Introduction to the Special Issue

This special issue demonstrates how key governance areas and democratization have been impacted by the world economic crisis since September 2008. It provides a historical contextualization of recent events, as well as analysis of diverse policy issues using theoretical and empirical case evidence. The authors examine how governance, economic policies, international cooperation, and effective norms can be enhanced through strategic measures. Also, we examine the significance of diverse aspects of polity formation and governance for democratization. Democratization and governance have become fashionable themes in scholarly literature since the 1990s. The core focus in this collection on challenges and opportunities since the 2008 world economic crisis constitutes a wide-ranging analysis of the new policy context, focused especially on how effective governance can enhance democratization and societal development. This includes articles on different global regions; on the role of international actors, negotiations, and organizations; on key topics such as corruption, human rights, civil society engagement, and economic development; plus on major political events such as the “Arab spring.” These articles examine diverse national cases such as Chile, Mexico, Egypt, and Hungary; plus international aspects of the aftermath of the 2008 financial crisis, including the significance of the Group of Twenty (G20), negotiations between developed and developing states, and the increasing influence of international norms on human rights, corruption, democracy, and other key aspects of public policy making. The first contribution, “The G20 and ad hoc Embedded Liberalism: Economic Governance amid Crisis and Dissensus,” is by Jonathan Luckhurst. It analyzes the G20 and international economic governance since the financial markets collapse of September 2008. The author demonstrates how the subsequent world economic crisis has influenced scholarly debate and national policy making, in addition to international economic relations. The economic crisis led experts and policy actors to redefine core aspects of economic governance, and Luckhurst analyzes competing perspectives within the G20 during this period. Discursive contestation has delegitimized previous neoclassical conventional wisdoms, especially the efficient markets hypothesis. This has been rejected as a core principle of economic policy by industrialized and developing states, plus by leading international fora and financial institutions. Also, what some scholars call the “bounded rationality” of individual actors, plus policy norms, have been reconstituted as a consequence. Meanwhile, Keynesian policies have been implemented in important national and international contexts. Luckhurst emphasizes significant similarities between the contemporary situation and the post-war “Bretton Woods era” of embedded liberalism, concluding that many recent national policies and the consolidation of international economic governance constitute an ad hoc embedded liberalism. Luis Eduardo Zavala de Alba, in “Toward an International Implementation of Public Policies in Human Rights: A Necessary Step in Every Democratization Process for Advancements in Economic and Social Rights,” examines the contemporary internationalization of human rights norms. In particular, he demonstrates how this has significantly influenced governance and democratization in domestic policy contexts. The author argues that international human rights norms have spread through international regimes and institutions that are concerned with national policy implementation. He asserts that this constitutes a context of public and global governance, necessitating a new constitutionalist element in international law, one that goes further than a minimalist vision of human rights to include economic and social rights within this framework. Finally, he notes that national policy making should conform to these new international legal guarantees. This piece goes further, therefore, than more limited conceptions of human rights law and makes an interesting contribution to the recent literature on global governance and democratization. The next article is from Paul Lagunes in, “Corruption's Challenge to Democracy: A Review of the Issues.” He presents an overview of key aspects of corruption that undermine democracy, which he views as a complex set of challenges. He notes that democracy is attractive because it offers people a state that is accountable to the public. However, this is a guarantee founded on the notion that sovereign power belongs to the citizenry, such that government officials are the public's agents. Lagunes argues, therefore, that when civil servants use their position of authority to serve their personal interests, they weaken the democratic regime's legitimacy and place the entire social contract at risk. Given the risks associated with corruption, the battle to curb this undesirable behavior using multiple mechanisms of accountability is necessary. The author thus indicates the significance of effective public policy making to overcome the problems of corruption. The contribution from Hartmut Lenz provides a different theoretical approach, grounded in bargaining theory, in “Negotiating among Equals? The Effects of the World Economic Crisis on Negotiations between Developed and Developing States.” This concerns an analysis of international cooperation from a bargaining perspective; it pins down the key factors that lead to success or failure of intergovernmental cooperation between developed and developing states. Furthermore, it explores the impact of institutional variation on cooperation and highlights the strong relationship between asymmetric information and negotiation failure. The article suggests that transparency of procedures and the reduction of uncertainty are key issue in facilitating cooperation. Lenz focuses on theoretical aspects of international bargaining, with some innovative insights that combine different theoretical tools. He demonstrates the relevance of his findings for the aftermath of the September 2008 financial crisis, especially in the context of the G20 and the contemporary multipolarity of international economic relations. Thomas Legler's contribution is titled, “The Shifting Sands of Regional Governance: The Case of Inter-American Democracy Promotion.” He evaluates the limits and possibilities of inter-American democracy promotion through the application of a five-part governance framework, focused on: the nature of the problem; governance architecture; the actor set; the construction of a sphere of authority; and contextual factors. The ability of the Organization of American States (OAS) to promote and defend democracy effectively has been hampered by a series of important changes in context: the structure of power, material conditions, regionalism, and, in addition, ideology and discourse. The propitious conditions that originally fostered the creation of an inter-American collective defense of democracy regime during the 1990s have been largely replaced in the new millennium by strong impediments to the consolidation of this issue area as a sphere of authority. The author argues that unless the regime acquires more stable contextual foundations, the future of inter-American democracy promotion will remain highly problematic. David Sarquís examines the historical and contemporary context of the beginning of democratization in “Democratization after the Arab Spring: The Case of Egypt's Political Transition.” The author notes the need to establish an effective rule of law for democratization to be successful in any developing state. Indeed, the difficulty of doing so is a key reason why there are many skeptics of democracy in the developing nations. This need to establish a new legal context to support the democratization of Egypt is a key issue facing Egyptians as they try to transform their country. After the revolution against Hosni Mubarak and subsequent elections, it became evident that the new democracy will have to overcome a hostile environment full of skepticism and characterized by corruption and poverty. Internal political and military relations still need to be reconstituted in a way that is consistent with Egypt's democratization. Also, there are major international challenges for Egyptian politicians, such as maintaining the peace treaty with Israel; dealings with other Arab states; and the complex issue of relations with the United States. Next is the contribution from Claudia Cerda Becker and Hernán Cuevas Valenzuela, “Can Social Dialogue Be a Social Coordination Mechanism? Social Dialogue Policies in Chile between 1990 and 2010.” This examines the significance of social dialogue (SD) as a means to enhance policy making in Chile, dating back to the post-Pinochet era of democratization starting in 1990. The authors explore SD as it relates to systems theory. A brief historical overview of Chilean SD policies between 1990 and 2010 precedes their analysis of employer and union leader discourse on the topic of SD. The article suggests that although SD condenses positive projections and is, consequently, valued by the parties involved in labor relations, concrete instances have encountered obstacles related to legitimization and institutionalization of SD. The authors propose that the primary factors diminishing the probability of communication are: the semantics governing each party's perceptions and each party's hetero-references and negative expectations of its counterpart. Nevertheless, the authors argue that SD could become an appropriate social coordination mechanism for an increasingly complex democratic society. Indeed, the tripartite SD between Chile's government, employers, and trade unions enabled them to construct a national pact to secure jobs following the outbreak of the recent world economic crisis. The final author to mention is Emilia Palonen, who contributes an interesting study on Hungarian politics, “Transition to Crisis in Hungary: Whistle-Blowing on the Naked Emperor.” This investigates the political context of Hungary, a new democracy in East-Central Europe and what the author calls a “whistle-blower” in the world economic crisis. Economic problems in the country came to light before the world crisis took hold, as the former prime minister announced a dramatic budget deficit only after the national elections of 2006, admitting that the government had “lied day and night.” This engendered much skepticism concerning the health of Hungarian democracy; the “transition to democracy” had been a negotiated reform, a result of round-table talks that brought liberal economic reforms and eventually resulted in a crisis of democracy. Doubts following the prime minister's budget revelations in 2006 increased public concerns regarding the functioning of the country's highly polarized liberal democratic system, one that the current government is trying to reshape. Political flaws in Hungary's democracy have evoked criticism from the European Union on issues of media law, the appointment of judges, and the role of the national bank. Arguably, however, the recent developments are “nothing new” in Hungary—rather, they are reminiscent of Cold War era problems in its polity. Once again, as before 1989, freedom of speech is being restricted; also, government intervention through the public sector is increasing. In the concluding article, “Governance and Democratization since the 2008 Financial Crisis,” Jonathan Luckhurst binds together insights from the aforementioned contributions with further analysis on core aspects of the special issue. This demonstrates especially the significance of financial and economic crises since 2008 for recent trends in governance, development, and democratization. Also, the author analyzes how crises sometimes encourage policy makers and societies to reconsider important aspects of governance, with beneficial consequences if the right lessons are learnt. In the recent context, as following the Great Depression, earlier neoclassical conventional wisdom has been undermined. However, key lessons from the 1997-98 Asian financial crises were mainly learnt by policy makers in that region; this was highly unfortunate, since had western policy makers learnt the same lessons the recent crises in the transatlantic region could have been prevented. Hence, this concluding piece analyzes linkages between the crisis in Asia and the “post-Lehman” events, examines new strategies of economic governance, and demonstrates how specific contexts of democratization have been affected by the recent economic crisis. Complementing and synthesizing arguments in the preceding articles, the conclusion also includes further analysis of the recent world economic crisis and its significance for contemporary governance and democratization

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