Why the Global Order Failed

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A feedback loop between economics, domestic politics, and geopolitics is spiraling out of control
MEG RITHMIRE is a professor at Harvard Business School.
Opinions expressed in articles and other materials are those of the authors; they do not necessarily reflect IMF policy.

Book: The Doom Loop: Why the World Economic Order Is Spiraling into Disorder — Eswar S. Prasad
The system imploded because it could not adapt to its own contradictions and deficiencies.
The global order rested on tenets: Democracy is self-correcting, markets know how to allocate resources and impose discipline, the rules ensure fair play.
Common explanations for the order’s decay include the rise of China, populist leaders, and technology that reshaped public discourse and concentrated power.
Prasad’s alternative diagnosis:
- China’s successes demand rethinking which political institutions work best.
- Climate and technology challenges reflect the hubris and irresponsibility of dominant countries.
- Market forces generate more debt and fragility than discipline.
These failures form negative feedback loops between economics, domestic politics, and geopolitics that are “spiraling out of control and becoming destructive on every front, turning into a doom loop.”
Today's policy tools and novel technology offer no promise of stability; central bank digital currencies, artificial intelligence, great-power competition, and industrial policy are described as problems, not solutions.
Repairing existing institutions is insufficient; new and better institutions are required to achieve a stable world order.

International institutions such as the IMF and World Bank must apply their rules more fairly and embark on reform.
Middle powers must choose long-term responsibility over quick fixes.
Chief executives must put social responsibilities above short-term profits and pressure politicians to pursue equitable policies and build bridges with other countries.
Voters must elect visionary leaders capable of managing the transition away from economic, political, and legal systems that have outlived their usefulness.
As Prasad writes: “We must strive to put in power leaders committed to long-term improvements in people’s lives and capable of managing the difficult transition away from economic, political, and legal systems that have outlived their usefulness.”

Reviewed by: MEG RITHMIRE
Review title: Why the Global Order Failed
Book title: The Doom Loop: Why the World Economic Order Is Spiraling into Disorder
Book author: Eswar S. Prasad
Publisher: Hachette
Location: New York, NY
Year: 2026
Length: 368 pp.
Price: $32
Context note: “Uncertainty” was the primary concern of US CEOs, according to a January 2026 survey.

F&D Magazine — June 2026

Why the Global Order Failed
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