Are Intellectuals Killing Convergence?
There is every reason to worry that a historic process of deglobalization is underway, threatening to scuttle the growth models of poor countries that previously used trade as a path to prosperity. Worst of all, this disturbing shift has been met by silence or even encouragement by those who should know better.
NEW DELHI – How will COVID-19 affect developing countries’ growth prospects? The answer will depend largely on how globalization – and intellectual support for it – evolves in the pandemic’s aftermath. The prospects are not encouraging.
Even before the pandemic struck, the global merchandise export-to-GDP ratio had been declining for the first time since World War II, falling by about five percentage points since 2008 to about 20% this year.
This is not the first time that the world has de-globalized. Between World War I and the eve of World War II, world trade collapsed, and the export-to-GDP ratio fell from a peak of 16% in 1913 to just over 6%. In John Maynard Keynes’s memorable words, this contraction was the result of “the projects and politics of militarism and imperialism, of racial and cultural rivalries, of monopolies, restrictions, and exclusion.”