One of the defining features of 'globalization' is that political power and regulatory authority are no longer the exclusive preserve of governments acting within their territorial boundaries. In the highly complex, internationally-integrated economic order in which national governments now operate, policymakers rely on international economic institutions to help co-ordinate such activities and provide a predictable, rule-governed framework in which economic activity can take place. The first part of this paper outlines the nature of global governance. Our key argument here is that although the development of a more powerful superstructure of political institutions and economic co-ordination mechanisms across and above states may have been inevitable, the rationale that informed their policy direction was not. Particular ideas about the most appropriate ways of organising economic activity have been promoted by political and economic interests that might expect to benefit from such initiatives. The second part of this chapter examines how such processes have affected Australia in a case study of its relationship with the World Trade Organisation (WTO), and its predecessor the General Agreement on Tariffs and Trade (GATT). One of the most important insights that emerges from this analysis is that globalization is a two-way street. In the complex dialectical interplay between the increasingly powerful economic forces and organizational structures that constitute the external international system on the one hand, and the contingent national institutional matrix through which such influences are mediated on the other, we find that while the forces of globalization may be constraining, they are not implacable
