Trajectories
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________________________________________________________________________ __ Trajectories Spring 2010 Newsletter of the ASA Comparative and Historical Sociology Section Volume 21, No. 2 ___________________________________________________________________________________________________________ SECTION OFFICERS CONTENTS 2009-2010 Corruption and Regulation in the Economic Sphere, New Research (Jeffrey Kentor and Mat- Chair thew Sanderson)…..…………………………….1 Elisabeth S. Clemens University of Chicago Corruption and Regulation in the Economic Sphere, New Research (Lori Qingyuan Yue, Jiao Chair-Elect Luo , and Paul Ingram)…………..…..………….5 James Mahoney Author (Mabel Berezin) Meets Critics (George Brown University Ross, John Agnew, Andreas Wimmer, Dario Gaggio)……………………………..………….7 Past Chair Author (Jeffrey Haydu) Meets Critics (Larry Rebecca Emigh Isaac, Pamela Walker Laird, Ajay K. Mehotra, UCLA William Roy)………………………………….22 Identities (King-To Yeung) ………………......44 Secretary-Treasurer Identities (Joya Misra)………………………...45 Victoria Johnson University of Michigan Member Publications………………………….47 Awards………………………………………..50 Council Members Isaac Martin, UC San Diego (2012) Announcements & Workshops…....…………..50 Ivan Ermakoff, U Wisconsin (2012) In the next issue………………………….……52 Ming-Cheng Lo, UC Davis (2011) Jeff Haydu , UC San Diego (2011) Marc Steinberg, Smith College (2010) Julian Go, Boston University (2010) Cory O’Malley (Student, 2010) Amy Kate Bailey (Student, 2009) Newsletter Editors Emily Erikson, University of Massachusetts Isaac Reed, University of Colorado Webmaster Robert Jansen, University of Michigan Trajectories Vol. 21, No.1 Fall 2009 Corruption and Regulation in the Economic Sphere, New Research Globalization, Corruption and Internal number of subsidiaries and foreign subsidiary Violence concentration , defined as the proportion of a host country’s foreign subsidiaries owned by the sin- gle largest investing country. In a forthcoming Jeffrey Kentor article (Kentor and Jorgenson 2010) we report University of Utah two key findings 1) the overall growth of foreign subsidiaries accelerates economic development in Matthew Sander son LDCs and 2) relatively high levels of foreign sub- Lehigh University sidiary concentration inhibit the overall growth of foreign subsidiaries, thus slowing economic Matt Sanderson and I are working on a cross- growth. national research project that explores the impact With this background now in place, we can of global processes of the world-economy on cor- proceed with an overview of our current work. ruption and violence in less developed countries (LDCs). Before giving a synopsis of this work in Globalization, Corruption and Internal Violence progress, however, a brief history of the research Globalization has been associated with the that set the stage for our current study may be rising importance of transnational corporations helpful. (TNCs) as significant actors in the global econo- my (Kentor 2005). The global expansion of TNC Background operations that began in earnest in the 1970s was, Our work is an extension of earlier research in part, facilitated by international financial insti- on the impact of foreign direct investment on tutions, which promoted widespread market libe- economic development in LDCs. This line of re- ralization and integration efforts under the rubric search began with Chase-Dunn’s (1975) empiri- of what is now commonly referred to as the cal work on the impact of foreign investment on “Washington Consensus.” Yet, as the first decade development. Chase-Dunn found that stocks of of the 21 st century comes to a close, the results of foreign investment inhibited economic growth in liberalization and integration are quite uneven. In less developed countries. Subsequent research by many LDCs, these efforts have failed to generate Firebaugh (1992, 1996), Dixon and Boswell significant improvements in living standards and (1996), de Soysa and Oneal (1999), among oth- in some, the results have been calamitous. Indeed, ers, was inconclusive, with findings on both sides many LDCs continue to confront significant im- of this argument. Terry Boswell and I took a dif- pediments to development, among the most im- ferent direction in 2003, arguing that the question portant of which are persistently high levels of of the impact of total foreign investment on de- government corruption and sustained internal vi- velopment was not a useful one; one more likely olence (Gleditsch et al. 2002). These outcomes to obscure rather than clarify the complexities of raise the question of whether there is a relation- foreign investment. We chose instead to decon- ship between economic integration, corruption, struct foreign investment, focusing on a new di- and internal violence in LDCs. mension that we referred to as foreign investment Our current project explores the extent to concentration ; the proportion of a host country’s which these phenomena are related. We focus foreign investment stocks owned by the single explicitly on the role of transnational corporate largest investing country. We found that, over expansion as a mechanism of global economic time, foreign investment concentration slows integration. These international headquarter- economic growth in LDCs. In more recent work, subsidiary linkages enable transnational corpora- our attention turned to foreign investment in tions to incorporate host countries into global cir- terms of organizations rather than capital, focus- cuits of accumulation. ing on the physical location of foreign subsidiar- Previous research has produced only mixed ies of transnational corporations. We considered results on the question of whether economic inte- two aspects of these subsidiaries; the overall gration is on balance beneficial or detrimental to 2 Trajectories Vol. 21, No.1 Fall 2009 internal political outcomes in less-developed country and “ foreign subsidiary concentration ”, countries. Proponents contend that integration the proportion of a host country’s foreign subsidi- reduces corruption and internal conflict primarily aries owned by the single largest investing coun- by stimulating economic growth. From this pers- try. pective, foreign investment is an indicator of Because TNCs exert control over the invest- “openness” (Hegre, Gleditsch, and Gissinger ment function, foreign investment connotes a 2003; Bussmann and Schneider 2007), which form of structural power. The ability to provide lowers the cost of capital, increases investment, investment capital and generate employment en- and provides technical knowledge and access to dows TNCs with significant influence in LDCs, modern technologies that are crucial for devel- where resources are relatively scarce. The sheer opment. Critics contend that integration increases scale of resources controlled by TNCs makes it internal conflict in LDCs. From this perspective, possible for these organizations to influence polit- foreign investment is an indicator of ical outcomes in host countries without explicit or “penetration,” or “de- concerted action. More- pendency” and it fur- over, the structural pow- ther extends developed er of TNCs is enhanced countries’ dominance Foreign investment and in contexts in which for- over LDCs. As foreign foreign subsidiary concen- eign investment is more investment assumes a concentrated, in terms of larger proportion of the trations exacerbate corrup- both capital and loca- domestic economy, it tion. In such contexts, inhibits economic tion by reducing state au- domestic economic and growth and promotes political elites confront uneven development tonomy both from without more integrated and uni- within the country (Di- and from within. From fied corporate interests. xon and Boswell 1996; The cohesiveness of Nielsen and Alderson without, it strengthens the these interests is further 1995, Kentor 1998, increased by the propen- 2000; Kentor and Bos- position of foreign actors sity of TNCs based in well 2003), raising in- the same country to have ternal political conflict vis-à-vis the state. From denser ties among (Dixon and Boswell boards of directors 1990). within, it strengthens the (Kentor and Jang 2004, The mixed results position of domestic elites Carroll and Fennema of previous studies may 2002, Useem 1984). reflect a failure to con- with ties to foreign capital. Thus, higher levels of sider the structural di- foreign capital and sub- mensions of integra- sidiary concentrations tion. Previous studies frame the question in terms provide a platform for foreign corporations to ex- of the level, or degree, of integration. However, ert greater influence over internal political- the theorized relationships between foreign in- economic dynamics in host countries. vestment and internal outcomes may be more ac- In these contexts, the state is weakened vis-à- curately assessed in terms of the structure of for- vis foreign interests, as state autonomy is reduced eign investment in a host country. Following pre- and the state’s capacity to implement policies that vious works in this area (Kentor and Boswell reflect citizens’ collective objectives is con- 2003; Kentor and Mielants 2007; Kentor and Jor- strained (Evans 1979, 1995). Foreign investment genson 2010) we focus on the two recently identi- and foreign subsidiary concentrations exacerbate fied aspects of foreign investment discussed corruption by reducing state autonomy both from above: “ foreign investment concentration”, the without and from within. From without, it streng- proportion of a host country’s foreign