Working Paper: NBER ID: w9129
Authors: Dani Rodrik
Abstract: The nation-state system, democratic politics, and full economic integration are mutually incompatible. Of the three, at most two can be had together. The Bretton Woods/GATT regime was successful because its architects subjugated international economic integration to the needs and demands of national economic management and democratic politics. A renewed 'Bretton-Woods compromise' would preserve some limits on integration, while crafting better global rules to handle the integration that can be achieved. Among 'feasible glablization,' the most promising is a multilaterally negotiated visa scheme that allows expanded (but temporary) entry into the advanced nations of a mix of skilled and unskilled workers from developing nations. Such a scheme would likely create income gains that are larger than all of the items on the WTO negotiating agenda taken together, even if it resulted in a relatively small increase in cross-border labor flows.
Keywords: No keywords provided
JEL Codes: F0
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| nation-state system + democratic politics (P16) | full economic integration (F15) |
| Bretton Woods-GATT regime (F33) | success in international trade (F10) |
| prioritizing national economic management + democratic processes (F52) | success of Bretton Woods-GATT regime (F02) |
| deeper economic integration (F15) | political legitimacy issues (P37) |
| absence of convergence in institutional arrangements (F55) | barrier to deeper integration (F55) |
| effective market functioning (G18) | well-regulated institutional framework (F55) |