Saturday, October 27, 2012

Dani Rodrik, national sovereignty and globalization

The issue of domestic policy space in the context of globalization and international trade rules has often been a subject matter of this blog. Does the international legal framework severely restrict national decision making abilities? Does it infringe upon democratic politics? I had blogged about this issue here.

Dani Rodrik has argued that hyper globalization, national autonomy and democracy cannot go together. Calling it a political trilemma, he is of the opinion that increased economic integration leads to a loss of national sovereignty and democracy. Increased globalization leads to a loss of democratic policy space.

Writing in the Project Syndicate and citing the example of the Eurozone, he argues:
"The conflict between democracy and globalization becomes acute when globalization restricts the domestic articulation of policy preferences without a compensating expansion of democratic space at the regional/global level. Europe is already on the wrong side of this boundary, as the political unrest in Spain and Greece indicates. 
That is where my political trilemma begins to bite: We cannot have globalization, democracy, and national sovereignty simultaneously. We must choose two among the three.
If European leaders want to maintain democracy, they must make a choice between political union and economic disintegration. They must either explicitly renounce economic sovereignty or actively put it to use for the benefit of their citizens. The first would entail coming clean with their own electorates and building democratic space above the level of the nation-state. The second would mean giving up on monetary union in order to be able to deploy national monetary and fiscal policies in the service of longer-term recovery.
The longer this choice is postponed, the greater the economic and political cost that ultimately will have to be paid."
While "globalization" or economic integration in the context of the Eurozone may have different connotations of domestic sovereignty, Joel Trachtman has argued that global trade rules do not severely curtail national will. By consenting to international agreements, countries do exercise their democratic choice. Further, the trade agreements themselves have tremendous scope for interpretation. Hence, even though a country is a part of an international legal system, the fine print of the agreements must be carefully engaged with to protect legitimate domestic space and national choice. While it is nobody's case that globalization does not have an impact on sovereignty, the extent and severity is the critical question. In times of crisis, the impact is played upon. However, global supply chains and interdependence on imports downplays the negative impact of globalization. Is it ever possible for countries to shun international mulitlateralism and become "protectionist" again? Will democratic will prevail on international economic realities? Are they irreconcilable? What do we make of examples of China which have actively participated in the globalized world after its entry into the WTO but at the same time maintained its national goals and commitments? Is there a middle path which carefully guards national democratic will but at the same time engages with the global framework?

No comments: