Course description:

The rise of illiberal forces and leaders we see in the world today happens because the liberal world order produced less than desirable outcomes and a system of haves and have nots, thus generating dissent and counter-movements. One of the decisive factors for this transformation in Western liberal internationalism is the impact that the global financial industry has on democracy, rule of law and human rights in highly financialized societies in the West, such as the United States and United Kingdom, and the subsequent effect of this inter-societal interaction for the configuration of the international system. The argument of this presentation is that the global financial industry undermines three essential bases of the Western liberal order: democracy, rule of law, and human rights in what constituted the core of this international system for the past 75 years.

This seminar/ workshop links the IR scholarship on global governance and the comparative politics research on the “finance curse” through a global political economy (GPE) perspective. Whereas mainstream IR theories study the interaction of national economies, contemporary events suggest that we should move from a view of the global economy focused on national “islands” to an understanding of the “matrix of balance sheets” of the systemically important financial institutions (Shin 2017, Tooze 2018) and other sets of actors operating in the global financial industry. Hence, IR explanations of the global financial crisis and its (mis)management, which resulted in the erosion of liberal democracy in the transatlantic space, should span a range of actors operating at multiple levels of analysis: global financial corporations, national political institutions, regulatory agencies, and other transnational actors that operate in a matrix of interconnected societies.

To develop this argument we will examine the mechanisms through which the so-called ‘finance curse’ impacts several essential institutions of the American-led liberal world order at its core. Similarly to a resource curse, an oversized financial sector carrying too much influence within and between countries can threaten other sectors of the economy, societal groups and political norms that translate in domestic and international behavior. The significance of this project stems from its consequences for democratic norms and the ‘rule of law’ in its extensive sense (a state based on human rights) in the transatlantic world order.

The seminar has three objectives:

• to familiarize the audience with concepts such as global finance, liberal world order, finance curse;
• to provide an overview of the interaction mechanisms between the global financial industry and the shifting structure of the international system;
• to introduce and structure a framework to guide new research and new debates in global governance studies.