The System Worked_How the World Stopped Another Great Depression
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Notes
Chapter 1
1. In the popular memory, the global financial crisis started with the collapse of Lehman Brothers in September 2008. In actuality, the crisis had started thirteen months earlier, in August 2007, when the market for subprime mortgage securities evaporated. See Irwin 2013, p. 1-4, and Blinder 2013, chapter 4, on how the subprime mortgage crisis metastasized into the Great Recession.
2. On comparisons with the Great Depression, see Eichengreen and O’Rourke 2010. On financial losses, see International Monetary Fund 2009, p. xi.
3. Roxburgh, Lund, and Piotrowski 2011, p. 2. An Asian Development Bank report estimates the 2008 decline in asset values to have been twice as large. See Loser 2009, p. 7.
4. International Labour Organization, 2010, p. 9.
5. See, for example, Cole 2012.
6. For a recent archaeology of the term “global governance,” see Weiss and Wilkinson 2013. The overwhelming focus of this literature has been on the noneconomic components of global governance.
7. See the discussion in chapter 2.
8. Wendt 1999; Johnston 2001.
9. For example, policies pushing trade and capital account liberalization are consistent with the animating ideas of free-market capitalism. See chapter 6 for more on the role of ideas.
10. Chinn and Frieden 2011, p. xvi. See also James 2001.
11. Claessens, Kose, and Terrones 2011, p. 18.
12. BBC World Service Poll, “Governments Misspend More Than Half of Our Taxes: Global Poll,” September 27, 2010, available on WorldPublicOpinion.org, http://www.worldpublicopinion.org/pipa/pdf/sep10/BBCEcon_Sep10_rpt.pdf.
13. BBC World Service Poll, “U.N. Continues to Get Positive, though Lower, Ratings with World Public,” January 24, 2006, available on WorldPublicOpinion.org, http://www.worldpublicopinion.org/pipa/articles/btunitednationsra/163.php.
14. See, for example, Stiglitz 2002.
15. See, for example, Bolton 2007.
16. Mason, Thibault, and Misener 2006.
17. Kieran Daley, “IOC Report Shows ‘Decades of Bribery,’” Independent (London), January 21, 1999; Duncan Mackay, “Samaranch’s Expensive Tastes Revealed as IOC Opens Its Books,” Guardian, March 19, 1999; Jules Boykoff and Alan Tomlinson, “Olympian Arrogance,” New York Times, July 4, 2012.
18. Forster 2006. See also Doreen Carvajal, “For FIFA Executives, Luxury and Favors,” New York Times, July 17, 2011.
19. According to the Guardian, twelve of the twenty-four members have been accused of corruption since 2009. Owen Gibson, “Sepp Blatter: How FIFA’s Great Survivor Has Stayed on Top,” Guardian, May 30, 2013.
20. Leander Schaerlaeckens, “FIFA Acts Like It’s above the Law,” Leander Schaerlaeckens blog, ESPN.com, http://espn.go.com/sports/soccer/blog/_/name/schaerlaeckens_leander/id/6611552/fifa-acts-the-law. See also Associated Press, “Blatter Poised for Re-election,” June 1, 2011, Associated Press, ESPN online, http://espn.go.com/sports/soccer/news/_/id/6614357/sepp-blatter-poised-re-election-fifa-vote-take-place-planned.
21. Roger Blitz and Stanley Pignal, “Battered Blatter Admits Fifa ‘Unstable.’” Financial Times, May 31, 2011; Dorveen Carvajal and Stephen Castle, “European Soccer Clubs Challenging FIFA,” New York Times, July 29, 2011.
22. “FIFA Corruption Probe ‘Being Resisted,’” ESPN, September 21, 2012, http://m.espn.go.com/soccer/story?storyId=1166102; Associated Press, “President: FIFA ‘Not Corrupt or a Mafia Organization,’” USA Today, September 28, 2012, http://www.usatoday.com/story/sports/soccer/world/2012/09/28/sepp-blatter-tells-fifa-advisers-to-curb-criticism-corruption/1600285/.
23. Rob Hughes, “Skeletons in Blatter’s Closet Return to Haunt Him,” New York Times, December 2, 2011.
24. James Montague, “Sympathy for the ‘Devil’: In Defense of Sepp Blatter,” CNN online, January 8, 2013, http://edition.cnn.com/2013/01/08/sport/football/blatter-racism-fifa-football.
25. Roger Blitz, “FIFA’s Tense Relations with Brazil on Show as Protests Rock Nation,” Financial Times, June 20, 2013.
26. See Hepeng Ja, “Closer Ties Urged between China and IEA,” Chemistry World, August 6, 2008; Eberhard Rhein, “China, India and Russia Should Join IEA,” BlogActiv.eu, August 6, 2008, http://rhein.blogactiv. eu/2008/06/08/china-india-and-russia-should-join-iea/; Henry Kissinger, “The Future Role of the IEA” (speech, 35th anniversary of the International Energy Agency, Paris, France, October 14, 2009), HenryKissinger.com, http://www.henryakissinger.com/speeches/101409.html.
27. Shai Oster, “U.S. Asks China to Join Global Energy Group,” Wall Street Journal, May 21, 2008; Press Trust of India, “US Keen on India to Join IEA,” May 22, 2008, http://www.business-standard.com/article/economy-policy/us-keen-on-india-to-join-iea-108052200029_1.html.
28. International Energy Agency website, “About us,” “FAQs,” http://www.iea.org/aboutus/faqs/membership/#d.en.20933, accessed June 2013.
29. Carola Hoyos, “China Invited to Join IEA as Oil Demand Shifts,” Financial Times, March 30, 2010.
30. On IEA member apprehension, see Patrick 2010, p. 49. On Chinese apprehension about joining, see Gao Xiaohui, “Time Not Yet Ripe for China’s IEA Membership,” Global Times, April 1, 2010.
31. Nick Butler, “It’s Time for the IEA to Get Real,” Financial Times, January 8, 2013.
32. Bernanke 2005; Gagnon 2012; Pettis 2013.
33. Alan Beattie, “IMF in Discord over Renminbi,” Financial Times, January 26, 2009.
34. Associated Press, “IMF Approves Huge Eventual Gold Sale,” USA Today, July 7, 2008, http://usatoday30.usatoday.com/news/washington/2008-04-07-3860859895_x.htm.
35. Crotty 2009; Levinson 2010; Bair 2012, pp. 27–40; Zaring 2009/10, p. 483.
36. Drezner 2006, p. 94.
37. The G7 members are Canada, France, Germany, Great Britain, Italy, Japan, and the United States.
38. Martin 2006; Sobel and Stedman 2006.
39. Martin 2008, p. 358; Cammack 2012, fn. 7.
40. Irwin 2013, pp. 1–4.
41. Paulson 2010, pp. 160–61.
42. Alison Smale, “‘Magic Is Over’ for U.S., Says French Foreign Minister,” International Herald-Tribune, March 12, 2008; Bertrand Benoit, “US ‘Will Lose Financial Superpower Status,’” Financial Times, September 25, 2008.
43. See Irwin 2013, chapter 10.
44. Barma, Ratner, and Weber 2007; Cammack 2012.
45. Mahbubani 2008.
46. Paulson 2010, pp. 210–11. See also Sorkin 2009, pp. 343–50; and Blinder 2013, p. 124.
47. See also Darling 2011; Irwin 2013, pp. 142–43.
48. National Intelligence Council 2008; Abdelal and Segal 2007; Drezner 2007a; Alexandroff 2008.
49. See BBC World Service Poll, “Economic System Needs ‘Major Changes,’” March 31, 2009, available on World Public Opinion.org, http://www.worldpublicopinion.org/pipa/articles/btglobalizationtradera/596.php; Program on International Policy Attitudes, “Publics Want More Aggressive Government Action on Economic Crisis,” July 21, 2009, available on World Public Opinion.org, http://www.worldpublicopinion.org/pipa/articles/btglobalizationtradera/626.php.
50. Pew Research Center, “Pervasive Gloom about the World Economy,” Pew Research Global Attitudes Project survey, Pew Research online, July 12, 2012, http://www.pewglobal.org/2012/07/12/pervasive-gloom-about-the-world-economy/
51. Samans, Schwab, and Malloch-Brown 2011, p. 80. See also Lee Howell, “The Failure of Governance in a Hyperconnected World,” New York Times, January 10, 2012.
52. World Economic Forum 2012.
53. Bremmer and Roubini 2011, p. 4.
54. Ian Bremmer, “Decline of Global Institutions Means We Best Embrace Regionalism,” The A-List blog, Financial Times, January 27, 2012, http://blogs.ft.com/the-a-list/2012/01/27/decline-of-global-institutions-means-we-best-embrace-regionalism/. See, more generally, Bremmer 2012.
55. Rothkopf quote from June 3, 2012 tweet at https://twitter.com/djrothkopf/status/209257908553261056. Patrick 2014
, p. 73.
56. Beattie 2012, p. 18. For other pessimistic books by Financial Times authors, see Rachman 2011 and Luce 2012.
57. See Mark Leonard, “In 2013, the Great Global Unraveling,” December 30, 2012, Reuters.com, http://blogs.reuters.com/mark-leonard/2012/12/30/in-2013-the-great-global-unraveling/; Martin Indyk and Robert Kagan, “A ‘Plastic Juncture’ in World Politics,” New York Times, January 20, 2013.
58. There are notable exceptions. See, for example, Kahler 2013 and Jones 2014.
59. Hale, Held, and Young 2013, p. 2; Frieden, Pettis, Rodrik, and Zedillo 2012, p. 2; Mazower 2012, p. 424; Zaring 2009/10, p. 475; Barma, Ratner, and Weber 2013, p. 56. See also, more generally, Patrick 2014.
60. See, for example, Mastanduno 2009; Cohen and DeLong 2009; Chinn and Frieden 2011; Temin and Vines 2013.
61. Kindleberger 1973, p. 292.
62. Feis 1966; James 2001; Ahamed 2009.
63. Altman 2009, pp. 8, 10.
64. Friedman and Mandelbaum 2011.
65. Zakaria 2008.
66. Layne 2012, p. 211. See also, more generally, Reich and Lebow 2014.
67. Mastanduno 2009, p. 152; Kupchan 2012, p. 7.
68. Jacques 2009; Bremmer 2009; Halper 2010; Kurlantzick 2013.
69. Liu Chang, “U.S. Fiscal Failure Warrants a De-Americanized World,” October 13, 2013, Xinhua online, http://news.xinhuanet.com/english/indepth/2013-10/13/c_132794246.htm; David Li, “Beijing Should Cut Back Its Lending to Washington,” Financial Times, October 15, 2013.
70. Ferguson 2004; Haass 2008.
71. Naim 2013, p. 158; Fabius quoted in Steven Erlanger, “Saudi Prince Criticizes Obama Administration, Citing Indecision in Mideast,” New York Times, December 15, 2013; Jentleson 2012, pp. 140–41; Schweller 2011, p. 287.
72. Cooper 2010, p. 742. This is an extension of the concept of “good enough” governance developed by Grindle (2004).
73. Rodrik 2011a.
74. Bremmer 2012, p. 4. See also Patrick 2014. [ALSO, I THINK THIS ENDNOTE NEEDS TO BE PUT BACK IN SEQUENCE]
75. See Davis and Pelc 2013 on learning in the context of trade policy.
76. I am grateful to Walter Mattli for making this point clear to me.
77. Zoellick 2005.
78. For an excellent discussion of this issue, see Gutner and Thompson 2010.
79. On embedded liberalism, see Ruggie 1982. On the new international economic order, see Cox 1979.
80. Wolf 2004; Bhagwati 2004; Dreher 2006; Subramanian and Kessler 2013.
81. Kindleberger 1978; Minsky 1986; Galbraith 1993; Reinhart and Rogoff 2009.
82. Webb 1995; Rodrik 2011.
83. See the discussion in chapter 6.
84. See King, Keohane, and Verba 1994 on the distinction between descriptive inference and causal inference.
85. On analytic eclecticism, see Katzenstein and Sil 2010.
86. See Lake 2009 for a summary of the open economy politics paradigm.
87. Pinker 2011; Goldstein 2011.
88. Burrows and Harris 2009, p. 35. See also Gelb 2010.
Chapter 2
1. Goldsmith and Posner 2005, pp. 38 and 86.
2. Krasner 1983, p. 2.
3. Keohane and Martin 1995, p. 45.
4. Martin 1992b; Drezner 2000.
5. Cooper 2010.
6. Keohane 1984; Axelrod and Keohane 1985; Martin 1992a, 1992b.
7. Snidal and Abbott 2000; Goldstein and Martin 2000.
8. Goldstein and Martin 2000, p. 619.
9. Or, to use the language of March and Olsen 1998, constuctivists rely more on the logic of appropriateness than the logic of consequences.
10. Drezner 2007b, chapters 3 and 5. See also Irwin 2013.
11. Finnemore and Sikkink 1998.
12. Hurd 1999; Johnston 2001.
13. Steffek 2003.
14. Haas 1992.
15. Goldstein 1996; Cortell and Davis 1996; Drezner 2003.
16. Simmons 2009.
17. Mansfield and Milner 2013.
18. In that sense, this effort is consistent with the “analytical eclecticism” of Katzenstein and Sil 2010.
19. By no means are these the only facts mentioned when critics talk about the failure of global economic governance. Other examples include the PBoC chairman’s March 2009 call for a “super-sovereign currency” to replace the dollar; the failure of the Copenhagen climate-change summit in December 2009; and the ongoing dispute between China, the United States, and the European Union over solar-panel dumping. Very often, general fecklessness of the United Nations is also cited as evidence of the failure of global governance.
20. Gamberoni and Newfarmer 2009.
21. Schwab 2011.
22. Rickards 2011; Dadush and Eidelman 2011.
23. Irwin 2013, pp. 204–5.
24. Andrew Ward, “EU in cold as climate deal redefines relations,” Financial Times, December 29, 2009. See also James Kanter, “E.U. Blames Others for ‘Great Failure’ on Climate,” New York Times, December 22, 2009; Mark Lynas, “How Do I Know China Wrecked the Copenhagen Deal? I Was in the Room,” Guardian, December 22, 2009.
25. Gutner and Thompson 2010, pp. 234–37.
26. Keohane 1984; Downs, Rocke, and Barsoom 1996.
27. Reinhart and Rogoff 2009, chapter 14; Claessens, Kose, and Terrones 2011; Reinhart and Reinhart 2010; Eichengreen 2011b; Jorda, Schularick, and Taylor 2012.
28. One example is the Scandinavian countries that experienced severe banking crises in the early 1990s.
29. Eichengreen and O’Rourke 2010, 2012.
30. Based on calculations from the Maddison Project Database presented in Bolt and Van Zanden 2013, http://www.ggdc.net/maddison/maddisonproject/data.htm.
31. Shaochua Chen and Martin Ravallion, “An Update to the World Bank’s Estimate of Consumption Poverty in the Developing World,” March 1, 2012; Annie Lowrey, “Dire Poverty Falls Despite Global Slump, Report Finds,” New York Times, March 6, 2012.
32. United Nations Development Programme 2013, pp. 75–77.
33. For more on the KOF index, see Dreher, Gaston, and Martens 2008.
34. The mean globalization score was 56.36 in 2007 and 56.6 in 2010, a modest increase of 0.4 percent.
35. For the overall globalization index, the mean G20 score was 69.52 in 2007 and 68.98 in 2010.
36. Dinah Walker, “Quarterly Update: The U.S. Economic Recovery in Historical Context,” Report released August 22, 2013, Council of Foreign Relations online, http://www.cfr.org/geoeconomics/quarterly-update-economic-recovery-historical-context/p25774. Accessed July 2012.
37. Ip 2013, p. 4.
38. Lund et al. 2013, p. 14; TheCityUK, Fund Management Report, November 2012, p. 1.
39. Lund et al. 2013, pp. 2 and 17.
40. Hills and Hoggarth 2013, p. 126.
41. Ip 2013, pp. 5 and 9.
42. United Nations Conference on Trade and Development 2013, p. xvi.
43. For FDI data, see OECD/UNCTAD 2012, 2013. For foreign investment assets, see Lund et al. 2013. For remittance flows, see World Bank 2013, p. 3.
44. See, for example, Rogers 2008; Joshua Kurlantzick, “The World Is Bumpy,” The New Republic, July 15, 2009; Brubaker 2011, p. 93.
45. Ponticelli and Voth 2011.
46. Institute for Economics and Peace 2013.
47. Data in this paragraph comes from ICC International Maritime Bureau 2013.
48. Thom Shanker, “U.S. Reports That Piracy Off Africa Has Plunged,” New York Times, August 28, 2012.
49. Institute for Economics and Peace 2012, p. 37.
50. Themnér and Wallensteen 2012, p. 566. See also Human Security Report Project 2010.
51. Brubaker 2011, p. 94.
52. Reinhart and Rogoff 2009, p. 273.
53. O’Rourke and Williamson 1999.
54. Krugman 2012; Stiglitz 2012.
55. Kindleberger 1973, p. 292.
56. “The Return of Economic Nationalism,” Economist, February 5, 2009; Kurlantzick, “The Worl
d Is Bumpy”; Michael Sesit, “Smoot-Hawley’s Ghost Appears as Economy Tanks,” Bloomberg News, February 19, 2009; Rawi Abdelal and Adam Segal, “Yes, Globalization Has Passed Its Peak,” http://www.foreignaffairs.com/articles/64856/rawi-abdelal-and-adam-segal/yes-globalization-passed-its-peak, March 17, 2009.
57. Evenett 2013.
58. Ip 2013.
59. The Simon Fraser Insititute reports can be accessed on the website Freetheworld.com, http://www.freetheworld.com/. The Heritage Foundation data can be accessed at http://www.heritage.org/index/visualize.
60. Hoekman 2012, p. 18.
61. Dadush, Ali, and Odell 2011.
62. European Central Bank 2013; Bown 2012; Siles-Brügge 2014.
63. World Trade Organization 2013; See also Henn and McDonald 2011; Siles-Brügge 2014.
64. Rose 2012, p. 4. See also Kee, Neagu, and Nicita 2013; Kim 2013, p. 7.
65. Ruddy 2010, p. 477; Madsen 2001, p. 849.
66. Dadush, Ali, and Odell 2011. See also Bussière et al. 2011.
67. Bown and Crowley 2013.
68. Ibid. See also Davis and Pelc 2013; Siles-Brügge 2014.
69. Gawande, Hoekman, and Cui 2011; Baccini and Kim 2012; Kee, Neagu, and Nicita 2011.
70. Bown 2012; Kee, Neagu, and Nicita 2013; Bown and Crowley 2013.
71. Ruddy 2010, pp. 492–93.
72. On pre-2008 compliance, see Wilson 2007. On Chinese compliance in particular, see He and Sappideen 2009; Zhang and Li 2013.
73. Alan Beattie, “Decommission the Weapons of Trade Warfare.” Financial Times, August 8, 2012.
74. Bhagwati was the great popularizer of the term (1988, p. 41).
75. Between May 2011 and November 2013, a maximum of 13 percent of business executives cited trade protectionism as a serious concern. The surveys can be accessed at http://ig.ft.com/barometer/.
76. Dadush, Ali, and Odell 2011, p. 3. See also Bown 2010.
77. Schwab 2011, p. 112.
78. Beattie 2012, pp. 10–11; Bremmer 2012, p. 4; Frieden, Pettis, Rodrik, and Zedillo 2012, p. 2.
79. Recounted in Irwin 2013, pp. 127–32.
80. Ibid., p. 161.
81. Bank of International Settlements 2012, p. 39.
82. Ibid., p. 41.