Regulatory regime for a world with no sheriff

David Held's book could be subtitled "Neither Washington nor Seattle but International Governance". In its rejection of global millenarianism and the anti-globalisation backlash alike, this is a Third-Way book with an international dimension. However, the tone is more interventionist and social democratic than the British variant. Indeed the urgent tone stems from a reaction to the neoconservative and Third-Way alliance over Iraq.

Held conjures up an image of a world without a sheriff. Against this, he proposes a network of legal and regulatory frameworks. He recognises that a regulatory international order already exists in some respects and that states now submit to considerable international monitoring, for example in respect of human rights, non-proliferation and the environment. But he regards this as insufficient both because states tend to appeal to popular sentiment in exporting spillovers to others (pollution, water shortage, genetic modification) and also because the existing international liberal order focuses on political, not economic power. He argues that if the arguments for political freedom and democracy are to become universal, they must be allied with economic reforms and associated international regimes of governance.

Held discusses the inequalities that exist within and between states. He recognises that the programme of greater integration in the world economy will not itself bring benefits unless accompanied by strong internal institutions and perhaps state-led industrial policies to guide development.

It is not hard to empathise with the drift of the book or to applaud many of the proposed initiatives: strengthening the capacity of developing countries to participate in international trade and to engage with finance agencies; linking debt reduction to increased school participation; deepening the UN global compact; creating networks and conventions to initiate reforms and support governance. However, some of Held's longer-run proposals, such as international taxation and multi-level citizenship, seem less attainable.

There is some ambiguity as to whether the urgency of the agenda is due to post-9/11 US unilateralism or globalising tendencies that are undermining political sovereignty. The latter issue is raised but not resolved, with evidence presented for and against the claim that the current wave of globalisation is especially significant. Given that Held's central thesis depends on a positive answer to this, it seems strange that the issue is not pursued more deeply. Held argues for a partisan view of regulation, but the achievable sort may be less to his liking. For example, how is regard for poor-country flexibility (for example, on subsidies) in keeping with the wish for greater global regulation?

Of course a sensitive social-democratic regulatory body might well be capable of wise choices, but the construction of regulatory regimes cannot by themselves be equated with social democratic outcomes. Held is surprisingly silent on this point. He refers repeatedly to the project for greater international regulation as a "social democratic" one rather than a field within which social democrats can try to wield influence. Regulation per se, however, is supported for diverse reasons by actors of varying political beliefs.

The institutions and programmes that Held proposes are in themselves no more inherently "social democratic" than any national competition policy, the Marshall Plan or the Treaty of Nice. This conflation of social democracy with global regulation (and, oddly, the "Washington consensus" with unilateralism) allows Held to downplay potential power struggles other than those between US neocons and everyone else. He offers little analysis of the power relations that underpin the existing order. There is an elision between the frequently made point that nothing is simple (true) and that there is no dominant set of power relations (false).

For example, the correct statement that there is no simple outcome of "a race to the bottom" a decade and a half after the emergence of the US as the sole superpower does not of itself establish that the trend is not in that direction. And the fact that many multinational corporations are for now agreed on engagement with "corporate social responsibility" may simply reflect the current balance of power.

In one passage, Held says the fact that social democratic policies have not been pursued is "more a matter of psychology and political choice, and less a matter related to any fundamental obstacles in the nature of the economic organisation of human affairs". This is all the more surprising because in a recent article in which he summarised his ideas, he criticised the columnist Martin Wolf for writing on globalisation as if "power is largely absent".

The book will be useful for courses in a wide range of disciplines.

Students, however, may find it hard to separate analysis from opinion. Karl Marx once remarked that ideas themselves become a material force when they grip the masses. Perhaps that is what this book is ultimately about.

Ciaran Driver is professor of economics, Imperial College London.