Working Paper: NBER ID: w26213
Authors: Dani Rodrik
Abstract: In a world economy that is highly integrated, most policies produce effects across the border. This is often believed to be an argument for greater global governance, but the logic requires scrutiny. There remains strong revealed demand for policy and institutional diversity among nations, rooted in differences in historical, cultural, or development trajectories. The canonical case for global governance is based on two set of circumstances. The first occurs when there is global public good (GPG) and the second under “beggar-thy-neighbor” (BTN) policies. However, the world economy is not a global commons, and virtually no economic policy has the nature of a global public good (or bad). And while there are some important BTN policies, much of our current discussions deal with policies that are not true BTNs. The policy failures that exist arise not from weaknesses of global governance, but from distortions of domestic governance. As a general rule, these domestic failures cannot be fixed through international agreements or multilateral cooperation. The paper closes by discussing an alternative model of global governance called “democracy-enhancing global governance.”
Keywords: No keywords provided
JEL Codes: F50; F60
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Domestic governance failures (H84) | Weak global governance (F69) |
| Global public goods (GPGs) (H40) | Necessitate international cooperation (F55) |
| Underlying domestic governance issues (O17) | Policy failures (H84) |
| Contentious policies (J18) | Domestic considerations (F52) |
| Distortions in domestic governance (D73) | Failures of policy in global context (F68) |
| Global governance (F53) | Cannot effectively remedy domestic governance issues (H11) |