Can multilateralism evolve?

• Date: 01 October 2020
• Author: Kharas, Homi

Over the last 75 years, multilateralism has been a powerful driver and pillar of global integration, peace, and prosperity. However, recent disaffection with globalization and with existing forms of global governance threatens the foundations of the rules-based multilateral order.

Growing political discontent with multilateralism, most notably in the United States, is associated with the failure of the post-Bretton Woods system to stem the tide of slow growth, rising inequality, migration, social fragmentation, and job insecurity associated with skill-biased technological change, offshoring and financialization.

In addition to its failure to deliver shared prosperity, the ever-widening scope of globalization also undermined democracy by reducing nations' sovereign policy autonomy, inhibiting often desirable policy diversity and experimentation in the process. As Dani Rodrik has argued, there is a trilemma preventing the simultaneous achievement of deep globalization, national sovereignty, and democracy. Far too often, small and medium-sized nations--particularly in the Global South--have been forced to choose between gaining access to global markets and keeping policy space for the pursuit of their national development strategies.

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