresses the intersection of international law and international politics as it relates to global trade. To study global economic governance is to study international law, international relations, and international political economy (IPE) all at once. The chapter begins with a brief introduction to IPE, a discipline which seeks to understand the workings of the global economy in its political context. It examines the relationship between economic globalization and state sovereignty, before turning to the construction of the postwar global economic order, with a focus on the Bretton Woods institutions. The postwar global economic order has often been described as ‘liberal’ by virtue of its underlying assumptions and the ideological convictions of its framers. Importantly, the postwar liberal order was built by, and for, the developed countries of the Global North-a fact that has informed critiques emanating from the developing countries of the Global South. The chapter then assesses global trade governance, analysing the structure, powers, and role of the World Trade Organization.
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Dermot Hodson and Uwe Puetter
This chapter discusses the European Union’s (EU) response to the euro crisis that emerged in late 2009, two years after the global financial crisis struck. It identifies the challenges this crisis has posed to the existing institutional set-up of economic and monetary union (EMU) and shows that it had a lasting impact on dicussions over the EU’s future well beyond its most dramatic moments. A timeline of the euro crisis is provided and the main changes to the institutional framework of European economic governance at the time of writing are reviewed. The chapter considers whether the crisis was caused by a deficit of centralized decision-making and whether it has served, in turn, as a catalyst for deeper economic and political integration in the euro area and the Union more generally. The consequences of the crisis for the EU’s legitimacy are also explored from competing theoretical perspectives.
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Dermot Hodson and Uwe Puetter
This chapter discusses the European Union’s (EU) response to the euro crisis that emerged in late 2009, two years after the global financial crisis struck. It identifies the challenges this crisis has posed to the existing institutional set-up of economic and monetary union (EMU) and shows that it had a lasting impact on discussions over the EU’s future well beyond its most dramatic moments. A timeline of the euro crisis is provided and the main changes to the institutional framework of European economic governance at the time of writing are reviewed. The chapter considers whether the crisis was caused by a deficit of centralized decision-making and whether it has served, in turn, as a catalyst for deeper economic and political integration in the euro area and the Union more generally. The consequences of the crisis for the EU’s legitimacy are also explored from competing theoretical perspectives.
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Matthew Watson
This chapter explores important issues in the conduct of global trade and global finance. In particular, it looks at how the Covid-19 pandemic has changed the experience of global trade and global finance in recent years. It asks why the global economy is so good at allowing some people to own untold riches while many others have too little money to meet basic subsistence needs, and whether the world would be better or worse off without the institutions of global economic governance. After discussing the globalization of trade and finance, the chapter considers the regulation of global trade and global finance. Two case studies are presented, one dealing with the Covid-19 vaccination programme and global economic recovery and another looking at US President Joe Biden's proposed global minimum corporate tax rate.
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This chapter examines the position of the European Union in the global political economy (GPE). It also considers key dimensions of change and development as well as the EU's impact on the operation of the contemporary GPE. To this end, the chapter discusses central ideas in international political economy and relates these to the growth of the EU. Furthermore, it analyses the EU's role in the GPE in three areas: European integration, the EU's engagement in the GPE, and the EU's claims to be a major economic power. It concludes with an assessment of global economic governance, focusing in particular on the EU's role in the financial, economic, and sovereign debt crises.
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This chapter examines the position of the European Union (EU) in the global political economy (GPE). It also highlights key dimensions of change and development, and evaluates the EU’s impact on the operation of the contemporary GPE. It does this by examining key ideas in international political economy (IPE), by relating these to the growth of the EU, and by assessing the EU’s role in the GPE in three areas: European integration itself, the EU’s engagement in the GPE, and the EU’s claims to be a major economic power. The final part of the chapter brings these together with an analysis of global economic governance—in particular, the EU’s role in the financial, multilateral state system with its principles of global governance, and pays some attention to recent crises (such as the Covid-19 pandemic) and the Russian invasion of Ukraine.
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Richard Jolly and Thomas G. Weiss
This chapter discusses ‘global governance’, the term now used widely to analyse the international system. Global governance consists of collective efforts to identify, understand, and address worldwide problems and processes that go beyond the capacities of individual states. The question of how to improve global economic governance can be understood by addressing the main ‘gaps’ in the international system: knowledge, norms, policies, institutions, leadership, and compliance. The chapter then presents three illustrations of current issues in global governance—and the gaps therein—to help in understanding international responses (both weak and strong) to communicable diseases, economic instability, and child welfare. Ultimately, addressing global governance problems requires more robust intergovernmental organizations (IGOs) and international non-governmental organizations (NGOs).
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This chapter explores the ideas and debates which shape global environmental politics. At least three types of socially constructed ideas play a key role in international environmental governance: world views, causal beliefs, and social norms. However, ideas are not universally shared, which means that ideological clashes are a feature of global environmental governance. The chapter looks at five of the major ideological debates that have marked the evolution of global environmental governance. The first two debates present conflicting world views: the first concerns the scope of environmental values, while the second examines the intrinsic values of non-human organisms. The following two debates concern causal beliefs: one is about the relationship between human intervention and environmental protection, while the other concerns the relationship between economic growth and environmental degradation. The last debate considers different social norms related to environmental justice and the appropriate behaviours expected towards historically marginalized populations.
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Matthew Watson
This chapter explores important issues in the conduct of global trade and global finance. It asks why the global economy is so good at allowing some people to own untold riches while many others have too little money to meet basic subsistence needs, and whether the world would be better or worse off without the institutions of global economic governance. After discussing the globalization of trade and finance, the chapter considers the regulation of global trade and global finance. Two case studies are presented, one dealing with the ongoing trade war between the US and China and the other with the effect of tax havens on overseas aid budgets. There is also an Opposing Opinions box that addresses the question of how far the institutions of global economic governance currently go to work specifically to the benefit of developing countries.
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3. The European Council:
the Union’s supreme decision-maker
Luuk van Middelaar and Uwe Puetter
This chapter discusses the central role of the European Council in European Union (EU) politics and policymaking. Even though it was not listed among the EU’s core institutions until the Treaty of Lisbon, the European Council regularly intervenes in EU decision-making to make other institutional actors follow its guidance. Initially, it was meant to be predominantly an informal institution for direct exchanges between the heads of state or government of the member states. Yet it assumed responsibility for landmark decisions which paved the way for key steps in integration, such as EU enlargements and the euro. The European Council has arguably saved the Union from break-up by acting as its ultimate crisis manager and, at times, has skirted the boundaries of EU law by finding institutional compromises and fixes. The institution plays a guiding role, especially in relation to the Commission and the Council of the European Union, which was formerly known as the Council of Ministers. The European Council devises strategic guidelines for policy development, shapes processes of institutional reform, and breaks impasses when agreement cannot otherwise be found. Since the Treaty of Maastricht, European Council intervention has become a routine in new EU policy areas, such as euro area economic governance and foreign policy. The Treaty of Lisbon assigns the European Council its own full-time president and places the institution right after the European Parliament (EP) in the list of EU institutions. Even though it has shaped European integration since 1975, the European Council did not find much recognition in traditional theories of European integration. This has changed more recently, with renewed debate about intergovernmentalism in EU politics.
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4. The Council of the European Union:
co-legislator, coordinator, and executive power
Uwe Puetter
The Council is an institution of day-to-day policymaking in which the interests of member state governments are represented by cabinet ministers who meet, according to their policy portfolio, in different Council configurations and within the Eurogroup. According to the Treaty of Lisbon, the Council has a dual mandate. It acts as a legislative organ as well as an executive and policy-coordinating institution. This dual role is reflected in the organization and meeting practices of the different Council configurations. Those groupings of ministers dealing primarily with executive decisions and policy coordination tend to meet more often and are regarded as being more senior than those formations of the Council which engage predominantly in legislative decision-making. As a legislative institution, the Council has increasingly acquired features of an upper chamber in a bicameral separation of powers system, working in tandem with the European Parliament. In contrast, Council decision-making relating to executive issues and policy coordination in important policy domains, such as economic governance and foreign policy, is closely aligned with the European Council. In these areas, the Council can be considered to constitute, together with the Commission, a collective EU executive.
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7. The Court of Justice of the European Union:
a quiet leader
Sabine Saurugger and Fabien Terpan
The Court of Justice of the European Union (CJEU) is one of the key institutions in the European political system, and amongst the less well known. Described as one of the most powerful international courts, and perceived as one of the reasons the UK left the European Union (EU) (their main argument being that they did not want to be held to account by an unelected and non-British court), the Court continues to be shrouded in mystery. The aim of this chapter is to facilitate an understanding of the structure, history, and workings of this Court, as a key actor in the EU’s institutional system. As such, it is not only a judicial actor but a ‘political’ actor too. Its constitutional role, as well as its role during the economic and financial crisis, illustrates these multiple facets.
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Clive Church and David Phinnemore
This chapter explores how the EU ended a long period of constitutional change by agreeing the Treaty of Lisbon and used it to face new challenges of financial crisis, Brexit, and Covid-19—the latter events leading to thoughts that further treaty change might be needed. The process started with the 2002–03 Convention on the Future of Europe leadin to the Constitutional Treaty of 2004 and in October 2007 produced the Treaty of Lisbon which eventually entered into force on 1 December 2009. Its implementation was complicated by the eurozone crisis, resulting in extra-treaty arrangements and another treaty amendment. Although the official appetite for treaty reform all but evaporated in the 2010s, the UK’s June 2016 vote to quit the EU raised the hopes for further changes. The end of the 2010s and into the 2020s saw Brexit being negotiated within the terms of the Treaty of European Union the EU’s treaty agreeing measures to deal with the Covid-19 pandemic. Calls for treaty revision continued but active steps to re-negotiate the consolidated treaties have not yet begun.
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Philippe de Schoutheete
This chapter focuses on the European Council as a locus of power. Created in 1974, the European Council plays a key role in the development of European integration. It gives political guidance and impetus to the European Union and, by virtue of the Lisbon Treaty, has the formal status of an EU institution under the leadership of a full-time President. This chapter discusses the European Council’s origins, composition, meetings and euro summits, and legal nature and characteristics. It also provides an overview of the debates and decision-making that take place at the Council, along with its functions, which can be grouped under: strategic guidelines, decision-making, economic governance, foreign policy, Justice and Home Affairs, and Treaty amendment. The chapter considers whether the European Council is an intergovernmental or hybrid institution before concluding with an assessment of its strengths and weaknesses.
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Clive Church and David Phinnemore
This chapter explores the emergence and implementation of the Treaty of Lisbon. Its origins lie in the Constitutional Treaty of 2004 and its rejection in the French and Dutch referendums of 2005, which led to a period of so-called reflection. Then, mainly under the German Council presidency of early 2007, there was an emphatic drive to produce not a constitution, but an orthodox amending treaty to carry forward the basic reforms of the Constitutional Treaty. A deal was reached in October 2007. However, while parliamentary ratification went successfully, an initial referendum rejection in Ireland in June 2008 cast doubt on the new Treaty’s future. In part, this symbolized a rejection of some elements of the Treaty, but it also owed much to a deeper unease about the EU. Once Irish concerns had been assuaged, a second referendum produced the necessary ‘yes’ to ratification and, following some last-minute concessions to the Czech Republic, the Treaty of Lisbon entered into force on 1 December 2009. Its implementation proceeded relatively smoothly but was complicated by the eurozone crisis, which in turn pushed the EU to pursue some further treaty reform. In the face of increasing Euroscepticism, and persistent question marks over the popular legitimacy of the EU, the appetite for treaty reform all but evaporated for much of the 2010s, even if for integrationists the eurozone crisis demanded further reform. Towards the end of the decade, with Emmanuel Macron as French President calling for a ‘re-founding’ of the EU and the UK negotiating its withdrawal from the EU, opportunities for and some interest in a new round of treaty reform appeared to be emerging.
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Tanja A. Börzel
After twenty years of continuous deepening and widening, European integration has entered an era of recurrent crises. Most students of the European Union (EU) seem to agree that the constitutional equilibrium between intergovernmental and supranational institutions has changed. Some see ‘new intergovernmentalism’ and ‘integration without supranationalization’ prevailing. Others contend that we are witnessing a series of functional and institutional spillovers empowering supranational institutions. This chapter argues that governance approaches are particularly useful to address the puzzling counter-positions represented in the current debate about the ‘nature of the beast’. They are better equipped to explore how and to what end institutional structures and processes have responded to the crises than mainstream integration theories. The chapter starts with introducing the ‘governance turn’ in EU studies as the attempt of EU scholars in the early 1990s to capture the nature of the EU. It then presents a typology that is based on a broad concept of governance as institutionalized forms of political coordination. The empirical part of the chapter uses this typology to give an overview of the structures and processes of EU governance before applying it to the financial and the migration crises. The chapter concludes with a discussion of the major challenges for European integration (theories) from a governance perspective, particularly with regard to managing current and preventing future crises.
