Daniel W. Drezner

The irony of global economic governance: the system worked

The irony of global economic governance:  the system worked

We live in a world where every other Thomas Friedman column bemoans the lack of global leadership, and every other David Rothkopf tweet bewails the dysfunction of global governance.  Phrases like "G-Zero" get tossed around a lot, and trashing global economic governance seems to be a prerequisite for writing in the Financial Times

Given this climate, I thought it would be useful to take a step back and point out a rather awkward and uncomfortable truth:  global economic governance has actually done a surprisingly good job in response to the 2008 financial crisis. 

Ludicrous, you say?  Well, to make my case, I’ve written up an IIGG working paper for the Council on Foreign Relations entitled, "The Irony of Global Economic Governance:  The System Worked."  The opening paragraph: 

The 2008 financial crisis posed the biggest challenge to the global economy since the Great Depression and provided a severe “stress test” for global economic governance. A review of economic outcomes, policy outputs, and institutional resilience reveals that these regimes performed well during the acute phase of the crisis, ensuring the continuation of an open global economy. Even though some policy outcomes have been less than optimal, international institutions and frameworks performed contrary to expectations. Simply put, the system worked

Now you’ll have to read the whole thing to see if I’m blinkered or not.  There’s a decent chance that I am, mind you, but I’m pretty comfortable with the empirics of my case.  What I’m uncomfortable with is the reasons why things have played out the way that they have.  More on that as I work it out in my own head. 

Now I’ve been just as skeptical as the next guy when it comes to some dimensions of global economic governance.  Still, this is one of those times when stepping away from the day-to-day of the blog and looking at the overall situation provides some valuable perspective. 

Still, feel free to point out where I’m wrong.  Cause I suspect that this paper is going to drive some Very Serious People in the foreign policy community absolutely bonkers.