Developing global scripts: The politics and science of capital openness and taxation norms

What is it about?

The policy response to the global financial crisis of 2007/8 cast light on the organizational infrastructure of the world economy: many international organizations had a key role in shaping and spreading global rules, for example on how to trade goods, transfer money, and tax incomes. These organizations—like the European Union or the World Trade Organization—often present their decisions as ‘scientific’: their highly-trained staff design policies based on pioneering academic thinking. Consequently, the policy preferences of international organizations become naturalised, and their output becomes branded as scientific and—therefore—apolitical. This narrative is only superficially true. Sociologists Alexander Kentikelenis and Leonard Seabrooke draw attention to the inner workings of international organizations to show how politics permeate these processes. Their analysis focuses on how the International Monetary Fund (IMF), an organization known for economic policies that change billions of lives, reached decisions over policies on financial openness and consumption taxes. Kentikelenis and Seabrooke trace tensions between science and politics in the IMF’s policy design by digging into thousands of pages of archival documents and interviews with key staff. They show that science has a background role in this process, and primarily relates to lower-level staff. In contrast, politics permeates the policy actions of the higher levels of the bureaucracy, and—of course—the governing body. Negotiations, backroom deals, coalition-building, and arm-twisting are commonplace features in policy design within the IMF. Importantly, the most powerful actors—notably, rich countries and the Managing Director—do not always win. Coalitions of developing countries can and do shape organizational policies. For example, Kentikelenis and Seabrooke show how they successfully blocked a rule to prohibit countries from regulating the inflows and outflows of money. Why does uncovering these organizational politics matter? Kentikelenis and Seabrooke show that the policies spread by international organizations are not inevitable, and document how they can be contested. Their approach is directly relevant to contemporary debates: the rules underpinning free trade and global finance are being reshaped by international organizations; the politics of these processes will determine who benefits and how.

Featured Image

Why is it important?

Why does uncovering organizational politics in global governance matter? Kentikelenis and Seabrooke show that the policies spread by international organizations are not inevitable, and document how they can be contested. Their approach is directly relevant to contemporary debates: the rules underpinning free trade and global finance are being reshaped by international organizations; the politics of these processes will determine who benefits and how.