Publisher web: Polity Press

Even though the modern state is often regarded as the most effective form of governance ever devised – ideally, securing unprecedented levels of prosperity and security for its citizens –globalisation has severely altered the social, economic and ecological relations between people, and no state, matter how competent, can address transnational issues unilaterally. This created a host of new policy challenges; many of which fall outside states’ territorial jurisdiction. At the same time, national institutions which states have historically deployed to address transborder problems, have proven wanting since most states seem unable to cooperate effectively. And so, Hale and Held weigh into the debate on how states are reacting to globalisation in terms of accommodating to, or attempting to pervert, transnational governance structures. They argue, in their stellar, assessment: The Handbook of Transnational Governance, that governance institutions alter over time, but that the current period has seen important institutional innovations in transactional governance; giving birth to a wide set of institutions, some with historical antecedents, some unprecedented. And so, it follows that the continuation of nation state governance, in modern times, is essentially using 17th century institutional technologies to confront 21st century challenges.

Private actors like nongovernmental organizations and companies are thus increasingly engaging in transactional governance either as partners of states or intergovernmental organizations, or as private authorities in their own right by providing technical expertise, setting agendas, monitoring compliant, lobbying decision makers and making regulatory decisions and even enforcing them besides providing best practices or recommendations that are voluntary in nature are required, de facto, which are sometimes later adopted into formal public international law and leading to international legal agreements recognizing them in transactional governance in the contexts as diverse as human rights agreements and bilateral investment treaties. And so, new modes of accountability and enforcement based on capacity building, transparency, market incentives or moral suasion are joining formal rules as key features of the governance architecture.

The proliferation of actors and institutions at the transnational level has also disrupted a common, though often implicit, assumption of the traditional cohesive regimes or institutions possessing norms, decision-making rules and procedures which facilitate a convergence of expectations into what can be called regime complexes defined as an array of partially overlapping and nonhierarchical institutions governing a particular issue area. Fifty examples of such innovations in transactional governance are presented by Hale and Held in their Handbook. One mapping innovations is transgovernmental networks which bring domestic government officials together with their peers around specific issues, often regulatory in nature and serves for the purposes of best practice and information. Some examples of these are the Basel Committee of Banking Supervision (BCNS); the Financial Action Task Force (FATF); and Transnational Policing, to name a few. Another mapping innovation is arbitration bodies to adjudicate transactional conflicts with examples being the Citizen Submission Process of the North American Commission on Environmental Commission, Transactional Commercial Arbitration and World Bank Inspection Panel. Then, there is the Multistakeholder initiatives, mixing private and public realms, like the World Bank Commission on Dams, for example, forming partnerships to achieve some governance goals and their activities ranging from service provision to deliberate policymaking. Other mapping include voluntary regulations with numerous codes of conduct for corporations and some with naming and shaming mechanisms for violators or rewarding compliers through reputational benefits such as eco-labels.

Such innovations raise three fundamental questions: what has changed why it has changed and what are the implications? Four classes of theories are subsequently introduced by Hale and Held to answer such questions and explain innovations in governance. The first theory is a functionalist theory that draws a line between changes to the nature of political problems, such as interdependence or complexity, and institutional arrangements, ideational or constructivist theories that ask what types of arrangements key actors believe to be normatively or functionally appropriate, and how these beliefs change, while historical approaches connect the nature of governance arrangement to contingent shifts in society and the economy. The implications of these is achieving effectiveness, the governance gap between North and South being narrowed down, as well as the global power shift and transactional governance mechanism and legitimacy of global governance being achieved. However, on observation, it is clear that with many actors in global governance, a monopoly of policies have been lost in both the nation states and traditional global governance institutions, sometimes producing unhealthy lobbying and competition among them; thematics which need to be addressed if the Handbook is to serve its purpose of guiding the construction of viable decision-making and governance architecture deep into the 21st century. Hale and Held have certainly constructed a solid Handbook; one which is accessible to students and scholars of international relations, instrumentation for 21st century decision-makers and inspirational for civil societies around the world.