WASHINGTON, DC – Can global governance solve most of our economic problems? Or does it too often promise more than it can deliver, and divert attention from more practical reforms that national governments should implement? In a recent commentary, Harvard University economist Dani Rodrik thoughtfully argues the latter. Is he right?
To be sure, national policy has a more direct effect – good or bad – on a country’s citizens. But we cannot ignore the global effects of bad national policies, the most obvious examples noted by Rodrik being greenhouse-gas emissions and infectious diseases. People in the “country of origin” may pay a price, but so will the rest of us.
“Globalization” has been a catchword for decades, and the need for global governance has admittedly been exaggerated in recent years, especially by those on the center left. This has led to calls for new alternatives, such as “responsible nationalism” or “inter-governmental” – as opposed to supranational – decision-making in the European Union.
Such proposals make for a healthy debate. For example, we should reevaluate the current system for deciding trade agreements, which have become more about regulatory and investment issues than about eliminating import tariffs or other import barriers. It is no surprise that even some free-trade supporters object to agreements that allow trade groups to insert language granting multinational corporations undue market power at the expense of consumer protection.