Inequality in the 21st Century

The London School of Economics & Political Science

London, UK

July 02 - 04, 2015

As markets and firms have internationalised, traditional governance by national states has been argued to have been weakened. In economic policy, national public policy makers have been seen as largely constrained by domestic borders. As a result, they have been forced to act through supranational or international agreements and organisations that suffer from their own weaknesses such as slow decision making or lack of democratic legitimacy. The result has been that the governance of markets has become increasingly indirect and reliant on regulation and/or that nation states have been weakened relative to internationalised firms.

Yet we also observe that states have extended their activities in ways that affect - or involve entering - overseas markets, thereby going beyond their national economic confines. We observe several prominent instances of such activities- for instance, state investments abroad, the purchase of resources in other countries, extra-territorial regulation and state lobbying overseas. These cases suggest national policy makers are able to act directly and without international or supranational agreements. They use both regulation and non-regulatory instruments such as public investment, spending, persuasion and negotiation. We study these phenomena and their effects on market governance, including the distribution of power between states and non-state actors and between Western and non-western states. In particular, the panel’s key questions will be: When and why do states extend the reach of their economic activities beyond their domestic borders? What instruments do they use? What effects do state overseas economic extensions have on the governance of markets?

The panel will discuss different ways the state influences and permeates overseas markets. It will cover different regions of the world and the way they are increasingly interlinked due to overseas state activities. One case concerns how France and Germany regulate inward equity investment by sovereign wealth funds from non-Western countries. These funds utilise market liberalisation and imbalances in capital, but can be seen as raising dangers due to being state owned, often by non-democratic countries. The second looks at extra-territoriality and multi-national enterprises, examining how different types of states deal with subsidiaries of such firms. Thereafter we turn to US lobbying over intellectual property rights in the case of pharmaceuticals, studying how Argentina and Brazil responded to US demands. Finally, we look at Gulf states seeking to buy the status of international statehood by carrying out international investments in the arts, humanitarian aid, universities and conferences.

The panel speaks both to the issues of regulation and governance and also to inequalities- both those between states and between states and multi-national firms. Such inequalities are often seen as a powerful explanatory factor for growing inequalities among individuals both in terms of cross-national comparison and within countries.

Please note that Professor Andreas Nölke of the Goethe-Universität Frankfurt has agreed to be chair and discussant.