Politics, Path Dependence and Public Goods The case of International Container Ports Joseph Hiney FCCA CMILT MA School of Law and Government Dublin City University Supervisors: Dr John Doyle; Dr Alex Baturo March 2014 Dissertation submitted for the award of PhD to Dublin City University Declaration of Work I hereby certify that this material, which I now submit for assessment on the programme of study leading to the award of PhD is entirely my own work, and that I have exercised reasonable care to ensure that the work is original, and does not to the best of my knowledge breach any law of copyright, and has not been taken from the work of others save and to the extent that such work has been cited and acknowledged within the text of my work. Signed: __________________________________ (Candidate) ID No.: 57212402 Date: March 12th, 2014 i Acknowledgements There is a large group of people who provided support and encouraged me to undertake this project. Dr John Doyle and Dr Alex Baturo were a source of encouragement and reassurance throughout the process and their support was invaluable. I am deeply grateful to Dr John Doyle for his general support throughout my time in Dublin City University. Funding is always an issue for a research student and I am very fortunate to have two sponsors for separate periods during this project. Dublin Port Company provided the initial impetus, including the opportunity to work in port environments in Asia and Africa. A postgraduate research scholarship from the Irish Research Council in 2011 proved an invaluable support. I owe a great deal to both organisations. From the port industry, two people deserve a mention here. To John Moore, a director of Dublin Port Company, and Mark Assaf from UNCTAD, I offer my sincere thanks for their support and insights. The foundation that all the work rests on is my family. I will be eternally grateful to my children, who were engaged with their own undergraduate and postgraduate degrees during this process, for their belief in me and for their endless reserves of support. To my wife Rita, who is always positive and patient despite the challenges of my taking on this task later in life than most, and who has stuck with me through all the highs and lows, I say simply thank you. I owe so much to my Dad, who encouraged me at all times to pursue educational opportunities, but sadly did not live to see me finish. For Dad: “Mol an óige agus tiocfaidh sí” ii Table of Contents Abstract ............................................................................................................................ vi List of Figures ................................................................................................................. vii List of Tables .................................................................................................................. viii Maritime Terminology ..................................................................................................... ix Abbreviations ................................................................................................................... xi Chapter 1: Is economic sovereignty lost forever? ...................................................... 1 1.1. Trade and Interdependence .................................................................................... 2 1.2. Path Dependence and port liberalisation ................................................................ 4 1.3. A research strategy ................................................................................................. 6 Chapter 2: Privatisation of public infrastructure as a response to globalisation ... 8 2.1. Ports as a unit for policy analysis ......................................................................... 10 2.1.1. Port Governance ............................................................................................... 14 2.2. Politics of globalisation ........................................................................................ 15 2.2.1. Competing theories of change .......................................................................... 18 2.2.2. Path Dependency .............................................................................................. 21 2.2.3. Neo-Institutionalism ......................................................................................... 24 2.2.4. Varieties of Capitalism ..................................................................................... 25 2.2.5. Political Coordination ....................................................................................... 26 2.2.6. Reactive Path Dependence ............................................................................... 29 2.3. A theory of port privatisation ............................................................................... 32 2.3.1. Linking „coalitional‟ and institutional politics ................................................. 36 2.3.2. Institutional constraints and interests ............................................................... 37 2.3.3. Clusters and Normative models ....................................................................... 41 2.3.4. Port Clusters ..................................................................................................... 43 2.4. Historical context matters .................................................................................... 46 Chapter 3: Explaining policy variance: the research design .................................. 49 3.1. A theory ................................................................................................................ 52 3.2. Selecting the countries ......................................................................................... 53 3.3. Modelling the data................................................................................................ 56 3.4. The Dependent Variable ...................................................................................... 59 3.5. The explanatory variables .................................................................................... 60 iii 3.5.1. The capacity of interest groups......................................................................... 60 3.5.2. Political Institutions .......................................................................................... 62 3.5.3. Economic Institutions ....................................................................................... 62 3.5.4. Economic context ............................................................................................. 63 3.6. Analytical narrative .............................................................................................. 63 3.6.1. Case Selection .................................................................................................. 64 3.7. Linking theory and data ....................................................................................... 66 Chapter 4: Measuring the retreat of the State ......................................................... 68 4.1. Historical and Comparative Context .................................................................... 70 4.1.1. International Container Ports ............................................................................ 75 4.2. Privatisation typologies ........................................................................................ 81 4.3. A New Policy Outcome Variable ......................................................................... 83 4.3.1. Competition ...................................................................................................... 86 4.3.2. State Aid ........................................................................................................... 89 4.3.3. Price Setting ..................................................................................................... 91 4.3.4. Equity Rules ..................................................................................................... 93 4.3.5. Veto Power ....................................................................................................... 95 4.3.6. Composite Variable .......................................................................................... 97 4.4. The Data ............................................................................................................... 99 4.5. „States to Market‟ continuum ............................................................................. 105 Chapter 5: Modelling change in public infrastructure policy .............................. 107 5.1. The arguments .................................................................................................... 107 5.2. The Dependent variable ..................................................................................... 109 5.2.1. Domestic interests as explanation .................................................................. 109 5.2.2. Political institutions as context ....................................................................... 112 5.2.3. Macro-economic context ................................................................................ 113 5.2.4. National economic interests ........................................................................... 114 5.2.5. Neighbourhood variable ................................................................................. 118 5.3. Statistical models ..............................................................................................