9. Global Governance: A Theoretical Framework

We can observe the change of research focus in this field by looking at Oran R. Young’s changes of research topics: he published International Cooperation in 1989, International Governance in 1994, and Governance in World Affairs in 2007. See Young (2007).

The greater complexity of research objects: the diversification of the concept of security, the diversification of the concept of power, the diversification of interests, and the increase in layers of governance. First, the concept of security has gone beyond the traditional military security to include broad non-traditional security. Second, unlike previous dependence on military measures, the power struggle in globalization has taken on a more diversified form typified by control of governance rules in certain fields. In different issue areas, the interests of all sides need to be coordinated. All sovereign states, commercial interest groups, global civil societies, and international organizations have their own interest appeals, and with different intensities and preferences. Finally, implementation of global governance measures may involve governance activities at both domestic and international levels. Domestic politics are closely related to global governance.

While having borrowed achievements and analytical language from research on international cooperation and international institutions, global governance research not only has covered a research subject that better reflects the characteristics of old and new ages but also has reshaped the analytical language. This paper attempts to develop an institutional analytical framework for global governance research by learning from past research achievements on international institutions, and on that basis, follows a research agenda that gradually includes the new theoretical elements.

Commission on Global Governance, Our Global Neighborhood, Chapter One; see http://​www.​gdrc.​org/​u-gov/​global-neighbourhood/​chap1.​htm.

Rosenau (2001).

Hardin (1968).

Yu (2005).

Williamson (2000).

Olson (1965).

Ostrom (2000).

One of Coase’s contributions was his discussion of the importance of defining property rights. See MacKenzie (2008).

Because state actors need to appeal to the legitimacy of rule, all states will seek a balance between domestic development and state aid. This is one of the basic assumptions of political economics. In this regard, the amount of global public goods that states provide will be directly restricted by domestic political factors. First, states need to protect the interest of domestic people and improve domestic welfare through economic development. Second, states also need to participate in global governance and gain international reputation by providing public goods.

Zhang and Li (2008).

Niebuhr (1998).

Uncertainty is one preset condition that decision-makers have to face. Uncertainty can be either endogenous or exogenous. The decision-maker is subject to the limitation of his or her knowledge reserve and information access; besides, external factors such as the unknowable orientation of other actors or unpredictable environment are also important source of uncertainty.

Schelling (1956).

Tuo (2004).

The story of Journey to the West goes well with “muddling through.” Among the actors in that book, some are whole-hearted, some are half-hearted, and some have no choice. But they all work together to obtain the true Buddhist scriptures and accomplish immortal achievements. Economist Lindblom called such a process of collective choice with multiple aims and unified action “muddling through.” See Lindblom (1959).

Keohane (2002).

According to the different combinations of non-excludability and non-rivalrousness, public goods can be divided into following categories: pure public goods (non-rivalrous + non-excludable), non-pure public goods (rivalrous + non-excludable) and club products (non-rivalrous + excludable). See Buchanan (1965).

Governance of specific issues requires provision of different public goods. Accordingly, this has put requirements on the capacity of various actors to provide global public goods. Security governance is the main domain for states and transnational organizations; stable global economic order is the goal that many related interest groups such as transnational organizations and corporations have tried to reach by lobbying state actors vigorously; most non-governmental organizations, such as the Red Cross and Greenpeace, advocate and promote global public affairs.

Sandler thought that financing for pure public goods depends on promotion by the public sector; financing for non-pure public goods which has the characteristic of being rivalrous and non-excludable depends on public international organizations; financing for non-pure public goods which has the characteristic of being excludable needs club structure with financing incentive; club products depends on scale economy; financing for mixed products needs to consider the proportional structure of private (market) and clubs. See Sandler (2002), Zhang and Li (2008), 195.

Kaul et al. (1999); Zhang and Li (2008), 186.

There are also a number of research papers which distinguish and define players by regional difference. See Zhang (2007).

Waltz (1999).

High stake-holding intensity may occur in two situations: in one, states have relatively strong capacity in providing certain public goods and little difficulty in coordinating domestic policies; in the other, the characteristics of state asset specialty determines the state’s lack of comparative advantage and relative vulnerability. The two situations will positively or negatively affect the preferences of the state as it participates in global governance and add to the difficulty for non-state actors to lobby states to provide global public goods.

Lin and Weijiang (2014).

Olson (1965), 36.

Stevens (1993), 68; Eatwell et al. (1992a), Coase (1960, 1992, 1998).

When proposing the concept of governance equilibrium, we borrowed the concept of “Lindahl equilibrium” from public finance economics and reshaped it to replace individuals with states. Erik Lindahl is a well-known Swedish economist who studied how to determine the amount of public goods to be provided and how to finance public goods through the use of a pricing system or market exchange. Specifically, Lindahl equilibrium means that the supply of all types of public goods, at a given set of prices, is equal to the demand for different public goods, or the cost for each person is equal to its (marginal) benefit. See Eatwell et al. (1992b)

North (2003). Drobak and Nye referred to Douglass.

Zhang (1994).

Keohane (1988).

Russell (1919, 1996).

Frege (2003).

There is no such thing as an institution of absolute equilibrium. Generally speaking, institutional arrangements that appear in various forms are all only relatively stable and can be temporarily accepted but are actually not in a state of absolute equilibrium.

Arnold Toynbee had used the three levels of objects, institutions, and ideas to describe the world in a stable state. The stable state in which the world is guided by a set of established institutions can also be reached by achieving equilibrium at the three levels. See Zhang et al. (2007).

It is necessary to add that the civilized human world is the crystallization of a certain civilization of institutions. It is impossible to discuss the world at a certain historic “juncture” without discussing institutions, and using earlier institutions to explain the stability of later institutions is not circular. We are not using institutions at a “static” state to explain institutions at certain “juncture.” Institutions are “dynamic.” Institutions in every historical period have the indelible features of their own time.

Stevens (1993), 47.

What is involved here is the logical and empirical examination of theory, more specifically, the stable relationship between concepts—correlation or causation.

Zhu (2009).

Exploration of potential interest in specific functional fields has promoted institutional innovation. In the context of global governance, the establishment of an international organization or other governance platform is usually first initiated and advocated by one state or other actor. Some individuals and non-state actors also organize spontaneously to protect rights and interests in a certain field. For instance, ananti-whaling organizations may be spontaneously set up by a group of activists engaging in whale protection. In the context of global governance, the proposal of an innovative plan is part of the process of designing an institutional framework. Historically, this has happened with the design of the framework and rules of organizations like the League of Nations, the United Nations, World Bank, and IMF. The operation of a governance platform, to a large extent, depends on the quality of institutional design. See Young (2007), 146.

A shift in composition occurs mainly through a change of power composition. See Qin (2013).

Haijun and Yi (2013).

Lin, Transaction Cost and Varying Institutional Level: Inclusive and ‘Informal’ Global Governance of the G20, Abbott and Snidal (1998).

Lake (2010).

United Nations Development Program (UNDP) and China Centre for International Economic Exchanges (CCIEE) (2012).

Habermas (1989), Weber (1997).

North (1992).

Ibid.

Buchanan and Keohane (2011).

Ibid.

Ibid.

Allee and Scalera (2012).

Tallberg et al. (2014).

Putnam (1993).