16 Globalization and Global Governance Michael Zürn INTRODUCTION and globalization research. On the one hand, the notion of globalization differs from that The literatures on interdependence in the of interdependence in that it refers to qualita• 1970s and more recently on globalization tively different conditions. Whereas the reveal remarkable similarities, of which two notion of interdependence refers to a grow• are especially striking.' The first is that the ing sensitivity and vulnerability between interest in both interdependence and globali• separate units, globalization refers to the zation can be seen as an expression of a merging of units (Section 2). This also affects "poorly understood but widespread feeling the causal mechanisms which lead to politi• that the very nature of world politics is cal change (Section 3). Therefore, a reassess• changing" (Keohane and Nye, Jr., 2000: ment of those propositions about political 104). The second is that both concepts never effects made by both interdependence and reached the status of a sound theory of world globalization literature is called for (Section 4). politics. While most users of these concepts On the other hand, to the extent that the realize that they challenge conventional theo• notion of globalization refers to much more ries of world politics and in a sense created than just interdependence between distinct new research agendas in International Rela• units, the propositions about change in world tions, endeavors to formulate an interdepend• politics go much further in the current debate ence or globalization theory of international on global governance (Section 5). They indi• relations have so far not succeeded. cate the need for a theory of world politics Not least because of these commonalities, that re-evaluates the notion of distinct territo• the more recent literature on globalization is rial units - be they ontologically given as confronted with questions such as "What's in Realism or socially constructed as in New?". In this contribution, I want to emphasize Constructivism - as theoretical buildings two differences between interdependence blocks (Section 6). 402 HANDBOOK OF INTERNATIONAL RELATIONS THE INDEPENDENT VARIABLE: Globalization and societal DIFFERENT FORMS OF denationalization INTERCONNECTEDNESS AND SOCIAL SPACES Globalization goes further than interdepend• ence. Richard Cooper (1986: 1) argues that Interdependence "the internationalized economy of the 1960s was characterized by a sensitivity of eco• Dependence, in its most general form, can nomic transactions between two or more be described as a situation in which a nations to economic developments within system is contingent upon external forces. those nations". By contrast, the process of Interdependence in the social sciences economic globalization describes a move• describes a situation of mutual dependence ment towards one integrated world market in between social actors. Thus defined, inter• which "buyers and sellers are in such free dependence relates to specific kinds of intercourse with one another that the prices actions in specific issue-areas (see Morse, of the same goods tend to equality easily and 1976:118). Based on the distinction between quickly" (Cooper, 1986: 71). This distinction the types of social actors that figure as between an internationalized economy and external forces, interdependence in interna• the global integration of markets can be tional relations can be due to two factors. taken pars pro toto. When generalized to all On the one hand, nation states and national societal relations, it points to the most impor• societies are dependent upon the activities tant difference between interdependence and of other states (state interdependence). In globalization. Globalization thus describes a this sense, states have been dependent upon process in which the world moves toward an each other at least since the Westphalian integrated global society and the significance system of states emerged (Bull, 1977). of national borders decreases. It thus calls National security has always been depend• into question the distinction between domes• ent upon the decisions of governments in tic and foreign relations. In this view, the neighboring states - for instance, whether living conditions of people and local com• or not to wage war. On the other hand, the munities have changed through globaliza• effects of given actions by a government tion; distant events of all sorts have immediate may depend on societal developments that consequences not only for states but for indi• take place outside of its jurisdiction (soci• viduals' daily lives (Rosenau, 1990: 78; etal interdependence). For instance, the Holm and S0rensen, 1995: 4-5; Hirst and development of national economies cannot Thompson, 1996: 7; Held et al., 1999: ch. 1). be understood without taking into account This notion of globalization refers to a meas• what happens elsewhere. Social intercon- urable process of social change which, in nectedness can lead to quite different forms turn, may or may not have causal effects on of societal interdependence. While there political developments. Globalization is thus are countless distinctions made in the lit• neither identical with nor does it necessarily erature (see, e.g., Baldwin, 1980; Caporaso, lead to the extension of political space and 1978; Senghaas, 1994; De Wilde, 1991), global governance. Nor does it necessitate the most consequential distinction is the the formation of a world society2 or trans• one between "sensitivity interdependence", national identities.3 defined in terms of mutual effects, and As opposed to globalization, the term "vulnerability interdependence", defined in "interdependence" refers to a condition. In terms of the opportunity costs of disrupting this context, it is helpful to contrast the terms the relationship (Keohane and Nye, Jr., "interdependence" and "globalism" (Keohane 1977: 12-15), and Nye, Jr., 2000: 104). The data however GLOBALIZATION AND GLOBAL GOVERNANCE 403 does not justify the use of the term globalism. relative to transactions that take place within Globalism may only be appropriate to sketch a national territory (see Deutsch and Eck• some exceptional cases such as the financial stein, 1961; Rosecrance and Stein, 1973; markets and some global dangers, but it is Rosecrance et al., 1977; Katzenstein, 1975; inappropriate for most other fields. Moreover, Hirst and Thompson, 1996; Garrett, 1998b; in some areas a process toward globalism, that Reinicke, 1998; Beisheim et al., 1999; Held is, globalization as a process leading to global et al., 1999). In the words of K.W. Deutsch societal spaces, does not seem to be taking (1969: 99), borders of national societies dis• place at all. Most importantly, regionalization solve when there is no more critical reduc• under the umbrella of American dominance is tion in the frequency of social transactions. a process running in parallel to globalization The objection raised now and again by (Katzenstein, 2005). Generally speaking, the economists to this approach to measurement context of globalization has fostered regionali• is that by observing these transactions, little zation mainly as a result of new regional agree• can be said about real interdependence or, for ments such as the European Single Market, the that matter, globalization. For instance, North American Free Trade Agreement changes in flow values may be due to market (NAFTA), and the establishment of the ASEAN volatility, that is, changes in the attractive• charter (Mansfield and Milner, 1997). ness of economic locations, and perfectly Against this background, the term "soci• integrated spaces may even be characterized by etal denationalization" (Habermas, 1998; lower flow values (see Garrett, 1998a: ch. 3). Sassen, 1998; Ztirn, 1995) seems to be more For this reason, economists often propose the appropriate. The question is then whether analysis of transaction costs and convergent intensified transboundary societal interac• prices, which they claim more closely tions at an already relatively high level sig• approximate the theoretical conception of nify a further decline in the importance of integrated spaces (Frankel, 1993; Garrett, nationally defined borders. The condition of 1998a). For instance, average prices for air a society can be described as denationalized travel with American airlines dropped from when transactions within national borders are around 45 cents in 1929, to about 14 cents in no denser than transnational transactions.4 The 1960 to about 4 cents per mile in 2009 (http:// term societal denationalization - as a pro• www.airlines.org/economics/finance/ cess - thus has the advantage that it defines a PaPricesYield.htm); international telecom• starting point (national society) of the pro• munication costs have sunk by about 8% per cess but leaves the end point indeterminate. year since the late 1960s (Zacher with Sutton, Moreover, if cases can be singled out that 1996: 129). show a clear trend toward globalization, Nevertheless, direct measurement of trans• there is no problem in interpreting them as actions is necessary in order to determine the special instances of a more general trend level of globalization from a political science toward societal denationalization. Seen thus, point of view. First, it is by no means certain the transboundary pollution of the Rhine is that low transaction costs are a more reliable just as much a phenomenon of societal dena• indication of integrated social spaces than the tionalization