keohane redefining accountability in kahler086

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overn nce in a Global conomy

P O L I T I C L U T H O R I T Y I N T R N S I T I O N

dited byMiles Kahler and David A Lake

P R I N C E T O N U N I V E R S I T Y P R E S S

P R I N C E T O N N D O X F O R D


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Chapter 5

REDEFINING ACCOUNTABILITY

FOR GLOBAL GOVERNANCE

R O B E RT O . K E O H A N E A N D JOSEPH S . NYE, JR .

G L O B A L I N S T I T U T I O N S are under challenge. 1 One of their problems is alack of legitimacy. Legitimacy implies that those subject to a governanceprocess accept it as properly authoritative. The legitimacy of institutionscan rest on tradition, symbols, or effectiveness. In democratic societies,legitimacy can also rest on procedures that are regarded as sufficientlyfair and participatory.

International institutions have little prospect of benefiting from sym-bolic, affective, or traditional legitimacy. Their defenders tend to justifythem in terms of their apparent efficacy: th e essential role they play inpromoting international cooperation and providing global public goods.Such a justification is important, but rarely sufficient in a democraticera. In today's world, there is also a widespread demand for account-ability. For international institutions to be legitimate, the challenge ofaccountability must be confronted. This chapter explores issues of ac-countability in global governance.

Issues of accountability have frequently been f ramed in terms of theso-called democratic deficit afflicting global governance. The leadingdemocratic political theorist of our era, Robert A. Dahl, has recentlydeclared (1999, 32) that international organizations are not and arenot likely to be democratic. In this view, chains of delegation are toolong, there is too much secrecy, and much international organizationalactivity does not take place even in the shadow of elections. It has beenargued, furthermore, that democracy requires a demos in Joseph W eiler swords, a polity with members by whom and for whom democraticdiscourse with its many variants takes place (1999, 337). Observing

1 T he authors are grateful, fo r comments on previous versions of this paper, to CraigBorowiak, Jessica Einhorn, Barbara Koremenos, Lisa Martin, Dan Nielson, and DaniRodrik, as well as to the editors, other participants at the La Jolla conference, 23-24March 2001, an d members of the Visions o f Governance Project at the John F. K ennedySchool of Government, Harvard University. W e have also benefited from conversations onthis topic wi th Francesca Bignami, Ruth Grant, an d David Soskice. We are particularlyindebted to K al Raustiala fo r calling ou r attention to the significance of administrativelaw for our subject.


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R E D E F I N I N G ACCOUNTABILITY 387

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t h i s l a c k o f a de m o c r a t i c c o m m u n i t y a n d a g r e e d - u p o n p r o c e d u r e s a t t h eglobal level , Dahl suggests that political scientists s h o u l d treat i n t e r n a -t i o n a l o r g a n i z a t i o n s a s b u r e a u c r a t i c b a r g a i n i n g s y st em s r a t h e r t h a n a sd e m o c r a t i c i n s t i t u t i o n s (1 99 9, 3 2) .

T h r e e q u i t e d i f f e r e n t r e a c t i o n s t o t h i s a l l e g e d d e m o c r a t i c def ic i t c a nbe ident i f ied. The first is to decry the lack of democracy in internationalo rg a n i z a t i o n s , a n d t o u rg e c a u t i o n , a s a r e s u l t , i n th e i r u s e . I n D a h l ' sv ie w, i n t e r n a t i o n a l o r g a n i z a t i o n s a r e n e v e r l ike ly t o b e d e m o c r a t i c , a n d

w e s h o u l d t h e r e f o r e b e c a u t i o u s i n e x p a n d i n g t h e i r a u t h o r i t y. I nweigh ing th e desi rabi l i ty o f b u r e a u c r a t i c b a rg a i n i n g s y s te m s in i n t e r n a -t i o n a l o r g a n i z a t i o n s , th e costs to democracy s h o u l d be c l e a r l y i n d i c a t e da n d t a k e n i n t o a c c o u n t . E v e n i f w e c o n c l u d e d t h a t t h e g a i n s , o r e x -p e c t e d g a i n s , o u t w e i g h t h e s e c o s t s , t h a t i s n o r e a s o n to i g n o r e t h e men t i re ly (Da hl 1999, 34; i talics in o r ig ina l ) .

A s econd v iew, e x e m p l i fi e d by Da v id He ld , i s to agre e tha t e x i s t ingi n t e r n a t i o n a l g o v e r n a n c e is u n d e m o c r a t i c , bu t t o u r g e m o r e d e m o c r a cy.H e l d a rg u e s t h a t w e s h o u l d t h i n k m o r e s e r i o u s l y a b o u t c o s m o p o l i ta ndemocracy, which would seek to entrench and deve lop democratici n s t i t u t i o n s a t r e g i o n a l a n d g l o b a l le v e l s a s a n e c e s s a r y c o m p l e m e n t t ot h o s e a t the l e v e l o f the na t ion -s ta te (1996 , 354).

A t h i rd , qu i t e d i f f e ren t r e a c t i o n t o t h e d e m o c r a t i c def ic i t i s t o a c c e p ti ts real i ty bu t deny i ts r e l evance fo r po l i cy. Among realist students o fw o r l d p o l i t i c s , i t s e e m s s e l f - e v i d e n t t h a t g l o b a l g o v e r n a n c e c a n n o t c o m ec l o s e t o m e e t i n g d e m o c r a t i c s t a n d a r d s . A t t h e c o r e o f r e a l i s m i s t h es t r o n g d i s t i n c t i o n b e t w e e n p o l i t i c s w i t h i n s t a t e s , w h e r e p o l i t i c a l c o m -m u n i t i e s exist, and among t h e m , in pol i t ics characterized n e i t h e r byc o m m u n i t y n o r h i e r a r c h y, b u t b y a n a r c h y ( Wa l t z 1 97 9) . I n t e r n a t i o n a li n s t i t u t i o n s a re s e e n e s s e n t i a l l y a s i n s t r u m e n t s t h a t s t a te s u s e t o a c h i e v ec o m m o n p u r p o s e s . To h o l d t h e m to d o m e s t i c s t a n d a r d s o f d e m o c r a t i cp r o c e d u r e is to e n g a g e in what philosophers ca l l a category mistake.It m a k e s n o m o r e s e n s e t o a s k w h e t h e r a n i n t e r - s t a t e o r g a n i z a t i o n is d e m o c r a t i c t h a n i t d o e s to a s k if a br o o m h a s a n i c e p e r s o n a l i t y. O n es h o u l d a s k m e r e l y i f t h e i n s t r u m e n t w o r k s w e l l . O n e m i g h t a s k a b o u tthe pe r sona l i ty of the j an i to r hand l ing the broom, and one m i g h t aska b o u t d e m o c r a t i c p r o c e d u r e s i n t he states u s i n g a n i n t e r - s ta t e i n s t i t u -t i o n . In t h i s r ea l i s t v iew, wor ld po l i t i c s i s i n h e r e n t l y u n d e m o c r a t i c a n dt h e r e is l i t t l e po in t in l a m e n t i n g th e o b v i o u s .2

C o m m e n t i n g o n t h e c r e a t i on o f the W o r ld B a n k a n d t h e I n t e r n a t i o n a l M o n e t a r y F u n din 1946 , J ohn May na rd K e y n e s i m p l i c i t l y o f f e r e d a f o u r t h a l t e r n a t i v e . T h i s v i e w r e jec t sd e m o c r a t i c a c c o u n t a b i l i t y a s a n i d ea l in f a v o r o f t e chno c racy. Keynes s a id t ha t h e h o p e dthe se tw o o rg a n i z a t i o n s w o u l d no t be a ffec ted by the bad fa i ry ' s curs e tha t 'you tw ob ra t s w i ll g row u p po l i t i c i an s . ' I f t h i s shou ld happen , K e y n e s dec l a r ed , t hen t he be s t


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388 KEOHANE AND NYE

W e agree with th e realists up to a point. In the absence of a globalpolitical community (which is not imminent), it makes little sense tohold global institutions to domestic democratic standards. Their ulti-m ate dem ocratic legitimacy rests in substan tial part on the extent towhich they are faithful instruments of the (mainly) democratic statesthat created them. Their electoral accountability is derivative, and de-pends on whether they are faithful agents of democratic principals. B utw e are not prepared to let the matter rest there. Both Dahl and Heldhave valid points, as well. As governance m oves increasingly toward theglobal level as documented by other chapters in the present volume maintaining a realist dichotomy between domestic and interna-tional politics becomes increasingly untenable. Transnational relationsand globalization cross borders to the point where boundaries become,to a certain extent, blurred. Insofar as decisions that affect ordinarycitizens from trade to environmental standard-setting are madethrough international, transnational, and transgovernmental processes,relying on nominal sovereignty is no longer reassuring to advocates ofdemocracy.

Those w ho raise the issue of democratic procedures are asking theright question, bu t phrasing it in a confusing way. The phrase demo-cratic deficit is based on an implied domestic model. The issue is not, How close do international organizations and regimes come to meet-ing th e model of a democratic community with a demos an d institu-t ionalized means of representation and accountability? If we ask thatquestion, the answer is clear: Not very close. And the prospects forclosing the gap between global reality an d democratic Utopia are notgood. A better way of putting the question is to ask about differentty s of accountability. Even in well-ordered democratic polities, someinstitutions are not subject to d irect electoral accountability: witness theSupreme Court or the Federal Reserve Board of Governors in the U nitedStates. Rather than making a judgment about how far global institu-tions deviate from an ideal standard of domestic democratic account-ability, w e propose to investigate how different forms of global gover-

nance create potentials fo r various kinds of accountability.The key to our analysis is the assertion that accountability ca n takemultiple forms. Direct electoral representation is not the only relevantform for contemporary international governance. Accountability can be

tha t could befall would be for the children to f a l l into an e ternal slum ber, never to wakenor be heard of again in the courts and m arkets of man kind (Gardner 1980, 266). O urview, on the contrary, is tha t international institutions that ar e significant fo r allocatingvalues will necessarily be political a nd , on grounds of direct or indirect democratic ac-countability, ought to be.

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390 K E O H A N E A N D N Y E

lies by controlling th e agenda, through campaign spending, or otherwise. Butthe compe tition of elites provide s some assuran ce that, in the long run , govern-ments cannot defy the strongly felt will of a majority.

2. H ierarchical ac cou ntab ility is typical of most dom estic gove rnm ental sys-tems. Principals ca n remove agents from office, constrain th e agents room fo rdiscretion, and ad jus t the rewa rds for services. Intern ation ally, head s of agenciescan be removed (or not renewed); rules can be developed to restrict discretion,and governments can hold back their bud geta ry con tributions .

3. Legal accountabil i ty through judicial or q uasi- jud icial processes is com-mon in domestic pol i t ies . Agents can be sued, f ined, and jai led. Furthermore,administrat ive law in demo crat ic countr ies provides for procedures such as no-tice an d comment, by which part ies that are not hierarchical ly superior to theagents promulgating rules can appeal to legal processes to request changes. Le-ga l acc oun tabil i ty is a somewhat less prom inent mechan ism internat ional ly, buti t can be observed in internat ional civil litigation, and, recently, in the operationof internat ional cr iminal t r ibunals . Moreover, corrupt agents of internat ionalinst i tut ions can be tried in nat ional courts . In chapter 14 , James Caporaso dis-cusses the developm ent of legal acco unta bility in the Eu ropea n U nion as thefounding t reat ies have been const i tut ional ized and individual legal rights havebeen establ ished through rul ings by the European Court of Just ice.

4. Reputational accountability occurs through publicity. The media enhancenecessary t ransparency, and can a lso produce th e sanction of embar rassmentan d damage to reputat ion. Judges have to wri te opinions that are scrutinizedby the public an d fel low members of the Bar. Federal Reserve decisions ar ecriticized both by Congress and by profes sional econom ists. Internation ally, or-ganizat ions are subject no t only to press criticism, but also to t r ansna t iona lprofessional ju dgm ents by mem bers of epistemic comm unit ies . Transn at ionalcorporat ions ar e sub jec t to naming an d shaming campaigns by NGOs, and mar-ket-rating organizations ca n help police th e credibility of companies, banks, an dcou ntries. Given the imp ortance of credibility as a key power resource in anin fo rmat ion age, reputat ional measures m ay become increasingly important inth e future .

5. Mark e t accountab i l i ty works th rough th e info rmation that marke ts pro-

vide and the rewards and punishments they bestow. It is impor tan t to emphasizetha t this form of acc ou ntab ility is not to an abstrac t force called the ma rket,but to specific pr incipals , whose influence on their agent is exercised in whole orin part through markets. In centrally planned systems, accountability of man-agers is hierarchical . Hierarchical accountabil i ty also operates within capitalistfirms. Investors and boards o f directors exercise direct political control, throughelections of board members an d selections of CEOs. For these principals, mar-ket responses are signals of performance. In competitive markets, however, firmsar e a lso accountable to investors an d consumers, whose responses ca n reducema rket share and stock prices. Hence ma rket acco untabil i ty is an important

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REDEFINING ACCOUNTABILITY 9

Lie-i b u t

category of its own although its effects are both indirect (signaling to boardsof directors and shareholders) and direct (punishment by affecting stock prices).Market accountability is hardly democratic, since influence in unequally distrib-uted by wealth. Ye t undemocratic markets ca n have unintended side-effects,some of which can reinforce democratic accountability. Global markets mayundermine entrenched domestic monopolies, and international investors maydemand transparency in public policy as a condition for entering a domesticmarket.

Accountability is sometimes treated as a good, per se, but it is aninstrumental value, subject to being traded off against other values.Making decisions about trade-offs is a complicated problem even inwell-ordered domestic polities. Processes without accountability can be-come corrupted and costly. On the other hand, processes designed toenhance democratic legitimacy and efficiency may turn out to be coun-terproductive in terms of effectiveness. In the United States, for exam-ple, progressive efforts to enhance bureaucratic accountability on issuesof f inances or fairness have diminished bureaucratic accountability forperformance (Behn 2001). Hammers costing $600 in the Pentagon arethe product not of corruption, but rather of congressionally imposedregulations to prevent it.

Electoral accountability is insufficient within modern democracies be -cause many tasks are delegated to nonelected agents, from bureaucraticagencies to courts. The increasing intensity of regulation during thetwentieth century fostered delegation of powers from Congress to itsagents (Epstein and O'Halloran 1999; Shapiro 1988). Delegation canprovide flexibility and bring expertise to bear on problems, but it raisesdifficulties with respect to accountability. Trade-offs need to be recog-nized and dealt with. Speaking of delegations of powers to administra-tive agencies by Congress, one expert declares that broad delegationsrecognize that tight accountability linkages at one point in the govern-mental system may reduce the responsiveness of the system as a wholeMashaw 1997, 155). In chapter 14, James Caporaso discusses delega-

tion models as they apply to the various components of the EuropeanUnion and to relationships on EU issues between national executivesand national parliaments.

To maintain more than nominal accountability by administrativeagencies, elections are insufficient. The chains of delegation are toolong, and voters cannot be expected to make their decisions contingento n agency actions. Hence, countries such as the United States, whichh v e separate institutions sharing legislative an d executive authority,h v e developed administrative law to make agencies genuinely account- b l e to the people they serve. In the United States, an extensive body of


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392 KEOHANE AND NY E

administrative law has been created both by Congress and by the courts(Shapiro 1988). It has been impossible for more than a century for Con-gress to specify, in statutes, contingencies that regulators might face.Seeking to do so would be burdensome for Congress, and polit icallyunpalatable since specific choices will necessarily antagonize somegroup s of voters. From the stan dpoin t of Con gress, it makes more senseto enact gen eral legislation an d to bu ild in prov ision s for notice andcomment, as well as judicial review, that will enable affected interest

groups to appeal adverse rulings. These appeals will serve as firealarms, alerting Congress to dissatisfaction with agency rulings andthe possibility that agency policies are diverging from congressional in-tent (McCubbins, Noll, and Weingast 1987).

Without broad delegation of authority to agencies, deadlock wouldoften result. Such deadlock would be normatively problematic, since itwould maintain th e status quo even when there is a winning coalit ionfavoring a general direction of policy change. Advocates of broad dis-cretion for agencies argue that it is best for the legislature to grantbroad authority to agencies, which can be responsive to par t icular situa-tions, and to control th e risk of arbitrariness through procedural re -quirements and judic ial review (Mashaw 1997, 148-56; se e also Ep-stein an d O'Halloran 199 9). Such requiremen ts have been elaborated inAmerican adm inistrative law, which requires advan ce public notice; thataffected interests be allowed to comment on proposed rules; that agen-cies respon d to such commen ts; and jud icial review of both adjudication n rule-making by agencies (Sh apiro 1988, chap ters 2-4).

Not only can accountabili ty be implemented through nonelectoralmeans in democratic countries, but also it can be deliberately limited.The p ublic may hold inconsistent t ime-horizons and preferences, andmay deliberately establish no nresponsive institutions as a means of tying itself to the mast as it sails by the Sirens of public or interest-group demands. Most ju dges are appo inted for a fixed term to insulatethem from direct democratic accountabili ty. Central ban k independencein many democracies is based on the belief that bankers are more likely

than politicians to take the long view required for a monetary policythat accom plishes the public's p refere nce for a stable price policy. Sim-ilarly in trade policy, Congress sometimes chooses to restrain its individ-ual mem bers by adopting a fast-track procedure as a way to deal withcollective-action problems related to rat ifying agreements.

None of these limitations on electoral accou ntability im plies absolutelack of accountabili ty to electorates. High-level executive-branch o f f i -cials mu st be confirm ed by the Senate. Congress can, and often does,change its laws in response to agency o r court decisions of which awinning coalit ion disapproves. The vaun ted indepen dence of the Fed-

eral Resthe Fed gress coueven th eCongrescratic atant genpowers incorpostructedthan un

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t i n e i

eral Reserve remains subject to the approval of Congress, and shouldthe Fed lose its effectiveness in producing a successful economy, Con-gress could change the rules. The structure of lower federal courts, andeven the number of members of the Supreme Court, can be altered byCongress. Impeachm ent serves as a safety net to insure ultimate demo-cratic accountability, but it is not the most important way. The impor-tant general point is that in constitutional systems with division ofpowers a s in the United States and the European Union inst itu t ions

incorporating various forms and degrees of accountabili ty are con-structed. The accountability systems are variegated and nuanced, ratherthan unitary and uniform.

International organizations typically have weaker legitimacy thancomparable domestic institutions: they often have shorter records of ac-complishment, and they do not benefit from being within the frame-work of a legitimate sovereign state. The result, ironically, is that theymay be more accountable than their formal provisions imply preciselybecause they are more vulnerable to outside pressure. For instance, theEuro pean Central Bank (ECB ), partially modeled on the U.S. Fed, is, informal terms, less accountable, although it makes quarterly reports tothe European Parliament and holds monthly press conferences. Yet ifthe ECB were to fail at its task of maintaining stability without throt-tling economic growth, it would surely be held accountable by the gov-ernments that are its ultimate masters, and that could reduce its auton-omy.'

Democratic political theory emphasizes that government should be responsive and accountable to the demos, a sovereign authority thatdecides important political matters either directly in popular assembliesor indirectly through its representatives (Dahl 1999). By this defini-tion, no global governance arrangements could pass muster as demo-cratic, since it is impossible to identify the demos in the absence of asense of global political community. But we have seen that, even withindemocratic countries, accountabili ty is more varied than this descriptionwould imply. Administrative law is all about procedures to decide im-

portant political matters outside of popular assemblies or legislativebodies. In our view, international organizations ar e here to stay becausethey are needed to promote internationa l cooperation. Rather than offera counsel of despair, we argue fo r more imagination in conceptualizing,and more emphasis on operationalizing, different types of account-ability. It is better to devise pluralist forms of accountability than tobewail the the democratic deficit.

This point w as suggested to one of the au thors by David Soskice in a conversation on2 M arch 2001.


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394 KEOHANE A N D N Y E

In the Uni ted States Const i tut ion, f ragmentat ion of power and indi-rect accountability were designed not to p romote effectiveness or de-mocracy, but ra ther to protect l iberty. Internationally, as well, account-ability involves trade-offs among values. In both domains, it is areasonable response to construct v aried instrum ents that provid e a m ea-sure of accountability while limiting i ts costs. Tenn yson's parliam ent ofm an m ade great nineteen th-century poetry, but, despite proposals toth e contrary, it is not the most feasible means of accomplishing global

accountability in the twenty -first century.

C C O U N T B I L IT Y AND MODELS OF G O V E R N N C E

Governance ca n occur in a var ie ty of ways . A t a g loba l level the re is noworld gove rnmen t , so we need not discuss hierarchical forms of gover-nance in which rules are authoritatively enforced by an entity called th e state. Putt ing world governm ent aside, four quite distinct ideal-typi-ca l models can be elaborated:

1. A statist m o d e l of governance . Th e c lassic pol i t ical-science model ofgovernance revo lves a round th e state, as in the J anus - faced concep t of sover-eignty. Sove reignty is a shield against e xternal inte rfere nce by other states.Hence, a t the intern at iona l level this s tat is t m odel focuses, a s real is ts do, oncompetition among states in an anarchic environment lacking common govern-ment. Governance occurs when ine qual i ty of power allows some states addi-tional constraint over others. Sovereignty also connotes authority over internalgovernance, hence autonomy. In this model, therefore, the state is autonomousinternal ly and externally, and the autonomy of the state is the essential basis fordemocratic governance.

2. An international-organization model of governance. Governance is

viewed in t e r m s of sites of authority and the re lat ionships between them. Th ekey quest ions a re those of delegat ion. H ow much u l t imate au thor i ty d o princi-pals retain when they delegate tasks to agen t s such a s i n te rna t iona l organiza-t ions? Who has the r ights of residual control? The guiding idea h ere is that theabi l i ty a u thor i t a t ive ly to a l locate va lues , in Da vid Easton's (1965) phra se, isloca ted in pa r t i cu la r en t i t ie s , o r shared be tween them.

3 . A t ransna t iona l -ac to rs mode l o f governance . Nongov ernm enta l actorscan produce a uthori t a t iv e outcomes by wielding mar ket power or by act ing inconcert within issue-areas over which they have inf luence. Exam ples include th edecis ions of m ul t ina t iona l corpora t ions on e m p l o y m e n t and i n v e s t m e n t , and de -cis ions of ind ustry organiza t ions on s tand ards. Such a m odel does not standa lone , s ince nongov ernm enta l ac t ions t ake p lace wi th in a f ram ework c reated bystate action. For example, capital markets in East Asia rest on a security struc-ture that rests on a long-term American mil i tary presence. Private actors can


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produce authoritative outcomes in wide areas of global activity wi tnes s theEast Asian financial crisis of 1997 and they can also affect the patterns ofpublic governance as exemplified by the fall of the Suharto government in Indo-nesia. But many of the most important activities of transnational actors f r o mthe Landmine Coalition to banking practices exert effects by prompting ac-tions by governments.

4. A policy-networks model of governance. In this model, outcomes are not

seen as the decisions of organizational entities, but rather as negotiated results

o f bargainin g among actors in networks. In Understanding Governance, R.A.W.Rhodes has reinterpreted British governance in terms of networks. Network

governance refers, in Rhodes's terms, to self-organizing, inter organizational

networks, characterized by interdependence, resource exchange, rules of the

game, and significant autonomy f r o m the state (Rhodes 1997, 15; emphasis inoriginal). The key features of network governance are: (1) interdependence be-

tween organizations; (2) cont inuing interactions between network members; (3)

game-like interactions, rooted in trust and regulated by rules of the game nego-

tiated and agreed by network participants; and (4) a significant degree of auton-omy from the state. 4 More recently, Wolfgang Reinicke has applied a variant ofthis model to international governance (1999-2000).

It is important to emphasize that these f o u r models should not be

seen as al ternatives. It is more helpful to see them as layered, witheach successive model in t roducing new layers o f complexity. Th e state-autonomy var iant of statism brings domestic politics into the picture.T he delegation m o d el in t roduces in ternat ional organizations, wi th somedegree o f agency, into the statist f ramework, wi th in which th e organiza-t ions operate. This m o d el also incorporates domestic politics, since pub-lics and legislatures serve as principals with respect to agents in exec-utive branches , and executives serve as pr incipals with respect toin ternat ional organizations. The transnational-actors model explicitlyin t roduces m u l t ina t iona l f i rms and nongovernmental organizations. F i-nally, the policy-networks m o d el takes into account the facts of statepower and chains of delegation to analyze how hor izontal ly organizednetworks affect outcomes along with the hierarchies of states and inter-

nat ional organizations.These f o u r models o f governance al l ideal types have quite differ-

en t implications for how we should conceptualize issues of account-ability under conditions of globalization. Indeed, since the very natureof accountabi l i ty depends on the model of governance that one em-ploys, we turn now to the question, What would accountability mean

Rhodes s formula t ion is designed to help unders tand con t empora ry British govern-ment, and, as will be shown, requires some modi f ica t ion as the basis for a discussion o fthe policy-networks mode l of global governance.


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396 KEOHANE AND NYE

wh n processes of global governance ar e thought of as operating aseach model specifies

Th e Statist Model

In the statist model, em phasis is placed on the activities of terr itoria llyboun ded states, intern ally and ex ternally. Two sets of questions aboutgovernance arise within the context of this model.

I N T E R N AT I O N A L C O N S T R A I N T S

In traditional realist interpretations of world politics, international con-straints are constructed by powerful states on the basis of their inter-estsgeopolitical and economic. In the phrase of the Athenians quotedby Thucyd ides, the strong do wha t they can and the weak suffer wha tthey mu st (Thucydides 1962, book 5, para. 89). Or, to u se a moderneconomic example, capital flows to where it is welcome and flees whenit is threatened. A democratic global organization that tried to allocateprivate flows of capital would not likely be effective. Even a WorldBank and IMF with equal ly weighted votes would not be effective. Pub-li c development organizations not controlled by the major donor coun-t r i e ssuch as the African Development Bank and the United Nat ionsIndustr ia l Development Organizat ion com ma nd scant resources. Forrealists, democracy is not an issue at the inter-state level since gover-nance is otherwise organized. Hence, as we noted in our Introduction ,issues of accountabi l i ty at the inter-state level ar e largely irrelevant torealists.

STATE AUTONOMY

Issues of s ta te autonomy under condi t ions of globalization raise morecomplicated issues fo r governance. A necessary condition fo r account-ability in this classic com parative- politics m odel is that state agents haveth e ability t o take effective action since if they lack such authority theirprincipals can hardly demand that they achieve results. Hence, within

this f ramework the most importan t barrie r to accoun tability wou ld be aprocess by which the capacity of the state was undermined or over-whelmed by globalization. If effective na tional control over imp ortantoutcomes were lost accoun tability throug h nation ally based hierarchiesand legal systems would be unattainable. Thus, the focus of recent liter-ature on state policy and globalization is on whether states have beenstrengthened, weakened, or merely changed by forces of globalizationacting upon them (Garrett 1998b; Kitschelt et al. 1999; Rodrik 1997).

Developing countries can be severely buffeted by global capital m o-bility, as the World Financial Crisis of 1997-1999 w h i ch began in


13/27

g s

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R ED E FINING A C C O U N TA B I L I T Y 397

Eas t As ia b u t a l so affected L a t i n A m e ri c a demon s t ra t e s . Th ese co un -t r i es l ac k the e c o n o m i c r e s o u r c es and g o v e r n a n c e c a p a b i l i t i e s to m a n a g eg l o b a l i s m on t he i r own (Gr ind le 2000). The poores t co un t r ie s , w h ichdepend o n i n t e r n a t i o n a l f i n a n c i a l i n s t i t u t i o n s fo r f u n d i n g , sacr i f ice c o n -s i d e r a b l e a u t o n o m y i n r e t u r n f o r l o a n s . F o r d e v e l o p e d c o u n t r i e s , h o w -ever, the pressures of g lo b a l i za t i o n are m o r e m a n a g e a b l e and the s ta te-a u t o n o m y m o d e l m o r e r e l e v a n t . For t h e s e c o u n t ri es , n a t i o n a l e c o n o m i ci n t e g ra t i o n r e m a i n s s t ro n g , m a i n t a i n i n g t h e r el e v a n c e o f b o r d e rs . F o re xa m p l e, J o h n H e l li w e l Ps s t u d i e s s h o w t h a t i n N o r t h A m e r ic a n a t i o n a lb o u n d a r i e s h a v e a p o w e r f u l effect o n e c o n o m i c a c t i v i t y. Toronto t r adest e n t i me s a s m u c h w i t h Va n c o u v e r a s i t do e s w i t h S e a t tl e ( H e l l i w e l l1998) , co n t ro l l in g fo r the r e l a t iv e s i ze o f these tw o c i t i es .

For h igh ly deve loped co un t r i e s , t he con s t ra in t s imposed by f inanc ia lmarke t s a re, i n genera l , s t rong bu t na r row . Desp i te f i n a n c i a l g l o b a l i z a -tion, t h e m o t i v a t i o n s f o r m a n y g o v e r n m e n t p o l i c i e s r e m a i n r o o t e d i ndomes t i c po l i t i c s and i n s t i t u t io n s (M o s l e y 2000, 766). Fu r thermo re,states, prodded by their l ead ing firms, can be seen as seeking compara-t iv e i n s t i t u t i o n a l a d v a n t a g e , e m p h a s i z i n g t h o s e a c t i v i t i e s that a re fa-v o r ed b y th e i n s t i t u t i o n a l i z e d s t r u c t u r e s l i b e r a l o r c o o r d i n a t e d t h a th a v e e v o l v e d w i t h i n them (Soskice 1999). G loba l i za t ion in te rac t s withdomes t i c po l i t i c s . I t is ne i the r t rue tha t g lo ba l i za t io n p roduc es the sameeffects eve ryw here (mu ch l es s des t roys the w e l fa re s t a t e , o r des t royss ta t e pow er ), nor that g l o b a l i za t i o n is irrelev an t (Sen 1999; Weiss 1998).G o v e r n m e n t s o f r i c h c o u n t r i e s c a n f i n d m u l t i p l e f e a s ib l e p a t h s fo r dea l -in g w i t h th e effects o f g l o b a l i z a t i o n , d e p e n d i n g o n h i s to ry, s t ruc tu res ,and a t t i t udes . Tom Fr iedman's golden s t r a i t j acke t is an a r r e s t ingphrase r a the r than an accura te desc r ip t ion (F r i edman 1999) .

S ince gov ernments in h igh ly deve loped cou n t r i e s r e t a in po l i cy cho ices ,t r a d i t i o n a l d e mo c r a t i c a c c o u n t a b i l i t y r e m a i n s po s s i b l e o n m a n y i ss u e s .The key obs tac le to effective a c c o u n t a b i l i t y, a t l e a s t f o r a d v a n c e d in d u s -t r i a l states, is not that the s t a t e is o v e r w h e l m e d by g l o b a l i z a t i o n , butt h a t g o v e rn m e n t s h a v e t o m a k e d i ff icu l t t r ade -o ff s b e t w e e n a u t o n o m ya n d w e l f a r e - e n h a n c i n g eff iciency. A s i n t e rdependence inc reases , i ncen-

t i ves i nc rease to s u b m i t t o t h e r u l e s o f in t e rna t iona l r eg imes a s i n t h eWor ld Trade Organ iza t ion (WTO) i n o r d e r t o g a i n a s s u r a n c e t h a to the r s w i l l a l s o b e h a v e i n a p re d i c t a b l e , ru l e - d r i v e n fa s h i o n . F ro m t h estate-policy perspective, the problem for gov ernments is that success fu lp o l ic y m u s t m ee t t h e d e m a n d s b o t h o f t h e i r o w n p u b l i c s a n d o f i n t e r n a -t iona l po l i t i c s . Succes s fu l fo re ign econo mic po l i cy r equ i res tha t do mes-tic and i n t e r n a t i o n a l win-sets be made to overlap (Evans , Jacobson,and Putnam 1993; Putnam 1988) . The s ta te needs to act s t r a t eg ica l ly int h e i n t e rn a t i o n a l a r e n a , b u i l d i n g c o a l i t io n s a n d m a k i n g d e a l s t h a t a d -v a n c e its in teres ts ; and t h e s e b a rg a i n s m u s t be c o n s i s t en t with the pref-


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398 KEOHANE AND NYE

erences of publics at home, and not easily overturned by oppositionpolitical parties.

Th e International Organization Model

The international-organization model builds on the statist model: it as-sumes the existence of states as the most important sites of author i ty inth e contemporary global system. This model, however, introduces inter-national organizations operating within the framework of public inter-national law, which recognizes th e nominal equal i ty of states. Hence, incontrast to the realist world of untrammeled state power, the interna-t ional organization model builds in a set of restraints however weakthey may be on th e exercise of power. Power has to be exercisedthrough sets of procedures that , at least in formal terms, respect th eindependence of states, although they may (as in the UN Security Coun-cil) ins t i tu t ional ize inequal i t ies in certain respects.

The key question of accountabili ty in this model becomes one of dele-gation. Can the princ ipals design institutions that ensure that theiragents act as they wish? Do the nominal principals retain residual rightsof control if they wish to re ta in them? At w h a t cost can they reclaimsuch control? Can the principals remove leaders (their agents) frompower? Most generally, do principals retain th e abili ty to control,within relatively narrow limits, th e actions of their agents nationalexecutives or in ternat ional organizat ions?

As w e have done throughout this chapter, w e have to distinguish,in this model, between accountabili ty per se and democratic account-ability. If we focus on accountabili ty per se, international organizationsclearly have more of it than the classic realist model of inter-state rela-tions. The head of state of a hegemonic power is accountable to no oneoutside of his country, wh ile the executive he ads of international organ i-zations are accountable to states through a regularized process of elec-tion and reelection. In reality, heads of international organizations maybe accountable , through a hierarchical process, to one or a few power-

ful states. Boutros Boutros-Ghali was denied a second term as Secre-tary-General of the United Nations as a result of opposition from theUnited States, an d many other leaders of international organizationshave found their reelections contested. When on e state alone is able toensure the defeat of an executive head s candidacy for reelection, thereis indeed a form of wh at could be called hierarchical accountabili ty,a l though it is hardly democratic. On the other hand, neither was it dem-ocratic when the inept head of UNESCO was kept in office by one-state-one-vote majo rity composed princ ipally of small nondem ocraticcountries. In that case, th e United States an d some other democracies

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withdrew f rom the organization. Since almost all international organi-z a t i o n s l ack t axa t ion sources o f thei r own, they a re t yp ica l ly dependen to n states f o r r evenue , a n d t h u s s u b j e c t t o the f o r m a l controls that a c -company these subventions. When only a few states with relatively con -s i s ten t p refe rences wie ld u l t im a te con t ro l ove r appo in tmen t s and f i -n a n c e s , i n t e r n a t i o n a l o rg a n i z a t i o n s a re s u b j e c t to a c c o u n t a b i l i t y f r o mmember s ta tes , a s n e w w o r k o n th e Wor ld Bank h a s b e g u n to s h o w(Nie l son a n d Tierney 2002a, b ).

Democra t i c accoun tab i l i ty is more e lus ive . I n p r inc ip le , a s J ames Ca -poraso a r g u e s i n t h e p resen t vo lum e , democra t ic acco un tab i l i ty cou ldbe enhanced by increasin g legislative control over policy at the suprana-t ion al level, e i ther by givin g n at io n al legis la tures a di rect overs igh t rolewith respect to i n t e r n a t i o n a l i n s t i t u t i o n s o r b y c r e a ti n g s u p r a n a t i o n a llegislatures. Only in the European Union has either of these two mecha-n i sms been deve loped : the first in coun t r i e s such a s D e n m a r k , th e sec-o n d ( s o m e w h a t h a l t i n g l y ) wi th th e E u r o p e a n P a r l i a m e n t , w h o s e powershave g radua l ly been inc reased . In D e n m a r k i t i s not the P a r l i a m e n t a s aw h o l e b u t o n l y th e European Commi t t ee o f t h e P a r l i a m e n t that exer-cises ove r s igh t , a n d t h i s ove r s igh t is i nh ib i t ed b y poor access to t imelyin fo rmat ion , and genera tes a l ack o f f l exib i li ty fo r Dan i sh nego t ia to r s inBrussels (Hegeland and Mattson 1996 . Since general iz ing Dan ish over-s i g h t to fifteen o r twen ty -seven co un t ri e s co u ld eas i ly lead to dead lock ,e x p a n d i n g th e powers o f the E u r o p e a n P a r l i a m e n t is m o r e p ro m i s i n g .

What may be true in Europe does not generalize easily at a g loba lscale. Since a ll members of the EU are democra t i c , th e EU is h a r d l y a nappropr ia t e mode l fo r a d iverse wo rld in wh ich many s t a t e s a re u n d e m -ocrat ic , o r on ly ma rg in a l ly democra t i c . Even th e E u r o p e a n P a r l i a m e n thas con f ron ted se rious p ro b lems o f vo te r d i s in te res t . A g lo ba l l eg i s l a -ture in a wor ld o f s ix b i l l i on people, m a n y o f w h o m d o n o t l ive wi thinna t iona l democrac ies , cou ld ha rd ly b e expected t o be representa t ive .

An experiment in 2000 by the Internet Corporation on Assigned Namesa n d Num bers ( ICANN ) ind ica tes h o w d i ff icu l t g loba l e l ec t ions wouldb e, e v e n a m o n g th e h igh- t ech p ro fess iona l s w h o live o n t h e In ternet .

When ICANN decided to elect five directors worldwide by direct voteo f In ternet users , fewer than 35,000 i n d i v i d u a l s vo ted (o f hundredso f mi l l ions o f In ternet users) , a n d g r o u p s that orga nized bet ter tha no the r s o f t en o rgan ized on the bas i s o f na t iona l a ff i l ia t ion w e re a b l eto cap tu re th e process ( K e n n e d y S c h o o l 2001 . Hence, fu l ly democrat ica c c o u n t a b i l i t y o n a g loba l sca le is likely to r emain e lus ive .

Yet despi te the lack of d i rect e lectoral accountabi l i ty of actual in ter-national organizations, they may operate indirectly in the shadow ofelectoral a cco un tabi l i ty. As we have pointed o ut , s ta tes especiallyp o w e r f u l states ac t as the pr incipa ls , su pervis ing the b eha vior o f in ter-


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KEOHANE AND NYE

national organizations and instructing their representatives at such or-ganizations. It is not inherently any more undemocratic for the U.S.president to delegate authority to the U.S. trade representative to nego-tiate at the WTO than for the president to delegate authority to theattorney general to deal with organized crime. As long as the publ icknows what actions th e delegated agent took, it can reward or punishthe president, and his party, for its deeds. In such situations, transpar-ency is critical. Affected interests need to be notified and given the op-

portunty to participate in the process which may mean engaging inpolitical activity at the domestic or at the international and transna-tional levels. It is not surprising that recent criticisms of the IMF, WorldBank, an d European Commission have often centered not only on theirdistance from democratic voters, but on their alleged lack of transpar-ency and the insufficient procedural legitimacy of the processes bywhich they are claimed to have taken decisions affecting governments,private f i rms, nongovernmental organizations, and individuals .

The normative issues become more serious when th e agent is not arepresentative of a democratic government but an anonymous WorldBank or IMF bureaucrat , or a panel, or Appellate Body, at the WTO.The absence of a legislative body in the WTO, apart from periodicmeetings of the parties, means that rule-making takes place largelythrough adjudicat ion. T he lack of a legislature and the unanimity re -quirement for action when WTO -member governm ents meet ensuresconsiderable freedom of action for the Appellate Body in particular.5When agents have this much freedom to make binding rules, transpar-ency may not be sufficient to assure adequate accountabili ty.

Th e Transnational Actors Model

In the transnational-actors model, accountability principally takes theforms of market and reputational accountabili ty. Legal issues may alsobe important because most markets ar e embedded in legal systems pro-viding, more or less, fo r protection of contracts ( though in some cir-

cumstances kinship structures may be f unc tiona l equivalents). Estab-lished firms rely for their success on their rep utations with a variety ofconstituencies, including financial analysts, customers, and their ownemployees (Kreps 1990 . Markets and NGOs provide a form of non-electoral accountability. Corporations and governments that fail to per-form well are held accountable by principals acting through markets.Rating agencies help to consolidate and publicize a num ber o f mark et

Unanimity provisions m ake i t hard to overrule or modify th e interpretations of agentsand c ourts. See Tsebelis and Ga rrett (2001 , especially 369).

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to t h epu l i cp u n i s h

E Wo r l dn t h e i ra r i ipa r

judgments about firms. Governments that are closed and corrupt find itmore difficult to attract capital and maintain the confidence of transna-tional investors. In the aftermath of the East Asian financial crisis, ac-countability to markets may have led to more increases in transparencythan did any formal intergovernmental agreements.

The most important threats to the efficacy of accountability in thetransnational-actors model lie in a breakdown of legal or market mech-anisms. On the legal side, corruption and mafias turn attention from

productive activity to rent- or protection-seeking behavior. On the mar-ket side, monopoly power by definition reduces the accountability ofdominant firms, who need no longer fear exit by their customers(Hirschman 1970). Severe informational problems, and collective-actionproblems involving panic, can also adversely affect the efficacy of ac-countability in the market model.

There is no necessary connection between accountabili ty in the trans-national-actors model and democratic accountability. Obviously, peoplehave unequal votes in markets depending upon the wealth they bring tothe table. And NGOs are self-selected, not elected. Indeed, if resources,an d effective demand, ar e distributed in highly unequal fashion, marketaccountability may well be at odds with democratic accountability. Atthe same time, by pressing for transparency and legality, private inves-tors and NGOs can sometimes reinforce democratic accountability.

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Th e Policy-Networks Model

The policy-networks model assumes the existence of the other threemodels: markets and states are important, and policy is made largelythrough international organizations, acting as the (imperfectly con-trolled) agents of states. In the policy-networks model, however, cross-cutting networks and mixed coalitions, sometimes involving actors fromall three sectors, are important forces in shaping the policies pursued bystates and international organizations. Furthermore, networked coali-tions may themselves make policy through arriving at agreements thatare then implemented within bureaucracies, by corporations, or by non-governmental organizations (NGOs). Accountability becomes moreproblematic, since sites of governance are more dispersed. As Rhodesdiscusses with reference to his network model of British government, The system of accountability focused upon institutions and their pro-cesses of decision making and implementation. Here lies the fundamen-tal problem: to call one institution to account for how it has operated isto disregard key features of the differentiated polity. Policy is the responsibility of no one institution but emerges from several (1997, 21;emphasis added).


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402 K E O H A N E A N D N Y E

In this model, outcomes result from the interactions of independentpolitical entrepreneurs rather than from the decisions of hierarchicalorganizations. Rhodes contrasts such networks with th e formal West-minster model of ministerial accountability to the electorate. In the in-ternational analogue, states and internat ional organizat ions acting aspr incipals and agents linked by delegation a re replaced by t ransna-tional networks that m ay involve one or several sectors.

The most important forms of accountability in the policy-network

model ar e nonelectoral. In this model, decision-making elites are ac-countable to other elites with which they have ongoing relationships.Hierarchical and legal accountability are not very important . Reputa-tional accountability is crucial: without credibility, organizations andgroups cannot become accepted as participants in the ongoing bargain-in g processes that p roduce outcomes. W ell-inform ed par ticip an ts in net-works have the ability to pull fire a larms including false alarm s-when outcomes do not meet with their approval (Lupia and McCubbins1994; McCubbins an d Schwartz 1984 . A related form of account-ability consists of the responsiveness of the elites wh o belong to thesenetworks to professional norms. A s Ar thur Applbaum has argued, pro-fessional e thical s tandards can be used to ho ld adve rsaries accoun table(1999) . Lawye rs care about the opinion of the bar; academ ic econo-mists about their standing in the eyes of some colleagues. Epistemiccommunities increasingly take th e lead in raising th e issues an d con-structing th e dom estic an d transnational conversations necessary to cre-ate a public space (Haas 1992; Keck and Sikkink 1998). Their activities,at least to some limited extent, may keep gove rning elites accou ntable,corresponding to the way in which networks of legal scholars or econo-mists make the Supreme Cour t or the Federal Reserve accountable:through reasoned criticism and discussion, rather than through elec-tions.

In the absence of hierarchy, th e efficacy of any form of accountabilityin the policy-networks model depends first of all on the diffusion ofpower. If power is diffused, specific actors need to bargain with others

to attain their objectives. As in the United States Constitution w h i c hincorporates elements of the policy-networks model even within a hier-archical sovereign state power checks power.

The second essential condition fo r accountability in the policy-net-works model which is also important in the other models i s th eavailabili ty of in format ion : transparency The media play a particularlycrucial role in this model because hierarchical controls between princi-pals an d agents ar e weak or nonexistent. In networks, th e e f f i c c y ofactors depends on their credibility, and on their reputations, more gen-erally. Accountability is achieved not through legal actions, hierarchy,


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or markets, but through the effects of one's actions on one's reputation,and therefore on one's future effectiveness and influence.

Even if ac countability is secured in the policy-networks model throughthe operation of reputation, there is no guarantee of democraticaccountability. Indeed, networks are by definition elitist. To be an activeplayer, an organization or group must devote resources to being in-formed. In the absence of formal hierarchy, much less elections, thereare no regularized ways of assuring that public reactions as a result,

fo r instance, of media publicity wi ll have focused effects. Formal gov-ernm ental institutions provide such a focus and in democratic societiesgive competing politicians incentives to publicize errors and corruptionby those in power; such institutions are lacking in global governance. Inthe absence of such institutions, the collective-action costs of publicsmaking their wishes known even if they have sufficiently well-formedattitudes to regard them as wishes m a y be prohibitive. Hence, pol-icy-network forms of ac countability are unlikely to be democratic.

ACCOUNTABILITY IN CLUBS AND CONTESTED NETWORKS

Reality under conditions of complex interdependence blends al l fourabstract models that we have discussed above. The models we sketchedare useful for highlighting the features of actual regimes that are likelyto generate certain types of accountability, and difficulties of account-ability. But they cannot be transferred one-to-one to real situations, allof which incorporate some combination of the features highlighted bythe abstract models.

For this analysis of accountability, however, we do not purport tooffer a rich description of all of the varieties of transnational and inter-national governance that are appearing at the beginning of the twenty-first century. Instead, we propose to stylize the range of real situationsalong a dimension that is directly relevan t to acc ountability: that is, thedegree of informational transparency an d openness to new groups of agiven network or cluster of networks. In this descriptive conceptualiza-

tion, the blends of states,

international organizations (lOs),

and net-works can run from lO based clubs to contested issue networks IO -based club s (Ke ohane and Nye 2001) involve a closed, selected g roup ofactors u n i ts of states, international organizations, an d transnationalactors focused around an international regime: a set of rules, stan-dards, organizations, and procedures established to govern a set of is-sues. Contested issue networks, by contrast, are open to new entrants,whether the established participants welcome them or not. Contestedissue networks are likely to be more transparent to nonparticipantsthrough th e media.


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K E OHANE AND NYE

It is important to recognize that we do not assume that more open-ness necessarily mean s m ore accountabili ty, much less more legitimacy. f all other features of si tuations were held constant , transparency cer-tainly would increase acco untability. But transpare ncy and opennessmay have other effects. For example, they could enable new groups,whose inte rnal arrangem ents are less transpa rent tha n those of estab-lished groups, to play more important roles. Openness to new groupscould cause th e breakdown of established, publicly known proceduresfo r decision making , com plicating the process so mu ch that few out-siders could unders tand it , even if informat ion were, in principle, avail-able. Finally, openness could lead to deadlock to Fritz Scharpf's joint-decision trap (Scharpf 1988) t h at makes it difficult to know whomto hold responsible fo r nondecisions.

Accountability in lO based Clubs

Transgovernmental relations seem to have been expanding rapidly inrecent years, but they are not necessarily new (Keohane and Nye 1974;Slaughter 2000). Indeed, many of them seem to have emerged from th einternational regimes that were created during the 1940s and 1950s. In

th e club-like institutions that emerged, cabinet ministers or the equiva-lent, working in the same issue-area, in itially from a relatively smallnum ber o f relatively rich countries, got together to m ake rules. Theynegotiated in secret, then reported their agreements to national legisla-tures and publics. Until recently, they were largely unchallenged. Theirmembers constructed rules ei ther in the form of traditional interna-tional law or as sets of established, but less obligatory, practices knownas "soft l a w " t o govern their relationships within the issue-area.6 A sJames Caporaso points out in chapter 14 in the present volume, suchclubs worked satisfactorily in the European Community as long as masspublics were not involved in the issues being discussed.

lO-based clubs were very convenient fo r officials negotiating agree-ments within issue-areas since they kept outsiders out (Keohane and

N ye 2001). Indeed, in lO-based clubs a lack of transparency to outsiders was a key to political efficacy. Protected by this lack of transpar-ency, ministers could m ake pac kage deals that were difficult to disaggre-gate or even sometimes to understand. For instance, after th e UnitedStates Congress deconstructed th e trade agreements made during th eKennedy Round (1967), implementing unilateral modifications to bar-

Our lO-based clubs resemble what Rhodes refers to as "policy communities." Weregard "community" as inappropriate language fo r world politics, in view of the diver-gences of interest that persist even among members of clubs.

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gains that had been reached, Am erica's trade partners dem anded m od-ifications in internal U.S. practices as a condi t ion for the next trader o u n d . Congress agreed to use a fast-track procedure that l im ited it spower to pick apart agreem ents. In effect, Congress agreed to tie itselfto the mast as it sailed past specific protectio nist Sirens. Cooperationon international trade was enhanced, but labor and environm entalistinterests, whose power was reduced by the practice have reactedstrongly against it and the associated intern ation al institutions.

In terms of hierarchical delegation, lO-based clubs can meet somerequirem ents in dem ocratic theory fo r accountability, but often in suchan indirect way that the delegation is highly attenuated. Ban king policy,securities coordination, and insurance policy do not of ten m ake thef ront pages even of the business section. The networks in these areas, asSlaughter recognizes, are often closed; the Basle network of centralbankers is a case in point (Slaughter 2000, 182). Their activities takeplace largely in secret. The agents in these networks cannot easily beremoved or sanctioned by publics thro ugh dem ocratic processes. TheWorld Bank and the IMF may seem far removed from publics, but atleast their actions can be identified (and m ade m ore transparent) and achain o f delegation can be identified w i th governm ents as the principalsand the in ternat ional organizat ions as the agents. Such identification isin m any cases im possible with respect to t r ansgovernm enta l ne tworks . The informal i ty, flexibility, and decentral izat ion o f ne tworks m eansthat it is very difficult to establish precisely who is acting and when(Slaughter 2000, 193-94).

The pattern o f acco untabi l i ty in lO-based clubs is m ixed. They do no tmee t t radi t ion al dem ocrat ic s tandards o f accountability, and are there-fore no rmat ive ly quest ionable insofar as they seek to m ake b ind ing po l i-cies on issues o f general significance. Th e strongest l ines o f account-ability wi thin th e club m o d el are to interest gro ups with in issue-areas,and on ly indirectly to legislatures influenced by a broad range o f inter-es t groups. Yet the norm at ive im plicat ions o f po l i cy-m aking th roughclubs depend o n whether th e issues are technical o r involve a broad

range of values. The m ore technical th e task, th e m ore legi t im ate theseclubs m ay be. If c lubs m ake effective policy, they may be justifiedo n output grounds (Slaughter 2000). 7 Indeed, publics are ra t ional ly

' Fritz Scharpf (1999, chapter 1) has distinguished between input-oriented and out-put-oriented legit imization, but he l imits input-or iented l eg i timiza t ion to par t ic ipatoryprocesses involving s t rong collective identities an d consensus. Hence, h is category o f out -put-oriented l eg i t imiza t ion merges together what w e wish to separate: acco untabili ty an deffectiveness.


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406 KEOHANE AND NYE

ignorant about man y issues and do not expect or even desire to beconsulted about everything.

Accountability in Contested Issue etworks

In some respects th e broader issue networks that are now emerging ont rade and development issues arguably allow fo r greater accountabilitythan the old policy com mu nities did. The issue networks are open ifraucous; the policy communities were closed and sedate. But the roughaccountability that is emerging is very rough indeed, and partial.

In the first place, the new contested issue networks are also domi-nated by elites. W hat ha s changed is not so much public participation the number of demonstrators is t iny relative to the electorates of devel-oped countries but the resources that are effective in the network. Inthe old clubs, effective reso urces included access to go vern m ent policyprocesses and resources that would enable political entrepreneurs to af-fect policy. Such resources included economic resources that could betranslated into political power at home. On the obscure issues, polit icalpower w as exercised discreetly. Only on ma jo r issues such as trade werepublic appeals important. In the new contested issue networks, by con-trast

th e ability

to appeal

to individuals worldwide

on the Internet

a ndto catch the attention of the media become ma jo r political resources.Demonstrators chanting democratic and environmental slogans are vi-sually more telegenic than technocrats discussing arcane policy issues orseeking to defend themselves with comp lex justifications of policies thatseem pernicious to many.

The collapse of the proposed OECD M ultilatera l Agreement on In-vestment ( M AI) il lustrates the shift from c lubs t o issue networks in dra-matic fashion. More than 600 orga nizations in nearly 70 countriesformed an Internet-based network of opposition to this agreement,which had been negotiated secretly within the OECD. In the p hrase ofth e Financial Times network g uerillas am bushe d the negotiations(Kobrin 1998). From the perspective of the OECD negotiators, these

new participants in the political process came out of nowhere. Theyhelped to create a contested issue network where earlier there was onlya policy community.

Contested issue networks are much more transparent than lO-basedclubs. Hence, what w e referred to as the inform ational mechanism sof issue networks are much more conducive to democratic account-ability than th e in form ational mechanisms of relatively closed policycommunities; however, procedures fo r rewards and sanctioning nwhich agents can be provided with consistent sets of incentives by prin-


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cipals a r e bedeviled, in contested-issue networks, by uncertainty.When new actors ambush negotiations, incentives change dramati-cally: the MAI, for instance, while still not agreed-upon by governmentswas a dead letter soon after it was leaked and publicized. Anticipatingadverse publicity and activism in response to complex negotiations,governments and other organizations in the old policy community orclub may decide that it is not worthwhile to make the effort.

A major problem with policy processes both of policy communities

and contested issue networks is that they are disarticulated; that is, theylack a focal set of institutions in which interests are aggregated, bar-gains are struck, trade-offs are made, and authoritative decisions aretaken (Bignami and Charnovitz 2001). The structural stability that oneobserves in domestic constitutional systems is lacking at the interna-tional level. As we have seen above, those intergovernmental organiza-tions that do make binding rules o f t en lack the democratic legitimacythat comes f rom having transparent procedures, institutional arrange-ments that facilitate accountability, and activities by politicians seekingreelection by appealing to publics. Their delegated decisions are lessauthoritative, at the best of times, than those of legitimate national gov-ernments. Furthermore, as lO-based clubs have given way, at least inpart, to more open contested issue networks, the stability of decisionshas been further threatened. Established processes are subject to suddeninvasion by new actors with populist appeals, effective networkingskills, and media savvy. Recently, such invasions have been particularlyevident in the issue-area of food safety. Processes governing acceptanceof genetically modified foods have been removed f rom a principallytechnical and industry-dominated set of organizations to the forum ofpublic debate and media discussion of Frankenstein foods (Pollackand Shaffer 2001). These new actors find international organizations amuch easier target than the governments of established democracies,run by politicians with direct ties to their publics, and able to call onnational symbols, as well as electoral procedures, for legitimacy.

The disarticulation of contested issue networks seems to have a bias.

It is relatively easy to defeat proposals but diff icult to negotiate cooper-ation. Hence, transparency and openness may lead to a one-sided ac-countability. Governments and international organizations may be heldstrictly, and rather rudely, accountable for their actions but may not beheld equally accountable for inaction. The result would be a bias againstpolicy change, and against cooperation. Ironically, contests mounted inthe name of civil society, or the people, lack even the semblance ofdemocratic accountability that delegation theory provides, and mayprevent cooperation that would b ene f i t the people if they were con-


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8 KEOHANE AND NYE

suited. In an era of extremely rapid technological an d economic change,gridlock in the policy process could create serious inconsistencies be-tween policy an d practice.

The issing Element Intermediating Politicians

The key e lement that is missing both from th e lO-based c lubs an d fromexpanded issue-netw orks is the presence of interm ediating polit icians,communicat ing both wi th each other and with their publics. The ab-sence of effective political leadership m ay have mattered less in the clubmodel when most issues were less publicized, an d l inkages between is -sues were weaker. On the minor issues, publics did not demand s t r ic taccountability. On major ones such as trade, accountability to legisla-tures and publ ics could be mainta ined through ins t i tu t ional ized ar-rangements as discussed above. B ut l inkages between ma jo r issues, suchas trade and environment or labor, and the publicity associated withmany policies dealt with by contested issue networks, create a strongerneed for the inv olvement of pol i t ic ians who can ar t icula te pol icy themesin ways that are attractive to domestic and transnational constituencies.

Polit icians, furthermore, are needed to create th e polit ical conditions

under which decision-making organizations as in the pr incipal-agentmodel face stable incentives from their principals. International orga-nizations need to know th e parameters that define th e l imits of politicalfeasibility in their policy areas; an d they need assurance that leaders ofnat ional governments w ho support th e idea of negotiations will notleave them in the lurch whe n advocates in issue networks pub licize theirobjections. Someone has to take responsibility fo r mak ing judgmentsabou t th e relative importance of issues, and how to manage th e t rade-offs between them. In a democratic society, politicians w ho take thisresponsibility are held accountable for their actions. Indeed, their veryaccountabi l i ty is a source of credibili ty an d strength, since policy pro-nouncements, for accountable officials, are potentially costly, ratherthan being mere cheap talk. If constituents have confidence in their

elected officials, they ar e more likely to support policies endorsed bythose officials, even if they do not un ders tand the specifics of those poli-cies. Politicians intermediate between organizations and constituenciesin civil societies, strengthening th e legi t imacy o f organizations in returnfo r ensuring that constituencies have influence over th e organizationspolicies.

In the in ternat ional , t ransnat ional , and t ransgovernmental politicsthat we are describing, polit icians have rarely played this role. W e con-jecture that this is not because they are ignorant of what might be re-quired to make these networks operate more effectively, but ra ther b e-


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cause the structure of the situation creates insufficient interests to playentrepreneurial roles. At home, heads of government reap rewards fo rrisky and costly political efforts. But at the internat ional level, the bene-fits of success will be widely diffused, while the costs a nd risks of takingan initiative may remain specific to the politician and his political orga-nization. In other words, due to classic collective-action problems, oneshould expect systematic underinvestment by politicians in making con-tested issue-n etwork s operate. These problem s will be compounded by

th e pervasive uncertainty alrea dy discussed: in such a tu rb u len t env i ron-ment, the likelihood of misjudgment, hence failure, is relatively high.UN Secretary General Kofi Annan s efforts to create a global compactof transnationa l corporations and NGOs could be considered the appar-en t exception that proves (or tests) the rule. The fact that even themost a rticulate and cha risma tic UN Secretary-General lacks close ties todemocratic publics makes it very difficult for him to connect publicswith policy. Without a political community, it is hard to be an effectivepolitical entrep reneur.

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CONCLUSION: LEGITIM ACY AND ACCOUNTABILITYIN GLOBAL GOV ERNANCE

A potentially debilitating problem for international governance is lackof legitimacy. Critics of contemporary law and institutions, from boththe Right and the Left, argue that international institutions suffer fromaccountability deficits.

These critics have a point, but their conception of a ccountab i l i tytends to be limited to hierarchical, and especia lly electoral, acc ount-ability. Legal accountability (as in adm inist ra tive law), reputat ional ac-countabili ty, and market accountabi l i ty a re a lso important in the policynetwork s in which the business of interna tional governa nce is ac tuall yconducted. Recognizing the role of networks, par t icular ly the contestedissue-networks that we have described, makes it clear that th e problemis more complex than one of a democratic deficit, with its implied do-mestic

analogy. If we

think clearly about other forms of

accountabi l i tythan traditional electoral accountability, we may be ab le to design inter-national institutions that meet ou r needs fo r effective cooperation with-out han ding our fates over to unelected technocrats.

The international problem is structural. In a well-functioning consti-tutional democracy, the various aspects of political inputs popular ac-tivity, media attention, pluralist interest-group lobbying, parties, elec-tions, and formal legislation are articu lated together. There is a clearpathway by which laws can be created; and when laws are enacted,regular procedures and organ izations exist to implement , amend, and


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410 KEOHANE AND NYE

change those laws. Actions broadly consistent with th e p ublic will, canbe taken. Ideally, then, both th e input-oriented and output-oriented re-quirements for legitimacy can be met. In transnational and internationalrelations, by contrast, lO-based clubs accomplish tasks at the expenseof direct acco untabili ty, jeopardizing input-oriented legitimacy. Con-tested issue-networks increase transparency and therefore awareness byoutsiders of what is happening; but they diffuse responsibility. Theymay enhance reputational and market accountabili ty, but diminish dele-gated d emocratic accountabili ty. They m ay produce deadlock, in whichthere is lack of focus and no effective decisions for which to hold poli-cymak ers accountable. Output-oriented legitimacy, based on effectiveaction, therefore suffers.

International governance does not benefit from affective or symboliclegitimacy as in M ax Weber's traditional or charismatic forms of legit-imacy. Hence, i ts legitimacy must rest p rincipa lly on its apparent effi-cacy as an instrum ent. The justification may be that rational-bureaucra-ti c organizations are devoted to purposes that cannot be accomplishedeffectively at a national or local level (Ba rnett and Finnem ore 1999 ; orthat networks ar e flexible and effective in responding to the complexchallenges of globalization (Slaugh ter 2000 . Nonetheless, procedurallegitimacy matters because of democratic values as well as for reasonsof efficacy. Neither government in backrooms, nor government by dem-onstration, would meet the tests of democratic legitimacy.

We need a more sophisticated normative theory of accountabili ty.Delegation theory is necessary but not sufficient given the distance be-tween democratic principals and their international agents, and giventhe p lurality of principals that allows for considerable agency slack. Wehave argued that democratic electoral accountability can be supple-mented by other forms of accountability hierarchical, legal, reputa-tional, and marke t t h at , while not democratic per se, can help to en-sure some responsiveness of international agents to publics (and thus bemore consistent with democratic principles). International organizationsas agents may be distant from the shadow of direct elections, but they

should not be held to a higher standard of democratic accountabili tythan are such instruments as domestic regulatory agencies or monetaryauthorities.

Global governance today lacks a sufficient role fo r politicians, inter-mediating between policy and publics. Even leaders such as the UnitedNations Secretary-General and the head of the European Comm issioncannot effectively play this role, much less the executive heads of theInternat ional Monetary Fund or World Bank. They simply do not havesufficiently strong links with elites or broader publics in democracies, orsufficient cre dibility with those natio nally based audiences.

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REDEFINING ACCOUNTABILITY

w p p t| t cputa

t o c n

A major normative implication of this argument is that the gover-nance of globalization will depend in significant measure on n tion lpolitical leaders in democratic states. Political support for coherent gov-ernance will require that these leaders look beyond their borders as theydevise their strategies. For example, rather than hide behind and blameinternational agencies such as the IMF for u npo pular actions, they wo uldhave to help shoulder th e polit ical burden. But as we have pointed out,national political leaders have incentives to do exactly the opposite: ap-peal to their own national publics and blame international organiza-tions for failures . As political scientists, therefore, we expect globa lpolitical leadership from domestic politicians to be rare and the gover-nance of globalization t o remain disarticulated a nd disjointed.

In view of the inadequacies of accountabili ty in global governance,more experimentation would be desirable. Contested issue-networks arerelatively transparent, due to the competition among th e actors, butlack focus, an d often capacity fo r decision. lO-based c lubs are threat-ened with a loss of legitimacy, partly because they often rely on secrecy;but at least the international organizations provide focal points for as-sessing actions, and assigning responsibility. New combinations of issuenetworks with international organizations are needed, to combine open-ness and contestabili ty with th e capacity to make decisions. Transna-tional representation needs further institutiona l work, as the difficultieswith ICANN elections shows; but the idea is promising. As NGOs be-come more important, they will need to become more transparent abouttheir membership and finances to ensure internal accountabili ty. It maybe that more involvement of parliamentarians in international networkswould help to broaden their horizons.

In judging whether the problems of democratic accountabili ty, bothof organization s and n etworks, are justified by their results in terms ofefficacy of global governance, we need to assess th e trade-offs. As Dah lsays, the costs to democr cy shou ld be clearly indicated and taken intoaccount. How we evaluate international-governan ce processes depend sboth on their accomplishments and on the extent to which their pro-

cedures approximate ideals of democratic accountabili ty. W e have notsough t in this chapter to provide a net assessment of the legitimacy ofall such instruments, but instead to offer a framework that helps us tomake re levant normat ive judgments as we confront th e complexity ofinternational and transna tional gov ernance in the twenty-first century.

keohane redefining accountability in kahler086

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