When we started our blog with one year ago in January 2009 many things were unclear: Will it work out to subsume very different empirical fields under the heading of transnational governance? Will we manage to find enough time for blogging? Will blogging influence our research? What issues will be of greatest interest?

At least regarding the last question, our open source blogging software WordPress provides some data, which we present in form of the all-too popular end-of-the-year-listings:

Top 5 blog posts 2009 (in terms of visitors):

  1. Pirate Parties: Transnational mobilization and German elections
  2. Fair Value Accounting and the ‘Inactivity’ of Markets
  3. Fair Value Accounting in Retreat?
  4. The Kindle Controversy: No Right to be a Reader?
  5. Accounting at the G20 London summit: Watering down or walking the talk?

Top 5 search terms guiding visitors to our blog in 2009:

  1. Kindle controversy
  2. Fair value accounting
  3. Transnational governance
  4. Copyright example
  5. Epistemic community

Top 5 tags attached to blog posts in 2009:

  1. Creative Commons
  2. Microfinance / Microcredit
  3. Copyright / Copyright Regime
  4. Development
  5. Transnational governance

Top 5 series started in 2009:

  1. Microcredit Myths (4 posts)
  2. Kindle Controversy (3 posts)
  3. Eastern Frontiers (2 posts)
  4. Transnational Studies and Governance (2 posts)
  5. Wikimania Preview (2 posts)

In total we published 64 posts in 2009, with a total of 63 comments attached to them. While this means we reached our self-imposed goal of publishing at least one post per week, we hope to improve our comment-per-article ratio above the current average of 1 in our second blogging year 2010.

The microfinance industry, which once set out to protect the poor from extortionate moneylenders, may depend on those same moneylenders for its business success; and these moneylenders in turn may be profiting from microfinance. So reports the Wall Street Journal today.

Ketaki Gokhale is a Stanford University graduate student currently working for the WSJ as this year’s Daniel Pearl Memorial Journalism Intern. Earlier this year Gokhale reported on credit bubble tendencies brewing in the microfinance sector in India, an article which provoked controversy and some indignation among the microfinance industry and its advocates.

One of Gokhale’s interviewees reported being overwhelmed by the sudden and forceful supply of credit in her neighbourhood. “Suddenly, in the shantytown where she lives, lots of people wanted to loan her money. She borrowed $125 to invest in her husband’s vegetable cart. Then she borrowed more.” The lady descended into a borrowing binge, at the end of which she even bought a television. She was forced to sell virtually all of her assets and still remained in debt worth around a quarter of her annual income.

Refinancing microfinance loans through the grey market

Gokhale has now followed up her earlier investigation into the dark side of microfinance and uncovered structural complementarities and interdependencies between the microfinance business and local moneylenders. The irony and sadness of the story is that microfinance originally set out to put these same moneylenders and their practices of extortion out of business by offering the poor loans which they could afford. Moneylenders in India are reported to charge interest rates even beyond 1000 per cent annually, leading to debt bondage and other existential problems for the poor.

The entry of microfinance banks into the market may have pushed down the interest rates of some moneylenders, but paradoxically the moneylending business appears to be growing. As Gokhale reports, more than 80% of registered moneylenders in Mahabubnagar started their businesses after the year 2000, which coincides with the phenomenal bout of growth in microfinance in India in the past decade.

It appears that many microdebtors cannot afford to comply with the extremely rigid repayment schedules of microfinance banks, so they must turn to moneylenders, thereby re-financing their loans through the grey market – the market which microfinance sought to protect them from. Read the rest of this entry »

In preparing this post I struggled with the question how to call the process between two parties offering complementary services that obviously refer reciprocally in their actions to each other but do not directly and explicitly negotiate? This question came to me, when recently the German debate on an ancillary copyright (see “Dilbert on Ancillary Copyright“) for publishing houses arrived in the US. “Editor & Publisher”, proud of being “America’s Oldest Journal Covering the Newspaper Industry”, features an article asking “Change in Copyright Law: A Possible Solution to News Content Crisis?”  As a solution suggest by industry representatives, the article reports demands for introducing compulsory licensing fees for Web-based agregators or re-distributors of news content.

But aside this transatlantic discourse coalition addressing legislative bodies, we can see interesting dynamics of unilateral (non-)negotiation between two big players in this game, thereby changing the rules as they “play”: Google and Rupert Murdoch’s News Corp. The latter’s opener were plans of a partnership with Microsoft regarding the new search engine Bing. Business Week’s Douglas MacMillan describes the potential deal as follows:

“In an effort to keep News Corp.’s newspaper content out of Google’s search results, Murdoch’s media giant has held early-stage talks to forge a deal that would put content from The Wall Street Journal, and possibly other company-owned publications, exclusively in Microsoft’s Bing search engine. […] In exchange for the exclusive content, Microsoft would pay an undisclosed fee[.]”

Only about a week later Google announced its counterstrike on its corporate blog, explicitely referring to concerns of newspaper publishers: Read the rest of this entry »

The last several weeks have been extremely frustrating for many activists, international organizations and general public. Several international summits have shown that the global governance system was significantly damaged by the global financial crisis. The crisis created uncertainty about the future and made governments of the world’s leading economies careful about their commitments. After the meeting of parties of the UN Framework Convention on Climate Change on 2-4 November 2009 in Barcelona it became clear that the conference of parties to be held in Copenhagen in December was not likely to result in any legally binding arrangement to succeed the Kyoto Protocol. The World Summit on Food Security held on 16-18 November also did not result in any significant binding commitments. Meanwhile, the Food and Agriculture Organization of the UN reports that due to the global economic recession, the number of hungry people in the world will exceed one billion in 2009. In 2008, it was 850 million people. Only the G-20 Summit in Pittsburgh in September 2009 can be seen as a success of international regulatory efforts, at least to some extent. G-8 was transformed into G-20. The general principles of the new global economic architecture were approved. One of such principles is tough regulation of financial markets. Read the rest of this entry »

Yesterday the Society for the Advancement of Socio-Economics (SASE) announced the topic of its 22nd Annual Meeting, which takes place June 24-26 2010 in Philadelphia. It reads as follows:

“Governance Across Borders: Coordination, Regulation and Contestation in the Global Economy”

In the Call for Papers and Sessions, the organizers describe the focus of the conference:

This year’s conference focuses on the development, dynamics, impact, and implications of emerging forms of transnational governance in the global economy – public, private, and hybrid.

So not only because this blog bears the same name as is this year’s conference theme, we greatly encourage submitting paper or session proposals at the conference website.

Besides, we are thankful for receiving the honor of being SASE’s “featured blog“.

Not so long ago I asked in this blog: “Is Google News Piracy?” when the European Publisher Council (EPC) as well as the World Association of Newspapers and News Publishers (WAN-IFRA) and many of their member organizations signed the “Hamburg Declaration on Intellectual Property Rights” (see list of signatories), which bemoans too little protection and compensation of online content.

Several months of lobbying from major media corporations such as the Axel Springer AG (publisher of the largest German boulevard paper “Bild“) or Burda and one federal election later, Germany seems to end up answering this question with “yes”. The new conservative German government plans to quickly introduce a new ancillary copyright bill, which shall protect publishers of being “expropriated” by new online news services, as Hubert Burda put it (German). According to Christoph Keese, chief lobbyist of Axel Springer, and Christoph Fiedler from VDZ, the umbrella organisation of German Magazine Publishers, this new legislation shall eventually lead to the formation of a new copyright collective for publishers and journalists (see the German video of a recent debate in Berlin).

As only little is known so far about the details in the upcoming bill, speculations regarding potential consequences of such an ancillary copyright spread. The Austrian IT-news portal futurezone, for example, paints the picture of upcoming “linking crimes” (“Link-Verbrechen”) and fears “worsenings for researchers, bloggers and journalists.” And while it seems pretty clear that publishing houses will profit most from the new ancillary copyright, the question “who pays the bill?” is still open for debate.

But the best summary of the current situation is again – for another example, see “Google Books and the Kindle Controversy” – provided by Scott Adam’s Dilbert, who needs only three small boxes to tell more than my entire description above did:

Dilbert.com

[update:]

Very interesting in this regard is a plenary session at the “Monaco Media Forum” featuring Arianna Huffington, founder of the news website Huffington Post, and Mathias Döpfner, CEO of the German Axel Springer AG:

Especially interesting is the part after about 17 minutes when Döpfner starts talking about “web communism”:

“I think this theory that only a free access to information is, I have to admit, one of the most absurd theories that I have heard. It is a very late ideological outcome of web communists.”

At this point Arianna Huffington jumps in with the question:

“Is Chris Anderson in the room?”

His book is called “Free. The Economics of Abundance and Why Zero Pricing Is Changing the Face of Business”. It is available for free online, as a PDF as well as an audio book (285MB).

(leonhard)

In spite of its regular portrayal as “anarchic”, “anything goes” was never true for Wikipedia. Beginning with the list of principles issued by its founder, Jimbo Wales, a continuously growing number of rules guides contributors to and hence development of Wikipedia. One of the most prominent rules is the aim of delivering a “Neutral Point of View” (NPOV). Other important rules deal with notability. While the NPOV is debated with regard to every single article, Wikipedia’s several “notability guidelines” try to resolve the question which information ought (not) to be included in the free online encyclopedia in the first place. Over the years, long lists of conventions have emerged for all kinds subjects. Regarding people, for example, the English Wikipedia lists in detail the notability criteria for members of different professional groups – ranging from Academics over Criminals and Diplomats to Entertainers (including actors, comedians, models, etc.).

But notability guidelines or, as they are called in the German Wikipedia “relevance criteria” (“Relevanzkriterien”), share the problem of all taxonomies, namely a certain degree of arbitrariness; an arbitrariness that makes them particularly prone to being criticized and challenged. In the English Wikipedia debates about notability even led to the formation of two antagonistic camps: The “Association of Deletionist Wikipedians” (ADW) sails under the banner of Antoine de Saint-Exupéry and his famous quote:

“Perfection is achieved, not when there is nothing more to add, but when there is nothing left to take away.”

The opposite camp assembles around the “Association of Inclusionist Wikipedians” (AIW), which goes even back to the old Romans for their motto:

“The motto of the AIW is Conservata veritate, which translates to, ‘with truth preserved.’ This motto reflects the inclusionist desire to change Wikipedia only when no knowledge would be lost as a result.”

While both “associations” exist since 2004 and their dispute seemed to be rather settled, recent controversies about “relevance” in the German Wikipedia demonstrate that and how such rules may still be re-negotiated: Read the rest of this entry »

Thursday, October 15th 2009 was a day of good news. The FT print version headlined “JP Morgan profits lift the Dow”, as JPM posted a net income of 3.6 billion US $ in the three months leading up to September (online article of similar contents). Goldman Sachs posted earnings of nearly as much, as the DOW soared above 10,000.

A good time to be unemployed (for the wealthy)

Meanwhile, the preparatory discussions for Germany’s new coalition government brought an improvement for Germany’s unemployed. If the new government goes forth with its plans, unemployed people will be allowed up to 750 Euros savings per year of age (up from currently only 250) – that means, for instance, if you’re 30 years old and lose your job, you’ll be allowed 22,500 Euros on your bank account and still receive minimum social security cheques (Hartz IV). Sadly, however, according to local radio station WDR5 last night, only 0.2 per cent of currently unemployed people will benefit. It seems appropriate, therefore, to call the move mere “social cosmetics”, as the Frankfurter Rundschau did.

Probably the best financial news of the day was that the top 23 financial institutions in the USA (alone) will pay out 140 billion US $ in bonuses this year, as the Wall Street Jounal reported – the biggest round of bonuses ever. And that’s among a significantly reduced population of bankers compared to 2007. Goldman Sachs is paying out 743,112 Dollars per employee, on average.

Thursday, October 15th 2009 was also a day of bad news, however, though reported by fewer. At least, the left-leaning German newspaper “die tageszeitung” (taz) framed the good news above in a shocking fashion by underscoring it with pictures of starving Ethiopians. Read the rest of this entry »

According to the press release of the Nobel Foundation, Elinor Ostrom was awarded The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel aka Nobel Prize in Economics “for her analysis of economic governance, especially the commons”.

Both, economic governance and commons are recurrent themes in this blog. And while most of Ostrom’s works deal with traditional commons such as forests or fisheries, Creative Commons’ Vice President Mike Linksvayer was eager to point to an article on knowledge commons she co-authored with Charlotte Hess titled “Ideas, Artifacts, and Facilities: Information as a Common-Pool Resource”.

Nevertheless, I fear that applying Ostrom’s insights for transnational governance of transnational commons is far from trivial. This is emphasized in the very article mentioned above for the example of scholarly information:

“But analyzing the whole ecosystem of scholarly information is much more tenuous than in Governing the Commons, where (1) the boundaries were clear, (2) the resource systems studied were small and easy to observe, (3) solving problems was of high salience to appropriators, (4) institutions were long-enduring and had evolved over time, and (5) extensive field observation was available.

[…]

Information, on the other hand, often has complex tangible and intangible attributes: fuzzy boundaries, a diverse community of users on local, regional, national, and international levels, and multiple layers of rule-making institutions.” (p. 132)

And as Sean Safford at orgtheory states, Ostrom’s main conclusion for governing traditional commons is “that coordination happens through self-organization and local (very local) governance”.

Consequently, Ostrom herself makes a difference between local and global commons. Together with others, she lists the following “challenges to establish global institutions to manage biodiversity, climate change, and other ecosystem services” in a Science-article titled “Revisiting the Commons” (2007, p. 282 f.):

  • Scaling-up problem. Large numbers of participants lead to greater “difficulty of organizing, agreeing on rules, and enforcing rules.”
  • Cultural diversity challenge. While diversity can be an asset, Ostrom et al. fear that it also “can decrease the likelihood of finding shared interests and understandings.”
  • Complications of interlinked common-pool-resources. Global issues have more interactions and, with increased specialization, become more interdependent, which also increases the difficulty of governance.
  • Accelerating rates of change, which make, due to Ostrom et al., “’Learning by doing’ […] increasingly difficult, as past lessons are less and less applicable to current problems.”
  • Requirement of unanimous agreement as a collective-choice rule for global resource management.
  • We have only one globe with which to experiment, which leaves “less leeway less leeway for mistakes at the local level, while at the global level there is no place to move.”

To sum it up, as far as transnational governance of common pool resources are concerned, Elinor Ostrom’s work predominantly helps in identifying difficulties. For finding solutions, however, these works – according to herself and her colleagues – at best “provide starting points for addressing future challenges.” (p. 282)

(leonhard)

This entry is part of a series in which we discuss concepts and phenomena in the field of transnational studies.

The major critique of cosmopolitan sociology on empirical research in social sciences is its methodological nationalism. Methodological nationalism means that most studies define (explicitly or implicitly) the nation state as the container of social processes. Thus the nation state unit is the key-order for studying major social, economic and political processes. One of the major critics of such a perspective, Ulrich Beck, argues that it is wrongly based on assumptions of the congruence of political, cultural and social borders. The nation state perspective doesn’t capture transnational linkages, structures or identities.

But how can one analyze transnational phenomena empirically? It is a fundamental problem of research on transnationalism that most data sets and strategies of social inquiry are nation state bound. That makes inferences on transnational phenomena difficult or impossible. This methodological problem is therefore fundamentally linked with sociological concept formation, which is  – from a cosmopolitan perspective –   nation state bound and thus unable capture the multi-dimensional process of change.  Or as Beck and Sznaider formulate it:

The decisive point is that national organization as a structuring principle of societal and political action can no longer serve as the orienting reference point for the social scientific observer (Beck and Sznaider 2006).

Read the rest of this entry »

The Book

Governance across borders: transnational fields and transversal themes. Leonhard Dobusch, Philip Mader and Sigrid Quack (eds.), 2013, epubli publishers.
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