Liberalism in Retreat

Abstract

The deep crisis that afflicted the developed countries in 2008 created shock waves through the world economy and ushered a new era of economic uncertainty whose implications are not yet fully understood. The prolonged but weak recovery in the US combined with stagnation in several Eurozone countries led many to question the very premises on which the international economic order was based and gave rise to populist and anti-globalization sentiments The emergence of China as a leading global power with a system of “state capitalism” and the reemergence of Russia with a similar system have raised questions about the prospects of liberalism. The final questions were raised by the new US administration whose policies starting in 2016 increased trade protection and bilateralism, and thereby, undermined the global multilateral institutions which the US helped establish in the post-World War II era. Amidst these serious challenges to the liberal economic order, starting in 2020, the global community was to suffer the devastation caused by the COVID-19 pandemic. This chapter reviews the main global trends in aid, trade, and globalization during the decade 2009–2019 and their impact on sustainable development.