DP3524 | Feasible Globalizations

Author(s)

Publication Date

20/08/2002

JEL Code(s)

Keyword(s)

Programme Area(s)

Network(s)

Abstract

The nation-state system, democratic politics, and full economic integration are mutually incompatible. Of the three, at most two can be had together. The Bretton Woods/GATT regime was successful because its architects subjugated international economic integration to the needs and demands of national economic management and democratic politics. A renewed ?Bretton-Woods compromise? would preserve some limits on integration, while crafting better global rules to handle the integration that can be achieved. Among ?feasible globalizations,? the most promising is a multilaterally negotiated visa scheme that allows expanded (but temporary) entry into the advanced nations of a mix of skilled and unskilled workers from developing nations. Such a scheme would likely create income gains that are larger than all of the items on the WTO negotiating agenda taken together, even if it resulted in a relatively small increase in cross-border labor flows.