Abstract
ABSTRACTExisting theories make divergent predictions about the impact of new powers on the global political economy. Some argue that a more even distribution of power will erode international cooperation, while others argue that cooperation can continue with the help of international institutions to overcome collective action problems. We argue that this debate overlooks a critical determinant of the shape of power transitions: the distribution of preferences amongst the major powers. It is primarily in the context of divergent preferences that power transitions are likely to give rise to conflict. Moreover, even where preferences diverge, the gains of cooperation provide a strong incentive to continue to pursue goals through multilateralism. This situation leads to forms of institutional change unanticipated by established theories. These include deadlock in expansive multilateral fora, institutional drift as old rules cannot keep up with the changing political and economic context, and fragmentation as countries seek minilateral solutions that reduce preference diversity. We develop this preference-based, institutional argument by examining the distribution of preferences and institutional change at the World Trade Organization (WTO) and its Doha Round, where the power transition is relatively advanced.
Highlights
For the first time in the modern era, non-Western countries are becoming major world powers and taking on an increasingly central role in the global economy
While it is widely accepted that China, and to a lesser extent India, Brazil and other emerging economies, have shifted the distribution of international power, the implications of this shift for the global political and economic order are the subject of debate
This paper has shown that the rise of new powers has increased the diversity of the distribution of power-weighted preferences at the World Trade Organization (WTO)
Summary
The adoption of semi-liberal but state-guided paths of development by new trade powers suggests in particular differences with regard to the ‘deep integration’ (Lawrence 1996) agenda of regulatory alignment These were to a large extent originally subsumed in the WTO DDA under the label of ‘Singapore’ issues: the issues of the relationship between trade and investment, competition policy, and government procurement. In line with our assumption that states pursue multilateral policies that reflect their domestic economic structures, we expect that, on average, the rising powers will have expounded different and less liberal positions in multilateral trade negotiations These differences should be especially acute with regard to ‘deep integration’ issues that increase the potential for friction between divergent economic systems.. It does reinforce that it is hardly the power shift alone that challenges the global trade order—the societally-derived preferences of the major players play a critical role
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