Transnational Communities and Economic Governance

Transnational Communities and Economic Governance

When we hear the word ‘community’, we tend to think of a close-knit group of people, clustered in one location and connected by deeply engrained traits or traditions. However, in the modern world, communities can be very different, in several ways.

As people in developed countries gain more freedom to define themselves as individuals, they can increasingly choose which communities they want to be part of. They probably belong to several communities at once, which they enter and leave at will. As a result, communities are dynamic, fluid and open rather than fixed, static and bounded.

Also, the members of a modern community need not be physically close to each other. In many cases, symbolic closeness can replace physical proximity. Communities are built around shared ideas and projects or common ways of seeing the world. Since some community members never see or meet each other, the community is, in a way, ‘imagined’ by its members. A virtual community, enabled and structured through electronic communication, is an extreme version of the ‘imagined’ community. This looser definition of ‘community’ means that the group can accommodate more internal diversity; it also means that its members can be affiliated to many other groups at the same time.

Traditional communities are often defined by the race, religion or culture of their members. For example, we might speak of the ‘Chinese community’ in a major city like New York. Since attributes like race and religion are difficult or impossible to change, people can only leave these communities by physically moving away. Modern communities are, on the other, characterized by ‘limited liability’ belonging. Their members are rather like investors in a startup company: they ration their commitment and can walk away at any time. Some members may be very active and involved in the community, for different periods of time, while others are passive ‘satellites’ or ‘followers’.

What are transnational communities?

Since modern communities are not bound to one location, they can be spread over multiple countries. These transnational communities are increasingly important and active in the world today, which is why we are interested in researching them. We define transnational communities as social groups emerging from mutual interaction across national boundaries, oriented around a common project or ‘imagined’ identity.

Transnational communities have always existed. Prominent historical examples of transnational communities include international cartels, merchant leagues, churches and the communist international, as well as transnational migrant communities. However, our focus is on the more contemporary variants of this type of communities. We look at those transnational communities that are based on shared interests, projects of causes such as those structured around international accounting standards, financial governance, labour or environmental standards.

Where transnational communities come from

How do transnational communities originate and develop? There are two main ways, which we call ‘bottom-up’ and ‘top-down’. In ‘bottom-up’ development, transnational communities are slowly built up when members of different local or national communities reach out to each other across borders. Over time, they progressively converge on a shared identity, gradually achieve transnational integration and eventually become powerful and authoritative. Professional bodies and the open-source software community are good examples of ‘bottom-up’ development.

In ‘top-down’ development, the community is ‘born transnational’. A small, elite transnational group is formed with a particular project or agenda in mind, then starts making new connections, building a broader international base for its work and persuading local or national communities to get involved.

Transnational communities and cross-border governance

Because they are interlinked with society, business and the economy, transnational communities have an important impact on cross-border economic governance. Areas that they can influence include the environment, labor law, accounting standards, competition, the internet, and social responsibility.

The influence of transnational communities has six main dimensions. Firstly, they help to define and frame governance issues, creating a transnational ‘problem space’ where different individuals and organizations can meet and collaborate. It is hard to predict which causes will be taken up: for example, certification communities have promoted forest protection as a key concern, while giving less attention to other, may be even more urgent environmental issues.

Secondly, having identified a problem, transnational communities help to mobilize collective action by defining goals, pooling resources and focusing joint efforts. They may also find ways to involve other organizations in the project.

The third way in which transnational communities affect governance is by serving as public arenas for discussion and, sometimes, conflict. Transnational communities are not always harmonious: they are also places where conflicting views and interests collide and, ultimately, compromise solutions to complex issues need to be found.

Through time, transnational communities’ fourth role comes into play: fostering preference transformation. As a result of discussion and debate, members’ opinions gradually become more closely aligned. This may be because they have learned new things and gained new perspectives, or because they have been ‘leaned on’ by the rest of the community or its leadership. Whatever the reason, opinions and preferences come to be more closely aligned.

Transactional communities’ fifth role is in setting rules. Because they cut across national and organizational borders, and because their membership is usually quite varied, transnational communities are in a unique position to define rules that help to overcome fragmentation. This is linked to their sixth area of activity, which is imposing sanctions and social control over their members. Sanctions can be either formal or informal, and are often backed up with the threat of exclusion from the community.

Questions for the future

We feel that transnational communities are a key area for future academic research. As we explore them further, we can learn more about the workings, impacts and limitations of cross-border governance – as well as the importance of social bonds and shared perceptions in effective governance.

It seems that ‘bottom-up’ communities have a broad reach and can mobilize resources well, but are less agile. Conversely, ‘top-down’ communities are better placed to act in unison, but have more limited reach. It would be interesting to confirm which type is more effective in achieving its goals; the answer may be that a collaboration between both types works best.

Another area of interest is how transnational communities link with formal organizations, and when they form their own organizational structures. Finally, it would be worth exploring how ‘top-down’ or ‘bottom-up’ communities achieve and maintain their legitimacy, in the sense of being regarded as neutral and authoritative in their sphere. 

Further Reading:

Transnational Communities: Shaping Global Economic Governance

ESSEC Knowledge on X