Dani Rodrik – Globalization Paradox: Democracy and the Future of the World Economy

now I'm pleased to introduce Dani Rodrik professor Roderick is the Rafik Hariri professor of international political economy at the JFK School of Government here at Harvard he earned his PhD in economics and his MPA at Princeton University and his research focuses on international economics and economic development he has earned numerous awards and recognitions for his work including the inaugural Albert Hirschman prize from the Social Science Research Council in 2007 he's been widely published in scholarly journals as well as publications like the New York Times in The New Republic and his books include his globalization gone too far and one economics many recipes professor Rodricks latest book the globalization paradox continues his work of challenging the perceived benefits of globalization the book takes on three centuries of economic history and argues that our pursuits of democracy national autonomy and economic globalization are at odds with one another and then going forward we must choose our national priorities thank you thank you all for for coming it's nice to see the crowd here let me begin with with with a confession which is that I'm an economist that means you know you're free to to hold me and my friends culpable for everything that we've been going through in the last three years I think I do think we share some of the blame but I think I'm a bit of an unusual economist in that that if you actually look at the book you'll see that I'm not trying to sell you globalization so it's one of these sort of you know unusual I hope yeah this way I want to hold on to it for the whole time I guess what what I've tried to do in this book is play a bit of a of an unusual role where try to on the one hand explain to economists and the technocrats and the policy people what the what the what the concerns of ordinary people about globalization are and that that sort of meant trying to actually understand them and put it in ways and frameworks that could be communicated to the economists and that's that's an art in itself but I also was concerned about trying to explain you know why is it that economists thinks think globalization is such a wonderful thing that has done so many good things for so many people around the world so the book is is I hope you'll find you know when you if you look at it you'll find it did its that it is fairly readable I've tried to make it readable but there is enough of the economists in it and that's why I start out with that confession I was driving a couple of hours ago on the highway and I was listening to a news program and it was somebody being interviewed it was a political I guess it was a Republican being interviewed on economic policy and subject was the deficit of course and and and he was saying a lot of things about why the deficit ought to be reduced and he said and most fundamentally most importantly we have to reduce the deficit so that we can compete in the in the global economy and I thought about that and I said how many times have we heard this and just take removed a bit about we have to reduce the deficit and substitute any and all of whatever you think this country ought to be doing or any other country ought to be doing and call it X and we have to do X to compete in the global economy how many times have we have we heard that it's become sort of like a mantra we have to cut down the government we have to it doesn't have to be such as the right-wing it's not just Republicans right because you also hear we have to invest in our people so we can compete in the world economy we have to invest infrastructure so we have to compete in the world economy we have to invest in R&D so we can compete in the world economy any number of things that you want to do and makes you makes you start to think you know when when did it become the norm that everything we're going to be doing was for the world economy rather than the other way around you know why is it that you know you know we're supposed to be doing things for the world economy as opposed to the world economy doing things for us wasn't actually sort of the whole idea that globalization in the world markets and this openness and this new era was go actually going to be benefitting us and I think this way of thinking about the relationship between how we fit into globalization is a relatively recent narrative is a narrative really off of the that started in the 1980s that suddenly we started to look at the world economy in a very different way we started to look at – uh does being sort of in service in the service of the world economy rather than the rather than the other way around and what I'm trying to do in this book is actually to reverse or chore or provide an alternative narrative which I think sort of puts globalization in its proper sphere which is to say let's look at how globalization can work for us what that what does that actually mean for how far we can push the globalization what it means for the kind of rules we should place on globalization what it means for the balance between the nation-state domestic policymaking on the one end and global governance and international institutions on the other let me give you a bit of an idea about what's in the book or what was the nature of the argument in the book by sort of briefly going over three steps in the argument or three building blocks in the argument the first of these is the idea that markets and governments are complements they are not substitutes there's a markets and governments go together they're not adults with each other this is another one of these ideas the fact that of markets and the States you know sort of have to get out of the way so that markets can work well things one of there's been one of the most destructive ideas in terms of our thinking about economic policies when you think about what makes markets work well Marcos work well only when you have a broad range of strong institutions that underpin those markets you don't have markets without legal institutions market to not work well without a regulatory institutions markets are given to instability if you don't have stabilizing in from institutions and markets cannot last if you don't have legitimizing institutions so markets are in self-creating they're not self-regulating they're not self-stabilizing they're not self legitimizing what makes markets last and and and and provide for prosperity are these other institutions mostly provided by collective action by the public sector by government in modern days you know think about the alphabet soup of regulatory institutions that you need to ensure that the products you buy on the marketplace are safe or that banks most of the time do what they're supposed to be doing or that when you run into a crisis that the Fed the federal government is there to actually pump liquidity into the system bail out banks that are going under so that the crisis one called worse and so forth so one of the striking regularities around us today is that actually markets work best the states when the governments are strongest not the weakest you can actually give this even a statistical meaning by looking at the correlation between how open and economy's to trade and how large the government or the public sector of an economy is and this is very positively correlated the most open economies in the world are in fact the ones where the government's are largest in terms of tax revenue or in terms of public spending so the first idea is really just to get into our minds that if you want markets to work well including global markets we have to have very strong public institutions to ensure that markets work the way that they're supposed to do the second idea the second building block here is that is the notion that when you think about how the state and various public institutions are organized to provide this infrastructure for market to provide these under view under girding of markets there is not a single model that that market-based capitalism or market-based systems don't come in a single model there is an almost infinite variety of models of market capitalism that that you can think of and not and not one of them is necessarily superior to the other every decade we have an idea of what the best model but the best economic model is you remember the Japanese model of the 1980s you know sort of the idea was that here was sort of capitalism at its best that we need you know everybody needed to become more like Japan of course in the 1990s it was the judge the American model of financial capitalism and look where that got us everybody's not talking about the Chinese model do we really want to be like China or can anybody really be like China the point is that when you think about how you regulate markets what kind of labor market institutions to have what kind of corporate governance what kind of social protections and the welfare state there are many many different ways in which you can arrange those institutions which means that in fact is one of the major strengths of capitalism and why it has proved so durable despite all these problems is that it's very malleable that you can sort of that you know the kind of capitalism we had even in a within a country in the United States 19th century version of capitalism is very different from what we have today so capitalism changes both across time and over space and we shouldn't sort of fixate on this idea that if you want our economies to work well that there is just one sort of big ideal that that we have to that we have to all converge to the second point here is that we really think should think about the world as being comprised not as different societies or different market-based economies that are all necessarily converging to one single model but when one where countries ought to be able to free to express the desires and preferences with respect to exactly the shape those institutions or to take so that would that would be a world in which we accept the legitimate diversity of institutions under girding capitalism so that's a point number two point number sort of the third building block is the idea that when you think about how we decide collectively about what kind of institutions we should have what kind of financial regulation what kind of labor markets what role should trade unions have in labor markets how extensive should our social protections and the welfare state be when we think about how we're designing those specific institutions of capitalism who should be doing those thinking and how we should should we decide well in a democracy you think that it ought to be decided through democratic deliberation through democratic mechanisms of decision-making accountability and representation right and then you ask what is the appropriate locus of that decision-making another way of asking that question is to say where our political communities organize today in the world by and large political communities are organized at nation-state don't go looking for global governance anywhere don't go looking for global politics anywhere don't go looking for any of the institutions in the world having the kind of of thick exchange of of politics that we see at the nation at the level of domestic politics so for very good reasons and for the foreseeable future we're going to have politics organized mostly at the level of nation-states that means that the nation-state is going to remain with us and we simply cannot wish it away and all they talk about a flat world a flat world without borders where domestic governments are disappearing is simply hogwash if you look at the recent crisis when you ask the question when push comes to shove who bailed out the banks who bailed out the auto companies who pumped the liquidity to inflate the economy who stabilized demand and and who ultimately was the in snow people actually felt was responsible the answer to all of that is actually national governments it wasn't the IMF it wasn't the World Bank it wasn't the World Trade Organization so that's the best point number three that political communities political communities remain organized largely around nation-states so when you put those three building blocks together you get a picture of how we should think about globalization and the future of globalization that I think is is quite different from what a lot of sort of chatter around the future of globalization is and this is a vision this is a picture which I try to describe at greater detail in in my book which basically says that we need a better balance between the prerogatives of the nation-state between democratic nation states on the other and the scope and the reach of markets since we cannot truly underpin global markets with global institutions democratically governed we need to reduce our ambitions about how far we can push globalization we cannot have what I call in the book hyperglobalisation a world in which we're trying to make world markets as integrated as unified as well functioning as domestic markets that might seem obvious but it's remarkable how much of our policy efforts at the international level in domestic level are animated by that view as if we can keep pushing on on lowering barriers removing barriers so that we can have this single unified global market when that's really an impossibility so this is a vision of globalization which I try to sketch out in the book that puts the National democracy's front and center that says the global rules ought to leave room for domestic policy makers to design their own policies their own institutions their own preferences and second that you might think that this would be actually very detrimental to the world economy if all countries all democracies in the world and other nation states were to decide just to go on the basis of what they want to do that this might be the collapse of the world economy I argue that that is in fact not correct that is not true a world in which a world of democracies in which countries decide their own policies and their own settle on their own institutions is actually a world that's going to be much more conducive to a healthy globalization than one where we simply try to rein in domestic policy makers as much as possible and the reason for that is going back to where I started out with which is that we can have a globalization and economic globalization only to the extent that people believe and actually see in product to practice that is working towards the kinds of ends both economic and social that people want to see and and that's possible only when we have that kind of control and and the strong institutional underpinnings of globalization are actually provided and they can only be provided at the level of nation-states so you know in a nutshell this is what what the book is about it's about trying to argue something that might seem on the face of it a counterintuitive and paradoxical that we actually are going to have a better globalization a healthier globalization the better functioning world economy if we actually give some more power to nation-states instead of assuming that we can keep sort of moving towards sort of global institutions or global governance or global rules or global governance that's going to help us create to the world market work better so let me just stop here I'm happy to ask questions I'm happy to get I'm always happy to ask questions I'm also happy to get some so including those who want to disagree with me so thanks again for coming I'm happy to listen to you now I think that's a great question and first of all I think you're absolutely right that the that the conception of the global economy that we had with the Bretton Woods regime sort of the set of rules that we had for the last day the first three decades after the Second World War we're very different and in a way what I'm trying to do is get back to that earlier conception that I think at a better balance between domestic objectives and and and Andy and the global economy and also secondly for the reasons you cite we live in an hour very different world economy even if we go back to the spirit of that we're not going to be able to go back to exactly the same so the you know for the United States let's say you know maybe 30 years ago the share of trade and GDP was about maybe 6 to 8 percent and now it's more like double that not a huge amount but it is double what it was we're never going to go back to that and that's not what I'm arguing but I'm are what I'm arguing is the choices that we make as we go forward and I think we do have many choices there because the integration of markets and the progress of globalization does is it's not a process that just happens on its own it's a process that we shape by the decisions that will make by the decisions that we take in the World Trade organization's by the decisions that would make taken the Basel Committee when we decide on capital adequacy rules the decisions that we decide when the IMF decides whether capital controls are okay or not so I think I am I am calling I think for a rather drastic change in mind frames but I think in terms of what it does that that means in practice and what I outline in in in the last chapter in the book in terms of some of the concrete things that we ought to be doing those tend to be more marginal changes as we go forward but I think cumulatively we'll have the the impact that I that I that that I want to see which is to liberate policymakers in the right direction from this sort of you know self-imposed constraint that they have you know whatever they have to do they have to justify in terms of being competitive in global markets yeah I think the I mean I mean it's it's I mean you you know the difference between strong institutions and weak institutions by traveling to places where there are weak institutions or institution so it's a question about partly about enforcement it's partly a question about who makes the rules whether it's just a narrow elite or some more broad-based so therefore ultimately a question about the durable durability of those rules it's a question about how well those rules match up with the actual realities about you know it's actually about the design of those so we can say about financial regulation with it well-designed was it actually actually designed to adequately deal with the kinds of risks that financial markets are facing so it's partly about the appropriate design partly about the mechanisms of accountability and control and partly about enforcement whether you know whatever you decide you're actually able to do you are actually able to implement those things and I think you know in terms of those dimensions we look at cross the world of course you see huge amounts of differences on all to own all three dimensions well it has had an impact on the rest of the world I don't feel like I feel like on mainstream now I mean in many ways I mean I think when you look at for example how how views have changed on capital controls is quite striking let know that the capital controls order or freedom of mobility of financial capital is sort of like one of these bellwether things about how our approach to globalization that that you know whenever you know we get very skeptical about globalization we say let's regulate those short-term capital flows those hot money that doesn't know that sort of you know can destroy economies because they can leave just as quickly as they can go and then there are periods of time when we say but it's wonderful let's just money flow wherever it can go so that people can borrow and lend and you know sort of why interfere with these things you know the sort of the the gold standard in 19th century was of course a period of very you know free capital flows then sort of coming out of the Second World War the thinking of the the the architects of the Bretton Woods regime the architects of the IMF and the World Bank and so forth including most prominently John Maynard Keynes was that capital controls immediate that financial capital flows this hot money flows had been a reason why the world economy during the interwar period had been so unstable so they they said we just want to cap their you have to have capital controls all over the place you can't let short-term capital move around and that was the reigning orthodoxy up until really the early 1980s and at in the 1980s so people said why bother you know why not you know just notice you know just let capital flow freely and for the last 30 years that has been the orthodoxy countries you know sort of have moved in the you know sort of just letting finances financial flows move all around now one area where in fact we've seen now this change very happen very very prominently is in the aftermath of the crisis the IMF which had been on the sort of the the leading edge of those who argue for freedom of capital mobility the IMF has not come back last year and said we think that there is a legitimate role for capital controls in the world economy that that that actually may make sense it's sort of like a total total change in the mind frame it's truly a result of the financial crisis and and and the effect of that now I'm happy to say to my views on the 7 change because I always thought that capital controls ought to be part of the you know sort of part of the tool I could have written the IMF's you know policy briefed on this 20 years ago but then at the time you know sort of I was looked at you know sort of as a bit of a of a maverick on BC on these issues and now that view has become I think much more mainstream that has happened a little bit in in the in the in the trade front as well for example the argument that I've repeatedly repeatedly made that if you want an open trade policy you better have very strong social policies very strong social protections again that sort of has become more or less mainstream even in the United States where idea that the idea that that you really need to ensure that there's much better Adjustment Assistance wage insurance or something else for job for people who lose their jobs that is good social policy good economic policies good political policy that you need to have those things so it has become more of a mainstream idea what I think is is is is sort of new in this book is is you know that is the broader conception it's the broader architecture of trying to say look you know it's it's you know don't worry about the you know the nation-state getting too strong right now the problem is not that the nation-state is too strong the problem is the nation's trade is too weak and actually by making the nation-state a bit stronger you'll make the world economy work better too I think there's too much of a willingness to abdicate responsibility on the part of domestic politicians and I think this as an as as as part of the electorate this is what we should not allow them to do I think it's actually often is easier to deal with the power of money at the domestic level than it is when the same monies power is exercised in international fora so a very concrete example is when you think about how we should regulate our financial system how we should regulate our banks there is broadly speaking two ways you can go one way is to say you know we want a globally consistent harmonized system of financial regulation so that banks have a level playing field wherever they go so there's a constant that a common set of regulations the other ways you can say what we'll do mostly we'll design our regulations ourselves even though they might differ from those in Europe in Japan in Canada whatever that that it'll be us made and for the same as literal Europe will say it'll be Europe may Japan will say is Japan made and so forth now what happens in practice and what has happened when we've gone the the first route which is to sort of try to design these regulations at the global level is because no nobody here has any access to you know how these decisions are actually made in Basel in Switzerland we're actually sort of a bunch of bankers get together and decide what the rules ought to be that's how those rules have been designed in the past by something called the Basel Committee on on regulation and so there we have you know no control there it's really just money speaks period but if those things were actually determined it was viewed that the right locus of decision-making for those things were actually the domestic political setting it would be much harder for the power of money to have money will always be powerful but there will be much greater countervailing power then then what has happened recently so I think one advantage of actually drawing back some of this responsibility bringing it and bringing it back home is that you get a much wider set of scale of stakeholders and voices speaking on these issues now when I talk about these two sort of economists and technology makers they say oh my god you're going to politicize these issues it's that's exactly my point I want to politicize these issues because you know a lot of this stuff is political and just by sort of not taking it out of this political domain it's not like you're necessarily getting better outcomes you're just getting just one set of voices determining the outcome well let me say a word about sort of the comparison and then a word about what that means for globalization I think when I look at those two countries I you know obviously China until very recently has done much much better economically than India has but I think the future looks much tougher for China and it does for India and I think India has one huge advantage compared to China which is that it is democratic that it has those democratic mechanisms of governance the most fundamental institutional transformation that a country needs before it becomes wealthy is already in India's past whereas it's in China's future so I think you know the critical question that China faces as you know in in the next not necessarily in the next couple of years but certainly next couple of decades how is going to manage that huge institutional transformation of becoming either becoming more democratic or ultimately if it doesn't become more democratic I don't think it's the economic engine will continue to function nearly as well it's obviously a question where the Chinese are extremely extremely nervous in the context of these Middle Eastern you know sort of protests the way that they've reacted suggests that they're very very very very concerned about this issue as well but that's I think that's you know I think you know looking towards the future this is one major reason why I would bet on India rather than on rather on China in terms of what this implies you know the rise of India and China implies for globalization I would say this that that this feeds into and strengthens my argument granted China is not a democracy however both China and India value intrinsically national sovereignty to an extent that it's become you know sort of quaint in the advanced industrial in the advanced industrial countries so if we are going to be moving towards a world where the United States in Europe the main internationalist powers in terms of global institution building are becoming much less powerful India and China are rising and there they put tremendous importance on the importance of national self-determination nation the nation-state national sovereignty don't tell me what to do I won't tell you what to do that the stability of that world the stability of the architecture of that world is possible only if you recognize that the nation-state centrality has got to be maintained so you cannot build a stable international economic order on the assumption that you're going to get all of these countries together they will all agree on what their policies ought to be or what they will all agree on a common set of financial policies instead of trade policies common set of labor market policies and so forth so the best that you can think of is actually think of a world in which do you design traffic rules how you going to mediate these you know the the interface between these different institutional arrangements in these different countries and that's exactly the kind of globalization that I think we ought to have anyhow so you know so this adds recognition that India and China are going to be now in ever-growing part of the world economy adds an additional layer of practical necessity to the desirability of the kinds of global arrangements and I've been I've been advocating yeah I or I I agree I argue in the book that there are some global normative standards so for example I would put democracy and human rights as one of those as a clear I would say that that's a global normative standard that that democracy there's no nation-state can legitimately say I don't have to be democratic because I'm different they can say I need different kinds of financial regulations or different kinds of labor market regulations or different type of social protection because I need I need different but I don't think any nation state has can say from a normative standpoint that my people don't need democracy or my people my people don't need Human Rights so from that standpoint I think there are those those at that level at least there are very strong normative standards and the way that those work into my argument is to say that when we think about these traffic rules that we were going to be talking about so part of these traffic rules are about thinking when should countries be allowed to opt out or exercise an escape clause from an international agreement and there I would say that if you are a democracy a prima facie democracy that any decision you make on the face of it reflects the will of the people and therefore you do not have to you don't have any reason to justify yourself as to why you're doing something whereas for a non democracy that argument doesn't fly so a specific example of this would be to talk about for example labor standards an issue of labor standards I think India can legitimately say because I'm a democracy labor standards I have reflect the will of my people now of course democracy you know it works in all kinds of weird ways but but you know Who am I to say that their democracy is worse than mine so it's a very clear-cut stand that says that that institutions that reflect because those society as a democratic are in some sense reflect the will of the people and that's an argument that China cannot use and therefore these rules would actually discriminate between democracies and non democracies which set higher thresholds that non-democracies would have to jump over because of that yes I mean I think um you know if we have a deliberate if our domestic trade policies and our domestic policies are being decided in the way that I suggest through domestic deliberative practices there's there's no presumption that that means that the individual participants in that debate will care only about themselves or only about their communities or only about their nation-states they may very well if you can convince them or I can convince them or as their own consciousness changes over time because they care about what's happening elsewhere they may very well start taking into account that their decisions have impact somewhere else and that therefore there are some trade-offs and therefore some if some things that they want that might be good for their communities might have harmful effect on other countries and how to trade those off so those are all deliberate or those are all relevant considerations that should enter into our discussion all that I'm saying is that the appropriate locus for that discussion for the foreseeable future is going to be the domestic setting not transnationally through international NGOs or corporate social responsibility or any other kinds of global governance mechanism which can thing is a it's a question where are three books I've written two of those the third I started reading I mean that that of course is the you know is the big question and the way that I think about this is is in a number of steps one is to really ask the question do you have a government in place who actually is interested in economical open in the first place now this might seem like you know crazy question but not all governments actually want economic development not because they are evil but because you know there may have you know so many other constraints or so many other considerations you know now keeping the ethnic balance you know sort of you know ensuring that you know cronies or weather are being sufficiently fed and so forth so the first consideration is that if you if you don't have a government that's going to make economic development a real priority I mean you've you know you've lost it already then what you're going to get is a lot of you know sort of fake action you'll get a lot of aid you'll get a lot of you know words you're going to get a lot of you know missions and and but you're not going to get it you look at the you know sort of you know big transitions in economic growth economic development you know why is that South Korea and Taiwan all of a sudden took off in the early 60s why did China all of a sudden took off in the late 70s why is it that you know Mauritius began to take off in the 70s in all of these cases you have you know governments that come into power and that that really truly make economic growth and development at your key priority that's number one number two is you say do you have a government that's sufficiently self-confident that is going to rely on its own resources and on its own understanding of what its problems are because if you get a government that's simply going to invite the World Bank and the IMF and economists from Harvard to come and tell them what to do and they think that's how you get economic development policy is something not going to work because one of the key lessons from the history of development is that all successful development programs have a high degree of context specificity nobody would have been able to tell China that the way to know develop was going to be the kind of two-track pricing and the special economic zones and the township and village enterprises that they came up with no Western economies would have been able to dream up of these things it was just thinking about sort of what might work here being pragmatic being experimental and that requires sort of you know sort of listening to advice but also being sufficiently self confident to to understand that that whatever work whatever works will have to be designed in light of local constraints and local opportunities and that requires that kind of self conscious confidence and the third I think is is a little bit more more technical but I think it's important it's sort of being able to to have clear sense of where the major constraints or or or obstacles to development are it's clear that if you're a country like Mozambique you know you can turn yourself into Sweden overnight so if you ask the World Bank you know say what should I do the World Bank will come back and say you know your institutions are rotten you have to fix them your governance is rotten you have to fix them your trade regime is rotten you have to fix them your your subsidies are rotten here to fix them your Agricultural Extension system is rotten you have to fix them so I can't do all of that all at once but the lesson from is from economic histories the good news is that countries get rich without necessarily having to do all at once because if you're so far behind on all dimensions now it's enough to do just a few things just to get going so that's the potential and so what you need at that point is really to figure out we're the most significant blow obstacles to picking your economy up is in some cases it's just going to be that you truly have a corrupt leadership and unless you really change your governance and change it send a different signal to the private sector you won't get any action so there you just have to work on on the corruption issue and maybe the trade policy the Agricultural Extension and other aspect of institutions can wait in other places now you have a decent general maybe not bad government but what you have is really a very high trade barriers and then you have to work on that and you know you can delay other things in in other cases maybe you know that that the banking system isn't working well and people aren't getting financed and that's really the major obstacle if you fix that you can get high girls for the next ten years until you know the next thing becomes binding so that step really requires sort of having a good sense of where you start how you prioritize your reforms so all successful countries I've had these broadly speaking these three elements the unfortunate thing is I cannot give you a recipe because you know as I'm explaining to you I mean I think sort of when you look at the details of what countries have done it's actually it's no they've all given incentives to private markets to work but they've always had also strong government's they've also have played a role of leadership and the devil has been in the details in the way that you know they've addressed those three key areas yeah I made a very I made a very very broad statement you know at that level of no I think we can probably agree that that that India is a democratic country in China isn't China is a fair amount of local democracy today but it's certainly you know you can't go out and vote for the people that you want or you don't have the kind of civil liberties and press freedom that that you have and that I think also reflects itself in in labor market arrangement it is true that just very recently wages have have begun to increase but that reflects much more broadly sort of economic developments and not necessary changes in bargaining labor market bargaining or changes in collective bargaining institutions or the power of unions in China yeah last chapter talks about four different areas so in the area of trade policy I talked about how the next round of you know trade sort of negotiations in the auspice of WTO ought to focus on on the rules of the regime what I call about this sort of this at least new traffic rules that's going to enable countries to have great a greater room for their trade and industrial and and and other policies so the idea is to to change the what trade negotiators negotiate about from exchanging markets market access which is I lower my barriers you lower yours instead of having that conversation having a conversation about let me have more policy room in exchange for you having some more policy room and can we design that in a way that's actually going to not create adverse pullovers on each other in the area of a financial market regulation I talked about how we should allow different countries to design their own different financial regulations and allow them to interfere in cross-border flows through cap Lakan management or other techniques to prevent financial market arbitrage in other words from flows from low regulation countries from undermining the integrity of regulations in the more more highly regulated countries in labor markets I talked about how we could design a short-term temporary labor scheme where workers from poor countries can spend three to five years in the rich countries reap the benefits of that kind of globalization which I think have been actually quite limited that's really from an in terms of expanding the global pie that's really the the most unexplored frontier that we have and I'm finally I talk about how we manage the rise of China and and how we should deal with the question of macroeconomic imbalances and China's external surplus so those are the areas that I'm talk about okay thank you very much thank you

3 thoughts on “Dani Rodrik – Globalization Paradox: Democracy and the Future of the World Economy

  • The video editors shouldn't have edited out the questions. One can't properly understand the answers without hearing the questions.

  • Good book. Learned quite a bit of the intricacies of globalization and of the uniqueness of trade among various nations. Agreed that, capitalism and government supplement or compliment each other, rather than substitue. Looking forward to more from Dani.

  • I am afraid that history and our contemporary experience are not on the side of progress in the arena of real human rights, particularly our equal birthright to the planet. The earth is carved up into geo-political terrirories the control of which is still subject to acquisition by warfare and conquest. One can argue that from the time of the end of feudal obligations on leaders to act as stewards of the society's surplus wealth and the beginning treatment of nature as private property (completed with the enclosures of the commons in the Old World and the accommodation of land speculation and land monopoly in those parts of the world where colonialism ocurred). As Turgot, du Pont de Nemeurs and the other Physiocratic writers showed, the people of the world were dominated by a privilege "rentier" elite. If anything, this trend has accelerated during the last half century. The solution? Well, if you aren't impressed by what the Physiocrats had to say on the subject, Adam Smith urged the same response: socialize the rent of land.

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