Global networks and domestic policy convergence: A network explanation of policy changes

Research output: Contribution to journalArticle

36 Citations (Scopus)

Abstract

National economies are embedded in complex networks such as trade, capital flows, and intergovernmental organizations (igos). These globalization forces impose differential impacts on national economies depending on a country's network positions. This article addresses the policy convergence-divergence debate by focusing on how networks at the international level affect domestic fiscal, monetary, and regulatory policies. The author presents two hypotheses: first, similarity in network positions induces convergence in domestic economic policies as a result of peer competitive pressure. Second, proximity in network positions facilitates policy learning and emulation, which result in policy convergence. The empirical analysis applies a latent-space model for relational/dyadic data and indicates that position similarity in the network of exports induces convergence in fiscal and regulatory policies; position similarity in the network of transnational portfolio investments induces convergence in fiscal policies; and position proximity in igo networks is consistently associated with policy convergence in fiscal, monetary, and regulatory policies.

Original languageEnglish (US)
Pages (from-to)375-425
Number of pages51
JournalWorld Politics
Volume64
Issue number3
StatePublished - Jul 2012

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domestic policy
fiscal policy
regulatory policy
national economy
monetary policy
capital movement
Economic Policy
divergence
globalization

All Science Journal Classification (ASJC) codes

  • Sociology and Political Science
  • Political Science and International Relations

Cite this

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abstract = "National economies are embedded in complex networks such as trade, capital flows, and intergovernmental organizations (igos). These globalization forces impose differential impacts on national economies depending on a country's network positions. This article addresses the policy convergence-divergence debate by focusing on how networks at the international level affect domestic fiscal, monetary, and regulatory policies. The author presents two hypotheses: first, similarity in network positions induces convergence in domestic economic policies as a result of peer competitive pressure. Second, proximity in network positions facilitates policy learning and emulation, which result in policy convergence. The empirical analysis applies a latent-space model for relational/dyadic data and indicates that position similarity in the network of exports induces convergence in fiscal and regulatory policies; position similarity in the network of transnational portfolio investments induces convergence in fiscal policies; and position proximity in igo networks is consistently associated with policy convergence in fiscal, monetary, and regulatory policies.",
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Global networks and domestic policy convergence : A network explanation of policy changes. / Xun, C.

In: World Politics, Vol. 64, No. 3, 07.2012, p. 375-425.

Research output: Contribution to journalArticle

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