V-Puscas-Managing Global-book.pdf

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MANAGING GLOBAL INTERDEPENDENCIES

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VASILE PUŞCAŞ



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© Prof. dr. Vasile Puşcaş

Editura EIKONCluj-Napoca, str. Bucureşti nr. 3A

Redacţia: tel 0364-117252; 0728-084801; 0728-084802e-mail: edituraeikon@yahoo. comDifuzare: tel/fax 0364-117246; 0728-084803e-mail: eikondifuzare@yahoo. comweb: www. edituraeikon. ro

Editura Eikon este acreditată CNCSIS (cod 132)

Descrierea CIP a Bibliotecii Na ţionale a României PUŞCAŞ , VASILE

Managing Global Interdependencies / Vasile Puşcaş. -Cluj-Napoca : Eikon, 2010

ISBN 978-973-757-362-9

327

Editor: Vasile George DÂNCU

Copertă: Mihai ALEXANDRESCUTehnoredactor: Ioachim GHERMAN


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MANAGING GLOBALINTERDEPENDENCIES

Cluj-Napoca, 2010


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CONTENTS

Abreviations ............................................................................. 9 Foreword.................................................................................. 13 Introduction............................................................................ 17

THE MANAGEMENT OF GLOBALINTERDEPENDENCIES..................................................... 23 The Management of Post-CrisisGlobal Interdependencies. .................................................... 25

Introduction.................................................................... 25Global interdependence............................................... 27Managing the interdependence.................................. 31Management of the post-crisis world........................ 33Cross-border crisis management................................ 35Effects of interdependence .......................................... 38Global strategic management ..................................... 43Multilateralism............................................................... 46

The “G-system” ............................................................. 48Institutionalized cooperation...................................... 50Restructuring internationalfinancial institutions...................................................... 53Interdependence and integrationat a regional level........................................................... 57The EU and multiple interdependencies.................. 62

The EU and inter-regional relations........................... 64Intergovernmental management................................ 73Conclusions .................................................................... 74


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Intercultural Communication in

Managing Global Interdependence................................ 93The contemporary international system................... 93Interdependence............................................................ 95Intercultural communication in managingglobal interdependence................................................ 98Europe and intercultural communication .............. 105The main goals of managing interdependenceand intercultural communication............................. 108Conclusion.................................................................... 117

THE EUROPEAN UNION AND GLOBALINTERDEPENDENCE....................................................... 127

Global Developments and the Role of the EU:An Outlook........................................................................ 129The Evolutionary Approach in the AccessionNegotiations of Romania withthe European Union ........................................................ 153

Changing society......................................................... 156Preparing to join the EU:a process of modernization........................................ 157

Negotiating for accession:assessing the stage of modernization ...................... 163Several lessons ............................................................. 167Conclusions .................................................................. 170

From Traditional National Politics to PoliticalPluralism and Consensus – Building in EU Politics.. 174

Introduction.................................................................. 174

The European Parliament and RepresentativeDemocracy.................................................................... 176The Participatory Democracy ................................... 188


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The Consociational Theory........................................ 191

The Concept of Federalism........................................ 192Network Governance ................................................. 193The Process of Globalization and the CosmopolitanDemocracy.................................................................... 196Conclusions .................................................................. 201

MANAGING THE REGIONALIZATION

AND GLOBALIZATION.................................................. 213 The New Europe and the Mediterranean Area -Geo-economics, Geo-culture and SocialCommunication................................................................ 215

The Euro-Mediterranean area in theglobal context ............................................................... 219The social communication solution ......................... 227

Global Public Health: Achievements, Challenges,and Opportunities............................................................ 238

CULTURE, HISTORY AND THEINTERNATIONAL MANAGEMENT........................... 255

The Origin and the End of the Cold War:

Historiography in the Geopolitical and GeostrategicContext............................................................................... 257

Index ....................................................................................... 277


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ABREVIATIONS

AIDS Acquired Immune Deficiency Syn-drome

ALDE Alliance of Liberals and Democrats forEurope

APEC Asia Pacific Economic CooperationAPSED Asia Pacific Strategy for Emerging Dis-

eases

ASEAN Association of Southeast AsianNations

ASEM Asia-Europe Meeting

BCBS The Basel Committee of Banking Su-pervision

CDU Christlich Demokratische UnionDeutschlands (German Christian De-mocratic Union)

CEPR Centre for Economic Policy

ResearchCFSP Common Foreign and Security

Policy

CWIHP Cold War International History Project

ECDC European Center for DiseasePrevention and Control

ECOSOC Economic and Social CouncilEI Epidemic Intelligence


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EIPA European Institute of Public

AdministrationEMU Economic and Monetary Union

EPP European People’s Party

ESDP European Security and DefencePolicy

EU European Union

FDI Foreign Direct Investment

FDP Freie Demokratisch Partei (GermanFree Democrat Party)

FPDA Five Power Defence Arrangements

FPÖ Freiheitliche Partei Österreichs (Aus-trian Freedom Party)

FRUS Foreign Relations of United States

HIAP Health Insurance AssistanceProgram

ICD Institute for Cultural Diplomacy

IGOs Inter-Governmental Organizations

IMF International Monetary FundINGOs International Non-Governmental

Organizations

ISIG Istituto di Sociologia Internazionale diGorizia

IUIES International University Institute for

European Studies JHA Justice and Home Affairs

MERCOSUR Mercado Común del Sur


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MNCs Multinational Corporations

NAFTA North American Free TradeAssociation

NGOs Non-Governmental Organizations

OECD Organization for EconomicCo-operation and Development

ÖVP Österreichische Volkspartei

(Austrian Popular Party)PDL Partidul Democrat-Liberal

PES Central-Left Party of the European So-cialists

PNL Partidul Naţional Liberal

PPS People, Processes and Structures

PSD Partidul Social Democrat

RTAs Regional Trade Agreements

SAIS School of Advanced International Stud-ies

SARS Severe Acute Respiratory Syndrome

SPD Soziakdemokratische Partei Deutsch-lands (German SocialDemocrat Party)

SPÖ Sozialdemokratische Partei Österreichs(Austrian SocialDemocrat Party)

TNC Transnational Company

UN United Nations

USA United States of America


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USSR Union of Soviet Socialist Republics

WHO World Health OrganizationWTO World Trade Organization

WWII World War II


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FOREWORD

Dr. Vasile Puşcaş is a valued member of theInstitute for Cultural Diplomacy’s Advisory Boardand we are pleased to welcome the newest addition

to his impressive volume of literature. The majorityof the papers in this book have been presented inthe context of lectures at ICD conferences during2009 and 2010, and our network has been eagerlyawaiting the publication of this book.

Global interdependence is a subject that has

come to shape the very nature of international di-plomacy. As Dr. Puşcaş writes, the process of eco-nomic globalization combined with the global na-ture of many modern issues, from terrorism to cli-mate change, means that states can no longerfunction in isolation. Rather, they must work to-

gether in regional groups or in a united interna-tional front. The growth of regional institutions,most notably the European Union, as well as in-ternational organizations, such as the United Na-tions, clearly demonstrates the international drivetowards globalization in the political system.

In this increasingly globalised and interde-pendent world intercultural communication is, asDr. Puşcaş describes, “no longer an option, but a


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necessity”. Cultural diplomacy, the exchange of

ideas and aspects of culture amongst nations andpeoples, has an invaluable role to play at the local,national, regional, and international levels.

At the local level it can be used to supportintegration and promote reconciliation in war-torn societies. At the national and regional levelscultural diplomacy can replace traditional hardpower strategies with techniques that are mutu-ally beneficial to the parties involved.

At the international level this exchange cansupport attempts to generate a norms-based glo-

bal community with respect for human rights anddemocracy and the political will to tackle globalchallenges. This activity is already taking place.

From the Open Fun Football Schools run bythe Cross Cultures Project Association to the West-Eastern Divan Orchestra, governments, NGOs, and

international organizations are working together topromote peace and stability through this exchange.

As political globalization increases and glo-bal interdependence becomes the norm, countriesand cultures must learn not just to tolerate eachother, but also to work together and understand

each other. The challenge that lies before us is, inessence, how to manage these global interde-pendencies. The Institute for Cultural Diplomacy


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is delighted that Dr. Puşcaş has met this challenge

head on, and we congratulate him on the publica-tion of his latest work.

Mark C. Donfried

Director

Institute for Cultural DiplomacyBerlin


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INTRODUCTION

The international contemporary system hasbeen waiting for more than two decades to be re-structured and for its concepts to be rethought.The end of the Cold War did not put a stop to the

international crisis. On the contrary, some of theold concepts were reactivated and new ones mani-fested themselves even with violent outbursts, in-cluding in Europe. Strategic regions of the worldincreased their importance, and the balance ofglobal power was always present when important

decisions in international politics were made. This“traditional” behavior of the important actors inthe international system after the Cold War ex-plains the slowness of and sometimes the retreatfrom the main transformations of the system.

The last two decades have proved that the

transformation phenomena and processes in theinternational system could not be stopped. Baylis& Smith (2001) believe that a remarkable aspect ofthe “world order” reconfiguration can be found in„the highly dense and complex network of con-temporary forms of international governance (re-

gimes, international organizations and NGOs)”,which led to a „multilateral management”. These“profound forces”, as J.B. Duroselle calls them,


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continued to operate within the international arena

and even in “endemically precarious” conditions(Andretti, 2004), but they did not despair. On thecontrary, as professor Gasparini has pointed out(2008), redefining the concepts of globalization and“world order” are intended „for understanding,intervening in and managing the mechanisms de-

signed to achieve acceptably peaceful conditions”.The authors of “Civilizing World Politics” (2000)find that changes in international relations „maybe understood as a process of global society forma-tion (development of a world society), which goesbeyond the mere intensification of interdepend-

ence and interaction”.In such an international context, when re-newed impulses toward globalization press forquality and major changes in the international con-temporary system, global interdependencies mani-fest themselves not only in the economic area, but

also in the political, social, cultural, communica-tion, and other areas. Generating much more thanpositive effects, regional and global interdepend-ences also produce more than vulnerabilities.Therefore, the management of global interdepend-encies is a necessary path to equilibrium and the

public international goods that are so much de-sired by people.At the beginning of the ‘90s, a famous mem-

ber of the Rockefeller family said that because of the


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disappearance of the bipolar system and the fall of

the communist regime, the world should be go-verned by business managers and bankers, and notby ideologists. Such a belief was appropriate forinternational economic and financial management.Research into international management dealt withglobal financial and commercial markets and high-

lighted the role of multinational companies, notonly at an economic but also at a social and politicallevel. In the case of universities, international ma-nagement was oriented towards the same objec-tives, as they increasingly became training centersfor the same kind of actors.

The great international crisis after 1989, in-cluding “9/11”, signaled the need for change inthe international system. The financial and eco-nomical crisis broke out in 2007 because the sys-tem’s transformations that were so necessary didnot match the rhythm and directions of global evo-

lution. It was also the international financial crisisthat emphasized the role of global interdependen-cies, which sometimes were blamed for the veryproportions and intensity of the crisis. However,we warn against returning to a takeover solely ofeconomic interdependencies instead of all catego-

ries of contemporary global interdependencies.We believe that it is necessary to revive thestudy of international management, and not just ina limited form. This is because a simple extrapola-


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tion of management techniques and concepts to

the international environment is not sufficient todeal with present and future aspirations and de-velopments. Cooperation and crisis/conflicts ofthe world of global interdependencies are beco-ming very complex, and the intensity of globaliza-tion (Hodgets & Luthans, 1994) requires ‘thinking

internationally” and “acting globally”. In order topromote competitive advantages on a global scale,international management must not concentrateonly on business, trade and investment environ-ments, but also on international processes (global-ization, interconnectivity and regions/states/pro-

cesses interdependencies, NGOs, MNCs, regio-nal/international organizations, etc.). Thus, pre-sent and future international management mustdeal also with changes within the internationalsystem, the conformity of state/non-state actorswith international rules, integration and globaliza-

tion processes, and efficient administration of re-sources (Puşcaş, 2007).As a result of my own European and inter-

national experiences and scientific / academic re-search in the field of international relations, foreignaffairs, and international and European negotia-

tions, I have recommended several subjects of in-ternational management for debate in economic,social, cultural, political and diplomatic areas aswell as in the academic field. The present volume


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introduces lectures about international manage-

ment which focus on global and regional interde-pendencies.

I am grateful for the support of the Institutefor Cultural Diplomacy in Berlin (Dr. Mark Don-fried, Dr. Riman Vilnius), the Institute for Interna-tional Sociology and the International University

Institute for European Studies in Gorizia, Italy (Pro-fessor Alberto Gasparini). Last but not least, I amgrateful to Professor Keith Hitchins (University ofIllinois at Urbana-Champaign, US) for his perma-nent support and inspiration. Also, my thoughts goto my younger colleagues at the Institute for Inter-

national Studies, Babes-Bolyai University of Cluj-Napoca, Romania (Dr. Mihai Alexandrescu, Dr.Marcela Sălăgean, Drd. Daniela Czimbalmos).

References

ALBERT Mathias et al (2007), Civilizing World Poli-tics, Rowman & Littlefield, New York

ANDREATTA Filippo (2004), Alla ricerca dell’ or-dine mondiale, Il Mulino, Bologna

BAYLIS John, SMITH Steve, (2005), The Globaliza-tion of World Politics, 3rd Edition, OxfordUniversity Press, Oxford


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GASPARINI Alberto, (2008), Globalization, Recon-ciliation and the Conditions for ConservingPeace, in “Global Society”, Vol. 22, No.1

HODGETTS Richard M., LUTHANS Fred, (1994),International Management, 2nd Edition,McGraw-Hill, Inc, New York

PUŞCAŞ Vasile, (2009), International / Transnational

Relations, IUIES - ISIG, Gorizia


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THE MANAGEMENT

OF GLOBAL

INTERDEPENDENCIES


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THE MANAGEMENT OF POST-CRISIS

GLOBAL INTERDEPENDENCIES*

Introduction

The contemporary international system can beconsidered a complex network of unities, which areinvolved in a multitude of interactions, transactionsand communications. In order to see these interac-tions as power relations (“the balancing of pow-ers”), one should see the cooperative and integra-

tive potential of transactions and communications.For those who have skeptically considered the“socio-causal perspective” of Karl Deutsch to bemore about an integrated international system, therecent global economic and financial crisis revealedthe meanings of Deutschiane conceptualization.

Aspects of global interdependence are commonsubjects of analysis, whether the focus is the eco-nomic sub-system, or the cultural, social or politicalones. “The world is not divided into camps”, saysFareed Zakaria, in his most recent book, “and it is

* Paper presented at the International Economics Congress on“An Interdisciplinary Analysis of the Roles of Global Politics &Civil Society in International Economics”, 4-7 February, 2010,Institute for Cultural Diplomacy, Berlin


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far more connected and interdependent than it was.

‹‹Balancing›› against a rising power would be dan-gerous, destabilizing and potentially self-fulfillingpolicy” (Zakaria, 2009). Furthermore, Joseph S. Nyedefines globalization at the beginning of the 21st century as “worldwide networks of interdepend-ence” (Nye, 2003).

In A world in crisis? (1987), Johnson and Taylorwere insisting that change in the international sys-tem was still seen as a state level process. Nume-rous studies, which appeared in the 1970s and the1980s, also emphasized, “the linkage between statesand particular type[s] of social relations between

countries” (Johnson and Taylor, 1987). On the otherhand, as a response to the worldwide economic cri-sis of the 1970s, “the solution adopted by manycorporations and banks was essentially interna-tional because of internationalization of capital”,whilst states and governments considered the

world economic crisis as an “essentially nationalphenomenon” (Johnson and Taylor, 1987). Never-theless, “as a result of the world economic crisis, theworld economy has become more integrated thanever before”, for instance, interconnections betweenthe multinational corporations and the banks have

increased; the ties between multinational corpora-tions and countries have been strengthened; and agreater number of connections have been esta-blished between states and banks. Maybe this is


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why Michael P. Sullivan asserts that, “in the

broader world of international politics, the interde-pendence of the 1970s and the globalization of the1980s implied idealist notions of the 1920s” (Sulli-van, 2002). This idealism has been realized in theform of “regimes”, which have produced explana-tions for international political behavior. However,

we should not overlook the reality that interna-tional actors continue to focus on power relations,anarchy, integration, interdependence, and devel-opment.

Global interdependence

As a result of the global interdependence phe-nomenon, twenty-two years ago, Seyom Brown ob-served a reduction in the cohesion of the Cold Warcoalitions, along with a diminution of the accompa-nying strategic and ideological dimensions. Thisphenomenon not only affected the political relationsbetween states, but also disseminated intersectoralsensibilities into both the economic and social inter-national sectors. Brown was not the only one toemphasize that “managing the domestic politicaleconomy with its deep intersectoral interdepend-

ence had become a complicated art, requiring suchfine tuning that there is an understandable reluc-tance to subject economic policies to international


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decision pro-cesses” (Brown, 1988). In the 1970s,

Keohane and Nye showed that it was necessary tosee “what kind of policy it could be” – alternative tothe realist hypothesis or the liberal theory – in a“political pro-cesses of complex interdependence”(Keohane and Nye, 2009), in order to manage thisintegration.

In 1978, Modelski pleaded not only for “themanagement of global problems or relations” butalso for the “management of global interdepen-dence” (Modelski, 1978). In the globalized and inter-dependent world, such management must considerthe transformation processes of the phenomenon.

However, such processes seem to have been largelyignored by states’ officials and politicians since theCold War. According to Keohane and Nye, politi-cians had problems with the process of “learning”about the necessary changes. I would not say thatthis is the cause of the recent international financial

and economic crisis, but instead agree with Waller-stein’s statement, that a crisis of the internationalsystem appears when there are uncertainties of evo-lution, which should be addressed in order to re-structure, transform and reinforce the system (Wal-lerstein, 1991). In the post-crisis context, one should

consider the changes generated by the “interactionbetween constraints and opportunities of the interna-tional system” (Keohane and Nye, 2009). This wouldnecessitate an even more rigorous interpretation of


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the complex interdependence concept, but also a global

management, in which a combination of internaland international processes is shaping actors’ op-tions.

Globalization and interdependence are notaccessories of the current economic and financialinternational crisis, they are instead products of

historical evolution (Modelski et al, 2008). Somesay globalization belongs to the international rela-tions of the 20th century and Nye insists, as dem-onstrated before, that in the 21st century globaliza-tion will appear as “networks of interdependence”.This means that we could define present day glob-

alization as “a progress of growing cross-borderconnectivity and interdependence within all thekey domains of the human activity” (Reuveny,2008). Ghiţă Ionescu (1998) defines interdepend-ence as a system of internal and international rela-tions interconnected through synergy that encom-

passes a new environment and, somehow, differsfrom their total aggregates. So, the main character-istics of today’s globalization are intensity, expan-sion, and the speed of connectivity between all ar-eas of human life. The complex dynamic of this“structured web” (Modelski et al, 2008: 425) shows

the role of the states, markets, institutions, alli-ances, governmental international organizations,and civil society, in the contemporary world. Thisglobal connectivity is called, in specialized litera-


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ture, interdependence and interconnectivity. If, in

the 1970s those most often associated with globa-lization and interdependence were economists,particularly in the fields of trade and finance, thepresent approach appears to incorporate multipledo-mains of activity, using for example, economicswith social sciences, politics and culture.

Figure 1: Processes related to globalization(Source: Modelski et al, 2008)


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Managing the interdependence

Before the present economic and financial cri-sis (2007), John Ashton, (the UK government’s spe-cial representative for climate change) warned thatstates, international organizations, business andcivil society altogether should be aware of the “re-

ality of interdependence”: “There is one force,whether you are Chinese or African or Europeanor American, which, more than any other is shapingthe world we live in, and that is the rapid growth ofinterdependence” (Ashton, 2006). Prior to that, theReport of the Commission on Global Governance

(Our Global Neighborhood, 1995) warned that “thegrowing interdependence of economics and civilsociety” needs “a carefully crafted balance betweenthe freedom of markets and the provision of publicgoods”, because the international community facesenormous challenges dealing with globalization, but

“the mechanisms for managing the system in a sta-ble, sustainable way have lagged behind”.Almost a quarter of century ago, Professor

John Richardson (American University) said wemustn’t wait for major catastrophes which periodi-cally remind us that “we are small, fragile ele-ments in a tightly linked, interdependent world”,but to take global interdependence as a “fact oflife”. Furthermore, Richardson pleaded for a realis-tic identification of the global interdependence is-


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sue because addressing it would require “a global

perspective and radically new analytical planningand decision-making tools that incorporate a pla-netary view”. His message about the 21st centurywas that “changes in human values, model of thin-king, and visions of the future are needed for us tolive more sustainable and harmoniously – indeed

to survive – in an interdependent world” (Richard-son, 2008).

If we do not adopt the catastrophic theories asa hallmark of the 21st century (Kunsenther, Michael-Kerjan, 2007), then we should admit that regardingthe international system, there was a major preoccu-

pation for theories and policies in the last decades.The management of International Relations was ap-proached sporadically, because on one hand it waswidely considered that the anarchy of the post-ColdWar world was evolving almost entirely positively,and on the other because the “management” theme

was largely left for the business managers them-selves to deal with. This is why we consider that theinterest of scholars in globalization and interdepen-dence management is absolutely necessary becausetheir approach can be systematic, continuous, multi-dimensional, and integrative. In his lecture about

“Globalization and Social Conflict (Spring 2009,Brown University), Professor Patrick Heller showedthat the current global economic crisis “has revealedmany of the social and political fault lines of con-


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temporary capitalism”, but at the same time, poses

many new challenges of global governance. Specifi-cally, Professor Heller considered that global inter-dependence “requires new forms of coordinationand cooperation between states, and between states,capital and civil society (Heller, 2009).

Management of the post-crisis world

“The Progressive Program for Economic Re-covery & Financial Reconstruction”, developed bya group of scientists at the University of Massa-

chusetts Amherst, states that “the roots of the cur-rent crisis are complex but they include the globalimbalances that have dominated the world’s eco-nomic growth over the last several decades” (Ashet al, 2009). This is because, since the beginning ofthe crisis, governments, corporations, internationalinstitutions, and in some ways civil society havebeen focused primarily on economic and financialsolutions to resolve it. It is not my intention to of-fer an explanation for this. For now we should becontent with Ash’s suggestion that, “the roots ofthe current crisis are complex”, and as such, whilsteconomic aspects are among these roots, they can-

not be considered the sole cause.A recent study of the EU Institute for Security

Studies begins with the following line: “The world


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has entered the great transition from the short-

lived post Cold War international system to a new,unprecedented configuration of international rela-tions” (Grevi, 2009). Managing “the great transi-tion” meant to take into consideration both the re-distribution of power at the global level and in-creasing interdependence. The redistribution of

power emphasized the issue of anarchy within thecontemporary international system. Interdepen-dence theorists assume that “cooperation in the in-ternational system is not only possible but likelyand ongoing.” This assumption “is in direct con-flict with the assumption of anarchy-minded ana-

lysis, where cooperation is generally held to be lesscommon, short and goal-specific among interna-tional actors” (Kissane, 2006). Grevi (2009) lookedat the interaction between the redistribution ofpower and growing interdependence and said thisleads to a very asymmetric allocation of different

assets. In this context, he suggested the transitiontowards an interpolar international system (“inter-polarity is multipolarity in the age of interdepend-ence”). Of course, according to Grevi, the longtransition towards a new international system fa-cilitated the conditions of the current international

economic crisis. At the same time, the ongoing eco-nomic crisis accelerated the change process thetransition towards the interpolar international sys-


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tem. However, “although features of the two sys-

tems will still coexist for some time” (Grevi, 2009).The then serving Secretary for Foreign and

Commonwealth Affairs in the UK, David Mili-band, said recently “we hope to change theworld”. He defines “the change” via three aspects:1) the global real-time interdependence; 2) the shift

in the balance of powers (the national to the inter-national level, from West to East and, very interest-ingly, “from governments and corporations to in-dividuals”; and 3) a set of changes in the currenteconomic crisis (Chatham House, 2009). The re-semblance of opinions is clear between Miliband

and Grevi. We successively presented their ideasin order to emphasize Grevi’s assumption that to-day, “the international system is marked by deep-ening, existential interdependence”. And if the in-terdependence is existential, that means that “itsmismanagement can threaten not only the prosper-

ity but political stability and ultimately, in extremecases, the very survival of the actors that belong tothe system” (Grevi, 2009).

Cross-border crisis management

The Basel Committee of Banking Supervision(BCBS) suggested, in 1995, five key areas of reform


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to be considered when we think about crisi mana-

gement (Lane, 2009): Cross-sector supervisory coordination, Strengthening of prudential standards in

emerging markets, Encouraging transparency in the private sec-

tor,

Improving standards of reporting and disclo-sure in the area of derivative trading,

Enhancing cooperation and information sha-ring arrangements among security ex-changes.The management of a global crisis must start

with early detection of critical problems and coor-dination between all involved parties. Open com-munication and a formal process for contacts haveto facilitate finding the best approach and develop-ing the ability to diversify and mitigate risks. Thisis followed by the search for the best solution to

mitigate the effects of the crisis. Included amongstthe many complexities surrounding the manage-ment of a global crisis, there are: the absence ofinternational law; inconsistent national laws; pri-vate sector coordination; diverse regulatory infra-structures and practices; diverse processes for cri-

sis management and insolvency; diverse centralbank practices and policies; and home-host issuesthat must be addressed. The BCBS has many me-chanisms and active committees to address the va-


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rious complexities surrounding cross-border crisis

management (see Wood, 2005).Global interdependence and integration pose

new challenges for crisis management and crisissolution. We have learnt in the last few years thatcrisis management, crisis solution and regulation,and supervision “need to be internationally coordi-

nated and, in the end, formalized” (Persson, 2009).The recent experience of managing the global crisisdemonstrates that without common rules and ac-knowledged forms of cooperation mechanisms forshared decision-making, international crisis resolu-tion becomes a “non-cooperative game where every

country is looking out for itself” and, as Perssonpointed out, this game is a test, a chicken race, or atworst, a Prisoners’ Dilemma (Persson, 2009).

Some authors are more skeptical on the su-pranational solution to the global crisis, especiallythe financial crisis. The current global economic cri-

sis proves the importance of domestic and nationalrules, but how useful are the international rules?Why rules? The answer of John W. Burton is: “In agame, as in any social relationship, there have to berules so the players (or members of society) can re-liably predict the behavior of others. Everyone then

knows what is expected and how to respond. Itwould be impossible to play a game if the ruleswere subject to alteration or modification during it”(Burton, 2009).What does this mean? This means


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that supranational institutions might play a very

important role in the crisis resolution in a globalcontext.

Effects of interdependence

Gasparini (2008) asserts that the globaliza-tion is a product of an historical process whichstarted with a “mechanical globalization” (of in-dependent states), and continues with “an organicglobalization (the interpretation of national sov-ereignties, relations among networks of states,

sub-states, social and economic groups, organiza-tions, and individuals, civil societies and publicopinion). The interconnectivity and interdepend-ence affect both domestic and foreign politics.There are benefits of interdependence (sometimesexpressed as zero sum) and there are costs which

can involve, according to Nye (2003), short-runsensitivity or long term vulnerability. Ostry(1987), too, underlined two aspects of interde-pendence: vulnerability and opportunity. Manyscholars agree that managing the interdependentworld means to confront the global imbalance(asymmetry) and to generate equilibrium (symme-try).


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F i g u r e 2 : T h e a s y m m e t r i c n a t u r e o f i n t

e r d e p e n d e n c e ( S o u r c e : N y e , 2 0 0 3 )


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In such circumstances we can agree with Nye’s

statement that asymmetry “is at the heart of the poli-tics of interdependence” (Nye, 2003), in that “ma-nipulating” the asymmetries of interdependence canbe a tool of gaining new sources of power in interna-tional politics. Gasparini emphasizes the detrimentalpotential for “the accumulation of asymmetries”

(Gasparini 2008), as such a situation can push onecountry to the periphery of the globalization processand can lead to frustration and obstacles to achievingmodernity.

The transformational thesis of globalization ar-gues that global interconnections and interdepen-

dence will generate new links and dissolve someexisting ones. Held (1999) suggests that relationshipsamong nations will be reconfigured and power rela-tionships restructured. The post-crisis world will bedifferent and the New World must take into consi-deration the management of global interdependence.

It was proved again, in 2007, that what might seemlike an isolated fact in a single sector, can subse-quently spill over into others. All these facts and ef-fects were related to another one. Barbara Parker isright when she says that “first-order effects of global-ization in each sphere forge interconnections and

stimulate subsequent-order effects in their spheres ofglobal activity” (Parker, 2005). Today, the world isgoing to perceive more radically the difference bet-ween the term “globalization” and the term “interna-


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tionalization”. The same goes for “international

management” (managing between nation-states andcultures) and “global management” (managing in-terconnections and interdependence among all typesof global actors rather than simply between nation-states). According to Keohane and Nye, today’s glo-balization means “thick” relationships involving ma-

ny people within interconnected networks. Other a-cademics conclude that the present stage of globa-lization represents an increasing worldwide interde-pendence, rapid and discontinuous change, increas-ing numbers and diversity of the actors, and in-creased complexity.

Figure 3: Global interconnections (Source: Parker, 2005)


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Parker’s book considers six domains of

global interdependence: 1) business and indus-tries; 2) the national environment; 3) the economy;4) political / legal activities; 5) technology – IT;and 6) culture. The interconnections occur at threelevels. First, at the center, is the organizationwhich integrates people, processes and structures

(PPS) to shape outcome in our global world.These outcomes depend on the activities of theaforementioned six major global areas – whichcompose the second level. The third level of inter-connections occurs because many other actorssuch as NGOs, suppliers, unions etc, mediate be-

tween one, some, or all six domains and the focalgroup, organization or firm.“System theories” describe the relationship

bet-ween an actor and the system in which it op-erates. The evolution of interdependence, in real-ity, is quite predictable in such a context. Parker

(2005) furthers this, introducing the idea of anintegrative approach, for example betweengovernments, business, social actors, and civilsociety (“to integrate internal mechanisms ofstructure, people and processes better to respondto real or anticipated global shifts”).


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Global strategic management

The current context of financial and eco-nomic global crisis brought to the forefront theterm “global economic interdependence”. It istrue that, in general, the term “globalization” re-fers to the “development of global or worldwide

business activities, competition and markets andthe increasing global interdependence of nationaleconomies” (Stonehouse et al, 2004). Grevi (2009)says that the core of today’s global interdepen-dence is an interconnection of economy, energyand environment, but economic interdependence

is part of an “existential interdependence” (“is-sues that are the center of the well-being and evensurvival of large parts of the world population”).In that case, globalization cannot be preventedbut can be managed to raise living standards forall. Those responsible for such management

should be governments, international institutions,business community and civil society.Global strategic management can be repre-

sented as a series of “learning loops” (Stonehouseat al, 2004), which have the capacity to augmentorganizational learning and to develop and conti-nuously improve the transnational strategy of theorganization.


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F i g

u r e 4 : T h e p r o c e s s m a t r i x o f g l o b a l s t r a t e g

i c m a n a g e m e n t ( i n t r a n s n a t i o n a l s t r a t e g y

)

( S o u r c e : S t o n e h o u s e e t a l , 2 0 0 4 )


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F i g u r e 5 : T r a n s n a t i o n a l s t r a t e g y ( S o

u r c e : S t o n e h o u s e e t a

l , 2 0 0 4 )


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Transnational strategy must combine the be-

nefits of global scope, co-ordination and integrationwith local responsiveness. Taking the example ofbusiness activity, transnational strategy has to in-corporate strong geographical management, busi-ness management and worldwide functional ma-nagement.

The topic of management is strongly relatedto the issue of leadership. Leadership involves “de-veloping a vision and strategic interest for the or-ganization, creating shared values, developingpeople and the organization, creating, changingand moving the organization towards the aspira-

tion encapsulated in the vision statement” (Stone-house, 2004). In other words, leaders must be: de-signers, teachers and stewards. They must be able todeal with an ethnocentric policy, a polycentric po-licy, a global policy and, of course, a transnationalapproach.

Multilateralism

În 2007, when the current global crisis began,Andrew K. P. Leung noted that there has been “anawakening in the US that neoconservative unilater-

alism is no panacea in an interdependent world dri-ven more by asymmetric forces and surging natio-nalism worldwide; where «soft power» or «smart


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power» are beginning to carry more sway” (Leung,

2007). From an analytical point of view, Cone Bavecadds: “A multidimensional view would complicateour models and interpretation of results, but it is theonly way to gain a deeper insight into the compli-cated interplay between social values and economyin general” (Bavec, 2007). At the end of 2009, Mon-

sarrat and Skinner (2009) concluded: “the crisis hasexposed deep inequalities and structural problemsin the international economic system”. In the samevolume, David McCormick claimed that, “a newmultilateralism” is needed.

Multilateralism must be more than just the

policy response to the current crisis. Resisting thetemptation to adopt protectionist policies is not amatter of virtue. Both states and international insti-tutions have to show commitments in internationalcooperation and negotiations (WTO, Doha Roundetc). From a global perspective “the threat is not so

much of explicit protectionism but rather of natio-nally specific policies that impose costs on others,directly or indirectly” (Frieden, 2009). There is littleevidence that national governments take into ac-count the international impact of their domesticdecisions. Conclusion: a sustainable international

cooperation requires both multilateral and domes-tic support of countries and their governments.Giovanni Grevi argues that: “Meeting the

challenges of existential interdependence through


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multilateral cooperation is therefore the overriding

priority of the years ahead” (Grevi 2009). Ofcourse, the reform of multilateralism and a dose ofpragmatism are expected. However, states and go-vernments must take interdependence as a “strate-gic calculus” when they decide between “self-inte-rest” and “shared-interest”. The increase in inter-

dependence demands regulation, effectiveness,and coordination. Interdependence pressures largepowers to consult and cooperate and, most impor-tantly, to join efforts in addressing shared pro-blems. Contemporary and complex issues, such asenergy security, development, food security, mi-

gration flows etc., motivate countries and nationalgovernments to put these on the internationalagenda, in order to address this set of challengestogether. We can suppose that both state and non-state actors will agree to enhance the legitimacyand effectiveness of international institutions and

multilateral cooperation.

The “G-system”

The evolution of the “G-system”, now G-20,convinced states and leaders of the usefulness of the

“Summit Diplomacy” approach. It is not my inten-tion to focus on merits and criticisms regarding theG-20. It is worth remembering that political condi-


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tions were not very favorable for the first G-20 meet-

ing; the US was changing its leadership, the EU wasfacing difficulties with the presidential mantle, fewimportant Asian countries had weak political go-vernments, and most dangerously, national politi-cians were struggling with how best to combat theeconomic crisis. For these reasons the G-20 meeting

in Washington was a good opportunity for the lead-ers “to show that they have the will to get out aheadof the political crisis” (Eichengreen, Baldwin, 2008).

The G-20 is an example of the success of a Sum-mit Diplomacy approach, suggesting that the invol-vement of major powers in multilateral cooperation

is preferable. Such an approach possesses the follow-ing qualities: being an informal group with no for-mal rules or charters, and thus existing in a more fle-xible format; the capacity to be established and de-veloped at variable geometries, bringing together themost decisive actors; a forum in which decisions are

based on consensus and can cut across different po-licy domains; and fundamentally providing a plat-form for building confidence and trust among po-wers, allowing leaders the opportunity to developpersonal links, and promote their priorities and con-cerns (Grevi, 2009; Pentillä, 2009). Pentillä calls this

model of informal international organizations, “mul-tilateralism light”. We have seen similar cases appearthroughout history, which have been identified bythe term “concerts” (“institutions that rely on few in-


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formal rules and mainly serve to coordinate po-

licy”). Accordingly, the G-20 could be considered “aglobal concert”. The same author defines “globalconcert” as “a typical coalition of great powers in-volved in the long-term joint management of inter-national relations” (Pentillä, 2009).

The management of the international crisis uses

informal groups of states as problem-solvers. Ofcourse, once a solution is identified, it is redirectedtowards the international institution that has the au-thority to implement policy decisions in the respec-tive area. It is necessary to remember that there ismore than one type of informal group of states, used

in finding the best solutions to the international crisis(see the “contact groups” or “ad-hoc coalitions”, the“group of friends” etc). If we see the G-20 as a pro-cess and not only an event, then we can say for cer-tain that the G-20 might become a multilateral insti-tution, ready to involve in the next levels of global

governance.

Institutionalized cooperation

The current international crisis underlines therole of cooperation among global actors (states and

non-states). We are able now to understand howimportant institutionalized cooperation (global go-vernance) is. Neoliberal institutionalists are very


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active in arguing the conditions and methods in

which today’s world politics is institutionalized.Most of the post-World War II international insti-tutions were made under the pressure to reform.They were strongly criticized for failing to performadequately. It has been suggested that “it is theinteraction of power and complex interdependence

that combine to create institutional change” (Mil-ner, 2009). Neoliberal institutionalists tend to seeinterdependence as a defining feature of the inter-national system. Many of the chapters in Milner &Moravesik’s volume emphasize the four elementsof the neoliberal paradigm: the role of non-state ac-

tors, including international institutions, the formsof power besides military force and threats, therole of interdependence in addition to anarchy inthe international system and the importance of co-operation in international politics. A distinctivepoint has been “the move from cooperation to ins-

titutionalized cooperation – or global governance”(Milner, 2009). The trans-governmental relationsare necessary but not sufficient in a world of com-plex interdependence. Private sector and NGO in-volvement in global governance could generate amore successful global cooperation as a result of

higher compliancy rates. Some authors emphasizethe value of issue area approaches, and suggestthat it is the structure of issue area, which matterto the design of international institutions. I agree


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nal cooperation across all segments of financial

markets; and 5) reforming international financialinstitutions. G-20 leaders were interested, first ofall, in recovery, and for this reason their approachwas finance-orientated. They did try to fix the fi-nancial matter and after that opened the agenda toother considerations that included a wide range of

issues that were relevant globally. Bossone (2009)categorizes the global crisis debate on internationalreforms into three main issue areas:

1. How to shape a more legitimate system ofglobal financial governance;

2. How to make international financial institu-

tions more effective;3. How to make them more relevant.

Restructuring international financial institutions

Briefing the Committee on Economic andMonetary Affairs of the European Parliament(January 2009), Anna Sibert (University of Londonand CEPR) asserted that in restructuring the inter-national financial architecture, for the purpose ofaddressing crisis issues, we must focus upon three

areas: 1) crisis prevention; 2) surveillance; and 3)crisis management. Sibert (2009) noted that each ofthese three aspects could be addressed by a re-


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formed IMF. There was a strong pressure for many

years to reform the Bretton Woods system and es-pecially the IMF. Issues like the voting system,conditions and independence of management wereextensively discussed. Bird (2009), Rapkin &Strand (2006), Gros, Klüh, di Mauro (2009), Wil-liamson (2009), Atkinson (2009), and Bossone

(2009) are only a few of the analysts today, whosuggest many ideas and mechanisms for reformingthe IMF. Not only analysts and policy-makerswere attracted by the international debate on re-forming the governance of global finance. In 2008,the IMF itself appointed a committee chaired by

Trevor Manuel (Minister of Finance of South Af-rica) to advise on the Fund’s decision-makingprocess (the World Bank took a similar step by in-viting former president of Mexico, Ernesto Zedillo,to lead a commission to explore possible ways tomodernize World Bank governance). Recently the

“Group of Lecce” reunited experts of internationallaw, finance and economics in order to prepare aproposal for submission to the leaders of the G-20with an agenda to reform global economic govern-ance. Before the previous IMF annual meeting (Oc-tober 2009, Istanbul), Mr. Dominique Strauss-Kahn

met with representatives of the “Fourth Pillar Pro-cess” (a five month consultation with civil societyorganizations) which emphasized three areas:changing quotas and distribution of seats on the


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IMF Executive Board; introducing a new voting

procedure for the Board; and strengthening theFund’s accountability (Atkinson, 2009).

Bird (2009) recognizes that the global finan-cial crisis has forced a more significant change inthe IMF. The announced institutional changes bythe IMF, in 2009, are the result of the fact that du-

ring an ongoing crisis, pressures to address imme-diate concerns of crisis management are abound.Of course, the resolution of medium and long termproblems was still considered important, but thesetook a back seat. There is only a general agreementthat the IMF is the right platform to develop a

structure of more effective policy coordination. AsDe Grauwe (2009) notes, both the G20 and the IMFconcentrated on coordinating strategies becausethese allow countries to improve the managementof monetary and fiscal policies. However, the co-ordinated approach was based on the notion of

spillover. Positive or negative spillover effects offiscal policies are the consequence of global eco-nomic interdependence, and of the degree of fi-nancial and economic integration. Of course, itshould be taken into consideration that differentcountries face quite different economic conditions.

Focus on the world financial issues will be ex-plained through our current situation. In my opi-nion, global economic governance requires the at-tention of states, international institutions, and cor-


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porations. Public goods are essential for the grow-

ing interdependence of the global economy, provi-ding both benefits and costs for neglecting them.The basic international public goods are:

- Systemic financial stability;- Infrastructure and institutions;- Environment;

- Equity and social cohesion;- Peace.“Good management practice is probably the

most important defence against financial troubles”,claims Peter G. Peterson (1984). Reform of the inter-national economic system is a very important task.

The UN Secretary General also underlined the im-portance of how the international community couldengage all countries and the United Nations, in or-der to ensure coherence of the crisis response. It isnecessary to coordinate with the UN, the BrettonWoods and other financial institutions in order to a-

chieve an effective international cooperation in newand potentially difficult areas.After the G20 London Summit, Mr. Ban Ki-

Moon proposed that the UN establish “a system-wide mechanism for monitoring vulnerability andsounding the alert when necessary” in order to

keep the financial crisis and economic recessionfrom, “evolving into a major humanitarian crisisand a breakdown in peace and security” (ECOSOC/6388, 2009). There were discussions about working


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towards a “second Bretton Woods” conference.

Gleckman (2009) developed this to suggest that onecould reformulate this initiative from a BrettonWoods II plan into a Better World II Initiative. Ac-cording to Gleckman, in the Better World II ap-proach, “one could define what are the best visionsand goals for international relations that are appro-

priate for the first part of the 2000s”. The content ofa Better World II policy would seek to articulate “anew set of the first principles that somehow cap-tures a sense of equity in international relations, acommitment to global poverty reduction, a commit-ment to a healthier planet, res-pect for multicultural

realities and other values along with the practicallessons the world has learned in international orga-nizations’ governance since the end of the WWII”(Gleckman, 2009).

Interdependence and integration

at a regional level

Seyom Brown (1988) emphasizes the interde-pendent relationships between economic sectors andalso between countries. He concludes that “many ofthe emerging and most durable of interdependence

relationship’s are incongruent with many of the in-herited structures of national governance and alli-ance coordination”. Johnson and Taylor (1987) fur-


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ther develop this claim: “After all, the world-systems

project will culminate in the mobilization of peoplein regions”. And according to Gasparini’s (2008) re-cent words, “at a regional level, globalization tendsto be complete, controllable, shared, relatively easyto achieve, effective and lasting”. Authors of thebook Globalization, Regionalism and Economic Interde-

pendence define globalization as ane “increasingly[and] interdependent world economy” (Dees, diMauro, McKibbin, 2009) and they suggest that eco-nomic integration at a regional level has strength-ened as a result of institutional arrangements as wellas pressure of the market.

There are many forms of regional and sub-regional agreements. Ken Heyden (2001) underlinesthe role of regional trade agreements (RTAs) whichare very diverse: a non-preferential arrangement(APEC), free trade areas, custom unions or otheragreements, such as the European Union, which

deeply integrate markets and have a common cur-rency. Traditionally, RTAs have predominantly beenbetween neighbouring countries seeking to maxi-mize the advantages of proximity. These types ofregional arrangement appear to bring speedier re-sults in terms of developing markets. RTAs offer a

coherent way of setting the rules and standards for aglobal market; they can function as laboratories fordeeper integration. The WTO and the OECD support


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RTAs because they complement the multilateral

trading system.

Figure 6: EU global trade relationship.(Source: Jemet, 2008)

Regionalization has gained momentum in thelast two decades. Not only RTAs are spreading, butdifferent sub-regional agreements are becoming

“bridges between those sub-regional groupings anddevelop a network of intra-regional agreements”(Voronkov, 1998). “Regional factors” are now the


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most important in the business cycles of North Ame-

rica, Europe and Asia, especially in the regionswhere trade and financial linkages have increased.Regional integration seems to have played an in-creasing role in recent decades also in the interna-tional transmission of shocks and “as a force modify-ing the impact of common shocks on individual

countries participating in regional groups” (Dees, diMauro, McKibbin, 2009). Whilst political regional or-ganizations still play an important role in conflictprevention and settlement in different areas of theworld, the regional and sub-regional economic ar-rangements are also significant. Voronkov (1998)

states that promoting regional integration and “mu-tual interdependence” is “one of the most importantelements of a long-term strategy of conflict preven-tion and stability strengthening”.

The globalization process increases the demandfor international public goods. An excess demand for

international public goods generates an “institu-tional disequilibrium” within the international sys-tem. Podoan (2009) argues that regional agreementsare a source of supply of international public goodsand that globalization provides incentives for thedevelopment of new institutions, contributing to the

build-up of regional comparative advantage. Therole of institutions could be decisive one “in a worldof regional aggregations”, in helping to reach co-ope-rative solutions.


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International trade and international financial

flows are taken as indicators and quantitative mea-sures of interdependence (Alam, 2004). Petri (2005)agrees that interdependence is an inevitable productof globalization, but highlights the recent trend indefining interdependence as regional involvement,in trade relations with regional partners. He states

that “in popular discussion”, interdependence is of-ten associated with the concept of intra-regionaltrade. The measure of “intensity of interdependence”reflects the relative strength or weakness of naturaland policy barriers to free trade. The intensity of in-terdependence has both positive and normative ef-

fects, because interdependence can affect the per-formance of an economy, and on the normative side,the intensity of a country’s interdependence can beaffected, at least to a certain degree, by policy.

For this reason Petri asserts that regionaltrade liberalization, in particular, is the most obvious

intervention for managing interdependence. “Themanagement of regional relationships involves creat-ing regional biases that may follow economic logic(when policy «internalizes» positive externalities as-sociated with greater interdependence), or may runagainst it (when policy targets linkages for non-eco-

nomic reasons, or to favor one country at the ex-pense of others” (Petri, 2005:8). In this context, itwould be useful to clarify a few terms: “regionalism”refers to policy initiatives, which increase intra-re-


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gional bias, and “regionalization” is a phenomenon

created by market forces. I am in agreement withPetri, that such a distinction is very useful, and Iwould add that it is very useful to understand thatglobal interdependence management should not on-ly occur at the regional level.

The EU and multiple interdependencies

“The European model” of economic and politi-cal integration has evolved over the last five decadesand today needs to be adapted in order to accom-

modate both an increase in numbers and the chang-ing economic and global circumstances (Steil, 1999).This “model” has generated enormous interest a-round the world. The current global crisis and theEU attempt at resolution of the crisis, reveals the im-portance of factoring in interdependence. Ending thecrisis requires a co-ordinated effort between the EU,as an institutional catalyst, and all Member States ina coordinated national effort, combining EU policiesand funds to benefit from globalization via “smartaction”. The “European Economic Recovery Plan”(November 2008) was designed to “exploit synergiesand avoid negative spillover effects through coordi-

nated action” and to “shape the EU’s contribution to[the] international response” (European Commis-sion, 2009).


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Clear post-crisis EU governance is essential to

convince all European citizens and global partnersthat the European Council will be able to ensure theintegration of policies; to manage multiple interde-pendencies between Member States, market actorsand the EU; to make effective decisions; and to setachievable objectives in close cooperation with the

Commission and the European Parliament.The European Union is now focusing on mak-

ing a successful recovery from the crisis, but dueconsideration must be given to the context of globa-lization in order to make a successful transition intothe new international system. The reality of interde-

pendence at both the European and the global level,underlines the need for a successful strategy withregard to the future of the EU, based on the correctidentification of the challenges to be tackled. The“Reflection paper on the future of EU 2020 strategy”emphasizes the need for a “strategy for convergence

and integration” which explicitly recognizes themultiple interdependencies of the EU:1) Interdependence between Member States, for

example, the spillover effects of national activi-ties, especially within the Euro zone. Neil Flig-stein (2008) explains that France and Germany

have been the traditional leaders of the EU, be-cause of the relative size of their economies;2) Interdependence between different levels of

government, for instance, the multi-layered


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governance of the EU, Member States, regions,

and social partners;3) Adoption of common policies such as the case

of telecommunication policies at the national,supranational and multilateral level (Kaiser,2001);

4) Interdependence at a global level (EU has to be

“a sui generis type of cooperative power thataims to limit conflicts through a multi-level in-stitutionalization of international cooperation”(Teló, 2009).“The original driving force” for creating a Eu-

ropean common market was based on the idea that if

Europeans were to cooperate on matters of trade,they would be less likely to make war. This conside-red, politics has been a means to develop economicinterdependence. As interdependence strengthened,the dynamic of integration generated not only an in-crease in trade across Europe, but also political dis-

cussions centered in Brussels, that deve-loped newprojects to further integration (Fligenstein, 2008).

The EU and inter-regional relations

The European Union itself is a multilateral con-

struction. The development of regional organizationsand inter-regional relations plays a very importantrole in facilitating multilateral action. Today’s new


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regionalism supports “a new post-hegemonic multi-

lateralism” (at both political and economic levels). Inhis “Introduction” to the volume “European Unionand New Regionalism”, Mario Teló (2009) affirmsthat, under the post-crisis conditions, regionalgroups can contribute to global governance, and“new regionalism” can provide a positive response

to the demand for international public goods andcan develop a “new multilateralism” at a global le-vel. This scenario involves all types of actors in themanagement process of global interdependence:

a) National actors are in a better position to adaptand adjust (an agreement between national

and regional levels is a beneficial pre-conditionfor an international regime in providing theopportunity for international organizations tobetter interact with regional actors);

b) Regional agreements necessitate issue linkages(economic, security, trade, monetary), which

are very useful for stabilizing international re-gimes;c) The advantages of both integration and inter-

dependence are consistent with domestic po-litical equilibrium and are relevant to nationalactors’ relatively long-term commitment to re-

gional rules.In October 2005, José Manuel Barroso, endedhis lecture at SAIS, Johns Hopkins University (Wash-ington DC) with the following words: “[…] I would


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argue that, while independence from the Old World

must have seemed so attractive to the original JosiahBartlett and his friends back in 1776, today it is ourinterdependence that promises so much” (Barroso,2005). The title of the Barroso lecture was “The EUand the US: A declaration of interdependence”, andthe speech’s goal was to push the Washington policy

community toward “drawing Europe and Americaeven closer together”.

When Charles Grant (2009) stated that the EUoffers a model of multilateral cooperation that looksattractive to other regions, he did not refer to the US,but to the African Union, ASEAN, and MERCOSUR.

I am sure Grant had in mind what Teló calls “strate-gic regionalism” as a possibility for the EU to deve-lop partnerships and worldwide alliances, in orderto implement “new multilateralism”.

One of the main tasks of “strategic regiona-lism” is to emphasize the growing role of “transna-

tional interdependence” (Teló, 2009), and the declin-ing role of force in managing international relations.A “new multilateralism” is opposed to a Eurocentricapproach to the role of the EU on a global level. Thiskind of “new multilateralism” “is more than an inter-national regime-building and more than a bigger role

for international organizations, it is a matter of trans-national communication towards a global, more legi-timate and pluralistic global polity” (Teló, 2009).


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Managing interdependence is one of the key

issues associated with inter-regional relationships.Balme and Bridges (2008) explain that regions are“sub-systems of international relations at the globallevel”, concerned with raising their own living stan-dards, but also in engaging in mutual economic re-lations. Teló (2009) specifically draws attention to

cultural similarities as a foundation for creating co-hesion, which leads to relationships of interdepen-dence. He gives the example of the “transatlantictriangle” (EU, NAFTA, MERCOSUR), demonstra-ting that regional blocs do not correspond to classi-fied civilizations, but include a diversity of infra-

state cultural groupings (“all three belong to thesame Christian and Western culture, but are differ-entiated along East-West and North-South clea-vages”). Cultural interdependence creates transna-tional cultural networks, and allows for the deve-lopment of transnational cultural dialogue and faci-

litates cross-cultural multilateral action, and the for-mation of trans-regional coalitions.Recently, academics of International Relations

have argued for the significance of inter-regional di-alogue. This inter-regional dialogue is seen as “anadditional element of level” to manage global inter-

dependence (Balme and Bridges, 2008). Most resear-chers recommend that the EU support and dissemi-nate regional cooperation to other continents, not

just because there are established regional entities of


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the globalized world, but the 21st century will show

more regionalism than the 20th century did (Teló,2009).

Managing interdependence is a problem-sol-ving activity. Alam (2005) analyzes the economic in-terdependence between the EU and its Asian tradepartners, using an input-output model, which

shows how imports and exports between the EUand its trading partners influence each other. The a-forementioned author shows that trade interde-pendence between the EU and Asia presents a highdependency of Asian countries on exports from theEU. At the same time, the EU’s core objective is to

strengthen its presence in Asia, and to do this itmust focus on six key-areas: 1) strengthening EUengagement with Asia in political and securityfields; 2) strengthening EU-Asia two-way trade andinvestment relations; 3) contributing to reduce po-verty in the region; 4) helping promote the speed of

democracy; 5) good governance and the rule of lawacross the regions, concomitant with building glo-bal partnerships with key Asian partners; and 6)promoting further the awareness between the tworegions.


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T a b l e 7 : E u r o p e – A s i a p a t t e r n s o f r e l a t i o n s . ( S o u r c e : B a l m e a n d B r i d g e s , 2 0 0 8 )


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The main conclusion of Balme and Bridges’

book is that Europe-Asia inter-regionalism in the e-conomic field is “both selective and asymmetrical”.On the other hand, the political relations (“strate-gic partnership”) refer to “a claim of cooperation ingeneral political and security issues (terrorism, nu-clear proliferation, human rights and environment)

rather than to specific security agreements and co-alitions” (Balme and Bridges, 2008).

Another example of managing interdepen-dence as a problem-solving activity is demonstra-ted by the EU-Russia relationship. Finon and Loca-telli (2007) analyze Russian and European gas in-

terdependence. The two researchers conclude, thatfollowing the gas dispute between Russia andUkraine in January 2006, European states “are in-creasingly concerned about their growing depen-dence on Russian gas”. Many economists and poli-tical analysts saw a political risk associated with

dependence on business relations, highlighting therisk of a market power resulting from this gas de-pendence. At that time, the EU wanted to managethe growing energy dependence of its MemberStates but had no joint foreign policy on energy, la-cking both institutional and geopolitical means

(Finon, Locatelli, 2007). The European Commissionrecommended coordination and solidarity ofMember States, and diversification of supplysources. The response to the economic risk of Eu-


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rope’s asymmetrical relations with Russia were: 1)

integration of Russia in the European regulatoryspace for trade and energy; 2) the creation ofEuropean authority to coordinate the negotiationsof European buyers with foreign producers; 3) thedevelopment of interconnection and import infra-structure to improve the contestability of the

market in the future.Leonard and Popescu (2007) analyzed the

same topic and found that between the EU andRussia there is an “asymmetric interdependence”.The EU’s vulnerability is a result of the structureof its gas markets (a series of national energy

markets connected by state-owned pipelines).Searching for a “symmetrical interdependence”,the above-mentioned authors suggested that theEU should build its partnership with Russia “onthe same foundation that made European integra-tion success – interdependence on stable rules,

transparency, symmetrical relations and consen-sus” (Leonard and Popescu, 2007). They recom-mend, first of all, to strengthen the EU’s mostpowerful tool – its unity, and after that only todevise new individual policies.


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Intergovernmental management

We should remember that a very interestingphenomenon occurred during the last few decades,one that is very sensitive for today’s politicians. To-gether with the growing interdependence betweenstate and non-state actors, more nations have gai-

ned their independence, and the need for small na-tions to exercise their independence increased ra-ther than diminished. Today interdependence bet-ween countries is managed through the develop-ment of inter-governmental and international insti-tutions (the EU is probably the most developed in-

ter-governmental institution in the world for mana-ging regional and global interdependence). In anera of global economic interdependence, a key roleof national governments and international institu-tions is to restructure the global markets to facilitateeconomic growth (Cowhey and Richards, 2004:1-2).

I do not intend to enter the debate on territorialityand sovereignty (see details Reinicke, 1998) but ifnational governments are to be able to shape globa-lization, they must have a fully operational internalsovereignty in a non-territorial context. Multilateralinstitutions will succeed in their role, if national go-vernments permanently communicate and interactin order to collectively implement policy decisions.

Conlan and Posnes (2008) conclude that “pu-blic expectations for governmental response to a


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wide range of public and private problems have

prompted grown in number, size and complexity ofgovernmental initiatives and programs”. Amongthem are “overwhelming intergovernmental in na-ture”, and the management capacity and fiscal re-sources have become very important to the successof national initiatives. Partnerships between various

governments and agencies have worked for someyears now, in order to combine resources from twoor more players to achieve a sub-regional, regionalor global objective, and to establish performancestandards in order to guide the behavior of stateand local governments (the waiver process can be

used to make a case for policy change). In this way,both bureaucrats and politicians are attracted to di-rect regulation and can be involved in the manage-ment of regional and global interdependence.

Conclusions

Globalization is not a linear process. If the ve-ry essence of globalization is interdependenceand interconnectivity, then the purpose of in-terdependence management is to deal withdiscontinuities. In order to cope with the pos-

sible negative effects produced by shocks (seethe case of current international financial cri-sis) and discontinuities, and also to maximize


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the positive consequences of global integra-

tion, it is necessary to understand the way inwhich nature shapes power relations in the in-ternational system, and to recognize the po-tential influence ‘ordering’ effect that interde-pendence management could have.

Interdependence is not a question which re-

quires a yes or no answer; it is a matter of de-gree (symmetrical or asymmetrical variables),and connects both domestic and foreign poli-cies in medium- and long- term governmentstrategies. Interdependence generates oppor-tunities, but taking advantage of such oppor-

tunities can create difficulties. The 20th century history was the expression of

extreme or radical manifestations and globalcooperation. A greater interdependence cre-ated tensions and conflicts between nationalsovereignty and collective welfare. Govern-

ments proved themselves to be increasinglyunable to manage growing global integrationand interdependence alone because these haveimportant international dimensions. This doesnot mean the erosion of national governmentbut its transformation, including transferring

parts of traditional sovereignty to supranatio-nal institutions (among the inter-governmen-tal experiments one must note the institutionaldevelopment of the European Union). The re-


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cent movement to reform the IMF, the World

Bank and other international institutions areheading in the same direction.

The post-Cold War process of integration andinterdependence continues to bring state andnon-state actors together and increasingly ex-poses the weakness of post-WWII internatio-

nal political and economic arrangements. Ma-naging post-crisis world affairs demands anew international system and concerted globalaction: “what is needed”, as claimed by saidRobert Hutchings (2009), “is a «global grandbargain» that brings together the relevant in-

ternational actors to address the global institu-tions and the global strategic agenda”. The G-20 is not a perfect grouping but it could play avery useful role in conjunction with a refor-med UN and other existing international insti-tutions.

Managing global interdependencies, whethereconomic, political, cultural, or social, aims todevelop multilateralism. The current interna-tional crisis has brought a new/old form ofmultilateralism: “multilateralism light”. "Multi-lateralism light” offers an efficient and pragma-

tic way to incorporate the emerging powers’contributions to the joint management of inter-national affairs. Several academics agree, thatwith the rise of informal global organizations


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(see the G-20), the world has entered a dual

system of global governance and the process ofdecision-making and its legitimization havebeen separated. In res

Documents

V-Puscas-Managing Global-book.pdf