Globalizing America

Globalizing America

The USA in World Integration

New Horizons in International Business series

Edited by Thomas L. Brewer and Gavin Boyd

The authors address questions in current business and policy literature regarding the structural linkages evolving in the globalization process. The authors conclude that the US administration and American firms have to be more responsive to the interests of the international community that are being vitally affected by the integrating effects of transnational production and world trade.

Chapter 11: Structural statecraft

Gavin Boyd

Subjects: business and management, international business


Gavin Boyd Intensifying rivalries between firms striving for larger world market shares have increasing effects on the spread of benefits and costs as globalization continues. The consequences for growth and employment cause governments to adopt measures that are intended to enhance the structural competitiveness of their economies. The structural interdependencies linking their economies can be managed with advantage by administrations whose national firms achieve combinations of efficiencies that result in superior levels of structural competitiveness. The international economic rivalry however also involves uses of leverage over issues of market openness: large states, and groups of states, can discriminate against states with weaker bargaining power, thus in varying degrees limiting any advantages those states may derive from greater structural competitiveness. Bargaining strength based on the size of its economy enables the USA to exert very powerful leverage against the European Union, Japan and the industrializing countries. How this bargaining strength is used depends primarily on the dynamics of highly pluralistic policy processes which tend to be more understandable in public choice than in public interest perspectives. These processes make the enhancement of structural competitiveness difficult, and limit the scope for measures that might be considered for that purpose.1 Hence there is an overall tendency to rely on market opening leverage against other states in the international economic rivalry. In policy statements this is justified with reference to the potential benefits of general trade and investment liberalization. It is also justified with complaints that structural policies...

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