A partial conversion: how the ‘unholy trinity’ of global economic governance adapts to state capitalism
| Published date | 01 December 2024 |
| DOI | http://doi.org/10.1177/13540661241226472 |
| Author | Ilias Alami,Jack Taggart |
| Date | 01 December 2024 |
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JR
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https://doi.org/10.1177/13540661241226472
European Journal of
International Relations
2024, Vol. 30(4) 867 –893
© The Author(s) 2024
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DOI: 10.1177/13540661241226472
journals.sagepub.com/home/ejt
A partial conversion: how
the ‘unholy trinity’ of global
economic governance adapts
to state capitalism
Ilias Alami
Uppsala Universitet, Sweden
Jack Taggart
Queen’s University Belfast, UK
Abstract
To what extent is neoliberal global economic governance transforming in a world
where states play greater roles as promoters, supervisors and owners of capital? Do
these transformations signal a potential paradigm shift? To answer these questions, we
focus on global financial governance and the trade and investment regime. We analyse
recent policy documents from the IMF, World Bank and WTO – the ‘Unholy Trinity’
of neoliberal global governance. Our analysis reveals a growing acceptance of state
interventionism within and across these organizations. Although this accommodation is
significant, we argue that it constitutes a limited transformation. We observe attempts
to incorporate emerging state interventionist practices and state-owned entities into
established governance arrangements in order to discipline, curtail and control them.
We argue that this does not signify a shift towards post-neoliberal plurality within
Western-dominated global economic governance, but rather a defensive, ‘mutating
neoliberalism’ which seeks to incorporate depoliticized and commercially oriented
state ownership into its mainframe.
Keywords
State capitalism, global governance, IMF, the World Bank, world trade organization,
neo-liberalism
Corresponding author:
Jack Taggart, Queen’s University Belfast, 23 University Square, BT7 1NN, Belfast, UK.
Email: j.taggart@qub.ac.uk
1226472EJT0010.1177/13540661241226472European Journal of International RelationsAlami and Taggart
research-article2024
Original Article
868 European Journal of International Relations 30(4)
Introduction
How does Western-dominated global economic governance respond to policy practices
that challenge prevailing neoliberal orthodoxy? In the past decade, extensive govern-
ment intervention – in areas such as trade, investment, finance, production and technol-
ogy – has revived previously taboo policy tools, potentially signalling a ‘state capitalist’
era (Alami and Dixon, 2023; Wright et al., 2021). Historically, when faced with diver-
gent practices, Western-dominated global governance institutions (GGIs) have remained
steadfast to the core of neoliberal dogma, emphasizing privatization, engendering a com-
petitive market order and capital account liberalization. Wade (1996) documented this in
his influential work on the ‘East Asian Miracle’ and the World Bank’s efforts towards
‘paradigm maintenance’, despite Japan’s efforts to encourage greater recognition of the
market-guiding role of the state. Although Best (2014: 105) documents a more ‘provi-
sional’ style of governance following the erosion of expert authority after the Asian
financial crisis and the ‘failures’ of structural adjustment across Sub-Saharan Africa,
these institutions nevertheless remained true to the ‘stock-in-trade’ of neoliberal princi-
ples described earlier. Today, however, there are indications that Western-dominated
GGIs are becoming more accepting of an active state role in the economy, signalling a
potential departure from this traditional response.
The International Monetary Fund (IMF, 2022b), for instance, has softened its position
on capital controls and acknowledged the resurgence of industrial policy (Cherif and
Hasanov, 2019), while the World Bank and bilateral development agencies are embrac-
ing an enhanced state role to leverage additional finance (Alami et al., 2021; Schindler
et al., 2023). Some scholars interpret these developments as indicative of a shift towards
a more pluralistic order and the resurgence of both neo-mercantile alongside market-
dominant approaches (Belesky and Lawrence, 2019; Johnstone and Lincoln, 2022).
Hence, for Sandbu (2021) of the Financial Times, ‘the conversion by the IMF and World
Bank to support the activist state would put Saul of Tarsus to shame’. This article criti-
cally examines these claims, exploring the extent of transformation in governance rules,
institutions, discourses, practices and norms to accommodate the expanding role of
states, and whether this signals a broader paradigm shift in global economic
governance.
We specifically analyse the response of the IMF, World Bank and World Trade
Organization (WTO) – the so-called ‘Unholy Trinity’ of neoliberal global governance
(Peet et al., 2003) – to the rise of state capitalism. For critical scholars, these institutions
have traditionally promoted an aggressive form of neoliberal capitalism, emphasizing
market rule, corporate dominance and private sector self-regulation (Gill, 2019). We
investigate their adaptation to the increasing state role in the global economy and whether
these shifts challenge or reinforce the dominant neoliberal discourse.
Grounded in critical IPE and Gramscian scholarship, our empirical contribution
explores the ‘internal relationship’ between ideas and shifts in material relations (Bieler
and Morton, 2004). We view GGIs not as neutral sites of problem-solving and rule-
making, but as constitutive – albeit quasi-autonomous – components that reflect and
perpetuate global capitalist social relations (Cox, 1981). Drawing on recent studies, we
examine GGIs’ adaptive roles as ‘collective organic intellectuals’ of the transnational
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