the involvement of state governments in us foreign relations ||

The Involvement of State Governments in US Foreign RelationsSamuel Lucas McMillanISBN: 9781137015402DOI: 10.1057/9781137015402Palgrave Macmillan

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The Involvement of State Governments in US Foreign Relations

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10.1057/9781137015402 - The Involvement of State Governments in US Foreign Relations, Samuel Lucas McMillan

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The Involvement of State Governments in US Foreign Relations

Samuel Lucas McMillan

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THE INVOLVEMENT OF STATE GOVERNMENTS IN US FOREIGN RELATIONS Copyright Samuel Lucas McMillan, 2012.

All rights reserved.

First published in 2012 by PALGRAVE MACMILLAN in the United States a division of St. Martins Press LLC, 175 Fifth Avenue, New York, NY 10010.

Where this book is distributed in the UK, Europe and the rest of the world,this is by Palgrave Macmillan, a division of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS.

Palgrave Macmillan is the global academic imprint of the above companiesand has companies and representatives throughout the world.

Palgrave and Macmillan are registered trademarks in the United States, the United Kingdom, Europe and other countries.

ISBN: 9780 230 11325 1

Library of Congress Cataloging-in-Publication Data

McMillan, Samuel Lucas. The involvement of state governments in U.S. foreign relations /

Samuel Lucas McMillan. p. cm. ISBN 9780230113251 (hardback) 1. State governments and international relationsUnited States.

2. Subnational governmentsForeign relationsUnited States. 3. United StatesForeign relations19451989 4. United StatesForeign relations1989 5. United StatesForeign economic relations. 6. GlobalizationUnited StatesStates. I. Title.

JZ1480.M38 2012 327.73dc23 2011028062

A catalogue record of the book is available from the British Library.

Design by Newgen Imaging Systems (P) Ltd., Chennai, India.

First edition: February 2012

10 9 8 7 6 5 4 3 2 1

Printed in the United States of America.

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To Lisa Cameron McMillan

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Contents

List of Figure and Tables ix

Acknowledgments xi

1 Introduction 1

2 Linking International Relations to American Politics 13

3 The Changing Roles of Governors 31

4 US State Politics, Federalism, and Intergovernmental Relations 51

5 Subnational Governments in the International System 75

6 US States and Governors in Foreign Relations 105

7 Analysis of Governors Foreign Relations Activities 123

8 US States and Governors in Foreign Economic Relations 143

9 Analysis of Foreign Direct Investment and Export Promotion 163

10 Conclusions and Future Research 187

Appendix 203

Notes 213

References 219

Index 247

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Figure and Tables

Figure

7.1 Sums of sample governors foreign relations activities 133

Tables

3.1 History of governor-led overseas missions 39 3.2 Factors encouraging governors foreign

relations activities 49 5.1 US states international offices, 19532006 81 5.2 Interviews with directors of US states

international offices 89 6.1 Countries in which sample governors met with

national & subnational officials 113 7.1 Governors examined in this study 124 7.2 Research hypotheses for governors foreign

relations activities 128 7.3 Results of independent variables on governors

foreign relations activities 135 8.1 US states relationships with overseas

chambers of commerce 157 9.1 Results for study of US states per capita foreign

direct investment, 19952005 174 9.2 Results for study of US states per capita

exports, 19952006 181

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Acknowledgments

The initial stages of this research took place at the University of South Carolina, so I thank the members of my dissertation committee: Harvey Starr, Blease Graham, and Jerel Rosati as well as Earl Fry of Brigham Young University. Each has been instru-mental in improving this project. I also benefited from gifted teachers and scholars at Wofford, St. Andrews, and Warwick. The late Larry McGehee helped me to realize that I wanted to spend my life on a college campus, and many professors shaped my interests, including William DeMars, Linton Dunson, John Seitz, Ben Rosamond, Ann Bowman, Donald Puchala, and Joel Samuels. Scholars such as Thad Beyle, Timothy Conlan, Phillip Stone, and Kelly OReilly offered use-ful advice. Kimberly Richburg is a trusted colleague, and Adam Haigh of Lander Universitys Jackson Library supplied helpful assistance.

Numerous officials agreed to be interviewed for this project, pro-vided reports and data, and offered their expertise. This includes gov-ernment officials at the US state and federal levels, as well as officials associated with many nongovernmental organizations. The opportu-nity to speak with former governors was perhaps the most exciting part of my research, and the assistance of all practitioners heightened my scholarship. USCs Walker Institute for International and Area Studies helped fund my research and travel expenses to interview officials in the United States and abroad. I thank the South Carolina Department of Commerce because of the many officials that aided me, Michael Samuels and Dan OFlaherty for help with interviews, and the staff of the South Carolina Department of Archives and History for assis-tance with my examination of governors papers. Chris Whatley of the Council of State Governments also deserves special thanks.

Earlier portions of this research were published in Foreign Policy Analysis and International Interactions , so I thank Wiley-Blackwell and Taylor & Francis respectively for allowing me to use some similar

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xii Acknowledgments

language here. Finally, I thank the editors at Palgrave Macmillan, espe-cially Robyn Curtis and Farideh Koohi-Kamali, for all of their help with this project.

My parents, Jill and Sam McMillan; brothers, Jason and Austin; and grandmother, Martha McMillan have been supportive since the early years of my fascination with history and politics. Other family members, especially Barbara and Steve Cameron, and friends have continuously supplied encouragement. Our son William has always been a source of endless enjoyment and laughter. I know that our new son Henry will as well. With this project completed, I look forward to spending more time with our boys.

Most of all, Lisa, my Phi Beta Kappa wife, gives immeasurable sup-port every day. Her contributions to me, to our family, and to this research are numerous.

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CHAPTER 1

Introduction

A few years ago it would have seemed incongruous if not wholly inappropriate for State governors to be concerned officially with for-eign affairs. Yet in recent years, delegations of governors have conferred with heads of foreign states in Buenos Aires, Rio, and the Kremlin, while a steady f low of foreign policy resolutions has issued from the annual Governors Conferences. While these actions have had only a minor inf luence in the international scheme of things, they notably alter the traditional role of the State executives.

In a sense, the addition of this international aspect of the daily con-cern of governors is merely a ref lection of the growing interdependency of all nations in a complex planet.

Glenn E. Brooks in When Governors Convene (1961)

Governors and other US states leaders are increasingly involved in American foreign relations and international politics. They help to recruit foreign direct investment (FDI), promote exports and tourism, and take positions on the use of National Guard troops and the US military. They sometimes voice beliefs about foreign policy issues and work on a variety of internationally oriented issues such as border security, counterterrorism, environmental concerns, immigration, and public health. These subnational leaders have become transgovernmental actors in world politics due to heightened interde-pendencies and the blurring of foreign and domestic issues, especially since 1945.

The Constitutions mandate that the national government oversee external relations appears to establish a non- permeable internal politi-cal boundary that excludes the states from dealing directly with political entities located outside U.S. territorial borders (Kline 1996, 330). Yet, governors meet with high- level officials abroad and receive ambassadors

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2 State Governments in Foreign Relations

and heads of government in state capitals. US states and localities have taken positions on the Iraq war; on human rights abuses in Burma, Indonesia, Nigeria, South Africa, and Sudan; on the conf lict over Kashmir; and on the use of Holocaust- era bank accounts. They have adopted the Kyoto Protocols regulations, and governors have signed agreements with national and subnational governments involving topics such as environmental issues, trade, tourism, university exchanges, and shared government databases (Fry 1998; Howard 2004; Kline 1999; Shuman 19861987, 1992).

Perhaps most notable for the study of international politics, the United States is not the only nation- state to experience this change. Subnational leaders in Africa, Asia, Europe, North America, and South America especially those in federal systems are increasingly involved in foreign relations in todays globalized world (Michelmann 2009a). Local leaders, especially large cities mayors, have also been active in foreign relations and economic development pursuits (Hobbs 1994), but this study will focus on US states. Many subnational prov-inces and states (and some cities) actively promote trade and invest-ment and operate offices abroad to pursue these goals (Blase 2003b; Fry 1983, 1998; Hocking 1993a; Michelmann 2009a; Michelmann and Soldatos 1990; Whatley 2003). The extent to which subnational gov-ernments participate in foreign relations varies with the constitutional framework and division of power within the nation- state, partisan relationships between two levels of government, and variables such as geography, economic development, ethnicity, and culture (Michelmann 2009c). Cornago (2010) concludes, Sub- state interventions in the dip-lomatic realm once considered exceptional or deviant are becoming normal (35).

Rosenau (1990) offers a framework of a turbulent, multicentric sys-tem and encourages scholars to look at the complexity of many actors in international relations (IR). He points out that there are few issues in world politics today in which one level of government is allocated all responsibility. Issues can also no longer be easily placed within the domestic or foreign policy arena, so intermestic issues (Manning 1977) constantly affect citizens. This means that foreign policy and foreign relations, traditionally controlled by the national government, are increasingly within the interests (and some might argue the responsibil-ity) of US states and governors.

One recent governor says, Todays governors now constantly deal with the domestic consequences of foreign policy decisions (Personal Interview 2007). 1 In that spirit, Utah Governor Jon M. Huntsman, Jr.



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Introduction 3

(R, 20052009) 2 said he was not trying to empower the governors office beyond what it should do when he consolidated his US states international economic development efforts into the governors office in order to better coordinate strategies for a global economy (Bernick 2005, A1). As this research will show, governors now understand that as an effective representative of their citizens concerns, they not only discuss issues such as roads and schools, but also act within the arena of foreign relations.

Continued advances in global communications and transportation make it easier for current governors to be involved in international issues (Michelmann 2009b). A globalized world has produced interdependen-cies, which make it much more difficult for governors to ignore how their US state may be affected by international events, whether appear-ing as economic, environmental, or political challenges. Globalization since 1945 has led to changes that have decreased economic barriers, challenged the sovereignty of the nation- state, heightened processes of democratization, and increased the voice of subnational actors in foreign relations. Thus, it is not merely the economic aspect of globalization that precipitates US states and governors foreign relations participa-tion (Beaumont 1996; Fry 1998; Kincaid 2001; Kline 1996).

The study of IR now recognizes the importance of transnational relations and the many nonstate actors, such as multinational corpora-tions (MNCs), who participate in world politics. Foreign policy analysis has expanded beyond the unitary state to examine the impact of gov-ernmental officials and elites, but research continues to consider only national - level actors. This project seeks to expand the definitions of transnational and transgovernmental actors and argues that US states and governors are significant actors in world politics.

Although some scholars note the intermestic processes of multilay-ered diplomacy (i.e. Fry 1998), the foreign relations behavior of US states and governors has been largely overlooked. This book investi-gates the actions and activities through which US states and governors engage in American foreign relations and, more importantly, attempts to explain what mechanisms enable and motivate this participation beyond reasons of economic interdependence. By specifically examining governors foreign relations participation, this study argues that guber-natorial power is a useful explanatory tool, especially since scholars note that it helps illustrate differences in US state politics. Federalism stud-ies also show that a governors political leadership is useful in explaining US states international activities (Conlan and Sager 2001). Since gover-nors actions have not been systematically studied, gubernatorial power



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has not been factored into previous research. This project seeks to build cumulation across political science subfields and to expand institutional approaches in order to more fully examine the growing professionalism of subnational governments. Thus, theories and approaches from IR, international political economy (IPE), and foreign policy analysis need to be refined.

Many studies of US states and governors international activities have been conducted by federalism scholars, so much research comes from the viewpoint of intergovernmental relations, and this important contribution is explored later in the book. But although these earlier works such as Kincaid (1984) and Sager (2002) include some analy-sis of trade policy, they are not framed within a broader foreign policy context. Sager (2002) notes that the line between international trade and foreign affairs is often difficult to distinguish (30). She presents her book as a study of international trade policy. This book takes the opposite approach incorporating all international activities of US states and governors into the classification of foreign relations, which are broadly understood to encompass policies and decision making of many contexts, whether political, economic, or defense in nature.

Foreign policy is defined as the scope of involvement abroad and the collection of goals, strategies, and instruments that are selected by gov-ernmental policymakers (Rosati and Scott 2007, 4). While noting the effects of nongovernmental actors, the critical difference for this book is that policymakers are located not only at the national level, but also at the US state level. Since most actions of governors and US state govern-ments do not rise to the level of shaping and attempting to implement policies that form the United States role in the world, the term foreign relations better describes any actions within an international context.

The increasing trend toward heightened foreign relations activities by US states and governors has four possible causes: (1) rising global economic interdependence tearing down barriers in policy jurisdic-tions, bringing citizens in contact with more international issues, and altering business principles that encourage contact between foreign and US state officials; (2) New Federalism giving less federal aid to US states and decentralizing management of some issues; (3) the modern-ization and professionalization of US state governments centralizing more power in governors, raising legislative expertise, and expanding bureaucracies; and (4) the growing involvement of interest groups at the local and US state levels (Frank 1998; Fry 1998; Kincaid 1984; Kline 1996). IR scholars such as Earl Fry and John Kline concentrate on



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Introduction 5

economic interdependence as an explanatory tool, leading much of the literature to concentrate on the foreign economic initiatives. Federalism scholars such as Timothy Conlan and Michelle Sager focus on New Federalism as a basis for these activities. Yet little attention has been directed toward the focus of this project, which is the modernization and professionalization of US state governments and formal and infor-mal gubernatorial powers.

What Changes Have Occurred?

The role of governors has continued to evolve over the last fifty years, primarily because of rapidly increasing economic interdependence as well as US state reforms emphasizing professionalization, efficiency, and management, which in turn have led to centralizing more power in governors, legislative expertise, and expanding bureaucracies (Teaford 2002). This transformation has heightened governors interest in for-eign relations and has enabled US states to become engaged interna-tionally (Kincaid 1984, 101). It also has given governors more prestige, power, and leadership, such that they are now respected both in their own backyards and beyond their borders and are more informed about international relations (Sabato 1983, 194). Some US states pass resolu-tions regarding issues of foreign policy, and some governors now voice their own concerns over these issues formally controlled by national officials. But scholars do not have a strong empirical or theoretical grasp of US states and governors roles and motivations for participa-tion in foreign relations. The international activities within a US state go beyond the governors office, therefore this project also will show how US state governments executive departments and agencies, as well as their legislatures, have been internationalized.

Although the international activities of US states and governors are over fifty years old, they are only recently getting attention (Fry 1998). New York was the first US state to establish an international office by placing an official in Europe in 1953 (Levine 1993/1994, 43), and North Carolina governor Luther H. Hodges (D, 19541961) took the first governor- led mission seeking foreign investment in 1959 (Cobb 1984, 58). Teaford (2002) contends that US states have emerged as dynamic molders of domestic policy and vital providers of govern-ment services since 1950 (5). This relates to the fact that some US states foreign relations legislation has been overturned by the Supreme Court (Grimmett 2007). Policy debates continue about whether foreign



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relations activities by US states and governors are normatively beneficial or harmful.

Kline (1996) contends that scholars need to devise ways in which to examine both the institutional mechanisms of the f lexible strength of American federalism as well as those institutions and powers that aid governors in international affairs. The motivations, strategies, and methods of state and local involvement in transgovernmental and trans-national interactions must also be understood in relation to the politi-cal and economic aspects of foreign relations (343). Thus, this study takes an institutional approach to consider how formal and informal gubernatorial power relates to governors foreign relations activities, especially since research on US states international activities already acknowledges political leadership as a primary determinant (Conlan and Sager 2001; Sager 2002).

Some scholars assert that most US state involvement in highly politi-cized parts of foreign policy has been isolated incidents (Kline 1999). Twenty- eight states placed sanctions on U.S. and foreign businesses that operated in South Africa during apartheid before Congress passed restrictions (Fry 1998, 5), and six states adopted or amended stat-utes to penalize firms that complied with the Arab boycott of Israel, although the latter was preempted by an amendment to the Export Administration Act in 1977 (Kline 1999, 11315). The legislator who authored Massachusetts South Africa law wrote its Burma law of the same nature, which was declared unconstitutional by the Supreme Court (Guay 2000). California banned certain Swiss banks from bidding on billions of dollars of bond offerings and other contracts because it was unhappy with explanations given by these banks concerning the dis-position of gold and other assets taken from Holocaust victims prior to and during World War II all criticized by the US State Department (Fry 1998, 5). These actions were overtly political and had two goals: (1) to raise the profile of the issue; and (2) to pressure a foreign government to change its policies (Kline 1999).

Although some foreign relations actions of US states and governors have been political, most have been economic in nature. Especially since the 1970s, economic interdependence has intersected traditional state government economic interests and prerogatives, resulting in US states acting as players in foreign economic policy. This also altered officials roles and expectations, such that state leaders must view for-eign economic policy as increasingly relevant and important to their public responsibility for the economic growth and well- being of their own states (Kline 1983, 35).



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Introduction 7

The two main ways that many US states are engaged internationally are in their maintenance of offices internationally and in their governor- led overseas missions to promote exports and attract FDI. Since the US government is not involved in luring FDI, this is left to state and local governments. On the export side, there is a complicated network of actors including state governments, US Department of Commerce, world trade centers, chambers of commerce, and business consultancies (Kline 1983; Posner 1984; Whatley 2003). A survey finds that nearly all US states say trade and investment promotion is the main motiva-tion for overseas missions, although two claim tourism promotion is equally important and two others say political relations is a top motive (Edisis 2003, 6). Foreign economic activities have the longest history (Michelmann 2009b) when compared with other areas of con-stituent diplomacy (Kincaid 1990a). This project includes rigorous analysis of the tools used by US states and governors to recruit FDI and to promote exports. These studies are particularly important since US states face steep budget cuts today and desperately want to improve their economies.

Ikenberry, Lake, and Mastanduno (1988) analyze trade policy from an institutional approach and look at the presidency, Congress, and various executive agencies. However, analysis of American foreign pol-icy must include US state governments and their institutions. Findings from the studies in this project indicate that institutional approaches from IPE and US state politics are valuable for future research about the international capabilities of US states and governors. Given that US states react differently to multilateral trade agreements, treaties, and foreign policy problems, it is imperative for scholars to understand the foreign relations behavior of subnational actors. Although this book addresses actions of US state legislatures, the focus is on the executive branch of government. Most attention will be paid to governors offices, departments of commerce or economic development, and other agencies such as port authorities controlled by US states. Therefore, this project limits itself to activities by governors and those agencies, departments, and offices that governors most easily control.

Why Is This Significant?

These topics should be of considerable interest to academics and policy-makers alike. The findings of this research project touch upon academic theories in political science, but also affect public policy and interna-tional economic development. This research has implications for the



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work that US state officials and policymakers are trying to accomplish to better their economies and their communities. This is the first time in academic literature that all US states have been in a study that ana-lyzes FDI attraction and export promotion the two biggest ways that US states are engaged in the foreign economic arena. This project also makes important contributions toward illustrating the importance of healthy intergovernmental relations and providing possible solutions on ways of improving the relationships between governmental actors, busi-ness groups, and other nongovernmental organizations (NGOs), such as world trade centers. The authors interviews with many governmental and nongovernmental officials, which appear in subsequent chapters, help to explain current American intergovernmental relations and how they might be improved.

The purpose of this research is (1) to describe how US state govern-ments and governors are related to and active within foreign relations; (2) to provide a synthesis of literatures that have been or should be inter-ested in this topic; and (3) to provide empirical analysis of foreign rela-tions and foreign economic relations. The project is noteworthy because it is at the nexus of two fields that rarely communicate international relations and American state politics and mixes description and analy-sis, qualitative and quantitative methodology and has both substantive and theoretical implications. This is an area with which many scholars are unfamiliar and much of the data have not been collected for all US states. This project intentionally pulls from many fields to demonstrate the importance of overlapping research puzzles. The studies in subse-quent chapters seek to offer longitudinal analysis with generalizability, given that most previous research has been oriented toward case studies and/or sporadic examination of some US states for a shorter period of time. This project also brings into focus the actions and activities of gov-ernors, unlike the existing literature, which primarily focuses on US state governments and discounts the roles of governors and their offices.

It also is essential to remember that four of the last six American presidents two Democrats and two Republicans were former gov-ernors: James Jimmy E. Carter, Jr. (Georgia, 19711975); Ronald W. Reagan (California, 19671975); William Bill J. Clinton (Arkansas, 19791981, 19831992); and George W. Bush (Texas, 19952000). Thus, a governors participation in US foreign relations may serve as important training ground for later foreign policy actions pursued as president.

The value of this topic is illustrated by the increased actions and activ-ities of governors and US state governments that relate to international



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Introduction 9

issues as well as the political, economic, and legal challenges to be considered on both domestic and international levels. At the domestic level, federal courts continue to hear challenges about what US state actions are permitted under the Constitution, such as state legislative actions related to the genocide in Darfur. These actions are reminis-cent of disputes between various US states and the national government over economic sanctions applied to South Africa during the 1980s and Massachusetts procurement regulations on Burma (Myanmar) in the 1990s. At the international level, there is concern by other nation- states and international organizations about the myriad of nontariff barri-ers under the jurisdiction of US states and localities. For example, US states regulatory decisions have shaped transatlantic disputes between the United States and the European Union (EU) for several years to the extent that the EU has cited its complaints about varying US states standards before the World Trade Organization (WTO) (Ahearn 2003; European Commission 2007).

More than previous works, this research seeks to pull together rele-vant literature from international relations, international political econ-omy, foreign policy analysis, federalism, US state politics, and history. Past scholarship too often has relied upon previous research in one or two areas, thereby limiting the topics applicability. This project seeks to have the broadest significance and attempts to better integrate these literatures in a way that is understandable and informative, providing both theoretical and empirical benefits to future scholarship.

This project also incorporates qualitative and quantitative methodol-ogy because it relies upon statistical analyses as well as upon information gathered from the authors numerous interviews with US state officials from departments of commerce and governors offices, as well as from interviews with directors of US states offices overseas. Research is also informed by interviews with federal officials from the US Department of Commerce, the US Department of State, and the Office of the US Trade Representative as well as related NGOs such as world trade cen-ters, business councils, interest groups, and chambers of commerce. Personal interviews with twelve former governors who served between 1965 and 2011 provide greater depth in analyzing how the international roles of governors have changed over the years as well as what activi-ties have become institutionalized into the governorship. This research seeks to balance qualitative and quantitative methodology, but has strict measurement rules so that evidence is correctly interpreted.

Thus, the key questions for this research are: (1) What are the foreign relations activities of US states and governors? ; (2) How have governors



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roles and expectations changed? ; (3) What motivates governors to engage in foreign relations activities, especially beyond economic interdependence? ; and (4) What tools best help US states attract foreign investment and pro-mote exports? Empirical studies examine governors activities related to foreign relations including their international trips, public statements about American foreign policy, and meetings with foreign officials to see how this correlates with varying levels of gubernatorial power and how it relates to other US state and federal institutions. Chapters also examine the two primary tools used by US state governments to attract FDI and to promote exports international offices and governor- led missions abroad to not only see how they correlate with the annual levels of per capita US state exports and FDI reported by the US Department of Commerce, but also with changing gubernatorial pow-ers. All studies apply Beyles (2006) measures of both formal or institu-tional powers and individual- level informal (or personal) powers, such as those extracted from the support of the electorate.

This book makes use of large- scale datasets of all US states from 1995 to 2006. This period of analysis enables the project to examine the changing level and scope of international activities of American governors in regard to their individual- level attributes as well as their US states characteristics, including geography, political, economic, and regulatory environment as well as other national and international attri-butes. Analysis is embedded in discussions about various changes within American federalism and intergovernmental relations as well as within transformations in world politics that have resulted in more interna-tional engagement by subnational governments and their officials.

Although examples are taken from many US states, illustrations from South Carolina (S.C.) are used continually and are perhaps most prevalent. This is due to the authors many interviews with S.C. govern-ment officials both in the United States and overseas as well as with four S.C. governors. Interviews with US Department of Commerce officials in South Carolina and persons with the S.C. World Trade Center and foreign trade zones have also been conducted. Additionally, the author closely studied the history of South Carolinas international engagement and examined the official papers of several S.C. governors.

Overview

This introductory chapter lays the groundwork for the importance of this project and its significance across many areas of political science. The next chapter reviews the relevant literature within international



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Introduction 11

relations and American politics to set up the theoretical framework. Chapter 3 overviews the changing roles of governors, how gubernato-rial powers have been extended, and how governors international roles have grown. It also includes descriptions of the pioneers of international activity and of recent governors who have been involved in interna-tional engagement, as well as perspectives from the governors who have been interviewed by the author. The political leadership required to get involved in international activities in the 1950s and 1960s makes it necessary to examine governors first. Those such as North Carolinas Luther Hodges (D, 19541961), South Carolinas Robert E. McNair (D, 19651971), and Georgias Jimmy Carter (D, 19711975) were cru-cial variables in leading their states efforts to attract FDI and to estab-lish contact networks abroad.

Chapter 4 describes the evolving nature of US state governments in the American federal system and the steps taken toward profession-alization and internationalization of US states executive branches. This chapter also looks at states economic development strategies and intergovernmental relations and provides analysis of the relevant constitutional issues. Chapter 5 considers the changes in the interna-tional economic system and the sovereignty of nation- states and gives a summary of the activities of other subnational governments in world politics. The comparative politics section not only includes those subna-tional governments that have long been active in constituent diplomacy, such as Canadian provinces, but also looks to the future of those subna-tional governments that may become more involved in the international arena. This chapter explores the formation of US states overseas offices and how some states international networks have become institutional-ized over time.

The remaining chapters take an in- depth look at both foreign relations (generally defined) and foreign economic relations. Chapter 6 reviews the primary governmental and nongovernmental actors involved in for-eign relations and describes US states and governors activities within the categories of foreign (political) relations, international economic relations, and national security. Chapter 7 follows with an analysis of governors involvement in foreign relations and tests hypotheses to see what mechanisms drive this participation. Chapter 8 explains the rising importance of foreign economic issues and assesses the major US state and federal governmental actors as well as various nongovernmental actors such as interest groups, chambers of commerce, and world trade centers. Chapter 9 follows with an analysis about which tools are best for US states foreign economic engagement especially the use of



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international offices and governor- led overseas missions. Finally, chap-ter 10 overviews the conclusions from these studies and provides ave-nues for future research.

Political, economic, and legal challenges to the international activi-ties of US states and governors continue to swirl in American and international politics. For these reasons, scholars must seek to better understand the foreign relations behavior of US states and governors. This project shows how the governorship, US state governments, and the American federal system have evolved to increasingly work with international issues since 1945. It also illustrates how heightened eco-nomic, political, and cultural connections in a globalized world have altered world politics, such that subnational governments act beyond their borders.

Statecraft is defined as the art of conducting state affairs. Here state means nation- state, as within the literature of international rela-tions. This project describes those changes that have resulted in national leaders no longer being the only governmental actors in world politics. Constituent diplomacy is now widely practiced by leaders such as gover-nors and provincial premiers. Thus, a transformation in statecraft as traditionally defined has occurred because US states are continuously confronted with international issues and are involved in aspects of American foreign relations.



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CHAPTER 2

Linking International Relations to American Politics

[M]y dream is that California, the nation- state, the harmonious state, the prosperous state, the cutting- edge state, becomes a model, not just for the 21st century American society, but for the larger world.

Governor Arnold A. Schwarzenegger (R- California, 20032011) in his second Inaugural Address in 2007

The earliest extensive examination of US states foreign relations activities was likely Dennis Palumbos 1960 dissertation at the University of Chicago (Graves 1964). Since then, the majority of research on subnational governments international activities has appeared in the literature of federalism, although some has appeared in international relations. The extant literature answers the question, What are the international activities of U.S. states and governors? It also investigates the causes of these activities, but as chapter 1 indicated all relevant causes have not been given adequate consider-ation and systematic analysis has sometimes been lacking. Additionally, there remains debate about whether these activities, which relate to foreign relations, are beneficial or damaging to the American federal system.

The quote above from California governor Arnold Schwarzenegger recognizes what some academics have known for many years that the sovereignty of the nation- state is increasingly threatened as the primary unit of analysis in world politics (i.e. Keohane and Nye 2001; Rosenau 1990). Todays world is inf luenced by governmental forces at supra-national, national, and subnational levels as well as by multinational corporations (MNCs). World politics is not only coordinated by a sys-tem and society of states but also by important international regimes



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that manage global policies in issue- areas that are as diverse as envi-ronmental concerns and nuclear non- proliferation and by inf luential business networks that control areas such as accounting, insurance, and telecommunications (Strange 1996). Although scholars acknowledge the effects and order or disorder brought about by international gov-ernmental organizations (IGOs) and nongovernmental organizations (NGOs), the literature has been limited in examinations of how subna-tional governments whether US states, German Lnder , or Canadian provinces are involved in and may affect world politics, a fact identi-fied by scholars whose work shapes this research (i.e. Fry 1998; Hocking 1993a; Kincaid 1990a; Kline 1983; Michelmann and Soldatos 1990).

First, this chapter provides a detailed description of how this book defines foreign relations and foreign policy and how it will provide an analysis of the different contexts of foreign relations. Second, the con-cepts of federalism and intergovernmental relations are summarized. Third, this chapter reviews the relevant existing literature to clarify what questions have been answered and what remains to be studied. Fourth, this chapter turns to how this research project is nested within approaches from international relations, international political econ-omy, foreign policy analysis, and US state politics areas of political science in which this topic fits but has not been adequately applied. Finally, a summary provides an overview of the theoretical extensions proposed and discusses the changing relationship between the govern-ment and the economy. Therefore, this chapter sets up the theoretical framework from which the book proceeds.

Distinguishing Foreign Relations and Foreign Policy

For this research, it is imperative to not only describe how foreign and domestic policy definitions have blurred and changed, but also to understand how US states and governors international activities relate to, and are defined within, foreign policy. As noted in chapter 1 , foreign policy is defined as the scope of involvement abroad and the collection of goals, strategies, and instruments that are selected by governmental policymakers (Rosati and Scott 2007, 4). While considering the effects of many nongovernmental actors, the critical difference for this proj-ect is that governmental policymakers are not just located within the national government, but also within US states. This book acknowl-edges that (1) national government actors are not always unified in determining what goals should be pursued internationally; (2) the implementation of these agreed- upon goals is not always unified; and



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International Relations & US Politics 15

(3) these two activities are affected by subnational government activities and nongovernmental actors.

Although US states and governors have taken public positions on foreign policy issues and occasionally attempt to develop or implement policies outside the bounds of current federal actions (or in contradiction to accepted US policies), the large majority of activities seek to advance their US states relationships with national and subnational govern-ments in a way that does not challenge constitutional authority. These actions include cross- border initiatives as well as global- level activities such as working with other subnational governments and MNCs that fit into Keohane and Nyes (1974) categories of transgovernmental and transnational relations. Therefore, this research defines most actions by governors and US states as foreign relations rather than as foreign policy, given that the latter term incorrectly implies that US states have ultimate authority in shaping Americas place in the world. The term foreign relations denotes that US states and governors actions do not concretely establish US policy, even as the web of foreign political, economic, and defense relationships built and supported at the US state level continues to grow due to rising interdependencies. 1

The enlargement of what can be considered within a conceptualiza-tion of foreign relations connects to the difficulty of distinguish-ing between domestic and foreign policy. Scholars now understand that it is problematic to label issues and policies into these catego-ries. Heightened interdependencies also cause externalities from both domestic and foreign policy to easily affect one another (Fry 1998; Manning 1977). Although the majority of foreign policy analysis has focused upon national security policy (i.e. Allison 1971; Rosenau 1966; Snyder, Bruck and Sapin 1962), scholars have long noted its various strands whether oriented toward security and defense, economic, or political matters. 2 For the purposes of this project (1) national security or foreign defense policy (2) international economic, trade, or foreign economic policy, and (3) foreign (political) policy and diplomacy are all seen as part of the greater, holistic definition of foreign policy. As noted earlier, most international activities by US states and governors have been in the foreign economic realm, such as efforts to promote exports and to attract foreign investment. This has resulted in the liter-ature focusing on these endeavors and on issues related to trade policy (Fry 1990a, 1990b, 1993). Yet, it is crucial to realize that governors also act in foreign political ways by meeting with foreign subnational and national leaders in a fashion that has increased the need for US states to learn diplomatic protocol as well as to take positions related



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to foreign policy problems such as environment topics, immigration issues, and border disputes (Fry 1998; Whatley 2003). Although clearly the most limited category of activity, US state governments and gov-ernors also are involved in foreign defense; many US states National Guard troops are currently deployed in Afghanistan and Iraq, have par-ticipated in peacekeeping operations in Bosnia, and are engaged in the State Partnership Program (Howard 2004).

These three areas encompass the primary contexts of foreign policy and foreign relations. Whereas subsequent chapters show that there may be different mechanisms driving the activities of US states and governors within each category, this chapter demonstrates why it is important to frame this project within the sphere of foreign relations. Admittedly, this project focuses mostly on foreign economic and politi-cal activities, but actions are not easily categorized into one area because it is increasingly hard to differentiate between them (Dolan and Rosati 2006; Keohane and Nye 2001). David Baldwin (1985, 1997) shows that the term security can be applied to economic issues. US states slowly started to expand their economic development functions to enter the international arena in the 1950s, and thus began to play a role in inter-national trade. Sager (2002) argues that at the same time, the line between issues of international economics and issues traditionally rel-egated to the foreign policy arena has also become blurred (166).

Scholars now accept the problems in distinguishing between areas of high and low politics. Research illustrates how foreign economic policy may have become an area of high politics in the modern period of globalization (Dolan and Rosati 2006). Yet, academic literature has not adequately recognized the ways in which internationalization and modernization have altered governmental roles such that subnational actors are increasingly involved in international issues. Thus, because of the increased overlap between (1) domestic and international issues (2) among defense, economic, and political matters of foreign policy, and (3) the changing ranking of areas within high and low politics, this project is framed within the broad terms of foreign relations and foreign policy. Before a literature review and analytical framework show the need to extend theoretical approaches in international relations, we turn to the questions of discerning federalism and intergovernmental relations.

Federalism, Intergovernmental Relations, and Constituent Diplomacy

Scholars realize that the concepts of federalism and intergovernmental relations are confusing because of their similar meanings. Federalism



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is predominantly about the division of power between two levels of government a national government and one or more subnational governments. Walker (1995) says that federalism is the constitutional principle involving a distinctive territorial division of powers, usually a special approach to representation within the national government, and mechanisms both legal and political to settle interlevel disputes (20). With political authority divided into jurisdictions, a federal system represents an unfinished nation, such that two territorial communi-ties are refusing to merge and abandon their sovereignty. In Duchaceks (1970) words, this is a conf lict combined with a keen awareness of mutual dependence (192).

Thus, a federal system of government such as in the United States, encourages policy innovations since US state and local governments are laboratories of democracy that may attempt different ways to best rep-resent their citizens interests and to solve problems. Other chief advan-tages are its ability to promote political participation and to protect individual freedoms. However, federal systems are perhaps more eas-ily split apart, such as with the former Yugoslavia. Subnational level innovations may lead to greater redundancy and confusion and may hinder efficiency, such that different areas may have various regula-tions. Federal systems may also weaken national unity or hurt national interests (Bowman and Kearney 2005).

Whereas federalism is a two- tiered formal systemic concept that is predominantly constitutional, legal, jurisdictional, [and] power- political, intergovernmental relations are both formal and informal in that they have functional, fiscal, and administrative focuses but are also shaped by attitudes of officials and are complex, more encompassing, and multitiered (Walker 1995, 2122). Attention to this behavioral nature such as officials attitudes about intergovernmental relations and how it has altered officials jobs is highlighted by Wright (1988), a contribution that agrees with other scholars contention that the grow-ing significance of intergovernmental relations changed the governor-ship (Beyle 1988). Thus, intergovernmental relations are shaped by the federal system and the changes that occur within it, such as tenden-cies toward more centralization during President Lyndon Johnsons Great Society programs and decentralization, such as President Ronald Reagans New Federalism initiatives (Conlan 1998). Since the 1970s, intergovernmental relations have become more complex because of (1) more governmental units, actors, and officials; (2) the increases in contacts among these officials; and (3) the importance of officials actions and attitudes (Wright 1988, 14). This book over-views some changes in American federalism and provides analysis about



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intergovernmental relations, especially on issues related to foreign rela-tions. Therefore, it is important to differentiate between these two con-cepts, but to recognize that they remain intertwined.

Due to the problematic nature of the term foreign policy actions, scholars debate upon what to label subnational governments interna-tional activities. Some scholars use paradiplomacy, a shortened form of parallel diplomacy (Soldatos 1990), to discuss the ways in which sub-national governments engage in international activities, whether in an economic, political, or cultural context. Duchacek (1990) breaks down paradiplomacy into three types. Transborder paradiplomacy includes activities of subnational governments along national borders (i.e., Arizona working with Mexican officials). Transregional and paradiplo-matic contacts involve links between subnational governments whose territorial jurisdictions are not contiguous but whose national govern-ments are neighbors (i.e., Georgias international office in Ontario). Global paradiplomacy involves subnational governments links with for-eign national and subnational governments (i.e., New Yorks office in London). These contacts are primarily for the purposes of inf luencing trade, investment, or other policies. Duchacek (1990) notes, If by dip-lomatic negotiation we mean processes by which governments relate their conf licting interests to the common ones, there is, conceptually, no real difference between the goals of paradiplomacy and traditional diplomacy because it involves negotiation and implementation of agreements (16).

Another conception is Hockings (1993a) multilayered diplomacy such that subnational governments are involved in a complex diplo-matic network without exclusive territories of the domestic and inter-national rather than in hierarchical relationships between national and subnational governments (31, 36). He contends that while scholars recognize the state- centric ideas of international relations (IR), they too often assume that subnational governments activities are of a unitary nature. Instead, he claims that subnational governments are a part of complex patterns of relationships both inside and outside their national settings, and embrace a diversity of interests (Hocking 1993a, 4).

Whereas central governments must develop foreign policies that comport with a diverse national agenda, subnational governments interests will usually be determined by a narrow range of domestic constituencies with more finely targeted objectives (Hocking 1993b, 69). However, this is only partially accurate because there are more similarities than differences between US states international inter-ests, especially since foreign governments (such as Taiwan) and interest



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groups (such as the American Israel Public Affairs Committee and the Progressive States Network) seek to inf luence governors and US state legislatures in their international agendas (Conlan, Dudley, and Clark 2004; Nichols 2007). Former governors indicate that the Taiwanese and Israeli lobbies are some of the most aggressive in trying to persuade gov-ernors, legislators, and US state officials (Personal Interviews 2007).

Kincaid (1990a) calls the international activities of subnational gov-ernments constituent diplomacy. He contends that terms such as para-diplomacy, subnational diplomacy, and microdiplomacy imply that US states and other constituent governors are necessarily inferior, ancil-lary, or supplemental to the high politics of nation- state diplomacy and that every nation- state is a legitimate and competent representative of the interests of the people who inhabit its territory (Kincaid 1990a, 74, fn2). 3 This argument is similar to that offered by Duchacek (1990). For Kincaid, constituent governments are states, provinces, cantons, Lnder , municipalities, and port authorities that may represent local or regional, and sometimes national public sentiment more accurately than the elected leaders of opposition parties and the unelected leaders of inter-est groups to whom democratic pluralism accords a policy role (66).

It is not accidental that the constituent governments most actively and openly engaged in world affairs are those of democratic, especially federal democratic, nations (Kincaid 1990a, 56). He says that scholars should be asking about the benefits rather than the costs of subnational governments activities such as economic benefits, intergovernmental lobbying enhancing regional equity, cross- cultural communication, and public understanding of international affairs. Although pluralism allows both domestic and foreign interest groups to attempt to inf luence US foreign policymaking, the activities of US states and governors have been denounced by some commentators and courts. Thus, according to John Kincaid and perhaps Brian Hocking, federal democratic govern-ments are best served by allowing subnational governments to be part of foreign policymaking. Others, such as the National Foreign Trade Council, disagree and point out that these activities erode presidential authority over foreign affairs, thereby disrupting the unity of American foreign policy and perhaps complicating its goals (Personal Interview with Dan OFlaherty 2007). Since this project argues that US states and other subnational governments should be included in theoretical and empirical studies of international relations, the author has chosen to use the term constituent diplomacy.

One thing many scholars and policymakers agree upon is that US governors and other subnational government officials are treated well



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when they travel abroad sometimes received like heads of state rather than like heads of a state. In the authors interviews with former governors, several say how well they were received abroad, perhaps due to poor understanding about how the American federal system works. But, as interviews with other US state officials including overseas office personnel reveal, this is also a manner of business and political culture as many nation- states place a prime value on the involvement of government officials in international economic development (Personal and Telephone Interviews 20052007).

What to call subnational governments international activities as well as the conceptual reasons for these differences may not matter in some respects. Rather, it is more important for scholars and policy-makers to realize that the changes that have occurred in the blurring of local and international issues, the modernization of US state govern-ments and gubernatorial roles, as well as rising interdependencies have coalesced to transform the essence of diplomatic statecraft.

Review of the Literature

Most scholars who examine subnational governments in world politics adopt the interdependence theory framework from Keohane and Nye (2001) to think about how US states and governors interact in the world. This includes Duchacek (1984, 1990), Fry (1998), Hocking (1993a), and Kline (1983, 1984). Kincaid (1984) agrees, saying that the primary stimulus for governors international involvement has been economic (105). Kincaid (2001) explains that globalization has led to increased democratization, market liberalization, and regional integration such that political, economic, and cultural changes have helped to bolster the international engagement of many subnational governments. Tying this to the language of IR, one might point to the huge increase in transnational and intermestic issues that national and subnational government leaders face today.

Yet, there is a theoretical gap in international relations that needs to be filled in order for scholars to understand the need to consider all pos-sible motivations for these activities and how subnational governments affect international politics. Another problem is that much scholar-ship on subnational actors international activities has been descriptive, rather than explanatory or predictive in nature, as Hocking (1993b) points out. Others show how interdependencies have made subnational units more involved in world affairs and have heightened a new region-alism (Aldecoa and Keating 1999). For example, Conlan (1998) says that the combination of the decline of the nation- state, policy effects



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of party realignment, fiscal trends, and the modernization of US state governments may lead to increased devolution. Although the US gov-ernment is involved in the responsibilities of state and local govern-ments, many national [and international] issues are becoming more and more localized because of blurred boundaries of responsibility (Conlan 1988, 235).

Research focused on US states primarily offers an analysis of how they inf luence US foreign economic policy. Two exceptions are Howard (2004), who argues that US states can affect foreign defense policy, and Kline (1999), who writes about politically oriented legal cases involving US states from a foreign policy perspective. The publicity surrounding Massachusetts procurement law against Burma (Myanmar) led some policy- oriented journals to offer commentary (Clough 1994; Denning and McCall 2000). Kincaid (1990a) defends US states foreign policy involvement and shows how subnational governments are participating in foreign policy in Australia, Canada, and Germany. Legal scholar-ship also addresses these topics. The Massachusetts law received much commentary in international and constitutional law journals and the 2006 Illinois law regarding Sudan divestment was widely discussed. Henkin (1996) writes about US states ventures into foreign policy from a constitutional perspective, such as the many compacts and agreements (not treaties) that US states have entered into with foreign governmen-tal units (15256). Grimmett (2007) reviews US states sanctions leg-islation and major court decisions. Yet, the overwhelming majority of research in foreign policy analysis ignores US states and governors.

Since US states and governors international activities have been examined by many federalism scholars, these studies take the viewpoint of intergovernmental relations and emphasize New Federalism President Reagans plan to decentralize administrative control, to return powers to US states, and to give less federal aid to states as a possible cause. For example, Conlan (1998) shows how New Federalism may have enabled international activities to a greater degree. These changes resulted in intergovernmental connections such as the Intergovernmental Policy Advisory Committee (IGPAC) and State Point of Contact system, insti-tutions set up by the Office of the US Trade Representative (USTR) (Conlan and Sager 2001). Sager (2002) points out that these activities show that theories of federalism have to be reexamined because nei-ther dual federalism, nor brands of coercive federalism from Wright (1988) or Kincaid (1990b), nor Elazars (1966) cooperative federalism adequately explain todays intergovernmental relations. She notes that one factor causing variations among US states level of international



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activities is political leadership, a point acknowledged by Conlan and Sager (2001) who contend that political leadership is one of the largest sources of inspiration for state international initiatives (22). Studies of constituent diplomacy also claim that political and institutional factors cause variations in the level of activities (Aldecoa and Keating 2001). This project seeks to extend these arguments by investigating the rela-tionship of gubernatorial power to foreign relations activities. 4

US states are increasingly involved in international activities, although they are still relatively new and not institutionalized. Sager (2002) also says that resources, population, and priorities explain some of the differences in the scope and scale of states international activi-ties (26). Kincaid (1984) argues that governors international activities are idiosyncratic because of the perceptions of governors of their own proper roles as well as the proper roles of government (109). To this point, the next chapter describes the authors interviews with former governors in which they explain their own understandings of a gover-nors roles and their own views (and expectations) of how a governors responsibilities connect with international issues.

One way to think about the role that governors can play in shaping American foreign policy is to consider how they lobby for particular issues. For example, Minnesota governor Jesse Ventura (I, 19992003) helped to successfully lobby Congress for permanent trade relations with China, but Illinois governor George H. Ryan (R, 19992003) failed to convince authorities to change US policy toward Cuba (Hotakainen 2000; Loven 1999). Research also acknowledges that governors are discouraged about their ability to affect trade deals negotiated by the USTR. Although their concerns may be voiced to their Congressional delegation, USTR shapes trade agreements as well as any dispute reso-lution proceedings, many of which do not reach Congress (Beaumont 1996, 378). In 2003, 30 states attorneys general signed a letter request-ing greater protections of state interests in trade agreements (Whatley 2003, 10). Governors seek to gain promises to be consulted in negotia-tions and prior to any challenge by the United States of subnational measures in a foreign country (Beaumont 1996, 38283). By making sure that all factors are considered, perhaps governors are also aware that no matter if their efforts are for naught their voiced concerns will lessen the blame that they may receive if their US state is adversely affected by a trade agreement. In the Uruguay Round negotiations, the United States only agreed to apply procurement regulations to states that voluntary consented to the restrictions, and 37 governors eventu-ally concurred (Kline 1999). Since that time, fewer governors have been



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signing on to free trade agreements (FTAs) negotiated by USTR (Public Citizen 2007, 43).

By spending so much time on US states attraction of foreign direct investment (FDI), Fry (1998) is an exception in the literature. Although the US government is not really involved in FDI attraction, most stud-ies focus on export promotion (i.e., Conway and Nothdurft 1996; Ryen and Zelle 1997). Perhaps this is due to many authors specialization as federalism scholars. As both the national and state governments are involved in export promotion, federalism specialists may be drawn to an area that is likely to affect intergovernmental relations. For example, the scholarship of Conlan, Kincaid, and Sager focuses more on US states export promotion. Kelly (1996) concentrates on US states export pro-motion programs and concludes that they lead to more exports and jobs. Economic development literature looks at US states activities in both export promotion and FDI attraction, but predominantly seeks to determine the costs and benefits of various tools meant to promote these goals, such as the financial incentives offered by US states (i.e. Buss 2001; Hanson 1993; Van Raemdonck 1991).

With the absence of the US federal government in efforts to attract FDI (State International Development Organizations [SIDO] 2004; 2007b), it would seem that prior

the involvement of state governments in us foreign relations ||

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