Sovereignty Regimes: Territoriality and State Authority in Contemporary World Politics Author(s): John Agnew Source: Annals of the

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and Territoriality State Sovereignty Regimes:

John Agnew
Los Department ofGeography, ofCalifornia,Angeles University

World in AuthorityContemporary Politics

a that of in toargue states that I propose concept effective regimes exhibit sovereignty participatesovereignty from distinctive combinations ofcentral authority political state Two basic and conclusions, drawing territoriality. recent nor research political in territorial is isneither and are fields, that inherently geography other sovereignty itexclusively has invested on basis. so because much energy been organized a state-by-state Thismatters political in organizing about in and in in to writing sovTypically, politics general democracy particularrelation states. little as providing a norm legitimizes that central authority. state ereignty regards Unfortunately, or sovereignty no attentiongiven towhy should and is as this ofpolitical entail territorial a definition authority towhy always states thereby soleproprietors. dominant are font as singular its the The to continues privilege state the approach ofauthority when state's or even a and as sovereignty be decried hypocrisy seenas divisible issue-specific may rather "real" absolute.putforward than one or I to a model sovereignty of alternativethedominant byidenfour state that ofcentral authority from combinations tifying "sovereignty (legitimate regimes" result distinctive ofinfrastructural on and of despotic power) theone hand, degree political (the territoriality administration or on I a some of of not power) theother. "regime"mean system rule, merely sort international By protocol of between of I examine general the agreement putatively states. then equal trajectorythecombinationsovof from nineteenth The to ereignty regimes theearly geographycurrencies century thepresent. contemporary about serves illustrate general the (specifically argument sovereignty exchange-rate arrangements) toempirically inpolitical a brief conclusion that dominant model regimes. Finally, sovereignty suggests the Westphalian ofstate of and the relations deficientithaslong as been understandingrealities world for geography international theory, is and of of not for the politics,evenmore inadequate today, only itsignoring hierarchystates sources authority other than of but of on states, alsobecause itsmistaken (parexpression authority emphasis thegeographical under and territorial. Words: as invariably inevitably states, ticularly theambiguous of"sovereignty") Key sign effective sovereignty, territoriality, sovereignty dollarization. regimes,

hesovereignty ofstates long has been as has enjoyed systematic less viewed 1996;Koanalysis (Murphy both a sourceof and a response interin all claims about to and brin1997;Biersteker 2002). Implicit intra-state form takenby conflict. as theorists, state sovereignty the quintessential Amongpolitical mostattention been givento the relationship has claimsabout distinare bepoliticalauthority associated tweensovereignty political from and in a boundedterritory an external authority: particular, guishing strictly state that hasarisen enforce to the internal and order world thusfixing territorial ofsovereignty sovereignty scope and the for external Rethreat. legitimately to protect against (Agnew 1994). Territoriality, use of territory seen as a the of claimaboutde jureorlegal ends,is widely social,and economic cently, grounding this political, in the for to of successful sovereignty relation assumptions international largely strategy establishing exclusive and equality states been subject statesovereignty. has to anarchy by among jurisdiction implied some examination is so But effective (e.g., Badie 1999; Krasner1999, sovereignty not necessarily neatly and In of territorialized.a landmark 2001; Lake 2003). Indeed,acrossa number fieldspaperon sovereignty from between de to is (1996) distinguishes geography law and sociology-there a shared territoriality, Murphy sense that the conventional to of understanding sover- jure and de factosovereignty makethispoint.This thatthereacas and rule however, distinction, eignty unlimited indivisible bya stateovera necessarily implies and thepeoplein itis in needofserious from de is critical tually a purede juresovereignty which facto territory and Falk 1992; Walker1993; is scrutiny My (e.g.,Camilleri sovereigntya lapseor anomaly. claimis thatde for is. isall and facto 1994; Anderson 1996; Biersteker Weber Murphy sovereignty there The U.S. government, to a since2001,hasrefused recognize denialof 1996; Luke 1996; Hashmi 1997; Ong 1999; Mason example, from combatants Afghanistan to 2001; Sidaway 2003; Stacy2003). But the conceptual rights so-called enemy connection between and stateterritoriality heldat theU.S. basein Guantanamo Cuba,on the Bay, sovereignty
Annals the of Geographers 95(2), 2005, pp. 437-461 C 2005 byAssociation American of Association American of Geographers, Initial October2004 March2004; revised submission, submission, 2004; final acceptance, September Published Blackwell Oxford 350 Main Street, MA 02148, and 9600 Garsington OX4 2DQ, U.K. Road, Malden, by Publishing,

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and refugees creasingly porousto flowsof migrants and innovation state regulation; without knowledge it national honor no networks longer boundaries; is infor stateorigin a large to difficult establish creasingly tradeas transnational in of number commodities world their activities acrossmultiple coordinate corporations of a number public in locations different countries;large and enand private mediate, intervene, organizations of in the provision public goods across state gage innothe boundaries; political perhaps mostimportant the vationofrecent network, times, al Qaeda terrorist the while state boundaries works across exploiting lackof exercised someofitshoststates territorial by sovereignty of (in (such as Pakistan); privateers the form private licensed powerful contractors states)and piby military withlocalpopulations) rateson thehighseas (popular the that comebacks challenge thesis have madeserious the legitimate of use thatstatesinvariably monopolize within statesincreasviolence;and judicialregulation courts with reference supranational to involves (as ingly of Union[EU]) orto thedecisions foreign theEuropean ones (as in theU.S.). is not In otherwords, sovereignty necessarily effective territorial andfixed on by predicated and defined thestrict the states. boundariesindividual In my view, negotiation of in of and redefinition political authority geographically of the the ways suggests need to change terms complex is of article to The purpose this about debate sovereignty. wisdom of do so by:(a) critical analysis theconventional to attention the about sovereignty, paying particular of sourcesof authority beyondstatesand expansion as sovereignty's of theattenuation territoriality primary the mode of geographical (b) organization; examining "sovof incidence different and historical geographical in of global (capacities states different ereignty regimes" and de to situations exercise facto internally sovereignty of theexample the and (c) showing through externally); around or of operate "geographymoney," howcurrencies havecometo operhowtheseregimes theworld today, ate in recent years. de of The questioning territorial jure sovereignty
mattersnot simplybecause of the challenge to state political primacyfrom globalizationbut because the is to equationofstatewithsovereignty intrinsic the ways in in whichpoliticsin generaland democracy particular have been consideredin moderntimes.For one thing, dependent upon the democracyhas been historically nation-state-the state as underwritten a singular by national identity. Democracy and popular sovereignty grew togetherafterthe American and French revoluthe further reinforced link tions.The riseof nationalism (Dallmyrand Rosales 2001). I and othershave recited

claim that the base is not within the jurisdiction of American courts thusnotsubject judicial and to review the of holding concerning constitutionality peopleinwithout But Guantinamo is just definitely charge. Bay one ofa large chainofdetention an centers, American which Central the gulag, (CIA) and Intelligence Agency American worldwide scarcely nod with a military operate to local claimsof territorial (Priestand sovereignty localsovereignty is then mask a 2004). Indeed, Stephens to allowtreating in that would prisoners ways potentially be subjectto judicialreview the U.S. proper. in Reand to at markably, subject scarce commentarythetime a or since,under Military Orderof 13 November 2001, President gavehimself right detain nonBush the to any U.S. citizen in for anywhere theworld as longas he chose if therewere suspicion involvement anti-U.S. of in In humanitar"terrorist activity." thewakeofso-called ian crises, in Somalia,Bosniaand Kosovo,the U.S. as andother under mantle the of governments (sometimes the United Nations) have also intervened militarily the across globe, evenwhenthestates intervenfacing tionhavedefended themselves such"violations" against of territorial threats (Mills2000). Various sovereignty and dangers motivated interventions repeated military and in by American Sovietgovernments stateswithin theirputative of respective spheres influence during the Cold War (e.g.,Weber1995). Most recently, the threat theterritorial from to U.S. of supposed "weapons massdestruction" held allegedly bytheIraqigovernment was the prima facereasonforthe U.S.-ledinvasion of Iraq in 2003. But it was clear that when the U.S. "handedback" sovereignty an Iraqi-staffed to governmenton 28 June2004 thateffective resovereignty mainedup forgrabs. is not just the so-called It Great Powers thathave suchan extended reach, geographical however. example, For its through heavy troop presence, the Syrian exercises tremendous government leverage overthegovernment Lebanon, Australia inof and has in tervened in militarily the faceof political instability various Pacific island states. Morespecifically, impact globalization states the of on isfelt only thechallenge posestotheir in not it overall or
from otherstates,but also in its issue-specific authority of consequences for the territorialization sovereignty (e.g., Zacher 1992; Cohen 1998; Agnew 1999; Hardt and Negri2000; Slaughter and Burke-White 2000; Hall and Biersteker 2002; Langewiesche2004; Singer2004). For example,the worldwide explosionin negativeenvironmentalexternalities does not respect international boundaries;currencies, long seen as the badges of state are increasingly denationalized;manypeosovereignty, in ple hold citizenship multiplestates; bordersare in-

in World Politics and Sovereignty Regimes: Territoriality StateAuthority Contemporary in theways which deliberative the nature democracy of as it developed seemsto require territorial adjacency citizens in which symbolic and its content rests among on common territorial histories struggle social of and (Thaa 2001; Agnew 2002, 166-67). Butis organization there necessary a of conceptual dependence each on the other? Statements as "theideals citizenship such of clash with sovereign the in nation-state which werefirst they thattheyno 1998, 182) imply developed"(Linklater do. Indeed,muchoftheso-called longer cosmopolitan literature democracy on 1998; Held (e.g., Linklater a 2004) holdsto thisviewpoint, rhetorically advocating movebeyond state world the to Buttheonly citizenship. can of without waythatthey conceive world citizenship the condition demof opening to question founding up ocratic of theory-the presumption a territorialized politicalcommunity-is "scaling from individual by up" states theworld a whole. this to as In account, therefore, normative of and basedon categories consent legitimacy territorialization unaffected globalization. remain This by is becauseestablished democratic and theory practice haverequired necessary a fiction makethem to possible at all,thatis,thatthere absolute is popular sovereignty vestedin a national/territorial political community rigmarked from others off all 2003; Runciidly (Niisstr6m man 2003). Absolute continues to sovereignty thereby underwrite as it is typically of by democracy thought even as the contemporary democrats, cosmopolitan worldcalls forattention divisible to and sovereignty deterritorialized advocates will legitimacy. Democracy's have to respond thischallenge democracy to to if is survive in and prosper a globalizing world(Anderson 2002).

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at Sovereignty Bay?
In conventional is politicaldiscourse, sovereignty aboutcentral stateauthority. is a relationship This in which agent a statecan makecommands are an of that with those overwhom state the voluntarily complied by In claimsauthority. the typical such internal or story,

"domestic" sovereignty requiresa source of authority the nation, the-people-in-government, (kingship, etc.) thatoperateseffectively within territory the state. the of is therefore, Explicitly, sovereignty seen as state-based and territorial. dominant understandings of Currently state sovereignty based on older ones in whichsovare was associated with the physicalperson of a ereignty monarch. Thus, the incorporealrealm of the state is in oftendescribed Western as thought a "body."In early modernEuropeanabsolutism, "bodypoliticis always the an adultmale bodythathas no history birth of and is not

This whosehead to deterioration. body, subject natural are of is a kingand whoselimbsand organs subjects or attack the incan die onlybyviolent various rank, of fection some of its parts"(Shemek2002, 5). The has been symbolically of physicality the sovereign from to transferred the monarch the state territory 1957;Melzer 1995,98; also see Kantorowicz (Bartelson Thismetaphor resists idea that the and Norberg 1998). At can sovereignty be deterritorialized.the sametime, dihas and in the same story, sovereignty an external as be mension. Anygivenstatemust recognized soveras eignby otherstatesin orderto qualify such.Such statesin between a recognition equality implies formal overothers. command which nonecan exercise "Juridthe ical" or legalsovereignty, therefore, provides necesof for condition theoperation domestic sary geographical between the hierarchy a rigid distinction sovereignty: from its exercised the statewithin territory the anby thatprevails it. beyond archy statesovereignty be unFromthisviewpoint, may as territorial derstood theabsolute of organizationpolitical Mostaccounts sovereignty of acceptitseither/ authority. a does or does not have soveror quality: stateeither as they (see eignty Lake 2003). Theydiffer to whether see thisas a foundational in, (originating for principle withthe Peace of the seventeenth century example, socialpractice. or earlier) as an emergent or Westphalia in in are that also vary accepting there actors inThey that weaker ternational states) (suchas militarily politics Hobbes(1651) and Locke From are notfully sovereign. (1690) to Schmitt(1985) and Agamben(1998), to statesand political modern namejust a few, however, Even bondedtogether. are seen as practically authority with Foucault (1991,93), a theorist a lessstate-centered as stateauthority seems see central to viewoftheworld, with "a world in themodern sovereign achieving power whichhas triangle, sovereignty-discipline-government, and thepopulation as itsessential as itsprimary target as of mechanism apparatuses security" theexclusive the Foucault Of (1980) is also centerpiece. course, political between the theorist who pointed to the conflict
the sovereign powerofrulesbacked bysanctionsand the of actual dailyexperience powerexercised a multitude by element of disof nonstate sources as a fundamental this course and social practice. Unfortunately, dualist vision has rarelyprevailed in critical analysis of the for of Rather, example,when practices statesovereignty. economic and politstates show evidence of increasing as this ical interdependence, is construed eithera choice interests that theyhave made in pursuitof self-evident ratherthan an exogenouschallengeto them (Helleiner is 1994), or sovereignty seen as totallyunder threator

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strands conof of From brief the overview dominant three aspects about sovereignty thinking temporary two The standin need ofparticular scrutiny. first have has But attention. the third been received increasing that is The first the assumption sovneglected. largely of or is exogenously,ina "state nature," ereigntyacquired of thanin an ongoing rather system states.So-called have concerned with this constructivists beenespecially Wendt ofcontemporary 1999).Key thinking (e.g., aspect is the to their sovereignty-both interpretation ideathat as constructed states domestic external-issocially and withone another. and conflict interact with, imitate, disoron is "Domestic order" thuspremised "external" In thisunderstanding, derand danger 1992). (Campbell is by sovereignty a social factproduced the practices from the "statethan emerging of states.So, rather war of all againstall-that Thomas of-nature"-the Hobbes(1651 [1968,186]) usedas thebasisfor positing comesaboutas a the origins the state,sovereignty of and in of of result the"purposes" states interaction can that and of a involve widerange actualpractices policies overtime.This is all good and well,as I have change above,but it failsto addresstwo further emphasized viewsof to that assumptions are critical the dominant sovereignty. between One oftheseis thatofan essential equality theobvious states notwithstanding claiming sovereignty, in actorsin world of reality hierarchy powerbetween in is oneofmajor world The inequalities politics. modern in world between states different (Slater regions power of is 1997). Muchofthisinequality theresult imperialexercised theU.S. ismin thepastand thehegemony by the and its allies in the present. Thus, although asand of (bothdomestic jusumption equal sovereignty to at ridical) mayapply, leastto a degree, theEuropean their settler China,and a states, states, offspring Japan, havea serious in of states therest theworld few others, is For deficit. them, sovereigntyas yet"unsovereignty do and realized" 1995).Theysimply (Inayatullah Blaney reto resources challenge nothave thepower seriously states strictions placed upon themby morepowerful
(and other actors such as internationalinstitutions, banks,and multinational businesses).Nor can theyexpect ready recognitionof their internalpolitical autheirclaim to when theyhave eitherinherited thority rule fromcolonial powersor depend fortheircontinuance in power on externalsupport (Keene 2002). Of as course,a dangerhere lies in seeingstatesovereignty a largelyrealized phenomenon in the West and absent elsewherewhen it is betterthoughtof as "unrealized" that it is usuallyalleged in everywhere the de jure form to take.

"newtechnologies" power "at bay"from of (LukeandO Tuathail and 1998). Butwhatiftheabsolute indivisible in aboutstatesovauthority political implicit thisstory and itspresumed territorial is problematic basis ereignty with? to begin The conventional isbasedon giving state the an story and character to ontological a moral equivalent thatof in theindividual liberalism Jacobson person classical (N. Skinner 1998; Agnew1999; 1999). The stateis thus treated a "given." is rooted a grammar fixed as It in of and boundaries identities. a naturalized As inabstract the a that dividual, statehas acquired personhood then its underwrites special status thelocusofsovereignty. as of This depiction the stateis especially beconvincing a moral claimequating autonomy an indicause the of vidualperson withthatof the stateis masked the by natural claimthatis madeon behalf thestateas an of In individual. thisway,the historical construction of as statehood a particular of political is type enterprise makeover. sovereign The state givena transcendental as is exalted thesingular solution boththeproblem to of humanaggression, displacing that aggression from by within territorythestateintotherealm interthe of of staterelations, to the problem organizing and of economiclife,by usingits unique qualitiesto compete within global a division labor(Inayatullah Rupert of and 1994). In fact, statehood personhood and alikeare not the this Rather, are pregiven phenomena story suggests. they bothsubjectivities formed ofsocialinteraction out and mutual Persons states and form such as recognition. only the and of through interaction recognition households, social movements, such. More and tribes, dynasties, statehood out for particularly, emerges ofstruggles conit a basis thosestruggles. In trol; is never preexisting for a other words, stateis notontologically to a setof prior interstate relations. state A and as emerges is recognized suchwithin setofrelationships define rules a that the for whatis andwhat nota "state." is Statehood results from mutual states(Biersteker Weber and recognition among 1996). It is not the outcomeof "isolatedstates"
and then engagingwith achievingstatehoodseparately one anotheras abstractindividuals. The importance of the Peace of Westphaliain 1648, forexample,lay in the mutual recognition among elites of the new European territorial states as a set of neutral centers of public wars.Yet, the powerin the face of devastating religious of also legitimation statesovereignty dependedon the increased loyalty and supportof populationsthrough the of cross-mapping nationwithstate (Gottmann1973). In the nationalistimagination,the state then becomes of something a superperson (e.g., Schmitt1985).

World inContemporary Politics andState Authority Sovereignty Regimes: Territoriality

Buttheproblem lackofconformityan absolute of to is becausehiersovereigntyevenmore pervasive simply archicaldominancein worldpoliticsis even more in than between widespread itseffects justintherelation and subordinate ones (or imperial hegemonic) powers situations of 1999;Lake2003). Moregenerally, (Krasner "shared in (such sovereignty" as one China,twosystems of Hong Kong,the emergence supranational systems suchas theEU, and theceding economic of into power the handsof international institutions as the Insuch ternational Fund(IMF) in thecase ofheavily Monetary and anomalous indebted, countries) other undeveloping situations as that of the Palestinian National (such the government Bosnia,and the British/ of Authority, Irishcollaboration Northern over how Ireland)suggest to indivisible widespread exceptions theruleofabsolute, exercised can be. Sovsovereignty equally all states by is divisible seems and so the ereignty increasinglyacross world(Delbruck In thiscontext, 2003; Stacy 2003). international a between lawyers increasingly distinguish historic insular which a to sovereignty, emphasizes right and relational whichis resist, an emerging sovereignty, thecapacity engage(e.g.,Slaughter to 2004). Theyuse thisdistinction thebasisfor as the explaining proliferation of networks government of officials who share information and coordinatetheir activitiesaround theworld. This"disaggregated sovereignty" tothe points of statesto shareauthority the face of in willingness and that environmental, economic, socialproblems go wellbeyond their individual to on capacity manage their own. The last problematic one assumption, thathas receivedlessattention, theassumption sovereignty is that is invariably territorial exercised or overblocsofterrestrial tends understand to space.Modern theory political as territorial: world divided the is geography entirely up intocontiguous units with territorial as the state spatial the basic building block from whichotherterritorial units(such as alliances, of spheres influence, empires, or etc.) derive develop(Agnew1994).' Thisis thereason why muchofthespeculation about"thedecline of
the state"or "sovereignty bay" is posed as the "end of at recordsuggests thatthere Yet, geography." the historical is no necessity politiesto be organized for As territorially. Spruyt(1994, 34) claims,

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or a one. diction geographic Mubegin endis thus purely borders delimit of spheres jurisdiction. recognized tually for the social, Territoriality, use of territory political, that is in facta strategy has develand economic ends, contexts thanin others. oped morein somehistorical to state, Thus,theterritorial as it is known contempoin early modern initially theory, developed rary political of with retreat nonterritorial the dynastic systems Europe from of ofruleand thetransfer sovereignty thepersonto hood of monarchs discretenationalpopulations as statesovereignty, (Neocleous2003). That modern the didnotoccur construed, overnight following usually in PeaceofWestphalia 1648isnowwellestablished (e.g., of Osiander 2001; Teschke 2003). Territorialization enhanced the devewas by authority further political economies of and,later, an inby lopment mercantilist thatemphasized dustrial capturing powerful capitalism disfrom externalities exponential contiguous positive in costs declines transportation and from tance-decay economies(resource of the clustering external mixes, laborpools,etc.) within of socialrelations production, boundaries national-state 1986; Teschke (Kratochwil 2002). the suchconditions, Absent sovereignty-in senseof of constructed thesocially authoritypractices political or in scattered be exercised nonterritorially pockets may networks. connectedby flowsacross space-spanning in can Fromthisviewpoint, sovereignty be practiced nodesin places acrossspace withdistributed networks or that are eitherhierarchically arranged reticular In theformer a central directing or case, node). (without in it whereas the latter, is esis centralized, authority All of the shared across network. forms politysentially nomadickinship tribes from hunter-gatherer through territorial to structures city-states, states,spheresof alliances,trade pacts, seaborneempiresinfluence, and Corsomesortofspace (Agnew therefore, occupy if however,not 1995;Smith 2003).Whatis clear, bridge debatesabout within widely recognized contemporary is is thatpolitical statesovereignty, authority not necessarilypredicatedon and definedby strictand fixed boundaries. territorial is Two issues are crucialhere: that politicalauthority is to not restricted statesand thatsuch authority thereby is not necessarily Authority the exclusivelyterritorial. and attriexerciseof power.The foundation legitimate entitieshas changed to bution of legitimacy different of By historically. wayof example,the legitimacy ruleby monarchsin the medievalEuropean orderhad a differrulers and that thatof laterabsolutist ent meaningfrom operatingunder more recent democraticjustifications

Ifpolitics aboutrule, modern is the stateis verily unique, it for claims and in It is sovereignty territoriality. sovereign that it claimsfinalauthority recognizes higher and no source jurisdiction.is territorialthatruleis defined of It in as exclusive over territorial authority a fixed space. The criterion determining for where claimsto sovereign juris-

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for statepower has (Bobbitt 2002). In no case,however, the authority the stateeverbeen complete. of There been competing have always of sources authority, from the churchin the medievalcontextto international social and businesses, nongorganizations, movements, overment Morespecifically, (NGOs) today. organizations and transparency, efficiency, expertise, accountability, are as muchfoundations legitimacy are of as popularity and 2003,30nationality democratic (Delbruck process but also see Hudson2001; Mulligan 34; 2004). Thus, even ostensibly entities supranational and private govare ernments often accordedas greator even greater than For in authority arestates. example, theU.S.,there of theefficiency accountais widespread and suspicion of the federal oftenleads to This bility government. excessive in faith thevirtue privatization of of perhaps whatare elsewhere seen as "public"services. Italy, In muchofthepopular enthusiasm theEU is driven for by will thehopethat Brussels increasingly Romeas supplant the seat ofpower in mosteffective relation people's to lives. everyday Phrasessuch as "divisible" and "graduated" soverareoften usedto givethesenseofan increasingly eignty labilesovereignty not (political authority) immediately with associated territorialized power. state exThus,for that Ong (1999,217) claims ample,

tout is latter Territorynotgeography court. disappears. to or can of Indeed,"states" one type another continue is even serveas lociofpolitical power authority as their rather thanby territorial flows networked by deployed For states. other control sovereign penetrating nominally can supervise statestoday powerful relatively example, transacin threats distant security placesand financial direct havelittle in centers tions "offshore" (evenas they acand/or control) rewarding by punishing regulatory of in relation thespatial to tions thatthey efficacy judge their 1994;Hudson1998;Palen authority Roberts (e.g., is in 2002). Of course, suchsituations, sovereigntynot as absolute. clear, But,then, is increasingly and as crittwo aboutconventional icismof the first assumptions state sovereignty views of state sovereignty implies, evenwhenappareverhas been,or is, absolute, rarely territorialized 2004). (Lind ently neatly is only of The mainissueis thatterritoriality one type or wayin whichspace is constituted socially spatiality et and andmobilized (Durand al. 1992;Offner politically Pumain1996; Agnew1999; Allen 2003). Territoriality blocks rigidly of bordered has space always twofeatures: as of or anddomination control themodality power upon relies which bordering (Gottmann the 1973;Sack 1986). with Such power i.e., maywellbe legitimate, exercised but or (eitherbureaucratic charismatic), it authority domination. restson demarcation through ultimately has a Globalization induced situation graduated of sover- It works division space,boundary of territorial through even state maintains control its over eignty, whereby as the of dissemination authoriand control, the hierarchical it ... entities theterms set for territory, letscorporate tativecommands. Yet, space and powerhave other and some and constituting regulating domains. Weaker .... modalities (Mann 1993; Allen2003). Centralpossible lessdesirable are overto theregulation of groups given and can command obedience, opizedpower, involving entities. supranational as overlongdistances wellas over eratebetween points It is not theexistence thenature sovereignty territorial for but of of the blocs, example, through deployment thatis transformedtheworkings graduated of of sover- military but assets, thismayhave lesspossibility susby is in whom on whomanage flows tained, legitimate, and eignty. Authority vested agents impact thepeoplewith orthrough action a distance much at as a as But it comesintocontact. thisis thenstill networked through space in thosewho manageterritories. and terri- form power. isbasedonflows It of Adjacency through space-spanning of division spaceas modalities power torial of thusface access to territories not networks, privileged (blocks of thechallenge coercive and to power authority diffused refers power power emanating ofspace).On thecontrary, scattered sites.The spatiality authority, from of but there- thatis not centered directly commanded that or cannot be entirely reduced to the territorial temand results from of fore, patterns socialassociation interaction
the Indeed,withglobalization, plate ofstatesovereignty. transactional balance is increasingly in tipping favorof a networked of that challenges system politicalauthority state sovereignty the singularface of territorialized as effective sovereignty (Appadurai 1996). In thisregard, terms the and "territory" "space" need to be very carefully fromone another distinguished (Durand et al. 1992; L~vy 2001).2 Simplybecause the former in mightbe supersededor supplemented the orof politicalauthority does not mean that the ganization in groups and movements forexample,in NGOs and (as, marketexchange global social movements)or through (creditrating agenciessuch as Moody'sare one example, see Sinclair2000). Diffused powercan be territorialized in so faras the networks it but and authoritative, only constrained centralstate audefinesare territorially by are networks limited Otherwise, onlyby thority. spatially the purposesfor which they are formed.In this way, associal and market-based poweris generatedthrough ratherthan and reticular diffusion sociation,affiliation,

World inContemporary Politics andState Sovereignty Regimes: Authority Territoriality

authoritative command domination. is or This through thatcomes intoexistence association and power through assent a result human as of When (Arendt 1958). agency not sustained collective howaction, through legitimate thepower networks created disintegrate. thus will ever, bothcentralized diffused and are Today, powers arguably lessterritorializedstateboundaries thanat anytime by since the nineteenth century (Agnewand Corbridge Paasi1999). 1995; as exercise power(as of Sovereignty the legitimate is about ceded, setherefore, necessarily authority), diffused as duced,and co-opted power wellas coercion centralized The precise by (and acceptance of) power. combination powermechanisms of assent, (coercion, in of seduction, etc.) co-optation, involved theexercise states all authority different can be thesamefor issue by areas(trade, differ across etc.) security, currency, ormay them operate and within state's a ormore solely territory either ornonterritorially.without But widely territorially at leasta modicum activecollaboration collective of by actors both on sidesofborders, statesovereignty be can neither sustained In nor undermined. short, John as Allen (2003, 159) remarks, "domination not everyis where." evendemarcation meansofborders, Indeed, by the quintessence state territoriality, to a of relies considerable degreeon the extentto whichnetworks of association affiliation and the of parallel boundaries domination. Even the seemingly most Westphalian of states,then,are riddled withauthoritative power networks diffused and/or (basedon centralized power) whoseextension territorial boundaries rencan beyond derclaims absolute to statesovereignty butwhose moot insidetheboundaries critical is to continuing presence their credibility. apparent

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and serveas a finalseat of authority (2) an accepted of and definition functional geographical scope(territoits which commands rialand nonterritorial) go beyond What has been lacking in and unenforced. unheeded at the of associated efforts understanding range practices the has withsovereignty been a meansof identifying of in of effects co-variation the effectivenessstateaureliance on on thority, the one hand,and its relative on the stateterritoriality, other(e.g.,Hurd1999). on so A useful to writing approach doing comesfrom the of thehistorical sociology power. Specifically, terms and infrastructural have been used by power despotic the Mann(1984) toidentify twodifferent in which ways and a governmental acquires usescentralized apparatus In theseterms words, identify, respectively, power. other and functions states that thetwodifferent perform that the for theirclaimsto sovereignty: struggle underpin in one statein elitesand interest groups poweramong elsewhere the and relation elitesand interest to groups of provision public goods that are usuallyprovided In (by publicly states). Mann's(1984, 188) words, of these Letus clearly power. distinguish twotypes state denotes Thefirst [despotic sense power the by state power] The over eliteitself civilsociety. second [infrastructural to and ofthestate penetrate denotes power the power] activitiescivil of the co-ordinate society through centrally infrastructure. itsown in infrastructural has risen imporHistorically, power This tancesincetheeighteenth century. isbecauseelites to have been forced struggles become through political to moreresponsive their and, as a result, populations have demanded moreinfrastrucgroups rising pressure of the tural goodsgavea goods.In turn, delivery public Until of sovereignty. reboostto the territorialization for thetechnologies providing goodshave public cently, to territorial not leastrelating the had a built-in bias, externalities. of however, Increasingly, capture positive acrossnetworks infrastructural can be deployed power locatedin discrete that,though places,are not necesfields thatthey in territorial the externality prosarily
duce. Thus, currencies,systemsof measure, trading networks,educational provision,and welfareservices in need not be associatedwithexclusivemembership a of conventionalnation-state.New deployments infrastatesand structural existing powerboth deterritorialize reterritorialize membershiparound cities and hinterlands, regions,and continental-level political entities such as the EU (Cox 1998; Scott 1998). International likewisehave both privateand state-run, organizations, the capacityto delivera wide rangeof public developed power.There is a goods associated with infrastructural

Effective and Sovereignty Sovereignty

Regimes

betweenactorsthatpermits some actorsnot asymmetry just to commandbut also to enrollothersin theirdesires and activities."Ascribed" is the key term. As Bruce Lincoln puts it, "Persuasion and coercion alike are of but constitutive authority, once actualized and rendered explicit they signal-indeed, they are, at least negation" (Lincoln 1994, 6). Today,it temporarily-its rerequires both communicativeand infrastructural sourcesand a highdegreeof popularacceptance to opMore specifically, erateeffectively. politicalauthority qua sovereignty requires: (1) a governmental apparatusto

Political is of authority thelegitimate practice power. In otherwords, is the myriad it effects an ascribed of

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as a of American towards sort imperium power despotic the the U.S. government (what destroyed authority of was there ofit) ofthegovernment Iraq.Butthisdeside of in had a number devastating efstruction turn inside war a bitter ofresistance fects, Iraq,the including of along ethnicand disintegration prospect internal in diminution worldwide lines,and a general religious This the towards U.S. government. is because respect in of has bereft legitimacy the theinvasion beennotonly of of inthose much therest of but of eyes most Iraqis also of the worldand of largesegments American public Coercivepoweras an elementof effective opinion. of has therefore, limited possibility longsovereignty, it enroll unless can simultaneously andgain term success effecundermine It the consent others. can actually of as tivesovereignty,it seemsto have done fortheU.S. to its in Iraq and moregenerally. Through stimulus reterrorist members anti-American into of cruitment more of seems havemadetheterritory to it networks,certainly thanit wasbefore an theU.S. itself evengreater target the 2001 thatstarted rush of theevents 11 September to war. a indicates different A secondexample aspectofthe in nexus.In Britain, the 1980s,fisovereignty-territory their nancial elites, ascendancy long-term political using for the the within state, pushed government regulations of thatwouldenhancethe performance Londonas an center(see Ingham international 1994 on the banking of Britain conflict inCity long-running of Londonvs. suchregulations instance, (for relaxing terests). Though and controls deregulating markets) commodity capital financial benefited London's sector, theyhad generally as effects thestateterritory on macroeconomic negative had the a whole.In thelongterm, mayalso have they effect the ability the govof on unintended negative directions because they to ernment movein contrary now link interests whoseloyalties generated powerful rather centers than to their themto otherfinancial about British nominal homestates. anxiety government has the Monetary System been exacjoining European mosteferbated the despotic by powernow exercised
within Britishpolitics by London's financial fectively center,even though such a move mightbe helpfulto interestselsewhere in and agricultural manufacturing is Britain.This conundrum relatedto the "who is 'us'?" U.S.-owned businesses question raised about nominally in the early1990s thatpaid low or no taxes in the U.S., and yet deinvestedheavilyin jobs in othercountries, pended on American consumersfor final demand for what theyproduce. basis to sovereignty of But the recasting the territorial and the challenge to central state authority through

simultaneous and of scaling-up scaling-down the relevant geographical fieldsof infrastructural powerdeon thepolitical economies scaleofdifferent of pending and regulatory, productive, redistributive publicgoods Brenner "the 1998; Ilgen 2003). Consequently, (e.g., of moreeconomies scale ofdominant goodsand assets from structural ofthenational the scale statediverge and the morethosedivergences back into each feed otherin complex ways-thenthe morethe authority, and policy-implelegitimacy, policymaking capacity, effectiveness the [territorial] willbe of state menting eroded and undermined both withinand without" 1995,621). (Cerny At thesametime, despotic power(in Mann'ssense) has historically to rely come muchmore establishing on than itslegitimacy oncewasthecase. Direct is coercion lesseffective a modeofrulein modern as states. simply recalcitrant minorities, Thoughit can be used against ofthepopulation must placated be and largesegments than coerced.Rulersneed to establish pleasedrather at least a modicum popularauthority of before they their can achieve is It goals.Suchlegitimacyalsofragile. be cannot takenfor But establishing granted. authority need not always involve singular a focus fixed on state if territories elites and pressure groupsadjust their and identities interests other to territorial (suchas levels and or to localities, empires) shift city-regions, loyalties nonterritorial entities such as international organizasocial movements, religious or tions, corporations, (e.g.,Gill 1994; Kobrin1997; Cutleret al. groupings couldinvolve enhancing territhe of 1999). This shift in pursuit for torial an of, example, imperium, hierarchy or theattenuation territorial of in sovereignty theform ofthediffusionauthority of across multinodal a financial network transnational banks, involving corporations, other and states, debt-rating agencies, NGOs. Thereis no necessary betweendespotic association, therefore, and central stateauthority. Both despotic-govpower and ernmental diffuse socialpower work can to together central stateauthority. an challenge Consequently, upor of can as scaling a fragmentationsovereignty result
elites and social groupspursue theirgoals in ways that unpotentiallyterritorially expand or nonterritorially dercutthe authority the centralgovernmental of apparatus,respectively. By way of recentexample,the use of Americanmilitaryforcesto invade Iraq in 2003 withoutbenefitof sanction fromthe United Nations had a number of rationales:"weapons of mass destruction" that shifting threatenedthe U.S., Iraqi ties to al Qaeda, and so on. Most of these turnedout to be based on poor or false One outcome,however, been to deploy has intelligence.

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directindeterritorialization statelevel and reterritoriali- (even if increasingly at the on dependent foreign zation localandsupranational and a at for scalesofinfrastructural vestment overseas and markets its exports) and despotic are unevenaroundthe world(D. statepolitical central ofeffective authority. power highdegree China is a good testcase forhow long 2001; Newman 2001). Thereis no one trend Jacobson Contemporary towards whatsomehave called the "migration aufor can of absolute pressures divisibility sovereignty survive democratic the and the need to establish state's legitithority" (e.g.,Kahlerand Lake 2003). And, as noted such are to previously, trends notinvariably open macywhenincreasingly to the restof the world. equivalent the erosion stateterritorial of that The second case resembles a story emphasizes most tout sovereignty court. Whatis needed, is a typology themain reach in worldpolitics withnetworked of but therefore, hierarchy ways in whichsovereigntycurrently is territorial control. This imexercised takeacto overspace as wellas direct countof: (1) itssocialconstruction; its association perialist of is the (2) regime in all respects exactopposite the with hierarchical and is stateauthority subordination; (3) itsdeployment classiccase.Not only central seriously in territorial nonterritorial and maand in question forms. The two basic becauseof external dependence mismandimensions the typology defined the relative nipulation well as corruption chronic to and are as by of state is also to stateterritoriality subject separatist strength central (state authority agement; despotic power) on one axisand itsrelative inlocal insurgencies, poorinfrastructural and consolidation stateterri- threats, in Infrastructural is weakor nonexistent, The (stateinfrastructural on theother. toriality power) tegration. power former involves in hands abouttheextent which is to and despotic a judgment effectivelyoutside power often statehas acquired maintains effective legitand such an institutions as the World and international (including imate of The latter to but refers thedegree Bankas wellas distant morepowerful to states).It is apparatus rule. which of ifalsoreliant theassent and cooperation and on of provision public goods operation markets imperialist, is heavily is tied stateregulated bounded and of Reoflocalelites, becausethepractice sovereignty territorially. as socialconstructions, dimensions status these to define ineluctably the dependent garded political-economic boththe extent stateautonomy the degreeto in the regions, such as the of and that manystatesendure which is territorial practice. it in and LatinAmerica, Africa, continua, MiddleEast, sub-Saharan Intersecting rather thandiscrete the dewhere prevails.3 it categories, twodimensions finefour in extreme cases thatcan be identified ideal to as The othertwocases are less familiar relation for oftheoretical on state and critical discussion empirical both conventional and types purposes perspectives These are relational character, in is The to analysis. reprereferring regime the integrative, sovereignty. third how sovereignty exercised is has over sentedhereby the EU. In thiscase, sovereignty effectively timeand than discrete differbetween territorial to into space, rather categories complexities relating thecoexistence whichexisting statescan be neatly and I slotted. refer ent levelsor tiersof government the distinctive to thesefour idealtypes sovereignty as across are areas of functional that represented differentially regimes, systems effective to from EU-wide thenational-state that thedifferent levels, sovereignty, recognizing anyactualrealworld case need not exactly character conform one particular and subnational-regional. the territorial to But to of someofits infrastructural is difficult deny (Table1). regime power Of thefour for theclassic is the theCommon cases, Policy, example), (consider exemplary Agricultural example one closest thestory EU to the for told evenifcentral state authority both entire and frequently aboutstatesovevenherethere be complications the member can statesis weakerthanwheneach of the ereignty, although on of and for was states an independent (for Quiteclearly, example, HongKong Taiwan China).The many entity. senseis one ofbothdespotic infrastructural have and the founding statesof the Westphalian system power
still largelydeployed withina bounded state territory in thrown theirlot withone anotherto create a larger and, as yet, politicallyunclassifiable entitythat chalTable 1. Sovereignty in statesovereignty functionally Regimes complex lengesexisting and oftentimes nonterritorial ways. STATETERRITORIALITY The best Finally,the fourthregimeis the globalist. Consolidated Open excurrent sovereignty example of this is the effective ercisedby U.S. withinand beyondits nominalnational Classic Globalist Stronger institutions within international boundaries and through CENTRAL STATE influential(such as the IMF). which it is particularly AUTHORITY Britain in the nineteenthcenturyalso folCertainly, Weaker Integrative Imperialist lowed a version of this regime. But, in both cases,

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four nineteenth temintheearly century. Perhaps periods to nineteenth from can be identified the early century in combinations soverof the present whichdifferent withdistinctive have prevailed geograpeignty regimes coincide these hies to them.Not surprisingly, periods a in that from withgeneral trends world history result and mix geopolitical, technologicomplex ofeconomic, are cal change.Needlessto say,the periods heuristic the of for rather thandefinitive the purpose exploring relative incidence sovereignty of Anyperiodiregimes. is The contestable. present zation inherently is purpose the and to apmerely historicize contextualize relative over and not of regimes time space, pearance sovereignty overthepast of a to provide totalaccount world history twohundred years.4 with associated The classic is, closely regime ofcourse, version statesovereignty, of the so-called Westphalian as it emerged a potentially practical only although really in form thenineteenth 1999;Murphy (Croxton century 1996). If the Concertof Europeis its mainhistorical a legacyas new statesformed "balanceof power"in it the of in theyears after defeat Napoleon, coEurope outside Europewithimperiof the existed from outset in in alistregimes (suchas theBritish India,theFrench and the Dutch in the East Indies) and with Africa, a a relatively British weak that, regime through globalist to tradeand a gold-sterling commitment free standard, sometypes infrastructural wellbeyond of power deployed was This order underBritain's boundaries. geopolitical in mined thelatenineteenth century theemergence by the as ofa setofrival projects Germany, U.S., imperialist in andJapan different challenged Britain's ways globalist regime. the The neteffect 1875-1945wasto encourage over at of consolidation classicand imperialist regimes the even as one. hardened of expense theglobalist Borders of were threatened the expansionism those by they and statessuch as Germany Japanthatsaw powerful as themselves closed out of or disadvantaged the by The Great and regimes. previous imperialist globalist of protectionist presDepression the 1930s reinforced ecoeconomies from suresto seal off territorial foreign
this simply nomic competitors. Plausibly, deepened the economic misery.But it also encouraged nationalist This period reached a crescendo with the sentiments. Second WorldWar. The outcomeofthatwarusheredin a periodin which an overarching Cold War led to two competing imperialist regimesof which one (the U.S.) had incipient globalist elements. The countriesof Western Europe and Japan, however,retained a relatively high degree and the rapid expansion of of central state authority,

have other states, coattempts beenmadeto recruit by and assentas muchas by coercion, intothe optation can Indeed, regime. globalization be seenas theprocess with necessary and economic (along technological ofenrolling in states theglobalist changes) sovereignty From viewpoint, globalist this the state relies on regime. in and hegemony, thesenseofa mixofcoercion active to others linewith objectives. into its The consent, bring in revolution information and telecommutechnologies nications alliedwith end oftheBretton has the Woods in transaction 1970sto lower system theearly monetary costsin financial centers and spurthe deregulation of financial markets the extentthatvarious to figlobal nancialcenters New York, in London,and Tokyo, (in are increasingly collective the center the of particular) American globalist regime(Martin1994). Although central stateauthority remains (notrelatively strong the problems its republican of constituwithstanding in tionalism coping with global its to role),itscentrality world catches between conflicting it two politics political one towards scattered a impulses: thatpresses imperium the (as in Iraq) and one thatpushestowards keeping U.S. as an openeconomy. basisofitshegemony The is of immigrants foreign and investment and welcoming of elsewhere, goodsand encouraging thesetendencies butat thesametime to being increasingly subject fiscal overextension it endeavors intervene as to globally yet alsoserve demands itspopulation pensions the of for and healthcare benefits. Statesotherthan the hegemonic one thatenter intotheglobalist are to regime notlikely the becausetheycan restrict their experience tension and from the military expenditures thus can benefit as longas they retain relatively a globalist regime high of stateauthority. other In words, degree central open borders be beneficial long as statesretainthe can as to the is capacity close themdown.Otherwise, danger thattheglobalist becomes for always regime imperialist states other thanthedominant one.

HistoricalGeography Sovereignty of

Regimes

None of the sovereignty regimesis totallynew, althateach takesvariesover time thoughthe preciseform and from place to place. They are ideal typesor models that cannot map exactlyonto real-world cases. Given this caveat, however,a strongcase can be made fora historicalpattern to their coappearance (Agnew and 1995). The purposeof thissectionis to give a Corbridge sense of the historical of geography effective sovereignty since the presumedemergence the modernstate sysof

inContemporary Politics World andState Sovereignty Regimes: Territoriality Authority

welfare statesacrossstatesin these regions created akin to the classic regime. The Bretton something Woodsmonetary basedon a fixed system, exchange-rate between US$ (backedbygold) and the maincurthe rencies Western of untilits tended, Europeand Japan, in 1970s,to redisintegrationthelate 1960sand early inforce territorial to sovereigntythosestates the basis in whosecurrencies convertible were within As former it. colonial countries achieved from late independence the 1940s down into the 1970s, theyaspiredto classic of the sovereignty. Unfortunately, terms tradefortheir mainproducts the weakness their and of central state worked inmany cases this, authority against reproducing the imperialist states couldsteera regime. Onlywhere course between their and pastdependence theglobalist in regime (as incipient American sovereignty in East Asia) wasthispathavoided. WhentheU.S. government actedin theearly 1970s to protect domestic its a from series external of economy shocks in initiated the 1960s(byabrogating Bretton the WoodsAgreement a dollar-gold of it standard), inadfurthered opening oftheU.S. andother the vertently up economiesto relatively flowsof capital, unregulated andservices. the of of goods, Alongwith actions a range newpolicies from U.S.-dominated international existing such institutions, as theIMF andtheGATT (after 1994, the WTO), thisstimulated worldwide the of spread a new "market access"modelofglobaltradeand investment.Together withthe end of the Cold War,as the SovietUnionand its alliesessentially abandoned their becauseof itsfailure deliver to ecoimperialist regime nomicgrowth political and thisliberated participation, theU.S. for unrestricted of pursuit a globalist sovereignty In of the however, perregime. many parts the world, is a of ception thatthisis simply new version the imIn of regime. Europe,the deepening the EU perialist sincethelate 1980srepresents major the of example the construction an integrative of Thereare,howregime. a of candidates sucha soverfor ever, number possible should U.S.-sponsored the eignty regime globalist regime falter the FreeTradeArea of the Americas, the (e.g.,
Association of South East Asian Nations [ASEAN], etc). States such as China, India, and possibly Russia,all remainas the best surviving largecountries, examplesof the operationof the "classic" sovereignty regime. Previous periods faded away. There seems no good reason to think that the present one has unlimited staying power.So, what mightbringit to an end? The majorconflict potentialtodaylies betweenthe globalist on regime, the one hand, and those trappedin the imon perialist regime, the other.Even thoughasymmetric in orthodoxsecurity thistensionlies at the heart terms,

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of muchcontemporary in, globalconflict forexample, America. Classicandglobalist EastandLatin theMiddle antithetical. The are however, also basically regimes, U.S.-Chinaconflict overtradeand exchangecurrent If of is ratevaluation an example thistension. the inin rise regime gives toa globalist regime Europe tegrative with one, too, incompatible thecurrent thenthis, could as a of conflict interests globalist regimes produce major for reach. compete global

and Sovereignty Currencies Regimes

demneedsempirical This largely abstract argument currencies In of onstration. thecontext state sovereignty, In reasons. thefirst are interesting three for place,they feature central of state and are a keymaterial symbolic cur2000). National (Cohen 1998;Simmons authority in roseto prominence themid-nineteenth rencies only in and as Europe North century stateauthority Western to established. Americawas firmly They contributed transaction costs reduced identities, firming national up the revenues raised national within economies, through a andprovided means ofcurrency minting (seigniorage), taxes the on to their states payfor for through purchases from incomes capitalism emanating industrial increasing are currencies also,then, 2003b).As a result, (Helleiner of one ofthemainexamples infrastructural But power. national also currencies seem to be losingtheir many havemuchenlarged becausethey either character geoand the banking graphic scope (becauseof electronic or have across ease ofcurrency borders) they exchange currencies a wide for beeneffectively by replaced foreign of of (not range transactions leastthestorage wealth). to realm," Second,"it is in the monetary according to Helleiner (1999,309), "where challenges thepractice areparticularly of[sovereign state] territoriality apparent of the various in the present impacts gloage." Thus, ofstate should on balization theterritoriality sovereignty to obviousin relation the geobe mostimmediately Because currencies. of dynamics national-state graphical is of a medium exchange, oney a belief itisprimarily "[m] with other has that tobe shared 2003, people"(Goodwin
fluidmedium in which 4). This makes it a relatively over its issuance and managementis always authority an vulnerableto challengefrom arrayof actors (central investmentbanks, transnationalcorporations, banks, (not etc.) and yet,because of its symbolism speculators, least that displayedon coins and banknotes), is frequently one of the most visible examples of state sovereignty. and other actors Finally,decisions by governments share a about whetherto maintaina national currency,

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financial centers localelites. for Given the foreign dominant economicrole of the U.S. in some world this a of regions, is usually process dollarization.

newone,substitute a national with global one a one,and a how to manage globalone provide common a metric forexamining descriptive the merits the typology of of In other the contemporary words, sovereignty regimes. of a geography money provides wayofbothillustrating the typology sovereignty of and showing the regimes and territorial nonterritorial theseregimes work. ways To be morespecific aboutthe connections between and monetary first globalization sovereignty requires the take on currencies identifying processes whereby distinctive with states mapand relationships particular identified pingtheseontothesovereignty regimes preSince the collapse of the BrettonWoods viously. in worldwide ex1970s,no single Agreement the early has prevailed.5 This suggests change-rate arrangement thatmonetary a of involves variety politiglobalization cal-economic not a processes, simply single imperialism or free-floating market and Le(Bernhard capitalism Thereare four in whichcurrencies blang1999). ways tendtowork with to national respect anygiven territory, the This fact,in paralleling foursovereignty regimes. at the of itself, that, leastfor geography money, suggests there something is useful aboutthefourfold theoretically schemaofsovereignty The regimes. four currency processesare as follows:

reThese processes map onto the foursovereignty Table1 (see Table casestaken from with four the gimes decisions thepart stateand other on of 2). Theyreflect of basedon socialized influential actors understandings interests" their 2004,437). These (Widmaier "monetary or views to of reflect, onedegree another, understandings inrelation thedifferent to and state market performance that the structural positions vis-a-vis worldeconomy in. and local actorsfindthemselves Thus, the states classic case can be seenas basedon theKeynesian logic the market that statescan mitigate failures, globalist that statesshould a approach represents neoclassical the work their and retreat letmarkets magic, imperialist thatstatefailure stresses classical the theory monetary and of radical necessitates decoupling domestic moneis and tary policies, theintegrative a mixofKeynesian/ in of the inside and neoclassical/outside grouping states arenot theditherefore, Currency question. processes, but rectresult materialist of by pressures are mediated and actors theunderstandings bring governments other situations. to their material in a (1) theterritorial,which national-state currency of are In thecontemporary there still world, examples dominates stateterritory the population a and thatreflect "classic"statesovercurrencies territorial has restricted accessto currencies wider of cirin is But years awayfrom eignty.6 thenet trend recent culation a fixed a rate, except through exchange this the One ofthebestexamples toward others. regime or mechanism controlled float, other managed by is ofa classic currency, regime China,whose sovereignty central stateauthority; theUS$ in a therenminbi yuan),is pegged (or against in issued (2) the transnational, whichthe currency is insulated and whoseeconomy thereby float onestate(invariably a powerful circulates managed by one) shocksemanating degreefrom monetary centers,floats to a certain widelyamong world financial The from wider world the economy. onlycontemporary is in freely, a standard reserve) (or currency rebetweena transnational lationto which other currencies denominat- exampleof an intersection are is and a "globalist" regime sovereignty process for ed, and is a preferred currency transacting currency of is the mainmetric transnational the U.S. The US$ commerce; global that and tradeand commerce themaincurrency other in a alliance (3) theshared, which formal monetary full either union(as operates through monetary
with the Euro and the EU) or throughan exchange-rateunion among economic equals with an internal managedfloatand, in both cases, an externalfloating exchangerate; in (4) the substitute, whicha transnational currency substitutes eitherofficially unofficially all or or in transactionsfor the nominal territorial many of currency a givenstate.The substitute currency is particularly as important a store of wealth in local banks, a hedge againstinflation the nain tionalcurrency, a mediumof capitalflight and to Processes Sovereignty and Table2. Currency Regimes REGIME SOVEREIGNTY Classic Globalist Integrative Imperialist TerritorialChina DOMINANT CURRENCY Transnational PROCESS Shared Substitute

US EU Latin America

inContemporary Politics World andState Sovereignty Regimes: Authority Territoriality

states(including As China) holdas a reserve. a result, theUS$ is alsothecurrency is themain that instrument of globalization. exchange-rate The mechanism associatedwith globalist the is thefree float.' The only regime current of is example a shared currency theEuro,associatedas it is with project pan-European the of unification.Historically, national such currencies as the many out of US$ emerged oftheunification moregeographicallyvariegated (see, e.g., Helleiner currency systems to 1999;Broz1999;Goodwin 2003). Finally, theextent thatcertain territorial currencies reflect weakness the of their national for economies, aresubstituted bythe they use of transnational currencies. the Currently, US$ is themost ofthetransnational either currencies, important informal formal or dollarization, moreinand, through so-calledcurrency boardsor some frequently, through variant thereof thatinsulate decisions from monetary domestic In bothcases,anypretense political pressures. at territorial is sacrimonetary sovereignty essentially ficedto dampen increase inflation, investment, foreign and reducethe proclivity growth government for in LatinAmerican countries recently have spending. Many thisintersection between substiexperienced currency tution what calltheimperialist and I sovereignty regime, even though few have engaged in relatively countries or Each full-fledged official dollarization.8 of the four is withreference the to currency processes discussed specific example. But a secondissueconcerns howthecurrency processes operate undera givensovereignty geographically The and are regime. territorial shared currency processes the mostevidently territorialized. even theyare But closedmonetary coexist hardly totally spaces. Theymust witha transnational that downborders currency breaks and challenges hold of national the currencies over a not the rangeoftransactions, leastbyencouraging deof markets financial at centers velopment currency within their This territories. is an opening ofpossiup bilities theredistribution for ofpolitical authority beyond cities central whose banks and finance ministries capital must nowwork share to with other in actors the power realm. course, Of muchofthemonetary flow monetary
across territorial boundariestoday tends to be between centersin the richest financial countries. Wall Street(in New York)and the City (in London) are the keyplaces of authority withaffiliates collaborators and all scattered over the worldeconomybut withthe densestpresence in North American, European, and East Asian cities (Martin 1994; Thrift 1994). This is because mostglobal flows involvedin "diversification are "intended finance," to reduce risk throughthe fine-tuning portfolios" of (Taylor2004, 31). One hundredyearsago a significant

449

movedfrom richto of proportion worldcapitalflows comuchofthiswas within Of poorcountries. course, blocsthatusedthesameor closely lonialcurrency peg2002). That thisis no longer (Helleiner ged currencies currencies thatthe use of substitute the case suggests state elites todayis more a questionof subordinate than storm for looking a monetary in an economic port tousecurrency a as state ofa hegemonic actively looking to mechanism subordination. susceptibility the of Yet, for a incentive of demands foreign capital provides major however some statesand local actorsto findshelter, of in the holding a less volatiletransnaproblematic, suchas the US$, as evidenced the tionalcurrency by of domestic foreign and holdings such currencies large and centers) the by salting" (in offshore other"dollar countries. of and nationals governmentsmany China of If the industrializationAsia was the "mostspecof tacular economic happening the secondhalfof the twentieth 1994,165), thenit has been (Daly century" since 1978 as a majorglobal China'srapidemergence economicactor that is perhapsits most remarkable from world to feature. Closedoff thecapitalist economy becomea 1949 untilthelate 1970s,Chinahas quickly and in trading financial major presence boththeworld's Chinahas becomean incrediIn economies. particular, as basedon massive machine ble exporting foreign well China's exports investment. as domestic greweight1990 and fold-to morethan $380 billion-between an 2000 and 2003 thisrepresented in2003. Between of total. Allied 3.9 creaseoffrom to 6 percent theworld has this to domestic investment, export explosion genas and a for erated hugedemand rawmaterials localfirms cahave vastly increased investors production foreign As in suchsectors steeland cement. of2002, as pacity of moresteel(25.8 percent theworld China consumed or total) than the EU (16.8 percent), NAFTA (16.0 for of In percent). 2002Chinaaccounted 16 percent the secondonlyto theU.S. in theworld economy, growth 2003; Hale and Hale 2003,37-38). (McGregor
Since 1978, but especiallysince 1987, the Chinese model a economyhas gone from command-and-control one. but to a state-managed, market-driven, UndoubtChina has enteredinto the worldeconedly,however, on omy largely its own terms.Much of its growthhas directinvestment been drivenby foreign (FDI), which accounts for over 40 percent of GDP (compared to a minuscule l.1 percent in Japan). But the central has retainedmuch more control over its government national economy than is characteristicof most

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thatthis resisted Wang(2003) claims this. government of the a was mainly question maintaining government's of and But to self-imagecontrol autonomy. he alsopoints to and theroleofcommitment lowinflation thelackof influence government on policyof local and foreignin ownedenterprises China thatlobbied unsuccessfully dea for devaluation. evenin thefaceofincreased So, was on FDI, the Chinesegovernment more pendence concernedabout other,largely goals than political, investors. its pleasing foreign is is thiscurrency Whether system sustainable an One danger comesfrom of overheating open question. asset investment sector. themanufacturing As fixed grew in all in half by31.1 percent Chinafor sectors thefirst of the the times ratefor wholeof 2000,con2003, three at (Hale andHale 2003, grew sumption only 8.8 percent a of indicates highdegree excessca39). Thisdisparity of the rateencourages growth The fixed exchange pacity. which then push up the exchangereserves, foreign in 12 money (up supply from percent 2001to 20 percent assetinthis morefixed in 2003). In turn, encourages the thusexacerbating vestment speculative by capital, investment as ofshrinking margins more profit problem the At or demand. this chasesstagnant shrinking point, wouldhaveto strengthen authorities Chinese monetary in exchange capital controlsand intervene foreign of the markets suppress appreciation the renminbi to there 2004,however, (Kuroda 2003). As ofNovember was no signof either. Indeed,Chineseofficials spoke controls of openly easing-notofstrengthening-capital 2004). (Kynge of comesfrom efforts foreign the A secondthreat of such as the U.S. Secretary the politicalleaders, to the to Treasury, persuade Chinesegovernment move in to renminbi order avoid theimto a freely floating Disturbed sanctions. of by position tradeand financial a behind to the China'sability exploit US$ by"hiding" thosewho wouldchangethe Chinese float, managed should note how much however, monetary system, labor costs in businesses American investing Chinalower andAmerican andreaphigher customers/workers profits
receive lower prices and low-paying jobs (both in the same buildingat Wal-Mart) fromthe currentsystem. raw mateChina has also increasedits imports(largely rials) at a higherrate than its exportsover the period 1998-2003. But the pressureis likelyto continue. A and a globalizing worldeconomyare territorial currency one with the other,particularly not easilyharmonized, such as China withan increasingly fora country heavy in worldtrade (Leblang 2003). As of summer presence was approximately percentun40 2003, the renminbi dervaluedagainstthe US$ (Swann 2003). This hands an

states. One of the mainmechanisms for contemporary control beenthemanaged central has float of continuing theChinese renminbi yuan)against US$. This the (the control servedto bothkeep Chinesegoodscomhas in market those of other as petitive the American countries havebecomelessso becauseoftheappreciationoftheir currencies the against US$ since2001 and to buildup massive whichthe Chinese US$ reserves has been investing inter alia, U.S. in, government to boththe bonds,and thushelping finance Treasury American federal and current accountdeficits. budget tradedeficit withChina exIndeed,as the American between1996 and 2003, the panded monotonically Chinese of securities climbed a at purchase U.S. Treasury much faster especially 2000 (Economist after rate, 2003). usesthemonopoly therenminbi of within China,then, thecountry keepoutexternal to shocks to and currency itself a destination massive cultivate as for direct foreign investment on low laborcostsand a stable premised rate againstthe US$. Two majorquestions exchange arise: howdoesthis work is it sustainable a world and in whereconventional statemonetary seems sovereignty under considerable pressure? The Chinesemanaged-float system beganin 1994. Before thatdate,therenminbi severely was overvalued at about1.7 to theUS$ to segregate planned the Chinese economy the from restof the world. The official rate in exchange waspegged 1994at 8.4 to theUS$, but in December1996 did the Chinesegovernment only IMF Article andsetabout 8 the accept making renminbi for convertible current account transactions.9 Since the fixed 1996,therateagainst US$ hasbeenvirtually at Rmb8.28.The relatively exchange encourages fixed rate both to in denominated exports theU.S. andFDI inflows U.S. dollars. Much of China'sgrowth since the mid1990s is owed to thisexchange-rate It system. allows China to profit whilemaintaining internal externally and stability. renminbi a The is currency homogeneity territorial whosevalue is moreor less fixed currency the of market the and against currency itsmainexport maincurrency world of trade.
insulaBy way of example forthis criticalmonetary the crisisof 1997-1998, the tion,during Asian financial Chinese economyremainedlargelyunaffected because the renminbi not convertible capital accounts,so is on investorscould not suddenlywithdrawtheir funds as theycould elsewhere.Though therewas some pressure frominternational business to devalue the renminbi, not least fromthe ethnic Chinese business networks that provide foreigncapital for Chinese development fromSan Franciscoand Vancouver, Canada, as well as from and Southeast Taiwan, Asia,theChinese Hong Kong,

World inContemporary Politics andState Sovereignty Regimes: Territoriality Authority

enormous to competitive advantage businesses operating in China versus in businesses the U.S., resulting a in lossofAmerican in relevant sectors. of major jobs Many the 2.8 million lostin theU.S. bemanufacturing jobs tween beginning theGeorge Bushpresidency the of W and summer 2003 disappeared becauseof competition from China:an amazing out ofevery one sevenjobs in American No American ever manufacturing. president oversucha hemorrhagingjobs oversucha of presided short of period time(Beddoes2003). That thislossoccurred a timewheneven manyservice at sector jobs werealso becoming vulnerable relocation to overseas from U.S. andEurope countries as Indiaand the to such China(e.g., software andcallcenters) programming only madethepolitical tension muchgreater that (Economist of 2003). Only a radicalrestructuring the Chinese and monetary system through relaxing capitalcontrols theUS$ andother currencies freely to circulate allowing betweenChinesefinancial centers such as Shanghai andHongKongand foreign is likely assuage ones to the critics.Whetherthis is possiblefor a government still for reasons maintaining on seemingly intent political a classicsovereignty thepolitical moregime-keeping exercised theCommunist and nopoly by Party reestabthe lost to lishing prestige whenChinawas subject the of in and depredations colonialpowers the nineteenth twentieth centuries-remains be seen. to early

451

standard an rencies by provided theUS$ against external of a against fixed price gold. pegged The was By the 1960s,the system in deep trouble. of dollars was the increasing beyond leakage problem of the shoresthrough accumulation dollar American of banksand theemergence central reserves foreign by market. theone hand,the On Eurodollar theso-called thatthey meant and of economic recovery Europe Japan was but reserves "this attractive accumulated dollar large conabouttheir was no question onlyas longas there dollarbalances into vertibility gold.But once foreign the relative U.S. goldreserves, credibility to loomed large be cast into doubt"(Eicof thiscommitment might as 1996, 116). As early 1947,the economist hengreen that Triffin predicted thiswouldbe a probhad Robert U.S. liabilities exceeded dollar lem.By1960,U.S. foreign If countries wantedto convert reserves. foreign gold beto there woulda rush cashin dollars their reserves, devalue. Thisthreat could authorities fore American the debate refrain international of becamea major monetary in the 1960s. became On the otherhand,the dollarincreasingly in rather thana territorial a transnational currency the to Woods system sense it had to be forthe Bretton marin function Beginning 1958,a Eurodollar properly. dollars kethad sprung in Londonto service beyond up As of domain boththeU.S. andBritain. a theregulatory were where intothismarket dollars flowed result, they reference capitalcontrols. to then lent out without ratesin The UnitedStates Q, Banking Regulation whichcappedinterest in investment the Eurodollar the U.S., encouraged As one of the victorious businesses from U.S. Multinational the after the Second market parked powers World theU.S. was themainagentofimposing accounts avoidAmerican to in Eurodollar a dollarfunds War, relative to fixed differentials on econotaxes and to gain interest-rate exchange-rate system theinternational Thissystem, known thenameofthe banks. U.S.-located governments myofthetime. by by Attempts American the where it was negotiated to correct the imbalances manipulating U.S. by place in New Hampshire of between U.S. government British the and accountdid slowdownthedevelopment the (mainly govcapital "enmarket But ernment in market. theEurodollar dollar Woods offshore representatives1944)-the Bretton in of the financiers engage exactly type to rates a Agreement-pegged exchange against dollar-gold abledprivate Woodsregime standard theperiod for that from transactions theBretton 1945until1971.Although hot-money difullconvertibility Europeancurrencies As of had soughtto eliminate. predicted Triffin's by againstthe
US$ did not occur until 31 December 1958, political acceptance of the systemin the U.S. and elsewhere restedmore on its stimulusto open, multilateral trade than on its particular as a strategy organfor properties izing internationalmonetary relations (Eichengreen can be seen as part of 1996, 99). Althoughthe system the "embeddedliberalism" that the U.S. extendedto its sphereof influence duringthe Cold War (Ruggie1982), it was a deeply territorialized of managingcurrenway cies. It rested initiallyand finally the capacity of on (and centralbanks) to regulatetheircurgovernments for lemma,the opportunity arbitrage againstthe profits was dollarand the othermajorcurrencies overwhelming. the worsened,and ultimately Speculationconsequently (Blyth2003, 240). system collapsed" The action taken by PresidentNixon in 1971 in be BrettonWoods can plausibly unilaterally abrogating In classic sovereignty. seen as an attemptat reasserting other words,given that a fixed exchange rate system to seemed to deliverdecreasingbenefits the American then it would be best to abandon it territorial economy, the (e.g.,Gowa 1983). Whatevertheintention, outcome

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and industrial goodsand services, the maincurmany for of capitalflowsrency denomination international Outside of at shorttermand interbank. particularly inuse the dollaras their prime governments Europe, to the dollar-and tervention currency-often pegging central heldbyforeign bondsare widely U.S. Treasury as banks and treasuries official exchangereserves" and as 2001,3). Thisisbecause, McKinnon (McKinnon, to transnational have argued, others money providing one thing, For is theworld monopoly. economy a natural territorial in a world about 150 potential of currencies, if in costs tremendous savings transaction occur justone All is chosenas a vehiclecurrency. foreigncurrency the can bidsand offers be madeagainst one exchange of economies scale For significant currency. another, in and accruefrom goodsand services pricing invoicing The trade international in one territorial currency. fact are of that commodity exchanges major many theworld's and in located theU.S.,in Chicago NewYork, also gives a further to thedollar. fillip for isnot The dollar, therefore, justa matter America, Over is becausethedollar notjustAmerica's currency. U.S. borders. billsareheldoutside of one-half all dollar bondsare heldas reAlmost one-half U.S. Treasury of thoseof centralbanks,particularly servesby foreign and of Japanand the People'sRepublic China (Porter Othercurrencies cannot, 1996;Davidson 2002). Judson to rivalthisglobalreach.Consequently, at leastas yet, dollar a de facto is the someeconomists, world nowon standard 2001; Davidson2002). Certainly, (McKinnon now currencies float territorial and more more nominally with thedollar(and other currencies) the against freely The as thecommon ofcomparison. percentage unit US$ withpeggedexchange of IMF members arrangements in in from about77 percent 1977to36 percent declined with in the 1997and34 percent 2001,while percentage from12 percent increased arrangements free-floating in in 1975 to 25 percent 1997 and to 32 percent in et 2001(IMF 1997;Hochreiter al. 2002). Butthetrend flexible to from fixed rates more arrangements exchange to and both can be exaggerated in general with respect
Ratherthan freefloating againstthe dollarin particular. floating against the dollar,many currenciesstill freely fixedpegs. of take the form managedfloatsor relatively a the comingof the Euro offers potentialalMoreover, of ternative currency wideruse to the dollar. about the dollarthanits role What is moreimportant as a monetary standardis the revolutionary hollowing It thatit has facilitated. currencies out ofotherterritorial is now a directmeans of exchange in many countries currencies. thatstillhave theirown territorial Indeed,in it of manyfinancialcentersirrespective country, is the

in wasa system which dollar liberated gold, the was from and after1973, it floated freely againstothermajor currencies thana return to 1996).Rather (Eichengreen, theUS$ as a territorial theUS$ has therefore, currency, becomean evenmoretransnational than currency that market the 1960s. of by augured theEurodollar in the ministers of Arranged discussion among finance theG-5 (theU.S.,Japan, andBritain) France, Germany, in 1975,thefloating was exchange-rate system formalizedin 1978bya secondamendment theArticles to of of the Agreement the IME This removed roleof gold and legalized and countries promote to floating obliged in exchange ratesby authorizing IMF to the stability the oversee monetary of This policies members. was all of 1996, something a "leap in the dark"(Eichengreen knewhow it wouldwork.In the 139). No one really 1970s, manyestablished monetary policiescoexisted withthenewsystem, as capitalcontrols consuch and certed intervention. financial New to devices, designed in increased such markets, copewith volatility exchange and options, as futures bred speculation and further of volatility (Strange1994, 59). The large quantity dollars introduced world into financial markets the by in increases thepriceofoil had an adOPEC-inspired ditional stimulative effect, giventhatworldoil prices in weredenominated theUS$. Thisincrease to the led of lending international banksthatproduced by spate thedebtcrisis countries received for that loansbutthen werefacedwithdeclining terms tradepluslargeinof terest-rate in increases the 1980s,as the U.S. Federal Reservetriedto wring inflation of the American out But in the 1980s,partly response perin to economy. and partly theincreased to sisting stagflation popularity ofideasofmarket over most superiority state regulation, industrialized countries movedtoward greater exchange rateflexibility abolishing and inby targeting reducing terestrate interventions. coordination Policy among did countries helpto somedegree reducing in volatility in foreign markets. exchange The net effect the post-Bretton of Woods turnof has events,therefore, been to make the US$ into a
transnational In currency. a sense, the dollarhas inheriteditsrolefrom Bretton Woods whenit was "the central for numeraire" the system a whole (McKinnon 2001, as 3). As the currencyof the world's largest territorial witha long-established dominant and economy presence in world financial markets,the dollar was not "dethroned"when the official exchange rate paritiescolthe lapsed in 1971. If anything, oppositehas happened. The US$ has become "the vehicle currency the inin terbankspot and forward exchange markets,the curtrade and for rencyof invoice forprimary commodity

World inContemporary Politics andState Sovereignty Regimes: Authority Territoriality

of Its and currency mosttransactions. authority, thatof thoseactors whocommand is often thanthat it, greater ofthenominally state. Thisis one ofthemain sovereign features the transnational of the US$. At the of uses sametime, dollar still thecurrency theU.S. the is also of the its Specifically, U.S. uses itsdollarto finance large current accountand federal deficits budget (e.g.,Corand all 1991;Wolf bridge Agnew 2004). Ofcourse, those dollars havea stake keeping the in foreigners holding up of flow dollars intotherestoftheworld. Theyhave an in interest keeping wholesystem motion. this the in For as America's creditors reason, McKinnon (2001) argues, have a stakein preserving dollar's the roleas a transnationalcurrency even as the U.S. current account deficit balloons.As a country witha largefinancial services the from sector, U.S. alsobenefits indirectly the thattheUS$ serves a transnational as globalist regime This has in interest seeing use currency. sector a vested of the dollarexpandaroundthe world. also are They as in sector powerful political proponents, is thefinancial the other that Britain, only country has botha chronic current-account deficit and a majorfinancial services ofliberalized markets sector, 2003, globalcapital (Blyth

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the creationof a shared currency, cation through One is as an has therefore, had two distinct origins. to the end of Bretton Woods.The economic response is other muchmoreclearly building European political: unification. on integration monetary at In the European Community (EC), attempts recurrencies gave rise volatility amongEuropean ducing in float theearly 1970s. first "theSnake"ormanaged to the six This was a collectivearrangement whereby rateswithin members peggedtheirexchange original bands.The Snakedidnotlastlong, 2.25 percent mainly effects on of becausetheoil shock 1973had devastating and the weakercurrencies, as governments adopted did suchas France in 1976, fiscal expansionary policies, had to leave the Snake.Eventually, 1978,the by they bandshad within currencies idea ofpegging unchanging currenwhenthe European runitscourse, particularly thedollar. The cieswere floating against simultaneously the Snake (EMS) replaced Monetary System European the in 1979. Underthis arrangement, Germanmark role assumedthe strong-currency thatthe dollarhad Woods. Eightof nine EC underBretton performed in the EMS fromthe outset countries participated was the sole exception). 255). Italywas allowedto (Britain because The Achilles'heel of the US$ as a transnational havea 6 percent a bandfor "transitional" period is whereasthe system a as it currency thatalthough givesthe U.S. a "uniquely of persisting highinflation, Therewereno withsoft credit withtherestoftheworld" line wholehad one of 2.25 percent. (McKinnon four were the with drawals 2001,8), italso (as inrelations China)opensup the during 1980s,but the first years in U.S. economy competition sectors theMitterrand to in because where is less it turbulent government mainly fiscal Once on embarked an expansionary policy. manFrance (as competitive internationally in labor-intensive across and a in the thiswasabandoned, however, convergence ufacturing) portends future which U.S. will policy to to havetorely foreign-owned andforeign for on madeiteasier thesystem respond the central members capital banks(evenifin dollars) finance domestic of the dollarin the late 1980s. to its relative econstrengthening As Bretton Woods'appearedto be 'minilateral of of omy. a net importer 69.2 percent totalglobal "Europe's flows 2001,theU.S. risks in resilience" its 1996,167). (Eichengreen capital unbalancing own gaining that the at kinds jobs,etc.) It wasprecisely this of however, a setof moment, economy (through lossofcertain in order provide transnational acrossthe countries to a concerns totherest of emerged currency nonmonetary firms the of the world. oftheEU. Theseincluded ability European Foreigners notneed to carethatmuch may reduce abouttheAmerican current accountdeficit, withtheU.S. andJapan, therefore, to compete unemployin butAmericans a different welfare are maintain ment, programs thefaceof entirely. European question dollar liberalize to the exerted through floating pressures the labor marketsand pension programs, reinvigorate The EuropeanUnion
Though what todayis knownas the EU can traceits rootsback to the European Coal and Steel Community of the early 1950s and the European Economic Comof munityof 1957, it was not until the disintegration BrettonWoods in 1971 that much effort was made to some sortofmanagedcurrency implement system among memberstates.And it was not until the late 1980s, in unionbecame a major fact,thata fully-fledged monetary unifiobjectiveof the organization. European monetary and createa singleEuropeanmarket "Europeanproject," A the through removalof capitalcontrols. new visionof in Europe based on these concernsfoundexpression the of Delors Report 1989 and in the MaastrichtTreatyof conversioncosts December 1991. Eliminating currency market. an was one of the ways of forging integrated one way of liberalizingtrade among Concurrently, was to rememberswithoutstimulating protectionism move the threatof membergovernments engagingin The onlyway to do these exchange-rate manipulation.

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features do setit apart that from a coupleofother being a curjust that.One is thatit is already transnational it the in that,after dollar, is now the mostimrency, for financial transactions. currency worldwide portant it the insideEurope, has replaced markand Critically, mostimportant curthe dollaras the two previously in in flows. rencies cross-border Second,it is peculiar overfiscal control stateshave retained thatindividual have ceded control overmonetary even as they policy to markets. If exchange policy theECB and theforeign a the latter has tendedto lead toward more"Angloin financial cenAmerican" market capitalism Europe's serious has ters(Dyson2002,363), theformer created France and as countries, notably problems somemember the defihave government Germany, violated excessive of citsrule (no morethan3 percent GDP) thatthey whenplanning sharedcurrency the agreedto follow The EU's fiscal therefore, rules, appear (Major2003). and Until unenforceable unchangeable. simultaneously in between levels at the there someparallelism Europe is are this which fiscal monetary and policies made, is likely and for to be a continuing currency problem theshared one ofitsroleas a transnational (Wachtel anydeepening

twothings to create shared was a for currency theentire EU. Without forward monetary to union,the moving fear also was thatthepolitical ofEuropean uniproject wouldalso founder thefaceof the transnafication in threat Europe tional to from andJapanese U.S. economic competition. The Maastricht for unionthrew blueprint monetary commitment the EMS intoimto continuing political mediate doubt. with global the of recession 1990Along thedecline thedollar of the and 1992, against mark, the risein German interest ratesfollowing German reunifiin cation,thissealed the fateof Europe's experiment currencies What managing 1996,171-81). (Eichengreen it toward a replaced in the 1990swas the movement shared a and currency declaringsetoffiscal monetary by for criteria accession monetary to union.These critecentral banks from ria-freeing control, political setting and government inflation, debt, government spending etc.-shouldbe understood justas goalsin not targets, the pursuit pricestability trade of and benefits. Rather, can "European monetary integration be bestunderstood as a political ideasand compromise involving divergent within between France preferences Europe, specifically and Germany" If the French (Chang2003, 219). government desired enhanceFrance's to inand Europe's from U.S., Germany the wanted see its to dependence reunification to acceptedas unthreatening the restof If the Bundesbank-like assumedby the role Europe. what the EuropeanCentralBank (ECB) represents Germans wantedout of the system, independent an bank devotedto keeping inflation undercontrol, the have acquireda currency can potentially French that the challenge US$ as a transnational currency. The transition a shared to has currency gonethrough three as in and stages foreseen theDelorsReport agreed to in theMaastricht (Artis Treaty 1992).The first stage, 1990 to 1994,saw theremoval capitalcontrols from of for members, amongpotential political independence central toward banks,and convergence treaty obligations.The secondstage,from 1994 to 1999,saw the of and indicators policies convergence macroeconomic
and planningforintroduction the new currency. of Fiof nally,the thirdstage has seen the introduction the new currency, alongsidethe existing first territorial currenciesand then insteadof them.The implementation wentremarkably Since January 2002, the Euro smoothly. has been the sole legal tender in all of the then-EU countriesexcept Britain, Denmark,and Sweden, which have chosen to remainoutsideforthe timebeing (Underhill2002). In a sense, of course,the sharedcurrency simply is a new territorial for area. But it also has currency a larger

2003).

LatinAmerica over influence monThe U.S. has longhad a strong In in etary policy LatinAmerica. the earlytwentieth of the this century, tooktheform encouraging useofthe US$ as partofa "goldstandard (Rosenberg diplomacy" to thatwouldbring 1985,1999) monetary stability the to American business opand makeit easierfor region unitsthatwere erateif countries currency possessed In in identical valuetothedollar. Rosenberg's (1999,24) a the bloc,cenwords, idea was to "create golddollar the in tered NewYork, rival de facto to [British] sterling also dollar At standard." thesametime, diplomacy could involveencouraging straightforward adoptionof the meant This dollarization, dollaritself. however, usually not the theuseoftheUS$ alongside territorial currency, in exclusive ofthedollar itsplace (Helleiner use 2003c).
By the 1920s, dollar diplomacyof both species had largely peaked. IncreasingLatin Americannationalism, the various advantagesof issuinga territorial currency and serious currentaccount crises (identified earlier), needed of thatthe economicthinking thetimesuggested activistmonetary policies conspiredto limitthe substitutionof nationalcurrencies the dollar. by Americanpolicy After Second WorldWar,official the for was to discourageuse of the dollar as a substitute was in territorial currencies the region.The new priority

World inContemporary Politics andState Sovereignty Regimes: Territoriality Authority

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national economic so dollarization. Althoughthere are seidevelopment, the bestmonetary about official be and should an independent with one transaction conversion prestige, each country gniorage, cost, cost, policy its own currency. course,thisfitinto the ofthesecan be gained Of by having many advantages, geopolitical Official dollarconventional economic dollarization. wisdom the timesas maniof and unofficial surreptitious in the fested theBretton of Woods and has the majordrawbacks exposing U.S. ization other Agreement many costs and if stalls imposing if U.S.-sponsored growth policiesin the late 1940s and 1950s. politicallyeconomic in crises. even endorsedecotheU.S. has to intervene financial Indeed, Americangovernments Onlyifthe nomicnationalist policiessuch as import-substitutionEuro came to challengethe statusof the dollaras in substitute industrialization, as a toolto undermine partly currency LatinAmerica, left-wing the preeminent and wantto have,does to LatinAmericans thecurrency side really groups co-optnationalists theAmerican in the Cold War, also becauselargeAmerican becomemore but Cohenthink thatAmerican manumight policy firms wantedto buildfactories in pushing dollarization. official behindhigh facturing aggressive have tariff wallsto servelocal markets and Ecuador El Salvador America and In Latin itself, (Maxfield Nolt This illustrates muchAmerican in recent to fully dollarize their how 1990). years legislation monetary enacted in dollarized from its at Panamahas been largely reflected American economies. policy LatinAmerica thetime at and of as influence policyinterests the relative foreign dependency the timeof the origins an American American manufacturers of to however, large-scale compared foreign construction thePanamaCanal. Elsewhere, financial have investors American and official unofficial) not or full investors mines in and dollarizations (either did From1991 until 2002,Argentina employ 2003c,419). But it also suggests occurred. (Helleiner agriculture a that boardto maintain fixed were like territories seenbylocalsand strongly thestate something a currency Americans alikeas very the muchthebasicbuilding ratebetween peso and the US$ but the blocks exchange to for economic all discretion In considerable American of charter theboardallowed policies. this regard, policy be in LatinAmerica Thiscannot differed from authorities British themonetary and (Hanke2003). considerably French in dollarization. and elsewhere often that seen as a truecase ofofficial Manyother policies Africa pucurshed forcurrency in blocs (suchas the FrancCFA zone LatinAmerican countries factnow floattheir in former French in colonies WestAfrica) currency renciesagainstthe dollarand othercurrencies or (IMF Latin boardsto limitthe monetary thispointofview, discretion the local of 1997;Berget al. 2003). From than less is America now relatively dollarized (Helleiner officially 2003a). governments in dollar it was in the late 1980s whenmanyof its countries to returned Beginning the 1970s, diplomacy the American Pricestability had currencies wereclosely that agendain LatinAmerica. peggedto the dollar such mechanisms as economic as thecentral so-called intermediate or adopted ofAmerreplaced growth goal more ican policy the toward region. of thispolicy crawling andbands(Jameson 1990; generally Adoption pegs was obviously of the ideological fixedversusfloating in shift on trends adopting toward neoexchange part see liberalism followed freeing currencies that the of from ratesacrossdevelopedand developing countries, the fixed rates after collapse Bretton the of Bernhard al. 2002; Joshi et Woods. words, 2003). In other exchange and But economic conditions LatinAmerica in the is between globalist theimpealso made continent stuck ifgiven the changeseem moreimperative than it otherwise rialist eventhough many governments, regimes, have appeared. particular,number factors a choice, to In a wouldaspire classic of sovereignty. might a is matter dollarization a different a Unofficial entirely. played rolein making pricestability higher priority thanofficial thanformerly. were difficult document to much more Two crucial: extremely Although the especially in and substantial amount inflation inthecountries theregion the rates of this and dollarization, is clearly high in of FDI of growth export-oriented as themotor economic effects (Doyle 2000). Forexample,in Argentina 1992,
in As development place ofimport-substitution. a result, the eliminationof exchange-raterisk has come to be American trade and inwidelyseen as likelyto foster vestment the region(Helleiner2003c, 421). throughout In 1999, a bill devoted to the spread of official dollarization throughout Latin America was actually introduced in the U.S. Senate. But aftera flurry interest, of enthusiasmseems to have faded. Cohen (2002) maintainsthat,from Americanperspective, is likely an it that American governments will remain passivelyneutral one study estimates that the dollars in circulation amounted to $26 billion or around 11 percentof ArgentineGDP (Kamin and Ericsson1993). In Boliviaand Uruguayin the same year,the ratio of paper dollarsto threeor four as was local currency reported an incredible to one (Calvo and Vegh 1993). Bank depositsin different currencies easier to trackthan physicalflowsof are cash. Many Latin American countries allow dollardenominated depositsin domesticbanks. Cohen (1998, that suggest perhapsas much as 112-13) reports figures

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of is 80.9 percent all deposits domestic in in banks Bolivia But world. thisstandard conception a poorguideto in 1992were foreign of that hidden It dollars, political (almost currency entirely analysis. is a "truth" has always this In In one surmises). the same year in Argentina, the morethanit reveals. a globalizing world, obfuswas We In cationis particularly figure 41.5 percent. 2000,therange comparable problematic. cannotmeaningto a went from high 92.5percent alldeposits US$ in of of of in orthodox conception sovereignty fully applythe and Boliviato a low of4.9 in Mexicowitha meanof49.2 exercise relative, of theconditional limited, partial and acrossall countries LatinAmerica in thatalthatlocal,regional, international, national, percent powers nowexert. lowedforeign bankdeposits and et al. 2003). communities actors nonterritorial currency (Berg All this addsup to a major an to unofficial spontaneous) I have proposed alternative the orthodox ap(or of recent dollarization. reasons notdifficult find. The that from are to to critiques They proach sovereignty draws to the of one the orthodoxy's authority, rangefrom factthatdrugtrafficking, of the understandingpolitical of Andeancountries' maineconomic of is whichI have added a critique its understanding activities, an enmodel dollar business Thisalternative remittances migrants spatiality absolute from as tirely through territoriality. or to the U.S. (thisis particularly in relieson the idea of "sovereignty regimes," combiimportant Central and stateauthority conof of America)to the salting awayof dollarsas a defense nations degrees central and I inflation to aid in the acquisition dollar of solidatedor open territoriality.have empirically against to assetsabroad (i.e., capitalflight offshore of to the illustrated efficacy thisapproach disentangling banking in centers theCaribbean to Miami).The factthat and on the impacts globalization state territoriality of by in in and various states, sovereignty, many ways which monetary particularlyCentral AndeanAmerexamining tax as to eventhe the ica,failto raiseenough revenue payfor obviously symbolic wellas important perhaps most barest modern of of manifestationstatesovereignty, states, efoperates including adequatemonetary material also leads theirown elitesto look to the fourdistinctive I have identified currency regulation, fectively. as dollar thebestguarantee future of wealth. beunder global Lying contemporary political-economic processes hind much of the unrealized and subof shared, conditions-territorial, transnational, sovereignty Latin of American statesis the factthatLatinAmerica now is stitute-thatmaybe mappedonto the fourtypes inteoriented almost toward U.S. bothas a the classic, globalist, completely respectively, sovereignty regime, of of source investment as thedestination many and This has of for and grative, imperialist. typology thevirtue intheregion's in whichglobalization andcapital. It various commodity migrants, ways exports, distinguishing is LatinAmerica's different on to produce econtersects stateterritoriality with very dependence theAmerican in thathas produced substitutionthedollar the or of for of modes actually omy sovereigntythe existing effective territorial currencies thatis singularly the Thatthis is We do notlivein a world world throughout region. today. The unofficial theresult diffusion thedollar or of or of mainly integrative, Westphalian. imperialist, globalist, in intothe economic fiber the region of a differencesthe rather thanthe alsoprovides wayofgauging typology outcomeof a formal and of over of adoption the dollaras a remeaning sovereignty time spaceand thereby somesort for currencies nevertheless debate overwhether is a the moves placement territorial beyond sterile When asis strike thepossibility realmonetary of universal of "statesovereignty" eroding. significant against of on of nature terand universal In countries. aboutthefixed sovereignty thepart LatinAmerican sumptions in thisregard, effective lies to El Norte work locatesovereigntyplace, to and is no sovereignty ritoriality longer is exercised thatthere and network better for flows U.S. dolof we beginto see, for worse, through privatized of larsrather thanthrough construction stateadoption the the of beyond sovereign explicit authority political dollar a territorial as territorial currency. space.

Conclusion
The conceptionofsovereignty has predominated that in modernpoliticaltheory relieson the idea ofexclusive exercisedby a state over a given terpoliticalauthority This idea reflects concept of sovereignty the that ritory. from and thendevelopedalongwith emerged Westphalia and Enlightenment Romanticideals of popularrule and continueto act as if the Many governments patriotism. concept is actually descriptiveof the contemporary

Notes
of in situation thefield of 1. Thisis theopposite thehistorical as as where, Sack (1983,56) oncenoted, geography a whole territorialhas ignored analysis largely spatial "conventional
exceptionssuch as Gottmann ity."Fleeting,if important, however, (1973) onlyhelp to provethe rule.More recently, under the influenceof a certain reading of particularly Foucault and the strangerevival of interestin the Nazi of it Schmitt, is as ifpowercannot be thought philosopher an of (see, exceptin terms territoriality e.g.,Hannah 2000 for

Politics in World and Sovereignty Regimes: Territoriality StateAuthority Contemporary

of and a of 2004for critique the example theformer Barnett eventhough, Allen (2003) persuasively as demonlatter), it whocan provide besttheoretical the strates, is Foucault take-off for much richer ofthe point a understanding comof and plexspatialities power authority. 2. Thisconflationnotunusual eventhemost is in sophisticated of theoretical Elden (2005, See, arguments. forexample, forthcoming). 3. This "regime sovereignty"addressed moral in of is in not terms on political-economic byGrovogui's (2002) essay Africa's relations Europe. with a 4. Bobbitt (2002),for example, provides different periodizationbasedon theoutcomes warsrather of thananyother criteria as economic such downturns thecomplex poor of litical-economic discursive and factors that underpinning of and Agnew Corbridge (1995). 5. A good textbook of and survey currencies exchange-rate is regimes provided SachsandLarrain by (1993). 6. As of2001,thirty-nine countries no independent had curon such (i.e.,relied rency totally a foreign currency as the had boardsor pegged US$), fifty-one currency exchange seventeen exchange had ratesadjusted indicators rates, by or had (inflation exchange-rate targets), thirty-one managed and et floats, forty-seven floated (Hochreiter al.,2002, freely currencies themostintegrated are 29). The freely floating intotheglobal with economy themost independently powerful financial centers the where US$ serves thecommon as metric transactions. countries no independent of The with use ones. floats currency obviously substitute The managed in thosestates which statemonetary signify (and authority otherelements authority) relatively of is territorial. The countries currency with boards and pegged ratesare often in either macroeconomic orin transition crisis toward some "Network the otherexchange-rate externalities," regime. snowball effect surrounding of countries with operating other makethese"intermediate" systems, exchange-rate regimes with unstable financial and inherently globalization will push themtoward shared currencies withcentral (as European countries to admission theEuro after the awaiting joining EU in2004),substitute currencies independent (no or, currency) mostlikely all in mostcases underpresent of conditions, towards floating free 2002; Joshi (Bubulaand Otker-Robe countries words, 2003). In other onlythirty-one (plusthe of U.S.) could claim that theyhave the main features As the "classic" show, U.S. case monetary sovereignty.I later israther more than In casestheretreat of complex this. most central stateauthorityparalleled an increasingly is comby of flows Several replexspatiality currency and regulation. centstudies show that widerange state a of economic policy decisions fundamentally are constrained thetype exof by mechanism monetary and thatstates change-rate targets et 2002; Hochreiter al. adopt(e.g.,IMF 2000; Dgbrowski 2002;Joshi 2003). in 7. Strangely, someofthemacroeconomics literature moneis witha free tary sovereigntyassociated currency floating overa cur2002). Whygiving control (e.g.,Dybrowski up to should seenthis perhaps be reflects rency themarkets way the classicaland neoclassical that sensibility a currency should either "stand and deliver" go to thewall.It ceror seems havelittle nothing do with reality to or to the of tainly central stateauthority indicated different as by exchangeratemechanisms. thecontemporary it is successful In world

457

as mechanism fixed to that rates, floats, theclosest managed a of stateauthority themonin degree central signifyhigh realm. etary 8. Recently Canadaa public in discussion erupted the has over of as to merits dollarizing one wayofresponding theimporestrictive border of controls between U.S. the sition more and Canadain theaftermaththeterrorist of attacks the in 2001. Emily U.S. of 11 September Gilbert (2005) has exthe in issue this of journal. explored discussion a recent pertly is for 9. A fully convertible by currencyconvertible anyholder Under current account as presconvertibility, anypurpose. in of have ently operative China,holders therenminbi the of for suchas trade travel or but right conversion purposes loansor suchas making not forcapitalaccount purposes assets. Absence capital of account convertibuying foreign that authorities monitor the monetary bility requires national full under convertibility, as prevails fully with useofallfunds; and of this rates, is exchange floating sometypes managed notnecessary.

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e-mail: CA of Los Los of jagnew@ Correspondence: Department Geography, University California, Angeles, Angeles, 90095-1524, geog.ucla.edu.