The social scientific study of “globalization” has not been especially productive. Varying and expansive definitions of the phenomenon are used, cause and effect tend to be confused, and positive and normative claims are sometimes mixed. In this volume, Miles Kahler and David A. Lake offer a tractable and fruitful approach to the study of globalization by defining the phenomenon narrowly—in terms of economic integration made possible by reduced barriers to exchange and capital mobility—and by adopting a “second image reversed” perspective. Globalization is the independent variable used to explain changes in governance policies and institutions at the national level. This coherent focus allows the individual contributions to speak to each other while building on landmark works, such as Ronald Rogowski's (1989) Commerce and Coalitions and Robert Keohane and Helen Milner's (1996) Internationalization and Domestic Politics.

Kahler and Lake point to three aspects of governance potentially affected by globalization. First, economic integration may produce changes in the location of governance authority, devolved down to substate actors, delegated up to international institutions, or shifted to private actors. Second, it may engender convergence or divergence of policies and institutions across countries. Third, the degree of accountability of governing agents may change with globalization. These phenomena deserve serious scrutiny, as strong claims are made regarding all three in the globalization literature. As an alternative to functionalist explanations, the editors call on analysts to focus on actors, their strategic interactions, and their institutional environments—in other words, to adopt a more political approach.

The volume's contributors adhere to the editors' framework sufficiently to produce interesting comparisons and cumulative findings. Part I asks whether governance authority has shifted away from nation-states as a result of globalization. Analyzing a wide variety of substantive issues, the authors find that globalization does not lead in a straightforward way to either the decentralization or centralization of governance. Outcomes depend on a variety of contextual and intervening variables, including the relevant policy issue, the ways in which specific groups are affected by globalization, and the constraints imposed by existing institutions and path dependence. Chapters by Michael Hiscox, Geoffrey Garrett and Jonathan Rodden, and Pieter van Houten provide an especially coherent dialogue on the conditions under which policymaking is decentralized to regions or remains in the hands of central governments. While authority is shifted to international organizations (IOs) in some situations, Benjamin Cohen and Barry Eichengreen show that supranationalization of governance is often obstructed by political interests and entrenched institutions at the national level. And while globalization shifts some authority to private actors (see the chapters by Virginia Haufler and Walter Mattli), this has not necessarily come at the expense of public authority. Private actors are often constrained by governments and may even strengthen national bureaucracies that interface with them, as Mattli argues.

Part II considers whether the competitive pressures of globalization generate homogeneity in policies and institutions across countries. Ronald Rogowski argues strongly that governments are not converging toward capital-friendly policies; his model overwhelmingly predicts divergence. Peter Gourevitch points to various factors, including prevailing ideas regarding state–market relations, that lead countries facing similar market pressures to exhibit divergent governance outcomes. Even in the highly integrated European context—what should be a likely case for the “race to the bottom” argument—welfare programs remain intact and national differences remain, according to Kathleen MacNamara.

A fairly sanguine portrayal of accountability is offered in Part III. While the European Union may not be as democratic as many would prefer, James Caporaso argues, EU institutions are moving in the direction of more accountability. Robert Keohane and Joseph Nye argue that electoral accountability is not the most appropriate model for assessing global governance; various legal, market-based, reputational, and principal-agent mechanisms help promote IO responsiveness to citizens' needs.

Taken together, the contributions to this volume reveal just how complicated the effects of globalization are on governance. Many intervening variables and the “stickiness” of existing institutions and practices make it difficult to generalize about globalization's impact. This suggests a crucial corrective to the globalization literature: Facile declarations regarding the demise of the nation-state, global homogenization, and supranational bureaucracies run amuck must be tempered, examined in context, and qualified.

The volume also suggests that answers to questions about globalization and governance depend on how—in space and time—individual analysts choose to focus their analytical microscopes. Within a given polity, governance may be centralized for some issues and decentralized for others, as Garrett and Rodden (pp. 87–88) point out. Even within a given issue area, we may find significant centralization overall, only to find decentralization when the issue is disaggregated (see the chapter by Lisa Martin). Similarly, we may see convergence from a macroperspective but divergence as we examine policy choices more closely, as McNamara shows. Time is also a crucial factor. A look at the 1980s reveals primarily intergovernmental efforts to guide corporate responsibility in the area of the environment, while more recently, corporations themselves have taken the lead, according to Haufler. Possibly arbitrary choices about levels of aggregation and time periods may therefore drive our conclusions regarding governance. Reliable generalizations about the location and convergence of governance can only be made if we think carefully about the comparability of findings.

Governance in a Global Economy benefits from ignoring the distinction between international relations and comparative politics. The greatest shortcoming of the “two-level games” research program has been the tendency by individual scholars to focus on one direction of the causal story, ignoring the reciprocal and even simultaneous nature of interactions between levels. Kahler and Lake note that economic integration depends partly on political decisions and institutions (p. 4). They thus understand that their dependent variable, governance, is also a key component of their independent variable, globalization. The contributors do not systematically address the endogenous effects of governance changes on globalization (partial exceptions are Hiscox and Beth Simmons and Zachary Elkins). Nevertheless, along with other recent works (e.g., Daniel Drezner, ed., Locating the Proper Authorities, 2003), the framework offers the possibility of completing the two-level loop in the study of globalization.