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La falsa promesa económica de la gobernanza global

Aug 11, 2016 Dani Rodrik

CAMBRIDGE – La gobernanza global es el mantra de la élite moderna. El argumento es que el incremento de flujos transfronterizos de bienes, servicios, capital e información (derivado de la innovación tecnológica y la liberalización de los mercados) generó demasiada interconexión entre los países del mundo como para que cada uno de ellos por separado pueda resolver sus problemas económicos solo. Necesitamos reglas globales, acuerdos globales, instituciones globales.

Esta afirmación goza de tanta aceptación que cuestionarla puede parecer como sostener que el Sol gira alrededor de la Tierra. Pero lo que puede ser verdad en el caso de problemas realmente globales como el cambio climático o las pandemias no es aplicable a la mayor parte de los problemas económicos. Contra lo que oímos a menudo, la economía mundial no es un bien común global. La gobernanza global ayudará muy poco, y a veces ocasionará un perjuicio.

Lo que hace que, por ejemplo, el cambio climático sea un problema que demanda cooperación internacional es el hecho de que el planeta tiene un único sistema climático. Como da lo mismo dónde se emitan gases de efecto invernadero, imponer restricciones a las emisiones sólo en el nivel nacional generaría escaso o nulo beneficio al país que lo hiciera.

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0 Comments on this paragraph, 25 in all 25 Comments on this article

Dieter Heinrich Oct 2, 2016

I'm not buying. When corporations go global, so must public policy and oversight. As it is, corporations play countries off against each other to undercut taxes, labour practices, and environmental standards. This could be ended with a regime of common policies within a governance system. Global governance is needed to be commensurate in scale with global capitalism if it is to be held within the bounds of the public good.
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Anold Man Inthe Sep 3, 2016

You say you're going to challenge global governance, but ironically, the conclusion you reach to is the highest and purest form of global governance:
«What I have in mind is the creation of global norms and procedural requirements designed to enhance the quality of domestic policymaking.»

Global rules not only to govern a global system, but much more... to govern individual/domestic countries. I agree with you on transparency, broad representation, etc. Most of us can all agree on those... I don't even disagree with you on your conclusion. Ironically, again, I deeply disagree with your initial description of your stance. If anything, it's for more global governance.
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Anold Man Inthe Sep 3, 2016

«By contrast, good economic policies – including openness – benefit the domestic economy first and foremost, and the price of bad economic policies is primarily paid domestically as well. Individual countries’ economic fortunes are determined largely by what happens at home rather than abroad.»

First, how is one able to distinguish between an economic policy of mainly domestic nature and domestic implications?

Secondly, it will definitely depend on the size of the countries involved (small-small; small-big; etc.). Otherwise, how would we explain the sudden shift in stance w.r.t. some euro countries debts? It was only after the paper by rogoff and reinhardt, which increased the concern with a certain level of current account deficits, was integrated into the market agents' knowledge that Euro countries got penalized. Hell, the whole euro crisis is because countries may be determined in equal measure by what happens abroad... This effect tends to increase by the degree of openness of the economy.

Maybe Dani Rodrik, should try and live in some of those countries, and see just how much their lives may be determined by the exterior conditions.
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Keith Johnson Aug 21, 2016

We live in a world where expertise has never been more needed but one in which experts have never been more despised. Those of us who aspire to understanding have to get up off our arses and argue with integrity.

See where Cynicism meets Cynefin: johnsonnz.blogspot.co.nz/2016/08/the-crisis-in-governance-demagogue.html
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robert scollay Aug 18, 2016

Democratically inspired governance improvements at home may lead to good governance internationally in an ideal world, but it is easy to think of counterexamples from the real world where global rules have prompted improvements in domestic policies. In the trade field, WTO commitments on domestic agricultural subsidies may not have constrained EU agricultural policy much, but the commitments on export subsidies certainly did, and were a significant part of the pressure for gradual reform of the EU’s common agricultural policy. A series of adverse decisions at the WTO eventually led the United States to drop the “Byrd Amendment” and “zeroing” from its arsenal of abusive anti-dumping practices. Japan has periodically welcomed the role of “gaiatsu” (foreign pressure) in prompting desirable governance reforms. In the opposite direction, we find the United States working relentlessly to impose its flawed domestic intellectual property protection regime on its FTA partners. This pressure was fortunately resisted by the US’ partners in the recent TPP negotiations, and the resulting more balanced TPP rules on intellectual property may conceivably have some modest influence in prompting the US to consider improvements in its own intellectual property regime.
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John Brian Shannon Aug 17, 2016

Hi Dani,

I find myself in strong agreement with you Dani on the need to create a new institution devoted to improving the standards of global governance (but in a non-political and non-partisan way) by improving the quality of domestic policymaking.

"Global disciplines pertaining to transparency, broad representation, accountability, and use of scientific or economic evidence in domestic proceedings – without constraining the end result – are examples of such requirements." -- Prof. Dani Rodrik

Of course, there would be some knee-jerk resistance to such an institution, as there was just prior to the creation of the wheel, just prior to the creation of the League of Nations, and the United Nations (and even catcalls and laughter) on the suggestion that a UNDP should be created.

The same goes for the ISO (1947) and other organizations, such as The World Bank, the IMF, NATO, IRENA, etc...

Plenty of opposition when those organizations were first proposed!

But where would we be today, without them?

I shudder to think!

Back to your proposal. Such a centre for excellence in domestic policymaking should've been mooted decades ago, with about the same prestige and total financial commitment as the IMF enjoys in this century.

It would need to be utterly scrupulous and transparent, Dani -- otherwise, what's the point?

And it would need to be equally available to every nation -- even to 'bad boy' nations that might then be considering 'going mainstream' -- such as (hypothetically) North Korea.

It also needs to be (because there is a void to fill here) a resource centre for old and new governments and old and new democracies to allow them to research (online) their policy specialty.

And the worst thing would be for it to become an EU-centric, or America-centric, or any other region or continent-centric organization.

To my way of thinking, it would need to be non-aligned in every sense of the term.

Your idea represents an opportunity as big as the sky, yet we've been missing it since the end of WWII -- and almost every domestic (and related foreign policy) failure can be traced in part (at least) to the lack of such an institution.

A fascinating idea that has really captured my imagination! Thank you for posting your essay at ProSyn.

As always, very best regards, JBS
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Michael Public Aug 15, 2016

Good ideas and bad examples - GMO crops are a bad ideas for reasons other than macro economics. Since you are a specialist you can be forgiven for your ignorance, but I suggest using examples whose benefit or detriment does not rest squarely in other specialised fields like health, agriculture, business and common sense.
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Celik Kurtoglu Aug 15, 2016

Isn't what you are advising the what the EU has been developing, and what has been the principal complaint of the member countries?
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george sos Aug 15, 2016

@Robert P Bruce well said!!!
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Cary Fraser Aug 14, 2016

Unfortunately, there is an unwillingness to recognize that getting beyond the current levels of dysfunctional governance - at both global and national levels - will require the abandonment of the shibboleth of "free" markets. The ineptitude displayed by the financial and banking systems prior to 2007-2008 should be a reminder that the search for unfair advantage is inherent in the capitalist system. Global governance is fundamentally incompatible with capitalism based upon sectoral preferences or national imperatives.
- Cary Fraser Aug 16, 2016
  
  Unfortunately "commercial thinking" covers a range of behaviors that include both parasitic and predatory activity. The 2007-08 financial collapse revealed the ways in which the financial institutions were happy to be predatory prior to the collapse and ecstatic at being parasitic thereafter in order to survive the consequences of their folly.
  "Bureaucratic thinking" was required to devise the mechanisms necessary to underwrite the recovery.
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- Michael Public Aug 15, 2016
  
  The alternative to free markets is communism and that leads us back to the USSR. Free markets are a two edged sword - on the one hand they encourage unfair behaviors but on the other hand they encourage commercial thinking over bureaucratic thinking. They can be managed without being elimitated - for example - imagine a death tax of 90% and that workers are entitled to equal dividends to shareholders. Throw the baby out with the bathwater and you end up like the World's last truely communist country - North Korea.
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JAMES BECKMAN Aug 14, 2016

Mutual self-interest is the only permanent guide, with obvious need for each nation to show others why such & such rule is right for the other. So Orban wants to know WHY he should let in refugees. Brussels, you are not persuasive. You are just civil servants, please!
Apparently here in Germany, a future work force is sufficient motivation. Similarly, each nation must show its citizens why it is in their interest to hang in there with the EU, notably the economic losers of France, UK & possibly Eastern Europe.
Why small, heavily inter-connected nations like the Netherlands or Denmark would think of exiting will be seen as the UK most likely stumbles forward with its plans.
The exit-refugee connection is very appropriate, since either too many or not enough workers is so much a part of globali- zation, in my estimation.
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lakshma reddy Aug 14, 2016

The first principle subordinating all other principles and evolved through historical human experence is that human social laws must conform to and not repugnant to the "God will"ed natural laws.

If history is a guide and evolution of human institions to subservient the general public interest, no body need the doubt of evolution of UN institution born in 2nd WW from tranformation from nonsovereign to sovereign institution as global governance system and as the imminent process along with national democratic decision making as a part of economic necessity of global interest people.

The principle of Conditioning national democatic governance a condition for global governance instition is like demanding to No union of USA till all states attain equal stature.Its contrast proved a path finder and conformity with natural laws.

We enter contracts to attain ones maximum utility and interest satisfaction.it applies to all parties to contracts.it also applies to all nations and countries.it reflects the Adamsmith global division of labor and specialisation and the operation of invisible hand for maximum production with minimum cost and maximum utility with minimum human disutility across all nations on earth.

But this requires legal and constitional infrastructures to help maximum free contracts and need the dissimination of market information required to an informed decision making at indidual domestic and international level for free contracts as also the global enforcement machinery of the free contracts across the global world.

This contracting of parties may of local at county/village or provincial or cross country global interest reach.it is only the cross country global interest reach contracts that require global norms/laws, institutions assistance for legal and constitional enforcement machinery.

We have some such UN aided machinery but they are not invested with global enforcement systems and they are plagued with distrust and inequality an antithesis of justice systems.

Therefore while agreeing for global norms we need globally elected governing model through participatory representative democatic system for sovereign UN to legitimise it's authority.
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Frederick Hastings Aug 14, 2016

E pluribus unum—with emphasis on the pluribus. Those who belabor unum are envisioning an edifice devoid of a foundation.
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Joost ten Hag Aug 14, 2016

The pursuit of better domestic policy making and improved democratic processes are novel goals, but how does this relate to more or less global governance? Priority setting is importand but they do not seem to be mutually exclusive. The examples used to illustrate the point that policies from which possibly negative consequences are also born domestically do not require global governance (e.g. the financial crisis, rising income inequality) ignores te significant contribution of regulatory and fiscal competition between states that are fundamental causes of these events. Regulatory competition (e.g. Bank of England's soft-touch policy) and competition or lower corporate tax rates to attract foreign business are piovotal to the emergence of these events that will require cross-national cooperation in the form of effective (and democratic) regulation and enforcement as part of their solution.
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Juan Antonio Falcón Blasco Aug 13, 2016

Completmanete de acuerdo con la idea central de Dani Rodrik. Sin embargo, también se puede mejorar una economía local abriéndola al mercado internacional con medidas supranacionales: como en el caso de la ampliación de los mercados nacionales dentro de la Unión Europea.

Juan Antonio Falcon Blasco
Presidente de IRGEI
http://falconblasco.blogspot.com.es/
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Stephen Gwynne Aug 12, 2016

I'm glad to see that the difficulties that beset the eu in terms of harmonizing national policy but then at the same time constraining it is a very pertinent area to explore. However what I would like to see, rather than theoretical speculation, is for all countries to sit around the economic table and talk. What an interesting conversation this would be in order to tease out the balance between global regulation and national policy independance.
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Robert Bruce Aug 12, 2016

This piece manages to be both factually correct and dangerously wrong at the same time.

Of course national governments must remain the biggest driver of our economic and social policy. However, it is equally important to recognise that all governments around the World today are constrained by the same requirement - to remain inter-nationally competitive in a Global marketplace which is effectively unregulated. In several critical respects our national policies are dictated, not by any Global agreements, rules, or institutions, but to satisfy the needs of Global financial markets. With terrible irony some of the greatest challenges we face today are not the result of too much Global regulation, but because no truly effective systems for Global regulation exist. From carbon pricing, to eliminating tax havens, or regulating our Global financial industries, any national government that moves on these issues in isolation faces the prospect of losing out in Global trade and competition for inward investment and jobs. We all know that each of these steps is critical to our future prosperity and security, yet no national government dare act unilaterally on the scale needed, for fear of the consequences to their own competitive position.

This is the reality of what Paul Polman (Unilever CEO) has called today's “Crisis of Global Governance”. The term itself is misleading, because it implies the need for some form of “Global Government” when in fact what we require is proper coordination of policies reached by consensus of sovereign national governments. The key step is to move beyond the 20th century model of “them and us” thinking, and recognise that we are all in this together. The idea of “Global Citizenship” does not imply the need for a Global government. It is instead about moving beyond an economic model based on a zero-sum game, and recognising that the only way forward is to coordinate our economic policies. In a historic moment the opportunity has at last come to our generation to create a “Global Race” in which we can all be winners.

Robert P Bruce - author www.TheGlobalRace.net
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Robbie Jena Aug 11, 2016

Perhaps that is why we have BAD Governance. It is also supported by Heaven...just think about it...
- Robbie Jena Aug 11, 2016
  
  We are told, we are behaving like "infantile". The bad part is, a lot of people (physically) will go through misery while living on this planet.
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slightly optimistic Aug 11, 2016

The absence of enforceable domestic disciplines in finance was found by the G20 to be the cause of the 2008 cross-border crisis. A forerunner was the 'Nixon shock' in 1971. Still no appetite for sorting.
Until national systems are improved, we surely can't talk about global disciplines.
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Steve Hurst Aug 11, 2016

If you have global governance, if it is even possible to function, it destroys the whole point of globaisation which is to exploit differentials. You therefore will have corportaions in the West that benefit from globaisation and developing countries that benefit from globalistion seeking to undermine governance. Alll you are left with is national action and local democracy
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Paul Daley Aug 11, 2016

Perhaps. But the most serious democratic deficit lies at the international level in agreements that lay down rules and rights that are difficult to change. Sunset rules that require regular reconsideration of treaty rules would allow nations, individually and collectively, to profit from experience in defining their treaty commitments.
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Petey Bee Aug 11, 2016

A much simpler argument against global governance is to consider the consequences of a democratic system of global governance. The rules would certainly be written in a way that favors developing countries. This should pretty much put an end to such discussion in developed countries.
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