Globalizationand the choice of governing instruments: The direct, indirect, and opportunity effects of internationalization

Abstract

We propose to shed light on the effect of globalization on the choice of policy tools. Contrary to what is commonly believed, we find that the source of many of the changes in the patterns of instrument choice found in contemporary society lies in the domestic rather than the international arena. To the extent that global factors have had an effect, it is through what we term indirect and opportunity effects rather than direct ones. Further, we argue that traditional command and control instruments are not antithetical to globalization as is evident in their continued, and at times even increasing, use in a variety of settings. We conclude that what is important for policymakers is to ensure that their choice of instruments is consistent with traditional sectoral and national policy styles, with or without globalization.