International Relations

C01(c) - Governing a digital economy in a global context: Challenges, approaches, and new frameworks

Date: Jun 12 | Time: 08:30am to 10:00am | Location: McGill College 2001 735

Chair/Président/Présidente : Guillaume Beaumier (École nationale d'administration publique)

Discussant/Commentateur/Commentatrice : Tyler Girard (Purdue University)

The Digital Governance Trilemma: Guillaume Beaumier (École national d'administration publique)
Abstract: The United States, the European Union, and China are commonly depicted as representing three competing models of digital governance. Their so-called market, democratic, and authoritarian approach supposedly reflects their respective preferences over which actors should control the development and use of digital technologies. Building on Dani Rodrik’s globalization trilemma, we argue that more than representing different values, each model differs in how it resolves inherent tensions associated with governing a digital economy. When devising new digital policies, they must navigate tensions between achieving the three following objectives: promoting their regulatory preferences, developing their national industry, and supporting an open ecosystem. Significantly, the legacies and consequences of early policy choice promoting different combinations of these objectives create new constraints and limit their ability to move toward one of the other models. We examine this argument by comparing three historical narratives of the emergence and development of digital governance strategies in each jurisdiction. The article contributes to ongoing debates about the rise and origins of different digital governance models while bringing nuance to dichotomous arguments opposing democracies as promoting an open digital ecosystem and autocracies preferring a closed one.

Digital services and digital sovereignty games in the international political economy: Colin Chia (McGill University)
Abstract: How are sovereignty practices evolving as states pursue agency and control over digital economic flows? Permissive international treatment of digital economic flows is ending as international frameworks for taxing transnational digital services inch forward. Canada has already broken from the OECD moratorium and its digital services tax will go into effect from 2024. In international trade governance, debate has reopened over whether the WTO moratorium on digital services tariffs, in place since 1998, should continue. I build off Adler-Nissen & Gammeltoft-Hansen’s concept of “sovereignty games” which highlights how states instrumentalize sovereignty in areas of jurisdictional ambiguity – an issue especially relevant to cyberspace and digital economic activity. This paper examines digital sovereignty games and argues a shift is taking place from a permissive situation, in which states colluded with digital services firms by offering attractive tax and legal regimes, towards greater demands for tax and regulatory compliance.

The Transatlantic Diffusion of the Big Tech Pushback: Francois Gionet (Université de Montréal), Frédéric Mérand (Université de Montréal)
Abstract: The 2010s were characterized by the rise of Big Tech firms and a largely laissez-faire approach on the part of Western governments. This laissez-faire attitude came to an end in 2020. What emerged instead is a new wave of antitrust and content-control laws intended to rein in Big Tech, enhance consumer choice, enable better value sharing in the digital economy for smaller-medium businesses, and boost innovation. How can we explain this sudden and drastic surge in digital policymaking? In this paper, we focus on the EU, the US, the UK, Canada, and Australia and argue that the Big Tech pushback is explained by three interrelated factors. First, the “Brussels effect”. Popularized by Bradford, this describes the regulatory lead played by the EU in consumer protection and other policy fields such as environmental policy, whereby the EU institutions use the size of the single market to promote progressive norms and regulations that end up being adopted by firms operating on a global scale. The GDPR is one of the main examples discussed by Bradford, which the EU seeks to replicate with the DSA and DMA. Second, the Biden administration has proved unprecedently open to taking on Big Tech. While the Democrat administration remains a powerful political voice for the GAFAM, it has adopted corporate tax rules and a stronger antitrust strategy, and promoted digital regulations, that are at worst compatible and at best converging with EU policies. Third, a global process of “public policy emulation” led policymakers to “copy the policies and regulations they see experts promoting and leading countries embracing” (Simmons, Dobbin and Garrett 2004, 40). In the unusual context of the COVID-19 pandemic, the global scope and huge profits of Big Tech firms provoked similar public reactions which were accompanied by heightened intergovernmental and transnational policy dialogue among regulators, political forces, and civil society organizations.

La gouvernance du cyberespace en reconfiguration : les approches régionales de l’UE et de l’ANASE: Yaxin Zhou (Université de Montréal)
Abstract: Depuis le milieu des années 1990, le cyberespace connait un développement rapide et s’étend progressivement à travers le monde. Les États-Unis, en tant que première puissance de ce nouvel espace, ont historiquement établi les règles du jeu, promouvant les principes du libre marché et préconisant une intervention minimale de l'État (Nocetti, 2015). Néanmoins, le modèle de gouvernance américain est de plus en plus contesté, au sein et en dehors des pays occidentaux. L’Union européenne (UE) et l’Association des Nations de l’Asie du Sud-Est (ANASE) se présentent aujourd’hui comme deux acteurs régionaux importants dans la gouvernance du cyberespace faisant respectivement la promotion de leur identité régionale. Si l’approche européenne insiste sur la régulation, sur l’exportation de ses normes par l’effet de Bruxelles (Bradford, 2020) et sur ses valeurs européennes, l’approche anaséenne se distingue par son ASEAN Way et par la centralité de l’ANASE dans les affaires régionales (Acharya, 1998). En même temps, ces deux institutions régionales multiplient les échanges notamment par le processus de « socialisation à deux sens » et influencent leur développement respectif (Chen et Yang, 2022). En comparant les approches de l’UE et l’ANASE, tout en retraçant leurs interactions au fil du temps, cet article démontre comment ces différents modèles régionaux co-évoluent et contribuent ainsi à l’établissement de normes globales dans la gouvernance du cyberespace.