«EUI Working Papers RSCAS 2012/23 ROBERT SCHUMAN CENTRE FOR ADVANCED STUDIES Global Governance Programme-18 MULTILEVEL GOVERNANCE OF INTERDEPENDENT ...»
- Which powers of initiative, rule-making, rule-application, adjudication and rule-enforcement should be transferred to a higher level?
- Should the delegated powers be of an exclusive nature (e.g. for international adjudication of disputes among states) or concurrent powers (e.g. for clarification and enforcement of rules) with due regard to the ‘principle of subsidiarity’, i.e. that governance powers should be exercised ‘as closely as possible to the citizens’?
- Does the economic theory of ‘separation of policy instruments’ justify the separate mandates of UN Specialized Agencies? How should the coherence and cooperation between monetary, trade, Cosmopolitan ‘Aggregate Public Goods’ Must be Protected by Cosmopolitan Access Rights and Judicial Remedies development and environmental agencies be strengthened (e.g. following the model of European integration law) in order to promote synergies and reduce collective action problems (e.g. in the WTO’s ‘Development Round’)?
- To what extent should the membership of international economic and environmental organizations go beyond governments and provide for rights and duties also of non-governmental and parliamentary institutions and civil society as the ‘democratic owner’ and legitimate beneficiary of governance institutions?
Answers to such question may differ depending on the policy area concerned. For instance, multilateral negotiations in the UN and WTO could be enhanced by granting the UN SecretaryGeneral and WTO Director-General more ‘powers of initiative’. Synergies between regional and global public goods could be promoted by stronger incentives for using regional agreements (e.g. on free trade areas, environmental regulation) as ‘building blocks’ for global public goods. ‘Jurisdiction gaps’ exist not only at national levels but also at international levels, for instance in terms of inadequate constitutional and judicial protection of transnational rule of law for the benefit of citizens.
They entail multilevel governance gaps, as illustrated by the WTO dispute settlement system which – as it fails to connect the compulsory WTO jurisdiction for the settlement of trade disputes at the international level with the WTO guarantees of judicial remedies at national levels – secures neither transnational rule of law for the benefit of citizens nor decentralized compliance with WTO rules in domestic courts. The lack of political agreement on adequate WTO competition, investment and environmental rules entails risks of ‘legal fragmentation’ and coordination challenges that may require judicial dispute settlement and rule-clarification. Independent ‘international guardians’ of reasonable citizen interests in public goods (e.g. following the model of the EU Commission) and impartial, international adjudication based on ‘due process of law’ and principle-based, transparent reasoning may be in a better position to overcome conflicting claims of national jurisdictions than political negotiations dominated by interest group politics. The differences between the compulsory jurisdiction of WTO dispute settlement bodies and the ‘compliance procedures’ of multilateral environmental agreements focusing more on fact-finding, mediation, financial assistance and capacity-building illustrate that international dispute settlement procedures must be tailored to the specific regulatory problems. For instance, whereas multilevel rule-making may be most effective if based on internationally agreed minimum standards, multilevel administration and rule-enforcement are often more effective and more democratically acceptable at decentralized, national or private levels rather than international levels. Examples include
- the ‘global corporate economy’ governed by private law structures;
- the decentralized enforcement of European economic law by citizens empowered by effective legal and judicial remedies in national courts;
- the use of the US Alien Torts Claims Act for holding multinational corporations legally accountable for harmful violations of international law (like abuses of workers’ rights) in foreign jurisdictions.
Yet, the effectiveness and legitimacy of multilevel governance depend on bottom-up support by citizens and parliaments as well as on legal protection of the overall coherence of multilevel governance among private and public, national and international actors. Empowerment of individuals and transnational protection of public goods can be promoted by multilevel protection of cosmopolitan rights and judicial remedies as provided for in European economic law, international investment treaties, in the WTO Protocol on the Accession of China, and regional human rights treaties.
The governance gap, i.e. the inability of most intergovernmental organizations to regulate and govern the collective supply of international public goods democratically and effectively, requires new forms of multilevel constitutional, legislative, administrative and judicial commitments and institutions for collective protection of public goods. As explained by J. Rawls’ Theory of Justice, legitimate rulemaking in conformity with the human rights obligations of governments requires a ’four-stage sequence’ (Rawls, 1971) of constitutional, legislative, executive and judicial clarification of principles, rules and ‘public reason’ supported by citizens. The ‘monarchical model’ of ‘Westphalian diplomacy’ focuses on foreign policy discretion by government executives without legal and judicial accountability vis-à-vis citizens (e.g. for welfare-reducing trade protectionism and inadequate financial regulation). Democratic self-government and the ‘subsidiarity principle’ call for legal empowerment of citizens and decentralized government ‘as openly as possible and as closely as possible to the citizens’ (TEU, 2009, Article 1). As claimed by most economists in conformity with J.Rawls’ theory of justice, the poverty in most LDCs is unnecessary and due to lack of reasonable rules and institutions limiting welfare-reducing abuses of public and private power; 10 hence, civil society and parliaments must insist on stronger cosmopolitan rights, constitutional restraints of multilevel economic and environmental governance, and on compliance with international treaties ratified by parliaments.
European integration confirms that overcoming discriminatory ‘legal nationalism’ requires ‘international guardians of public goods’ based on joint leadership, independent Commissions with rights to initiate rule-making and promote ‘deliberative democracy’, multilevel judicial protection of transnational rule of law, and accountability for violations of internationally agreed rules. The transformation of the power-oriented GATT 1947 into the rules-based WTO trading system with compulsory, national and international jurisdiction for the peaceful settlement of disputes and judicial protection of rule of law was achieved by ‘intergovernmental leadership’ by constitutional democracies (e.g. insisting on the compulsory WTO dispute settlement system and on terminating GATT 1947). The ‘governance failures’ in concluding the ‘Development Round’ negotiations in the WTO illustrate the need for additional governance reforms of the WTO legal system, for instance by promoting leadership based on an enlarged mandate of the WTO Director-General, creation of a WTO Executive Committee, regular review of the WTO legal and dispute settlement systems by a WTO Legal Committee, institutionalizing the inter-parliamentary cooperation inside the WTO, and introducing more flexibility for ‘plurilateral trade agreements’ among WTO members. Extending national public goods to international relations requires support by ‘private-public partnerships’ and non-governmental stakeholders participating in the collective supply of international public goods; the ‘incentive gap’ for such civil society support can be reduced by legal and judicial protection of ‘access rights’ and judicial remedies enabling civil society to challenge welfare-reducing violations of international rules. Starting the long process of ‘piecemeal reforms’ of global economic governance and of its necessary ‘constitutionalization’ for the benefit of citizens might be assigned best to the G20, whose mandate would need to be extended (e.g. to multilevel environmental governance) and institutionally supported (e.g. by using the OECD Secretariat).
Multilevel ‘Incentive Gaps’ and resultant ‘Participation Gaps’ Westphalian conceptions of international law among sovereign states have also proven incapable of effectively regulating the ‘incentive gap’ and ‘participation gap’ impeding multilevel governance of interdependent public goods. The incentive gap, i.e. the inherent temptation of free-riding in the Cf. Rawls (1999, pp.37–38, 106–120): ‘the crucial element in how a country fares is its political culture – its members' political and civic virtues – and not the level of its resources’ (p.117). For instance, China and India – whose trade liberalization since the 1990s has helped to lift hundreds of millions out of poverty – could have avoided the impoverishment of many of their citzens if they had complied with GATT rules since 1948.
Cosmopolitan ‘Aggregate Public Goods’ Must be Protected by Cosmopolitan Access Rights and Judicial Remedies collective supply of international public goods whose costs and benefits are distributed unevenly, requires making ‘common but differentiated responsibilities’ for private and public, national and international actors more effective. UN financial and technical assistance for poor countries (e.g. if they provide transnational environmental services by protecting tropical forests that are of global importance for bio-diversity and carbon-reduction), like the WTO provisions for capacity-building and trade facilitation assisting less-developed countries in participating in world trade and supporting WTO rule-making, illustrate how legal and financial incentives for private and public participation in the supply of international public goods may assist in limiting ‘governance failures’ and promoting equitable sharing of adjustment costs. The limited incentives for less-developed countries to make use of the power-oriented GATT dispute settlement system was successfully reduced by the WTO provisions for legal assistance for LDCs (cf. Article 27 DSU) and by the establishment of a separate Advisory Center on WTO Law offering comprehensive legal and technical assistance for developing countries participating in the WTO dispute settlement system so that less-developed WTO members have become very active users of WTO legal and judicial remedies. The European experiences with financial redistribution (e.g. by EU regional, structural and development funds), capacity-building and ‘human rights conditionality’ illustrate how citizen-oriented ‘community law’ and rights-based ‘integration law’ can transform power politics by effective protection of cosmopolitan rights, development assistance and rule of law. The focus of the ‘Development Round’ on assisting the majority of less-developed WTO member countries to benefit from trade and from welfare-increasing trade regulation may have been a necessary incentive for promoting participation of LDCs in the consensus-practice of the WTO; yet, the continuing disagreement on how to maximize the developing countries’ gains from trade – as illustrated by the US insistence on reciprocal trade liberalization and India’s insistence on ‘policy space’ for protecting import-competing producers against trade competition – illustrates the need for limiting consensus-based WTO negotiations by more legal flexibility for ‘plurilateral trade agreements’ among ‘coalitions of the willing’.
The participation gap, i.e. the need for inclusive consensus-building promoting worldwide participation, requires empowerment of citizens by cosmopolitan ‘access rights’ to public goods, legal and institutional protection of ‘deliberative governance by discussion’, institutionalized leadership (e.g. by international organizations with mandates for initiating rule-making for global public goods) and financial assistance for 'capacity building' by ‘coalitions of the willing’ so that all relevant public and private actors cooperate in the collective supply of global public goods. As in European economic law, multilevel governance must be promoted by international duties of cooperation (e.g. among national governments and international organizations, national and international courts) and competition among ‘alliances of the willing’. WTO law encourages ‘competing liberalization’ at worldwide and regional levels, as illustrated by the increasing recourse to free trade areas, customs unions and preferential agreements among LDCs as ‘second best’ policies in the absence of worldwide consensus on concluding the Doha Round negotiations. International economic and environmental public goods are also crucially dependent on private stake-holder participation, for instance private industries developing ‘green technologies’, participating in decentralized ‘carbon emission trading systems’ and contributing to the financing of adjustment to climate change. As first explained by Kantian legal theories of ‘multilevel constitutionalism’ promoting citizen-driven ‘struggles for equal rights’ and ‘public justice’ (cf. Petersmann, 2012 chapter III) and illustrated by the citizen-driven structures of the diverse European economic, legal and human rights regimes, international economic, environmental and legal public goods (like ‘rule of law’ for the benefit of citizens) cannot become effective and legitimate without rights of all affected citizens to have recourse to legal and judicial remedies against unjustified restrictions of individual rights and market distortions.