Can small states be more than price takers in global governance?

Author:Heng, Yee-Kuang
Position:Report
 
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Existing debates suggest that small states can exert more influence than their size alone implies. This article contributes to such extant literature by addressing more specific questions about the conditions under which such ostensible price takers can play outsized roles. Generic claims of tiny Singapore punching above its weight have not yet been examined in light of its leaders' proactive initiatives in global governance to advance its national interests. Drawing on two strategies identified within theoretical debates on how small states project influence, this article analyzes Singaporean initiatives in coalition building and use of its comparative advantages in specific issue domains and how these strategies have evolved historically. Driven by an innate sense of vulnerability, Singapore's flexibility to embrace emerging modes of governance beyond its traditional UN-centric focus is a relatively overlooked feature in the literature deserving further attention.

Keywords: global governance, small states, price taker, Singapore.

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HOW CAN STATES BE ASSESSED ON THEIR LEVELS OF INFLUENCE AND ACTIVITY in shaping global governance norms and processes? One approach has been to address this question in dualistic terms of whether a country has to "take" (meaning it has little influence and commonly refers to small states) or can "make" (it has more influence and usually used to describe large powers) rules and norms of global governance. For instance, analysts suggest that India is becoming more of a norm maker than a norm taker in global energy governance. (1) Another large power, China, is also moving from rule taker to rule maker, and possibly rule shaker, in global trade governance. (2) Japan, according to Miles Kahler, has acted since the 1980s in a way "that might change the existing system by its behavior, as a 'price maker' rather than a 'price taker.'" (3) While leading players in global affairs, such as the great powers, are usually "price-makers of the system," it is conversely assumed that adjusting to accommodate the actions of these price makers is the perennial role of the smaller states, "the price-takers in the system." (4) This notion is often deployed by policy elites, particularly in the tiny Southeast Asian city-state of Singapore, whose population numbers 5 million and, with 714 square kilometers of land area, is less than half the size of London. Founding prime minister Lee Kuan Yew once said, "Quite simply, Singapore takes the position that we are price-takers; we are not price-makers. Our strategy simply is to make ourselves relevant to all the countries that matter to us." (5) Foreign Minister K. Shanmugam reiterated in 2012 that "we are a small state and a price-taker in international relations." (6)

However, the idea that small states are not necessarily helpless is an emerging theme of recent literature, and as this article shows, it rings true for Singapore as well. Several methods are available to such states, from adopting "small but smart strategies" to the use of "resilient diplomacy." (7) Small states can also build networks and linkages with other similarly sized like-minded states such as the Small Island Developing States (SIDS). Other methods such as alliances, bandwagoning, and balancing allow small states to pursue stability in the international system. (8) Building on these existing theoretical debates, in this article we examine Singapore's strategies over the years to increase its role in global governance, with an eye toward continuity and change in its policies. From a British colonial outpost to a developed nation with impressive gross domestic product (GDP) per capita rates, Singapore has ambitions to "transcend the limitations of physical size and punch above our weight class among the global competition." (9) The idea that Singapore is "punching above its weight" is a pretty standard element of discussions regarding its foreign relations, a notion repeated, for instance, by Hillary Clinton in 2010. (10) The notion is usually framed in terms of how its armed forces contribute to foreign policy and how the country serves as a key strategic player in Asia." In 2009, Stephen Walt named Singapore as one of his "over-achievers" on the basis of its economic success and role promoting regional integration and its leaders' frank views on major issues. (12) Yet there remains relatively little explanation of how this might apply to the city-state's initiatives in global governance. We build on existing claims about the price-taker analogy in Singaporean discourse, why it has arisen in the context of the elites' pervasive sense of vulnerability, and its linkage with global governance strategies that policymakers have historically utilized to demonstrate their competence in managing a range of constraints. Singapore's initiatives in global governance are thus highly instrumental. They are a means to an end; as we show in this article, Singapore has significant global finance, shipping, and aviation sectors that need protecting, as well as security needs to be met.

We begin by examining the price-taker analogy often used to describe the roles, expectations, and recommended strategies that small states can deploy in international relations and global governance. We highlight two strategies drawn from the extant literature--building coalitions and utilizing niche expertise--to form a basis for systematically analyzing Singapore's initiatives to augment its influence in global governance. The degree of influence is difficult to measure precisely and need not be tied entirely to achieving desired outcomes, although the input-output equation is important. We define influence not only by assessing a small state's ability to obtain formal positions in international institutions allowing it to shape processes and norms (e.g., policymaking councils and chairmanship of rulemaking committees) and its peer recognition and prestige (e.g., invitations to summits for which it is not formally a member), but also by the avenues and mechanisms it has assembled to boost its input into global governance processes. After outlining the historical constraints that Singapore has faced since independence, we analyze its concerted moves to build strength in numbers through the Alliance of Small Island States (AOSIS), Forum of Small States (FOSS), and Small Five (S5). Putting recent initiatives in historical perspective, we show how Singapore has played this role over the years and how it has evolved for the twenty-first century. While the UN historically was and remains at the core of Singaporean initiatives, the city-state has not shied away from establishing informal alternative approaches outside the UN framework, such as Global Governance Group (3G), to advance its national interests in response to the emergence of the Group of 20 (G-20) outside UN auspices. Finally, we highlight Singapore's comparative advantages and niche expertise derived from its financial center, air hub, and global maritime port hub. Singapore's technical and administrative capabilities in these fields have helped it achieve some measure of peer recognition as well as institutional sway within the international institutions regulating these key sectors, conferring more influence than its price-taker status might otherwise suggest. Above all, these strategies are a means to achieving Singapore's ultimate ends. (13) Its priorities include first and foremost pragmatic safeguarding of national interests in the finance, shipping, and aviation industries, but where possible, it has also tried to advance more normative goals of ensuring predictability in an international order ruled by law where small states have a voice at the table. Singapore's efforts to overcome its price-taker position are thus focused on delivering the means to advance its national interests.

Small States and the Price-taker Analogy

Global governance, as understood in this article, deals with a continuum of activities, rules, processes, and mechanisms. (14) These range from formal to informal and from public to private forms of meeting the needs and wants of a variety of actors (from states to transnational nongovernmental organizations) to manage global issues. Despite their size and capability constraints, small states can also attempt to shape and regulate the international system. Iver B. Nuemann and Sieglinde Gstohl argue that, even though small states are not system-determining forces, they link micro-, middle, and larger states in the international system through their diplomatic activities where they can represent the interests of great powers and middle powers as well as those of their own. (15) Small states' roles in global governance should therefore be as carefully evaluated as those of the great powers. Thus, although small states have to operate in an international system structured in favor of big countries, and although the top-down structure of international hierarchy remains intact and pervasive, the influence of bottom-up agency embodied in small states cannot be ignored. (16) In the absence of an overarching Leviathan-like "World Government" that can dictate rules and regulations, small states create space for themselves by forming fluid coalitions to shape agendas, priorities, and programs of global governance. (17) In his classic essay, David Vital reminds us that small states should be evaluated in terms of how they devise their own policies to withstand their own constraints, rather than simply judging them based on their size. (18)

Small states are often called price takers, a concept derived from economics referring to small firms that cannot influence prices in the market. Adapted to international relations, price takers usually refers to small states with limited capacity to shape the rules, processes, norms, and outcomes that are said to be determined by powerful states such as the great powers (the price...

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