Regionalism, Multilateralism, and Sovereign Debt: Observations from a Latin Americanist

Abstract

The paper posits a powerful mutuality of interests between global multilateralism and independent regionalism in the global South. The more-or-less liberal international order established following the Second World War struggles to retain political and financial support from advanced industrial countries. Since the underlying source of this tension reflects a structural shift in the interstate distribution of power capabilities toward rising global multipolarity, the only viable medium-term solution for peak multilateralism is achieving greater legitimacy among a wider field of countries. Greater innovativeness is a second benefit to central multilateralism of expanded regional access: important international policy challenges are not “seen” until those who experience them have sufficient voice. The counterpart challenge within the global South is the frustration of policy entrepreneurs from small and intermediate powers. Most recognize the need for prior interest-aggregation to exercise influence in peak international organizations where great powers dominate. However, effective regionalism, a perennial and obvious choice for non-great powers, in practice has been difficult, especially in Latin America. Yes, one explanation is vicious partisan squabbling in the neighborhood, but subtle, structural factors also undermine cooperation, as a quick comparison with Europe demonstrates. In this context, “regionalism” is best conceptualized as a mix of formal organizations and regionally-based transnational epistemic communities or activist networks. A case study of Latin America-focused policy entrepreneurship over several decades around the global financial governance of currency and sovereign debt illustrates these observations.