Conflict, Institutional Change, and Development in the Era of Globalization
New Thinking in Political Economy series
Edited by Joachim Ahrens, Rolf Caspers and Janina Weingarth
Chapter 1: Governance, Development, and Institutional Change in Times of Globalization
Joachim Ahrens 1. INTRODUCTION The 20th century, particularly its second half, witnessed the flourishing development of market-based economies as means to achieve economic and social development, political stability, and in some countries even prosperity and liberal democracy. Successful market and social development was secured through appropriate institutional underpinnings ranging from economic regulation and macroeconomic management to social insurance and legitimate institutions for conflict resolution. Such national institutional foundations sustainably helped comprehensive productivity gains to materialize. Globalization processes, which have accelerated particularly since the 1970s, pose new opportunities as well as challenges to national political economies (Rodrik 2000b). Globalization refers to an increase of globalism, which is being understood as a state of the world involving networks of interdependence at multi continental distances. These networks can be linked through flows and influences of capital and goods, information and ideas, people and force, as well as environmentally and biologically relevant substances. (Keohane and Nye 2000: 2) On the positive side, sharing information, knowledge, and beliefs, technological spillovers, free flows of products, capital, and people, as well as the progress in communication technology allows more and more countries and people to benefit from globalization and to improve their lives. On the other hand, internationally acting companies and banks still complain about obstacles to international trade and capital flows. Labor and consumer safety activists and environmentalists fear an erosion of national standards, legislation, and tax bases. 'Broad sections of the populace treat globalization J 2 Good Governance in the 2 Jst Century as a...
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