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How Countries Resist Global Institutions
Terry Halliday and Bruce Carruthers outline a series of strategies that countries may use to resist the influence of powerful global institutions.
Scholars Terry Halliday and Bruce Carruthers examine the different levels of influence that international financial institutions (IFIs) had on countries affected by the Asian economic crisis. In the cases of Indonesia, South Korea and China, they study the ways in which each of these countries resisted powerful international institutions.
What are the conditions under which countries are most likely to avoid external influence?
There are three circumstances that increase a country’s ability to resist pressure from IFIs:
States use different strategies to minimize the influence of IFIs. There are several circumstances in which particular strategies of resistance are likely to be most effective.
Strategies for Avoiding Influence
Outright refusal to adopt recommendations may be possible under three conditions:
In these cases, a country may obtain some amount of freedom by simply refusing to implement IFI recommendations.
Fragmenting Powerful External Coalitions
The power of IFIs can also be reduced when coalitions for change are fragmented. There are both internal (domestic) and external fragmentation strategies.
Internal Fragmentation Strategies
Claiming Cultural Exceptionalism
However, effectively playing of the "culture hand" on the domestic front requires a plausible basis. That is, the argument for cultural exceptionalism must rest on values and cultural norms that are either already in place or can be constructed.
The authors say that a country may offer signals of compliance to external constituencies, but proceed in different directions in practice.
There are several variants of symbolic compliance:
However, a symbolic compliance strategy requires that external regulators have limited surveillance or enforcement capacities, and that internal practices be relatively invisible.
Substituting a Solution
A country may substitute a home-grown solution to solve an IFI-designated problem.
There are three requirements for this strategy to work:
Procrastination is perhaps the least risky and most common tactic. A government can advise the IFIs that it accepts their conditions and recommendations, but then ’drag its feet’—doing as little as possible for as long as possible.
Stalling or slowing implementation is a strong tactic because it both avoids direct confrontation and has a surface plausibility. IFIs cannot always be sure whether the country is unwilling or unable to comply.
The effectiveness of delay may increase in two circumstances:
With regard to the last circumstance, a weak country, by definition, has less administrative and expert capacity to implement reform programs.
Another strategy for stalling is to break down a larger commitment into innumerable smaller steps.
This strategy can work when IFI pressures are not sufficient to force a comprehensive solution at the outset.
The relationship between crisis and resistance by segmentation is complex.
Constructing Exclusions and Escape Routes
Complying with IFI recommendations for reforms may threaten current power relations or forms of market regulation. Governments may build in "back-doors," exclusions and escape routes in order to preserve existing power relations. Three “escape routes” from reform include:
Halliday and Carruthers identify a number of strategies that "weak" countries may use to foil the intervention of powerful IFIs into their economies. The authors also identify conditions in which the different strategies may be more or less effective.
Data and Methods:
Based on interviews with actors involved in the development of international insolvency law.
American Bar Foundation.
Halliday, Terence C., and Bruce G. Carruthers. 2007. "Foiling the Hegemons: Limits to the Globalisation of Corporate Insolvency Regimes in Indonesia, Korea and China." Pp. 255-301 in Law and Globalization in Asia Since the Crisis, edited by Christoph Antons and Volkmar Gessner. Oxford: Hart Publishing.
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