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Governance for a Healthy Economy

Addressing the world's biggest challenges will require a completely new policymaking paradigm, one that looks past all the old arguments about the supposed inherent limits of government and the dichotomy between the public and private sectors. States and markets must be treated as the complementary institutions they have always been.

CAMBRIDGE – Our world is undergoing an economic transition that will require effective government action on many fronts to manage climate change, ensure public health, and rebuild our middle classes through good jobs and innovation. But are our governments up to it?

There is near-universal skepticism about governments’ ability to lead and achieve positive change. Such doubts may be well-placed. Polarization and authoritarian populism – which are mutually reinforcing – have overrun the public sphere in many countries and undermined societies’ capacity to mount collective action, both domestic and multilateral, against common problems.

Moreover, a longer-standing concern about government is that it has neither sufficient information nor the capabilities necessary to achieve positive structural change in the economy. Give governments too much power, the argument goes, and they will direct resources toward the wrong places and become captive tools of special interests. This argument lies at the heart of neoliberalism, and it will have to be overcome for any successor paradigm – like productivism – to succeed.