Abstract
The political and ideological pendulum appears to be moving away from an extreme position in favour of a dominant role for markets in a globalizing economy. The focus of the World Bank’s World Development Report-1997 (WDR-97)1 on the (absence of) effectiveness of the state in the process of economic transformation is a signpost of the exhaustion of the laissez faire approach to global economic policy.
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Notes
World Bank, World Development Report 1997: The State in a Changing World (Oxford and New York: Oxford University Press, 1997).
A parallel movement in terms of the United States domestic politics was concisely expressed by William Kristol and David Brooks (W. Kristol and D. Brooks, ‘What Ails Conservatism’, Wall Street Journal, 15 Sept, 1995). They argue that ‘the era of big government may be over, but a new era of conservative governance hasn’t yet begun’. For them, conservatives lack a governing doctrine. Contempt for ‘the nanny state’ is an inadequate ingredient in the formula to appeal for the public support of conservative causes. According to Kristol and Brooks, it is necessary to restore faith in government by making it more effective. A constructive approach to government is a necessary component of the Republican appeal for American greatness. For a summary of the Keynesian consensus which prevailed for 25 years or so after World War II, see J. Zoninsein, ‘Global Civil Society and Theories of International Political Economy’, in Michael G. Schechter (ed.), The Revival of Civil Society, Global and Comparative Perspectives (London: Macmillan, 1999). The introduction of the decisive role of civil society (as distinguished from political society and economic society) in economic policy-making implies that the simple analogy of an ideological hegemonic pendulum moving back and forth between the two extreme poles of the state and the market is imperfect. Postmodern civil society represents a third pole in macro social agency whose introduction significantly complicates any analysis and evaluation of global economic policy-making. (Ibid.)
L. Taylor, ‘Editorial: The Revival of the Liberal Creed — the IMF and the World Bank in a Globalized Economy’, World Development, 25/2 (1997): 145–152.
The recent criticisms by the chief economisdjustment lending to various Asian countries reinforces this t of the World Bank regarding IMF’s deflationary bias in the 1997–8 aalternative point of view. ‘World Bank, IMF at Odds over Asian Austerity’, Wall Street Journal (8 Jan, 1998): A5–6. Joseph E. Stiglitz, ‘More Instruments and Broader Goals: Moving Toward the Post-Washington Consensus’, 1998 WIDER Annual Lecture, World Institute for Development Economic Research, United Nations University, Helsinki, March 1998.
See, R. Gilpin, The Political Economy of International Relations (Princeton, NJ: Princeton University Press, 1987);
and E. Helleiner, States and the Reemergence of Global Finance: From Bretton Woods to the 1990s (Ithaca, New York: Cornell University Press, 1994).
Cerny discusses the erosion of the national autonomy in pursuit of active macroeconomic policies. He takes for granted the global neoclassical model which predicts that current accounts do not necessarily equal zero in the long run and that risk-adjusted interest rates on capital flows tend towards equality across financially open economies. P. G. Cerny, ‘American Decline and the Emergence of Embedded Financial Orthodoxy’, in P. G. Cerny (ed.), Finance and World Politics: Markets, Regimes and States in the Post-hegemonic Era (Aldershot and Brookfield, VT: Edward Elgar, 1973). Epstein and Gintis present an ingenious alternative model in which international credit is rationed and individual countries operate with a target external asset position (debtor or creditor) in relation to its capital stock. In this case, governments are able to adopt activist macroeconomic policies and alter the distribution of income, but they must introduce the required incomes policy to maintain price stability, and the investment projects must produce the expected increases in the flow of profits, saving and exports necessary to maintain the confidence of creditors in their ability to repay their debts.
G. Epstein and H. Gintis, ‘International Capital Markets and National Economic Policy’, Review of International Political Economy, 4/2 (1995): 693–718.
See Glyn, ‘Internal and External Constraints’; R. B. Reich, The Work of Nations: Preparing Ourselves for 21st Century Capitalism (New York: Alfred A. Knopf, 1991);
P. Krugman, ‘First, Do No Harm’, Foreign Affairs, 75/4 (1996): 164–70.
J, Tobin, ‘A Proposal for International Monetary Reform’, Eastern Economic Journal, 4/3–4 (1978): 153–9.
M. Haq, I. Kaul and I. Grunberg, The Tobin Tax: Coping with Financial Volatility (New York and Oxford: Oxford University Press, 1996).
J. L. Cohen, and A. Arato, Civil Society and Political Theory (Cambridge, MA: MIT Press, 1992).
The following argument expands some of the ideas originally presented in Zoninsein, ‘Global Civil Society’ (note 2), and J. Zoninsein, ‘Implications of the Evolving Structure for the UN System: A View from the South’, in Michael G. Schechter (ed.) Innovation and Multilateralism (Tokyo and London: United Nations University Press and Macmillan, 1999).
J. L. Cohen, ‘The Concept of Civil Society’, in M. Walzer (ed.), Toward a Global Civil Society (Providence, RI: Berghahn Books, 1995).
L. Panitch, ‘Globalization and the State’, in R. Miliband and L. Panitch (eds), Socialist Register 1994: Between Globalization and Nationalism (London: Merlin Press, 1994).
J. Habermas, ‘The European Nation-State — Its Achievements and Its Limits. On the Past and Future of Sovereignty and Citizenship’, in G. Balakiishnan (ed.), Mapping the Nation (London: Verso, 1996).
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Zoninsein, J. (2000). The Future of Globalization: Toward a Post-Hegemonic Consensus in Global Economic Policy. In: Aulakh, P.S., Schechter, M.G. (eds) Rethinking Globalization(s). International Political Economy Series. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-62425-6_14
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