Europe and the new global economic order: internal diversity as liability and asset in managing globalization

Abstract

The diversity of market economies that constitute the European Union (EU) presents both constraints and opportunities for Europe when it comes to shaping the post-neoliberal global economic order. Diversity is a constraint in that it often prevents strong common positions in global negotiations and thus undermines the ability of Europe to exercise its collective hard power resources. Paradoxically, however, the EU's enduring diversity over time has become the source of a different type of power that also provides Europe with opportunities to shape the nature of global economic governance. By reconciling commitments to greater economic openness and extensive multilateralism with national discretion, the EU enjoys ‘model power’. This type of power is based in specific institutional innovations within the EU that accommodate internal diversity and allow the EU to exercise important, if limited, influence over the substantive content and rules guiding the management of globalization.