MARKETS, POLITICS AND GLOBALIZATION: CAN THE GLOBAL ECONOMY BE CIVILIZED? by Gerald Karl Helleiner, Centre for International Studies University of Toronto, Canada

UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT 10th RAÚ PREBISCH LECTURE December 2000 Markets, Politics Globalization: Global Economy Civilized BY Gerald Karl Helleiner Professor Emeritus, Department Economics Distinguished Research Fellow, Centre International Studies University Toronto, Canada 10th Raul Prebisch Lecture Delivered Palais des Nations Geneva, 11 December 2000 - - Prebisch Lectures instituted 1982 . Gamani Corea, Secretary-General UNCTAD, honour Dr. Raú Prebisch, UNCTAD= founding father Secretary-General. lst lecture, 1982: Dr. Raú Prebisch 2nd lecture, 1983: . Indira Gandhi, Prime Minister India, UNCTAD VI Belgrade 3rd lecture, 1987: Dr. Saburo Okita, Japan, UNCTAD VII Geneva 4th lecture, 1989: Academician Abel . Aganbegyan, principal economic adviser USSR, occasion twenty- anniversary UNCTAD Geneva 5th lecture, 1992: Delivered jointly Dr. Bernard . Chidzero, Senior Minister finance, Economic Planning Development Zimbabwe; . Michel Rocard, Prime Minister France; . Enrique Iglesias, President Inter-American Development Bank, UNCTAD VIII Cartagena de Indias 6th lecture, 1994 Professor John . Dunning, Professor International Business State University Jersey, occasion UNCTAD= thirtieth anniversary, Geneva 7th lecture, 1996 Professor Jagdish Bhagwati, Arthur Lehman Professor Economics Columbia University, York, UNCTAD IX Midrand, South Africa 8th lecture, 1997 Professor Dani Rodrik, Rafiq Hariri Professor International Political Economy, John . Kennedy School Government, Harvard University, Geneva 9th lecture, 1998 Dr. Joseph Stiglitz, Senior Vice-President, Development Economics Chief Economist, World Bank, Washington, .. - iii - CONTENTS Page Welcoming address . Rubens Riicupero 1 10th Raú Prebisch lecture Markets, Politics Globalization: Global Economy Civilized Prologue.......................................................................................................... 3 . Globalization: Meaning Implications.......................................... 5 II. Markets Problems ................................................................. 8 III. Politics Problems....................................................................... 10 IV. Global Financial Governance ................................................................ 14 . Global Governance Markets – WTO .................................... 17 VI. Summary Conclusions.................................................................... 24 Welcoming address . Rubens Ricupero, Secretary-General UNCTAD outstanding economists introduction audience concerned trade development issues, Prof. Gerry Helleiner . Professor Emeritus Distinguished Research Fellow University Toronto, member Executive Board African Capacity-Building Foundation based Harare, Prof. Helleiner long intellectual involvement North-South issues, involvement 1962, obtained Ph.. degree Yale University. , devoted professional career improving understanding problems affecting World studying international policy action deal overcome problems. Author editor great number books trade, finance development, special reference Africa, edited introduced book burning issue capital account regimes developing countries. working book, dealing -traditional export promotion Africa. Professor Helleiner core important research initiatives. outstanding establishment North-South Institute, served Vice-Chairman, Chairman, years. Prof. Helleiner= advice international policy widely solicited. 1990 , Research Director Group 24 ( developing countries’ caucus IMF World Bank). consultant wide range Governments international institutions. UNCTAD , occasion, reaped benefits enlightened policy approaches issues varied transfer technology, transnational corporations macroeconomic policy. subject matter Prof. Helleiner addressing today utmost importance. title speaks : Markets, Politics Globalization: Global Economy Civilized , highlights markets politics deeply intertwined, influences , good bad. , empahsizes interaction markets politics influences direction globalization , , . world phenomenon operate favour mankind. , case, serve widen economic social differences, benefit create sources concern. Finally, question raised title central preoccupation present conference room: global economy civilized implies , present form, global economy lacks human dimension. responsibility international community inject dimension globalization process. great pleasure give floor Prof. Helleiner. 3 MARKETS, POLITICS AND GLOBALIZATION: CAN THE GLOBAL ECONOMY BE CIVILIZED Prologue deeply honoured UNCTAD= invitation deliver tenth Raú Prebisch Lecture Millennial Year. great admirer Raú Prebisch work ECLA/CEPAL, UNCTAD . hope honour memory. challenge. hope forgiven anecdote memorable encounter Dr Prebisch. younger man, knew distance; pretty confident didn= . huge international conference banking finance, held Dubrovnik earlier, happier times ( 1980), present paper foreign exchange risk advantages SDR unit account connection OPEC lending developing countries time. big conferences, papers time, programme slightly disordered. happened, immediately prior paper= presentation Executive Director IMF ( left unnamed). presentation IMF= role perfection conditionality distorted facts understood ( work -24 subject) turn tossed paper delivered angry totally extemporaneous lecture true nature IMF= proper role time, guidelines conditionality ( account special social political circumstances individual borrowing countries) apparent failure follow . finished preparing enjoy () polite applause, elegant silver-haired gentleman rose row audience, platform, warmly shook hand spoke . applause loud . gentleman , , indomitable Raú Prebisch, senior patrons conference. remember looked acted day ... graciously elegantly coming , misbehaved conference organizers, worth : agreed . hope approve -prepared remarks today. 4 . Globalization: Meaning Implications great deal nonsense written Aglobalization@ years. political , political left; business political leaders, NGOs people streets. risk annoying making case term Aglobalization@ slippery, ambiguous, subject misunderstanding political manipulation, banned ... agreed precise meaning proper usage. , involved economic political policymaking debate , insist, clarify messages sphere . term Aglobalization@, frequently , confuses totally phenomena. shrinkage space time world experienced consequence technological revolutions transport, communications information processing. good , means , world smaller place. References Aglobal village@ Aspaceship Earth@ , prosaically, Athe global economy@ capture reality part world carries greater impact parts humanity quickly case. dramatic behaviour world= interrelated 24-hour- -day financial markets. Aglobalization@ bred detailed --date knowledge = activities. income wealth imbalance created totally unbalanced information flows wealthy CNN . . Snow Aultimate obscenity@: rich sitting comfort living-rooms watching people starve colour television. ( virtue Aobscenity@ inability privileged longer conceal inaction excuse, implausible, Adid @. Today , argument matter.) technology-driven Aglobalization@ reality adapt. escape . usage term, hand, relates matters human policy choice degree opens submits oneself mindlessly surrounding external forces. Individuals, firms, governments NGOs choices. globalization ( meaning) fact, constrain choices, totally foreclose imply. direct. quarrel, sense Afor@ Aagainst@ globalization, globalization fact (, , liberty dislike ). equate globalization external liberalization full reliance global Amarketplace magic@, , , logical confusion; misleading. convenient pushing external liberalization agenda depict inescapable concomitant globalization fact. globalization ( fact) external liberalization , , logically distinct. globalization ( fact) proceed quickly countries externally liberalize .. open world goods, services factor markets (including, , labour markets liberalization enthusiasts reticent discussing preach virtues full free mobility capital). trend 5 external liberalization decades undoubtedly accelerated globalization= pace. association external liberalization policies technology-driven fact globalization contributed logical terminological confusion deplore. External liberalization policy dimensions involves political, economic social choices. effects liberalizations opening- agreed uniform places times (.. Rodrik, 1999; Rodrik Rodriguez, 1999). challenge national global levels , conscious policy choices, globalized system ( undoubted fact) work maximum human welfare. task globalization functional, Acivilize@ . reputable developing country analysts governments question positive potential roles international trade capital inflow economic growth development. question inevitable participation , considerable degree integration , global economy endless lectures Northern leaders heads international organizations policymakers developing countries, evidently incapable perceiving interests, inevitability ( benefits) globalization virtues participation global economy, tedious patronising. stop. real issues complex. matters policy politically difficult. relate, firstly, terms countries governments interact global economy. matters conducive Ayes@ Ano@ answers; slogans genre AGet globalization train =ll left @. , relate global rules institutions Agovern@ functioning emerging global economy. isn= obvious (1) external liberalization (Aopen-ness@) country= interest dimensions (2) overarching sweep global economic history world requires set global rules promote ease path greater freedom global market actors, universal uniform application. public / intellectual mood world today, venture scepticism counts. - bursts globalization liberalization, growing anxiety fate poorer, marginalised, vulnerable powerless (.. UNRISD, 2000; World Bank, 2000; UNDP, 1999; UNCTAD, 1997). sceptical mood , , reflected conclusions Trade Development Board innumerable international assemblies UN system. full implications globalized economy apparent, evident functions government, supply public goods pursuit social objectives, undertaken global level. remotely resembling global Agovernment@. visible reasonable time horizon. Institutions purposes constructed; 6 international rules, laws dispute settlement mechanisms address evolve. , , international private sector codes standards, introduced voluntary basis, , instances, Ahybrid@ privateBpublic arrangements achieve ends. important implications globalization world markets, , (1) implied, pressing development policies, national, regional community levels, optimal global economy interest national, regional local human welfare development; (2), difficult, greatly increased improved arrangements global economic governance. limitations knowledge enormous diversity national, regional local circumstances, difficult generalize ; , turn, implies global governance rules systems eschew -harmonization Aone-size-fits-@ approaches. Global economic governance constitute prime focus lecture. plan remaining time ( offer advance plan exit) . , background discussion global (market) economy, discuss functioning markets, problems , related issues. , political scientist, plan discuss critical role politics economic policy, limitations democratic political processes, political imperfections current global economic governance. direct attention, , current issues global financial governance; , current issues governance global markets role WTO. number suggestions appeals remarks global economic governance; , finally briefly, bring summary conclusion. 7 II. Markets Problems Market forces powerful ... powerful good. professional economist, ideologically encrusted, recognize , left unchecked, yield socially deleterious outcomes. economic theory perfectly competitive markets takes careful account Amarket failures@ forms externalities, public goods ; begins, important remember, abstracting equity income distribution distribution power. Empirical reality presents imperfection-ridden market system imperfectly competitive, imperfectly informed, markets missing . presents grotesquely inequitable Ainitial conditions@. , majority, inequities distribution income, wealth power important determinants economic outcomes market systems important targets international economic policy. Markets , , sole primary basis human interaction. Markets involved interact families, private businesses (including transnational corporations), communities, universities, governments manner bureaucracies, nations international institutions. institutions manner relationships hierarchical , gifts, gift exchanges, transactions lend easily simpleminded Amarket analysis@. Institutions, customs, laws traditions carry influence functioning markets. people Atransitional economies@ learned, great cost, important institutional legal prerequisites effective socially harmonious functioning markets, free market behaviour approximate law jungle. , financial crises scores countries underscored social economic disorder arise markets function freely fragile / inappropriate institutional frameworks. Modern economic theory, fact, devotes great deal attention origins, functioning role -market institutions. economists recognize vast, unrecorded sphere extremely valuable daily activity, Aeconomic@, involving care = fellow human beings (notably children, disabled aged). vast -called Aeconomy care@, feminists correctly directed attention, typically minimal, , material rewards; market behaviour (involving rational pursuit -interest) functioning, minds benighted economists, warped crude assumptions kind behaviour exists. Modern economic theory recognizes short-term pursuit individual - interest Aperfectly@ competitive markets negate achievement collectively beneficial objectives. - public goods defence social stability elaborates models individuals achieve objectives cooperating , participate repeatedly - situations implications future responsibility reputation. interesting frontiers theoretical economic research 8 exploration optimal means achieving cooperation = collective interest . Acollective action@ issues linked role - market institutions. short, markets important market incentives powerful, -pervasive, solve problems. proper context, safeguards institutions, markets incentives good. , , - great harm governments replace outdo markets circumstances capacity effectively . trick society, national global level, harness power markets social interest. , defence, attempts Aperfection@, markets, thick thin, traditional role economist. ( worth recalling modern economic science origins, Adam Smith, moral philosophy.) limitations pure market model market system disputed professional economists, social scientists broader competence. market-driven economy, completely market-driven society. universal agreement laws, rules, institutions Agovern@ functioning markets individual corporate behaviour. , , stuff politics ... , doubt, moral philosophy. 9 III. Politics Problems Political processes governmental decisions give rise influential, countries, determination level, composition location economic activity, distribution income wealth. world government exist, political processes carry influences global economy . noted earlier, global economic governance, sorts, exists continues evolve. evolution driven political processes power. political systems, Ademocratic@, oligarchic dictatorial, national international, money talks. AHe pays piper@ generally Acalls tune@. democratic politics, market economies, systemic imperfections abound. US, , estimated independent research body political parties supporters spent $3 billions (!) year= elections, declared Athe federal election system collapsed system organized bribery@ (quoted Financial Times, 25 October 2000). Business Week, American business magazine, ran front-page headline question: AToo Corporate Power@ , story , majority Americans today answering Ayes@ (11 September 2000). Corporate influence US major powers= political decision-making carry profound spillover effects rule-making global economy. Large private corporations purchase influence -called democratic societies. Geneva trade diplomats , influence ostensibly international negotiations considerable; witness role pharmaceuticals industry intellectual property debates banking financial sector capital account regimes trade financial services. international activities business lobbies subject limits registration requirements regulation. bulk activity untransparent public. public sees , Athrough glass darkly@. activities, formally legal, constitute graver threat prospect democratic accountable global economic governance, ultimately sustainable global human development, corruption developing countries ( payments Northern businesses) received attention OECD international financial institutions. Aexposed@, .. transparent, effects analysed , baleful, addressed. UN Global Compact private business address issue . money impacts heavily domestic international political processes, illusions bulk power decisionmaking relating global economy continue rest , countries, firms organizations economically (, added, militarily) strongest. , universally recognized democratic principles (recognized rhetorical level) provide equal participation weak strong individuals political processes. exists strong case attempting, global national levels, construct global governance arrangements , degree, reflect democratic principles (, implied earlier, setting bounds exercise influence wealthy powerful). 10 Needless , current governance arrangements global economy remotely reflect democratic principles analysts countries espouse, theory rhetoric. , global economic governance exists profoundly undemocratic. peoples developing countries, accounting 85% world= population ( percentage rising), severely -represented. Decision- making key global economic issues remains highly concentrated major industrial powers main international financial institutions ( International Monetary Fund, World Bank group Bank International Settlements) control. selection processes leadership key multilateral financial institutions demonstrate regard principles due process , degree, democratic nations large private corporations. processes systems carry credibility legitimacy ( politically sustainable) provide greater collective influence power developing countries. basis experience date, reason fear future evolution governance arrangements global economy continue biased favour interests industrial countries, -7 countries, governments private firms ( , cases, NGOs) exercise disproportionate influence global economic affairs. extent future global governance arrangements undertaken conjunction private ( -governmental) sector biased Northern interests perceptions intergovernmental institutions processes. , concern emerging global economic governance arrangements grant sufficient weight imperative sustainable global human development struggle human poverty (Culpeper Pestieau, 1995; Commission Global Governance, 1995, chapter 4; Helleiner, 2000a). great divergence political views role government national local levels, broad consensus global economy - governed respects. -7 Finance Ministers seek improved governance financial markets. -7 seek harmonized rules Alevel playing fields@ private firms. Environmentalists fight protect planet= biodiversity, ozone layer temperature levels. developing countries NGOs prime issues poverty empowerment. easy despair short- medium-term prospect developing political processes fair governance arrangements emerging global economy. time, , important recognize world , albeit spurts response costly crises. existence UN specialized agencies hard imagine turn twentieth century. Imperfect WTO undoubtedly , existence reflects worldwide recognition global governance . existing multilateral institutions product history. differently 50 100 years. Political processes, including events streets, continue drive . Significant change surely . , surely, unhelpful , streets , shut . 11 major challenge substantively envisage design institutional legal requirements global economic governance develop effective legitimate processes processes participatory fair move world required governance system. global rules system Aharmonized@ deeper integration national economies agreed framework, forecast advocate, , , full democratic representation rules framework created implemented. Ano harmonization representation@. global political tide running -7, OECD, Northern civil society, -77 UN direction reform major institutions global economic governance: greater transparency, accountability, democratic representation, prime concern sustainable human development shrinking planet. problem , present, world lacks political leadership required global vision. world= super-power, elected Congress, interest multilateral organizations instruments short- term interests. present, expect leadership kinds global economic governance processes institutions world increasingly requires source country , wealth, weakest aid performance record OECD (0.1% GNP 30% Middle East); remains arrears financial obligations United Nations; jealous sovereignty fails ratify obvious international conventions relating world= vulnerable (including relating rights child; economic, cultural civil rights; discrimination women; forced labour; freedom collective bargaining; land mines) (UNDP, 2000); continues oppose effective international conventions greenhouse gases preservation global biodiversity. reason expect leadership US Government years. , present, establish processes, proposals, analyse future possibilities, , , initiate regional functional arrangements address governance realities . time genuine opportunity fresh ideas initiatives discussed forums usual power centres. time Amiddle powers@ regional groupings developing countries join, rarely , sustained pursuit common interests -functioning global economy. formal structure governance decision-making international organizations, underutilized potential increased influence part small poor increased cooperation . cooperation forms ranging ad hoc issue-specific collaboration institutionalized arrangements information exchange development common positions. 12 Developing countries successful efforts collective action principal multilateral economic institutions IMF, World Bank group WTO. effective equivalent -7 Economic Summit remotely resembling industrialized countries= Organisation Economic Cooperation Development (OECD). cooperative research technical support operations weak. Developing country interests tended analysed greatest length multilateral organizations ; analyses subject obvious constraints ( influence industrialized countries bodies) independent work free. true economic political interests individual developing countries diverge, mutual fears suspicions ( speak armed conflicts) developing country group, international cooperation , circumstances, difficult. extremely important elements common economic interest global arena. arena industrial countries divergent interests pursue hold common greater effect. United Nations ( relevant agencies) play important facilitating role Anudging@ world direction majority members agree urgently . degree, UNCTAD, UNDP, Department Economic Social Affairs, regional commissions . continue; intensify efforts. UN Secretary-General Asoft power@ sphere chosen deploy; choose , ways actively encourage political quasi-political processes improved global economic governance. 13 IV. Global Financial Governance efforts prepare governance arrangements (international financial architecture, plumbing) global monetary financial system scarcely begun. (Culpeper, 2000, good account current state play.) central multilateral institutions concerned functioning global economy global monetary financial system remain IMF World Bank Group. Formal voting power determined formula assigning primary weight economic strength result governance , , democratic major multilateral bodies. developed countries, defined World Bank, account 17% voting strength United Nations ( Global Environmental Facility), 24% WTO, 34% International Fund Agricultural Development (IFAD), account 61B62% World Bank IMF (Woods, 1998). US retains Ablocking@ voting power (.. effectively, veto power) principal decisions Bretton Woods institutions. IMF World Bank democratic governance, incorporate degree developing country representation participation. meetings industrial countries economic financial matters -7/-8 Economic Summits; meetings -7 -10 Finance Ministers; meetings central bank Governors BIS; committees OECD, virtually . years, BIS invited participation larger significant developing countries, OECD incorporated Mexico Republic Korea membership; marginal , nature symbolic gestures, substantive nature organizations. significant emerging market economies invited participate Financial Stability Forum ( 1998 onwards) Group Twenty ( 1999 onwards), initiatives -7 carry international discussions financial architecture, Bretton Woods institutions. Increased developing country representation key current discussions international monetary financial reform welcomed. initiatives, , primarily directed narrow question prevention resolution systemic financial crises, wider range reform issues financial system require attention. -20 severely flawed representation poorest smallest developing countries European Alike-minded@ countries ( Nordics Dutch) , basis prior experience, expected periodically speak behalf. , poorest smallest constitute systemic threat. major Aarchitectural@ issues surrounding provision adequate development finance countries peoples. issues surrounding AHIPC initiative@, wholly inadequate global response -income country debt servicing, frozen, penalty, long . aid relationships longer functional acceptable. rhetoric, practice, aid donor community changed radically 14 favour transparent coordinated assistance support locally-owned donor-driven programmes, recipients= donors= control. Change practices eventually follow change rhetoric, slowly . sped improved independent monitoring aid donor performance country level, remains virtually -existent ( continued monitoring recipients). ( details , Helleiner, 2000b). -20 possess mechanisms reporting accountability broader international community, constituency system IMF World Bank, provisions -governmental inputs transparency. -20 potential, , start. initial processes wrong. origins -7 reduce legitimacy; membership fully representative; mandate narrow; procedures lack provisions - governmental participation, accountability transparency. present constituted, lead . existence deflects energies hopeful processes agendas. principal requisites rescue: () alter membership improve representativeness ( converting IMF/Bank members observers) institute sort Aconstituency@ system ensure full reporting sense ownership -members; (ii) declare accountability jointly UN Secretary-General, Managing Director IMF President World Bank, expectation report() presented UN= ECOSOC, Executive Boards , forthcoming UN Conference Financing Development; (iii) discussion papers, documents, reports publicly , encourage public parliamentary debate thereon world; (iv) significantly expand agenda address full range problems issues international monetary financial system, addressed instance UN Task Force Report, establish technical subcommittees address , . expanded agenda include: provision effective system global macroeconomic management, including provision adequate liquidity emergency responses; stable equitable system development finance developing countries finance development-related scientific research, health agriculture; agreed framework rules obligations international financial flows (including provision prudential regulation international financial markets institutions), capacity effective equitable application; 15 increased representation participation developing countries decision- making level international financial institutions properly reflect developing countries= growing role world economy, including credible processes selection chief executive officers (Kapur, 2000) democratic allocation voting power institutions; important , concrete provision financial requirements supply key elements human development world= population. Ambitious . Impossible . ( add , limited resources, United Nations= staff significant contributions efforts direction, notably UNCTAD= Trade Development Reports, Report UN Task Force International Financial Architecture. nerve face US -7 pressure, UN staff preparation -postponed UN Conference Financing Development.) 16 . Global Governance Markets BB WTO trading system rules govern -deepening integration national economies global market economy standardized rule system bulwark bullying strong. rules constructed strong protect interests imbalance capacity implement , system worse useless weak. (Corporate social responsibility place naive foolhardy rely Global Compacts dependent . States rules effective functioning social interest markets.) Evidently process matters rules established sets agenda rule-setting forums inputs disagreements analysed adherence rules monitored policed World Trade Organization (WTO) key global institution arena. accurately describe actual sphere activity. sort World Trade Organization , , doesn= concern trends fluctuations members= terms trade, weakest vulnerable members Aburdensome surpluses@ ( ITO charter called ) primary commodity markets restrictive business practices abuse dominant power international goods services markets paid scant attention obvious trading issues moved deeply domestic policy issues intellectual property regimes, domestic investment subsidy policies push labour standards environmental practices, , fact, Atrade-related@ basis current practice called World Market Harmonization Organization. , WTO= functioning present stalled. members deeply disillusioned experience years existence. world= NGO community launched major assault rules processes, legitimacy. enter range WTO disagreements Aimplementation@, TRIPs agreement, agriculture textiles, standards ( SPS), Aspecial differential treatment@, functioning ( abuse) dispute settlement system, extent nature technical assistance, disappointment Aintegrated framework@ developed, rest. prefer address fundamental issues purpose, process legitimacy. doubt longer dispute fact developing countries signed Marrakesh Agreement sufficient appreciation implications / expectation considerably change industrial country protectionist practice materialized. , suspect, disagreement industrial countries vastly overestimated developing countries= capacities (, turns , willingness) implement elements agreed timetables. escaping fact WTO bad start. question . 17 reality, capacity , , developing countries participate effectively WTO system advantage rights defend interests, meet obligations WTO doubt. WTO member-driven organization delegates member countries actively involved day--day activities interests . estimated WTO processes involve 45 meetings week Geneva, technically complex highly Alegalized@ (Blackhurst, 1997). requirements effective participation place enormous burden resource-constrained smaller poorer countries. represented , staffing inadequate handling -increasing complexity issues rising number meetings obligations characterising WTO processes. purely Arule takers@ opposed Arule makers@. , , developing countries present position play roles consensus-building consultations formal Geneva meetings. WTO= predecessor, GATT, secretive institution major decisions, formal structures, disproportionately influenced major industrial powers. , critical issues discussed Aresolved@ meetings Director-General limited group powerful countries. case earlier rounds, decision-making Uruguay negotiations Apyramidal@ structure major trading countries ( Atop@) implicit, effective, veto power negotiations= outcome (Winham, 1998). , informal consultations, major developed countries ( occasionally developing ) agreed major issues presented results members, essentially ratification. GATT traditions carried modus operandi functioning WTO, Seattle appeared . Adeeper integration@ WTO negotiating dispute settlement agenda generated public concern North (, degree, South) challenge governments developing countries. time, developing countries realized costs failure sufficiently prepared, involved united Uruguay negotiations GATT, creation WTO. view outcome negotiations fundamentally harmful interests recognize potential greater influence future negotiations WTO. early casualties current difficulties reaching agreement WTO- member governments present system governance. efficient system representative decision-making devised membership organization unwieldy size vast complex mandate. Failing development, WTO= formal structure, decision-making risks reversion previous AGreen Room@ practices main players exercise disproportionate inappropriate influence closed doors. achieve equity representation improve transparency processes, restore developing country confidence WTO system, major top-priority challenge. 18 casualty concept Asingle undertaking@ (originating Uruguay ) member countries required agree ( abide ) entire set rules, multilaterally negotiated WTO. flexible arrangements joining / opting subagreements organization, maintaining Afundamental core@ tenets practices subscribe arrangements analogous stages GATT conducive future agreements large varied membership; requirement restoration confidence, progress, WTO system. WTO requires, , attempt Aglobal@ negotiations , labelled ADevelopment @ public relations purposes, , present arrangements, recreate imbalances inequities . ( worth recalling Marrakesh Agreement product launched fanfare symbolic importance location developing country ... lead) , required pause current processes permit deliberate reconsideration, formal redefinition, fundamental purposes organization; independent review current capacity achieve . view WTO unambiguously clear , World Bank IMF ( decades forceful denial), Adevelopment institution@. present ; . WTO= raison =être today achievement agreed set rules, Alevel playing field@, economic transactions global economy. presumed, WTO secretariat -7 circles, universal application current rules ( agreed) promote development ; theory hypothesis reality. challenge ... reason. WTO charter formally commits poverty alleviation promotion sustainable development, primary WTO objectives. amount rhetoric symbolism effect, development primary purpose Uruguay ( earlier GATT Rounds) Marrakesh Agreement. optimistic dubious models future consequences Uruguay predicted income losses poorest countries. knew models missed negotiation story. future, WTO assessed primarily basis achievements poverty reduction sustainable global human development. statement purpose , , General Council approve. , urgently required independent review developmental consequences content actual implementation Marrakesh Agreement, including capacity WTO= current governance arrangements staffing promote global development future. potential development role WTO important global economy ( good ill) battles WTO politicized, independent group undertake review suggest appointed Secretary-General United Nations. liberally funded time job carefully. report provide critical independent input politically stalemated WTO, ECOSOC ( intensely interested) broader international community. 19 realist recognize reconceptualization WTO development institution happen quickly ( fully confident eventually ). suggested review time. change WTO short- medium-run. long WTO international rules system, including negotiation bilateral plurilateral agreements, continues current path, option, , seek protection weaker members international community case--case basis. Today= rules systems complex implementation requires legal inputs expensive. mere threat US European anti-dumping action, instance, discourage small developing country exporters wherewithal launch legal defence. Similarly, large countries breach agreed rules expense small poor, cost legal challenge exceed financial capacities (, cases, relevant trade losses). national jurisdictions, legal rights unable afford legal costs protected publicly-funded provision legal aid; typically grossly underfunded wholly inadequate task, ... acknowledges . growing recognition analogous international arrangements required protect small poor countries bullying strong areas international trade investment. small Acentre@ smaller poorer members protect interests WTO system launched, financial support consortium developing countries progressive aid donors, Geneva. efficacy untested , domestic antecedents, minor dent ( major) problem. Current efforts technical assistance WTO-related purposes remain utterly inadequate frequently, .. simply Aselling@ WTO rules, misdirected. needed major international effort analogous honourable elements medical profession recognized Nobel prize. organization ALawyers Borders@ ( economists, hope, thrown ) committed earning highest fees wealthiest clients principled defence rights poorest weakest global economy= legal system building capacity defend . Needless , function usefully variety -WTO- related Acases@ helping negotiate foreign investors creditors, draft domestic legislation, negotiate bilateral regional agreements, . principled lawyers ( economists) exist; work fanfare reward countries. Isn= time launch (, , funding) international apolitical, necessarily -governmental, organization create fairer international outcomes provide hope inspiration jaded young students schools international law economics world, developing countries dramatic activities édecins sans frontières, income welfare gains poorest countries organization achieve save lives. 20 VI. Summary Conclusions Globalized markets operate politically defined rules governance institutions. current global rules economic governance institutions repair, updating -legitimization. Governance simply matter designing optimal system putting place mechanisms (including coercion ). , thought communicative consultative process disputes resolved, consensus built performance continually reviewed. critical success policy instruments forum governance arrangement provide expression claims, review, discussion continuing reform. , good governance good process. develop required arrangements effective governance global economy effective credible process ideally process involving civil society ( limitations) business, governments existing international organizations. Current efforts improve governance newly globalized economy heavily biased interests governments, firms peoples wealthiest world bias easily overcome. signs larger potentially influential developing country players global economy eventually admitted global governance decision-making councils, interest effectiveness efficiency, smaller poorer risk continuing exclusion. Greater effort developing countries , , increased activism areas, quiescent years, develop positions agreed collective interest press energetically relevant multilateral fora. essential early step organized effort , South, exchange ideas formulate agreed positions international financial architecture future WTO, agreement , prior entering detailed discussion negotiation powerful actors accustomed setting terms international policy debate. Negotiations improved arrangements governance global economy, effective, require developing countries prepared ; place mutually agreed representative forums. preparation require increased resources, strengthening relevant research activities capacities developing countries regional cooperative institutions. reforms perfectly feasible long overdue. Developed countries= long-term interest effective global economic governance lead assist strengthening developing country capacities development improved negotiation processes fora -- carry broader legitimacy prospects genuine success. global economy civilized, civil , . powerful political economic forces overcome. 21 require longer-term vision part state leaders peoples, industrialized nations exercise control events vision free-market, level-playing-field, global economy muster enthusiasm, vision humane global governance, celebration humanity= diversity, promotion democratic processes, social economic justice human rights . ( ) vision trade, financial flows macroeconomic stability instruments objectives ends . Vision rhetoric ( lot) accompanied concrete action action rising Aabove@ powerful corporate political interest groups clamour. argued, repeatedly, process absolutely critical success. suggested start Asalvaging@ alterations mandate, membership functioning -20 international finance. sphere markets, wasting energies doomed effort launch cross--board ADevelopment @ existing WTO arrangements, suggest reconsideration WTO= fundamental purposes ensure conversion Adevelopment institution@; early initiation independent review WTO= capacity, current rules, arrangements staffing, developmental tasks. Progress , argued, Asingle undertakings@ required. independent international legal advisory organization quickly launched. proceeds task, Acivilizing@ global economy require steady sustained change; place incrementally ABig Bangs@. require constructive mix political statesmanship Aabove@ supportive political pressure Afrom @. countries board stage dimension global reform, powerful. ready move ( cases appropriately ) ways . AMiddle powers@, --7 members, groupings developing countries play critical role promoting initiating change. UN play major role facilitator. sound progress easy automatic. bound periodic setbacks, progress , fact, slow. , , confident . = Raú Prebisch, today, urge effort. 22 References Blackhurst, ., 1997, AThe Capacity WTO fulfill Mandate@, Anne Krueger (ed.) WTO International Organization, University Chicago Press. Commission Global Governance, 1995, Global Neighbourhood (Oxford University Press). 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