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Rethinking Global Governance: Cooperation in a World of Power

Dani Rodrik, Joseph Stiglitz

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We live in a highly integrated, highly interdependent world. Climate change affects all of us; carbon emissions in one country can have devastating global effects. Viruses know no international borders. For more than two hundred years, a basic lesson of economics has been that lowering trade barriers contributes to high standards of living by allowing for greater specialization and taking advantage of comparative advantage. Knowledge produced in one country can be of benefit to the whole world.

While all these areas and many others demand global governance, the reality is that we live in a world with limited global cooperation. Policies are determined by domestic politicians, based on “national interest.” The nation state remains the principal locus of political accountability. Moreover, some types of global governance can backfire when they privilege powerful countries (or special interests within them) instead of addressing common challenges. These and other considerations we discuss below imply that we should not be too demanding of global institutions—or perhaps more accurately, we can and should ask a great deal, but we should see these as aspirations of an ideal world; taking into account political realities, a more circumscribed, less ambitious global agenda may be preferable. Accordingly, we advance here a framework for a minimal global governance architecture.

In what follows, we first outline some general principles that should govern the design of global governance and provide their justification. The next section discusses the reasons, both positive and normative, for our minimal conception of global governance. In the remaining sections of the paper, we draw the implications of these ideas in a variety of arenas: IPR, trade, financial flows, monetary policy, investment agreements, management of debt. Our principles help guide us to areas where we should be hopeful of the possibility of good agreements (green lighted), areas where such agreements should be widely circumscribed (red lighted), and areas where we should proceed with extreme caution (yellow lighted).

About the Authors

Dani Rodrik
Rafiq Hariri Professor of International Political Economy
John F. Kennedy School of Government
Harvard University

Joseph Stiglitz
President
Initiative for Policy Dialogue (IPD)

Joseph E. Stiglitz is President of the Initiative for Policy Dialogue, and Chairman of the Committee on Global Thought at Columbia University. He is University Professor at Columbia, teaching in its Economics Department, its Business School, and its School of International and Public Affairs. He chaired the UN Commission of Experts on Reforms of the International Monetary and Financial System, created in the aftermath of the financial crisis by the President of the General Assembly. He is former Chief Economist and Senior Vice-President of the World Bank and Chairman of President Clinton’s Council of Economic Advisors. He was awarded the Nobel Memorial Prize in Economics in 2001.

Publication Information

Type Network Paper
Program -
Posted 03/15/24
Download 58kb docx
# Pages 23