Fuelling Change
The impact of the emergence of a Global Integrated Biofuels Network
on state sovereignty in the global political economy of energy
Name: Steven de Vries Student number: 0443867 Supervisor: dr. R.J. Pistorius Second reader: dr. L.W. Fransen June 2014
MA Thesis Political Theory & Behaviour Political Science
Graduate School of Social Sciences University of Amsterdam
TABLE OF CHAPTERS
ACKNOWLEDGEMENT 5
CHAPTER ONE: INTRODUCTION 6
1.1 THE IMPORTANCE OF PHYSICAL FLOWS OF FUEL FOR STATE SOVEREIGNTY 6
1.2 RESEARCH QUESTION 8
1.3 AIM AND RELEVANCE: ADDING THREE PERSPECTIVES TO EXISTING IPE LITERATURE 8
1.4 METHODOLOGY & CASE STUDIES 9
1.5 STRUCTURE 10
CHAPTER TWO: THE POLITICAL ECONOMY OF A GLOBAL INTEGRATED BIOFUELS NETWORK 12
2.1 INTRODUCTION 12
2.2 THE GLOBAL INTEGRATED BIOFUELS NETWORK 13
2.2.1 STUDIES ABOUT BIOFUELS 13
2.2.2 ARTHUR MOL’S GIBN 14
2.3 INTERNAL AND EXTERNAL STATE SOVEREIGNTY IN INTERNATIONAL RELATIONS AND INTERNATIONAL POLITICAL
ECONOMY 17
2.4 THE STATE IN ‘CLASSICAL’ THEORIES OF POLITICAL ECONOMY 18
2.4.1 IPE AND RELATIONSHIPS BETWEEN STATES: DEVELOPMENT 19
2.4.2 NEOCLASSICAL,(QUASI-)MARXIST AND ‘AGNOSTIC’ THEORIES 20
2.4.3 THE STATE AS STARTING POINT 22
2.5 THE STATE IN THE NETWORK SOCIETY 24
2.5.1 THE IMPORTANCE OF TECHNOLOGICAL INNOVATIONS TO CASTELLS 24
2.5.2 THE SPACE OF FLOWS 27
2.5.3 THE EMERGENCE OF THE NETWORK STATE 28
2.6 A POWER DIMENSION TO THE GLOBAL INTEGRATED BIOFUELS NETWORK 30
2.6.1 INTERNAL STATE SOVEREIGNTY IN A GIBN 30
2.6.2 EXTERNAL STATE SOVEREIGNTY IN A GIBN 32
CHAPTER THREE: BRAZIL, THE EUROPEAN UNION AND MOZAMBIQUE IN THE GIBN 34
3.1 INTRODUCTION 34
3.2 SCOPE, METHOD AND STRUCTURE OF ANALYSIS 34
3.2.1 DIFFERENT TYPES OF BIOFUELS: NARROWING DOWN THE SCOPE OF THIS CHAPTER 34
3.2.2 CHOICE OF PLACES AND DATA ANALYSED 36
3.3 BIOFUEL POLICIES IN BRAZIL 36
3.3.1 PUBLIC SUPPORT AND PRIVATE SUCCESS 37
3.3.2 A CHANGING ROLE FOR THE STATE 39
3.3.3 BIOFUELS IN BRAZIL: FROM NATIONAL INTEREST TO GLOBAL ASPIRATIONS 40
3.4 BIOFUEL POLICIES IN EUROPE 41
3.4.1 PUBLIC SUPPORT FOR BIOFUELS 41
3.4.2 BIOFUELS POLICY AS AN INSTRUMENT FOR DEVELOPMENTAL POLICY 42
3.5 MOZAMBIQUE,EUROPEAN AND BRAZILIAN INTERESTS 43
3.5.1 CONNECTING TO THE GIBN 43
3.5.2 AN INFLUENTIAL NODE OR A HUB OF RESOURCES? 44
3.6 THE BRAZIL-MOZAMBIQUE-EU FUEL FLOW 45
CHAPTER FOUR: INTERNAL AND EXTERNAL STATE SOVEREIGNTY IN AN EMERGING GIBN 46
4.1 INTRODUCTION 46
4.2 THE EFFECT OF THE EMERGENCE OF THE GIBN ON INTERNAL STATE SOVEREIGNTY 46
4.3 THE EFFECT OF THE EMERGENCE OF THE GIBN ON EXTERNAL STATE SOVEREIGNTY 47
4.4 CONCLUSION 48
CHAPTER FIVE: CONCLUDING REMARKS & FURTHER RESEARCH 50
ACKNOWLEDGEMENT
I would like to express my gratitude to the supervisor of this thesis, dr. Robin Pistorius. In the course that ultimately resulted in this thesis, Robin introduced me to a whole range of topics I had not been studying before. It has been a fascinating trip into the world of resources use, the agro-food order and, in the end, biofuels.
I would also like to thank my second reader, dr. Luc Fransen, for taking the time to review my thesis. Like Robin, Luc introduced me to (for me) unknown area of the political economy of corporate social responsibility. I thank him for broadening my perspective.
Steven de Vries Amsterdam, 27 June 2014
CHAPTER ONE: INTRODUCTION
1.1
The importance of physical flows of fuel for state sovereignty
The claim that fuel and other natural resources hand its possessors power is not new in theories of IR and IPE (Le Billon 2001, Brunnschweiler & Bulte 2009, Humphreys 2005). Conflicts over natural resources are of all time, and states use natural resources in their possession as a tool in foreign policy. Russia is just one example: its relations with other former soviet states and Western-Europe almost literally float on gas (Spanjer 2007). Studies of political science and political economy widely recognize this fact, but take the interests of the actors that possess these powers as the starting point of their analysis: power, in those theories, is a characteristic of the state and not of the natural resource(s) that provide the state with this power position. This thesis, however, will argue why this logic may not always hold. It will describe how power depends on physical flows of resources and will use the political economy of energy as a case study. It will show how the emergence of a new flow of fuel, biofuels like bio-ethanol and bio-diesel, have had an impact on the sovereignty (and thus power) of the state through the emergence of a Global Integrated Biofuels Network (GIBN). This GIBN is described by Mol (2007) as the result of a movement towards a global network that connects biofuels industries in different localities around the world. Mol bases his model on the theory of the network society, as formulated by the sociologist Manuel Castells (2004, 2005, 2010c, 2010a, 2010b). This thesis will describe how the theory of the network society captures the developments towards more globally connected biofuels industries.
In short, Castells describes how globalization, facilitated by technological innovation, led to the emergence of a society where economic activity flows through different global networks. Castells contrasts these ‘spaces of flows’ to the ‘space of places’ in classical theories in the political economy: these theories take the locus of the state as their starting point (2000: 42). If places and localities are no longer the autonomous units in which activity takes place without being influenced by actors based in other places, this could have an effect on state sovereignty: in a society where economic activity cuts across territories and takes the form of a global network, nation states cannot control this activity: it reaches beyond their territory and thus beyond their influence. This has its influence on state sovereignty, as Castells (2010b) describes. First of all, the state might be challenged by other national economic actors, like civil society or corporate actors. They will increasingly become active on a global level themselves, as they seek to get or stay connected to the flow of economic
activity that is structured on a global level. In this way, the state loses its traditional control power as the prime regulator of economic activity. This leads to a change in the global state system and to another challenge to state power on a global level. Due to the participation of civil society and corporate actors, the state system will become more fragmented (ibid.). At the same time, states will join forces in associations like the European Union (Cortvriendt 2008: 114). Both of these developments will lead the character of state influence to change: when the state becomes an actor in the network society, and thus a network state, it faces a decline in internal and external sovereignty. This is the central element of the power
dimension in the theory of the network society. This thesis will add this state power dimension to Mol’s GIBN description.
After constructing this state power dimension, this thesis will give a description of the working of the GIBN. It will do so by analysing the impact of the relatively newly emerging flow of biofuels on the power of the state in the global political economy of energy. The assumption here is that a change in physical flows of fuel, caused by the emergence of biofuels like bio-ethanol, also drives a change in power relations in the political economy of energy. In this sense, the thesis will use the concept of the ‘space of flows’ as an analytical angle. It will describe the emergence of a ‘Global Integrated Biofuels Network’ (GIBN), that spans the globe and connects regional and national biofuel industries (Mol 2007). The thesis will then describe how different states have been affected by the emergence of this GIBN. It will dedicate special attention to different effects of the emergence of the GIBN on developed states versus developing states, adding to the debate about the both risks and opportunities processes of globalization give to developing countries. This is not a new debate, but most academics and politicians point out the continuing dominance of developed countries: the debate about a New International Economic Order (NIEO) for example, departed from the acceptance of Northern hegemony. Even authors writing about the emergence of relations between countries from the South, South-South relations, stressed that “they are still far less influential than North-South relations” (Rosenbaum & Tyler 1975: 271). Biofuels might prove to be an interesting case in point, since one of the countries that has developed a major biofuels industry is a country from the global South: Brazil. This gives Brazil potentially major influence in the GIBN. The country has become a major advocate for South-South cooperation. In this, Brazil actively pursues foreign policy goals by making use of its advantage in specific sectors. As Stolte (2012: 1) writes: “Brazil advocates South–South cooperation projects that are based on its own development experience. Biomedical and health
research and agricultural research have been turned into effective foreign policy instruments” (ibid.: 1). (Castells 2010b)
1.2
Research question
What does the emergence of a Global Integrated Biofuels Network mean for the sovereignty of the state, both within its borders and on a global level, in the global political economy of energy?
1.3
Aim and relevance: adding three perspectives to existing IPE
literature
The relevance of this theses is that it adds to scholarly research and debate on three levels: On the most practical level, it will add a power dimension to research on the emergence of a globally connected biofuels industry. Although different authors have done research on changing power relations in the political economy of energy due to the emergence of biofuels (cf. Dauvergne & Neville 2009), and some have even used a flows perspective (cf. Mol 2007), the precise effects on state power is not the central focus of these authors. This thesis will add that perspective.
On a theoretical level, by adding a power dimension to the space of flows, the thesis will add to existing research on the relevance of Castells’ network society . After outlining his model, Castells applies his theory to architecture and urbanism. However, it is also relevant to political science and the study of political economy: Castells network society contains a state power dimension; it says something about the power of the state as government within its own borders, power of the state vis-à-vis other states and power of the state vis-à-vis global markets. In his theory, Castells (2010b) shows how the expansionary logic of capitalism led national economies to integrate on a global level, starting from the 1970s and fuelled by technological innovations that were able to bridge spatial distances. The result of this integration is that economic activity is no longer place based, but has taken on the form of a flow. This flow of activity cuts across territories and transports itself through a network that connects different places throughout the world. As Castells (ibid.) describes, this leads to the transformation of the classic nation state into a network state, that is gradually “losing power, although, and this is essential, not its influence” (Castells 2010c: 304). This has an effect within the territory of the state, where the state will face challenges to the legitimacy of its
authority and control power. It also has an impact on the state as an actor in the global state system: if states become the ‘nodes’ and ‘hubs’ of a global network, as Castells (ibid.)
describes, the question is what impact this has on the state system: does this give states a more equal position, thereby narrowing the gap between developed and developing countries? And what does a globalizing economy mean for the state, if it faces the emergence of other actors like multinational corporations on the global stage? These questions show the relevance of the work of Castells to political science and political economy. In describing the impact of the emergence of a GIBN on state sovereignty, this thesis will give an example of how the theory of the network society can be used in the scholarly field of IPE.
However, the thesis might be most relevant where it shows that physical flows of natural resources have major impacts on politics, power balances and state systems. Scholars of political science are used to analyse political interaction between actors from a perspective where the interests of those actors are a starting point for political processes that lead to certain outcomes. Few research however is focused on the influence a change in physical circumstances in which actors live on the interests they voice in political processes. This thesis shows how the emergence of a new type of fuels leads to a changing in the balance of power between different actors in the global political economy of energy. However, the same impact might be observed when studying the impact of changing food regimes, or climate change. Too often, political science research takes the actual world we live in as a never changing variable. This thesis shows that when something does change, it can have a high impact on states, societies and the state system.
1.4
Methodology & case studies
This thesis will start by constructing a theoretical answer to the research question. In order to examine what the impact of the emergence of a GIBN is on state sovereignty, it will first explain what the Mol’s GIBN is and how it is based in the theory of the network society (Mol 2007, ibid.). Then, it will link the GIBN to insights derived from classic theories in the field of IPE and will describe how the theory of the network society offers a new perspective on state sovereignty. From this description, a power dimension can be added to Mol’s GIBN. In doing so, the theoretical part of this thesis highlights how the theory of the network society is relevant to studies in the field of IPE.
After constructing a theoretical power dimension to the GIBN, this thesis will apply this new dimension in practice. It will analyse how the emergence of the GIBN had its effect
on the sovereignty of states in different places: it will examine the impact on countries and associations of countries, both in the developed and developing world. It will do so using already existing literature as well as data about the production of crops that are used to produce biofuels and data on trade between countries. This existing data will be analysed, from the perspective of the flow of biofuel, where most other studies take the perspective of states. From the results of this empirical analysis, the thesis will then draw lessons for the power dimension to the GIBN.
1.5
Structure
Chapter two will provide for the theoretical basis of this thesis. It will start with a description of the main rationale of the GIBN Mol (ibid.297-315) describes and will highlight the
possible impacts of the emergence of the GIBN on state sovereignty. It will then connect the model of Mol to theories of political economy. The chapter will explain how the impact of the GIBN on state sovereignty will be twofold: both on internal and external sovereignty. It will explain how classic theories in IPE view the role of the state in the political economy, in order to be able to highlight the relevant similarities and differences between these classic theories and the GIBN model of Mol. It will do so by showing how the theory of the network society, formulated by Castells (2010) and on which the GIBN model is based, can be related to existing theories in IPE. These insights will then be used to construct a theoretical power dimension to the GIBN model, which describes the impact of the emergence of the GIBN on state sovereignty.
In chapter three, the thesis will use this theoretical construction to describe the impact of the emergence of the GIBN on state sovereignty in practice. As noted, this chapter will build on findings in existing literature and primary data about trade flows and the production of crops that are the main inputs for biofuel production. Most of the existing research takes on a state-centred perspective, looking at the effect of the biofuels industry in one specific place. This thesis will add relevance to these place-based findings by analysing them from the perspective of the physical flow of biofuels and the global network in which these places are structured.
Chapter four will relate the more empirical findings to the theoretical construction of the power dimension added to the GIBN. Where necessary, it will add modifications to the initial construction of the power dimension, in order to make it congruent with empirical reality. Chapter five will provide for a short reiteration of the answer to the research question,
will highlight its broader importance to studies in the field of IPE and will make some suggestions for further research.
CHAPTER TWO: THE POLITICAL ECONOMY OF A
GLOBAL INTEGRATED BIOFUELS NETWORK
2.1
Introduction
This chapter will theoretically describe how the emergence of a Global Integrated Biofuels Network (GIBN) (cf. Mol 2007) influences the role of the state in the political economy of energy. In doing this, this chapter will analyse the model of a GIBN from a political economy perspective and will introduce a power dimension to the GIBN.
The first paragraph is about the first part of this goal: it describes what the GIBN is and how it can be related to different patterns of spatial organisation of societal activity. Also, the paragraph highlights some clues as to what is the possible impact of the GIBN on state sovereignty. With this, the chapter arrives at the second half of the overall goal: it will assess the impact of the GIBN on the role of the state in the political economy of energy. It will do so step by step, adding insights from classic theories in the political economy. First, it will describe how the impact of the GIBN on the role of the state has to be analysed on two different levels, since there is both an ‘internal’ and an ‘external’ dimension to the state {{9 Jackson, R.H. 2007/s9999;}}. Then, it will describe how classic theories in political economy describe (or sometimes proscribe) what the role of the state in the political economy is, (or should be). After that it will compare the theory of the network society, the theory in which the GIBN is rooted, to these classic theories of political economy. The aim of this comparison will provide for an analysis of the theoretical origins of the GIBN from a political economy perspective. This will allow for the power aspects in the theory of the network society to be placed on the continuum of classic theories about state power in the political economy. At the same time, it will highlight how the theory of Castells overlaps and differs with other theories in the political economy. In doing this, the political economic relevance of both the theory of the network society and Mol’s GIBN that is derived from it will become clear.
These insights will be used in paragraph four, which will provide for a synthesis of the findings in the subparagraph. This synthesis will result in a description of the power
dimension to Mol’s GIBN, allowing for the GIBN to be classified as a model that can be used in studies on the political economy of energy. This power dimension will then be applied to the biofuel flow between Brazil, the European Union and Mozambique in the next chapter.
2.2
The Global Integrated Biofuels Network
2.2.1 Studies about biofuels
Arthur Mol introduces his model of a Global Integrated Biofuels Network as a tool to analyse “the sustainability and vulnerability of biofuels, from the perspective of a sociology of
networks and flows” (Mol 2007: 297). From this perspective, Mol takes the physical flow of all aspects of biofuel production as the focus of his analysis. The author argues that the rationale behind this is the increasing globalization of biofuel production (Mol 2007: 302-303). Indeed, several other authors find that the production of biofuels is no longer restricted to one place, but that it instead takes place in different and interconnected regions around the globe (Dauvergne & Neville 2009, Magdoff 2008, Mol & Sonnenfeld 2000). It is therefore not uncommon to analyse the biofuels industry from a global perspective. Many scholars use this perspective for a social science analyses of the impact of an emerging global biofuels industry have focused on its environmental impact. As Mol & Sonnenfeld (2000: 3) argue, “Numerous social scientists have analysed … the changing role of the nation-state in safeguarding the environment (…) and of the role of social movements in representing environmental interests vis-à-vis economic agents.” The authors refer amongst other to work by Jänicke (1993). Other research shows that this focus on the ecological impact of the emergence of a global biofuels industry does not mean there is no attention at all for the changing role of the state in this global industry. Dauvergne & Neville (2009), for example, analyse how power relations between developed and developing states seem to change in the political economy of biofuels:
“Beyond collaborating in development (as Brazil does with the USA), developing countries are proving themselves to be reliable and attractive trading partners. While South–South trade and co-operation are unlikely to displace Northern countries completely, as EU countries hesitate, developing countries may provide alternative markets for biofuels, especially as their economic growth leads to increasing energy demands. As seen in the interactions between the USA and Brazil, the debates about biofuels are being used to broker a larger set of international negotiations on trade and global financing. The evidence for novel patterns of investment and trade in the biofuel sector itself is consistent with the prediction that these new South– South relationships will be significant drivers of biofuel production” (ibid.: 1094).
The authors describe how in the global biofuels industry the asymmetric power relationship between developing and developed countries is found changing, towards more equality. However, as becomes apparent in the last phrase of the citation, Dauvergne & Neville assume
that this change in power relations originates in relationships between developing countries. As the next subparagraph will show, this is an important difference with the perspective Arthur Mol (2007) takes: Where the Dauvergne & Neville take the state as the starting point of their analysis, Mol departs from that and starts his analysis from the physical flow of fuel.
2.2.2 Arthur Mol’s GIBN
Of the two reasons Mol (2007: 301) cites to explain why he uses a perspective of flows, the second one is most relevant: the author does it to show “what a sociology of networks and flows – that up until now has mainly focused on economic, bodily and information flows and mobility – has to offer for interpreting material and environmental flows.” Like other
scholars, Mol uses his perspective of flows to describe the ecological effects of the emergence of the biofuels industry. The author describes how the ‘space of flows’ is “a new …
dimension emerging within and in between contemporary societies”, that stands for “a new kind of time-space organisation of social practices” (ibid.9999). In short: the idea of the space of flows is that societies are not built around territorially fixed places, but rather organised around flows that span the globe. Spatial organisation is then no longer associated to place, but to flow. Mol uses Charles Urry’s (Urry 2003) classification of three patterns of spatial organisation: first, there is the pre-globalization world order of regions. These “consist of objects, actors and relations (networks) that are primarily clustered together geographically, often within one country” (Mol 2007: 302). In this world order, the spatial organisation of life and society is defined by location. Because of this geographical clustering, the nation-state plays an important role in this world order: the boundaries of the nation-state delimit the territory in which economic activity is organised. Flows of activity, like trade, are
“constrained by the fixed boundaries” of states (ibid.9999). In the second pattern the world is ordered by global integrated networks (GINs). In this pattern society is structured in networks that cut across boundaries and link activities in different locations. This is an important difference with the order of regions, as the spatial organisation of society is defined by networks and not location. However, although this leads to activity becoming more deterritorialised, according to Mol location still plays a relatively important role. This is precisely because the networks link different locations and are thus connected to specific places. This leads GINs to “consist of more or less stable, enduring and predictable relations between nodes or hubs stretching across different regions with relatively walled routes for flows” (ibid.9999). The third pattern Mol describes is that of the global fluid. In this pattern,
flows are not structured “neither by boundaries nor by more or less stable relations, but by large flexibility, liquidity, gel-like movement and permeable boundaries” (ibid.9999).
Mol argues that when it comes to biofuels, “the region modality of biofuel flows and networks is dominant” (ibid.: 303). Mol discerns two different biofuel regions, one made up of the “poorer developing countries” and one made up of “the more advanced developing countries (…) and (…) various OECD countries” (ibid.9999). The author identifies several important differences (ibid.9999):
“in the poorer developing countries biofuel systems are locally organised, with limited differentiation among actors, limited nation-state involvement, a poorly socio-material infrastructure … [in the more developed countries] biofuels regions are nationally organised, with a well-articulated socio-material infrastructure (…), strong state involvement, further differentiation among actors and a larger mobility and wider spatiality of biofuel flows”.
Despite the fact that Mol finds that biofuel flows are still mainly regionally organised, the author also identifies an emerging Global Integrated Biofuel Network, a GIBN. As Mol describes it, this GIBN is fuelled by “increasing transboundary flows of biofuels” (ibid.9999). This results in a decreasing role of the state, leading to a decreasing degree as to which
biofuels can be governed and a less powerful position of the state in economic activity and development. However, the increasingly globally organised network leads to “homogenisation and standardisation of networks” (ibid.9999). In all, Mol describes the emergence of a GIBN as a movement towards a global harmonisation of the biofuels industry: where regional
networks are still dominant, these networks increasingly make place for a global network. The author emphasizes, however, that this GIBN will not cause biofuels to be “truly boundless” (Mol 2007: 310).
If the emergence of a GIBN is a movement away from the national or regional government of biofuels towards a global network, this could mean something for the role of the state in the political economy of biofuels. Mol emphasizes that in the first pattern of spatial organization, the region, “states are still major governing actors, although under globalisation they can no longer structure in detail the patterns and regularities of societies” (ibid.9999). Mol continues describing how in a global network states are even less able to regulate flows of activity. This gives states fewer possibilities to regulate the outputs the network produces to all locations it is connected to. Indeed, Mol argues how networks “deliver the same kind of outcome at all nodes, with limited adaption to local circumstances” (ibid.9999). In this sense the state can no longer regulate the influence of these outputs within
its territory, affecting national sovereignty. What is more, if Mol is right in his claim that states have little or no influence on the direction of flows and thus on the form the network takes, they also cannot influence to which locations other than their own territory the network links. In other words: intra-state activity through these flows is not purposefully created by a governing state, but by non-governable networks that cuts across states. This could also have an effect on the sovereignty of the state relative to other states: from the perspective of the GIBN, the place of an individual state in the world order of states is determined by its place in the global network. From this, we can derive that the position of states in the world system of states is not dependent on hard (military) power, but much more on the degree to which states succeed in connecting to the GIBN. It also raises the question what the emergence of a GIBN would mean for the current divide Mol (ibid.303)describes, where the world system into a region of (semi-)developed states and a region of underdeveloped states. The GIBN might force states towards more equality through homogenization and standardization, which would be a major driver of change in intra-state. However, it might also change nothing to the divide between (semi-)developed and developed states or even make it deeper.
From the above it becomes clear that Mol’s GIBN has its effects on the role of the state in the political economy of energy, where the role of the state is determined in terms of state sovereignty: the degree as to which the state is capable to regulate economic activity and govern economic development within its borders. The above showed this sovereignty can be affected on two levels, both within the territory of the state and vis-à-vis other states. Also, Mol describes that the GIBN is emerging in an industry that is now ordered into two different regional modalities. Without making an explicit reference, these are two themes that scholars of international relations (IR) and international political economy (IPE) will be familiar with. The difference between the two levels of sovereignty, for example, is a well-known concept. The next paragraph will show how this distinction can be made. The paragraph after that will give an overview of what insights classic theories in the IPE offer on the role of the state in the economy and inequality among states. These insights will then be used to analyse the theory of the network society from an IPE perspective. This analysis will not only make clear how the power dimension of this theory is relevant for IR and IPE , but also how it builds on insights from the classic theories of IR and IPE. Most notably, the continuity between World Systems Analysis (Wallerstein 1987) and the theory of the network society will become apparent. The results of the analysis of the IR/IPE dimension to the theory of the network society will then be used to construct a state power dimension to Mol’s GIBN in the last paragraph.
2.3
Internal and external state sovereignty in International Relations and
International Political Economy
Making a difference between internal and external state sovereignty requires one to start with a clear definition for both of the two concepts. The distinction between both types of
sovereignty is not new in international relations theory: Jackson & Sørensen, for example, describe the distinction between “the state as a government versus the state as a country” (Jackson & Sørensen 2007: 22)
. Internal sovereignty is about the way in which “the government rules the domestic society, the means of its power and the sources of its legitimacy” (ibid.). Looking at the external aspect of the state involves the way in which “governments and societies of states relate to each other and deal with each other … how people from different states interact with each other and engage in transactions with each other” (ibid.).
As becomes apparent in the above, there is an important difference in the way the concept of statehood is defined between the internal and external aspect of the state. In short: when analysing the internal aspect of the state, ‘state’ equals ‘government’, the formal apparatus that governs society. However, when analysing the external aspect of the state, the ‘state’ no longer represents one actor. Just as Jackson & Sørensen denote, the external state “is not merely a government: it is a populated territory with a national government and a society” (ibid.). That means that when talking about interstate relations, this thesis cannot exclusively refer to interaction between national governments. Rather, it will be referring to interaction between governments and/or civil society actors from different territories. Thus, when talking about the external aspect of the state, ‘state’ equals ‘country’. This is an important aspect to the theoretical model this chapter will result in.
However, this thesis will employ the distinction of Jackson & Sørensen in a different way. The authors categorize states in weak or strong states (the internal aspect) and weak or strong world powers (the external aspect). This is classic International Relations, with a strong focus on the politics of the state. Although this thesis is not about the way the scholarly field of International Relations (IR) and that of International Political Economy (IPE) are related, it is important to make clear that this thesis takes an IPE perspective. Underhill (2000: 810) denotes the difference in perspectives:
“are we studying the ways in which economic and political factors in the international system affect each other in a continuing fashion, or are we seeking to explain the ways in which
underlying social structures and relationships, among a range of actors and institutions, generate the patterns of institutionalized and other aspects of political authority in a transnational world? As Strange might have put it, ‘politics of international economic relations’, or ‘transnational political economy’?”
This thesis will focus on the latter. It will analyse the degree as to which the emergence of a GIBN causes a change in the sovereignty of the state in the political economy of energy. These changes to the sovereignty of the state can occur on two different levels: first within its borders, meaning the sovereignty of the national government vis-à-vis other national actors such as civil society or corporate actors. Second, on the global level of inter-state interactions, i.e. the sovereignty of countries vis-à-vis other international actors. This chapter will follow this dual perspective in analysing the effects of the emergence of a global integrated biofuels network. This might seem counter-intuitive: one might think that the emergence of a global integrated network has its effects on the state as a global actor and not directly on the state within its own borders. However, if the emergence of a global integrated network implies a blurring of national borders, it can be expected that also the relation between the state and other national actors will be affected as they will both react differently to the emergence of a global integrated network. Therefore, both the internal and the external aspect of state sovereignty are relevant for this thesis.
2.4
The state in ‘classical’ theories of political economy
The previous paragraph showed how the differentiation between internal and external sovereignty of the state is defined in IR. With this definition, it will be possible to determine how the power dimension of Mol’s GIBN has an impact on internal and external state sovereignty. As described in the first paragraph of this chapter, the emergence of a global network leads to nation states losing control of economic activity within their territories. Also, the emergence of a global network can structure relationships between states, which become intertwined through non-governed economic activity rather than through active foreign policy by governments. Also in this aspect, insights can be drawn from classic theories of political economy. To do so, this paragraph will provide for a little but very relevant sidestep: it will summarize how different theories of IPE look at the power a state can or should exert over economic activity and how states are connected to each other. Like Mol (2007), classic theories will be found to define the connections between states in terms of development (Schwartz 2000). The paragraph will end highlighting the most important insights, but also a
common element of these theories: they all centre their theories on the locality of the state. This, as paragraph 1.4 will then show, is an important difference with the theory of the network society and thus with Mol’s GIBN model. The comparison of classical theories of IPE with the theory of the network society will bring us back to the main subject of this chapter: it will add an IPE perspective to the theory of Castells, which can serve as a basis for the construction of the power dimension of Mol’s GIBN.
2.4.1 IPE and relationships between states: development
As Underhill (2006: 6) sketches in three points how theories of IR and IPE do all but recognize the effect of transnationalization on the position of nation states. First, Underhill describes how “International political economy is concerned first of all with the relationship between the economic and political domains across territorial boundaries” (ibid.) Then, he points to the attention of IPE scholars to “the role of the state as the focus of decision-making in a system of competitive states that is (…) interdependent with a transnational market economy” (ibid.). These two points are all about the external aspect of the state: the first point alludes to the fact that the external state is an ensemble of different actors, including not only the government, but also civil society and corporate actors. The second point Underhill shows how the territorial logic of the state has become incongruent with the economic structure, which has become largely transnational. As his third important issue, the author points at “the linkage between the domestic and international domains (…) given that political-economic processes clearly cut across the lines of political decision-making
constituted by the institutional structures of the state. This implies focusing on the nature and political consequences of interdependence among states and their societies.” Here, Underhill touches upon the effects of globalisation on the internal sovereignty of the state.
From the description Underhill gives, it becomes apparent that the notions of the internal and external aspect of the state are not a contested idea in IPE. The
interconnectedness between states is analysed from a perspective of equality. As Schwartz (2000: 42) notes,
“a novel kind of economic inequality emerged after 1400, an inequality that had strong spatial aspects, that seemed to originate from the workings of the global economy itself … the kind of inequality found in premodern Europe and other agrarian societies reflected stratification within societies … what was novel about inequality consequent to the expansion of the northwestern European maritime economy was its spatial aspect: inequality existed and persisted not just inside societies but also among regions and nations”.
Here, Schwartz explains how the concept of inequality was extrapolated from the internal sphere of the state to the external sphere: how one country could fare better than the other. It is from this angle of inequality that different theories in the classical IPE describe the relations between states. Schwartz (ibid.: 43-48)himself divides these theories in three currents:
theories derived from neoclassical economics, Marxist theories and a group of what he calls “agnostics” (ibid.: 43). Neoclassical economics acknowledges that welfare in one place produces relative inequality, but disagrees with the opinion that a growth in welfare in one place requires a decline in welfare elsewhere (cf. Gilpin 2011). Marxist theories are built upon the exact opposing argument, amongst others resulting in an analysis of the
interconnectedness of states like that of the World Systems Theory (Wallerstein 1987, cf. Cox 1981). The group Schwartz defines as ‘agnostics’ “argue that the world market creates threats and opportunities for regions to grow or stagnate” (Schwartz 2000: 43).
2.4.2 Neoclassical, (quasi-)Marxist and ‘agnostic’ theories
From these three different assumptions follow different opinions about the role states should play in the global economy, to maximize national welfare. Should play – these theories are not descriptive, but normative. In neoclassical economics, the state functions as a protector of “discrete, absolute property rights” (ibid. 2000: 44). This is an understanding of the internal aspect of the state as the facilitator of stability and rule of law that is needed for economic activity. Where the external aspect of the state is concerned, neoclassical thinking is well represented by Ricardo’s insight of comparative advantage: economic innovation is an endogenous driver for economic growth, specialization enables states to gain a comparative advantage vis-à-vis other states. In this way, when one state outperforms the other, these states will be relatively unequal. However, in neoclassical thinking this does not mean that the position of the ‘laggard’ state will worsen in absolute terms. Moreover, neoclassical thinking assumes that states will trade, creating a connection between them that enables them to learn from each other: technologies and innovations can be shared, leading to a growth in economic welfare for all states. (ibid. 2000)
Theories based on Marxist thinking provide for a different rationale. Wallenstein’s World Systems Analysis (WSA), for example describes the connection between states as a global system: “unit[s] with a single division of labour and multiple cultural systems. It follows logically that there can. . .be two varieties of such world-systems, one with a common political system and one without” (Wallerstein 1987: 145). The one without is a world
economy (ibid.). What is important to note here, is that in WSA it is the position of the state in the world system that has decisive impact on welfare and economic activity on a national level: “For WSA, participation in the world economy determines domestic class structures, the structure of export production, and ultimately state power” (Schwartz 2000: 45). Where neoclassical economics regards specialization and innovation as a potential driver for
economic development in every country, in WSA they only drive further economic growth in core states and do not benefit peripheral states. Indeed, “the impoverishment of the periphery by world market mechanisms is crucial to the development of the core” (2000: 46). On the basis of this assumption the world can be divided into the developed North and the
underdeveloped South. Then there is also a quasi-periphery, that “suffers from unequal exchange with the core but exploits the periphery through unequal exchange” (ibid.). For states in the South to be able to control their national economies, WSA advocates that they disconnect them “from market pressures emanating from the world economy” (ibid.).
Schwarz defines the group of ‘agnostics’ as taking a middle position between neoclassical and Marxist theories: “This heterogeneous group mixes Marxists like Robert Brenner and statists like Alexander Gerschenkron who are united by an insistence that internal politics and struggles rather than external market pressures determine outcomes” (ibid.: 47). Gerschenkron is particularly interesting here, since he assigns the state the capability of fostering economic development through policies that correct market failure (ibid.). In this way, he regards the state to be more than the protector of property rights. Gerschenkron defines the state “more broadly, as entities encompassing all state activity in support of the economy, including the institutionalization of class conflict” (ibid.: 48). In this sense
Gerschenkron employs a more institutionalist line of thinking, in which the state has to fulfil a certain role as a driver of economic development. As Evans (1995) explains, the degree as to which the state can effectively fulfil this role depends on ‘embedded autonomy’ it has. The state is embedded when it is linked “intimately and aggressively to particular social groups to whom the state shares a joint project of transformation” (ibid.: 59). It is autonomous when it can “provide institutionalized channels for the continual negotiation and renegotiation of goals and policies” (ibid.). In this way, the state takes up its facilitating role for economic development. Evans calls this the ‘midwife state’ (ibid.).
2.4.3 The state as starting point
As becomes apparent from the previous subparagraph, different theoretical currents describe (or rather proscribe) different roles for the state in economic development. However, none of the three theories provide for a description that is completely satisfactory, for two reasons. First, neoclassical and (quasi-)Marxist theories should be analysed as two different positions in the debate about which role the state should play in economic development. Marxist theories like WSA are critical theories, pointing at possible flaws in neoclassical thinking and offering an alternative (Wallerstein 1998). Of course, the theories offer very relevant insights, e.g. the role of the state as a protector of a rule of law, which in turn guarantees the stability needed for economic development. The Marxist critique of this line of thinking is therefore not so much aimed at the role neoclassical thinking assigns to the state, but much more at the assumption that economic development in one state does not necessarily lead to economic regression in another. World systems analysis adds the insight that states are not just connected to each other, but act as connected flasks. However, the watershed between the global North and South that WSA assumes does not always seem to match reality. As
Schwartz notes, “observed reality confronts WSA with a gradient of incomes, market power, and state power rather than a sharp polarization” (Schwartz 2000: 46). Therefore, a semi periphery had to be added to match this reality, leaving the sharp distinction WSA makes a bit blurred. In a way, agnostics provide for a middle ground between neoclassical economics and Marxist thinking. Schwartz (ibid.) describes how, following agnostic thinking, class struggle is the determinant of both the role the state assumes in fostering economic development, the nature of production systems within a state and the shape the external market takes. Where NCE does not theorize anything about “the kinds of production systems that should arise” and WSA sketches a top-down influence of the world system on economic development on a national level, agnostics provide for a bottom-up chain of causality.
Then there is a second reason why the three described theoretical currents do not provide for a satisfactory theoretical framework. That is because their departure point is the state. Schwartz (ibid.: 43)recognizes this implicitly when he tries to tie together “the
important insights of these three groups” through Von Thünen’s spatial analysis. Von Thunen’s 1826 seminal work Der isolierte Staat (The isolated state) can be seen as the starting point of the emergence of spatial economics. In his analysis the starting point is, an isolated state:
“Thünen imagined an “isolated state” where a very large town is located at the centre of a homogeneous plain. He then attempted to determine simultaneously all variables of the economy through competitive markets of goods, labour and land, with a special focus on the land use pattern and land rent pattern in the agricultural hinterland. To achieve this grand objective, Thünen himself developed all the basic elements of modern competitive theory” (Fujita 2010: 3).
Schwartz turns to Von Thünens model because it describes how “markets powerfully shape the kinds of economic opportunities available to discrete regions, distributing productive activity in a hierarchical pattern of zones producing goods with diminishing degrees of value added” (Schwartz 2000: 43). In this logic, the central town is the origin of every activity and the centerpoint from which different zones with different levels of economic development are created. Weber (1909), however, added an important insight in his theory of industrial
location. Where Von Thünen developed his model in the time Europe was still a largely agricultural society, Weber drew lessons from industrialization. Weber analyses the factors that lead to the location of a factory in a specific location. Weber developed a triangle that determines the optimum location of a factory: in his model, a factory draws on two resources as inputs (two cornes of the triangle) and is dependent on the market for selling its output (the last corner of the triangle). Transport costs for the inputs as well as the outputs then
determined where the factory would be placed: as a factory is dependent on raw inputs to produce manufactured goods, the cost of these inputs and their transportation are decisive factors for the location of a factory. In a later stage, Weber also adds spatial difference in labour costs as a factor Fujita (Fujita 2010: 10) rightly points out that Weber’s theory “did not consider any endogenous determination of the prices of inputs and outputs”. However, the key insight that exogenous factors determine where different zones, or places, are located is
valuable: it draws into question the prime role of the state as the prime territorial determinant of the distribution of economic activity and the prime delineator of places in different stages of economic development. (Fujita 2010, Krugman 1998, Weber 1909)
Of course, it would go too far to conclude, on the basis of the above, that the state has no influence at all. The point here is not that the state is not important at all, but that classical theories in IPE largely disregard other factors that influence the shape of the global economy and the consequences this has both for individual states and the way in which states are connected. Especially with globalisation being an ever faster driver of change, it would be worthwhile to add a different perspective to IPE theories. While there are still important insights to be drawn from these classic theories about the way in which states can play a role in economic development, it can no longer be uncontestably assumed that economic
development can be analysed from a fixed spatial perspective. This is where the theory of the network society can add to existing theories of IPE. The next paragraph will therefore draw on the sociological theory of the ‘network society’ by Castells (2010b) and his departure from spatial analysis. It will describe the influence of flows in what Castells defines as ‘space of flows’. This chapter will then apply this to the way biofuels might alter the political economy of energy. Here, the hypothesis is that the emergence of a new type fuels, namely biofuels, cause a change in the role of the state and intra-state power relations in the political economy of energy.
2.5
The state in the network society
2.5.1 The importance of technological innovations to Castells
So far, this chapter has introduced Mol’s GIBN and described how it proposes the emergence of a global network of biofuels, which has the potential of decreasing both internal and external state sovereignty. As shown in this chapter, a definitionof these two types of sovereignty can be derived from IR theory. Then, the chaper has taken a small but relevant sidestep: it showed that in classic theories of IPE there is no alternative to spatial analysis, while the focus on the role of the state in economic development is being criticized in a globalising world. This is where a theory that originates in the field of sociology can add to theories of IPE, and partly become a theory of IPE in itself: the network society as described by Manuel Castells.
Castells published the three volumes of his trilogy The information age: economy,
society and culture (Castells 2010a, 2010b, 2010c) in 1996, 1997 and 1998 respectively. It
provides a broad framework for The analysis Castells makes of the influence of rapid
technological innovation on the way society is organized. It is important to note that, like also noted for the three theoretical currents in IPE described earlier, his work is not so much of an empirical research study, but as a “contemporary performative analysis of the late twentieth and early twenty-first century society” (Peltola 2006: 2). In this sense, the analysis is not only descriptive, but also contains a normative side. The network society of Castells is, therefore, not just a description of empirical findings. Instead, Castells actively constructs the concept of a network society. In this way, the author offers a different perspective in IR and IPE to global developments and the effects of those developments on both individual states and the way states interact.
Castells (2004: 3) defines the network society as “a society whose social structure is made of networks powered by microelectronics-based information and communication
technologies.” Castells hinges on one technological innovation, the internet, as the sole trigger for networks to become the most efficient form of societal organization and the emergence of the network society. This has led to some criticism by some authors, who claim Castells does not describe a variety of processes with relation to economic systems of production, power or the identity of people (Cortvriendt 2008, Peltola 2006). They are right in pointing out that, although Castells does describe changes to the system of production, state power and identity, all of these can be traced back to one driver: innovative information technologies. However, although critics rightly point at the one-dimensionality of information technology as a sole driver, it also offers a refreshing new insight: it shows how an exogenous factor like technology can have a major impact on economic systems of production, (state) power and identity. This is a highly relevant insight for this thesis: if IT systems can drive these changes, then why could the emergence of a new type of fuel not have the same effect? This question will be answered later in this chaper.
Castells (2010b: 77-147) gives a detailed account of how IT innovations lead to the emergence of a network society. In describing the effect of technological innovations on the system of production, the author aims to describe how capitalism has transformed societies on a global level. First, Castells points at the importance of productivity, because in capitalism those economic actors who have the highest productivity have a relative advantage over their competitors. Therefore, the search for higher levels of productivity is a main driver of the behaviour of economic actors. Castells explains how productivity depends on the capacity of economic actors to “generate, process, and apply efficiently knowledge-based information” (ibid.: 77). Hence, as Cortvriendt (Cortvriendt 2008: 110)points out, in the logic of Castells productivity is “more dependent on the mode of development than on the mode of
production”. This is an interesting insight: higher competitiveness can best be achieved through innovation. This challenges the basic idea that in capitalism economic activity just moves to the place where production costs are lowest. Rather, Castells makes the case that innovation drives productivity, implying that innovation attracts economic activity. In any case, with the search for productivity being a major driver for economic agents, Castells explains how the economy became organised on a global level. The author (ibid.: 95) defines the 1970’s as a watershed moment. The economic downturn of that decennium forced
economic actors, both firms and countries, to adopt new strategies to ensure short-term and longer-term positive results. According to Castells actors had to either reduce production and
labour costs, increase productivity and/or accelerate turnover. For any of these strategies to work out, however, “the broadening of the market and the fight for market share” (ibid.) was a precondition. This broadening of markets was the process of globalization: national
economies could no longer expand internal markets and therefore economic actors started to reorient themselves on the global level. In this line of thinking the 1970’s function as a watershed moment, because the economic downturn of that decennium proved that
“governments were no longer capable to absorb the underlying contradictions that had been growing for some time … since integrated national markets did no longer create sufficient surpluses, capitalism needed to restructure itself” (Cortvriendt 2008: 110). In Castells model, the economic necessity to expand markets coincided with the advent of information
technology. IT systems enabled corporations to mitigate the increasing spatial distance that came with the expansion of markets and develop truly global production networks. However, the upscaling of economic activity to the global level was not only dependent on information technology to bridge spatial distance, it also required a free global flow of capital. This is the explanation for the emergence of global financial markets, which Castells traces back to the end of the gold standard in 1971. Since then, national markets have integrated, having a “dramatic impact on the growing disassociation of capital flows from national economies” (Castells 2010b: 96). In this global financial market, financial institutions started to behave just like industrial firms: “Both are characterized by substantial quantitative growth,
systematic volatility, extreme diversification, and the structural interlinking of all its aspects into a single interconnected system operating on a global scale in real time” (Cortvriendt 2008: 110).
The globalisation of industrial production and financial markets, fuelled by innovative IT systems, led to the diminishment of the importance of national borders and a revaluation of an already known organisational form: the network (Castells 2010b: 77). As Peltola (2006: 2) points out, Castells does not give a clear definition of the concept of ‘network’ anywhere in his trilogy: “Rather than specifying the concept, Castells … uses ‘network’ as a ‘theory of everything’: a metaphor covering economic transaction system, social relationships, and ICT infrastructure.” Only indirectly, from his desctiption of the model of a network society, can a definition be derived that will be used in this thesis: the network society is made of different smaller networks. These networks connect economic agents that may be located in different zones on the globe. The networks link these economic agents into chains of any type of production and transaction: as described earlier, industrial production and financial transactions. The network provides for a governance structure for these production or
transaction chains. As Castells (Castells 2010b: 176) himself emphasizes, this governance structure is not hierarchical, but much more horizontal. This allows it to “adapt to the
conditions of unpredictability ushered in by rapid economic and technological change” (ibid.). This means there is no competent authority that has the power to regulate transactions or production within the network. This makes it clear that Castells sees these networks as bigger than a single, transnationally operating corporation: “Global production of goods and services, increasingly, is not performed by multinational corporations, but by transnational production networks, of which multinational corporations are an essential component” (ibid.: 121-122). From this, it becomes clear that the network society is a society where economic activity takes place in networks that span the globe and through which production and transactions are horizontally governed.
2.5.2 The space of flows
This is a radically different structure of society than the one the three classical theories in political economy assumed: in classical theories, the state is the clear locus for economic activity and it is the state that governs economic activity. Castells calls this the “historically rooted spatial organization of our common experience: the space of places” (ibid.: 408-409). In the Network Society, the national level seems to have almost vanished. Castells explains how our contemporary societies “are increasingly structured around a bipolar opposition between the Net and the self” (ibid.: 3). He opposes the historically rooted ‘space of places’ is being replaced with the ‘space of flows’:
“Our society is constructed around flows: flows of capital, flows of information, flows of technology, flows of organizational interaction, flows of images, sounds, and symbols. Flows are not just one element of the social organization: they are the expression of processes dominating our economic, political and symbolic life … The space of flows is the material organization of time-sharing social practices that work through flows” (ibid.: 442).
Castells (ibid.: 442-447) elaborates on the three different layers of the space of flows he distinguishes. With the first layer, Castells refers to the actual productive activity that flows through the network. The author cites telecommunications and transportation as examples, which are the means that link different places in the network. In a more broad understanding of this layer, physical product may also be included, e.g. natural resources. These are shipped across the network from supplier to manufacturer, who processes them into final products. Supplier and manufacturer are economic actors placed in the second layer of the space of
flows, ‘nodes’ and ‘hubs’. In this second layer, the sharp distinction between spaces of places and spaces of flows is nuanced: even the space of flows itself is made up of places, linked through networks through which economic activity flows. Each of these places may assume a different role, as “some places are exchangers … [and] other places are the nodes of the network” (ibid.: 443). Where the exchangers, the ‘hubs’, take up the role of coordinators, it is the nodes where strategically important functions are located. These functions provide for the link between a network and a locality, a place: an activity that takes place in a certain locality will be governed by the node, thereby linking the activity to the rest of the network. It is in these nodes that the institutions and people who govern the networks are found. They constitute the third layer of the space of flows, “the spatial organization of the dominant, managerial elites” (ibid.: 445). They form the most place-fixed element of the network. Castells describes that although these elites are cosmopolitan, they “do not and cannot
become flows themselves, if they are to preserve their social cohesion, develop the set of rules and the cultural codes by which they can understand each other” (ibid.: 446). These elites thus balance between the need to retain their legitimacy in the place they dominate on the one hand, and the need to remain connected through the network to elites in different places on the other hand. This characterizes the difficult fight for power in the network society: “in the network society, power and
powerlessness are a function of access to networks and control over flows” (Barney 2004: 30).
2.5.3 The emergence of the network state
What role is assigned to the state in the network society and the space of flows? Castells (ibid.: 15) affirms that “the state and its institutionalized monopoly of violence” is still the one institution upon which “power is founded”. However, it is clear that in the network society much less importance is assigned to national borders, as networks link activities on a global level. Like WSA, it provides for a top-down analysis of how different localities in the world are ordered and connected to each other. However, where WSA
assumes these localities to be states, in the network society there is no central focus on states: economic activities is no longer confined to state borders. Congruent to what Castells (2010a: 365) notes in the second volume of his trilogy, in the network society the state is being de-centered and has to share its sovereignty the other actors that have become active on a global level. This means the state is gradually “losing power, although, and this is essential, not its
influence” (Castells 2010c: 304). This has consequences not only for the state in its external role, but also for the internal aspect of the state. As Cortvriendt (2008) describes, with the loss of power the dominant position of the state is eroding. This leads to distress about the internal aspect of the state, since its legitimacy is being called into question. The national political process that decides on how the state is being run is then becoming less legitimate. In this way, the emergence of global networks may delegitimize the state itself. That is, unless the state manages to adapt. It can do so by becoming a node of the network itself. Castells (Castells 2010a: 316) explains that the state will have to adjust “domestic policies to the imperatives of global competitive pressures. This requires that the state becomes
interdependent within a broader network of economic pressures out of its control. ” Castells (Cortvriendt 2008: 114) concludes that in the network society, the state system is made up of “fragments of states” or “associations of states”, i.e. the subnational and the supranational level respectively. As Cortvriendt (ibid.) rightly points out, Castells uses a very unclear notion of power. First, Castells seems to suggest that national government is being replaced by some sort of global governance, which means both a shift in level and way of governing: from national to global, from government to governance. This would seem to imply that there no longer is one single actor able to claim sovereignty through exercising full control power over a flow or network. However, as Cortvriendt (ibid.) and Peltola (2006) note, the network state can also become a vehicle for all sorts of national actors to connect to the global network and seize control power. In this sense, “sovereignty is no longer something ‘territorial’ but
‘vectoral’” (Cortvriendt 2008: 114).
Although Castells departs from some fundamental assumptions in classical theories of political economy, this does not automatically mean that these theories can be discarded as irrelevant. Castells effectively challenges the assumption that every theory in political economy has to start from the perspective of the state: at least in the age of globalization he argues, it is not the state that determines how economic activity is shaped. Rather, it is the other way around: it is economic activity that creates a world system, to which individual states can do nothing but adapt. In this, Castells shares a systems perspective with world systems analysis. However, where WSA describes a clear hierarchy between core and peripheral states, the network Castells describes does not seem to come with a hierarchy between states or regions. As the next paragraph will show, this is an important insight that can be used when adding a power dimension to Mol’s GIBN.
2.6
A power dimension to the Global Integrated Biofuels Network
This chapter has described Arthur Mol’s model of a GIBN (2007) and the theory of the network society it is based on. It has related this sociological theory of Manuel Castells to the debate between the three main theoretical currents in the field of IPE about the role of the state in economic development. Here, the largest difference identified between Castells and the three currents of theories is the importance assigned to the state as the centre of analysis. To put in the words of Castells: where classic theories of IPE take a ‘space of places’
perspective, Castells and Mol start their analysis from a ‘space of flows’ perspective. However, the similarities between WSA and the theory of the network society have also become apparent: both share a systems perspective. As Mol describes, the emergence of a GIBN has an impact on the sovereignty of the state on two different levels. This chapter has shown that classic IR theory helps in providing for an analytical differentiation between those two levels, the internal and external aspect of the state. All these insights will be used in this last subparagraph, to add a state power dimension to Mol’s GIBN. The departure point for this is Mol’s on definition of power in global networks: “Power in networks is related to access, inclusion and exclusion and control over flows, both through being on and off the network and through power relations inside the network” (Mol 2007: 302).
2.6.1 Internal state sovereignty in a GIBN
When it comes to the internal sovereignty of the state in a GIBN, the bottom line is that a global network makes the state lose its power, but not necessarily its influence (Castells 2010b: 304). This is not how classic theories in the IPE see the role of the state: in
neoclassical economics the state takes on the role as a protector of the rule of law, a necessity to facilitate trade (Schwartz 2000: 44). Neoclassical theory teaches us that the ultimate authority lies with the state, but that the state should use this authority to facilitate freedom of economic activity, development and trade. In WSA, the internal sovereignty of the state is determined by the place it takes in the world system: this world system is dominated by countries in the global north, that enjoy the biggest degree of sovereignty and have power over countries in the global south (cf. Wallerstein 1987, 1998). WSA then teaches us how the outside world can have an impact on the internal sovereignty of the state, as economic activity and development within its territory can be influenced by actors outside its control. The group Schwartz (2000: 47) defines as ‘agnostics’ provide for a middle ground between the other two theoretical currents: they challenge the laissez-faire role the state is given in neoclassical
