New Global Economic Governance through Private Authority

“Private actors are increasingly engaged in authoritative decision-making that was previously the prerogative of states.”[1]

-          Ferdinand Braudel

One of the most obvious issues raised by the transition from autonomous sovereign states to an integrated world is the need for global governance structures to handle transnational economic issues. Nayef Al-Rodhan and Gérard Stoudmann explain that globalization “encompasses the causes, course, and consequences of transnational and transcultural integration of human and non-human activities.”[2] Activities which transcend preexisting sovereign boundaries require new approaches to authority.

The World Trade Organization is now the predominant actor overseeing international trade. Amnesty International lacks the same authority as the WTO, but is still a definitive voice on human rights, and Greenpeace plays a strong role in holding corporations responsible for environmental damage.[3] Each of these private authorities helps prevent negative externalities caused by global economic integration.

While some have decried the lack of coercive power held by private authorities, there is little doubt they contribute to holding multinational economic actors responsible for actions. In response to pressure from Amnesty International and numerous other international organizations, the United States Security and Exchange commission has implemented the “Conflict Minerals Rule,” forcing companies to disclose their use of conflict minerals in the manufacture of products.[4] The World Trade Organization has also provided a mechanism for states to hold each other and multinational corporations accountable for environmental harm.

In the absence of formal economic global governance institutions under the auspices of the United Nations, the private authority exercised by international actors and non-governmental organizations provides an important check on the negative externalities created by multinational economic activity.

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[1] Braudel, Fernand. Afterthoughts on Material Civilization and Capitalism, The Johns Hopkins Symposia in Comparative History. Baltimore, Johns Hopkins University Press, 1977., p. 20

[2] Al-Rodhan, Nayef RF, and Gérard Stoudmann. "Definitions of globalization: A comprehensive overview and a proposed definition." Program on the Geopolitical Implications of Globalization and Transnational Security 6 (2006), p. 1

[3] Kobrin, Stephen J. "Economic governance in an electronically networked global economy." Cambridge Studies in International Relations 85 (2002): 43-75. 67

[4] “Disclosing the Use of Conflict Minerals,” U.S. Securities and Exchange Commission, July 29^th, 2014 (Accessed online 14 March 2015, http://www.sec.gov/News/Article/Detail/Article/1365171562058#.VQRmU454rYg)