2007 Northern Trust Forum
Saving Globalization from its Cheerleaders
The 2007 Northern Trust Forum was entitled "The Wealth of Nations: The Globalization Conundrum" and focused on the political and policy challenges that the United States and the world face from globalization. Here are a few examples of the kinds of questions that will inspire the discussion and debate over the course of the forum:
- Is globalization is a panacea to the world's problems or is it exacerbating the world's problems?
- Does globalization encompasses the concept of world cooperation and progress or is it a tool of corporate interests and elite power mongers to exploit people and resources for their own benefit?
- Are the protestors on the streets every time the International Monetary Fund or the World Trade Organization hold a meeting exposing the threat globalization poses to the world or are they hampering the realization of the benefits it has to offer?
- Are globalization's "cheerleaders", who push for continued market opening around the world while ignoring, or worse yet, masking, the potential troubles inherent in the globalization policies they are advocating?
- What public policies, if any, should the US adopt to facilitate adjustment to global economic change?
- How should the US formulate its foreign policies to find a mutually beneficial mode of co-existence with countries such as China, India and Japan?
- Should the US compromise and expend political capital to salvage the current round of multilateral trade negotiations in the WTO, or "go-it-alone" by negotiating trade deals on a bilateral basis?
The keynote address for the 2007 Northern Trust Forum entitled, "Saving Globalization from its Cheerleaders" was delivered by Professor Dani Rodrik at 7:30pm on October 29th. Dr. Rodrik is professor of international political economy at the John F. Kennedy School of Government, Harvard University, and teaches in the School's MPA/ID Program. He has published widely in the areas of international economics, economic development, and political economy. If it is true that the political, economic and intellectual elite in Washington, London and the elite universities of North America and Europe mold the policy debate and set the parameters for what policy makers regard as desirable. What are they saying and where are they leading us? Professor Rodrik argues that when considering the globalization and its implications it is this question that should concern us most. The greatest obstacle to sustaining a healthy, globalized world economy today is not the insufficient openness of the world economy. No country's growth prospects are significantly constrained today by the lack of openness of the international economy. Professor Rodrik is concerned that the greatest risk to globalization lies in the prospect that national governments' room to maneuver will be inhibited to such a degree that they will be unable to deliver the public policies and programs that their electorates want and need in order for them to buy into the global economy. This poses the puzzle of trying to find the 'proper' balance between the national scope of governments and the global nature of markets. A myriad of questions emerge:
- How do we avoid a retrenchment to protectionism and autarky while guarding against the development of an unstable world economy with little social and political support from those it is supposed to help?
- Should a nation be given the flexibility to interfere with global trade norms or practices when they conflict with its deeply held values such as child labor, human rights or health and safety concerns?
- What if trade severely weakens the domestic employment market and/or the bargaining power of workers vis-àis their employers?
- Should poorer nations in particular be given the flexibility to engage in exchange rate and industrial policies aimed at diversifying and restructuring their economies in order to better position them to benefit from globalization? Some countries such as China, India, and a few other Asian countries that have done well recently did not significantly liberalize their import regimes until well after their economies had taken off, and continue to restrict short-term capital inflows. They have used industrial policies - many of them banned by the World Trade Organization - strategically to restructure their economies and to enable them to better take advantage of world markets.
- Should more developed economies see this as a necessary compromise toward greater globalization or should they use whatever influence they have to pressure the WTO and IMF to "enforce" their rules?
- Similarly should a nation, particularly those with emerging economies, be allowed to development growth strategies that take domestic concerns and realities into account even if those strategies conflict with current WTO and IMF rules?
- Should there be a return to a system similar to that created by the Bretton Woods Agreements?
Professor Rodrik suggests that perhaps globalization should not be thought of in terms of exchanging market access: "I will open my markets in x, if you open yours in y," but should consider instead the idea of exchanging policy space: 'I will allow you to protect your national social compact, if you allow me to engage in development strategies that conflict with WTO and IMF rules of good behavior. What are the implications of this approach? What happens to existing international trade norms and expectations? Who would be the "winners" and "loser" from this new approach? This concept paper provides but a glimpse into the challenges and opportunities that globalization presents for governments and economies of the world and for the world economy. Policymakers in the United States, as well as their counterparts across the globe, undoubtedly will have to make political and economic adjustments in response to those challenges and opportunities. This Northern Trust Forum provides an opportunity for us to learn about, think about, and debate about what those strategies of adjustment to globalization have been and what they might or should be in the future. The topics, questions, and issues to be explored at the Forum are certainly important as well as timely. These topics have no easy answers. But thinking, discussing and debating them will be an informative and enlightening experience for everyone who attends or participates in this fall's Northern Trust Forum.
The Roundtable discussion titled "Domestic Priorities and International Forces: National Politics in a Global Economy" was led by Professor Jude C. Hayes, together with Professors Hadi Esfahani and Robert L. Thompson.
Keynote Speaker: Prof. Dani Rodrik
Dr. Dani Rodrik is professor of international political economy at the John F. Kennedy School of Government, Harvard University, and teaches in the School's MPA/ID Program. He has published widely in the areas of international economics, economic development, and political economy. What constitutes good economic policy and why some governments are better than others in adopting it are the central questions on which his research focuses. He is affiliated with the National Bureau of Economic Research, Centre for Economic Policy Research (London), Center for Global Development, Peterson Institute for International Economics, and Council on Foreign Relations. He was awarded the inaugural Albert O. Hirschman Prize of the Social Science Research Council in 2007. He has also received the Leontief Award for Advancing the Frontiers of Economic Thought, an honorary doctorate from the University of Antwerp, and research grants from the Carnegie Corporation, Ford Foundation, and Rockefeller Foundation.
Professor Rodrik's articles have been published in the American Economic Review, Quarterly Journal of Economics, Journal of Political Economy, Journal of Economic Growth, Journal of International Economics, Journal of Development Economics, and other academic journals. His 1997 book "Has Globalization Gone Too Far?" was called 'one of the most important economics books of the decade' in Business Week. His most recent book is "One Economics, Many Recipes: Globalization, Institutions, and Economic Growth" (forthcoming, Princeton University Press.) He is the editor also of a collection titled In Search of Prosperity: Analytic Narratives on Economic Growth (Princeton University Press, 2003). In addition, he is the author of The New Global Economy and Developing Countries: Making Openness Work (Overseas Development Council, Washington DC, 1999).
Professor Rodrik is an editor of the Review of Economics and Statistics and an associate editor of the Journal of Economic Literature. He has given the Yan Fu Memorial Lecture in Beijing (March 2006), the WIDER Annual Lecture (November 2004), the Gaston Eyskens Lectures (October 2002), the Carlos F. Diaz Alejandro Lecture at the Latin American meeting of the Econometric Society (July 2001), the Alfred Marshall Lecture of the European Economic Association (August 1996), and the Raul Prebisch Lecture of UNCTAD (October 1997). His most recent research is concerned with the determinants of economics growth and the consequences of international economic integration.
Professor Rodrik holds a Ph.D. in economics and an MPA from Princeton University, and an A.B. (summa cum laude) from Harvard College.