432 Current Problems in International Political Economy
Philip G. Cerny (Reading 30) argues that states and markets are diverging under
the pressures of the “complex, globalizing world of the third industrial revolution.”
He predicts the development of an increasingly heterogeneous, multilayered system
of political authority in which different economic activities are regulated by
varying sets of institutions functioning above, below, and alongside the sovereign
territorial state.
Dani Rodrik (Reading 31) counters the common view that globalization is
significantly reducing the policy autonomy of states. To date, globalization has
rested on resilient social safety nets in the industrialized countries; Rodrik finds a
strong relationship between openness to trade and national spending on various
forms of social protection. The real danger, he argues, is that globalization depresses
the wages of the lowest-skilled workers in developed economies and is beginning
to erode the safety nets. If present trends continue unchecked, he concludes, political
support for policies of international economic openness may erode as well.
NOTE
- Charles P.Kindleberger, American Business Abroad (New Haven: Yale University Press,
1969), p. 207.