Project Syndicate: The Globalization Backlash Paradox

Some forms of globalization tend to be appreciated more than others, and economist Arvind Subramanian delves into why cross-border financial exchanges are more widely accepted than trade or migration despite having “regularly wreaked havoc on rich and poor economies alike over the last 40 years.” He concludes: “When it comes to real global integration, it is easy to identify perpetrators and victims; with financial integration, it is not.” Politicians find it easier to identify and target those suffering from trade or migration, especially if geographically concentrated, he suggests. Assigning blame during a financial crisis is less easy, and political leaders resist the integration in governance and rules-making that could prevent bad behavior. He urges controls of financial integration. “To support real integration, policymakers must create ambitious – even radically so – social safety nets that protect the inevitable losers, while highlighting the overall benefits that such integration affords…. policymakers will need to do a better job of managing financial integration – a task that may be all the more challenging, because no political constituency is really demanding it.” – YaleGlobal

Project Syndicate: The Globalization Backlash Paradox

The US and other nations that built multilateral institutions and global trade rules now undermine them, but they do not complain about financial integration
Arvind Subramanian
Thursday, April 26, 2018

Read the article from Project Syndicate about the need for controls over global financial integration.

Arvind Subramanian is chief economic adviser to the Government of India.

© Project Syndicate - 2018

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