ABSTRACT
The global economy is now so tightly linked that state policies, to be effective, have to be coordinated with one another. Coordination takes place most efficiently through established institutions: persistent sets of rules, procedures, and practices designed to govern particular sets of issues. Some of these institutions take the form of organizations, such as the International Monetary Fund (Imf), World Bank, and Bank for International Settlements, and have legal status. Many of the most important institutions, however, are not built around formal organizations but constitute networks with regular patterns of interaction: networks of central bankers have long existed, and now the G8 and G20 government networks play a major role, to the extent that economic coordination among major powers takes place. Although these institutions are designed to govern economic relations, they are intensely political: They are shaped by configurations of power and their politics reflects the domestic politics of their members. Their members act on the basis of their interests, as they perceive them, and make agreements on the basis of reciprocity. Asymmetrical interdependence – having others more dependent on oneself than vice versa – constitutes a crucial source of power, defined as the ability to pursue autonomous policies, on the one hand, and the ability to get others to do what one wants them to do, at feasible cost, on the other (Coleman 1973; Keohane and Nye 1977).
