Steering the World Toward More Cooperation, Not Less
IMF Blog, September 6, 2018
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Bibliographic details
- Authors: Vitor Gaspar, Sean Hagan, Maurice Obstfeld
- Published: September 6, 2018
Authors and context
- Vitor Gaspar, Sean Hagan, Maurice Obstfeld
- September 6, 2018
- First Group of 20 leaders’ summit: November 2008
- Observational timeframes referenced: since 1950; over the past seventy years; ten years ago
Core argument
- Countries cooperate when they perceive cooperation to be in their best economic and political interests.
- Global cooperation since World War II—through a system of rules, shared principles, and institutions—has delivered major economic and social progress, lifting millions out of desperate poverty.
- The world is more interdependent than ever before; therefore, it needs more—not less—multilateralism.
Evidence that cooperation is under stress
- Two main factors sapping confidence in economic cooperation:
- Technological innovation and growing global trade have helped drastically reduce inequality between people living in different countries, but they are part of the reason for greater inequality within many advanced economies.
- The success of international cooperation since World War II has reduced the share of world economic activity taking place in advanced economies in Europe, the United States, and Japan, while increasing that of emerging markets.
- Resulting public perceptions:
- Trade is often blamed for domestic dislocations.
- The benefits advanced economies provide by supporting global public goods are increasingly shared with other countries.
- Cooperation is harder to maintain in today’s multi-polar world.
Enduring need for global cooperation — shared challenges
- The information revolution and global supply chains have increased connections and complexity worldwide.
- Shared transnational problems requiring collective action include:
- climate change
- declining biodiversity
- the risk of pandemics and superbugs
- scarcity of clean water
- oceanic degradation
- cyber-crime
- terrorism
- large-scale migrations
- tax avoidance
- Socially damaging cross-border activities also bind countries together:
- human, drug, and arms trafficking
- anonymous cross-border flows of ill-gotten funds
Building political support for cooperation — policy requirements
- Cooperation will persist only if it attracts broad public support by mitigating legitimate concerns about the costs of globalization.
- Key policy measures to build support:
- ensure policies help those affected by dislocations (from trade or technological advances)
- promote policies that reduce inequality
- broaden economic opportunity through investment in people
- increase government transparency (especially of tax systems)
- curtail corruption
- Governments should favor “soft” law and best-practice frameworks (for example, the Basel Core Principles governing bank regulation) over a return to the postwar model of surrendering sovereignty via legally binding treaty obligations.
Role of the IMF and the way forward
- Over the past several years, the IMF has become increasingly focused on issues of inequality, opportunity, transparency, and corruption in its advice to countries.
- Meeting 21st-century challenges will require:
- new modes of cooperation
- better communication
- a global policy agenda that resonates broadly with the public
- The authors call for a “new multilateralism” to deliver results for the contemporary set of global challenges.
Source: Steering the World Toward More Cooperation, Not Less (IMF blog, September 6, 2018).
