In many countries, governments are currently grasping for a “quick fix” to the problems of hyperglobalization – whereby, over three decades or more, the prioritizing of narrowly financial interests has created an unsustainable and inequitable world in which too many people in too many places feel left out.
Stagnant wages, vertiginous levels of debt and recurrent financial crises are the most visible manifestations of a dangerously unbalanced world. But rigged markets, corporate rentierism and a dearth of productive investment are also hobbling economic recovery and longerterm transformation.
In developing countries, these problems are compounded by premature deindustrialization, the diminishing opportunities for export-led growth and a heightened vulnerability to external shocks both economic and environmental.
Other, older problems that long hindered developing countries are now emerging in even the most advanced economies – such as the surge in informality in many parts of the economy, resources lost to transfer pricing, or, after years of low investment, the problem of ageing and inadequate infrastructure.
This Policy Brief lists an inter-related set of policies that will be needed to address the problems of hyperglobalization and help build more inclusive, stable and sustainable societies.
The broad aim is to catalyse a big transformative push by breaking with austerity economics, promoting public investment and crowding-in productive private investment, and levelling the playing field for working families everywhere.
While the appropriate mixture of recovery, regulation and redistribution will vary across countries (and with policy experimentalism of particular importance in the developing world), all policymakers can still usefully recall the original New Deal of the 1930s but they must further translate its message to the global level to leverage the opportunities of today’s inter-dependent world.