Globalization's challenges, tensions and contradictions, indeed all of the variables that contribute toward the trajectory of globalization and its relationship to its principal actors, merely reinforce the primacy of globalization itself as a singular orthodoxy. And it is an orthodoxy that is itself embedded in the more fundamental governance orthodoxy of the mid-1945s from out of which the framework of its conception and operation was itself embedded. That orthodoxy itself posited a hierarchy in which politics served as the legitimating instrument of power, and that the state served as the apex organization of politics. That organization, itself, was expressed as the institutionalization of mass power framed within a set of fundamental substantive norms the limiting principles of which would be set by the community of states dominated by its leading members. Thus, the appearance of challenge and opposition that has been more sharply drawn since the start of this century might be understood as occurring within a carefully protected orthodoxy the object of which is to protect the primacy of politics (and law) with the state as its apex. And yet, one of the great ironies of globalization is the way in which its effort to cement a framework orthodoxy after 1945 has served to overturn orthodoxy itself, and in its place, has ushered in an age of heterodoxy that is both ordered but anarchic. This presentation introduces some of the basic trends and actors that have emerged from out of the orthodox conceptual framework of globalization, and the extent to which these are contributing to its transformation as a vector of governance.

1. The Privatization of Governance:
Emerging Trends and Actors
Larry Catá Backer (白 轲)
W. Richard and Mary Eshelman Faculty Scholar Professor of Law and International Affairs
Pennsylvania State University | 239 Lewis Katz Building, University Park, PA
16802 1.814.863.3640 (direct) || lcb11@psu.edu
International Conference: New International Trade and Investment Rules
Between Globalization and Anti-Globalization
Held at Penn State Law, University Park. PA 16802
April 22, 2017

2. Ordering
Globalization
How does one think through
the issues of ordering
globalization?
(1) Start with a consideration
of the contradictions of
globalization
(2) Consider basic
presumptions and actors of
the ideological orthodoxy of
globalization
(3) Identify emerging
heterodoxy (a) actors, (b)
concepts, and (c )
consequences

3. Globalization as a Double Edged Sword
• PRO:
• strengthens commercial and financial
interdependence and cooperation among
different countries through robust
markets and production undertaken
through global supply chains.
• globalization appears to continue to
drive policy and to serve as the crux of
contemporary societal development.
• intensification of efforts to construct
conceptually coherent systems that are
meant to facilitate interactions among
states relating to the free movement of
goods, enterprises, capital, and, to some
extent, people across borders.
• Serves as a basis for maximizing
aggregate wealth and social progress
across states.
• ANTI:
• increased the gap between both rich and the
poor individuals within states, and between
developed and developing states.
• individuals and states participate unequally
in the processes and rewards of
globalization as an economic, societal,
cultural and political phenomenon.
• acceleration and deepening of globalization
has also accelerated and deepened
resistance among individuals within even the
most globalized states, and by states that feel
increasingly left behind.
• Globalization bifurcates economic
regulation: an elite global structure of
economic activity and residual localized
economic activity disconnected from global
flows.

4. The Contemporary Expression of Orthodoxy
CENTRALIZING FORCES
• WTO systems
• Trans-Pacific Partnership (TPP) and
the negotiation of the Transatlantic
Trade and Investment Partnership
(TTIP) and Trade in Service
Agreement (TISA), driven by
Western states.
• People’s Republic of China. China’s
One Belt One Road (OBOR)
Framework promises a different
approach and perhaps one that
serves developing states better.
DECENTRALIZING
• Protectionism
• in the service of development
• As derogations from global ordering
• Nationalism driving he
implementation of state
projections into global markets
• Bilateral Trade Agreements
• Regional Trade agreements
• Markets based
• “Western Socialist” models

5. Conceptual Basis of Orthodoxy
• Primacy of politics as an ordering and legitimating device
• Economics is the object
• Social ordering as a stabilization mechanism
• Centrality of the state as the principal means of ordering
politics
• Law as the core structuring mechanism
• Legalization and judicialization as the structures of
implementation
• Constrained delegations of authority from states to state
collectives
• The use of public international bodies as disciplinary
organs
• IFIs and conditionality for ordering macro economic policies
• Technical assistance for socializing “good governance”
• Global mechanisms for criminalization of destabilizing
activity and to discipline states with weak governance that
interfere with the flows of global production
• Socialization of ordering societal life through state power—
regional human rights organizations and common
constitutional traditions

6. Overturning Orthodoxy Through Orthodoxy
• One of the great ironies of
globalization:
• effort to cement a framework
orthodoxy after 1945 has served
to overturn orthodoxy itself,
• Emerging heterodoxy that is
both ordered but anarchic
• Identify emerging trends and
actors

7. From the Primacy of Politics to Economics
• Driven by the primacy of the global
production chain
• The contradiction of the governance
gap in the conceptual structures of
law
• De-centering the state
• Challenging the integrity of law and its
“rule”
• Movements
• From law to contract
• From command to management
• From planning to markets
• From public to private
• From norm making to technique
• From mass politics to consumer choice
• Manifestations:
• The business case for human rights
• Transformations:
• The states as economic actors
• The enterprises as governance vehicles
• The production chain and the MNE as
the new “territory” within which
regulation is targeted
• Sovereign debt as a driver of governance
and sovereign lending as an alternative to
domestic sovereign authority:
• Private financing as a means of global
regulation
• Popular will from political expression to
(1) consumer choice and (2) factor in the
production of value
• Assessment Technique (self and
collective); internalization of external
rankings.

8. The Business Case for Human Rights
• From a normative project grounded in
the legalization of the Universal
Declaration of Human Rights
• To a project of regulatory compliance by
enterprises
• Devolving regulatory authority to
intermediaries
• Banks
• Apex multinationals
• 3rd party certification
• Importing the language of risk, reputation
and complicity
• UNGP
• OECD Guidelines for Multinational
Enterprises
• The business of compliance:
• for norms and compliance mechanisms

9. The State as Private Actor
• Sovereign Wealth Funds
• Active shareholding
• Projection of policy through
investment
• Development
• State to state economic activity
• State Owned Enterprises
• Privatize economic operations in
outbound economic activity
• Hybrids
• SOEs in SWFs
• SWFs as development banks

10. The Enterprise as Legislator
• Apex Multinationals
• Production Chains
• Third Party certification
• Enterprise collectives
• The Rana Plaza Factory Building
Collapse as an exemplar
• The Alliance
• The Accord
• The Arrangement
Pix credit

11. Production Chains/MNEs as New Governance
Territory
• Role of Apex enterprises in
privatized regulation
• Especially useful in business and
human rights related efforts
• Functional effect is to produce
enterprise obligation/liability
• Role of production chains as site
for standards generation
• More efficient site for managing
its component parts
(environmental, social, labor
conditions)

12. Sovereign Lending as a Governance Driver
• Role of IMF-World Bank
conditionality in lending
• The role of technical assistance
as a socialization technique
• Discipline through control of
productive capacity abroad in
the event of failures to pay

13. Private Financing as Regulatory Center
• Within globalization looking for
aggregation of power can serve the
same functional effect as the state.
• In an economic model, the power
of finance can be useful.
• States and international
organizations that cannot legislate
directly can seek to devolve
legislative authority through
financial institutions with power
over economic sectors.

14. From Popular Will to Consumer Choice
• Where does popular power go
when governance seeps out of the
state?
• Direct relationship with banks and
enterprises exercised through
management of consumers
• NGOS as representative bodies
• Contests for control of consumer
tastes
• Investors as consumers
• Consumers within production
chains and wholesale markets also
consumers

15. Assessment and (Self) Control
• The power of transparency and data
• Ordering behavior through the rationales of
economic and societal advantage
• Power in the individuals and institutions that
have the authority (through law or
consensus) to develop the parameters for
assessment, data harvesting and
interpretation (ranking)
• Detaches governance from the legitimating
structures of politics, the state and law:
• this is technical and “neutral”
• Any actor may produce or manage
• Produces a governance regime in which the
targets of assessment become its principal
enforcers (internalization)
• Individuals
• Enterprises
• states

16. The Privatization of Governance
• The state has not disappeared
• Public order
• Protection of territorial manifestation of
international order
• Projection of power through markets
• International Organizations
• Producer of norms
• Creator of assessment mechanisms
• Private Enterprises and financial
institutions have emerged in a
regulatory capacity
• The societal sphere has become an
object of regulation
• These actors are now inter-linked and
collectively produce the web of
obligation that constitutes the global
trading order

17. Where Does China Fit In?
• The business case for human rights
• Two track compliance for SOEs:
• Within China—CSR and Chinese context as basis
• Outside China—Conform to local and international
requirements as necessary
• Transformations:
• The states as economic actors
• Chinese SWFs as drivers and sources of regulation
• The enterprises as governance vehicles
• SOEs as drivers of markets Marxism
• The production chain and the MNE as the
new “territory” within which regulation is
targeted
• The essence of One Belt One Road initiative
• Grounded on coordinated aggregated BITs
targeted toward Chinese production and its trade
needs
• Built on targeted infrastructure and development
financing
• Sovereign debt as a driver of governance
and sovereign lending as an alternative to
domestic sovereign authority
• Private financing as a means of global
regulation
• China lags behind in the institution of private
lending that advance state policy
• Popular will from political expression to (1)
consumer choice and (2) factor in the
production of value
• Socialist modernization requires a coordinated
approach between economic and societal
advancement
• State and economic actors undertake
responsibility to care for workers and promote
correct behavior through provision of services
• Assessment Technique (self and collective);
internalization of external rankings.
• Development of socialist society through social
credit systems

18. Taking Stock
• Where has governance gone?
• How is it manifested?
• The great orthodox vision of the period after
1945 has succeeded perhaps beyond the hopes
of its architects
• Yet in that success lay the seeds of the
transformation of the foundations on which it
was created
• adds an important contradiction to a global system
founded on the territorial and power asserting
integrity of states through legally framed politics.
• Provides the basis around which anti-globalization
acquires a reactionary character
• Produces a world that is divided into economic
territories rather than political territories (every
state contains distinct “worlds” of individuals
subject to distinct aggregate governance
systems)
• Leaves unanswered the framework within which
great global problems (climate change, terrorism,
etc.) might be approached.
The thrust of new governance produces:
(1) a new balance between private and public power in
powerful states;
(2) a move from private to privatized power in developing
states and weak governance zones.

19. Thank You!
Text may be accessed upon request.