Domestic ideas, institutions or interests? Explaining governmental preferences towards global economic governance

Abstract

Controversies in global economic governance are strongly shaped by domestic societal forces. In some instances, however, governmental positions reflect domestic interests, while ideas influence positions in other instances. Under which conditions do ideas prevail over interests and vice versa? How do they interact with each other and with domestic institutions? I argue that governmental positions predominantly follow interests if the governance issue at stake impacts the cost-benefit calculations of specific sectors, while ideas dominate when sectoral interests are affected in a diffuse way and fundamental questions on the role of politics in steering the economy are at stake. Furthermore, governmental positions tend to be consistent with national institutions, when the global governance issue concerned refers to questions related to domestic patterns of socio-economic regulation. In enhancing the societal approach to international political economy (IPE), the article exemplifies the relevance of these arguments in case studies on the G20 and the International Monetary Fund.

Refining domestic politics theories of IPE: A societal approach to governmental preferences

“…The societal approach was developed as a complementary approach to analyse empirical puzzles of IPE (Schirm, 2009(Schirm, , 2013(Schirm, , 2016(Schirm, , 2018. Especially, the societal approach aims at explaining the reasons for diverging governmental preferences in cross-country comparison and the reasons for the prevalence of domestic ideas and institutions in some cases and of interests in other cases of governmental preferences towards international economic governance.…”

“…The latter puzzle raised the question about the conditions for the prevalence of either value-based ideas, or institutions, or material interests. Before presenting the approach in detail, the results of two research projects shall be briefly sketched as examples for the empirical application of the approach's core hypotheses and for the usefulness of conceptualising the conditions for the prevalence of a specific domestic variable (for the complete analysis and evidence, see Schirm, 2013Schirm, , 2016 In one research project, the societal approach was able to explain the puzzle about the variation between the interest-driven controversies among the United States, Germany, and Brazil on global trade imbalances in the G20 on one hand, and the apparently ideasdriven controversies among the same countries over public debt and stimulus programmes in the G20 on the other hand. The evidence supported the societal approach's core hypotheses (see next section).…”

“…In complementing and building upon domestic politics theories, I developed and applied the societal approach over the last decade to analyse specific empirical puzzles (Schirm, 2009(Schirm, , 2013(Schirm, , 2016(Schirm, , 2018. The present theoretical article brings together the previously conceived and empirically tested parts, and considerably expands the approach.…”

In pursuit of self-determination and redistribution: emerging powers and Western anti-establishment voters in international politics

“…Cooperative agreements create winners and losers domestically; therefore they generate supporters and opponents" (Milner, 1997, p. 9). Hence, the analysis of IPE must reach beyond the simplifying notion of "countries" or "states" as units of analysis and examine with domestic politics theories such as the Societal Approach (Schirm, 2016) how governmental preference formation is shaped by value-based ideas, domestic institutions and material interests.…”

Societal Foundations of European Policy Divergence in Financial Governance

“…For this endeavor, both domestic material interests and societal ideas matter since both lobby groups pursuing sectoral interests and value-based collective ideational expectations of voters may influence governmental positions. Resting on the assumption that governments wish to remain in office, the societal approach to governmental preference formation argues that interests and/or ideas inform governmental positions prior to the international context and to inter-state negotiations on the regional and global levels (Schirm 2014). Thus, the core hypothesis of this paper is that European policy divergence on financial governance correlates with differences in sectoral interests and/or societal ideas in the domestic politics of EMU countries and European members in the G20.…”