Globalization transforms collective action in domestic and international politics. As the scale of markets widens and as economic organization becomes more complex, the institutional scale of political structures can become insufficient for the provision of an appropriate range of public goods. A process of this sort occurred prior to the emergence of the modern nation-state, which itself constituted a paradigmatic response to this predicament. Today, however, a complex process of globalization of goods and assets is undermining the effectiveness of state-based collective action. Overlapping “playing fields” are developing, made up of increasingly heterogeneous—transnational, local, and intermediate—arenas. The residual state retains great cultural force, and innovative projects for reinventing government are being tried. Nevertheless, the state's effectiveness as a civil association has eroded significantly, and this may lead to a crisis of legitimacy.

Many analysts associate internationalization of markets with wide-ranging changes in domestic politics. An “open polity” approach shows how extant domestic institutions mediate in this relationship between internationally induced changes in domestic actors' policy preferences, on the one hand, and national policy and institutional outcomes on the other. The nature of labor unions and formal political institutions often results in political outcomes that differ significantly from those that would ensue if outcomes simply mirrored preference changes. In addition, while existing institutions may sometimes constrain governments from pursuing policies that would improve long-term economic performance, governments will often fail to change these institutions because of short-term political considerations.

The conventional wisdom about the domestic political effects of economic internationalization in recent decades is overdrawn and too simple. Increasing exposure to trade and capital mobility has not led all countries to pursue the same types of economic policies. The political power of the left and the strength of organized labor still have a marked bearing on macroeconomic policy. Rather than being constrained by internationalization, the relationship between left-labor power and fiscal expansions has increased with greater trade and capital mobility. However, the political left and organized labor have had to pay a price for these expansions. With greater exposure to world market forces, left-labor power has been increasingly associated with lower levels of corporate taxation and with higher interest rates. Nonetheless, common assertions about the demise of partisan politics must be reconsidered.

Contemporary international politics embody a tension between formal equality and de facto inequality. States recognize each other as sovereign equals, yet the strong still push around the weak. Among the structures that reflect this tension are informal empires. The dominant assumptions in mainstream international relations theory, materialism and rationalism, privilege the formal equality of states in informal empires a priori: materialism by assuming that authority relations cannot exist between sovereign states; rationalism by assuming that states are sovereign over their own interests. A constructivist approach allows one to explore the hypothesis that transnational authority structures construct state identities and interests. An empirical analysis of the Soviet-East German relationship supports this hypothesis, which raises questions about the emerging study of international governance.

Nontariff barriers to trade are most pervasive when deteriorating macroeconomic conditions give rise to demands for protection by pressure groups, when countries are sufficiently large to give policymakers incentives to impose protection, and when domestic institutions enhance the ability of public officials to act on these incentives. Statistical results based on a sample of advanced industrial countries during the 1980s support the argument that the incidence of nontariff barriers tends to be greatest when the preferences of pressure groups and policymakers converge. More attention should be devoted to the interaction between societal and statist factors in cross-national studies of trade policy.