New Thinking in Political Economy series
Edited by Andreas Bergh and Rolf Höijer
Chapter 5: Can Competition Between Governments Enhance Democracy?
Viktor J. Vanberg INTRODUCTION Between the fears that are voiced in the popular as well as in parts of the academic debate on globalization the charge that globalization poses a threat to democracy is particularly prominent (Herman 1999; Bartelson 2004). In globalization, so it is argued, market powers come to dominate politics because democratic governments are forced to compete for internationally mobile capital in ways that hamper their ability to serve the interests of their constituencies whose well-being they are supposed to further. The purpose of this chapter is to critically examine the conjecture, implied in the above noted fears about globalization, that the kind of competition between governments that globalization induces requires democratic governments to bow to ‘market forces’ and limits their capacity to act as faithful trustees of the citizens-principals who elected them as their agents. In the sections that follow I will seek to show that contrary to this conjecture competition between governments can very well work as a disciplining force that helps to keep democratic governments in line with their principal duty, namely to advance the common interests of the citizensprincipals as whose agents they act.1 Before turning to the issue of how competition between governments may or may not interfere with their capacity to act as faithful agents of their citizens, a few comments are in order on the way in which I will use, for the purposes of this paper, the terms ‘government’ and ‘democracy’. GOVERNMENTS AS ‘TERRITORIAL ENTERPRISES’ In the most general sense,...