Introduction

FOR over half a century, the global economy and its governing institutions have been dominated by the United States and allied advanced-industrialized states. From its hegemonic position in the international system, the US has played a vital role in managing the making of global capitalism as we know it today — from the golden age of postwar reconstruction and embedded liberalism to the contemporary era of neoliberal globalization. Yet the global political economy is currently in the midst of profound change. There has been a significant shift in global economic activity from the advanced countries of the Global North to the developing countries of the Global South, with China, India, and Brazil, in particular, emerging as major players in the world economy. The share of global GDP produced by developed countries has dropped dramatically — from 80 percent in 1960 to 44 percent today — while the share of developing countries has risen from 20 to 56 percent, such that developing countries now account for more than half of global economic output. Just three developing countries alone — China, India, and Brazil — now make up 25 percent of the global economy, whereas the entire Group of 7 (G7) advanced economies (US, UK, France, Germany, Italy, Japan, and Canada) accounts for only slightly more, at 33 percent. China provides the most striking illustration of this change: three decades of sustained economic growth at rates averaging 10 percent a year have made it the world's largest manufacturing exporter and second largest economy. India's growth rates have been nearly as impressive, with it becoming one of the world's leading exporters of information technology (IT) and IT-enabled services. Brazil has emerged as an agroindustrial powerhouse, threatening to unseat the US and EU as the world's largest agricultural exporter. These large emerging economies are now major consumer markets, with their own globally competitive multinational corporations, and an important source of outward investment, loans, and aid. As Martin Wolf (2009) declared in the Financial Times, "[F]or the first time since the industrial revolution, economic power is no longer concentrated in Western hands." Instead, we are seeing the emergence of multiple centers of global economic power. Along with their increasing importance in the global economy, the emerging powers are demanding a greater role in its management, including at the World Trade Organization (WTO), International Monetary Fund (IMF), World Bank, and Group of 20 Leaders' Summit.

The rise of new powers and the corresponding decline in the hegemony of the US — and of the Global North more broadly — are reshaping the world economy and the institutions charged with its governance. This transformation has been identified as one of the most important in modern history (Ikenberry 2008; Warwick Commission 2008) and generated significant debate about the agendas of the emerging powers and the implications of their rise. This book focuses on how changes in the distribution of power among states are affecting the governance of neoliberal globalization. By neoliberal globalization, I refer to growing global economic integration occurring through the increased movement of goods, services, and capital across borders, propelled by free market ideology and policies, championing open and competitive markets, freed from the fetters of the state. In the prevailing popular discourse, economic globalization is depicted as a spontaneous and agentless economic process, propelled by the ingenuity of markets and the magic of the invisible hand (Friedman 2004; Wolf 2004). Extensive scholarship, however, has shown that globalization is neither a natural nor an inevitable force but a project, driven by specific agents, political struggles, and institutional changes (Chorev 2008; Gill 2002; McMichael 2004). It is thus as much a political as an economic process. Moreover, contrary to its own mythology, neoliberal globalization entails not the removal of economic regulation but the construction of new rules, regulations, and institutions to facilitate the spread and deepening of global markets (Block and Evans 1994; Braithwaite 2008; Fligstein 2005; Levi-Faur 2005; Peck and Tickell 2002). In other words, it is an institution-building project — and one that remains ongoing.

The US has been the primary driver of neoliberal economic restructuring globally (Babb 2009; Cox 2008; Evans 2008; Fligstein 2005; Harvey 2005; Helleiner 2001; Mann 2001). As the world's largest and most advanced economy, the US actively propelled the liberalization and opening of global markets, as a means to gain access to foreign markets, investment opportunities, and cheaper inputs. Multilateral economic institutions, such as the WTO, IMF, and World Bank, have played a central role in this endeavor, creating and enforcing new rules to govern the global economy, while inducing states to adopt neoliberal economic policies and open their national economies to foreign trade and capital. For their part, developing countries have historically been marginalized and excluded from decision-making in the multilateral economic institutions, while the "Washington Consensus" policy prescriptions they propagated produced economic and social dislocation across much of the Global South and provoked intense protest in many countries (Babb 2005; Shadlen 2005; Wade 2003).

In short, neoliberal globalization to date has been a US-led project, pursued in large part through the multilateral economic institutions and often resisted by the Global South. A key question, therefore, is what impact the rise of new powers from the developing world is having on the neoliberal project. This book sheds light on the nature and implications of contemporary power shifts by analyzing the case of the WTO, a core institution in global economic governance, responsible for setting and enforcing the rules of the global trading system. Changes in the global distribution of power, I argue, have ruptured the WTO's ability to fulfill its intended purpose in driving forward the process of neoliberal restructuring on a global scale, as signaled by the collapse of the Doha Round of trade negotiations. The rise of new powers has thus precipitated a crisis in one of the central governing institutions of global neoliberalism. Paradoxically, however, the rising powers should not be seen as carriers of a counterhegemonic movement in opposition to neoliberalism. They are certainly counterhegemonic in the sense that they are challenging US hegemony, but not the institutional structures and logic of global neoliberalism. Yet, even if the emerging powers do not represent an antisystemic movement — they are decidedly not seeking to bring about fundamental changes in the contemporary workings of global...