Substack

Friday, December 12, 2008

Impossibility theorem of global economy

The events of the past few weeks and months have proved that Dani Rodrik is right in claiming that it may not be possible to simultaneously have all the three desirables - democracy, national sovereignty and global economic integration. We can choose either of these three.

Given that democratic politics is non-negotiable, and ceding substantial national sovereignty is an impossibility, we may be left with little choice. The only trade-off possible is between national sovereignty and global economic integration, with the balance decisively tilted in favour of the former. This underlines the limiatations of globalization in shaping the world economy.

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