International Institutions Are No Longer Term Paper

  • Length: 16 pages
  • Subject: Economics
  • Type: Term Paper
  • Paper: #37529

Excerpt from Term Paper :

As a result, liberal international institutions broke down. Conversely, ineffective international institutions compounded national economic difficulties. (Holm & Sorensen, 1995, p. 148)

Following World War II, the United States assumed a leadership role in developing new types of international institutions. For example, the General Agreement on Tariffs and Trade (GATT) provided for a liberalization of international trade, the Bretton Woods framework created a fixed exchange-rate system (which lasted until 1971), and the International Monetary Fund controlled the flow of credits until the mid- 1970s and once again from the early 1980s thereafter; in addition, these authors note that the EEC institutionalized a free-trade area in the heart of Western Europe at this time (Holm & Sorensen, 1995). According to Mingst (2006) international institutions are defined as those they are comprised of membership from at least three states, having activities in several states, and whose members are held together by a formal agreement. A coordinating body for international institutions, the Union of International Associations, currently distinguishes between the more than 250 international governmental organizations (IGOs) that have been created by intergovernmental agreements and whose members are states, and the approximately 6,000 nongovernmental organizations (NGOs), whose members are associations or individuals (Mingst, 2006). This author points out that, "IGOs range in size from three members to more than 185 (e.g., the United Nations [UN]), and their geographic representation varies from one world region (e.g., the Organization of American States) to all regions (e.g., the International Monetary Fund)" (Mingst, 2006, p. 3). While some types of international institutions were created to achieve a single purpose (e.g., the World Intellectual Property Organization), still others have been established to address a wide range of responsibilities (e.g., the North Atlantic Treaty Organization) (Mingst, 2006).

Furthermore, in recent years, the United States and other countries have witnessed an enormous amount of new international institutions and regulations that are designed to regulate the operations of companies on the Internet; indeed, local and federal governmental institutions (legislatures, regulatory agencies, and courts within and across countries), as well as many national and international non-governmental bodies, are administering current laws as well as implementing new Internet-specific regulations (Jarvenpaa, Tiller & Simons, 2003). For example:

The U.S. Congress has passed Internet laws protecting children (Children's Online Protection Act);

California and other states have passed laws limiting online e-mail advertising know as "spam";

U.S. courts have invoked traditional trademark infringement and trespassing laws to protect incumbent companies from domain name "cybersquatters" and electronic trespassers; and,

The Internet Corporation for Assigned Names and Numbers (ICANN), a non-governmental body, has established global policy on domain name disputes; and the International Electronic Task Force (IETF) has set international technology standards affecting Internet access issues (Jarvenpaa et al., 2003).

These international institutions, though, have in many cases been allowed to deteriorate from a lack of commitment and funding from the sponsoring nations, and new models to assume their responsibilities have not been forthcoming. For example, in his essay, "The Buck Stops Everywhere," Burke (1997) makes the point that, "The world already has an environmental organisation: the United Nations Environment Programme (UNEP), based in Nairobi. Admittedly it has been allowed to fall into disrepair under a corrosive combination of weak leadership and slashed income from governments. It is a perverse outcome of the first Earth Summit that the world has weaker institutions for handling global environmental problems than it had before" (p. 14). Therefore, today, both domestic and international regulatory agencies that must embrace the dynamic online environment are confronted with a broad range of control activities, including legally binding rules coming from governmental institutions as well as technical standards for digital behavior coming from non-governmental and international organizations, or from the businesses themselves. In this regard, Jarvenpaa and his colleagues report that, "Technology standards that enable the web to operate are the most pervasive form of Internet regulation. Any actor that affects the architecture is acting as a regulatory agent on the Internet" (Jarvenpaa et al., 2003, p. 72). Furthermore, these various social, economic, and technical regulations that are becoming commonplace have the capacity to fundamentally affect how companies compete on the Internet, including how they store, protect, share, and commercialize their digital data both internally and externally (Jarvenpaa et al., 2003).

From a public choice perspective, a supply-and-demand-based exchange model of business and regulatory institutions where regulators are seen as suppliers of regulations for incumbent businesses who "buy" those regulations with various electoral resources (i.e., votes, campaign contributions, and so forth) is highly congruent with the political, social and economic forces playing out in the real world today (Jarvenpaa et al., 2003). The public choice model maintains that regulation facilities the preservation of some level of "control" over these areas and provides economic incentive by incumbent businesses; however, this view appears to be diametrically opposed to emerging Internet technologies that are intended to promote open structures and processes.

In this regard, Jarvenpaa and his associates point out that the technology that operates the Internet was intended to provide an open environment where proprietary or controlling structures would be discouraged, and this openness has allowed highly decentralized and user-driven developments, such as community-based organizations (e.g., eBay) and peer-to-peer computing (e.g., Napster and Kazaa music trading). "Indeed, entertainment industry-supported regulation to control digital piracy, the Digital Millennium Copyright Act (DMCA), has been fairly unsuccessful," they add, and "The DMCA made it a copyright violation for anyone to circumvent a technology control (anti-piracy device such as encryption) that a firm attached to its software" (Jarvenpaa et al., 2003, p. 72). While these initiatives were originally targeted at digital music and DVDs, continuing innovations in peer-to-peer computing and open-source decryption software have made it increasingly difficult for entertainment copyright holders to enforce their rights under the DMCA today (Jarvenpaa, 2003).

According to Calestous (2005), though, the studies of globalization and its impact on policymakers have typically focused on broad cultural contexts that ignore the other realities facing the 200-or so nations of the world today. This author cites the linkages between globalization and concerns about food safety, specifically on international trade rules regarding food, particularly genetically modified foods. For instance, Calestous points to the introduction of technological innovations that have far outpaced the ability of international regulatory agencies to keep up. In this regard, the author reports that, "Sections of the public have remained concerned that existing regulatory institutions have not changed enough to ensure the safety of genetically modified foods. The introduction of new technologies can destabilize global markets that had reached a temporary state of equilibrium" (Calestous, 2005, p. 265).

Clearly, then, in this dynamic environment, "The technology itself is the most pervasive form of Internet regulation that limits or expands social and economic opportunities [and] organizations that design the technology, not any government entity, often govern the use and ownership of the technology" (Jarvenpaa, 2003, p. 72). These authors cite as examples the patents and copyrights that AOL controls that govern the protocols for Instant Messaging; likewise, Microsoft controls the Windows operating system, thereby affording each company with significant regulatory power concerning their respective access and fees; in fact, they suggest that technologists instead of legislators or politicians are increasingly being placed in charge of providing policies and controlling the environment in which companies compete (Jarvenpaa, 2003).

Impact of Events and Trends on International Institutions.

The foregoing represent some serious issues when it comes to ensuring that adequate regulatory systems are in place for global commerce and its associated industries. For example, the system of international banking that is in place today did not fall out of the sky, but is rather the result of hundreds of years' of economic interaction among the countries of the world; it has been in recent years, though, that events have clearly demonstrated the extent to which the respective financial condition of these individual countries can significantly affect the everyday lives of a nation's citizenry as well as their economy. Today, there are not many countries in the world that have economies that are completely insulated from the rest of the world, and even highly isolated nations such as Cuba and North Korea continue to depend heavily on international assistance for their survival; in fact, Fidel Castro ceded power during the composition of this paper, an event that captured headlines over the fighting wars in the Middle East (pers. obs.). In this regard, then, the failure of one country's economy today can have a profound impact on the economic performance of all others. "Clearly, the days of pursuing economic and financial isolation are over for most nations; and momentum is building to tap multinational financial markets efficiently" (emphasis added) (Khambata, 1996, p. 1).

According to a report by Shankar (2004), the so-called Shadow Financial Regulatory committees of Asia, Europe, Japan, Latin America, and the United States recently supported a reduction and an eventual elimination of the current policies that…

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