IPI WP 2008: Governing the Global Economy

Full Title: Governing the Global Economy: Strengthening Multinational Institutions

Author: Ngaire Woods

Type: Other (IPI Working Paper, 2008)

Abstract

The good news in the global economy is that the past two decades have seen globalization proceed apace with unprecedented economic growth in several parts of the world. To date, sound economic policy has made hyperinflation a rarity. Rising commodity prices are fueling growth in sub-Saharan Africa. Formerly poor countries are emerging as major players in the world economy.

The bad news is that the world economy is currently looking more precarious, more unequal, and less governed than it has been in previous decades. In part this is because governance within the global economy has not kept up with globalization and growth. This paper examines practical measures which could refashion and reinvigorate the role of institutions in governing the global economy so as to better manage the precariousness, the inequality, and the lack of engagement in multilateralism from which many countries are currently suffering.

The precariousness of the global economy is currently underlined by the teetering crisis in Europe and the United States emerging as a result of the subprime mortgage market collapse and its immediate effects on the financial sector. The US and EU are large economies whose prosperity affects all others. For example, a slow-down in
either will soon reduce growth rates in China posing both economic and political problems within that country as well as its surrounding region. As national  governments and central bankers fumble for solutions to the growing financial crisis, a spotlight has been shone on the inadequacies of global economic institutions. They have failed to regulate international finance effectively in the past, and they do not seem to be at the center of robust intergovernmental efforts to regulate it in the future.

Author Bio

Professor Ngaire Woods is the inaugural Dean of the Blavatnik School of Government and Professor of International Political Economy. Her research focuses on global economic governance, the challenges of globalization, global development, and the role of international institutions. She founded and is the Director of the Global Economic Governance Programme. She is co-founder (with Robert O. Keohane) of the Oxford-Princeton Global Leaders Fellowship programme. She lead the creation of the Blavatnik School of Government at Oxford University and, before her appointment as Dean, served as the School’s Academic Director.

For more information about Professor Woods, please see her people page