Individualism and World Order
Other elements of global economic integration also empower the encompassing interest within nations by facilitating jurisdictional competition. For instance, multilateral agreements on capital flows increase the mobility of capital. Mobile capital, in turn, increases the pressures of jurisdictional competition among nations, because people tend to invest in nations with sensible regulatory and tax burdens and with respect for the rule of law. While such agreements sometimes require regulatory changes in a nation's legal system, their overall thrust is deregulatory and therefore they do not require substantial international regulatory structures. Thus, open capital markets and investment agreements help make sovereignty work on behalf of the encompassing interest of society even though individuals cannot easily move from one nation to another.
Such multilateral economic agreements might ultimately create a world constitutive mechanism that resembles aspects of the original Constitution of the United States. The Constitution promotes decentralized order by creating a market for governance where open capital markets and free trade force state governments to deliver good and efficient government. As the economist Barry Weingast has noted, this system sustained very substantial growth and limited governmental expenditures through much of the 19th and early 20th centuries. Similarly, the jurisdictional competition afforded by the world trading system in the era of globalization performs these same beneficial functions today.
Human Rights: The term "human rights" covers a variety of very disparate matters from property rights to welfare rights to civil rights. The advisability of international rules on human rights depends upon the substance of the rights protected. Unfortunately, some international agreements, like the Covenant on Economic, Social and Cultural Rights, include welfare rights, and many internationalists wish to expand them. These are the worst kind of rights to frame at the international level.
First, they violate principles of subsidiarity. Even assuming that government should guarantee some kind of welfare rights, it is clear that the particular guarantees must depend upon the budgetary constraints of individual nations. But if welfare rights are to take account of the differing circumstances of various nations and their traditions, substantial discretion must be given to international institutions that would enforce them. This discretion, in turn, empowers international bureaucrats and other elites who will determine the appropriate level of guarantees. Second, international agreements should not lock in specific economic and social policies that are likely to change with the political winds.
Civil rights connected to democracy, like voting, and the panoply of rights connected to the criminal justice system are more plausible for inclusion in international agreements than welfare rights but less plausible than international trading rights. Unlike international trade agreements, civil rights agreements lack the strongly contingent nature that provides the best justification for multilateralism. The international elaboration of civil rights by a multilateral mechanism in one nation does not directly generate civil rights in another.
Nevertheless, the case for global decentralization is weaker for civil rights than for economic matters. The relative immobility of persons in a world with relatively strict immigration laws inhibits jurisdictional competition in civil rights, whereas the relative mobility of companies and capital aids jurisdictional competition in economic regulations. Because of the inefficacy of jurisdictional competition in this area, internationalizing core civil rights, including the right to be free from torture or genocide, is beneficial.
But there are alternative ways of promoting civil rights more generally that carry less risk of international structures that may impose mistaken or ill-fitting conceptions of rights on particular countries. International trade agreements may themselves provide a mechanism. These agreements facilitate the expansion of civil rights not through fiat but through encouraging the wealth creation that will generate pressure for such rights internally. Historically, this theory accords with the evidence that a rising middle class demands civil and political rights to help secure its swelling wealth against the dangers of tyrannical government and political instability.
Moreover, a bottom-up model of diffusing human rights through economic growth will lead to a bundle of rights that better fits the needs of each nation. Rights generated internally are more likely to take account of the particular preferences and traditions of individual countries. They are also likely to be more resistant to political backlashes, because they will be more securely rooted in the soil of these countries.
The potential of international trade agreements to cascade into civil rights has one other important advantage over the direct international pursuit of human rights, since the most glaring defect of human rights agreements is that they often do not help the peoples who are most oppressed. In fact, a recent study by Oona Hathaway of Yale Law School has shown that nations that signed human rights treaties sometimes had worse human rights practices than would otherwise be predicted, because they used their accession to deflect criticism of their actions.
In contrast, despots are more likely to honor trade agreements because expanding trade will make their nations richer and therefore redound to their personal advantage by permitting them to increase their tax revenues, not to mention their personal wealth. By offering attractive bait to hook despotic regimes, trade agreements may actually provide a more effective, if circuitous, route to securing civil and political rights than civil and political rights conventions themselves.
International Regulatory Agreements: The push for new international regulatory regimes often goes by the name of "harmonization." This term conjures up an image of citizens of many nations happily singing in harmony. But nations, like individuals, differ in their circumstances and endowments, and therefore the process of imposing similar regulations is likely to give rise to the opportunity for some nations to take resources from others. Some domestic groups will also systematically benefit from harmonization because they will be in a position to influence them to their advantage. For this reason, regulatory harmonization is always in danger of becoming the song of the oligarchs.
Accordingly, with one important exception, international agreements on regulatory issues are more problematic than trade agreements because they require many more complex institutions of elaboration that give additional leverage to special interests. First, mutual gains are unlikely to arise from international multilateral regulations in such circumstances. Countries differ in their level of development, traditions and preferences of their people and are likely to choose different regulations. While it is true that a multilateral regulatory regime could theoretically permit different nations to forge different regulations, the principle of subsidiarity suggests one jurisdiction should not frame and potentially distort another jurisdiction's regulatory regime.
Second, unlike the case of international agreements on trade, international regulation interferes with the operation of markets. This feature also necessarily makes its enforcement more bureaucratic, because the relevant agreements will need to formulate regulations rather than simply remove barriers. International regulatory regimes also may reduce jurisdictional competition among sovereign nations. Thus, if trade agreements have the virtues of the original Constitution, then regulatory multilateralism has all the dangers of command and control regulation with the added disadvantage of distance from citizens.
The one area in which the welfare gains from coordinating a uniform standard might outweigh the losses concerns cases of externalities or spillovers--where one nation, for instance, pollutes the territory of another. That is the justification given for the Kyoto agreement on climate change. Because of such spillovers, no nation in the absence of an international agreement has the appropriate incentives to control pollution: Since each country does not pay the full cost of its pollution, each country lacks the appropriate incentives to reduce pollution to reflect its real costs and benefits.
Nevertheless, even in such circumstances multilateral regulatory agreements do not always provide the proper solution. International regulatory regimes create the potential for political externalities, costs that one faction imposes on others through manipulating the regime. For instance, newly emerging industries may see particular kinds of pollution regulations as a way of driving up the costs of their rivals in other nations. Such political externalities are potentially very vexing in the case of international agreements, because the public cannot easily control international bureaucracies.
International agreements on regulations thus should meet four conditions. First, the externalities or spillovers from one nation to another must be clear. Second, the agreements must offer a real prospect of solving the externality problem. Third, other less centralized mechanisms fail to accomplish the job. Fourth, the regulatory regime must devise restraints to prevent multilateral institutions addressing externalities from becoming an engine of interest group power. Even under these conditions, however, global regulatory multilateralism does not reinforce the decentralized order and generate the cascading benefits of global trade agreements.
International Criminal Court: While the United States has not yet acceded to treaties establishing the International Criminal Court (ICC), most nations of the world have agreed to it. While limited in jurisdiction to certain heinous crimes, the ICC suffers from many of the same problems as other international regulatory regimes because criminal law is a species of regulation. The apparatus for enforcing international criminal law, like that for enforcing international regulations, will prove less accountable than criminal law enforcement in nations with democratic and accountable governments.
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