Must-Read: Dani Rodrik: Put Globalization to Work for Democracies:
Look closely at the economies that converged with richer counterparts — Japan, South Korea, China — and you see that each engaged globally in a selective, strategic manner...
China pushed exports, but it also placed barriers on imports to protect employment in state enterprises and required foreign investors to transfer know-how to domestic companies. Other countries that relied on globalization as their growth engine but failed to put in place a domestic strategy became disillusioned. For example, few countries tried as hard as Mexico to integrate with the world economy....
The bigger worry today is that unmanaged globalization is undermining democracy... deepened the economic and cultural divisions between those who can take advantage of the global economy and those who don’t have the resources and skills to do so.... We must reassess the balance between national autonomy and economic globalization. Simply put, we have pushed economic globalization too far....
Some simple principles would reorient us in the right direction. First, there is no single way to prosperity.... Countries have the right to protect their institutional arrangements and safeguard the integrity of their regulations.... Countries should be able to prevent such “regulatory arbitrage” by placing restrictions on cross-border transactions.... Imports from countries that are gross violators of labor rights, such as Pakistan or Vietnam, may face restrictions when those imports demonstrably threaten to damage labor standards at home.... Poor and rich countries alike need greater space for pursuing their objectives... restructure their economies and promote new industries... address domestic concerns over inequality and distributive justice. Both objectives require placing some sand in the cogs of globalization...
