[Thread] Very good article – as always – by Dani Rodrik (@rodrikdani) on the need for a renationalisation (i.e. re-democratisation) of economic policies. Below are some key points (all direct quotes from the article):
prospectmagazine.co.uk/magazine/dani-…
prospectmagazine.co.uk/magazine/dani-…
1. Global supply chains and cross-border finance might seem to have been driven by fundamental trends in transportation and communication technologies; but the truth is little was predetermined about the globalisation we have got.
2. [Globalisation] runs on an extensive infrastructure of rules. Some of these are formal regulations written into explicit contracts, as with global trade agreements, certain banking regulations, or the European Union’s acquis communautaire.
3. Others are simply norms of good behaviour that are internalised by political leaders and officials, and then sometimes reinforced by transnational institutions such as the International Monetary Fund (IMF) and World Bank at moments when they enjoy leverage.
4. [Globalisation under Bretton Woods, for example, was very different:] While trade in manufacturing was significantly liberalised under the GATT, governments were free to devise their own regulatory models.
5. By contrast, under the more recent hyper-globalisation, the WTO (established 1994) has pursued a “deep integration” under which domestic regulations in health, environment, intellectual property and industry have come to be viewed as inefficient trade barriers.
6. In sum, we ended up with today’s globalisation not because of technology or forces outside human control, but by choice, in response to powerful voices demanding it (and prevailing narratives that legitimised it).
7. [Hyper-globalisation is unsustainable because] nations each have different needs and circumstances, and national authorities are, in principle, the best judge of how to respond to those.
8. This argument applies with special force in democracies, since no one has yet figured out how to consult the people in effective ways across national borders. But more generally, nations should be free to choose what is best for them.
9. [Globalization regimes] have the disadvantage of reducing autonomy, which may impede democracy, and can also inhibit diversity and experimentation in policy at the national level.
10. As we have seen in the COVID-19 context with [different] testing regimes, that very diversity can sometimes be extremely useful in helping the world as a whole to learn lessons, creating a knowledge “spill-over” whose logic actually pushes against global uniformity.
11. [Nationally tailored development policies are good for all:] The policies that expand the national economic pie also tend to be good for other nations … Full-employment policies [and] growth-promoting structural policies are all the cornerstones of a healthy global economy.
12. Incompetence or the power of special interests frequently push governments to make mistakes that are costly to their own economies, and hence to others’ as well. ... But there cannot be a presumption that any globalised regime will improve on domestic misrule.
13. Global rules can be hijacked by special interests just as easily as domestic policies can, to subvert the broader public interest. Worse, the institutions of global governance are at one remove from democratic argument and the scrutiny of national media.
14. In and among them, lobbies can sometimes operate in the dark—and be all the more effective for that. Perhaps the clearest example of this is how big pharma has managed to rewrite global rules on patents to preserve and increase monopoly profit.
15. Finally, where there is no clear-cut case for global rules—either on beggar-thy-neighbour or global public goods grounds—our goal should be to preserve space for national policy autonomy and institutional diversity.
16. We can never be sure that national governments will do the right thing for themselves (and thereby for the world economy). But as long as political representation and accountability are vested in national governments, we have little choice. [end of thread]
