globalization and public policy

Société québécoise de science politique

Globalization and Public Policy: Situating Canadian AnalysesAuthor(s): Grace SkogstadSource: Canadian Journal of Political Science / Revue canadienne de science politique, Vol. 33,No. 4 (Dec., 2000), pp. 805-828Published by: Canadian Political Science Association and the Société québécoise de sciencepolitiqueStable URL: http://www.jstor.org/stable/3232664Accessed: 22/09/2008 01:24

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Field Analysis/Orientations de la science politique

Globalization and Public Policy: Situating Canadian Analyses1

GRACE SKOGSTAD University of Toronto

Introduction

Globalization and its implications for domestic policy making are not new issues for Canadians. Indeed, the country's political economy has long made Canadians highly vulnerable to developments beyond their borders. Dependent on foreign trade and investment, Canada's economy has become deeply integrated into the American economy and, for selected primary commodities, the international economy. Relat- edly, Canadian governments have been long-standing supporters of multilateralism and international regulatory frameworks like the Gen- eral Agreement on Tariffs and Trade (GATT), now the World Trade Organization (WTO). Nonetheless, the developments associated with the phenomenon of globalization-and regionalization-are sufficiently different in kind to pose new challenges to domestic governance and policy making. Fundamental questions arise whose answers have important implications for public policies. To what extent is the sovereignty of the Canadian state truly imperilled by globalization and regionalization? Are these phenomena overwhelming? Or are globalization's effects more modest and more contingent, confined, for

1 I am grateful to Steven Bernstein, Richard Simeon, Richard Stubbs, Linda White and the anonymous reviewers for the JouRNAL for their constructive comments on an earlier version of this article.

Grace Skogstad, Department of Political Science, University of Toronto, Toronto, Ontario M5S 3G3; [email protected] Canadian Journal of Political Science /Revue canadienne de science politique XXXIII:4 (December/Decembre 2000) 805-828 ? 2000 Canadian Political Science Association (l'Association canadienne de science politique) and/et la Soci6et qu6ebcoise de science politique

GRACE SKOGSTAD

example, to the loss of particular policy instruments in specific policy areas? Which is the bigger threat: globalization or regionalization? And what facets of these developments render the Canadian state especially vulnerable? Is it the economic dimension of regionalization that spins some regions of Canada ever more tightly into the American commercial web?2 Or is it globalization's cultural homogenizing ten- dencies as modern technologies transmit values seemingly inexorably around the globe?3 Moreover, if the Canadian state has not been dealt a mortal blow by globalization, what strategies emerge as viable options for reinvigorating it?

These questions highlight the need to take stock of ongoing developments in the international political economy, variously described as globalization, internationalization and regionalization, and their consequences for Canadian politics and public policy. This article undertakes this task by placing the study of Canadian public policy within the wider scholarly debate surrounding globalization. Examining the public policy consequences of globalization, an over- theorized and illusory concept, has the virtue of fixing the phenomenon: its consequences "on the ground" in the form of courses of "action or inaction chosen by public authorities to address a given problem or an interrelated set of problems."4 Public policies are more than solutions to problems; they incorporate a society's shared beliefs about the ends to which it is striving collectively, as well as the means to achieve these goals.5 Inquiring into globalization's effects on public policy making and outcomes reveals not only its programmatic consequences but also its ideational and normative repercussions.

This article begins by extracting a number of themes relevant to public policy analyses from the literature on globalization, regionalization and internationalization, then appraises the extent to which these themes figure in the study of Canadian public policy and the degree to which Canadian findings replicate those elsewhere. The main part of the article is structured around five themes: first, the multiple and somewhat contested meaning of globalization and its distinctive features as compared with regionalization and internationalization; second, the redefined-both narrowed and broadened-scope of the public policy domain as national sovereignty is jeopardized and a

2 As suggested by Thomas Courchene and Colin Telmer, From Heartland to North American Region State (Toronto: Centre for Public Management, University of Toronto, 1998).

3 See William Watson, Globalization and the Meaning of Canadian Life (Toronto: University of Toronto Press, 1998).

4 Leslie A. Pal, Beyond Policy Analysis (Scarborough: Nelson, 1997), 1-2. 5 Ronald Manzer, Public Schools and Political Ideas: Canadian Educational Pol-

icy in Historical Perspective (Toronto: University of Toronto Press, 1994), 6.

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Abstract. This article situates the study of Canadian public policy and globalization within the wider scholarly debate on the topic. It extracts five themes from the literature and appraises the extent to which these themes figure in the Canadian literature. The five themes are: the multiple and contested meanings of globalization; the redefined scope of the public policy domain with "the decline of the state" and the emergence of "the competitive state"; the role of domestic political institutions in mediating globalization; the emergence of new supranational policy sites and transnational actors; and the heightened attention to the normative dimensions of policy processes and outcomes. Questions central to a research agenda on globalization and Canadian public policy are outlined.

Resume. Cet article traite des d6bats que suscite l'analyse de la politique publique canadienne et de la mondialisation au sein de la litt6rature acad6mique. II 6value l'impor- tence qu'occupent, au sein de cette dernire, cinq sujets controvers6s: les nombreuses definitions concurrentes du concept de mondialisation; les nouvelles delimitations du domaine de la politique publique issues de la prise en compte du <<declin de l'Etat? et de l'apparition de <l'Etat comp6titif>; le role des institutions politiques nationales du point de vue de la m6diatisation de la mondialisation; l'6mergence de nouveaux acteurs transnationaux et de forums supranationaux d'elaboration des politiques; l'attention croissante accord6e aux dimensions normatives des processus d'adoption et des effets des politiques publiques. L'article expose egalement les questions qui devraient etre au centre d'un agenda de recherche sur la mondialisation et la politique publique canadienne.

competitiveness logic prevails; third, the interaction between globalization and the domestic political/institutional framework as the latter mediates domestic responses to globalization and globalization trans- forms domestic governance and policy making; fourth, the emergence of new supranational policy sites and transnational actors; and fifth, the heightened attention to the normative dimensions of policy processes and outcomes. The examination of each theme in the broader scholarly literature is succeeded by a discussion of its treatment in the Canadian literature. Viewed against the broader scholarly debate, much of the Canadian discussion is speculative and rhetorical, subject to bold assertions and dire warnings. Conceptually clear and empiri- cally informed studies are in short supply. This survey of the Canadian literature, which is relatively comprehensive but by no means exhaus- tive, identifies several questions central to a research agenda on globalization and Canadian public policy. It concludes with suggestions on how these questions might profitably be addressed.

The Meaning and Novelty of Globalization

The effort to discern the implications of globalization for the study and substance of public policies, including Canadian public policies, is troubled by the lack of consensus on the meaning of globalization, its novelty and how it is distinguished from "regionalization" and "internationalization." Underlying these debates are often different assumptions about the motors of globalization and regionalization, and their public policy consequences.

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Analysts fold at least four processes into the concept of globalization. The first is economic: the deepening integration of markets as a result of heightened trade and investment, and enhanced capital mobility.6 Globalization is most closely identified with these economic structural developments, themselves rooted in technological and spatial changes in the movement of capital and the organization of production. The second process is political: a restructuring of power relations with the emergence of new supranational centres of political authority so that citizens are now subject to multiple layers of political authority.7 The third oft-noted dimension of globalization is the cultural diffusion of values, tastes and norms worldwide and a geographic stretching of interactions, both the consequence primarily of novel communications technologies.8 And a fourth facet of globalization is the ideological process associated with the displacement of embedded liberalism by market liberalism, deregulation and privatization.9 Glob- alization constitutes a "hegemonic discourse" that alters individuals' a priori ideas, perceptions of the empirical world and their expectations of the role of the state.10

Not surprisingly, contestation about the meaning of globalization spills over into debates about what drives it and how novel it is. Are the spatial reorganization of production, growing trade and the integration of financial markets rooted in technological developments relating to information processing, communications and transportation?1 Or

6 Ricardo Petrella, "Globalization and Internationalization: The Dynamics of the Emerging World Order," in Robert Boyer and Daniel Drache, eds., States against Markets: The Limits of Globalization (London: Routledge, 1996), 68.

7 David Held, Democracy and the Global Order (Stanford: Stanford University Press, 1995).

8 Malcolm Waters, Globalization (New York: Routledge, 1995); and Jan Aarte Scholte, "Global Capitalism and the State," International Affairs 73 (1997), 431-32.

9 See John Ruggie, "International Regimes, Transactions, and Change: Embedded Liberalism in the Postwar Economic Order," International Organization 36 (1982), 195-231; Robert W. Cox, "A Perspective on Globalization," in James H. Mittelman, ed., Globalization: Critical Reflections (Boulder: Lynne Rienner, 1997), 23; Stephen Gill, "Knowledge, Politics, and Neo-Liberal Political Econ- omy," in Richard W. Stubbs and Geoffrey R. D. Underhill, eds., Political Econ- omy and the Changing Global Order (1st ed.; Toronto: McClelland and Stewart, 1994), 75-88; Jason Abbott and Ronen Palan, State Strategies in the Global Polit- ical Economy (London: Pinter, 1996), 14; and Robert Boyer, "State and Market: A New Engagement for the Twenty-First Century?" in Boyer and Drache, eds., States against Markets, 84-115.

10 Philip G. Cery, "Globalization and Other Stories: The Search for a New Paradigm for International Relations," International Journal 51 (1996), 617-37.

11 Philip G. Cery, "The Dynamics of Financial Globalization: Technology, Market Structure, and Policy Response," Policy Sciences 27 (1994), 319-42. An early Canadian contribution to this debate is Richard G. Harris, "Globalization, Trade, and Income," Canadian Journal of Economics 26 (1993), 755-76.

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Globalization and Public Policy: Situating Canadian Analyses

are they an inevitable working-out of the logic of capitalist processes of surplus accumulation?'2 Alternatively, is globalization the result of political choices and public policies of governments?13 Regarding the novelty of globalization, a division appears between those with a long historical focus who argue that developments associated with globalization have been occurring for over a century14 and those who main- tain that contemporary developments differ sufficiently in kind so as to represent a significant rupture with the past.15

Such analytical conciseness is less apparent in distinguishing "globalization" from "internationalization," and more so, from "regionalization." Here the broad debate centres on whether it is global economic and social activity that is occurring, or rising interaction between well- defined national economies. If the latter, then some would argue the world economy is more international than global, and the term "internationalization" is more appropriate.16 Defined thus, one might legitimately ask how internationalization differs from "interdependence"-the traditional term used to describe the vulnerability that ensues when countries are economically or politically interdependent.17 A further point of debate is whether regionalization around the triad of the United States, the European Union and Japan is a more appropriate term to describe

12 Scholte gives pride of place to the logic and dynamics of capitalism, but also contributes a role to "technological innovation, the dynamics of the states system, and certain features of modem culture" ("Global Capitalism and the State," 432).

13 Cery, "Globalization and Other Stories"; Philip G. Cemy, "Globalization and the Changing Logic of Collective Action," International Organization 49 (1995), 595-625; and Eric Helleiner, "Explaining the Globalization of Financial Markets: Bringing States Back In," Review of International Political Economy 2 (1995), 315-41.

14 Using history to deny the novelty of globalization are P. Hirst, "The Global Economy: Myths and Realities," International Affairs 73 (1997), 409-25; Paul Hirst and Grahame Thompson, Globalization in Question: The International Economy and the Possibilities of Governance (London: Polity, 1995); and Wat- son, Globalization and the Meaning of Canadian Life. For an alternative methodology to demonstrate that "the globalization template remains quite weak," see Louis W. Pauly and Simon Reich, "National Structures and Multinational Corpo- rate Behavior: Enduring Differences in the Age of Globalization," International Organization 51 (1997), 25.

15 See Jonathan Perraton, David Goldblatt, David Held and Anthony McGrew, "The Globalisation of Economic Activity," New Political Economy 2 (1997), 257-78.

16 Hirst and Thompson, Globalization in Question; and Robert Wade, "Globaliza- tion and Its Limits: Reports of the Death of the National Economy Are Greatly Exaggerated," in Suzanne Berger and Ronald Dore, eds., National Diversity and Global Capitalism (Ithaca: Cornell University Press, 1996), 60-88.

17 Robert O. Keohane and Joseph S. Nye, Power and Interdependence: World Poli- tics in Transition (Boston: Little, Brown, 1977).

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developments underway.18 If so, then is the enhanced regionalization (the building of "concrete patterns of transaction within an identified regional space"19) a stage in the transition to globalization? Does regionalization signal a re-positioning to strengthen countries' participation in the global economy or, alternatively, is it a defence against globalization and a means of regulating or resisting it?20 These questions, to which there are as yet no clear answers, beg for greater con- ceptual precision with regard to the terms that lie at the centre of the globalization debate-regionalization, internationalization and globalization-even while recognizing their different drivers: economic, ideological, political and cultural.

Canada: Regionalization and/or Globalization? In their efforts to identify the phenomenon of globalization, Canadian scholars have stressed the interconnections among the economic and ideological dimensions of globalization and the role of elected governments in promoting its development.21 Expanding beyond governments, H. W. Arthurs casts the net wider, to embrace the Canadian business, intellectual, cultural, scientific and technological elite, whose "globalization of the mind" leads it to sponsor globalization.22 Even while couched within the context of "globalization," it is regionalization in the context of the Canada-United States Free Trade Agreement and the North American Free Trade Agreement (NAFTA) that have attracted the most attention. Indeed, there is an unfortunate tendency to subsume globalization and regionalization under the same label.23

18 Hirst, "The Global Economy"; and Petrella, "Globalization and Internationaliza- tion."

19 Helge Hveen, "Explaining the Regional Phenomenon in an Era of Globaliza- tion," in Richard Stubbs and Geoffrey R. D. Underhill, eds., Political Economy and the Changing Global Order (2nd ed.; Toronto: Oxford University Press, 2000), 72.

20 Ibid., 71. See also Richard Stubbs, "Introduction: Regionalization and Globaliza- tion," in ibid., 231-34.

21 See Gill, "Knowledge, Politics, and Neo-Liberal Political Economy"; Cox, "A Perspective on Globalization"; Helleiner, "Explaining the Globalization of Finan- cial Markets"; Daniel Drache and Meric S. Gertler, eds., The New Era of Global Competition: State Policy and Market Power (Montreal: McGill-Queen's Univer- sity Press, 1991); and Andrew F. Johnson and Andrew Stritch, eds., Canadian Pub- lic Policy: Globalization and Political Parties (Toronto: Copp Clark, 1997), 297.

22 H. W. Arthurs, "Globalization of the Mind: Canadian Elites and the Restructur- ing of Legal Fields," Canadian Journal of Law and Society 12 (1997), 219-46.

23 Keith Banting, George Hoberg and Richard Simeon, eds., Degrees of Freedom (Montreal: McGill-Queen's University Press, 1997), focus exclusively on a Canada-US comparison when examining the convergent effects of "globalization." H. W. Arthurs states that "globalization, regional integration within NAFTA, and continentalism are all more or less synonymous" ("Globalization of the Mind," 225).

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That is, the ever tighter integration of the Canadian economy with the US market is taken as evidence of the globalizing of the Canadian economy. This general failure to query whether the two phenomena are driven by the same levers and yield the same policy-making consequences ignores the possibility that one of these two processes may be a bulwark against the other, mitigating its convergent and dependency effects. Equating globalization and regionalization also obscures the possibility that Canada's asymmetrical relationship vis-a-vis the United States (one tenth the size of the US market and dependent upon it for more than 85 per cent of its trade) may make certain themes in the globalization and public policy literature less relevant to the Cana- dian case. While limited in its empirical documentation, Stephen Clarkson's work on the differing models of "continentalism" at play in North America and Europe represents an effort to determine the uniqueness of the Canadian case. Clarkson argues that the weakly institutionalized, market-driven, minimal-state model of regionalization incorporated in NAFTA stands in sharp contrast to the European Union model and has the effect of reducing the sovereignty of the Canadian state.24

Globalization and the Redefined Scope of Public Policy Globalization redefines the scope of the public domain in two ways. First, it is argued that the perceived sphere of action within which public authorities are able to act has narrowed as a result of the actions of private economic actors (transnational corporations) and international institutions. Students of the international political economy couch this transformation in terms of a loss of national sovereignty or a decline of the nation state. Public policy analysts speak of a loss of state capacity as policy instruments are lost or rendered ineffective, and pressures for policy convergence mount. Second, economic globalization yields imperatives to be economically competitive, which reinforce pressures for a retrenched public sphere and alignment of policy instruments and outcomes with those in other countries. At the same time, and paradoxically, competitiveness imperatives may lead the state to expand into new activities.

24 Stephen Clarkson, "Fearful Asymmetries: The Challenge of Analyzing Continen- tal Systems in a Globalizing World," Canadian-American Public Policy (Bangor: The Canadian-American Centre, The University of Maine, 1998), 41-48.

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The Decline of the State

Whether phrased as the loss of national sovereignty or the retreat of the state, the effects on the possible scope of domestic policy making of economic developments and ideological currents closely associated with globalization are much debated. Are the agents of economic globalization-transnational corporations and mobile financial capital-able to escape the reach of national authorities, thereby imper- illing the sovereignty of the state? Or do borders continue to be significant for economic transactions so that the viability of the nation state remains intact? Answers to this question pit what may be described as first-wave globalization scholars, epitomized by Keniche Ohmae25 who proclaimed the death of the nation state, against a second, later wave, whose views of globalization's threat are more tempered. The latter note, first, that the capacity of states to formulate and implement public policy has almost invariably fallen short of their formal claims to sovereign national power; and, second, that the loss of sovereignty is contingent upon several factors. A strong proponent of diminished state sovereignty, Susan Strange argues that changes in the structure of production give markets and firms who control knowledge, production and finance significant power over state actors by enabling them to influence the framework through which decisions are made, agendas are set and transactions and negotiations are conducted. She, nonetheless, concludes that the global structural changes that affect all governments "do so very differently, sometimes putting snakes in their path, sometimes ladders."26 Others concur, arguing that while some states have lost some sovereignty in some policy areas, by no means has the state been side-lined.27 In some respects, its policy-making role has been enhanced.

The Competitive State: Lost and Found Policy Instruments, New Policy Priorities

States, declares Strange, are now competing with one another to have value added within their territory and not elsewhere. They are thereby forced "to bargain with foreign firms to locate their operations within

25 Kenichi Ohmae, The Borderless World: Power and Strategy in the Interlinked Economy (New York: Harpers, 1990).

26 Susan Strange, Retreat of the State (Cambridge: Cambridge University Press, 1996), 64; and Susan Strange, "Rethinking Structural Change in the International Political Economy: States, Firms, and Diplomacy," in Stubbs and Underhill, eds. Political Economy and the Changing Global Order (1st ed.), 110.

27 See John Zysman, "The Myth of a 'Global Economy': Enduring National Foun- dations and Emerging Political Realities," New Political Economy 1 (1996), 157-84; Boyer, "State and Market: A New Engagement for the Twenty-First Century?" 84-115; and Scholte, "Global Capitalism and the State."

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the territory of the state, and with national firms not to leave home, at least not entirely."28 In public policy terms, the emergence of the competitive state has two disparate consequences. First, it curtails governments' range of policy options by setting governments' priorities (or defining their agenda) even while undermining the efficacy or use of particular policy instruments. And, second, competitive imperatives cause governments to embark on new policy initiatives designed to equip their labour force and economic sectors with the skills and technology needed to survive and expand.

The "strong globalization" thesis argues that the competitive state is required to align its priorities with those of transnational economic interests-transnational corporations and the main international financial markets. The difficulty of regulating mobile capital and the seeming imperative to make national economies more competitive, it is posited, entail reduced government expenditures-hence, a broad- side attack on the welfare state-and deregulation. The competition state is thus a "residual state" in terms of the policy instruments it can deploy and the policy outcomes that ensue. Macro-economic policy instruments are jeopardized most as a result of capital mobility and financial market integration.29 A "weaker globalization" thesis allows more scope for independent economic policies, both across countries and over time. Governments that are prepared to pay the (potentially prohibitive) costs of policy independence-most likely left-labour governments-can retain it. Geoffrey Garrett noted a continued and even strengthened relationship between left-labour power and fiscal expansion into the 1990s; Geoffrey Garrett and Peter Lange demon- strated that partisan colouration exerts a strong influence on macro- economic policy.30

Social welfare policies have become a test case of globalization's assault on governments' policy autonomy. The progressive liberalization of world markets in the post-Second World War period was accompanied by governments' provision of social insurance policies. Social welfare policies, by guaranteeing citizens a "future beyond the market" and sheltering them from the risks of more open markets,

28 Strange, "Rethinking Structural Change," 107. The phrase "the competition state" was first coined by P. G. Cery, The Changing Architecture of Politics: Structure, Agency, and the Future of the State (London: Sage, 1990).

29 See Scholte, "Global Capitalism and the State"; and Evelyne Huber and John D. Stephens, "Internationalization and the Social Democratic Model: Crisis and Future Prospects," Comparative Political Studies 31 (1998), 353-97.

30 Geoffrey Garrett, "Capital Mobility, Trade and the Domestic Politics of Eco- nomic Policy," in Robert O. Keohane and Helen V. Milner, eds., International- ization and Domestic Politics (New York: Cambridge University Press, 1996), 79-107; and Geoffrey Garrett and Peter Lange, "Internationalization, Institutions and Political Change," in ibid., 48-75.

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enabled states to embrace the market liberalization that accompanies globalization/internationalization.31 Notwithstanding the difficulty of disentangling the pressures on welfare state retrenchment that arise from capital mobility as compared with those rooted in fiscal deficits, there is evidence that globalization's impacts are muted relative to demographic changes and ideologically conservative parties. Elmar Rieger and Stephan Leibfried discount the popular belief that globalization pressures have led to a radical dismantling of welfare states in western Europe. To the contrary, globalization "tends to function as a blocking mechanism vis-a-vis policy reforms deemed necessary from an 'internal,' domestic perspective; it has not become a forcing mechanism for such reforms."32 Their observation stands in contrast to other claims that globalization renders "exceedingly difficult" governments' ability to implement generous social programs.33

Compared with capital mobility, the effects of trade-induced economic interdependence are likely less constraining and no greater than those which have always existed in asymmetrical, highly integrated trading relationships.34 As will be elaborated more fully below, at least in some sectors (agriculture, cultural industries), a far greater con- straint than market integration to the use of trade policy instruments are the regulatory frameworks under regional and multilateral trading agreements (NAFTA and the WTO).

While certain policy instruments have been lost to governments, or their utility diminished, the scope of the public domain has broadened to encompass new activities and policy arenas. The competitive state men- tality triggers a search for the public policies that will situate states most favourably vis-a-vis transnational economic actors and external competi- tors. Governments' competitive strategies to improve the domestic cli- mate for business are likely to shift from demand-side measures (associated with the Keynesian state and including protective trade barriers,

31 See Dani Rodrik, "International Trade and Big Government," in Benjamin J. Cohen, ed., International Trade and Finance: New Frontiers for Research (Cambridge: Cambridge University Press, 1997), 89-125. See also John Ruggie, "International Regimes, Transactions, and Change: Embedded Lib- eralism in the Postwar Economic Order," International Organization 36 (1982), 195-231.

32 Elmar Rieger and Stephan Leibfried, "Welfare State Limits to Globalization," Politics and Society 26 (1998), 364-65; emphasis in the original.

33 Dani Rodrik, Has Globalization Gone too Far? (Washington, D.C.: Institute of International Economics, 1997), 6.

34 See Garrett, "Capital Mobility, Trade and the Domestic Politics of Economic Policy"; Huber and Stephens, "Internationalization and the Social Democratic Model"; and Milner and Keohane, "Internationalization and Domestic Politics: A Conclusion," in Keohane and Milner, eds., Internationalization and Domestic Politics, 256.

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nationalization of utilities and key manufacturing sectors, subsidizing key or strategic industries) to supply-side interventions which provide the conditions for generating growth.35 Thus, rather than retreating, governments have become active where they were not previously-for example, in policy fields related to the information-based economy. Far from being powerless in the face of globalization, states can deploy a range of strategies-that is, public policies-to enhance their competitiveness.

Pressures for Policy Convergence

Notwithstanding the fact that cross-national policy convergence can be the result of factors quite independent of internationalization, developments associated with internationalization exert their own independent pressures for cross-national policy alignment. First, domestic and foreign-based transnational economic actors are inclined to seek uniform regulatory and other policies to lower their transaction and compliance costs and improve their profitability and competitiveness. Second, state actors are likely to see the merits of harmonizing policies and regulatory practices in order that the latter not become nontariff barriers to foreign markets. And, third, given the former two incentives, supraterritorial regulation through international agreements and/or international bodies generates opportunities for national bureaucrats and other technical experts to engage in joint problem solving and consensus building around policy solutions to common problems.

Empirical studies suggest an uneven and ambiguous link between market integration and policy convergence. In the world's most highly integrated regional bloc, the European Union, social welfare policies are growing more similar36 even while member states continue to differ in a host of areas.37 The diversity across countries in the instruments, content, goals, outcomes and styles of public policy suggests limits to the homogenizing effects of transnational economic processes. Steven K. Vogel reveals that diversity continues to characterize countries' regulatory policies, even as reregulation takes place in response to globalization and other pressures.38 These limits are rooted in the reality that countries face regionalization and globalization with

35 Abbott and Palan, State Strategies in the Global Political Economy. 36 Martin Rhodes, "'Subversive Liberalism': Market Integration, Globalization and

West European Welfare States," in William D. Coleman and Geoffrey R. D. Underhill, eds., Regionalism and Global Economic Integration (London: Rout- ledge, 1998), 99-121.

37 Brigitte Unger and Frans van Waarden, eds., Convergence or Diversity? Interna- tionalization and Economic Policy Response (Aldershot: Avebury, 1995).

38 Steven K. Vogel, Freer Markets, More Rules: Regulatory Reform in Advanced Industrial Countries (Ithaca: Cornell University Press, 1996).

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"different levels and kinds of resources, different histories and cul- tures, different policy options and choices."39

Canada: Competitiveness, Uneven Convergence The "decline of the state" and "the competitive state" themes loom large in the Canadian literature, articulated forcibly by first-wave globalization scholars. Thomas Courchene, arguably the most sustained commentator on globalization's effects on the Canadian state, expounds its neutering effects.40 The more common and more recent perspective is to deny that Canadian governments are either dead or irrelevant, and to minimize the restrictions that economic integration places on government.41 As noted above, these second-wave analysts argue that the constraining effects of economic globalization are fre- quently exaggerated to obscure an ideological preference for a restricted state.42

The competitive imperative is an implicit or explicit theme in vir- tually all Canadian analyses of globalization.43 There is evidence that competitiveness objectives have redefined Canadian governments' policy priorities, and that a globalization logic has been instrumental in reducing Canadian governments' responsibilities in a number of economic and social policy areas. However, the discrete contributions of economic globalization, deficit-cutting objectives and neo-liberal ide-

39 Scholte, "Global Capitalism and the State," 440. 40 For examples of Ohmae-like discourse, see Thomas Courchene, Rearrangements

(Oakville: Mosaic, 1991); Courchene and Telmer, From Heartland to North American Region State, 271; and Richard Simeon, "Globalization and the Cana- dian Nation-State," in G. Bruce Doern and Bryne B. Purchase, eds., Canada at Risk? Canadian Public Policy in the 1990s (Toronto: C. D. Howe Institute, 1991), 46-58.

41 Bob Rae, The Three Questions: Prosperity and the Public Good (Toronto: Viking, 1998), 34; and Watson, Globalization and the Meaning of Canadian Life, 10-11.

42 See Leo Panitch, "Globalisation and the State," in Ralph Milliband and Leo Pan- itch, eds., Between Globalism and Nationalism (London: Merlin, 1994); Stephen McBride, "Investing in People: Labour Market Policy," in Johnson and Stritch, eds., Canadian Public Policy, 54; and H. W. Arthurs, "Constitutionalizing Neo- Conservatism and Regional Economic Integration: TINA x 2," in Thomas J. Courchene, ed., Room to Manoeuvre? Globalization and Policy Convergence (Kingston: School of Policy Studies and McGill-Queen's University Press, 1999), 17-74.

43 See various essays in Johnson and Stritch, eds., Canadian Public Policy; G. Bruce Doern, Leslie A. Pal and Brian W. Tomlin, eds., Border Crossings: The Internationalization of Canadian Public Policy (Toronto: Oxford University Press, 1996); John Shields and B. Mitchell Evans, Shrinking the State: Global- ization and Public Administration "Reform" (Halifax: Fernwood, 1998); Rae, The Three Questions, 3; and Courchene and Telmer, From Heartland to North American Regional State, 2.

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ology, themselves interlinked phenomena, in reducing the effectiveness of policy instruments are not easily distinguished. Nor do all agree that competitiveness necessarily means taxing policy instruments are whittled away. Echoing the "risk reduction" theme in the broader scholarly literature, William Watson disputes claims that capital mobility restricts governments' capacity to tax corporate incomes, to argue that jurisdictions can levy higher taxes and thereby support social welfare policies, providing these same governments "give people something in return for their taxes, possibly including socially pro- ductive income redistribution."44

A rich body of Canadian literature addresses the issue of cross- national policy convergence and confirms the uneven and ambiguous link between globalization and growing policy similarity across countries. There is some evidence of cross-national policy convergence in particular sectors, like agriculture and banking, but this harmonization should not be exaggerated nor should it be attributed solely to market liberalizing forces.45 Nor is there compelling evidence that Canadian and US policies are becoming more similar, even while their economies merge. The period of closest integration of the Canadian and American economies has also been the period of the largest differences in their fiscal policies.46 Nor have Canadian and American regulatory standards in a number of areas, including labour and the envi- ronment, converged as a result of NAFTA.47 The most comprehensive survey of convergence of Canadian and American public policies, Degrees of Freedom: Canada and the United States in a Changing World, downplays regional economic integration as a force for policy harmonization. Evidence of cross-national policy similarity occurs only with respect to macro-economic and industrial policies, where "the costs of distinctive policy choices" may be increased as a result of globalization.48 Other policy spheres reveal a mixture of similarity

44 Watson, Globalization and the Meaning of Canadian Life, 65. 45 On agriculture, see William D. Coleman and Grace Skogstad, "Neo-Liberalism,

Policy Networks and Policy Change: Agricultural Policy Reform in Australia and Canada," Australian Journal of Political Science 30 (1995), 242-63; and William D. Coleman, Grace Skogstad and Michael Atkinson, "Paradigm Shifts and Policy Networks: Cumulative Change in Agriculture," Journal of Public Pol- icy 16 (1997), 273-301. On banking, see William D. Coleman, "Policy Conver- gence in Banking: A Comparative Study," Political Studies 42 (1994), 274-92.

46 Watson, Globalization and the Meaning of Canadian Life. 47 Robert Howse and Michael J. Trebilcock, "The Myths of NAFTA's Regulatory

Power: Re-thinking Regionalism as a Vehicle for Deep Economic Integration," in G. Bruce Doern, Margaret M. Hill, Michael J. Prince, and Richard J. Schultz, eds., Changing the Rules: Canadian Regulatory Regimes and Institutions (Toronto: University of Toronto Press, 1999), 336-60.

48 Richard Simeon, George Hoberg and Keith Banting, "Globalization, Fragmenta- tion, and the Social Contract," in Banting et al., eds., Degrees of Freedom, 399.

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and difference, and some, like social policy, remain decidedly different. The editors' summary merits quoting: "Canada and the United States are not being driven inexorably towards a single, homogenized model of social and economic life. Although the constraints on state activity have strengthened in palpable ways, there is still room for domestic choice, and policies continue to be shaped by the rhythms of domestic culture and politics."49

Hence, the Canadian evidence reinforces that of other industrialized countries: economic globalization is not uniformly constraining, governments retain scope for independent economic policies if they are prepared to pay the costs and the parameters of the public domain stretch and shrink as governments reconfigure and assume new regulatory and expenditure responsibilities in an effort to render their industries more competitive.50

The Mediating Effects of Domestic Institutions

The disparate effects of globalization across countries and policy areas-the snakes and ladders to use Strange's terminology-draw attention to the role of domestic institutions and other factors in mediating the various dimensions of regionalization and globalization. What role does the domestic institutional framework-in its widest sense of encompassing political institutions, economic structures, cultural values and frames of meaning, and national policy legacies- play in determining national responses of resistance or accommodation to globalization pressures?

Domestic institutional features set the parameters of domestic responses to internationalization and regionalization-whether these pressures will be rebuffed or not, and what the nature of the response will be. Established ideas and interests privileged by existing domestic institutions and the drag of policy legacies are likely to act as bulwarks against the reformist or convergent impulses of globalizing forces. If internationalization does trigger economic shocks and political crises, political entrepreneurs are likely to gain some political space to effect institutional and policy changes that wrestle power away from vested interests. Beyond this, governments will be confronted by new domestic coalitions as the opportunities and costs of greater economic openness fall differently across social and economic actors.51

49 Ibid., 405. 50 See examples in Doern et al., eds., Border Crossings, and especially William D.

Coleman and Tony Porter, "Banking and Securities Policy," in Doem et al., Bor- der Crossings, 57.

51 Keohane and Milner, eds., Internationalization and Domestic Politics.

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Across industrialized countries, responses to internationalization and globalization appear to be affected by a broad range of domestic institutional features, including preferred policy instruments; national implementation styles;52 the partisan complexion of the governing party; the organization of domestic labour and financial markets; the independence of the central bank;53 and the capacity and autonomy of the state, the character of state-societal linkages and institutional mechanisms of interest representation and political consensus building.54 The multiplicity and range of these institutional factors indicates both the contingency and complexity of globalization's effects across countries.

Canada: Reconfigured Policy Networks, the Logic of Federalism

Given the strong institutionalist tradition in Canadian public policy, it is not surprising that the role of political institutions as mediators between the international and domestic environments figures large in analysis of Canadian governments' responses to regionalizing and globalizing phenomena. The first focus of attention has been structural changes in policy-making processes, both internal to government (re)organization and the composition of policy networks, to enable accommodation to internationalizing pressures and to promote domestic adjustment strategies. Canadian case studies reveal evidence of a widening and deepening of policy networks as new nonstate actors are drawn more fully into the policy process, often sharing power with state officials.55 Domestic as well as transnational in their origins, these new nonstate actors may be able to forge coalitions that enable them to exercise influence commensurate with that of state officials

52 Frans van Waarden, "Persistence of National Policy Styles: A Study of Their Institutional Foundations," in Unger and van Waarden, eds., Convergence or Diversity?

53 Garrett and Lange, "Internationalization, Institutions, and Political Change." 54 See Keohane and Milner, eds., Internationalization and Domestic Politics;

Berger and Dore, eds., National Diversity and Global Capitalism; Thomas Risse- Kappen, ed., Bringing Transnational Relations Back In: Non-State Actors, Domestic Structures and International Institutions (Cambridge: Cambridge Uni- versity Press, 1995); Linda Weiss, The Myth of the Powerless State: Governing the Economy in a Global Era (Cambridge: Polity Press, 1998); and Richard Simeon et al., "Globalization, Fragmentation, and the Social Contract," 402-05.

55 Steven Bernstein and Benjamin Cashore, "Globalization, Four Paths of Interna- tionalization and Domestic Policy Change: The Case of Eco-Forestry in British Columbia, Canada," this JouRNAL 33 (2000), 67-99; Doem et al., eds., Border Crossings; Coleman, "Policy Convergence in Banking;" Coleman and Porter, "Banking and Securities Policy"; Coleman and Skogstad, "Neo-Liberalism, Pol- icy Networks and Policy Change"; and Coleman, Skogstad and Atkinson, "Paradigm Shifts and Policy Networks."

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and well-entrenched economic interests. At the same time, policy network changes enable state officials to extract and co-ordinate resources of information, support and/or compliance, as well as to dislodge well- entrenched interests. In policy spheres subject to extensive international regulation, bureaucratic officials are more likely to gain influence relative to societal groups.

The second preoccupation has been the intervening role of federalism as a transmission belt between globalization and domestic policy. Two aspects of the political economy of Canadian federalism are of especial importance for public policy making and policy outcomes. First, the distinctive features of provincial economies ensure that the costs and benefits of liberalization and integration into the North American and international markets fall differently across provinces and their governments. As the policy goals and resources of state officials and societal actors at the two orders of government are thereby altered, the potential for inter-provincial and federal-provincial con- flict rises. The consequence is a lesser possibility of coherent adjustment and competitiveness strategies.

Second, globalization/regionalization may undermine the incentives of all governments, but especially wealthy provincial governments, to support internal redistribution. Provinces that are more dependent upon external markets than domestic markets are unlikely to be willing to bear the economic costs of internal fiscal transfers that have little hope of being recycled back to their own pocketbook. Ontario's political and economic elites, argue Thomas Courchene and Colin Telmer, have little incentive to support an east-west "social and human-capital union" as the province's economy becomes integrated into "a north-south trading system."56 Motivated by self-interest and overwhelmed by competitive pressures, provincial elites' eroding support for inter-provincial income redistribution puts them on a collision course with a national government whose own legitimacy requires its continuing commitment to inter-regional transfers. The argument raises important questions about the specifics of the Canadian experience with globalization/regionalization. To wit, are national political communities like Canada, whose solidarity rests on the glue provided by public policies rather than market interdependence, easily unstuck by globalization and the surge of localized loyalties?

56 Courchene and Telmer, From Heartland to North American Region State, chaps. 8-9. For similar arguments see Courchene, Rearrangements, chap. 5; Simeon, "Globalization and the Canadian Nation-State"; and Ian Robinson, "Trade Pol- icy, Globalization, and Canadian Federalism," in Franqois Rocher and Miriam Smith, eds., New Trends in Canadian Federalism (Peterborough: Broadview, 1995), 245-51.

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New Policy-Making Sites and Actors: International Institutions, Transnational Actors

Students of public policy have always sought to place policy making in its wider context. In some respects, the phenomena of globalization, internationalization and regionalization simply reinforce the imperatives of a contextual analysis, albeit a geographically expanded one populated by new state and nonstate actors. There are two implications of this enlarged context of domestic policy making. First, problems on the domestic agenda and their solutions often originate outside the boundaries of the state. Transnational corporations and transnational networks of organizations representing civil society can exploit the existence of international bodies to shape national decision making and undermine national communities' domestic policy autonomy.57 Second, the boundary between domestic and external policies blurs as policy areas hitherto perceived almost entirely as domestic matters acquire an external dimension. The shifting definitions of policy fields is not confined to those with an economic dimension but also includes, for example, human rights.58

Conceptualizing globalization or regionalization as a contextual factor that shapes policy making within states obscures the emergence of the international tier as an authoritative site of policy making in its own right. The international institutions, formal and informal, which predate the current globalizing era have become a more prominent fea- ture as governments recognize that, in an interconnected and interdependent world, the effective resolution of some problems is only possible by co-ordination and co-operation among public and private actors, and by global policies. Besides formal bodies like the WTO and European Union-level institutions, less formal arrangements are also mechanisms of supranational governance. Private systems of authority exist in a number of financial service areas and give private actors with specialized knowledge powers of self-regulation.59

The rule-making and regime-building activities of these formal and informal international institutions on state sovereignty and policy autonomy can both limit and enhance national (and subnational)

57 For examples, see Risse-Kappen, ed., Bringing Transnational Actors Back In; and Margaret E. Keck and Kathryn Sikkink, Activists beyond Borders: Advocacy Networks in International Politics (Ithaca: Cornell University Press, 1998).

58 Andrew F. Cooper and Leslie A. Pal, "Human Rights and Security Policy," in Doem et al., eds., Border Crossings, 207-38.

59 A. C. Cutler, V. Haufler and T. Porter, "Private Authority and Global Gover- nance," in A. C. Cutler, V. Haufler and T. Porter, eds., Private Authority in Inter- national Affairs (Albany: State University of New York Press, 1999); and William D. Coleman and Anthony Peri, "Internationalized Policy Environments and Policy Network Analysis," Political Studies 47 (1999), 691-709.

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sovereignty. On the one hand, international institutions and regimes may enable states to retain their exclusive rule-making authority within their domestic borders by "pooling their sovereignty" at the international tier. National authorities may also use international treaties to gain some autonomy vis-a-vis other domestic political actors and domestic constituencies.60 On the other hand, international institutions whose regulatory decisions become binding on member states result in the latter forsaking a measure of domestic policy autonomy. The WTO, relative to the GATT that it replaced, is intrusive of domestic decision-making autonomy. Not only are its rulings binding, but its various agreements on agriculture, technical barriers to trade and sanitary and phyto-sanitary measures, for example, invade domestic policy making to an unprecedented extent.61 The displacement of rule-making and rule-enforcement powers to international bodies like the WTO thus results in a transfer of influence and authority from domestic public and private actors.

Canadian scholarship has always been sensitive to the role of transnational economic actors in circumscribing Canadian policy making, and this appreciation is prominent among analysts, noted earlier, who weigh the consequences of the economic and ideological dimensions of globalization and regionalization. The penetration of transnational actors representing non-economic interests into domestic policy making, altering local policy discourse and outcomes, is also being recognized. But the traditional disciplinary divide between students of Canadian domestic politics and foreign policy has tended to act as a brake on sophisticated inquiry into the policy implications of the enhanced rule-making and rule-enforcement authority of international institutions. Certainly, observers are pointing to a host of examples which reveal how Canadian policy spheres-and policy autonomy- are being transformed by the binding character of WTO rulings. But what is less clear, and awaits closer study, is the degree to which WTO rulings with respect to Canada's policies to safeguard and promote Canadian magazines, dairy supply management and a regional aircraft industry effectively tie governments' hands, or whether other, still available, instruments can be deployed to achieve the goals sought by these now illegal policies.

60 See Judith Goldstein, "International Law and Domestic Institutions: Reconciling North American Unfair Trade Laws," International Organization 50 (1996), 541-64.

61 Sylvia Ostry, The Post-Cold War Trading System (Chicago: University of Chicago Press, 1997).

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Globalization and the Normative Dimension of Policy

As the preceding discussion reveals, globalization and regionalization affect public policy making and public policy outcomes in a number of ways. Understandings of the scope of the public sphere and governments' responsibilities are reshaped, relationships between private and public actors are reconfigured and notions of authority and legitimacy are altered in the process. Norms of efficiency and effectiveness are elevated over equity and fairness considerations. The neo-liberal paradigm that accompanies globalization encourages a contraction of the public domain by popularizing a minimalist notion of politics. The quest for efficiency and effectiveness in the name of the competitive state means that markets and public-private partnerships are expected to replace governments as purveyors of goods and services. While their extent and pace differ across countries, these developments raise both procedural issues of legitimacy and substantive concerns of social justice.

Legitimacy issues arise as the norms and structures of democratic decision making are undermined by economic and political globalization. As Dani Rodrik observes, transactions in the international mar- ketplace carry "the least inherent" legitimacy because they are not regulated by an overarching political authority.62 Even where the latter exists in the form of supranational forums like the WTO, it is princi- pally non-elected actors, whose authority resides in their expertise rather than their popular support, who effectively make policy. These new nodes of policy making sit uncomfortably alongside traditional notions of legitimacy predicated upon democratic criteria of popular sovereignty and accountability. Elected officials can be made to answer to their electorate for their actions and for those of their officials; non-elected lawyers and technical experts in international institutions less readily. The same phenomenon occurs at the domestic level in policy areas whose legal parameters are defined by supranational regulatory frameworks. The primacy of technical knowledge in policy making shifts influence away from nonspecialist domestic con- stituents to bureaucrats equipped by their professional training with such knowledge. Thus, even where national officials are effective decision makers, national democratic channels can be effectively nullified. A democratic deficit ensues.

Issues of transparency acquire heightened significance as institutions and actors beyond the territorial state acquire political authority and decision-making powers. Supraterritorial forums have typically

62 Rodrik, Has Globalization Gone too Far? 71. Rodrik credits Karl Polanyi, The Great Transformation (Boston: Beacon, 1944), for this observation. See also Ian Robinson, "Globalization and Democracy," Dissent 43 (1995), 373-80.

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been closed to nonspecialists. In an effort to shore up their legitimacy, institutions like the WTO and its ancillary bodies are engaged in ren- dering their decision making more transparent-for example, by sharing information with nongovernmental organizations and giving them observer status at international forums. These initiatives on the part of international bodies towards greater openness can be expected to rip- ple through to domestic politics. First, they present organized interests with an alternate forum to build coalitions for the purpose of pressing claims upon their domestic governments. Second, they create pressure for domestic decision makers to render their own decision making more visible and inclusive. Paradoxically, then, globalization as supraterritorial governance may enhance not only effective and efficient policy making, but also more legitimate governance.63

Substantive social justice concerns also mount with evidence of the growing gap between rich and poor that economic globalization leaves in its wake. On wealth distribution across individuals and countries, there is a growing belief that economic globalization is not "just." Although it is difficult to separate the independent effects of government fiscal restraint and globalization/regionalization in generating inequities in the distribution of wealth among Canadians, their manifestation has been a subject of concern. To cite one example, former Ontario premier Bob Rae, in The Three Questions: Prosperity and the Public Good, draws attention to how "smaller craft" are being "swamped" by the same "rising tide" of globalization that "lifts many yachts, and strong cruising boats even more so."64 His prescrip- tion to correct these inequities? Restore politics and the public domain to their rightful places and use public policies to forge a common interest and sense of solidarity among Canadians. Whether these are the solutions or not is less important than is Rae's warning, echoed by others:65 unless the social inequalities and dislocation that spring from economic globalization/regionalization are checked, support for market liberalization will increasingly erode.

Conclusion: Where to and How?

The foregoing survey illustrates that the Canadian literature parallels the broader debate on a number of dimensions, replicating the schism between those who view the structural forces of globalization as overwhelming and disempowering of states and immobile citizens, and those who perceive room for domestic actors and institutions to mould

63 See Wolfgang H. Reinicke, Governing without Government? (Washington, D.C.: Brookings Institution, 1998).

64 Rae, The Three Questions, 84. 65 Rodrik's Has Globalization Gone too Far? is perhaps the best-known warning.

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and even resist globalizing trends. At the same time, there is a rough consensus that globalization and regionalization have contributed to a transformation of policy-making goals and processes in Canada, led Canadian governments to place a higher priority on objectives of efficiency and competitiveness and created some pressures for Canada to align its policies with those of other countries. But disagreements arise on the degree to which competitive pressures are self-induced or exogenously imposed; the extent to which convergence pressures can be resisted; whether domestic policy instruments have been torpedoed and, if so, which ones; and the latitude that remains for "made in Canada" policies.

These divergent perspectives are grounded in different ontological and methodological assumptions. Structuralist assumptions underlie the global determinist literature which perceives states to be beholden to financial markets. Rationalist accounts also figure prominently, as attention is directed to the altered incentives of utility-maximizing transnational actors-and, by definition, of governments-in a context of capital mobility and market interdependence. By contrast, historical and sociological institutionalist assumptions underwrite explanations of globalization's limited and disparate effects across countries with respect to corporate behaviour66 and policy diversity. Political discourse assumptions also figure prominently among those who main- tain that globalization and regionalization are fuelled by ideology and rhetoric rather than by structural exigencies. From a discursive perspective, state authorities' recourse to the language of diminished state autonomy and national competitive imperatives justifies neo-liberal policies that are embraced, but not dictated.

The abundance of conflicting propositions, alongside the still- limited empirical analyses, suggests several lines of inquiry that would be fruitful in enhancing understanding of globalization and regionalization, and their consequences for Canadian public policy. First, there is a need to distinguish more clearly the disparate impacts of regionalization and globalization-that is, to overcome the tendency to equate globalization and regionalization. The key questions here are the following. Do regionalization and globalization push and pull policy making in the same directions? Are the forces at work in the North American bloc only different in degree rather than in kind from global processes? Should globalization as multilateralism be more appropri- ately viewed as a bulwark against regionalization? And what about the converse: is regionalization a firewall against globalization? The working hypotheses here are the following: (1) regionalization and global-

66 Louis W. Pauly, "The 'Culture' of Multinational Corporations and the Implica- tions for Canada," in Courchene, ed., Room to Manoeuvre? 89-116.

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ization are distinct phenomena in terms of their economic, cultural and political manifestations but share a market liberal ethos; (2) because the Canadian economy is more regionalized than internationalized and Canadians share in large part the liberal values and cultural beliefs of their dominant trading partner, regionalization through economic integration and acculturation is a more potent force in Canadian politics than economic and cultural globalization; and (3) the political dimension of globalization (supranational regulation) is a significant factor that can offset to some degree the effects of market-driven regionalization. Testing these hypotheses, and isolating the discrete impacts of regionalization and globalization will entail comparative case studies of policy developments in a host of areas that are variously subject to regionalization alone, globalization alone and to both regionalization and globalization.

Second, there is a need to disentangle the discrete effects of globalization/regionalization, fiscal constraints and neo-liberal ideology on Canadian public policy making. The retreat of the Canadian state in a number of expenditure and regulatory policy areas has occurred alongside a perceived imperative for neo-liberal governments to reduce bud- get deficits. It is, accordingly, difficult to sort out the independent contribution of factors associated with globalization (the augmented influence of mobile capital, competitiveness pressures arising from open markets, explicit constraints on particular policy instruments stem- ming from international trade agreements). The transition of Canadian governments from fiscal deficits to fiscal surpluses presents the opportunity to examine the independent contribution of globalization- induced phenomena. An interesting question here is whether, and how, the discourse of competitiveness will affect the scope and substance of policies, including social welfare policies, when fiscal exigencies can no longer be called upon to justify retrenchment. Greater attention to, and a more systematic comparison of, policy making by neo-liberal and nonneo-liberal provincial governments will also help to disaggre- gate the independent effects of fiscal constraints, neo-liberal ideology and globalization/regionalization. The task will not be easy, however, as neo-liberal ideas are inextricably intertwined with the economic processes that give globalization and regionalization their momentum.

Third, there is a need to understand better the disparate impacts of globalization/regionalization across policy areas-to identify which policy areas are most susceptible to exogenous and endogenous pressures for change in a regionalizing and globalizing era. Given the significance of trade to the Canadian economy, one would expect policy sectors that have a direct trade component or cross-border externalities to be most vulnerable to regulatory and/or expenditure policy change. Sectors that are less directly and visibly trade-related should be more isolated from globalization/regionalization effects. However, both exter-

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nal and internal pressures will be mediated by domestic institutional factors so that policy sectors that would appear to be especially vulnerable to deregulation and fiscal retrenchment may be able to resist such pressures and/or accommodate them. Although the Canadian literature offers valuable insights into how Canada's political institutional framework affects domestic responses to regionalization and globalization, the written account is incomplete. Questions still abound as to how the capacity for decisive action afforded by executive-centred government and disciplined political parties is undermined, strengthened or unaffected by practices of executive federalism and democratic norms of societal consultation, sectoral policy participation and transparent government. The manner of functioning and efficacy of this broad institutional framework in promoting, resisting or adjusting to regionalization and globalization is likely to vary across policy sectors, suggesting the need for a methodology that combines institutionalist assumptions (including those surrounding policy networks and policy communities) with power resource models that highlight the shifting balance of power among societal forces, and between governments and societal forces.

Fourth, the political dimension of globalization and its implications for domestic policy making are still little understood. This development arguably poses the greatest challenge to traditional models of public policy, undermining assumptions about the priority of the domestic arena-domestic problems, domestic political constituencies and authoritative domestic decision makers. With the emergence of sites and modes of policy making that extend beyond public authorities to embrace private actors, and trespass the local and supranational spheres, domestic policy analysts must train their sights beyond Canada's borders to an unprecedented extent. An understanding of international regime formation and the rule-making and rule-enforcement authority of international institutions like the WTO is necessary to grasp the degree to which Canadian governments have ceded, and are likely to be urged to cede, policy autonomy to international regulatory bodies.

The role of transnational networks, nourished by the technological developments associated with globalization, in Canadian policy making is little understood. Are the experiences of transnational alliances in helping thwart a multilateral agreement on investment and the launch of a round of the WTO in Seattle in late 1999 the trend of the future? Do transnational networks exert an independent effect on Canadian domestic policy making or do they work in interaction with economic globalization?67

67 For a helpful discussion along these lines, see Bernstein and Cashore, "Global- ization, Four Paths of Internationalization and Domestic Policy Change."

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The internationalization of domestic policy making-through transnational societal networks and international regulatory bodies- raises issues of political legitimacy. Procedural notions of legitimacy, associated with democratic norms of popular sovereignty and democratic accountability, underpin the Canadian political system. Interna- tional regulation presents a challenge to these procedural notions by creating the opportunity for the authority of non-elected experts-sci- entists and lawyers-to supplant the domestic preferences of citizens and their governments. Both rationalist and historical institutionalists can offer insight as attention is directed to the need to democratize international institutions to render their decision making more accessi- ble and more transparent to nonstate actors.

Globalization and regionalization have altered the Canadian domestic policy landscape. How dramatically, through what pathways and with what consequences for domestic policy autonomy, democratic government and citizens' well-being is not fully known. Devel- oping a fuller portrait of how domestic policy making has been affected by Canada's experience in the North American regional bloc and the international political economy is the challenge for Canadian policy analysts.

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globalization and public policy

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