Teaching Comparative Government and Politics

Tuesday, February 11, 2014

Ceding Sovereignty

Why would a nation state voluntarily give up some of its sovereignty? Is this the beginning of the obsolescence of sovereignty in a global world?

Government-to-government trade
Unbundling the nation state: Countries have started to outsource public services to each other

Today [a] scenario may appear... unlikely: a Norwegian government agency managing Algeria’s sovereign-wealth fund [or] German police overseeing security in the streets of Mumbai… Ever more governments are trading with each other, from advising lawmakers to managing entire services. They are following businesses, which have long outsourced much of what they do. Is this the dawn of the government-to-government era?

Such “G2G” trade is not new, though the name may be…

One reason G2G trade is growing is that it is a natural extension of the trend for governments to pinch policies from each other. “Policymaking now routinely occurs in comparative terms,” says Jamie Peck of the University of British Columbia…

When China realised in the run-up to the 2008 Beijing Olympics that it needed to improve its air-safety regulations, it could just have looked around for the best examples and come up with its own version. Instead it asked America’s Federal Aviation Administration (FAA) to write a new rule book and to train Chinese pilots. The FAA now has full-time offices in Beijing and Shanghai…

Dispute resolution is a particularly lively part of the G2G market. Britain will soon play host to an arbitration court for Saudi Arabian disputes, helping to allay investors’ concerns about the Gulf state’s legal system…

The most radical form of G2G is the delegation agreement: the government of one country providing a public service in another, which in effect cedes part of its sovereignty. In 2003 the government of the Solomon Islands, concerned at rising violence and falling tax revenues caused by corruption, asked the Australian-led Regional Assistance Mission to the Solomon Islands (RAMSI) to take over law enforcement. RAMSI brought in more than 2,000 soldiers and other personnel and succeeded in establishing the rule of law.

No one knows the size of the G2G market. Governments rarely publicise deals, not least because they fear looking weak. And there are formidable barriers to trade. The biggest is the “Westphalian” view of sovereignty, says Stephen Krasner of Stanford University: that states should run their own affairs without foreign interference….

Local governments, however, both have greater incentives to trade and face fewer barriers. Rapid urbanisation creates urgent practical problems for cities: in 2009 the urban population in developing countries stood at 2.5 billion, a number expected to double by 2050. And, unlike countries, cities are not hobbled by issues of sovereignty…

Weak government services are the main reason poor countries fail to catch up with rich ones, says Paul Romer of New York University (NYU)… In a recent paper with Brandon Fuller, also of NYU, Mr Romer argues [for]… further lowering the barriers to trade in privately provided goods and services. Firms have long outsourced activities, even core ones, to others that do them better. It is time governments followed suit.

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