NEW YORK – Since my teenage years, I have been fascinated by the permutations and machinations of national politics. Today, I find myself focusing on broader political trends that also help to explain global economic issues.
One such trend is the political fragmentation and polarization evident in Western democracies. Fringe movements, some operating within established political structures, and others seeking to create new ones, are placing pressure on traditional parties, making it difficult for them to mobilize their supporters, and, in some cases, causing them real damage. Desperate not to appear weak, long-established parties have become wary of cooperating across the aisle.
The resulting refusal to work together on the major issues of the day has had a dramatic impact on economic policies. Once formulated through negotiations conducted at the political center, where Western democracies have long been anchored, policymaking is increasingly shaped by stubborn forces on the extreme left and right.
This approach has, it must be said, yielded the occasional breakthrough – sometimes good, sometimes bad. But the overall result has been policy paralysis, with even the most basic elements of economic governance (such as actively passing a budget in the United States) suffering as a result. Needless to say, the greater the governance and policy challenges at home, the more difficult regional and global cooperation becomes.