Feasible globalizations

Globalisation is limited by desirable institutional diversity

This essay conveys two core ideas. Firstly, there are inherent limitations as to how far global economic integration can be pushed. Secondly, within the array of feasible globalisations, there are many different models to choose from. Each of these models has different implications for whom is empowered and whom is not.

The author argues that markets need to be embedded in a range of non-market institutions in order to work well. These institutions perform several functions critical to markets’ performance: they create, regulate, stabilise, and legitimate markets. There is no simple or unique mapping between these functions and the form that the institutional basis of market economies can take. Now that formal restriction on trade and investment have mostly disappeared, such institutional diversity is now the single most significant impediment to full economic integration.

Institutional diversity performs valuable functions and so harmonisation is not desirable. Global federalism is also impossible in the short-to-medium term because global inequalities would overwhelm a political system that truly transcended national sovereignty. The nation-state system, deep economic integration, and democracy are mutually incompatible.

The policy implications of this are twofold

scale down ambitions with respect to global economic integration
do a better job of writing the rules for a thinner version of globalisation with bigger gains. The authors major suggestion in this regard is to relax restrictions on the international movement of workers

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Feasible globalizations