Nikhil Kalyanpur, PhD

Globalization did not negate state power. It changed the toolkit. We expected the norms and incentives of the liberal economic order to push regimes in places like China and Russia to democratize. Instead, authoritarianism appears to be thriving. This article argues that authoritarians have learned how to take advantage of the institutions underpinning globalization for their own illiberal ends. They use courts in major economic powers to negate the effects of international institutions and to target their political competition. They subvert our expectations by repurposing the basic premises of liberalism – predictability and openness. The article demonstrates these claims by examining how the institutions of multiple international economic regimes, which were designed as constraints, have been turned into offensive tools. The findings illustrate that International Political Economy (IPE) scholars need to begin analyzing how governments learned these tactics and whether we can reconcile the contradictions they exploit.

The Energy Charter Treaty (ECT) is the primary international mechanism protecting the property rights of foreign energy investors. By giving firms the ability to sue host governments in neutral venues, the hope was that expropriation risks would reduce and thereby spur investment. Has the ECT lived up to these aims? We analyze how exogenous changes to the property rights provided to Russian firms under the Energy Charter Treaty impact political risk. We find no evidence that the increases or decreases to rights under the investment regime altered firm value. The results indicate that the ECT has limited effects on an investment climate, at least in the eyes of financial markets. The findings suggest that critics of the ECT are right to call for reforming the institution as it may be hampering a green energy transition without adequately providing the promised economic returns. More theoretically, the paper contributes to debates on the relationship between state power and international environmental institutions, and highlights the importance of offshore finance for altering business-government relations in the energy sector.

We investigate how the international investment regime turned into an investment vehicle. Through the process called third-party funding, financiers back international legal claims by firms against countries and in turn seek a share of any potential award. More generally, we add to debates on how international regimes evolve and at times generate unanticipated consequences. Building off work on the sociology of fields, we argue that institutional change can occur when individuals from different fields interact. Each field has its own local practices and beliefs about how governance institutions like international regimes function. When professionals from one field analyze problems in another, they use the tools from their native field. If potential solutions provide material and status benefits for the dominant actors in the targeted regime, cross-field coalitions can form and change the targeted regime’s practice. As hedge funds in the finance field and lawyers in the international law field sought to reinvent themselves after the 2008 financial crisis, they teamed up to make Investor State Dispute Settlement a speculator’s game. Theoretically, we embed theories of regime change within larger social relations, highlighting the importance of informal interactions among regime operators for the use and function of governance institutions. We underscore the role of field interdependence as actors engage in contestation across social and political domains. Empirically, we demonstrate the way in which financialization has had far-reaching consequences that extend well beyond traditional economic sectors, reconfiguring the practice of international law.

This article revisits the relationship between law and international order. Building on legal research concerned with transnational law, we argue that domestic courts are endogenous sites of international political change. National courts are constitutive of international order by generating new rules, adjudicating transnational disputes, and bounding state sovereignty. We illustrate the ways in which national courts create new political opportunities by updating three core international relations theory debates. Recognizing the role of domestic courts as global adjudicators enhances our understanding of regime complexity and international forum shopping. By re-interpreting aspects of conventional international law, and engaging in cross-border dialogue, domestic courts challenge our understanding of international diffusion and judicialization. By redefining the boundaries of state authority and sovereignty, national courts create potential for conflict and cooperation. A transnational law perspective illustrates the porous nature between domestic and international spheres, highlighting how domestic courts have become adjudicators for state and non-state actors that operate across mainstream levels of analysis. Our approach calls on scholars to move beyond analyzing national legal systems as mechanisms of compliance to instead consider domestic courts as co-creators of international order.

While the EU takes on an increasingly global regulatory role, we have only a limited understanding of how or when foreign firms influence EU regulation. Multinational Corporations (MNCs) have many of the power resources that determine lobbying success. We argue, however, that high salience blunts foreign corporate power. High salience generates legitimacy concerns for EU institutions, creating a political opportunity structure that favours pluralistic participation. Civil society can point to the instrumental power of foreign firms as a means to contaminate business interests, amplifying consumer voices in the process. We label this the MNC-Coalition paradox. We investigate the European Union's General Data Protection Regulation to assess our argument, as the revelations made public by Edward Snowden created an exogenous shock in salience. Highlighting the presence of MNCs – such as Google and Facebook – in the lobbying process allowed civil society leaders to delegitimize business preferences and bolster consumer protection. In addition to the theoretical contribution, our evidence sheds light on the policy process behind legislation that will shape fundamental civil liberties and privacy rights not only for Europeans but globally.

States with large markets routinely compete with one another to shield domestic regulatory policies from global pressure, export their rules to other jurisdictions, and provide their firms with competitive advantages. Most arguments about market power tend to operationalize the concept in economic terms. In this paper, we argue that a state's ability to leverage or block these adjustment pressures is not only conditioned by their relative economic position but also by the political institutions that govern their markets. Specifically, we expect that where a state chooses to draw jurisdictional boundaries over markets directly shapes its global influence. When a state expands its jurisdiction, harmonizing rules across otherwise distinct subnational or national markets, for example, it can curtail a rival's authority. We test the theory by assessing how changes in internal governance within the European Union altered firm behavior in response to US extraterritorial pressure. Empirically, we examine foreign firm delisting decisions from US stock markets after the adoption of the Sarbanes–Oxley accounting legislation. The act, which included an exogenous compliance shock, follows the harmonization of stock market governance across various European jurisdictions. Econometric analysis of firm-level data illustrates that EU-based companies, which benefited from jurisdictional expansion, were substantially more likely to leave the American market and avoid adjustment pressures. Our findings contribute to debates on the role of political institutions in economic statecraft and suggest the conditions under which future regulatory conflicts will arise between status quo and rising economic powers.

How does maintaining international primacy affect a hegemon's domestic political economy? Debates on hierarchy, retrenchment, and structural power in the global economy are dominating international relations, yet scholars pay limited attention to the second-image reversed consequences of America's global role. The three books under review begin to correct this deficit. Combining their insights uncovers the effects of power politics on an area of substantial public and academic interest: economic inequality. While rising inequality is surely a multicausal outcome, research across the social sciences pinpoints technological change and the financialization of the American economy as fundamental drivers of the recent “redistribution.” These two shifts are generally treated as exogenous shocks in our models; the causal logics of the works under review illustrate that hegemony is the underlying, endogenous force. The analysis indicates a need for political scientists to study the interaction of international and domestic politics as a dynamic process, which would be bolstered by borrowing historical institutionalism's analytic toolkit. Investigating feedback loops and sequencing across both levels of analysis and across issue areas that are currently studied in isolation indicates an agenda that will better integrate security and political economy scholarship.

Dominant perspectives in International Relations start from the assumption that the problem-constellation determines international institutional design. Given the difficulty these ends-oriented approaches face when explaining institutional inefficiencies and pathologies, this article develops an alternate perspective based on anthropologist Claude Lévi-Strauss's concept of bricolage. Design by bricolage starts from the premise that actors are means-focused, seeking to recombine and redeploy tools from their existing environment. Designers constantly experiment, adapting institutional elements from cognate fields, with the aim of creating novel institutional arrangements. The outcomes of international cooperation are a function of the design process, more than the initial problem type. To illustrate the usefulness of this perspective, the paper examines the evolution of the International Financial Architecture, with a focus on the evolution of the international securities regime. A design by bricolage perspective is well positioned to make sense of enduring International Relations puzzles such as why second-best solutions often persist yet later succeed, and, importantly, re-opens the conversation on agency in international institutional design that has been downplayed by conventional, structural approaches. The design of international institutional elements is frequently experimental where form trumps function

The proliferation of production networks and cross-border contracting is frequently cited as empowering globally active corporations to skirt, and shape, national regulations. While scholars often focus on the political gains from these new forms of business organization, we shift the conversation to the potential political costs of global firm reorganization. The spread of corporate subsidiaries and global supply-chain networks leave firms vulnerable to a host of jurisdictional claims, and by targeting a domestically rooted affiliate, states can bring the global practices of the multinational corporation in line with their interests. In other words, states can take advantage of the transnationalization of the firm to transnationalize their authority beyond traditional jurisdictional boundaries. We label this process “networked liabilities.” Specifically, the combination of a firm’s sunk costs and the country’s jurisdictional substitutability determines the ability of governments to exert demands on multinational corporations. A key contribution of the article is to better specify the relationship between mobility and authority and to illustrate that networked liabilities can further empower a variety of states beyond traditional economic powers like the US or the European Union. We further highlight when firms may curtail the authority of great powers. The growing reach of the regulatory state domestically, coupled with the transnationalization of the firm, creates an increasing number of tools for certain governments to engage in economic statecraft beyond their borders. Our findings, then, contribute to debates on business–government relations in a globalized world, the changing nature of political risk, and the deterritorialization of state authority.