DOCUMENTO DE PRESENTACIÓN DE LA RED LATINOAMERICANA, CARIBEÑA Y EUROPEA PARA EL ESTUDIO DE LOS COSTOS DE LA NO INTEGRACIÓN DE AMÉRICA LATINA – RED REINTEGRACIÓN
RESUMEN EJECUTIVO
Preparado por: EDGAR VIEIRA POSADA∗
[Comunicación personal de introducción al documento:
Apreciados amigos: hemos estado estos meses definiendo la estructura
definitiva de la Red Reintegración y un acta de intención con el
Convenio Andrés Bello, que aprovechando su localización en Bogotá,
coincidiendo con la Coordinación General a mi cargo, nos permite
trabajar conjuntamente en el proyecto de estudio de los costos de la
no integración de América Latina.
El CAB manejará y administrará los recursos que se obtengan de
financiación de actividades de estudios de la Red Reintegración.
Esto despeja las condiciones de presentación de solicitudes de ayuda
financiera a cooperantes internacionales y locales, al responsabilizarse
un organismo internacional del manejo de los recursos que se obtengan.
El Convenio brindará igualmente ayuda a la Red, pagando durante seis
meses a partir del mes de mayo, una Asistente General de tiempo completo,
que ayudará en la organización definitiva de la Red. Su nombre es
Diana Puyo y esta semana inició gestiones relacionadas con el
funcionamiento del proyecto.
Igualmente, se definió la manera de adecuar y de finalizar la incorporación
de Coordinadores de las barreras a la integración de la Red, quienes
deben cumplir ciertos requisitos que permitan contar con personas de alta
calificación y experiencia. Los requisitos son:
a) profesional con postgrado no inferior a Magíster y
preferencialmente con Doctorado;
b) experiencia académica no menor de siete años;
c) relación de la actividad académica ejercida con los temas de integración;
d) compromiso de dedicar un tiempo de su actividad profesional a las
labores de coordinación del grupo de barreras para el cual fue seleccionado.
De otra parte, les acompaño el resumen sobre la Red Reintegración de
siete páginas, en el que apreciarán la estructura y los trabajos a
desarrollar semestre por semestre en estos tres años.
Son tareas prioritarias estos meses acabar de seleccionar los Coordinadores
de acuerdo con los requisitos mencionados, precisar los Enlaces que darán
apoyo y estructurar las primeras propuestas de estudio de las barreras a la
Integración. Ya comenzaron a hacerlo los grupos de barreras políticas y de
barreras jurídico-institucionales y seguirá el grupo de barreras regionales
y fronterizas. Simultáneamente se irán estructurando las solicitudes de
cooperación financiera.
Los invitamos a vincularse activamente a los trabajos de la Red. Este es
el año de su puesta en marcha!!! La crisis de la integración latinoamericana
así lo exige!!! La oportunidad para la academia de contribuir a precisar los
rumbos de la integración de América Latina constituye un momento histórico
inaplazable!!!
Reciban cordial saludo, Edgar Vieira, Coordinador General Red Reintegración.]
1.- Antecedentes del proyecto
Desde el año 2003, surgió la preocupación por parte de algunos académicos de convocar a universidades latinoamericanas y del caribe y algunos centros de investigación, con el propósito de conformar un grupo de estudio de las barreras que afectan la culminación de la integración de América Latina, vinculando igualmente al proceso a universidades europeas. La idea central del proyecto es la de que las autoridades gubernamentales latinoamericanas dispongan de elementos que les permita apreciar el significado de la no finalización de unos procesos de integración, iniciados hace medio siglo con el objetivo de alcanzar un Mercado Común o una Unión Latinoamericana.
La Red Latinoamericana, Caribeña y Europea para el estudio de los costos de la no integración de América Latina - Red Reintegración, fue formalmente creada en reunión efectuada en Bogotá - Colombia el 24 de marzo de 2006, con la firma del Acta respectiva por treinta y siete (37) investigadores y académicos de veintisiete (27) universidades y de cuatro (4) centros de investigación, procedentes de diez países latinoamericanos y del Caribe (Argentina, Brasil, Chile, Colombia, Cuba, Ecuador, Guatemala, México, Perú y Venezuela) y de dos países europeos (España y Francia).
En los momentos iniciales se había pensado en adoptar como referencia la experiencia vivida por la integración europea, en donde la instrumentación de los distintos reglamentos para lograr el mercado único interior en desarrollo del libro blanco de 1985 de la Comisión Europea sobre la necesidad de culminarlo y del Acta Única de 1987, condujo a la elaboración del trabajo liderado por el profesor Cechini sobre los costos de la no integración de Europa. Pero con relación al trabajo europeo que estuvo centrado en variables económicas, se consideró que un estudio de los costes de la no integración de América Latina, debía abarcar facetas de una integración multidimensional que incorporase también lo político y lo social.
2.- Justificación
La razón fundamental para el enfoque de los estudios a realizar en la identificación de los costos de la no integración de América Latina y el Caribe, es que la respuesta formal a la pregunta de POR QUÉ INTEGRARNOS está en el conocimiento de lo que representan los COSTES DE NO HACERLO.
El conocimiento de esos costes colocaría a los gobiernos de la región en la obligación de no continuar difiriendo por más tiempo un proceso, que en el contexto actual de un mundo globalizado, tiene en la integración la respuesta válida para que América Latina pueda posicionarse en el Sistema Internacional y tenga condiciones suficientes para negociar con los demás bloques económicos.
Procesos subregionales de integración como la CAN y el MERCOSUR estaban avanzando en la dirección correcta, al ir sentando las bases de una integración no sólo económica, sino política y social. Pero la negociación del ALCA a nivel hemisférico a finales de los años noventa y ante su no concreción, la puesta en marcha de acuerdos de libre comercio fraccionados, como es la tendencia actual; implican diferencias muy grandes con la negociación de fases de integración más profundas que requiere y debe alcanzar América Latina. La interrupción de las negociaciones sobre conformación de una Comunidad Latinoamericana de Naciones (CLAN) que se estaban adelantando durante la primera mitad de los años noventa, indica la carencia de voluntad política y de interés en disponer de posiciones propias respecto al desarrollo y al papel de la integración latinoamericana en el mundo.
Las recientes crisis de los procesos subregionales y los continuos cambios en la institucionalidad y objetivos de la integración suramericana en los últimos años, hacen evidente la necesidad y conveniencia de los estudios propuestos por este proyecto, antes que se acentúe la dispersión de acuerdos nacionales o bilaterales, y la tendencia de darle paso a posiciones individuales de los Estados, deteriorando peligrosamente las condiciones de participación en escenarios de compromisos comunitarios de integración. A los problemas vividos por cada proceso subregional, se agrega la conformación de liderazgos individuales y la radicalización de posiciones alrededor de ejes que antes que unir, pueden contribuir a perjudicar más aún los esfuerzos de integración.
Este contexto de dificultades de los procesos subregionales, contribuye a generar mejores condiciones para la convergencia en un espacio suramericano y a mediano plazo latinoamericano, los cuales necesitan se precise adónde se quiere llegar en materia de desarrollo y de integración en América Latina. Corresponde justamente a la academia participante en el estudio, pronunciarse sobre los elementos que podría contener una concepción propia del desarrollo y la integración latinoamericana.
3.- Objetivos general y específicos
El objetivo general del estudio es la identificación de los principales costos de la no integración de América Latina.
Un primer objetivo específico es el de identificar las barreras políticas, jurídico - institucionales, regionales, fronterizas, ambientales, físicas, históricas, socio – culturales, educativas, científico-tecnológicas, macroeconómicas y técnicas que afectan la integración latinoamericana.
Un segundo objetivo específico es el de formular unas reflexiones de la academia alrededor de elementos de una concepción del desarrollo de América Latina, así como del marco conceptual y teórico que debe acompañar la integración latinoamericana.
Un tercer objetivo específico es el de evidenciar ante los gobiernos de América Latina y el Caribe, los costos de no integrarse.
4.- Marco teórico
Todo proceso de integración estructurado y organizado debe estar acompañado de un marco teórico y conceptual, como ha sido el caso de la integración europea pero no de la integración latinoamericana, la cual solo tuvo acompañamiento teórico basado en concepciones propias de desarrollo, en las primeras décadas de funcionamiento.
Con la generalización de las tendencias de la nueva ola de globalización, que pretende la universalización de los mercados más que la armonización de políticas, se ha producido un vacío teórico reflejado en la pérdida de rumbo y falta de claridad conceptual que caracteriza los momentos actuales de la integración latinoamericana. Mientras América Latina se confunde con la idea de que es suficiente integración articularse en zonas de libre comercio y deja de lado el debate teórico; la Unión Europea avanza simultáneamente en la construcción de las etapas finales de integración económica, social y política, acompañándolas de aportes teórico-conceptuales sobre los nuevos interrogantes que abren etapas más profundas de integración.
Teorías que han acompañado la integración europea como las del neofederalismo, del neofuncionalismo, del neointerdependentismo y en particular las del neoinstitucionalismo y las de la gobernanza multinivel, deberían ser estudiadas en sus posibilidades de disponer de teorizaciones similares en América Latina, sumadas a teorizaciones propias sobre el grado de profundidad que debe alcanzar la integración, así como de elementos sobre condiciones del desarrollo latinoamericano, que brinden opciones frente a la primacía de las leyes del mercado como elemento organizador del desarrollo de esta parte del mundo. De otra parte, la democratización que aportarían teorías como las de la gobernanza multinivel, puede contribuir a descentralizar el poder y a exponerlo mucho más a las demandas de la sociedad civil y a la participación de las regiones y comunidades locales.
5.- El estudio de las barreras a la integración latinoamericana para determinar el costo de la no integración de América Latina.
Las barreras a la integración de América Latina que serían objeto de estudio en cuatro grandes grupos de barreras, serían las siguientes:
1. Barreras Políticas, Jurídicas e Institucionales
2. Barreras Históricas, Socio – culturales, Educativas y Científico tecnológicas
3. Barreras Regionales, Fronterizas, Físicas y Ambientales
4. Barreras Macroeconómicas y Técnicas.
6.- Desarrollo y estructura organizativa de la Red Reintegración
La determinación de los costos de la no integración, así como la definición de elementos propositivos, lo puede hacer en mejores condiciones de objetividad y fundamentación científica que otros sectores, la academia y centros de investigación y pensamiento de nuestro continente, con el apoyo de la academia y organismos de la integración europea, para establecer escenarios de participación, de cooperación y de transmisión de experiencias.
La posibilidad de realizar el “Estudio de los Costos de la No Integración de América Latina” surge como coyuntura ideal para que los estamentos universitarios profundicen en el tema en crisis, busquen crear una opinión alrededor de estos procesos, actúen con la libertad académica que es inherente a los claustros universitarios de nuestra región, y realicen aportes intelectuales para unos procesos que deben marcar el futuro latinoamericano.
Los estudios de los costos de la no integración de América Latina deberán estar finalizados para el año 2010, coincidiendo con el aniversario del bicentenario de la proclamación de independencia de España, de tal manera de poder disponer de una hoja de ruta clara en materia de integración y desarrollo para la década 2011-2020.
La Red Reintegración tiene como estructura funcional de trabajo, la siguiente:
Un Consejo Asesor, compuesto de personas e instituciones con trayectoria en la integración y el desarrollo latinoamericano y europeo.
Un Consejo Académico, integrado por los Coordinadores de los Grupos de Barreras a la integración y el Coordinador General de la Red Reintegración.
Un Equipo de Reflexión sobre Alternativas de Desarrollo y Fundamentación Teórica de la Integración, en el cual participa un grupo selectivo de personas que se han destacado en la reflexión sobre el marco teórico de la integración y sobre las condiciones del desarrollo latinoamericano.
Un Coordinador General de la Red, con la colaboración de un Asistente General de la Red y de un Asistente Técnico del Equipo de Reflexión. El cargo de Coordinador General de la Red, es ejercido por el Dr. Edgar Vieira Posada, Director de la Especialización en Integración de la Universidad Javeriana de Bogotá – Colombia y uno de los gestores iniciales del proyecto.
El plan de trabajo de cada Grupo de Barreras para cada uno de los temas que se vayan seleccionando, acompañado del presupuesto correspondiente, incorporará el tiempo aportado por los investigadores participantes en cada tema de estudio.
7.- Plan de trabajo por semestres
Luego de la etapa de organización efectuada estos años, se pasa durante tres años a la realización de los diferentes estudios por cada uno de los Grupos de barreras a la integración y por el equipo de reflexión sobre concepciones de modelo de desarrollo y de marco teórico de integración para América Latina, medio año de los cuales dedicado al final, a la presentación y socialización de los trabajos realizados de acuerdo con el siguiente proyecto de cronograma de trabajo semestre por semestre.
PRIMER SEMESTRE 2008
o Continuar la selección de los Coordinadores y de los “Enlaces” de los grupos.
o Continuar la conformación del Consejo Asesor.
o Continuar de conformar el equipo de reflexión sobre alternativas de desarrollo y fundamentación teórica de la integración de América Latina.
o Elaboración en los grupos del respectivo plan de trabajo, con identificación de los temas y del orden en que se realizará el estudio de las barreras.
o Revisión y análisis por el Consejo Académico y el Coordinador General de los planes de trabajo elaborados por cada grupo de investigación.
o Gestiones en las universidades de los participantes para el registro de las líneas de investigación de la Red en las que están participando.
o Presentación, gestiones y seguimiento a las solicitudes de financiación ante distintos gobiernos, organismos internacionales y nacionales públicos y privados.
o Inicio de los trabajos de investigación en los primeros grupos.
o Acordar plan de trabajo del equipo de reflexión sobre alternativas de desarrollo y fundamentación teórica de la integración de América Latina.
o Organización y realización de encuentros de investigadores del Grupo de barreras Políticas, Jurídicas e Institucionales, y del Grupo de barreras Históricas, Socio - culturales, Educativas y Científico-tecnológicas para socializar los primeros escritos e ideas acerca de unas primeras barreras seleccionadas para estudio.
SEGUNDO SEMESTRE 2008
o Gestiones y seguimiento a las solicitudes de financiación ante distintos gobiernos, organismos internacionales y nacionales públicos y privados.
o Organización y realización de encuentros de los investigadores de los Grupos de barreras Regionales, Fronterizas, Ambientales y Físicas, y de barreras Macroeconómicas y Técnicas para socializar los primeros escritos e ideas de cada investigador de las primeras barreras seleccionadas para estudio.
o Primer conversatorio de los investigadores del equipo de reflexión sobre concepciones de modelo de desarrollo y de marco teórico de integración para América Latina.
o Reunión para revisar el documento de los primeros temas investigados por los Grupos de barreras Políticas, Jurídicas e Institucionales y de barreras Históricas, Socio – culturales, Educativas y científico-tecnológicas.
o Reunión del Grupo Gestor y de los Coordinadores para revisar las actividades adelantadas en el 2008 y programar el seguimiento a las de 2009.
PRIMER SEMESTRE 2009
o Reunión para revisar el documento de los primeros temas investigados por los Grupos de barreras Regionales, Fronterizas, Ambientales y Físicas y de barreras Macroeconómicas y Técnicas.
o Segundo conversatorio del equipo de reflexión sobre concepciones de modelo de desarrollo y de marco teórico de integración para América Latina.
o Organización y realización de encuentros de los investigadores de los Grupos de barreras Políticas, Jurídicas e Institucionales, y de barreras Históricas, Socio – culturales, Educativas y científico-tecnológicas, para socializar los escritos e ideas de cada investigador de los demás temas investigados en cada barrera.
o Foro de las Universidades europeas sobre el acompañamiento realizado a los distintos trabajos de los grupos de barreras.
SEGUNDO SEMESTRE 2009
o Organización y realización de encuentros de los investigadores de los Grupos de barreras Regionales, Fronterizas, Ambientales y Físicas y de barreras Macroeconómicas y Técnicas para socializar los escritos e ideas de cada investigador de los demás temas investigados en cada barrera.
o Tercer conversatorio de los investigadores del equipo de reflexión sobre concepciones de modelo de desarrollo y de marco teórico de integración para América Latina.
o Reunión para revisar el documento de los demás temas investigados por los Grupos de barreras Políticas, Jurídicas e Institucionales y de barreras Históricas, socio- Culturales, Educativas y científico-tecnológicas.
o Reunión del Grupo Gestor y de los Coordinadores para revisar las actividades adelantadas en el 2009 y programar el seguimiento a las de 2010.
PRIMER SEMESTRE 2010
o Reunión para revisar el documento de los demás temas investigados por los Grupos de barreras Regionales, Fronterizas, Ambientales y Físicas y de barreras Macroeconómicas y Técnicas.
o Cuarto conversatorio de los investigadores del equipo de reflexión sobre concepciones de modelo de desarrollo y de marco teórico de integración para América Latina.
o Foro de las Universidades europeas sobre el acompañamiento realizado a los distintos trabajos de los grupos de barreras.
o Elaboración del documento final de identificación de las barreras y elementos propositivos para superarlas.
o Elaboración del escrito del equipo de reflexión sobre concepciones de modelo de desarrollo y de marco teórico de integración para América Latina.
SEGUNDO SEMESTRE 2010
o Presentación a los gobiernos de los resultados de los trabajos.
o Foros de socialización de los resultados con la sociedad civil.
8.- Presupuesto
Para el desempeño del plan de trabajo esbozado en el punto anterior, se necesita acudir a distintas fuentes de financiación correspondientes a organizaciones internacionales vinculadas con las actividades de integración de América Latina y de Europa, a gobiernos nacionales y regionales de países desarrollados que apoyan proyectos de investigación en los países en desarrollo, a organismos estatales vinculados con el desarrollo de la investigación, la ciencia y la tecnología, y a organizaciones y fundaciones internacionales y nacionales no gubernamentales.
El recibo y administración de los fondos aportados por las entidades cooperantes lo realizará el Convenio Andrés Bello (CAB), organismo internacional con sede en la ciudad de Bogotá, en la cual funciona igualmente la Coordinación General de la Red Reintegración. Para tal efecto, manejará una cuenta exclusivamente abierta para los fondos que se obtengan para el proyecto de estudio de los costos de la no integración de América Latina.
Para la realización de las distintas actividades, se estima un presupuesto en los tres años 2008, 2009 y 2010 entre un mínimo de US$ 1.700.000 y un máximo de US$ 4.600.000, según el número de estudios y de participantes que se logren financiar, y cuyos montos específicos serán objeto de presentación detallada en cada solicitud de financiamiento de alguna de las actividades señalas en el plan de trabajo de cada semestre.
∗ El autor, Doctor en Estudios Latinoamericanos de la Universidad de París III Sorbona Nueva, dirige la Especialización en Integración en el Sistema Internacional, es Coordinador del Centro de Estudios sobre Integración (CESI) y es profesor asociado de la Facultad de Ciencias Políticas y Relaciones Internacionales de la Universidad Javeriana de Bogotá – Colombia. Ha estado realizando la coordinación de la Red REINTEGRACIÓN.
Este é um blog "dependente" ou "assistente" de meu blog principal (diplomatizzando.blogspot.com/), que sucedeu a varios outros (ver os links em Blogs PRA), no qual pretendo "depositar" textos diversos, cuja inserção naquele blog resultaria num peso adicional ou num estorvo à leitura. Considere-se, portanto, como frequentando um sebo ou uma "biblioteca", por certo mal arrumada e mesmo caótica, mas ainda assim um repositório de escritos esparsos.
sábado, maio 24, 2008
sexta-feira, maio 23, 2008
338) The Growth Report: Strategies For Sustained Growth And Inclusive Development
Aos que se interessam por crescimento e distribuição, transcrevo abaixo informação essencial para conhecer o conteúdo e acessar o relatório de comissao de 21 "sábios" que trabalharam no relatorio do Banco Mundial.
Não se trata, obviamente, de uma prescrição liberal, mas que tenta combinar as virtudes da economia de mercado com políticas de Estado, como aliás corresponderia à maioria dos membros da Comissao, alguns "planejadores" estatais.
Creio, de toda forma, que se trata de uma boa contribuição para uma reflexão ponderada sobre esse tema.
-------------
Paulo Roberto de Almeida
Commission on Growth and Development
The Growth Report: Strategies For Sustained Growth And Inclusive Development
(Washington: The World Bank, released: May 2008)
Compilação efetuada por:
Paulo Roberto de Almeida
23 Maio 2008
Links:
1) To the World Bank page of the report
2) To the Slide Show of the presentation
3) To a PDF presentation
4) To a Video Presentation
Overview of the Report:
New Report Sheds Light on Success Strategies of Fast-Growing Countries
Related Links
* Report: Strategies For Sustained Growth And Inclusive Development
* Story: Global Imbalances
* Story: Global Warming
* Story: Income Inequality
* Press Release: Launch of Growth Commission Report
Overview:
* 13 countries averaged 7% growth for 25 years or more after World War II.
* High, sustained growth can be achieved in other countries, argues report.
* Industrialized countries should grant African countries trade preferences to manufactured exports to help them overcome the disadvantages of being late starters.
May 21, 2008 — South Korea was once one of Asia’s poorest countries. Today, it’s one of the wealthiest, a high-income country with a standard of living about the same as Slovenia, Israel, or Saudi Arabia, and higher than in the Czech Republic, Oman or Portugal.
South Korea is one of only 13 countries that managed to pull off a kind of miracle in the post World War II era—economic growth averaging 7 percent or more for at least 25 years in a row, according to the “Growth Report: Strategies for Sustained Growth and Inclusive Development.” The report was prepared by the Commission on Growth and Development, an independent body supported by Australia, Sweden, the Netherlands, United Kingdom, William and Flora Hewlett Foundation and the World Bank Group.
High, long-lived growth isn’t easily achieved, but the report by some of the world’s top policy-makers and thinkers argues it can be repeated in other countries, thereby giving them a chance to reduce poverty and improve opportunity and quality of life for their citizens.
“The Growth Report,” released today in London, Cairo, Cape Town, New York and St. Kitts, seeks to unlock the growth strategies of high growth countries and highlight the potential of economic growth to improve lives around the globe. Some 3 billion people have been able to enjoy the fruits of growth in the post-war period, and another 2 billion could also benefit from the global economy.
“There is, perhaps for the first time in history, a reasonable chance of transforming the quality of life and the creative opportunities for the vast majority of humanity,” says Chairman Michael Spence, one of two Nobel Laureates on the 21-member commission comprising leaders from business, government and academia.
“Economic growth is absolutely important to eradicate poverty and uplift the standard of living of people,” adds Gon Chok Tong, Chairman of Monetary Policy in Singapore, one of six countries that achieved high income status through sustained high growth.
The Growth Report identifies some of the distinctive characteristics of high-growth countries and highlights the importance of leadership and governance, economic security, competition, sound fiscal and monetary policy, and public investment in health and education. It also looks at global trends and their impact on growth, including global warming, rising prices, rising income inequality, and labor migration.
No Silver Bullets
“We are acutely aware that there are no silver bullets to create long-running, inclusive growth, and that no single paradigm exists,” says Commission Vice Chair Danny Leipziger, who is also Vice President for Poverty Reduction and Economic Management (PREM) at the World Bank.
The report’s major goal is to give policy makers in developing countries an opportunity to figure out the right mix of policy ingredients for their own country, adds Leipziger.
Nevertheless, the 13 countries had at least five things in common. Each country:
* Fully exploited the world economy
* Maintained macroeconomic stability
* Mustered high rates of saving and investment
* Let markets allocate resources
* Had committed, credible and capable governments
Six countries, including Hong Kong, Japan, Korea, Malta, Singapore and Taiwan, China, sustained high growth long enough to reach high income status, but several others lost momentum long before catching up to the world’s leading economies.
Brazil, one of the first countries to achieve sustained high growth, began to slow down in 1980. The country suffered inflation and debt overhang from the 1973 oil shock. Instead of seeking to expand exports, the country turned inward in 1974 and extended a policy of sheltering light manufacturing domestic industries to heavy industries and capital goods production so they could compete in the home market against foreign rivals. Brazil’s exchange rate appreciated dramatically and its exporters lost much of the ground they’d gained in previous decades. When interest rates spiked in 1979, Brazil was plunged into a debt crisis from which it took a decade to emerge, says the report.
The report observes that domestic demand is no substitute for the “expansive global market.”
“For growth to be sustained, it must be growth that takes into account that we are living in a more and more globalized world,” says Danuta Hubner, European Commissioner for Regional Policy. “We need growth that is using all the opportunities that are offered by the global economy.”
Advice for Africa and Latin America
The Growth Report also offers specific recommendations for Sub-Saharan Africa and Latin America, both of which face challenges to sustained growth. Sub-Saharan Africa must contend with “unhelpful borders, bequeathed by colonialism, and the mixed blessing of unusually rich natural resources.” In Latin America, countries with incomes as high as $4,000 a head “nevertheless contain large numbers of poor people, who lack access to formal jobs, capital markets and public services.”
Among the advice for Sub-Saharan Africa: encourage regional cooperation and regional integration—seen as particularly important for landlocked countries; give citizens access to secure channels for saving and credit; and adopt best practices for the exploitation of natural resources.
The Commission also calls for industrialized countries to grant African countries time-bound trade preferences to manufactured exports to help them overcome the disadvantages of being late starters, and to finance the expansion of Africa’s tertiary education to make up for brain drain.
Latin America needs to increase savings rates and to transition to a more knowledge and capital-intensive economy, says the report. While middle income countries in Latin America demonstrate that growth is not sufficient in itself to reduce poverty, progress can be made by redistributing income, assets or access to services, it adds.
“I do believe that a lot is gained by generating inclusiveness, by making sure that growth is widely shared,” says Nobel Laureate Robert Solow. “Leadership and governance cannot do the job by itself unless it can generate support from wide parts of the population.”
Global Imbalances:
May 21, 2008 — The growing wealth and influence of the developing world in the global economy means these countries share a “joint responsibility” for the stability of the global financial system, says the Growth Report.
Currently, no international institution allows developing countries to “discharge this responsibility properly,” the report observes. Given the increasing importance of new global players, it argues for a rebalancing of global responsibilities and representation.
“As the number of influential countries grows, it becomes all the more important to establish a mechanism for coordinating their policies,” says the report.
At $3.2 trillion, China’s economy is now about 20 percent the size of the United States economy. India’s economy is approaching $1 trillion. By mid-2007, reserves held by central banks were about $4.5 trillion, with China’s alone at $1.6 trillion and rising.
At the same time, US savings rates are low, while China’s reserve accumulations are continuing at the same pace, and its trade surplus is rising rapidly. Currencies that track the dollar (or the yuan) have largely accompanied the American currency on its descent, in defiance of their underlying fundamentals.
Global Economy Outrunning Capacity to Manage It
Several markets have become more opaque and difficult to regulate, as the current credit crisis in the US and Europe illustrates, says the report. The responsibilities of central banks “now extend well beyond inflation to credit crunches, growth slowdowns, asset bubbles, and, in some cases, exchange rates.”
“It is clear to most observers that the global economy has outrun our capacity to manage it,” the report says. “This creates risks for developing countries in particular, because they are most vulnerable to sudden stoppages of credit, and sudden switches of international demand or supply.”
Just as the credit crunch is affecting advanced economies, the report also stresses the importance of a strong financial system in developing and countries and argues for careful supervision of the banking sector to prevent banks expanding credit too far, and the removal of capital controls only in step with the financial market’s maturity.
An international institution that gave emerging economies their due would monitor the financial system for financial strains, imbalances, and fragilities, allowing it to act early to reduce the chances of abrupt adjustments, and to “muster a timely and co-ordinated response to those crises it failed to anticipate, such as rising food prices.”
Global Warming:
May 21, 2008—Can all developing countries grow as fast as the fastest growing economies without causing global greenhouse gases to spiral out of control?
The answer is no, unless technology and new techniques are used to “radically” reduce the amount of energy needed to produce goods, as well as cut CO2 emissions, says the Growth Report. “That is the only way developing countries can grow rapidly without subjecting the world to potentially catastrophic global warming,” it adds.
Climate models suggest coastal erosion from global warming may threaten more than 1 million people by 2050 in the Nile delta in Egypt, the Mekong delta in Vietnam, and the Ganges-Brahmaputra delta in Bangladesh, notes the report.
It adds that fast-growing developing countries like China and India that generate a lot of CO2 must take part in efforts to mitigate global warming if the world is to succeed. However, they are resisting, partly because committing to cut emissions might threaten their growth, and partly because they consider such commitments unfair as most of the CO2 in the atmosphere was generated by high income countries.
The report says that uncertainties about the impact of climate change and the cost of cutting carbon will be resolved over time. The world, therefore, should not lock itself into precise, quantitative commitments for the far-flung future. “It should anticipate that information will improve—and leave some options open.”
“In particular, for developing countries that are on a fast growth trajectory, we need to be very sensitive on the way in which targets are set for them and on the way in which technology and financial systems are applied to countries,” says Lord John Browne, former CEO of British Petroleum.
Global Carbon Tax or ‘Cap and Trade’ Urged
Nations should instead consider a global carbon tax or a “cap and trade” system that would allow countries to emit a given amount of CO2 or sell permits to other countries. Enough greenhouse gas permits should be awarded to developing countries to allow them to grow, says the report.
A carbon tax or cap and trade system will take years to design, negotiate and implement, it adds. In the meantime, advanced nations should cut emissions aggressively and pay more generous subsidies to energy efficiency and carbon reduction technologies.
Income Inequality
May 21, 2008 — Countries should combat rising income inequalities across the globe with social insurance or similar policies to support workers rather than turning to protectionism of industry, says the new Growth Commission Report.
Protecting companies and jobs from competition will slow economic progress, the report argues. “A better approach is to protect people and incomes, providing support to workers between jobs and preserving their access to essential services during these transitions.”
Policy-makers in most countries “have done too little to ameliorate” the effects of two trends: the rapid movement of economic activity from one location to another; and the impact of labor-saving technologies, particularly in the sphere of information-processing.
“Both trends add to the economic growth. But both also pose a potential threat to some people’s jobs and job security,” says the report.
Much of the rise in income inequality is attributed to globalization. “The result is a growing skepticism about the benefits of globalization, in developing and developed countries alike,” the report notes.
In political terms, these attitudes can translate easily into protectionist sentiment. The Doha Round of global trade talks, seen as a test of the world’s commitment to a flexible multilateral trading system, were supposed to be completed by 2004 but are still going on, the report notes.
Governments May Need to Adapt Safety Nets
“With enough effort from governments and international organizations, the benefits of the global economy could be distributed widely across nations and within them,” says the report. “The net welfare gains from openness provide ample resources to compensate globalization’s casualties, if governments have the political will to manage the problem. At the moment the rhetoric is consistent with this priority, but the actions are not.”
Governments may have to change their domestic policies to shore up support for an open global economy, the report adds. That might mean adapting the country’s safety nets, social insurance systems, and tax system.
“The alternative approach is distinctly worse. It is to preserve domestic systems in aspic and to shy away from the global economy itself.”
“Some kind of competition is absolutely essential at every stage of economic development,” says Robert Solow, Nobel Laureate and a member of the Growth Commission.
The Growth Report
Strategies For Sustained Growth And Inclusive Development
The Commission on Growth and Development released its final report,The Growth Report: Strategies for Sustained Growth and Inclusive Development,which looks at how developing countries can achieve fast sustained and equitable growth.
According to the Commission, fast sustained growth is not a miracle; it is attainable for developing countries with the "right mix of ingredients." Countries need leaders who are committed to achieving growth and who can take advantage of opportunities from the global economy. They also need to know about the levels of incentives and public investments that are necessary for private investment to take off and ensure the long-term diversification of the economy and its integration in the global economy.
"We chose to focus on growth because we think that it is a necessary condition for the achievement of a wide range of objectives that people and societies care about. One of them is obviously poverty reduction, but there are even deeper ones. Health, productive employment, the opportunity to be creative, all kinds of things that really matter to people seem to depend heavily on the availability of resources and income, so that they don’t spend most of their time desperately trying to keep their families alive."
Michael Spence,
Chair, Commission on Growth and Development
Table of Contents: The GROWTH Report*
Part One
Preface[PDF]
Overview [PDF]
Introduction [PDF]
Part 1. Sustained, High Growth in the Postwar Period [PDF]
Part 2. The Policy Ingredients of Growth Strategies [PDF]
Part 3. Growth Challenges in Specific Country Contexts [PDF]
Part 4. New Global Trends [PDF]
Part Two
Statistical Appendix: The World Economy and Developing Countries Since WWII [PDF]
Report Highlights
Overview
The Growth Report was written over two years during which the 21 Commissioners interacted and consulted with, and learned from leading academics, business leaders, policy makers, and NGOs. The report reflects the learning over this period, and is informed by the Commission members' own experiences.
Engagement with the Global Economy
The Growth Report sees engagement with the global economy as crucial to future growth with strategies that rely exclusively on domestic demand having limited time spans.
The world economy offers developing countries a deep, elastic market for their exports, with a strong export sector a critical ingredient of high growth, especially in the early stages
Interaction with the global economy also allows fast-growing economies to import ideas, technologies and know-how from the rest of the world. Foreign direct investment and foreign education, which often creates lasting international networks, are viewed as particularly important in the Report.
Leadership & Governance
The Growth Report finds that successful, high-growth economies share the characteristics of credible, inclusive and pragmatic governments. While governments should not try to do too much, to try to replace markets or to close the economy off from the rest of the world, they still play an important role. It falls to the government, for example, to maintain price stability and fiscal responsibility, both of which influence the risks and returns faced by private investors.
Policymakers have to choose a growth strategy, communicate their goals to the public, and ensure that they have the populace's tacit support through a convincing that the future rewards are worth the effort, thrift and economic upheaval.
A long planning horizon and pragmatic approach to government is also crucial as is a culture of honest public service. Administration must attract and retain talented people, by offering better pay, promotions and recognition to officials who can measurably improve the public sector's performance. The Report also recommends an increase in the number of international exchanges for civil servants. More>
Last Updated ( Friday, 23 May 2008 )
Commissioners
The Commission on Growth and Development comprises 21 members, who are distinguished practitioners from government, business and policy making committed to the goals of fostering faster convergence of incomes between rich and poor countries.
The role of the Commission members is to provide inputs, advice, and guidance to the preparation of the final report, which they will ultimately endorse. The report’s goal is to bring forth the best understanding of the growth challenges faced by developing countries, and transform what is now known about growth into a framework that can be used by those who make economic policy decisions.
CHAIR
Michael Spence
Nobel Laureate and Professor Emeritus
Stanford University, UNITED STATES
VICE-CHAIR
Danny Leipziger
Vice-President & Head of Network
World Bank, UNITED STATES
Montek Singh Ahluwalia
Deputy Chairman, Planning Commission
INDIA
Edmar Bacha
Director of the Casa Das Garças Institute for Economic Policy Studies
BRAZIL
Dr. Boediono
Coordinating Minister for Economic Affairs
INDONESIA
Lord John Browne
Former Chief Executive Officer,
British Petroleum
GREAT BRITAIN
Kemal Dervis
Administrator of the UNDP Programa Pos-Grad.Rel.Int. Unesp-Unicamp-PUC-SP Turkey
Alejandro Foxley
Minister of Foreign Affairs in Chile
CHILE
Han Duck Soo
Former Prime Minister
REPUBLIC OF KOREA
Goh Chok Tong
Senior Minister and Chairman of the Monetary Authority of Singapore
SINGAPORE
Danuta Hübner
European Commissioner for Regional Policy
POLAND
Carin Jämtin
Former Minister for International Development
SWEDEN
Pedro Pablo Kuczynski
Former Prime Minister of Peru
PERU
Trevor Manuel
Minister of Finance of South Africa
SOUTH AFRICA
Mahmoud Mohieldin
Minister of Investment of Egypt
EGYPT
Ngozi N. Okonjo-Iweala
Managing Director, World Bank
NIGERIA
Robert Rubin
Chairman, Citigroup
UNITED STATES
Robert Solow
Nobel Laureate and Professor Emeritus
Massachusetts Institute of Technology
UNITED STATES
Sir K. Dwight Venner
Governor of the Eastern Caribbean Bank
SAINT KITTS AND NEVIS
Ernesto Zedillo
Director of the Yale Center for the Study of Globalization
MEXICO
Zhou Xiaochuan
Governor of the People's Bank of China
CHINA
The Commission
Ideas Informing Action
Launched in April 2006, the Commission on Growth and Development brings together twenty-one leading practitioners from government, business and the policymaking arenas, mostly from the developing world. The Commission is chaired by Nobel Laureate Michael Spence, former Dean of the Stanford Graduate Business School, and Danny Leipziger, Vice-President, World Bank, is the Commission's Vice-Chair.
Over a period of two years the Commission will seek to gather the best understanding there is about the policies and strategies that underlie rapid and sustained economic growth and poverty reduction. The Commission's audience is the leaders of developing countries.
The Commission is supported by the Governments of Australia, Sweden, the Netherlands, and United Kingdom, the William and Flora Hewlett Foundation, and the World Bank.
Motivation
The Commission has been brought together by the belief that the world's challenges - poverty, environment, misunderstandings within and between nations, vast differences in living standards within and across countries - are best met in conditions of rising and sustained prosperity, and expanding economic opportunities.
The Commission was established "to take stock of the state of theoretical and empirical knowledge on economic growth with a view to drawing implications for policy for the current and next generation of policymakers." Its creation responds to:
1. the sense that poverty cannot be reduced in isolation of economic growth, and that that link has been missing in the minds and strategies of many;
2. growing evidence that the economic and social forces underlying rapid and sustained growth are much less well understood than generally thought - economic advice to developing countries has been given with more confidence that justified by the state of knowledge;
3. realization that the accumulation of highly relevant (both successful and unsuccessful) growth experiences over the past 20 years provides a unique source of learning; and
4. growing awareness that, except for China and India, and other rapidly growing economists in East Asia, developing countries need to accelerate their rates of growth significantly for their incomes to catch up with income levels in industrialized countries, and for the world to achieve a better balance in the distribution of wealth and opportunity.
The Commission's activities have taken place at three levels: 1) the Commission defined the themes and issues it thinks important for growth and development; 2) the Commission invited world renowed academics, practitioners and experts to author papers exploring the state of knowledge in these themes and issues; those were reviewed and discussed at the Commission workshops; and 3) a working group which interacts with academics and Commissioners, reviews and comments on papers throughout the process. The working group support the Chairman in its drafting of the final report by reviewing interim drafts and providing comments. The Commission is funded by the William and Flora Hewlett Foundation, the governemnts of Australia, Netherlands, Sweden, and the United Kingdom, and the World Bank.
Our Work
Activities of the Commission on Growth and Development take place at three levels:
1. The Commission defines the themes and issues that believes important for understanding of growth and development. It also guides and reviews the work carried out under its auspices, and endorses the final report. Individual Commission members may also sponsor additional work on issues of particular interest to them.
2. The Commission invites academics—leading experts on the themes and issues identified in the Statement of Purpose —to author papers exploring the state of knowledge in their respective areas of expertise, and its implications on public policy, economic growth and development. The Commission will be asked to take a view and endorse the final report, and to take note and comment on the academic papers. It will not, however, be asked to endorse the thematic papers and case studies . The papers will be reviewed and discussed in regional conferences, to which Commission members are invited, and published separately. Several academics agreed to participate in the project with the understanding that they would have direct and non-intermediated exchanges with the Commission.
3. A Working Group interacts with academics and Commission members, commissions thematic papers and country case studies, reviews and comments on them throughout the process and drafts the final report.
Não se trata, obviamente, de uma prescrição liberal, mas que tenta combinar as virtudes da economia de mercado com políticas de Estado, como aliás corresponderia à maioria dos membros da Comissao, alguns "planejadores" estatais.
Creio, de toda forma, que se trata de uma boa contribuição para uma reflexão ponderada sobre esse tema.
-------------
Paulo Roberto de Almeida
Commission on Growth and Development
The Growth Report: Strategies For Sustained Growth And Inclusive Development
(Washington: The World Bank, released: May 2008)
Compilação efetuada por:
Paulo Roberto de Almeida
23 Maio 2008
Links:
1) To the World Bank page of the report
2) To the Slide Show of the presentation
3) To a PDF presentation
4) To a Video Presentation
Overview of the Report:
New Report Sheds Light on Success Strategies of Fast-Growing Countries
Related Links
* Report: Strategies For Sustained Growth And Inclusive Development
* Story: Global Imbalances
* Story: Global Warming
* Story: Income Inequality
* Press Release: Launch of Growth Commission Report
Overview:
* 13 countries averaged 7% growth for 25 years or more after World War II.
* High, sustained growth can be achieved in other countries, argues report.
* Industrialized countries should grant African countries trade preferences to manufactured exports to help them overcome the disadvantages of being late starters.
May 21, 2008 — South Korea was once one of Asia’s poorest countries. Today, it’s one of the wealthiest, a high-income country with a standard of living about the same as Slovenia, Israel, or Saudi Arabia, and higher than in the Czech Republic, Oman or Portugal.
South Korea is one of only 13 countries that managed to pull off a kind of miracle in the post World War II era—economic growth averaging 7 percent or more for at least 25 years in a row, according to the “Growth Report: Strategies for Sustained Growth and Inclusive Development.” The report was prepared by the Commission on Growth and Development, an independent body supported by Australia, Sweden, the Netherlands, United Kingdom, William and Flora Hewlett Foundation and the World Bank Group.
High, long-lived growth isn’t easily achieved, but the report by some of the world’s top policy-makers and thinkers argues it can be repeated in other countries, thereby giving them a chance to reduce poverty and improve opportunity and quality of life for their citizens.
“The Growth Report,” released today in London, Cairo, Cape Town, New York and St. Kitts, seeks to unlock the growth strategies of high growth countries and highlight the potential of economic growth to improve lives around the globe. Some 3 billion people have been able to enjoy the fruits of growth in the post-war period, and another 2 billion could also benefit from the global economy.
“There is, perhaps for the first time in history, a reasonable chance of transforming the quality of life and the creative opportunities for the vast majority of humanity,” says Chairman Michael Spence, one of two Nobel Laureates on the 21-member commission comprising leaders from business, government and academia.
“Economic growth is absolutely important to eradicate poverty and uplift the standard of living of people,” adds Gon Chok Tong, Chairman of Monetary Policy in Singapore, one of six countries that achieved high income status through sustained high growth.
The Growth Report identifies some of the distinctive characteristics of high-growth countries and highlights the importance of leadership and governance, economic security, competition, sound fiscal and monetary policy, and public investment in health and education. It also looks at global trends and their impact on growth, including global warming, rising prices, rising income inequality, and labor migration.
No Silver Bullets
“We are acutely aware that there are no silver bullets to create long-running, inclusive growth, and that no single paradigm exists,” says Commission Vice Chair Danny Leipziger, who is also Vice President for Poverty Reduction and Economic Management (PREM) at the World Bank.
The report’s major goal is to give policy makers in developing countries an opportunity to figure out the right mix of policy ingredients for their own country, adds Leipziger.
Nevertheless, the 13 countries had at least five things in common. Each country:
* Fully exploited the world economy
* Maintained macroeconomic stability
* Mustered high rates of saving and investment
* Let markets allocate resources
* Had committed, credible and capable governments
Six countries, including Hong Kong, Japan, Korea, Malta, Singapore and Taiwan, China, sustained high growth long enough to reach high income status, but several others lost momentum long before catching up to the world’s leading economies.
Brazil, one of the first countries to achieve sustained high growth, began to slow down in 1980. The country suffered inflation and debt overhang from the 1973 oil shock. Instead of seeking to expand exports, the country turned inward in 1974 and extended a policy of sheltering light manufacturing domestic industries to heavy industries and capital goods production so they could compete in the home market against foreign rivals. Brazil’s exchange rate appreciated dramatically and its exporters lost much of the ground they’d gained in previous decades. When interest rates spiked in 1979, Brazil was plunged into a debt crisis from which it took a decade to emerge, says the report.
The report observes that domestic demand is no substitute for the “expansive global market.”
“For growth to be sustained, it must be growth that takes into account that we are living in a more and more globalized world,” says Danuta Hubner, European Commissioner for Regional Policy. “We need growth that is using all the opportunities that are offered by the global economy.”
Advice for Africa and Latin America
The Growth Report also offers specific recommendations for Sub-Saharan Africa and Latin America, both of which face challenges to sustained growth. Sub-Saharan Africa must contend with “unhelpful borders, bequeathed by colonialism, and the mixed blessing of unusually rich natural resources.” In Latin America, countries with incomes as high as $4,000 a head “nevertheless contain large numbers of poor people, who lack access to formal jobs, capital markets and public services.”
Among the advice for Sub-Saharan Africa: encourage regional cooperation and regional integration—seen as particularly important for landlocked countries; give citizens access to secure channels for saving and credit; and adopt best practices for the exploitation of natural resources.
The Commission also calls for industrialized countries to grant African countries time-bound trade preferences to manufactured exports to help them overcome the disadvantages of being late starters, and to finance the expansion of Africa’s tertiary education to make up for brain drain.
Latin America needs to increase savings rates and to transition to a more knowledge and capital-intensive economy, says the report. While middle income countries in Latin America demonstrate that growth is not sufficient in itself to reduce poverty, progress can be made by redistributing income, assets or access to services, it adds.
“I do believe that a lot is gained by generating inclusiveness, by making sure that growth is widely shared,” says Nobel Laureate Robert Solow. “Leadership and governance cannot do the job by itself unless it can generate support from wide parts of the population.”
Global Imbalances:
May 21, 2008 — The growing wealth and influence of the developing world in the global economy means these countries share a “joint responsibility” for the stability of the global financial system, says the Growth Report.
Currently, no international institution allows developing countries to “discharge this responsibility properly,” the report observes. Given the increasing importance of new global players, it argues for a rebalancing of global responsibilities and representation.
“As the number of influential countries grows, it becomes all the more important to establish a mechanism for coordinating their policies,” says the report.
At $3.2 trillion, China’s economy is now about 20 percent the size of the United States economy. India’s economy is approaching $1 trillion. By mid-2007, reserves held by central banks were about $4.5 trillion, with China’s alone at $1.6 trillion and rising.
At the same time, US savings rates are low, while China’s reserve accumulations are continuing at the same pace, and its trade surplus is rising rapidly. Currencies that track the dollar (or the yuan) have largely accompanied the American currency on its descent, in defiance of their underlying fundamentals.
Global Economy Outrunning Capacity to Manage It
Several markets have become more opaque and difficult to regulate, as the current credit crisis in the US and Europe illustrates, says the report. The responsibilities of central banks “now extend well beyond inflation to credit crunches, growth slowdowns, asset bubbles, and, in some cases, exchange rates.”
“It is clear to most observers that the global economy has outrun our capacity to manage it,” the report says. “This creates risks for developing countries in particular, because they are most vulnerable to sudden stoppages of credit, and sudden switches of international demand or supply.”
Just as the credit crunch is affecting advanced economies, the report also stresses the importance of a strong financial system in developing and countries and argues for careful supervision of the banking sector to prevent banks expanding credit too far, and the removal of capital controls only in step with the financial market’s maturity.
An international institution that gave emerging economies their due would monitor the financial system for financial strains, imbalances, and fragilities, allowing it to act early to reduce the chances of abrupt adjustments, and to “muster a timely and co-ordinated response to those crises it failed to anticipate, such as rising food prices.”
Global Warming:
May 21, 2008—Can all developing countries grow as fast as the fastest growing economies without causing global greenhouse gases to spiral out of control?
The answer is no, unless technology and new techniques are used to “radically” reduce the amount of energy needed to produce goods, as well as cut CO2 emissions, says the Growth Report. “That is the only way developing countries can grow rapidly without subjecting the world to potentially catastrophic global warming,” it adds.
Climate models suggest coastal erosion from global warming may threaten more than 1 million people by 2050 in the Nile delta in Egypt, the Mekong delta in Vietnam, and the Ganges-Brahmaputra delta in Bangladesh, notes the report.
It adds that fast-growing developing countries like China and India that generate a lot of CO2 must take part in efforts to mitigate global warming if the world is to succeed. However, they are resisting, partly because committing to cut emissions might threaten their growth, and partly because they consider such commitments unfair as most of the CO2 in the atmosphere was generated by high income countries.
The report says that uncertainties about the impact of climate change and the cost of cutting carbon will be resolved over time. The world, therefore, should not lock itself into precise, quantitative commitments for the far-flung future. “It should anticipate that information will improve—and leave some options open.”
“In particular, for developing countries that are on a fast growth trajectory, we need to be very sensitive on the way in which targets are set for them and on the way in which technology and financial systems are applied to countries,” says Lord John Browne, former CEO of British Petroleum.
Global Carbon Tax or ‘Cap and Trade’ Urged
Nations should instead consider a global carbon tax or a “cap and trade” system that would allow countries to emit a given amount of CO2 or sell permits to other countries. Enough greenhouse gas permits should be awarded to developing countries to allow them to grow, says the report.
A carbon tax or cap and trade system will take years to design, negotiate and implement, it adds. In the meantime, advanced nations should cut emissions aggressively and pay more generous subsidies to energy efficiency and carbon reduction technologies.
Income Inequality
May 21, 2008 — Countries should combat rising income inequalities across the globe with social insurance or similar policies to support workers rather than turning to protectionism of industry, says the new Growth Commission Report.
Protecting companies and jobs from competition will slow economic progress, the report argues. “A better approach is to protect people and incomes, providing support to workers between jobs and preserving their access to essential services during these transitions.”
Policy-makers in most countries “have done too little to ameliorate” the effects of two trends: the rapid movement of economic activity from one location to another; and the impact of labor-saving technologies, particularly in the sphere of information-processing.
“Both trends add to the economic growth. But both also pose a potential threat to some people’s jobs and job security,” says the report.
Much of the rise in income inequality is attributed to globalization. “The result is a growing skepticism about the benefits of globalization, in developing and developed countries alike,” the report notes.
In political terms, these attitudes can translate easily into protectionist sentiment. The Doha Round of global trade talks, seen as a test of the world’s commitment to a flexible multilateral trading system, were supposed to be completed by 2004 but are still going on, the report notes.
Governments May Need to Adapt Safety Nets
“With enough effort from governments and international organizations, the benefits of the global economy could be distributed widely across nations and within them,” says the report. “The net welfare gains from openness provide ample resources to compensate globalization’s casualties, if governments have the political will to manage the problem. At the moment the rhetoric is consistent with this priority, but the actions are not.”
Governments may have to change their domestic policies to shore up support for an open global economy, the report adds. That might mean adapting the country’s safety nets, social insurance systems, and tax system.
“The alternative approach is distinctly worse. It is to preserve domestic systems in aspic and to shy away from the global economy itself.”
“Some kind of competition is absolutely essential at every stage of economic development,” says Robert Solow, Nobel Laureate and a member of the Growth Commission.
The Growth Report
Strategies For Sustained Growth And Inclusive Development
The Commission on Growth and Development released its final report,The Growth Report: Strategies for Sustained Growth and Inclusive Development,which looks at how developing countries can achieve fast sustained and equitable growth.
According to the Commission, fast sustained growth is not a miracle; it is attainable for developing countries with the "right mix of ingredients." Countries need leaders who are committed to achieving growth and who can take advantage of opportunities from the global economy. They also need to know about the levels of incentives and public investments that are necessary for private investment to take off and ensure the long-term diversification of the economy and its integration in the global economy.
"We chose to focus on growth because we think that it is a necessary condition for the achievement of a wide range of objectives that people and societies care about. One of them is obviously poverty reduction, but there are even deeper ones. Health, productive employment, the opportunity to be creative, all kinds of things that really matter to people seem to depend heavily on the availability of resources and income, so that they don’t spend most of their time desperately trying to keep their families alive."
Michael Spence,
Chair, Commission on Growth and Development
Table of Contents: The GROWTH Report*
Part One
Preface[PDF]
Overview [PDF]
Introduction [PDF]
Part 1. Sustained, High Growth in the Postwar Period [PDF]
Part 2. The Policy Ingredients of Growth Strategies [PDF]
Part 3. Growth Challenges in Specific Country Contexts [PDF]
Part 4. New Global Trends [PDF]
Part Two
Statistical Appendix: The World Economy and Developing Countries Since WWII [PDF]
Report Highlights
Overview
The Growth Report was written over two years during which the 21 Commissioners interacted and consulted with, and learned from leading academics, business leaders, policy makers, and NGOs. The report reflects the learning over this period, and is informed by the Commission members' own experiences.
Engagement with the Global Economy
The Growth Report sees engagement with the global economy as crucial to future growth with strategies that rely exclusively on domestic demand having limited time spans.
The world economy offers developing countries a deep, elastic market for their exports, with a strong export sector a critical ingredient of high growth, especially in the early stages
Interaction with the global economy also allows fast-growing economies to import ideas, technologies and know-how from the rest of the world. Foreign direct investment and foreign education, which often creates lasting international networks, are viewed as particularly important in the Report.
Leadership & Governance
The Growth Report finds that successful, high-growth economies share the characteristics of credible, inclusive and pragmatic governments. While governments should not try to do too much, to try to replace markets or to close the economy off from the rest of the world, they still play an important role. It falls to the government, for example, to maintain price stability and fiscal responsibility, both of which influence the risks and returns faced by private investors.
Policymakers have to choose a growth strategy, communicate their goals to the public, and ensure that they have the populace's tacit support through a convincing that the future rewards are worth the effort, thrift and economic upheaval.
A long planning horizon and pragmatic approach to government is also crucial as is a culture of honest public service. Administration must attract and retain talented people, by offering better pay, promotions and recognition to officials who can measurably improve the public sector's performance. The Report also recommends an increase in the number of international exchanges for civil servants. More>
Last Updated ( Friday, 23 May 2008 )
Commissioners
The Commission on Growth and Development comprises 21 members, who are distinguished practitioners from government, business and policy making committed to the goals of fostering faster convergence of incomes between rich and poor countries.
The role of the Commission members is to provide inputs, advice, and guidance to the preparation of the final report, which they will ultimately endorse. The report’s goal is to bring forth the best understanding of the growth challenges faced by developing countries, and transform what is now known about growth into a framework that can be used by those who make economic policy decisions.
CHAIR
Michael Spence
Nobel Laureate and Professor Emeritus
Stanford University, UNITED STATES
VICE-CHAIR
Danny Leipziger
Vice-President & Head of Network
World Bank, UNITED STATES
Montek Singh Ahluwalia
Deputy Chairman, Planning Commission
INDIA
Edmar Bacha
Director of the Casa Das Garças Institute for Economic Policy Studies
BRAZIL
Dr. Boediono
Coordinating Minister for Economic Affairs
INDONESIA
Lord John Browne
Former Chief Executive Officer,
British Petroleum
GREAT BRITAIN
Kemal Dervis
Administrator of the UNDP Programa Pos-Grad.Rel.Int. Unesp-Unicamp-PUC-SP Turkey
Alejandro Foxley
Minister of Foreign Affairs in Chile
CHILE
Han Duck Soo
Former Prime Minister
REPUBLIC OF KOREA
Goh Chok Tong
Senior Minister and Chairman of the Monetary Authority of Singapore
SINGAPORE
Danuta Hübner
European Commissioner for Regional Policy
POLAND
Carin Jämtin
Former Minister for International Development
SWEDEN
Pedro Pablo Kuczynski
Former Prime Minister of Peru
PERU
Trevor Manuel
Minister of Finance of South Africa
SOUTH AFRICA
Mahmoud Mohieldin
Minister of Investment of Egypt
EGYPT
Ngozi N. Okonjo-Iweala
Managing Director, World Bank
NIGERIA
Robert Rubin
Chairman, Citigroup
UNITED STATES
Robert Solow
Nobel Laureate and Professor Emeritus
Massachusetts Institute of Technology
UNITED STATES
Sir K. Dwight Venner
Governor of the Eastern Caribbean Bank
SAINT KITTS AND NEVIS
Ernesto Zedillo
Director of the Yale Center for the Study of Globalization
MEXICO
Zhou Xiaochuan
Governor of the People's Bank of China
CHINA
The Commission
Ideas Informing Action
Launched in April 2006, the Commission on Growth and Development brings together twenty-one leading practitioners from government, business and the policymaking arenas, mostly from the developing world. The Commission is chaired by Nobel Laureate Michael Spence, former Dean of the Stanford Graduate Business School, and Danny Leipziger, Vice-President, World Bank, is the Commission's Vice-Chair.
Over a period of two years the Commission will seek to gather the best understanding there is about the policies and strategies that underlie rapid and sustained economic growth and poverty reduction. The Commission's audience is the leaders of developing countries.
The Commission is supported by the Governments of Australia, Sweden, the Netherlands, and United Kingdom, the William and Flora Hewlett Foundation, and the World Bank.
Motivation
The Commission has been brought together by the belief that the world's challenges - poverty, environment, misunderstandings within and between nations, vast differences in living standards within and across countries - are best met in conditions of rising and sustained prosperity, and expanding economic opportunities.
The Commission was established "to take stock of the state of theoretical and empirical knowledge on economic growth with a view to drawing implications for policy for the current and next generation of policymakers." Its creation responds to:
1. the sense that poverty cannot be reduced in isolation of economic growth, and that that link has been missing in the minds and strategies of many;
2. growing evidence that the economic and social forces underlying rapid and sustained growth are much less well understood than generally thought - economic advice to developing countries has been given with more confidence that justified by the state of knowledge;
3. realization that the accumulation of highly relevant (both successful and unsuccessful) growth experiences over the past 20 years provides a unique source of learning; and
4. growing awareness that, except for China and India, and other rapidly growing economists in East Asia, developing countries need to accelerate their rates of growth significantly for their incomes to catch up with income levels in industrialized countries, and for the world to achieve a better balance in the distribution of wealth and opportunity.
The Commission's activities have taken place at three levels: 1) the Commission defined the themes and issues it thinks important for growth and development; 2) the Commission invited world renowed academics, practitioners and experts to author papers exploring the state of knowledge in these themes and issues; those were reviewed and discussed at the Commission workshops; and 3) a working group which interacts with academics and Commissioners, reviews and comments on papers throughout the process. The working group support the Chairman in its drafting of the final report by reviewing interim drafts and providing comments. The Commission is funded by the William and Flora Hewlett Foundation, the governemnts of Australia, Netherlands, Sweden, and the United Kingdom, and the World Bank.
Our Work
Activities of the Commission on Growth and Development take place at three levels:
1. The Commission defines the themes and issues that believes important for understanding of growth and development. It also guides and reviews the work carried out under its auspices, and endorses the final report. Individual Commission members may also sponsor additional work on issues of particular interest to them.
2. The Commission invites academics—leading experts on the themes and issues identified in the Statement of Purpose —to author papers exploring the state of knowledge in their respective areas of expertise, and its implications on public policy, economic growth and development. The Commission will be asked to take a view and endorse the final report, and to take note and comment on the academic papers. It will not, however, be asked to endorse the thematic papers and case studies . The papers will be reviewed and discussed in regional conferences, to which Commission members are invited, and published separately. Several academics agreed to participate in the project with the understanding that they would have direct and non-intermediated exchanges with the Commission.
3. A Working Group interacts with academics and Commission members, commissions thematic papers and country case studies, reviews and comments on them throughout the process and drafts the final report.
quinta-feira, maio 22, 2008
337) Ganhos da globalizacao para os EUA
Alguns, os pessimistas da globalização, dirão que isto só se aplica à economia dominante e que a globalização, na verdade, acelera e intensifica a concentração de renda e de riqueza em favor dos já ricos.
Acho que os chineses, de qualquer condição social, não concordariam com isto...
-------------
Paulo Roberto de Almeida
Answering the Critics: Why Large American Gains from Globalization Are Plausible
by Gary Clyde Hufbauer, Peterson Institute
May 2008
Link
The author thanks research assistant Matt Adler for his contribution to this paper.
The Peterson Institute calculates that the US economy is approximately $1 trillion richer each year owing to past globalization--the payoff both from technological innovation and from policy liberalization--and could gain another $500 billion annually from future liberalization (Bradford, Grieco, and Hufbauer 2005). These estimates have attracted sharp criticism, notably from Dani Rodrik (2007) and L. Josh Bivens (2007a, 2007b, 2007c). The critics are particularly annoyed that the Peterson Institute calculations enjoy wide circulation in the public debate (USTR 2007, Schwab 2007), and Bivens has gone so far as to urge that they be "retired" (Bivens 2007a ). Apart from answering these critics, it is worth commenting on a US International Trade Commission report (USITC 2007) that gives an unbelievably low figure for the cost of import protection to the US economy.
Underlying the noisy attack from our critics is their fear that, if public officials believe in a substantial payoff from globalization, they will be too eager to negotiate new trade agreements. Many of our critics implicitly fault us for paying insufficient attention to domestic losers. The Peterson Institute, however, can point to a long and vigorous record of urging meaningful remedies for workers adversely affected by globalization (Rosen 2008). Our research and recommendations on this critical topic stretches from 1986 to the present day.1 Judging from presidential primaries in Ohio and Pennsylvania, meaningful programs for domestic losers will become a priority if a Democrat is elected in 2008. That said, a short rejoinder is in order both to defend the magnitude of our payoff calculations and to urge the next administration not to put trade liberalization in the freezer.
Dani Rodrik. In his weblog for May 7, 2007 (http://rodrik.typepad.com/), Dani Rodrik took us to task for exaggerating the benefits of globalization. Professor Rodrik long ago established his reputation as a globalization skeptic; today he is the favorite Harvard economist among the backlash crowd. In 1997, Rodrik voiced a critical note in a book published by the Institute for International Economics, Has Globalization Gone Too Far? (http://bookstore.petersoninstitute.org/book-store/57.html) Two years later, Francisco Rodríguez and Rodrik (1999) notched their academic guns against Jeffrey Sachs and Andrew Warner (1995), questioning the benefits of liberal trade policy for developing countries. As targets of Rodrik's latest outburst, we share good company.
To debunk the payoff from globalization, Rodrik resurrects arithmetic developed by Frank Taussig (1927) as a "reality check" on our calculations. Taussig was a great economist, but economic science has actually progressed since 1927. The partial equilibrium formula cited by Rodrik essentially confines the benefits of globalization to the "welfare triangles" created when tariffs are abolished. As calculated by Rodrik, the welfare triangles total 0.25 percent or less of US national income, around $35 billion of potential gains if all US tariffs were abolished (Rodrik 2007). By contrast, our conservative estimate suggests that full global liberalization would ultimately increase US national income by about 4.1 percent of GDP, about $570 billion based on GDP in 2007. Even on its own terms, Rodrik's application of welfare triangle analysis is biased downward for reasons spelled out in appendix A. The more serious problem, however, is that welfare triangle analysis misses the big story.
Done properly, welfare triangles are fine for examining the cost of protecting individual products in otherwise perfectly competitive and undistorted markets. Years ago, we used this analytic framework for examining steel quotas, textile and apparel tariffs, sugar duties, and other barriers (e.g., Hufbauer and Elliott 1994). But this sort of analysis completely misses multiple forces that enormously expand the payoff from policy liberalization and technology innovation for a country that participates in a global economy.
What are these forces? "Rightsizing" inputs to the needs of industrial producers, lowering the true cost of household purchases below the advertised inflation rate, "sifting and sorting" firms so that the most efficient expand and the least efficient shrink, curtailing the markup margins associated with monopolistic competition, stimulating laggard industries (think autos and steel) to match the productivity of foreign competitors, reducing the enormous international differences that prevail in prices for traded goods, and enjoying the benefits of increasing returns to scale.
Even using a simplistic formula, Rodrik's analysis compares apples and oranges. His "reality check" of 0.25 percent of GDP reflects the static cost of US tariff barriers imposed only on merchandise trade. Our number of 4.1 percent (which Rodrik compares to his 0.25 percent) reflects a comprehensive analysis that includes US tariff and nontariff barriers on merchandise trade, US barriers on services trade, foreign barriers of all kinds, and multiple dynamic effects thwarted by assorted barriers here and abroad. If all of these features of our analysis are stripped away, we would be left with an estimate near 0.5 percent of US GDP. This is about what one would expect from a proper static formula that accounts for differences in protection across sectors. But why focus on a misleading comparison when more robust analysis is available?
In analysis that Rodrik criticizes (Bradford, Grieco, and Hufbauer 2005), we used alternative methods to calculate some, but not all, of the progrowth forces unleashed by globalization. The literature points to additional channels besides those we cited; for example, Keller and Yeaple (2005) showed that a growing role of foreign multinational enterprises (MNEs) in the United States boosts the productivity of domestic firms; Arnold, Javorcik, and Mattoo (2007) reported that services liberalization enhanced the productivity of downstream manufacturing firms in the Czech Republic; and Henry and Sasson (2008) provide evidence that capital account liberalization raises real wages.
Perhaps sensing that his own back-of-the-envelope calculations cannot be trusted, Rodrik cites the results of computable general equilibrium (CGE) studies carried out by Kym Anderson, Will Martin, and Dominique van der Mensbrugghe (2005, 2006). These respected World Bank economists suggest that global free trade in merchandise would increase US incomes by just 0.1 percent in 2015, an estimate that falls well below the median of other CGE models. Though saying he has no idea whether the World Bank number is right, Rodrik seems to regard the 0.1 percent figure as confirmation for his own "reality check" (Rodrik 2007). So it is worth exploring the World Bank model a bit further.
The basic flaw in the World Bank CGE model is that it omits virtually all the important channels of growth opened by policy liberalization and technology innovation--the forces we have already enumerated--and it also omits services from the story. Services are the fastest growing component of global commerce and promise the biggest payoff from future liberalization. In reality, the World Bank CGE model is a glorified version of Taussig's framework, made vastly more complex thanks to computer power, but limited to merchandise trade under static conditions. The only "dynamic" feature in the model is its ability to calculate year-by-year results. For a truly dynamic CGE model that reflects forces set in motion when an economy liberalizes, and covers services as well, interested readers should instead consult the University of Michigan model, designed by Drusilla Brown, Alan Deardorff, and Robert Stern (e.g., Kiyota and Stern 2007). Similar to our calculations, the Michigan modelers estimate that global free trade in goods and services would increase US national income by 3.4 percent.
Rodrik implicitly accuses us of using increasing returns to scale to cook the books. Increasing returns may be important in the real world, but they play a minor role in our 4.1 percent figure. Rodrik further claims that our calculated price gaps are caused mostly by things other than trade barriers. He provides no evidence for this claim even though published studies make the case that trade barriers are substantial (Bradford 2003, Bradford and Lawrence 2004).
To embellish his argument, Rodrik credits us with several straw men and ridicules the whole lot. Supposedly, according to Rodrik, we believe that globalization "will yield full price convergence;" supposedly we urge the United States to harmonize its laws with those of its trading partners and join them in a global currency union; and supposedly we welcome 80,000 pages of EU-style regulations. All this is nonsense.
Finally, Rodrik takes us to account for misstating Andrew Rose's (2003) gravity model as to the increase in merchandise trade created by a regional trade agreement (RTA). As we explained (Bradford, Grieco, and Hufbauer 2005, 93, footnote 60), we used the most conservative RTA coefficient calculated by Rose (middle column, Rose's table 1), namely 0.78 (exp0.78 -1.00 = 118 percent), which we then discounted by our own estimate of trade diversion. Subsequent gravity model studies, reflecting additional free trade agreements besides those included in Rose's original data set, buttress our expectation that global free trade would substantially boost world commerce (e.g., DeRosa and Gilbert 2005, Hufbauer and Schott 2007).
Speaking of gravity models, these modern econometric workhorses demonstrate that free trade agreements (FTAs) enlarge bilateral commerce to a much greater extent than predicted by Frank Taussig's classic framework. The payoff of FTAs, in terms of boosting two-way merchandise trade flows, are many times larger than classic trade theory, based on estimated price elasticities, might suggest.
It makes an enormous policy difference whether those in power think the gains to the United States and to the world at large, from total free trade in goods and services, would be only 0.1 percent of GDP, or instead could reach 4 percent of GDP. If gains are as small as 0.1 percent, why bother? Forget about the Doha Development Round and put those pesky free trade agreements (300 and counting) on the shelf. If gains are as large as 4 percent, the payoff is handsome: That's right at the top of what governments can deliver through economic policy reform.
In this debate with Rodrik and Bivens, we are glad to be on the same page as Federal Reserve Chairman Bernanke and Treasury Secretary Paulson.2 Free trade remains our prescription.
L. Josh Bivens. L. Josh Bivens along with Jared Bernstein, both of the Economic Policy Institute, launched an attack on April 9, 2007, with a personal criticism of the director of the Peterson Institute, C. Fred Bergsten, and the Washington Post columnist, Sebastian Mallaby. In "Cheerleaders Gone Wild," Bernstein and Bivens embraced the same antiquated arithmetic as Rodrik, claiming that "reasonable estimates" of potential US gains from trade liberalization range between $4 billion and $20 billion (http://www.huffingtonpost.com/jared-bernstein-and-josh-bivens/cheerleaders-gone-wild_b_45405.html). Enjoying his Rip van Winkle moment in the yesteryear of trade analysis, Bivens repeated his arguments in three more papers (Bivens 2007a, 2007b, 2007c).
Bivens gives a simple-minded calculation, based on assumed parameters, suggesting that a return to the Smoot-Hawley tariff would only reduce the US economy by 1 percent. Such calculations may sing to Patrick Buchanan or Lou Dobbs, but not to anyone who has seriously studied the Great Depression or international economics.
Bivens missed a lot of things in his multiple and repetitive critiques, but foremost he ignored Solow's landmark finding (1956) that productivity gains explain more than 80 percent of US economic growth. Where does all this productivity come from? Innocent scientists laboring away in isolated labs, content to live on small stipends from penurious universities? That doesn't describe Charles Edison, Henry Ford, or Bill Gates. Nor does it explain why Britain has so lagged America, despite brilliant scientific achievements, nor why India and Egypt remain so far behind Korea. Competitive pressure, economies of scope and scale, and product diversity explain a great deal of productivity gains, and that's where globalization enters the picture.
My coauthors and I are not claiming that expansion of international trade and investment is the leading cause of productivity growth. But we do claim that these forces make a significant contribution through channels identified in the empirical literature and summarized in our chapter, all of them dismissed by Bivens.
Before offering further rejoinders, let me clarify a couple of points. Our analysis emphasized that globalization creates losers as well as winners and provided numerical estimates of lifetime compensation losses for dislocated workers. While national gains far exceed individual losses, we agree that the US safety net is far too parsimonious.
We did not debate the merits of the Stolper-Samuelson theorem, which underpins the assertion by Bivens that "losers may well outnumber winners, even if winnings are greater than losses" (Bivens 2007c). As a theoretical proposition, it is possible that losers may outnumber winners. But empirical research on the American economy does not support the contention that income distribution has been strongly affected by international trade and investment. The forces of technology, education, and immigration are far more salient (Lawrence 2008).
Another point worth clarifying is that we did not claim that policy liberalization was the only driver of the gains estimated in our chapter. Rapidly falling transportation and communication costs are equally and perhaps more important aspects of the globalization story. Bivens implies that we have attributed past gains from falling transport and communications costs to policy liberalization. Au contraire. We were careful to state that the $1 trillion retrospective figure conflates policy liberalization with technological advance. The $500 billion prospective figure, however, reflects only prospective gains from policy liberalization.
Appendix B offers rejoinders to some of the complaints that Bivens voices about our use of the work of other scholars in constructing estimates of the payoff from globalization. But one point requires emphasis here. Bivens makes a big thing of the fact that "not a single one" of the studies we cited gives a calculation of the payoff of globalization resembling our estimates. He is absolutely right. The cited studies made no estimates whatsoever of the payoff in GDP terms. If our work had an original dimension, it was to tease out, from the academic studies, numbers that can be easily understood in the public debate.
The ITC Report. The International Trade Commission Report, titled The Economic Effects of Significant U.S. Import Restraints--Fifth Update 2007, applies a CGE model to conclude that the welfare cost to the United States of all the "significant restraints" now in place is only $3.7 billion annually. By implication, removing "significant" barriers would enlarge the US economy by only $3.7 billion annually. Even taking into account its recognized limitations--for example virtual exclusion of the service industries and ignoring multiple regulatory barriers--this estimate does not pass the laugh test. It is completely at odds with estimates based on CGE models carried out by the World Bank, the Carnegie Endowment, and the University of Michigan. To summarize the alternative CGE estimates:
* The World Bank estimates that an "ambitious" outcome from the Doha Round (not complete tariff and nontariff barrier [NTB] elimination, just an "ambitious" outcome) would generate $29 billion in gains for the United States.3 Unlike the ITC model, the World Bank model reports gains both from liberalizing US import barriers and foreign barriers on US exports. However, gains from import liberalization are usually more than half of the total pie. In discussing Rodrik's critique, I have already noted shortcomings in the World Bank model; even so, the World Bank calculation of gains from liberalizing imports is several times the size of the ITC calculation.
* The Carnegie Endowment published an estimate to the effect that the United States would gain about $16 billion from "full liberalization" (Polaski 2006, table B.1). The Carnegie model embodies the limitations of the World Bank model, and some of its own making. Akin to Rodrik and Bivens, the author of the Carnegie model, Sandra Polaski, belongs to the camp of globalization skeptics. Even so, the Endowment's figure exceeds the ITC calculation.
* Turning to globalization optimists, the Michigan Model estimated a payoff to the United States of $600 billion (5.5 percent of US GDP in 2003) from complete world liberalization (Brown, Deardorff, and Stern 2002, table 1). The Michigan Model has many truly dynamic features not built into the World Bank or Carnegie models. A large portion of the calculated gains flow from postulated liberalization of the service sectors, not captured either in the ITC model (with the exception of maritime transportation), nor in the World Bank model.
Leaving aside alternative estimates based on competing CGE models, a couple of rhetorical questions illustrate why the ITC figure of $3.7 billion is implausibly small.
* If the cost of protection is so modest, why are apparel tariffs, dairy quotas, and farm subsidies so energetically defended by producer lobbies? And why do countries abroad bother complaining about US trade barriers?
* According to the ITC report, removing US barriers on beef imports would increase employment in the beef industry by 0.3 percent and increase exports by 12.3 percent. Can those numbers explain why the Cattlemen's Association insisted on a tariff phaseout lasting nearly 20 years on beef imports in the US-Australia free trade agreement?
To Conclude. Our calculations of the gains from past globalization--and the gains yet to be realized from future policy liberalization--are certainly not the last word. Better estimates will surely be made by future scholars. But the criticisms offered by Rodrik and Bivens, and the estimates published by the ITC, all represent giant steps to the past. Until we see solid contrary evidence, we stick with our calculations: To date, postwar globalization has made the US economy $1 trillion richer each year; total policy liberalization by the United States and all its commercial partners would add another $500 billion annually to the US economy.
Appendix A: Technical Flaws in Rodrik's Formula
Rodrik's formula depends on three crucial assumptions that bias the result downward. First, the formula assumes that governments use only tariffs. The protection package usually contains nontariff barriers (NTBs) such as agricultural subsidies and procurement restrictions. The more these NTBs are used, the more the formula's key number is biased downward. Second, the formula assumes that protection is the same for all goods and services. When properly accounting for the actual peaks and valleys in the protection profile across sectors, the estimated cost of barriers becomes much higher, typically two or three times as high. Third, the elasticity of import demand tends to increase as protection levels rise and import quantities fall. Taking account of this feature can also yield higher estimates of protection costs. In short, using a crude formula as a "reality check" on careful calculations is like using a yardstick to check the tolerance of a wristwatch.
Appendix B: Further Rejoinders to Bivens' Critique
In his working paper (2007c), Bivens offers a critique of several of the studies we relied upon, and the way we used them, to construct our estimates of the payoff to the US economy from past globalization and future liberalization. Here we give short rejoinders to some of his criticisms.
Bivens points to a supposed contradiction between the product variety account of Broda and Weinstein (2004) and the price convergence analysis of Bradford and Lawrence (2004). However, the US tariff schedule at the 8-digit level enumerates some 9,000 lines, and most of these 8-digit lines cover multiple products. In other words, the absolute number of products sold in the American economy is very large and, according to Broda and Weinstein, the variety has grown substantially over the past 30 years. Increased product variety is a microphenomenon. By contrast, the Bradford and Lawrence analysis covered a fairly small number of aggregated product categories, fewer than 100. The convergence of average prices between broad categories can go hand-in-hand with greater variety within each category.
Bivens also suggests that there is a contradiction between the sifting and sorting literature (Bernard, Jensen, and Schott 2003) and the concept of product variety (Broda and Weinstein 2004). He asks "if imports are largely adding to variety and often do not directly compete with domestically-produced output, then one must ask why they are killing domestic plants..." (Bivens 2007c). Here, Bivens misses the key idea of the substitution effect between similar goods--i.e., consumers can and will switch their purchases between similar but still different products--which in turn can foster the sifting and sorting of firms. An example illustrates how increasing product variety and sifting and sorting can occur simultaneously. Coca-Cola enjoyed market dominance for decades after its introduction, but when Pepsi Cola--a similar but different product--came on the scene, it cut into Coca-Cola's market share, presumably forcing the soft drink maker to ditch its less efficient distributors and plants.
Bivens dismisses OECD (2003), stating, the method used in the study "is an inadequate and potentially misleading way to measure the impact of trade on growth" (Bivens 2007c). We disagree. So does Cline (2004). Bivens first takes issues with the causality between trade and growth, but earlier works have already addressed this question. The instrumental variables approach applied by Frankel and Romer (1999) to disentangle cause and effect strengthens the argument that greater trade intensity promotes higher growth.
Second, Bivens disregards the openness ratio--two-way trade divided by GDP--as an appropriate way to gauge a nation's trade policy stance. He cites the example of a larger openness ratio for Vietnam than the United States as evidence that the ratio says nothing about the nation's trade policy stance. However, even Bivens (2007c) concedes, in an endnote, that the OECD (2003) study controls for other factors, like country size, that explain much of the variance across countries in their openness ratios. When the statistical method controls for other factors, as was done in the OECD (2003) study, the openness ratio serves as a good proxy for the nation's trade policy stance.
The sifting and sorting literature criticized by Bivens is still in an early stage. However, evidence is accumulating that competitive pressure enlarges the relative size of more productive firms within an industry, thereby increasing the productivity of the average surviving firm. Here's what the abstract from the paper by Bernard and Jensen (2004) says: "Exporting is associated with the reallocation of resources from less efficient to more efficient plants. In the aggregate, these reallocation effects are quite large, making up more than 40 percent of total factor productivity growth in the manufacturing sector."4
Bivens doesn't like the CGE model used by Bradford and Lawrence to reconstruct the Smoot-Hawley world. Bivens is correct that any CGE model embodies a large number of assumptions, and scholars obviously differ as to the correct assumptions.5 However, the Bradford-Lawrence CGE calculations are buttressed by the gravity model exercise reported elsewhere in Bradford, Grieco, and Hufbauer (2005).
To conclude this response, Richardson (2004) emphasizes, in writing up the growth accounting model, that rightsizing and precision fitting of imported inputs makes the difference. Purchasing industries can get just the component they need by tapping global sources of supply. Perhaps Bivens missed this point,6 because our exposition of Richardson's analysis did not give sufficient emphasis to the rightsizing aspect of Richardson's account.
References
Anderson, Kym, Will Martin, and Dominique van der Mensbrugghe. 2005. Market and welfare implications of Doha reform scenarios. In Trade Reform and the Doha Agenda, ed. K. Anderson and W. Martin. Washington: World Bank.
Anderson, Kym, Will Martin, and Dominique van der Mensbrugghe. 2006. Doha Merchandise Trade Reform: What's at Stake for Developing Countries? World Bank Policy Research Working Paper 3848 (February). Washington: World Bank.
Arnold, Jens Matthias, Beata Smarzynska Javorcik, and Aaditya Mattoo. 2007. Does Services Liberalization Benefit Manufacturing Firms? Evidence from the Czech Republic. World Bank Policy Research Working Paper 4109 (January). Washington: World Bank.
Bernanke, Ben S. 2007. Embracing the Challenge of Free Trade: Competition and Prospering in a Global Economy. Speech to the Montana Economic Development Summit, Butte, Montana. May 1.
Bernard, Andrew, and J. Bradford Jensen. 2004. Exporting and Productivity in the US. Tuck School of Business at Dartmouth, National Bureau of Economic Research and the Institute for International Economics. Photocopy (July).
Bernard, Andrew B., J. Bradford Jensen, and Peter Schott. 2003. Falling Trade Costs, Heterogeneous Firms and Industry Dynamics. IFS Working Paper 03/10. London: Institute for Fiscal Studies.
Bernard, Andrew B., Stephen Redding, and Peter Schott. 2004. Comparative Advantage and Heterogeneous Firms. NBER Working Paper 10668. Cambridge, MA: National Bureau of Economic Research.
Bernstein, Jared, and L. Josh Bivens. 2007. Cheerleaders Gone Wild. www.huffingtonpost.com/jared-bernstein-and-josh-bivens/cheerleaders-gone-wild_b_45405.html).
Bivens, L. Josh. 2007a. Marketing the Gains from Trade. Economic Policy Institute. Issue Brief #233 (June 19).
Bivens, L. Josh. 2007b. The Marketing of Economic History: Inflating the Importance of Trade Liberalization. Economic Policy Institute Issue Brief #238 (December 17).
Bivens, L. Josh. 2007c. The Gains from Trade: How Big and Who Gets Them? Economic Policy Institute. Working Paper (December 17).
Bradford, Scott C. 2003. Paying the Price: Final Goods Protection in OECD Countries. Review of Economics and Statistics 85, no. 1: 24-37 (February).
Bradford, Scott C., and Robert Z. Lawrence. 2004. Has Globalization Gone Far Enough? The Costs of Fragmented Markets. (http://bookstore.petersoninstitute.org/book-store/349.html) Washington: Institute for International Economics.
Bradford, Scott C., Paul L. E. Grieco, and Gary Clyde Hufbauer. 2005. The Payoff to America from Global Integration (http://www.petersoninstitute.org/publications/papers/2iie3802.pdf). In The United States and the World Economy: Foreign Economic Policy for the Next Decade (http://bookstore.petersoninstitute.org/book-store/3802.html), in C. Fred Bergsten and the Institute for International Economics. Washington: Institute for International Economics.
Broda, Christian, and David E. Weinstein. 2004. Globalization and the Gains from Variety. NBER Working Paper 10314. Cambridge, MA: National Bureau of Economic Research. February.
Brown, K. Drusilla, Alan V. Deardorff, and Robert M. Stern. 2002. Multilateral, Regional and Bilateral Trade Policy--Options for the United States and Japan. University of Michigan, Research Seminar in International Economics. Discussion Paper No. 490. Available at http://fordschool.umich.edu/rsie/workingpapers/Papers476-500/r490.pdf.
Cline, William R. 2004. Trade Policy and Global Poverty (http://bookstore.petersoninstitute.org/book-store/379.html). Washington: Institute for International Economics.
DeRosa, Dean A., and John P. Gilbert. 2005. Predicting Trade Expansion under FTAs and Multilateral Agreements. Working Paper 05-13 (October). Washington: Peterson Institute for International Economics. Available at www.petersoninstitute.org/publications/wp/wp05-13.pdf.
Frankel, Jeffrey A., and David Romer. 1999. Trade and Growth: An Empirical Investigation. American Economic Review 89, no. 3 (June): 379-99.
Henry, Peter Blair, and Diego L. Sasson. 2008. Capital Account Liberalization, Real Wages, and Productivity. NBER Working Paper No. W13880. Cambridge, MA: National Bureau of Economic Research.
Hoekman, Bernard M., and Marcelo Olarreaga, eds. 2007. Global Trade and Poor Nations: The Poverty Impacts and Policy Implications of Liberalization. Washington: Brookings Institution Press.
Hufbauer, Gary Clyde, and Kimberly Ann Elliott. 1994. Measuring the Costs of Protection in the United States (http://bookstore.petersoninstitute.org/book-store/77.html). Washington: Institute for International Economics.
Hufbauer, Gary Clyde, and Howard F. Rosen. 1986. Trade Policy for Troubled Industries. Washington: Institute for International Economics.
Hufbauer, Gary Clyde, and Jeffrey J. Schott. 2007. Multilateralizing Regionalism: Fitting Asia-Pacific Agreements into the WTO System (http://www.petersoninstitute.org/publications/papers/hufbauerppt1107.pdf). Presentation at New Asia-Pacific Trade Initiatives, November 27, Washington. Previously presented at the 2007 HEI SECO NCCR Conference, Geneva.
Keller, Wolfgang, and Stephen R. Yeaple. 2005. Multinational Enterprises International Trade, and Productivity Growth: Firm-Level Evidence from the United States. Discussion Paper Series 1: Economic Studies no. 07/2005.
Kiyota, Kozo, and Robert M. Stern. 2007. Economic Effects of a Korea-U.S. Free Trade Agreement. Korea Economic Institute of America (KEI) Special Studies Series 4. Washington. Available at www.keia.org/4-Current/KORUSFTASternWebFinal.pdf.
Lawrence, Robert Z. 2008. Blue-Collar Blues: Is Trade to Blame for Rising US Income Inequality? (http://bookstore.petersoninstitute.org/book-store/4143.html) Policy Analysis 85. Washington: Peterson Institute for International Economics.
OECD (Organization for Economic Cooperation and Development). 2003. The Sources of Economic Growth in OECD Countries. Paris.
Paulson, Henry M. 2006. Remarks by Treasury Secretary Henry M. Paulson on the International Economy, September 13. Treasury Department Cash Room. Washington.
Polaski, Sandra. 2006. Winners and Losers: Impact of the Doha Round on Developing Countries. Carnegie Endowment for International Peace Report (March). Available at www.carnegieendowment.org/publications/index.cfm?fa=view&id=18083.
Richardson, J. David. 2004. 'Sizing Up' the Micro-Data Benefits. Institute for International Economics. Photocopy.
Rodríguez, Francisco, and Dani Rodrik. 1999. Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-National Literature. NBER Working Paper 7081 (April). Cambridge, MA: National Bureau of Economic Research.
Rodrik, Dani. 1997. Has Globalization Gone Too Far? (http://bookstore.petersoninstitute.org/book-store/57.html) Washington: Institute for International Economics.
Rodrik, Dani. 2007. The Globalization Numbers Game (May 7). Dani Rodrik's Weblog (http://rodrik.typepad.com).
Rose, Andrew. 2003. Which International Institutions Promote International Trade? Review of International Economics Manuscript # 3147. Available at http://faculty.haas.berkeley.edu/arose/Comparer.pdf.
Rosen, Howard F. 2008. Strengthening Trade Adjustment Assistance. (http://www.petersoninstitute.org/publications/interstitial.cfm?ResearchID=878) Policy Briefs in International Economics 08-2. Washington: Peterson Institute for International Economics.
Sachs, Jeffrey, and Andrew Warner. 1995. Economic Reform and the Process of Global Integration. Brookings Papers on Economic Activity, 1995, no. 1: 1-118.
Schwab, Susan C. 2007. US Trade Update and Agenda. Presentation of United States Trade Representative, Ambassador Susan C. Schwab to the Senate Finance Committee. February 15, Washington.
Solow, Robert M. 1956. A Contribution to the Theory of Economic Growth. Quarterly Journal of Economics 70, no.1 (February): 65-94.
Taussig, Frank W. 1927. International Trade. Reprinted by Augustus M. Kelley Publishers: New York (1966).
USITC (United States International Trade Commission). 2007. The Economic Effects of Significant U.S. Import Restraints, Fifth Update. Publication Number: 3906. Available at www.usitc.gov/publications/pub3906.pdf (accessed April 29, 2008).
USTR (United States Trade Representative). 2007. Trade and Services: Services Trade Fuels Growth of US Economy. Benefits of Trade (January). Available at www.ustr.gov. (accessed April 29, 2008).
Notes
1. The first Institute publication on this subject was Hufbauer and Rosen (1986).
2. See for example Bernanke (2007) and Paulson (2006).
3. See Hoekman and Olarreaga (2007) and, importantly, a correct version of their table 2.2, which is available from the authors.
4. Bivens (2007c) also distrusts our extension of Bernard, Redding, and Schott (2004) from the 65 industries and OECD countries used in the model to all industries and countries. Further research may show that this extension cannot be made, but until then, the work of Bernard Redding, and Schott (2004) provides the best available estimate.
5. For example, Bivens (2007c) questions the use of increasing returns to scale in the model, preferring constant returns to scale.
6. Bivens (2007c) calls the use of Richardson (2004) in the context of growth accounting an "odd mistake."
(c) 2007 Peter G. Peterson Institute for International Economics. 1750 Massachusetts Avenue, NW.
Washington, DC 20036. Tel: 202-328-9000 Fax: 202-659-3225 / 202-328-5432
Site development and hosting by Digital Division
Acho que os chineses, de qualquer condição social, não concordariam com isto...
-------------
Paulo Roberto de Almeida
Answering the Critics: Why Large American Gains from Globalization Are Plausible
by Gary Clyde Hufbauer, Peterson Institute
May 2008
Link
The author thanks research assistant Matt Adler for his contribution to this paper.
The Peterson Institute calculates that the US economy is approximately $1 trillion richer each year owing to past globalization--the payoff both from technological innovation and from policy liberalization--and could gain another $500 billion annually from future liberalization (Bradford, Grieco, and Hufbauer 2005). These estimates have attracted sharp criticism, notably from Dani Rodrik (2007) and L. Josh Bivens (2007a, 2007b, 2007c). The critics are particularly annoyed that the Peterson Institute calculations enjoy wide circulation in the public debate (USTR 2007, Schwab 2007), and Bivens has gone so far as to urge that they be "retired" (Bivens 2007a ). Apart from answering these critics, it is worth commenting on a US International Trade Commission report (USITC 2007) that gives an unbelievably low figure for the cost of import protection to the US economy.
Underlying the noisy attack from our critics is their fear that, if public officials believe in a substantial payoff from globalization, they will be too eager to negotiate new trade agreements. Many of our critics implicitly fault us for paying insufficient attention to domestic losers. The Peterson Institute, however, can point to a long and vigorous record of urging meaningful remedies for workers adversely affected by globalization (Rosen 2008). Our research and recommendations on this critical topic stretches from 1986 to the present day.1 Judging from presidential primaries in Ohio and Pennsylvania, meaningful programs for domestic losers will become a priority if a Democrat is elected in 2008. That said, a short rejoinder is in order both to defend the magnitude of our payoff calculations and to urge the next administration not to put trade liberalization in the freezer.
Dani Rodrik. In his weblog for May 7, 2007 (http://rodrik.typepad.com/), Dani Rodrik took us to task for exaggerating the benefits of globalization. Professor Rodrik long ago established his reputation as a globalization skeptic; today he is the favorite Harvard economist among the backlash crowd. In 1997, Rodrik voiced a critical note in a book published by the Institute for International Economics, Has Globalization Gone Too Far? (http://bookstore.petersoninstitute.org/book-store/57.html) Two years later, Francisco Rodríguez and Rodrik (1999) notched their academic guns against Jeffrey Sachs and Andrew Warner (1995), questioning the benefits of liberal trade policy for developing countries. As targets of Rodrik's latest outburst, we share good company.
To debunk the payoff from globalization, Rodrik resurrects arithmetic developed by Frank Taussig (1927) as a "reality check" on our calculations. Taussig was a great economist, but economic science has actually progressed since 1927. The partial equilibrium formula cited by Rodrik essentially confines the benefits of globalization to the "welfare triangles" created when tariffs are abolished. As calculated by Rodrik, the welfare triangles total 0.25 percent or less of US national income, around $35 billion of potential gains if all US tariffs were abolished (Rodrik 2007). By contrast, our conservative estimate suggests that full global liberalization would ultimately increase US national income by about 4.1 percent of GDP, about $570 billion based on GDP in 2007. Even on its own terms, Rodrik's application of welfare triangle analysis is biased downward for reasons spelled out in appendix A. The more serious problem, however, is that welfare triangle analysis misses the big story.
Done properly, welfare triangles are fine for examining the cost of protecting individual products in otherwise perfectly competitive and undistorted markets. Years ago, we used this analytic framework for examining steel quotas, textile and apparel tariffs, sugar duties, and other barriers (e.g., Hufbauer and Elliott 1994). But this sort of analysis completely misses multiple forces that enormously expand the payoff from policy liberalization and technology innovation for a country that participates in a global economy.
What are these forces? "Rightsizing" inputs to the needs of industrial producers, lowering the true cost of household purchases below the advertised inflation rate, "sifting and sorting" firms so that the most efficient expand and the least efficient shrink, curtailing the markup margins associated with monopolistic competition, stimulating laggard industries (think autos and steel) to match the productivity of foreign competitors, reducing the enormous international differences that prevail in prices for traded goods, and enjoying the benefits of increasing returns to scale.
Even using a simplistic formula, Rodrik's analysis compares apples and oranges. His "reality check" of 0.25 percent of GDP reflects the static cost of US tariff barriers imposed only on merchandise trade. Our number of 4.1 percent (which Rodrik compares to his 0.25 percent) reflects a comprehensive analysis that includes US tariff and nontariff barriers on merchandise trade, US barriers on services trade, foreign barriers of all kinds, and multiple dynamic effects thwarted by assorted barriers here and abroad. If all of these features of our analysis are stripped away, we would be left with an estimate near 0.5 percent of US GDP. This is about what one would expect from a proper static formula that accounts for differences in protection across sectors. But why focus on a misleading comparison when more robust analysis is available?
In analysis that Rodrik criticizes (Bradford, Grieco, and Hufbauer 2005), we used alternative methods to calculate some, but not all, of the progrowth forces unleashed by globalization. The literature points to additional channels besides those we cited; for example, Keller and Yeaple (2005) showed that a growing role of foreign multinational enterprises (MNEs) in the United States boosts the productivity of domestic firms; Arnold, Javorcik, and Mattoo (2007) reported that services liberalization enhanced the productivity of downstream manufacturing firms in the Czech Republic; and Henry and Sasson (2008) provide evidence that capital account liberalization raises real wages.
Perhaps sensing that his own back-of-the-envelope calculations cannot be trusted, Rodrik cites the results of computable general equilibrium (CGE) studies carried out by Kym Anderson, Will Martin, and Dominique van der Mensbrugghe (2005, 2006). These respected World Bank economists suggest that global free trade in merchandise would increase US incomes by just 0.1 percent in 2015, an estimate that falls well below the median of other CGE models. Though saying he has no idea whether the World Bank number is right, Rodrik seems to regard the 0.1 percent figure as confirmation for his own "reality check" (Rodrik 2007). So it is worth exploring the World Bank model a bit further.
The basic flaw in the World Bank CGE model is that it omits virtually all the important channels of growth opened by policy liberalization and technology innovation--the forces we have already enumerated--and it also omits services from the story. Services are the fastest growing component of global commerce and promise the biggest payoff from future liberalization. In reality, the World Bank CGE model is a glorified version of Taussig's framework, made vastly more complex thanks to computer power, but limited to merchandise trade under static conditions. The only "dynamic" feature in the model is its ability to calculate year-by-year results. For a truly dynamic CGE model that reflects forces set in motion when an economy liberalizes, and covers services as well, interested readers should instead consult the University of Michigan model, designed by Drusilla Brown, Alan Deardorff, and Robert Stern (e.g., Kiyota and Stern 2007). Similar to our calculations, the Michigan modelers estimate that global free trade in goods and services would increase US national income by 3.4 percent.
Rodrik implicitly accuses us of using increasing returns to scale to cook the books. Increasing returns may be important in the real world, but they play a minor role in our 4.1 percent figure. Rodrik further claims that our calculated price gaps are caused mostly by things other than trade barriers. He provides no evidence for this claim even though published studies make the case that trade barriers are substantial (Bradford 2003, Bradford and Lawrence 2004).
To embellish his argument, Rodrik credits us with several straw men and ridicules the whole lot. Supposedly, according to Rodrik, we believe that globalization "will yield full price convergence;" supposedly we urge the United States to harmonize its laws with those of its trading partners and join them in a global currency union; and supposedly we welcome 80,000 pages of EU-style regulations. All this is nonsense.
Finally, Rodrik takes us to account for misstating Andrew Rose's (2003) gravity model as to the increase in merchandise trade created by a regional trade agreement (RTA). As we explained (Bradford, Grieco, and Hufbauer 2005, 93, footnote 60), we used the most conservative RTA coefficient calculated by Rose (middle column, Rose's table 1), namely 0.78 (exp0.78 -1.00 = 118 percent), which we then discounted by our own estimate of trade diversion. Subsequent gravity model studies, reflecting additional free trade agreements besides those included in Rose's original data set, buttress our expectation that global free trade would substantially boost world commerce (e.g., DeRosa and Gilbert 2005, Hufbauer and Schott 2007).
Speaking of gravity models, these modern econometric workhorses demonstrate that free trade agreements (FTAs) enlarge bilateral commerce to a much greater extent than predicted by Frank Taussig's classic framework. The payoff of FTAs, in terms of boosting two-way merchandise trade flows, are many times larger than classic trade theory, based on estimated price elasticities, might suggest.
It makes an enormous policy difference whether those in power think the gains to the United States and to the world at large, from total free trade in goods and services, would be only 0.1 percent of GDP, or instead could reach 4 percent of GDP. If gains are as small as 0.1 percent, why bother? Forget about the Doha Development Round and put those pesky free trade agreements (300 and counting) on the shelf. If gains are as large as 4 percent, the payoff is handsome: That's right at the top of what governments can deliver through economic policy reform.
In this debate with Rodrik and Bivens, we are glad to be on the same page as Federal Reserve Chairman Bernanke and Treasury Secretary Paulson.2 Free trade remains our prescription.
L. Josh Bivens. L. Josh Bivens along with Jared Bernstein, both of the Economic Policy Institute, launched an attack on April 9, 2007, with a personal criticism of the director of the Peterson Institute, C. Fred Bergsten, and the Washington Post columnist, Sebastian Mallaby. In "Cheerleaders Gone Wild," Bernstein and Bivens embraced the same antiquated arithmetic as Rodrik, claiming that "reasonable estimates" of potential US gains from trade liberalization range between $4 billion and $20 billion (http://www.huffingtonpost.com/jared-bernstein-and-josh-bivens/cheerleaders-gone-wild_b_45405.html). Enjoying his Rip van Winkle moment in the yesteryear of trade analysis, Bivens repeated his arguments in three more papers (Bivens 2007a, 2007b, 2007c).
Bivens gives a simple-minded calculation, based on assumed parameters, suggesting that a return to the Smoot-Hawley tariff would only reduce the US economy by 1 percent. Such calculations may sing to Patrick Buchanan or Lou Dobbs, but not to anyone who has seriously studied the Great Depression or international economics.
Bivens missed a lot of things in his multiple and repetitive critiques, but foremost he ignored Solow's landmark finding (1956) that productivity gains explain more than 80 percent of US economic growth. Where does all this productivity come from? Innocent scientists laboring away in isolated labs, content to live on small stipends from penurious universities? That doesn't describe Charles Edison, Henry Ford, or Bill Gates. Nor does it explain why Britain has so lagged America, despite brilliant scientific achievements, nor why India and Egypt remain so far behind Korea. Competitive pressure, economies of scope and scale, and product diversity explain a great deal of productivity gains, and that's where globalization enters the picture.
My coauthors and I are not claiming that expansion of international trade and investment is the leading cause of productivity growth. But we do claim that these forces make a significant contribution through channels identified in the empirical literature and summarized in our chapter, all of them dismissed by Bivens.
Before offering further rejoinders, let me clarify a couple of points. Our analysis emphasized that globalization creates losers as well as winners and provided numerical estimates of lifetime compensation losses for dislocated workers. While national gains far exceed individual losses, we agree that the US safety net is far too parsimonious.
We did not debate the merits of the Stolper-Samuelson theorem, which underpins the assertion by Bivens that "losers may well outnumber winners, even if winnings are greater than losses" (Bivens 2007c). As a theoretical proposition, it is possible that losers may outnumber winners. But empirical research on the American economy does not support the contention that income distribution has been strongly affected by international trade and investment. The forces of technology, education, and immigration are far more salient (Lawrence 2008).
Another point worth clarifying is that we did not claim that policy liberalization was the only driver of the gains estimated in our chapter. Rapidly falling transportation and communication costs are equally and perhaps more important aspects of the globalization story. Bivens implies that we have attributed past gains from falling transport and communications costs to policy liberalization. Au contraire. We were careful to state that the $1 trillion retrospective figure conflates policy liberalization with technological advance. The $500 billion prospective figure, however, reflects only prospective gains from policy liberalization.
Appendix B offers rejoinders to some of the complaints that Bivens voices about our use of the work of other scholars in constructing estimates of the payoff from globalization. But one point requires emphasis here. Bivens makes a big thing of the fact that "not a single one" of the studies we cited gives a calculation of the payoff of globalization resembling our estimates. He is absolutely right. The cited studies made no estimates whatsoever of the payoff in GDP terms. If our work had an original dimension, it was to tease out, from the academic studies, numbers that can be easily understood in the public debate.
The ITC Report. The International Trade Commission Report, titled The Economic Effects of Significant U.S. Import Restraints--Fifth Update 2007, applies a CGE model to conclude that the welfare cost to the United States of all the "significant restraints" now in place is only $3.7 billion annually. By implication, removing "significant" barriers would enlarge the US economy by only $3.7 billion annually. Even taking into account its recognized limitations--for example virtual exclusion of the service industries and ignoring multiple regulatory barriers--this estimate does not pass the laugh test. It is completely at odds with estimates based on CGE models carried out by the World Bank, the Carnegie Endowment, and the University of Michigan. To summarize the alternative CGE estimates:
* The World Bank estimates that an "ambitious" outcome from the Doha Round (not complete tariff and nontariff barrier [NTB] elimination, just an "ambitious" outcome) would generate $29 billion in gains for the United States.3 Unlike the ITC model, the World Bank model reports gains both from liberalizing US import barriers and foreign barriers on US exports. However, gains from import liberalization are usually more than half of the total pie. In discussing Rodrik's critique, I have already noted shortcomings in the World Bank model; even so, the World Bank calculation of gains from liberalizing imports is several times the size of the ITC calculation.
* The Carnegie Endowment published an estimate to the effect that the United States would gain about $16 billion from "full liberalization" (Polaski 2006, table B.1). The Carnegie model embodies the limitations of the World Bank model, and some of its own making. Akin to Rodrik and Bivens, the author of the Carnegie model, Sandra Polaski, belongs to the camp of globalization skeptics. Even so, the Endowment's figure exceeds the ITC calculation.
* Turning to globalization optimists, the Michigan Model estimated a payoff to the United States of $600 billion (5.5 percent of US GDP in 2003) from complete world liberalization (Brown, Deardorff, and Stern 2002, table 1). The Michigan Model has many truly dynamic features not built into the World Bank or Carnegie models. A large portion of the calculated gains flow from postulated liberalization of the service sectors, not captured either in the ITC model (with the exception of maritime transportation), nor in the World Bank model.
Leaving aside alternative estimates based on competing CGE models, a couple of rhetorical questions illustrate why the ITC figure of $3.7 billion is implausibly small.
* If the cost of protection is so modest, why are apparel tariffs, dairy quotas, and farm subsidies so energetically defended by producer lobbies? And why do countries abroad bother complaining about US trade barriers?
* According to the ITC report, removing US barriers on beef imports would increase employment in the beef industry by 0.3 percent and increase exports by 12.3 percent. Can those numbers explain why the Cattlemen's Association insisted on a tariff phaseout lasting nearly 20 years on beef imports in the US-Australia free trade agreement?
To Conclude. Our calculations of the gains from past globalization--and the gains yet to be realized from future policy liberalization--are certainly not the last word. Better estimates will surely be made by future scholars. But the criticisms offered by Rodrik and Bivens, and the estimates published by the ITC, all represent giant steps to the past. Until we see solid contrary evidence, we stick with our calculations: To date, postwar globalization has made the US economy $1 trillion richer each year; total policy liberalization by the United States and all its commercial partners would add another $500 billion annually to the US economy.
Appendix A: Technical Flaws in Rodrik's Formula
Rodrik's formula depends on three crucial assumptions that bias the result downward. First, the formula assumes that governments use only tariffs. The protection package usually contains nontariff barriers (NTBs) such as agricultural subsidies and procurement restrictions. The more these NTBs are used, the more the formula's key number is biased downward. Second, the formula assumes that protection is the same for all goods and services. When properly accounting for the actual peaks and valleys in the protection profile across sectors, the estimated cost of barriers becomes much higher, typically two or three times as high. Third, the elasticity of import demand tends to increase as protection levels rise and import quantities fall. Taking account of this feature can also yield higher estimates of protection costs. In short, using a crude formula as a "reality check" on careful calculations is like using a yardstick to check the tolerance of a wristwatch.
Appendix B: Further Rejoinders to Bivens' Critique
In his working paper (2007c), Bivens offers a critique of several of the studies we relied upon, and the way we used them, to construct our estimates of the payoff to the US economy from past globalization and future liberalization. Here we give short rejoinders to some of his criticisms.
Bivens points to a supposed contradiction between the product variety account of Broda and Weinstein (2004) and the price convergence analysis of Bradford and Lawrence (2004). However, the US tariff schedule at the 8-digit level enumerates some 9,000 lines, and most of these 8-digit lines cover multiple products. In other words, the absolute number of products sold in the American economy is very large and, according to Broda and Weinstein, the variety has grown substantially over the past 30 years. Increased product variety is a microphenomenon. By contrast, the Bradford and Lawrence analysis covered a fairly small number of aggregated product categories, fewer than 100. The convergence of average prices between broad categories can go hand-in-hand with greater variety within each category.
Bivens also suggests that there is a contradiction between the sifting and sorting literature (Bernard, Jensen, and Schott 2003) and the concept of product variety (Broda and Weinstein 2004). He asks "if imports are largely adding to variety and often do not directly compete with domestically-produced output, then one must ask why they are killing domestic plants..." (Bivens 2007c). Here, Bivens misses the key idea of the substitution effect between similar goods--i.e., consumers can and will switch their purchases between similar but still different products--which in turn can foster the sifting and sorting of firms. An example illustrates how increasing product variety and sifting and sorting can occur simultaneously. Coca-Cola enjoyed market dominance for decades after its introduction, but when Pepsi Cola--a similar but different product--came on the scene, it cut into Coca-Cola's market share, presumably forcing the soft drink maker to ditch its less efficient distributors and plants.
Bivens dismisses OECD (2003), stating, the method used in the study "is an inadequate and potentially misleading way to measure the impact of trade on growth" (Bivens 2007c). We disagree. So does Cline (2004). Bivens first takes issues with the causality between trade and growth, but earlier works have already addressed this question. The instrumental variables approach applied by Frankel and Romer (1999) to disentangle cause and effect strengthens the argument that greater trade intensity promotes higher growth.
Second, Bivens disregards the openness ratio--two-way trade divided by GDP--as an appropriate way to gauge a nation's trade policy stance. He cites the example of a larger openness ratio for Vietnam than the United States as evidence that the ratio says nothing about the nation's trade policy stance. However, even Bivens (2007c) concedes, in an endnote, that the OECD (2003) study controls for other factors, like country size, that explain much of the variance across countries in their openness ratios. When the statistical method controls for other factors, as was done in the OECD (2003) study, the openness ratio serves as a good proxy for the nation's trade policy stance.
The sifting and sorting literature criticized by Bivens is still in an early stage. However, evidence is accumulating that competitive pressure enlarges the relative size of more productive firms within an industry, thereby increasing the productivity of the average surviving firm. Here's what the abstract from the paper by Bernard and Jensen (2004) says: "Exporting is associated with the reallocation of resources from less efficient to more efficient plants. In the aggregate, these reallocation effects are quite large, making up more than 40 percent of total factor productivity growth in the manufacturing sector."4
Bivens doesn't like the CGE model used by Bradford and Lawrence to reconstruct the Smoot-Hawley world. Bivens is correct that any CGE model embodies a large number of assumptions, and scholars obviously differ as to the correct assumptions.5 However, the Bradford-Lawrence CGE calculations are buttressed by the gravity model exercise reported elsewhere in Bradford, Grieco, and Hufbauer (2005).
To conclude this response, Richardson (2004) emphasizes, in writing up the growth accounting model, that rightsizing and precision fitting of imported inputs makes the difference. Purchasing industries can get just the component they need by tapping global sources of supply. Perhaps Bivens missed this point,6 because our exposition of Richardson's analysis did not give sufficient emphasis to the rightsizing aspect of Richardson's account.
References
Anderson, Kym, Will Martin, and Dominique van der Mensbrugghe. 2005. Market and welfare implications of Doha reform scenarios. In Trade Reform and the Doha Agenda, ed. K. Anderson and W. Martin. Washington: World Bank.
Anderson, Kym, Will Martin, and Dominique van der Mensbrugghe. 2006. Doha Merchandise Trade Reform: What's at Stake for Developing Countries? World Bank Policy Research Working Paper 3848 (February). Washington: World Bank.
Arnold, Jens Matthias, Beata Smarzynska Javorcik, and Aaditya Mattoo. 2007. Does Services Liberalization Benefit Manufacturing Firms? Evidence from the Czech Republic. World Bank Policy Research Working Paper 4109 (January). Washington: World Bank.
Bernanke, Ben S. 2007. Embracing the Challenge of Free Trade: Competition and Prospering in a Global Economy. Speech to the Montana Economic Development Summit, Butte, Montana. May 1.
Bernard, Andrew, and J. Bradford Jensen. 2004. Exporting and Productivity in the US. Tuck School of Business at Dartmouth, National Bureau of Economic Research and the Institute for International Economics. Photocopy (July).
Bernard, Andrew B., J. Bradford Jensen, and Peter Schott. 2003. Falling Trade Costs, Heterogeneous Firms and Industry Dynamics. IFS Working Paper 03/10. London: Institute for Fiscal Studies.
Bernard, Andrew B., Stephen Redding, and Peter Schott. 2004. Comparative Advantage and Heterogeneous Firms. NBER Working Paper 10668. Cambridge, MA: National Bureau of Economic Research.
Bernstein, Jared, and L. Josh Bivens. 2007. Cheerleaders Gone Wild. www.huffingtonpost.com/jared-bernstein-and-josh-bivens/cheerleaders-gone-wild_b_45405.html).
Bivens, L. Josh. 2007a. Marketing the Gains from Trade. Economic Policy Institute. Issue Brief #233 (June 19).
Bivens, L. Josh. 2007b. The Marketing of Economic History: Inflating the Importance of Trade Liberalization. Economic Policy Institute Issue Brief #238 (December 17).
Bivens, L. Josh. 2007c. The Gains from Trade: How Big and Who Gets Them? Economic Policy Institute. Working Paper (December 17).
Bradford, Scott C. 2003. Paying the Price: Final Goods Protection in OECD Countries. Review of Economics and Statistics 85, no. 1: 24-37 (February).
Bradford, Scott C., and Robert Z. Lawrence. 2004. Has Globalization Gone Far Enough? The Costs of Fragmented Markets. (http://bookstore.petersoninstitute.org/book-store/349.html) Washington: Institute for International Economics.
Bradford, Scott C., Paul L. E. Grieco, and Gary Clyde Hufbauer. 2005. The Payoff to America from Global Integration (http://www.petersoninstitute.org/publications/papers/2iie3802.pdf). In The United States and the World Economy: Foreign Economic Policy for the Next Decade (http://bookstore.petersoninstitute.org/book-store/3802.html), in C. Fred Bergsten and the Institute for International Economics. Washington: Institute for International Economics.
Broda, Christian, and David E. Weinstein. 2004. Globalization and the Gains from Variety. NBER Working Paper 10314. Cambridge, MA: National Bureau of Economic Research. February.
Brown, K. Drusilla, Alan V. Deardorff, and Robert M. Stern. 2002. Multilateral, Regional and Bilateral Trade Policy--Options for the United States and Japan. University of Michigan, Research Seminar in International Economics. Discussion Paper No. 490. Available at http://fordschool.umich.edu/rsie/workingpapers/Papers476-500/r490.pdf.
Cline, William R. 2004. Trade Policy and Global Poverty (http://bookstore.petersoninstitute.org/book-store/379.html). Washington: Institute for International Economics.
DeRosa, Dean A., and John P. Gilbert. 2005. Predicting Trade Expansion under FTAs and Multilateral Agreements. Working Paper 05-13 (October). Washington: Peterson Institute for International Economics. Available at www.petersoninstitute.org/publications/wp/wp05-13.pdf.
Frankel, Jeffrey A., and David Romer. 1999. Trade and Growth: An Empirical Investigation. American Economic Review 89, no. 3 (June): 379-99.
Henry, Peter Blair, and Diego L. Sasson. 2008. Capital Account Liberalization, Real Wages, and Productivity. NBER Working Paper No. W13880. Cambridge, MA: National Bureau of Economic Research.
Hoekman, Bernard M., and Marcelo Olarreaga, eds. 2007. Global Trade and Poor Nations: The Poverty Impacts and Policy Implications of Liberalization. Washington: Brookings Institution Press.
Hufbauer, Gary Clyde, and Kimberly Ann Elliott. 1994. Measuring the Costs of Protection in the United States (http://bookstore.petersoninstitute.org/book-store/77.html). Washington: Institute for International Economics.
Hufbauer, Gary Clyde, and Howard F. Rosen. 1986. Trade Policy for Troubled Industries. Washington: Institute for International Economics.
Hufbauer, Gary Clyde, and Jeffrey J. Schott. 2007. Multilateralizing Regionalism: Fitting Asia-Pacific Agreements into the WTO System (http://www.petersoninstitute.org/publications/papers/hufbauerppt1107.pdf). Presentation at New Asia-Pacific Trade Initiatives, November 27, Washington. Previously presented at the 2007 HEI SECO NCCR Conference, Geneva.
Keller, Wolfgang, and Stephen R. Yeaple. 2005. Multinational Enterprises International Trade, and Productivity Growth: Firm-Level Evidence from the United States. Discussion Paper Series 1: Economic Studies no. 07/2005.
Kiyota, Kozo, and Robert M. Stern. 2007. Economic Effects of a Korea-U.S. Free Trade Agreement. Korea Economic Institute of America (KEI) Special Studies Series 4. Washington. Available at www.keia.org/4-Current/KORUSFTASternWebFinal.pdf.
Lawrence, Robert Z. 2008. Blue-Collar Blues: Is Trade to Blame for Rising US Income Inequality? (http://bookstore.petersoninstitute.org/book-store/4143.html) Policy Analysis 85. Washington: Peterson Institute for International Economics.
OECD (Organization for Economic Cooperation and Development). 2003. The Sources of Economic Growth in OECD Countries. Paris.
Paulson, Henry M. 2006. Remarks by Treasury Secretary Henry M. Paulson on the International Economy, September 13. Treasury Department Cash Room. Washington.
Polaski, Sandra. 2006. Winners and Losers: Impact of the Doha Round on Developing Countries. Carnegie Endowment for International Peace Report (March). Available at www.carnegieendowment.org/publications/index.cfm?fa=view&id=18083.
Richardson, J. David. 2004. 'Sizing Up' the Micro-Data Benefits. Institute for International Economics. Photocopy.
Rodríguez, Francisco, and Dani Rodrik. 1999. Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-National Literature. NBER Working Paper 7081 (April). Cambridge, MA: National Bureau of Economic Research.
Rodrik, Dani. 1997. Has Globalization Gone Too Far? (http://bookstore.petersoninstitute.org/book-store/57.html) Washington: Institute for International Economics.
Rodrik, Dani. 2007. The Globalization Numbers Game (May 7). Dani Rodrik's Weblog (http://rodrik.typepad.com).
Rose, Andrew. 2003. Which International Institutions Promote International Trade? Review of International Economics Manuscript # 3147. Available at http://faculty.haas.berkeley.edu/arose/Comparer.pdf.
Rosen, Howard F. 2008. Strengthening Trade Adjustment Assistance. (http://www.petersoninstitute.org/publications/interstitial.cfm?ResearchID=878) Policy Briefs in International Economics 08-2. Washington: Peterson Institute for International Economics.
Sachs, Jeffrey, and Andrew Warner. 1995. Economic Reform and the Process of Global Integration. Brookings Papers on Economic Activity, 1995, no. 1: 1-118.
Schwab, Susan C. 2007. US Trade Update and Agenda. Presentation of United States Trade Representative, Ambassador Susan C. Schwab to the Senate Finance Committee. February 15, Washington.
Solow, Robert M. 1956. A Contribution to the Theory of Economic Growth. Quarterly Journal of Economics 70, no.1 (February): 65-94.
Taussig, Frank W. 1927. International Trade. Reprinted by Augustus M. Kelley Publishers: New York (1966).
USITC (United States International Trade Commission). 2007. The Economic Effects of Significant U.S. Import Restraints, Fifth Update. Publication Number: 3906. Available at www.usitc.gov/publications/pub3906.pdf (accessed April 29, 2008).
USTR (United States Trade Representative). 2007. Trade and Services: Services Trade Fuels Growth of US Economy. Benefits of Trade (January). Available at www.ustr.gov. (accessed April 29, 2008).
Notes
1. The first Institute publication on this subject was Hufbauer and Rosen (1986).
2. See for example Bernanke (2007) and Paulson (2006).
3. See Hoekman and Olarreaga (2007) and, importantly, a correct version of their table 2.2, which is available from the authors.
4. Bivens (2007c) also distrusts our extension of Bernard, Redding, and Schott (2004) from the 65 industries and OECD countries used in the model to all industries and countries. Further research may show that this extension cannot be made, but until then, the work of Bernard Redding, and Schott (2004) provides the best available estimate.
5. For example, Bivens (2007c) questions the use of increasing returns to scale in the model, preferring constant returns to scale.
6. Bivens (2007c) calls the use of Richardson (2004) in the context of growth accounting an "odd mistake."
(c) 2007 Peter G. Peterson Institute for International Economics. 1750 Massachusetts Avenue, NW.
Washington, DC 20036. Tel: 202-328-9000 Fax: 202-659-3225 / 202-328-5432
Site development and hosting by Digital Division
terça-feira, maio 13, 2008
336) O Fim do Fim da Historia, por Robert Kagan
No, it's not a complete rebutal of Fukuyama's thesis, but a compelling argument for a reassessment of the so called international liberal order of the post Cold War.
Robert Kagan nao vê razão para achar que o mundo do fim da história será o da democracia liberal de mercado. Forças autocráticas e reacionárias (fundamentalismo islâmico) lutam ardorosamente para não serem sepultadas nas dobras da história e eventualmente cair naquela lata de lixo que traria, finalmente, a paz kantiana.
Embora eu quisesse acrescentar um ou dois comentários aos argumentos de Kagan, que são poderosos e quase inteiramente aceitáveis, vou me conter pelo momento, aguardando novos comentários, para em seguida dire mon mot...
Bonne lecture, and good reflections to all of you...
-------------
Paulo Roberto de Almeida
The End of the End of History
By Robert Kagan
The New Republic, April 23, 2008
Why the twenty-first century will look like the nineteenth.
I.
In the early 1990s, optimism was understandable. The collapse of the communist empire and the apparent embrace of democracy by Russia seemed to augur a new era of global convergence. The great adversaries of the Cold War suddenly shared many common goals, including a desire for economic and political integration. Even after the political crackdown that began in Tiananmen Square in 1989 and the disturbing signs of instability that appeared in Russia after 1993, most Americans and Europeans believed that China and Russia were on a path toward liberalism. Boris Yeltsin's Russia seemed committed to the liberal model of political economy and closer integration with the West. The Chinese government's commitment to economic opening, it was hoped, would inevitably produce a political opening, whether Chinese leaders wanted it or not.
Such determinism was characteristic of post-Cold War thinking. In a globalized economy, it was widely believed, nations had no choice but to liberalize--first economically, then politically--if they wanted to compete and to survive. As national economies approached a certain level of per capita income, growing middle classes would demand legal and political power, which rulers would have to grant if they wanted their nations to prosper. Since democratic capitalism was the only model of success for developing societies, all societies would eventually choose such a path. In the battle of ideas, liberalism had triumphed. "At the end of history," as Francis Fukuyama famously put it, "there are no serious ideological competitors left to liberal democracy. "
The economic and ideological determinism of the early post-Cold War years produced two broad assumptions that shaped both policies and expectations. One was an abiding belief in the inevitability of human progress, the belief that history moves in only one direction--a faith born in the Enlightenment, dashed by the brutality of the twentieth century, and given new life by the fall of communism. The other was a prescription for patience and restraint. Rather than confront and challenge autocracies, it was better to enmesh them in the global economy, support the rule of law and the creation of stronger state institutions, and let the ineluctable forces of human progress work their magic.
But the grand expectation that the world had entered an era of convergence has proved wrong. We have entered an age of divergence. Since the mid-1990s, the nascent democratic transformation in Russia has given way to what may best be described as a "czarist" political system, in which all important decisions are taken by one man and his powerful coterie. Vladimir Putin and his spokesmen speak of "democracy," but they define the term much as the Chinese do. For Putin, democracy is not about competitive elections so much as the implementation of popular will. The regime is democratic because the government consults with and listens to the Russian people, discerns what they need and want, and then attempts to give it to them. As Ivan Krastev notes, "The Kremlin thinks not in terms of citizens' rights but in terms of the population's needs. " Elections do not offer a choice, but only a chance to ratify choices made by Putin, as in the recent "selection" of Dmitry Medvedev to succeed Putin as president. The legal system is a tool to be used against political opponents. The party system has been purged of political groups not approved by Putin. The power apparatus around Putin controls most of the national media, especially television.
A majority of Russians seem content with autocratic rule, at least for now. Unlike communism, Putin's rule does not impinge much on their personal lives, as long as they stay out of politics. Unlike the tumultuous Russian democracy of the 1990s, the present government, thanks to the high prices of oil and gas, has at least produced a rising standard of living. Putin's efforts to undo the humiliating post-Cold War settlement and restore the greatness of Russia is popular. His political advisers believe that "avenging the demise of the Soviet Union will keep us in power."
For Putin, there is a symbiosis between the nature of his rule and his success in returning Russia to "great power" status. Strength and control at home allow Russia to be strong abroad. Strength abroad justifies strong rule at home. Russia's growing international clout also shields Putin's autocracy from foreign pressures. European and American statesmen find they have a full plate of international issues on which a strong Russia can make life easier or harder, from energy supplies to Iran. Under the circumstances, they are far less eager to confront the Russian government over the fairness of its elections or the openness of its political system.
Putin has created a guiding national philosophy out of the correlation between power abroad and autocracy at home. He calls Russia a "sovereign democracy," a term that neatly encapsulates the nation's return to greatness, its escape from the impositions of the West, and its adoption of an "eastern" model of democracy. In Putin's view, only a great and powerful Russia is strong enough to defend and advance its interests, and also strong enough to resist foreign demands for western political reforms that Russia neither needs nor wants. In the 1990s, Russia wielded little influence on the world stage but opened itself wide to the intrusions of foreign businessmen and foreign governments. Putin wants Russia to have great influence over others around the world while shielding itself from the influence of unwelcome global forces.
Putin looks to China as a model, and for good reason. While the Soviet Union collapsed and lost everything after 1989, as first Mikhail Gorbachev and then Boris Yeltsin sued for peace with the West and invited its meddling, Chinese leaders weathered their own crisis by defying the West. They cracked down at home and then battened down the hatches until the storm of Western disapproval blew over. The results in the two great powers were instructive. Russia by the end of the 1990s was flat on its back. China was on its way to unprecedented economic growth, military power, and international influence.
The Chinese learned from the Soviet experience, too. While the democratic world waited after Tiananmen Square for China to resume its inevitable course upward to liberal democratic modernity, the Chinese Communist Party leadership set about shoring up its dominance in the nation. In recent years, despite repeated predictions in the West of an imminent political opening, the trend has been toward consolidation of the Chinese autocracy rather than reform. As it became clear that the Chinese leadership had no intention of reforming itself out of power, Western observers hoped that they might be forced to reform despite themselves, if only to keep China on a path of economic growth and to manage the myriad internal problems that growth brings. But that now seems unlikely as well.
Today most economists believe that China's remarkable growth should be sustainable for some time to come. Keen observers of the Chinese political system see a sufficient combination of competence and ruthlessness on the part of the Chinese leadership to handle problems as they arise, and a population prepared to accept autocratic government so long as economic growth continues. As Andrew J. Nathan and Bruce Gilley have written, the present leadership is unlikely to "succumb to a rising tide of problems or surrender graciously to liberal values infiltrated by means of economic globalization." Until events "justify taking a different attitude, the outside world would be well advised to treat the new Chinese leaders as if they are here to stay."
Growing national wealth and autocracy have proven compatible after all. Autocrats learn and adjust. The autocracies of Russia and China have figured out how to permit open economic activity while suppressing political activity. They have seen that people making money will keep their noses out of politics, especially if they know their noses will be cut off. New wealth gives autocracies a greater ability to control information--to monopolize television stations, and to keep a grip on Internet traffic--often with the assistance of foreign corporations eager to do business with them.
In the long run, rising prosperity may well produce political liberalism, but how long is the long run? It may be too long to have any strategic or geopolitical relevance. As the old joke goes, Germany launched itself on a trajectory of economic modernization in the late nineteenth century and within six decades it became a fully fledged democracy: the only problem was what happened in the intervening years. So the world waits for change, but in the meantime two of the world's largest nations, with more than a billion and a half people and the second-and third-largest militaries between them, now have governments committed to autocratic rule and may be able to sustain themselves in power for the foreseeable future.
The power and the durability of these autocracies will shape the international system in profound ways. The world is not about to embark on a new ideological struggle of the kind that dominated the Cold War. But the new era, rather than being a time of "universal values," will be one of growing tensions and sometimes confrontation between the forces of democracy and the forces of autocracy.
During the Cold War, it was easy to forget that the struggle between liberalism and autocracy has endured since the Enlightenment. It was the issue that divided the United States from much of Europe in the late eighteenth and early nineteenth centuries. It divided Europe itself through much of the nineteenth century and into the twentieth. Now it is returning to dominate the geopolitics of the twenty-first century.
II.
The presumption over the past decade has been that when Chinese and Russian leaders stopped believing in communism, they stopped believing in anything. They had become pragmatists, without ideology or belief, simply pursuing their own and their nation's interests. But the rulers of China and Russia, like the rulers of autocracies in the past, do possess a set of beliefs that guides them in both domestic and foreign policy. It is not an all-encompassing, systematic worldview like Marxism or liberalism. But it is a comprehensive set of beliefs about government and society and the proper relationship between rulers and their people.
The rulers of Russia and China believe in the virtues of a strong central government and disdain the weaknesses of the democratic system. They believe their large and fractious nations need order and stability to prosper. They believe that the vacillation and chaos of democracy would impoverish and shatter their nations, and in the case of Russia that it already did so. They believe that strong rule at home is necessary if their nations are to be powerful and respected in the world, capable of safeguarding and advancing their interests. Chinese rulers know from their nation's long and often turbulent history that political disruptions and divisions at home invite foreign interference and depredation. What the world applauded as a political opening in 1989, Chinese leaders regard as a near-fatal display of disagreement.
So the Chinese and Russian leaders are not simply autocrats. They believe in autocracy. The modern liberal mind at "the end of history" may not appreciate the attractions of this idea, or the enduring appeal of autocracy in this globalized world; but historically speaking, Russian and Chinese rulers are in illustrious company. The European monarchs of the seventeenth, eighteenth, and nineteenth centuries were thoroughly convinced, as a matter of political philosophy, of the superiority of their form of government. Along with Plato, Aristotle, and every other great thinker prior to the eighteenth century, they regarded democracy as the rule of the licentious, greedy, and ignorant mob. And in the first half of the twentieth century, for every democratic power like the United States, Great Britain, and France, there was an equally strong autocratic power, in Germany, Russia, and Japan. The many smaller nations around the world were at least as likely to model themselves on the autocracies as on the democracies. Only in the past half-century has democracy gained widespread popularity around the world, and only since the 1980s, really, has it become the most common form of government.
The rulers of Russia and China are not the first to suggest that it may not be the best. It is often claimed that the autocrats in Moscow and Beijing are interested only in lining their pockets--that the Chinese leaders are just kleptocrats and that the Kremlin is "Russia, Inc." Of course the rulers of China and Russia look out for themselves, enjoying power for its own sake and also for the wealth and luxuries it brings. But so did many great kings, emperors, and popes in the past. People who wield power like to wield power, and it usually makes them rich. But they usually believe also that they are wielding it in the service of a higher cause. By providing order, by producing economic success, by holding their nations together and leading them to a position of international influence, respectability, and power, they believe that they are serving their people. Nor is it at all clear, for the moment, that the majority of people they rule in either China or Russia disagree.
If autocracies have their own set of beliefs, they also have their own set of interests. The rulers of China and Russia may indeed be pragmatic, but they are pragmatic in pursuing policies that will keep themselves in power. Putin sees no distinction between his own interests and Russia's interests. When Louis XIV remarked, "L'Etat, c'est moi," he was declaring himself the living embodiment of the French nation, asserting that his interests and France's interests were the same. When Putin declares that he has a "moral right" to continue to rule Russia, he is saying that it is in Russia's interest for him to remain in power; and just as Louis XIV could not imagine it being in the interests of France for the monarchy to perish, neither can Putin imagine it could be in Russia's interest for him to give up power. As Minxin Pei has pointed out, when Chinese leaders face the choice between economic efficiency and the preservation of power, they choose power. That is their pragmatism.
The autocrats' interest in self-preservation affects their approach to foreign policy as well. In the age of monarchy, foreign policy served the interests of the monarch. In the age of religious conflict, it served the interests of the church. In the modern era, democracies have pursued foreign policies to make the world safer for democracy. Today the autocrats pursue foreign policies aimed at making the world safe, if not for all autocracies, then at least for their own.
Russia is a prime example of how a nation's governance at home shapes its relations with the rest of the world. A democratizing Russia, and even Gorbachev's democratizing Soviet Union, took a fairly benign view of NATO and tended to have good relations with neighbors that were treading the same path toward democracy. But today Putin regards NATO as a hostile entity, calls its enlargement "a serious provocation," and asks, "Against whom is this expansion intended?" In fact, NATO is no more aggressive or provocative toward Moscow today than it was in Gorbachev's time. If anything, it is less so. NATO has become more benign, just as Russia has become more aggressive. When Russia was more democratic, Russian leaders saw their interests as intimately bound up with the liberal democratic world. Today the Russian government is suspicious of the democracies, especially those near its borders.
This is understandable. For all their growing wealth and influence, the twenty-first-century autocracies remain a minority in the world. As some Chinese scholars put it, democratic liberalism became dominant after the fall of Soviet communism and is sustained by an "international hierarchy dominated by the United States and its democratic allies," a "U.S.-centered great power group." The Chinese and Russians feel like outliers from this exclusive and powerful clique. "You western countries, you decide the rules, you give the grades, you say, 'you have been a bad boy,'" complained one Chinese official at Davos this year. Putin also complains that "we are constantly being taught about democracy."
The post-Cold War world looks very different when seen from autocratic Beijing and Moscow than it does from democratic Washington, London, Paris, Berlin, or Brussels. For the leaders in Beijing, it was not so long ago that the international democratic community, led by the United States, turned on China with a rare unity, imposing economic sanctions and even more painful diplomatic isolation after the crackdown at Tiananmen Square. The Chinese Communist Party, according to Fei-Ling Wang, has had a "persisting sense of political insecurity ever since," a "constant fear of being singled out and targeted by the leading powers, especially the United States," and a "profound concern for the regime's survival, bordering on a sense of being under siege."
In the 1990s, the democratic world, led by the United States, toppled autocratic governments in Panama and Haiti and twice made war against Milosevic's Serbia. International nongovernmental organizations (NGOs), well-funded by western governments, trained opposition parties and supported electoral reforms in Central and Eastern Europe and in Central Asia. In 2000, internationally financed opposition forces and international election monitors finally brought down Milosevic. Within a year he was shipped off to The Hague, and five years later he was dead in prison.
From 2003 to 2005, western democratic countries and NGOs provided pro-western and pro-democratic parties and politicians with the financing and organizational help that allowed them to topple other autocrats in Georgia, Kyrgyzstan, and Ukraine. Europeans and Americans celebrated these revolutions and saw in them the natural unfolding of humanity's destined political evolution toward liberal democracy. But leaders in Beijing and Moscow saw these events in geopolitical terms, as western-funded, CIA-inspired coups that furthered the hegemony of America and its European allies. The upheavals in Ukraine and Georgia, Dmitri Trenin notes, "further poisoned the Russian-Western relationship" and helped to persuade the Kremlin to "complete its turnaround in foreign policy."
The color revolutions worried Putin not only because they checked his regional ambitions, but also because he feared that the examples of Ukraine and Georgia could be repeated in Russia. They convinced him by 2006 to control, restrict, and in some cases close down the activities of international NGOs. Even today he warns against the "jackals" in Russia who "got a crash course from foreign experts, got trained in neighboring republics and will try here now." His worries may seem absurd or disingenuous, but they are not misplaced. In the post-Cold War era, a triumphant liberalism has sought to expand its triumph by establishing as an international principle the right of the "international community" to intervene against sovereign states that abuse the rights of their people. International NGOs interfere in domestic politics; international organizations like the Organization for Security and Cooperation in Europe monitor and pass judgment on elections; international legal experts talk about modifying international law to include such novel concepts as "the responsibility to protect" or a "voluntary sovereignty waiver."
In theory, these innovations apply to everyone. In practice, they chiefly provide democratic nations the right to intervene in the affairs of non-democratic nations. Unfortunately for China, Russia, and other autocracies, this is one area where there is no great transatlantic divide. The United States, though traditionally jealous of its own sovereignty, has always been ready to interfere in the internal affairs of other nations. The nations of Europe, once the great proponents (in theory) of the Westphalian order of inviolable state sovereignty, have now reversed course and produced a system, as Robert Cooper has observed, of constant "mutual interference in each other's domestic affairs, right down to beer and sausages." This has become one of the great schisms in the international system dividing the democratic world and the autocracies. For three centuries, international law, with its strictures against interference in the internal affairs of nations, has tended to protect autocracies. Now the democratic world is in the process of removing that protection, while the autocrats rush to defend the principle of sovereign inviolability.
For this reason, the war in Kosovo in 1999 was a more dramatic and disturbing turning point for Russia and China than was the Iraq war of 2003. Both nations opposed NATO's intervention, and not only because China's embassy was bombed by an American warplane and Russia's distant Slavic cousins in Serbia were on the receiving end of the NATO air campaign. When Russia threatened to block military action at the U.N. Security Council, NATO simply sidestepped the United Nations and took it upon itself to authorize action, thus negating one of Russia's few tools of international influence. From Moscow's perspective, it was a clear violation of international law, not only because the war lacked a U.N. imprimatur but because it was an intervention into a sovereign nation that had committed no external aggression. To the Chinese, it was just "liberal hegemonism." Years later Putin was still insisting that the western nations "leave behind this disdain for international law" and not attempt to "substitute NATO or the EU for the U.N."
The Russians and the Chinese were in good company. At the time, no less an authority than Henry Kissinger warned that "the abrupt abandonment of the concept of national sovereignty" risked a world unmoored from any notion of international legal order. The United States, of course, paid this little heed: it had intervened and overthrown sovereign governments dozens of times throughout its history. But even postmodern Europe set aside legal niceties in the interest of what it regarded as a higher Enlightenment morality. As Robert Cooper puts it, Europe was driven to act by "the collective memory of the Holocaust and the streams of displaced people created by extreme nationalism in the Second World War." This "common historical experience" provided all the justification necessary. Kissinger warned that in a world of "competing truths, " such a doctrine risked chaos. Cooper responded that postmodern Europe was "no longer a zone of competing truths."
But the conflict between international law and liberal morality is one that the democracies have not been able to finesse. As Chinese officials asked at the time of Tiananmen Square and have continued to ask, "What right does the U. S. government have to ... flagrantly interfere in China's internal affairs?" What right, indeed? Only the liberal creed grants the right--the belief that all men are created equal and have certain inalienable rights that must not be abridged by governments; that governments derive their power and legitimacy only from the consent of the governed and have a duty to protect their citizens' right to life, liberty, and property. To those who share this liberal faith, foreign policies and even wars that defend these principles, as in Kosovo, can be right even if established international law says they are wrong. But to the Chinese, the Russians, and others who do not share this worldview, the United States and its democratic allies succeed in imposing their views on others not because they are right but only because they are powerful enough to do so. To non-liberals, the international liberal order is not progress. It is oppression.
This is more than a dispute over theory and the niceties of international jurisprudence. It concerns the fundamental legitimacy of governments, which for autocrats can be a matter of life and death. China's rulers have not forgotten that if the democratic world had had its way in 1989, they would now be out of office, possibly imprisoned or worse. Putin complains that "we are seeing a greater and greater disdain for the basic principles of international law," and he does not mean just the illegal use of force but also the imposition of "economic, political, cultural and educational policies." He decries the way "independent legal norms" are being re-shaped to conform to "one state's legal system," that of the western democracies, and the way international institutions such as the Organization for Security and Cooperation in Europe have become "vulgar instruments" in the hands of the democracies. As a result, Putin exclaims, "no one feels safe! Because no one can feel that international law is like a stone wall that will protect them."
The western democracies would deny any such intention, but Putin, like the leaders of China, is right to worry. American and European policymakers constantly say they want Russia and China to integrate themselves into the international liberal democratic order, but it is not surprising if Russian and Chinese leaders are wary. How can autocrats enter the liberal international order without succumbing to the forces of liberalism?
III.
Afraid of the answer, the autocracies are understandably pushing back, and with some effect. Rather than accepting the new principles of diminished sovereignty and weakened international protection for autocrats, Russia and China are promoting an international order that places a high value on national sovereignty and can protect autocratic governments from foreign interference.
And they are succeeding. Autocracy is making a comeback. Changes in the ideological complexion of the most influential world powers have always had some effect on the choices made by leaders in smaller nations. Fascism was in vogue in Latin America in the 1930s and 1940s partly because it seemed successful in Italy, Germany, and Spain. Communism spread in the Third World in the 1960s and the 1970s not so much because the Soviet Union worked hard to spread it, but because government opponents fought their rebellions under the banner of Marxism-Leninism and then enlisted the aid of Moscow. When communism died in Moscow, communist rebellions around the world became few and far between. And if the rising power of the world's democracies in the late years of the Cold War, culminating in their almost total victory after 1989, contributed to the wave of democratization in the 1980s and 1990s, it is logical to expect that the rise of two powerful autocracies should shift the balance back again.
It is a mistake to believe that autocracy has no international appeal. Thanks to decades of remarkable growth, the Chinese today can argue that their model of economic development, which combines an increasingly open economy with a closed political system, can be a successful option for development in many nations. It certainly offers a model for successful autocracy, a template for creating wealth and stability without having to give way to political liberalization. Russia's model of "sovereign democracy" is attractive among the autocrats of Central Asia. Some Europeans worry that Russia is "emerging as an ideological alternative to the EU that offers a different approach to sovereignty, power and world order." In the 1980s and 1990s, the autocratic model seemed like a losing proposition as dictatorships of both right and left fell before the liberal tide. Today, thanks to the success of China and Russia, it looks like a better bet.
China and Russia may no longer actively export an ideology, but they do offer autocrats somewhere to run when the democracies turn hostile. When Iran's relations with Europe plummeted in the 1990s after its clerics issued a fatwa calling for the death of Salman Rushdie, the influential Iranian leader Akbar Hashemi Rafsanjani made a point of noting how much easier it is to maintain good relations with a nation like China. When the dictator of Uzbekistan came under criticism in 2005 from the administration of George W. Bush for violently suppressing an opposition rally, he responded by joining the Shanghai Cooperation Organization and moving closer to Moscow. The Chinese provide unfettered aid to dictatorships in Asia and Africa, undermining the efforts of the "international community" to press for reforms--which in practical terms often means regime change--in countries such as Burma and Zimbabwe. Americans and Europeans may grumble, but autocracies are not in the business of overthrowing other autocrats at the democratic world's insistence. The Chinese, who used deadly force to crack down on student demonstrators not so long ago, will hardly help the West remove a government in Burma for doing the same thing. Nor will they impose conditions on aid to African nations to demand political and institutional reforms they have no intention of carrying out in China.
Chinese officials may chide Burma's rulers, and they may urge the Sudanese government to find some solution to the Sudan conflict. Moscow may at times distance itself from Iran. But the rulers in Rangoon, Khartoum, Pyongyang, and Tehran know that their best protectors--and in the last resort, their only protectors--in a generally hostile world are to be found in Beijing and Moscow. One wonders how much Beijing officials can chastise Burmese generals for crushing Buddhist monks' protests when the Chinese are themselves crushing Buddhist monks in Tibet. In the great schism between democracy and autocracy, the autocrats share common interests and a common view of international order. As China's Li Peng told Iran's Rafsanjani, China and Iran are united by a common desire to build a world order in which "the selection of whatever social system by a country is the affair of the people of that country."
In fact, a global competition is under way. According to Sergei Lavrov, Russia's foreign minister, "For the first time in many years, a real competitive environment has emerged on the market of ideas" between different "value systems and development models." And the good news, from the Russian point of view, is that "the West is losing its monopoly on the globalization process." Today when Russians speak of a multipolar world, they are not only talking about the redistribution of power. It is also the competition of value systems and ideas that will provide "the foundation for a multipolar world order."
This comes as a surprise to a democratic world that believed such competition ended when the Berlin Wall fell. The world's democracies do not regard their own efforts to support democracy and Enlightenment principles abroad as an aspect of a geopolitical competition, because they do not see "competing truths," only "universal values." As a result, they are not always conscious of how they use their wealth and power to push others to accept their values and their principles.
In their own international institutions and alliances, they demand strict fidelity to liberal democratic principles. Before opening their doors to new members and providing the vast benefits that membership offers in terms of wealth and security, they demand that nations that want to enter the EU or NATO open up their economies and political systems. When the Georgian president called a state of emergency at the end of 2007, he damaged Georgia's chances of entering NATO and the EU anytime soon. As a result, Georgia may now live precariously in the nether region between Russian autocracy and European liberalism. Eventually, if the democracies turn their backs on Georgia, it may have no choice but to accommodate Moscow.
Again, this competition is not the Cold War redux. It is more like the nineteenth century redux. In the nineteenth century, the absolutist rulers of Russia and Austria shored up fellow autocracies in post-revolutionary France and used force to suppress liberal rebellions in Germany, Poland, Italy, and Spain. Palmerston's Britain used British power to aid liberals on the continent; the United States cheered on liberal revolutions in Hungary and Germany and expressed outrage when Russian troops suppressed liberal forces in Poland. Today Ukraine has already been a battleground between forces supported by the West and forces supported by Russia, and it could well be a battleground again in the future. Georgia could be another. It is worth contemplating what the world would look like, what Europe would look like, if democratic movements in Ukraine and Georgia failed or were forcefully suppressed, and the two nations became autocracies with close ties to Moscow. It is worth considering what the effect would be in East Asia if China used force to quash a democratic system in Taiwan and install a friendlier autocracy in its place.
The global competition between democratic governments and autocratic governments will become a dominant feature of the twenty-first-century world. The great powers are increasingly choosing sides and identifying themselves with one camp or the other. India, which during the Cold War was proudly neutral or even pro-Soviet, has begun to identify itself as part of the democratic West. Japan in recent years has also gone out of its way to position itself as a democratic great power, sharing common values with other Asian democracies but also with non-Asian democracies. For both Japan and India the desire to be part of the democratic world is genuine, but it is also part of a geopolitical calculation--a way of cementing solidarity with other great powers that can be helpful in their strategic competition with autocratic China.
There is no perfect symmetry in international affairs. The twin realities of the present era--great power competition and the contest between democracy and autocracy--will not always produce the same alignments. Democratic India in its geopolitical competition with autocratic China supports the Burmese dictatorship in order to deny Beijing a strategic advantage. India's diplomats enjoy playing the other great powers against each other, sometimes warming to Russia, sometimes to China. Democratic Greece and Cyprus pursue close relations with Russia partly out of cultural solidarity with Eastern Orthodox cousins, but more out of economic interest. The United States has long allied itself with Arab dictatorships for strategic and economic reasons, as well as to successive military rulers in Pakistan. As in the Cold War, strategic and economic considerations, as well as cultural affinities, may often cut against ideology.
But in today's world, a nation's form of government, not its "civilization" or its geographical location, may be the best predictor of its geopolitical alignment. Asian democracies today line up with European democracies against Asian autocracies. Chinese observers see a "V-shaped belt" of pro-American democratic powers "stretching from Northeast to Central Asia." When the navies of India, the United States, Japan, Australia, and Singapore exercised in the Bay of Bengal last year, Chinese and other observers referred to it as the "axis of democracy." Japan's prime minister spoke of an "Asian arc of freedom and prosperity" stretching from Japan to Indonesia to India. Russian officials profess to be "alarmed" that NATO and the Organization for Security and Cooperation in Europe are "reproducing a bloc policy" not unlike that of the Cold War era, but the Russians themselves refer to the Shanghai Cooperation Organization as an "anti-NATO" alliance and a "Warsaw Pact 2." When the Shanghai Cooperation Organization met last year, it brought together five autocracies--China, Russia, Uzbekistan, Kazakhstan, and Tajikistan--as well as Iran. When the ASEAN nations attempted to address the problem of Burma last year, the organization split down the middle, with democratic nations like the Philippines and Indonesia, backed by Japan, seeking to put pressure on Burma, and the autocracies of Vietnam, Cambodia, and Laos, backed by China, seeking to avoid setting a precedent that could come back to haunt them someday.
IV.
The global divisions between the club of autocrats and the axis of democracy have broad implications for the international system. Is it possible any longer to speak of an "international community"? The term implies agreement on international norms of behavior, an international morality, even an international conscience. But today the world's major powers lack such a common understanding. On the large strategic questions, such as whether to intervene or to impose sanctions or to attempt to isolate nations diplomatically, there is no longer an international community to be summoned or led. This was exposed most blatantly in the war over Kosovo, which divided the democratic West from both Russia and China, and from many other nonEuropean autocracies. Today it is apparent on the issues of Darfur, Iran, and Burma.
One would imagine that on such transnational issues as disease, poverty, and climate change the great powers ought to be able to work together despite their diverging interests and worldviews. But even here their differences complicate matters. Disputes between the democracies and China over how and whether to condition aid to poor countries in Africa affect the struggle against poverty. Geopolitical calculations affect international negotiations over the best response to climate change. The Chinese, along with the Indians, believe the advanced industrial nations of the West, having reached their present heights after decades of polluting the air and emitting unconscionable levels of greenhouse gases, now want to deny others the right to grow in the same way. Beijing suspects a western attempt to restrict China's growth and to slow its emergence as a competitive great power. Similarly, the nuclear nonproliferation regime will continue to suffer as the clashing interests of great powers and differing forms of government overwhelm what might otherwise be their common interests in preventing other nations from obtaining nuclear weapons. Russia and China have run interference for Iran. The United States has run interference for India, in order to enlist New Delhi's help in the strategic competition with China.
The demise of the international community is most clearly on display at the U.N. Security Council, which, after a brief post-Cold War awakening, is slipping back into its long coma. The artful diplomacy of France and the tactical caution of China for a while obscured the fact that on most major issues the Security Council has been sharply divided between the autocracies and the democracies, with the latter systematically pressing for sanctions and other punitive actions against autocracies in Iran, North Korea, Sudan, and Burma, and the former just as systematically resisting and attempting to weaken the effect of such actions. This rut will only deepen in the coming years.
Calls for a new "concert" of nations including Russia, China, the United States, Europe, and other great powers are unlikely to be successful. The early-nineteenth-century Concert of Europe operated under the umbrella of a common morality and shared principles of government. It aimed not only at the preservation of a European peace but also, and more important, at the maintenance of a monarchical and aristocratic order against the liberal and radical challenges presented by the French and American revolutions and their echoes in Germany, Italy, and Poland. The concert gradually broke down under the strains of popular nationalism, fueled in part by the rise of revolutionary liberalism. The great power concert that Franklin Roosevelt established at the U.N. Security Council similarly foundered on ideological conflict.
And now, once more, there is little sense of shared morality and common values among the great powers. Instead there is suspicion and growing hostility, and the well-grounded view on the part of the autocracies that the democracies, whatever they say, would welcome their overthrow. Any concert among these states would be built on a shaky foundation likely to collapse at the first serious test.
Can these disagreements be overcome by expanding trade ties and growing economic interdependence in this ever more globalized world? Clearly economic ties can help to check tendencies toward great-power conflict. Chinese leaders avoid confrontation with the United States today both because they could not count on a victory and because they fear the impact on the Chinese economy and, by extension, the stability of their autocratic rule. American, Australian, and Japanese dependence on the Chinese economy makes these nations cautious, too, and the powerful influence of American big business makes American leaders take a more accommodating view of China. In both China and Russia, economic interests are not just national, they are also personal. If the business of Russia is business, as Dmitri Trenin argues, then its leaders should be reluctant to jeopardize their wealth with risky foreign policies.
Yet history has not been kind to the theory that strong trade ties prevent conflict among nations. The United States and China are no more dependent on each other's economies today than were Great Britain and Germany before World War I. And trade relations are not without their own tensions and conflicts. Those between the United States and China are becoming increasingly contentious, with Congress threatening legislation to punish China for perceived inequities in the trade relationship. In both Europe and the United States, concerns about the growing strategic challenge from China are increasingly joined or even outstripped by fears of the growing economic challenge it poses. Fifty-five percent of Germans believe China's economic growth is a "bad thing," up from 38 percent in 2005, a view shared by Americans, Indians, Britons, the French, and even South Koreans. Today 60 percent of South Koreans think China's growing economy is a "bad thing."
The Chinese, meanwhile, may still tolerate pressure to adjust their currency, crack down on piracy, and increase quality standards for their products, as well as all the other hectoring they receive from the United States and Europe. But they are starting to feel that the democratic world is ganging up on them and using these disputes as a way of containing China not only economically but strategically. And there is also the matter of the international scramble for energy resources, which is becoming the primary arena for geopolitical competition. The search for reliable sources of oil and gas shapes China's policies toward Iran, Sudan, Burma, and Central Asia. Russia and the democracies led by the United States compete to build oil and gas pipelines that will provide them leverage and influence, or deny it to their competitors.
Commercial ties alone cannot withstand the forces of national and ideological competition that have now so prominently re-emerged. Trade relations do not take place in a vacuum. They both influence and are influenced by geopolitical and ideological conflicts. Nations are not calculating machines. They have the attributes of the humans who create and live in them, the intangible and immeasurable human qualities of love, hate, ambition, fear, honor, shame, patriotism, ideology, and belief--the things people fight and die for, today as in millennia past.
V.
Nowhere are these human qualities more on display than in the Islamic world, especially the Middle East. The struggle of radical Islamists against the powerful and often impersonal forces of modernization, capitalism, and globalization that they associate with the Judeo-Christian West is the other great conflict in the international system today. It is also the most dramatic refutation of the convergence paradigm, since it is precisely convergence, including the liberal world's conception of "universal values," that the radical Islamists reject.
As a historical phenomenon, the struggle between modernization and Islamic radicalism may ultimately have less impact on international affairs than the struggle among the great powers and between the forces of democracy and autocracy. After all, Islamic resistance to westernization is not a new phenomenon, though it has taken on a new and potentially cataclysmic dimension. In the past, when old and less technologically advanced peoples confronted more advanced cultures, their inadequate weapons reflected their backwardness. Today the more radical proponents of Islamic traditionalism, though they abhor the modern world, are using against it not only the ancient methods of assassination and suicidal attacks, but also modern weapons. The forces of modernization and globalization have inflamed the radical Islamist rebellion and also armed them for the fight.
But it is a lonely and ultimately desperate fight, for in the struggle between traditionalism and modernity, tradition cannot win--even though traditional forces armed with modern weapons, technologies, and ideologies can do horrendous damage. All the world's rich and powerful nations have more or less embraced the economic, technological, and even social aspects of modernization and globalization. All have embraced, with varying degrees of complaint and resistance, the free flow of goods, finances, and services and the intermingling of cultures and lifestyles that characterizes the modern world. Increasingly, their people watch the same television shows, listen to the same music, and go to the same movies. Along with this dominant modern culture, they have accepted--even as they may also deplore--the essential characteristics of a modern ethics and aesthetics. Modernity means, among other things, the sexual as well as political and economic liberation of women; the weakening of church authority and the strengthening of secularism; the existence of what used to be called the counterculture; and the exercise of free expression in the arts (if not in politics), which includes the freedom to commit blasphemy and to lampoon symbols of faith, authority, and morality. These are the consequences of liberalism and capitalism unleashed and unchecked by the constraining hand of tradition, or a powerful church, or a moralistic and domineering government. Even the Chinese have learned that while it is possible to have capitalism without political liberalization, it is much harder.
Today, radical Islamists are the last holdout against these powerful forces of modernity. For Sayyid Qutb, one of the intellectual fathers of Al Qaeda, true Islam could be salvaged only by warring against the modern world on all fronts. He wanted to "take apart the entire political and philosophical structure of modernity and return Islam to its unpolluted origins." A very different kind of Muslim leader, Ayatollah Khomeini, clearly identified modernity with the Enlightenment and rejected both. "Yes, we are reactionaries, " he told his opponents, "and you are enlightened intellectuals: You intellectuals do not want us to go back 1,400 years."
These most radical Islamists, along with Osama bin Laden, also reject that great product of the Enlightenment and modernity: democracy. Abu Musab al-Zarqawi denounced elections in Iraq on the grounds that "the legislator who must be obeyed in a democracy is man, and not God." Democratic elections were "the very essence of heresy and polytheism and error," for they made "the weak, ignorant man God's partner in His most central divine prerogative--namely, ruling and legislating." As Bernard Lewis has written, the aim of Islamic revolution in Iran and elsewhere has been to "sweep away all the alien and infidel accretions that had been imposed on the Muslim lands and peoples in the era of alien dominance and influence and to restore the true and divinely given Islamic order." One of those "infidel accretions" is democracy. The fundamentalists want to take the Islamic world back to where it was before the Christian West, liberalism, and modernity polluted what they regard as pure Islam.
Their goal is impossible to achieve. The Islamists could not take their societies back 1,400 years even if the rest of the world would let them. And it will not let them. Neither the United States nor any of the other great powers will turn over control of the Middle East to these fundamentalist forces. Partly this is because the region is of such vital strategic importance to the rest of the world. But it is more than that. The vast majority of the people in the Middle East have no desire to go back 1,400 years. They oppose neither modernity nor democracy. Nor is it conceivable in this modern world that a whole country could wall itself off from modernity, even if the majority wanted to do so. Could the great Islamic theocracy that Al Qaeda and others hope to erect ever completely block out the sights and sounds of the rest of the world, and thereby shield its people from the temptations of modernity? The mullahs have not even succeeded in doing that in Iran. The project is fantastic.
The world is thus faced with the prospect of a protracted struggle in which the goals of the extreme Islamists can never be satisfied because neither the United States, nor Europe, nor Russia, nor China, nor the peoples of the Middle East have the ability or the desire to give them what they want. The modern great powers will never retreat as far as the Islamic extremists require. Unfortunately, they may also not be capable of uniting effectively against the threat. Although in the struggle between modernization and tradition the United States, Russia, China, Europe, and the other great powers are roughly on the same side, the things that divide them from one another--the competing national ambitions, the divisions between democrats and autocrats, the transatlantic disagreement over the use of military power--undermine their will to cooperate.
This is certainly true when it comes to the unavoidable military aspects of a fight against radical Islamic terrorism. Europeans have been and will continue to be less than enthusiastic about what they emphatically do not call "the war on terror." As for Russia and China, it will be tempting for them to enjoy the spectacle of the United States bogged down in a fight with Al Qaeda and other violent Islamist groups in the Middle East and South Asia, just as it is tempting to let American power in that region be checked by a nuclear-armed Iran. The willingness of the autocrats in Moscow and Beijing to protect their fellow autocrats in Pyongyang, Tehran, and Khartoum increases the chances that the connection between terrorists and nuclear weapons will eventually be made.
Indeed, one of the problems with making the struggle against Islamic terrorism the sole focus of American foreign policy is that it produces illusions about alliance and cooperation with other great powers with whom genuine alliance is becoming impossible. The idea of genuine strategic cooperation between the United States and Russia or the United States and China in the war on terror is mostly a fiction. For Russia, the war on terror is about Chechnya. For China, it is about the Uighurs of Xinjiang province. But when it comes to Iran, Syria, and Hezbollah, Russia and China tend to see not terrorists but useful partners in the great power struggle.
The great fallacy of our era has been the belief that a liberal international order rests on the triumph of ideas alone, or on the natural unfolding of human progress. It is an immensely attractive notion, deeply rooted in the Enlightenment worldview of which all of us in the liberal world are the product. Our political scientists posit theories of modernization, with sequential stages of political and economic development that lead upward toward liberalism. Our political philosophers imagine a grand historical dialectic, in which the battle of worldviews over the centuries produces, in the end, the correct liberal democratic answer. Naturally, many are inclined to believe that the Cold War ended the way it did simply because the better worldview triumphed, and that the international order that exists today is but the next stage forward in humanity's march from strife and aggression toward a peaceful and prosperous co-existence.
Such illusions are just true enough to be dangerous. Of course there is strength in the liberal democratic idea, and in the free market. It is logical, too, that a world of liberal democratic states would gradually produce an international order that reflected those liberal and democratic qualities. This has been the enlightenment dream since the eighteenth century, when Kant imagined a "perpetual peace" consisting of liberal republics and built upon the natural desire of all peoples for peace and material comfort. Although some may scoff, it has been a remarkably compelling vision. Its spirit animated the international arbitration movements at the end of the nineteenth century, the worldwide enthusiasm for a League of Nations in the early twentieth century, and the enthusiasm for the United Nations after World War II. It has also been a remarkably durable vision, withstanding the horrors of two world wars, one more disastrous than the other, and then a long Cold War that for a third time dashed expectations of progress toward the ideal.
It is a testament to the vitality of this Enlightenment vision that hopes for a brand new era in human history again took hold with such force after the fall of Soviet communism. But a little more skepticism was in order. After all, had mankind really progressed so far? The most destructive century in all the millennia of human history was only just concluding; it was not buried in some deep, dark ancient past. Our supposedly enlightened modernity had produced the greatest of horrors--the massive aggressions, the "total wars," the famines, the genocides, the nuclear warfare. After the recognition of this terrible reality--the relationship of modernity not only to good but also to evil--what reason was there to believe that humankind was suddenly on the cusp of a brand new order? The focus on the dazzling pageant of progress at the end of the Cold War ignored the wires and the beams--the actual historical scaffolding--that had made such progress possible. It failed to acknowledge that progress toward liberalism was not inevitable, but was contingent on events--battles won or lost, social movements successful or crushed, economic policies implemented or discarded. The spread of democracy was not merely the unfolding of certain ineluctable processes of economic and political development. We do not know whether such an evolutionary process--with predictable stages, with known causes and effects--even exists.
What we do know is that the global shift toward liberal democracy coincided with the historical shift in the balance of power toward those nations and peoples who favored the liberal democratic idea, a shift that began with the triumph of the democratic powers over fascism in World War II and that was followed by a second triumph of the democracies over communism in the Cold War. The liberal international order that emerged after these two victories reflected the new overwhelming global balance in favor of liberal forces. But those victories were not inevitable, and they need not be lasting. Now the re-emergence of the great autocratic powers, along with the reactionary forces of Islamic radicalism, has weakened that order, and threatens to weaken it further in the years and decades to come. The world's democracies need to begin thinking about how they can protect their interests and advance their principles in a world in which these are, once again, powerfully contested.
Robert Kagan is senior associate at the Carnegie Endowment for International Peace and senior transatlantic fellow at the German Marshall Fund. His new book, The Return of History and the End of Dreams, will be published by Knopf later this month.
The article was originally published at this link.
Robert Kagan nao vê razão para achar que o mundo do fim da história será o da democracia liberal de mercado. Forças autocráticas e reacionárias (fundamentalismo islâmico) lutam ardorosamente para não serem sepultadas nas dobras da história e eventualmente cair naquela lata de lixo que traria, finalmente, a paz kantiana.
Embora eu quisesse acrescentar um ou dois comentários aos argumentos de Kagan, que são poderosos e quase inteiramente aceitáveis, vou me conter pelo momento, aguardando novos comentários, para em seguida dire mon mot...
Bonne lecture, and good reflections to all of you...
-------------
Paulo Roberto de Almeida
The End of the End of History
By Robert Kagan
The New Republic, April 23, 2008
Why the twenty-first century will look like the nineteenth.
I.
In the early 1990s, optimism was understandable. The collapse of the communist empire and the apparent embrace of democracy by Russia seemed to augur a new era of global convergence. The great adversaries of the Cold War suddenly shared many common goals, including a desire for economic and political integration. Even after the political crackdown that began in Tiananmen Square in 1989 and the disturbing signs of instability that appeared in Russia after 1993, most Americans and Europeans believed that China and Russia were on a path toward liberalism. Boris Yeltsin's Russia seemed committed to the liberal model of political economy and closer integration with the West. The Chinese government's commitment to economic opening, it was hoped, would inevitably produce a political opening, whether Chinese leaders wanted it or not.
Such determinism was characteristic of post-Cold War thinking. In a globalized economy, it was widely believed, nations had no choice but to liberalize--first economically, then politically--if they wanted to compete and to survive. As national economies approached a certain level of per capita income, growing middle classes would demand legal and political power, which rulers would have to grant if they wanted their nations to prosper. Since democratic capitalism was the only model of success for developing societies, all societies would eventually choose such a path. In the battle of ideas, liberalism had triumphed. "At the end of history," as Francis Fukuyama famously put it, "there are no serious ideological competitors left to liberal democracy. "
The economic and ideological determinism of the early post-Cold War years produced two broad assumptions that shaped both policies and expectations. One was an abiding belief in the inevitability of human progress, the belief that history moves in only one direction--a faith born in the Enlightenment, dashed by the brutality of the twentieth century, and given new life by the fall of communism. The other was a prescription for patience and restraint. Rather than confront and challenge autocracies, it was better to enmesh them in the global economy, support the rule of law and the creation of stronger state institutions, and let the ineluctable forces of human progress work their magic.
But the grand expectation that the world had entered an era of convergence has proved wrong. We have entered an age of divergence. Since the mid-1990s, the nascent democratic transformation in Russia has given way to what may best be described as a "czarist" political system, in which all important decisions are taken by one man and his powerful coterie. Vladimir Putin and his spokesmen speak of "democracy," but they define the term much as the Chinese do. For Putin, democracy is not about competitive elections so much as the implementation of popular will. The regime is democratic because the government consults with and listens to the Russian people, discerns what they need and want, and then attempts to give it to them. As Ivan Krastev notes, "The Kremlin thinks not in terms of citizens' rights but in terms of the population's needs. " Elections do not offer a choice, but only a chance to ratify choices made by Putin, as in the recent "selection" of Dmitry Medvedev to succeed Putin as president. The legal system is a tool to be used against political opponents. The party system has been purged of political groups not approved by Putin. The power apparatus around Putin controls most of the national media, especially television.
A majority of Russians seem content with autocratic rule, at least for now. Unlike communism, Putin's rule does not impinge much on their personal lives, as long as they stay out of politics. Unlike the tumultuous Russian democracy of the 1990s, the present government, thanks to the high prices of oil and gas, has at least produced a rising standard of living. Putin's efforts to undo the humiliating post-Cold War settlement and restore the greatness of Russia is popular. His political advisers believe that "avenging the demise of the Soviet Union will keep us in power."
For Putin, there is a symbiosis between the nature of his rule and his success in returning Russia to "great power" status. Strength and control at home allow Russia to be strong abroad. Strength abroad justifies strong rule at home. Russia's growing international clout also shields Putin's autocracy from foreign pressures. European and American statesmen find they have a full plate of international issues on which a strong Russia can make life easier or harder, from energy supplies to Iran. Under the circumstances, they are far less eager to confront the Russian government over the fairness of its elections or the openness of its political system.
Putin has created a guiding national philosophy out of the correlation between power abroad and autocracy at home. He calls Russia a "sovereign democracy," a term that neatly encapsulates the nation's return to greatness, its escape from the impositions of the West, and its adoption of an "eastern" model of democracy. In Putin's view, only a great and powerful Russia is strong enough to defend and advance its interests, and also strong enough to resist foreign demands for western political reforms that Russia neither needs nor wants. In the 1990s, Russia wielded little influence on the world stage but opened itself wide to the intrusions of foreign businessmen and foreign governments. Putin wants Russia to have great influence over others around the world while shielding itself from the influence of unwelcome global forces.
Putin looks to China as a model, and for good reason. While the Soviet Union collapsed and lost everything after 1989, as first Mikhail Gorbachev and then Boris Yeltsin sued for peace with the West and invited its meddling, Chinese leaders weathered their own crisis by defying the West. They cracked down at home and then battened down the hatches until the storm of Western disapproval blew over. The results in the two great powers were instructive. Russia by the end of the 1990s was flat on its back. China was on its way to unprecedented economic growth, military power, and international influence.
The Chinese learned from the Soviet experience, too. While the democratic world waited after Tiananmen Square for China to resume its inevitable course upward to liberal democratic modernity, the Chinese Communist Party leadership set about shoring up its dominance in the nation. In recent years, despite repeated predictions in the West of an imminent political opening, the trend has been toward consolidation of the Chinese autocracy rather than reform. As it became clear that the Chinese leadership had no intention of reforming itself out of power, Western observers hoped that they might be forced to reform despite themselves, if only to keep China on a path of economic growth and to manage the myriad internal problems that growth brings. But that now seems unlikely as well.
Today most economists believe that China's remarkable growth should be sustainable for some time to come. Keen observers of the Chinese political system see a sufficient combination of competence and ruthlessness on the part of the Chinese leadership to handle problems as they arise, and a population prepared to accept autocratic government so long as economic growth continues. As Andrew J. Nathan and Bruce Gilley have written, the present leadership is unlikely to "succumb to a rising tide of problems or surrender graciously to liberal values infiltrated by means of economic globalization." Until events "justify taking a different attitude, the outside world would be well advised to treat the new Chinese leaders as if they are here to stay."
Growing national wealth and autocracy have proven compatible after all. Autocrats learn and adjust. The autocracies of Russia and China have figured out how to permit open economic activity while suppressing political activity. They have seen that people making money will keep their noses out of politics, especially if they know their noses will be cut off. New wealth gives autocracies a greater ability to control information--to monopolize television stations, and to keep a grip on Internet traffic--often with the assistance of foreign corporations eager to do business with them.
In the long run, rising prosperity may well produce political liberalism, but how long is the long run? It may be too long to have any strategic or geopolitical relevance. As the old joke goes, Germany launched itself on a trajectory of economic modernization in the late nineteenth century and within six decades it became a fully fledged democracy: the only problem was what happened in the intervening years. So the world waits for change, but in the meantime two of the world's largest nations, with more than a billion and a half people and the second-and third-largest militaries between them, now have governments committed to autocratic rule and may be able to sustain themselves in power for the foreseeable future.
The power and the durability of these autocracies will shape the international system in profound ways. The world is not about to embark on a new ideological struggle of the kind that dominated the Cold War. But the new era, rather than being a time of "universal values," will be one of growing tensions and sometimes confrontation between the forces of democracy and the forces of autocracy.
During the Cold War, it was easy to forget that the struggle between liberalism and autocracy has endured since the Enlightenment. It was the issue that divided the United States from much of Europe in the late eighteenth and early nineteenth centuries. It divided Europe itself through much of the nineteenth century and into the twentieth. Now it is returning to dominate the geopolitics of the twenty-first century.
II.
The presumption over the past decade has been that when Chinese and Russian leaders stopped believing in communism, they stopped believing in anything. They had become pragmatists, without ideology or belief, simply pursuing their own and their nation's interests. But the rulers of China and Russia, like the rulers of autocracies in the past, do possess a set of beliefs that guides them in both domestic and foreign policy. It is not an all-encompassing, systematic worldview like Marxism or liberalism. But it is a comprehensive set of beliefs about government and society and the proper relationship between rulers and their people.
The rulers of Russia and China believe in the virtues of a strong central government and disdain the weaknesses of the democratic system. They believe their large and fractious nations need order and stability to prosper. They believe that the vacillation and chaos of democracy would impoverish and shatter their nations, and in the case of Russia that it already did so. They believe that strong rule at home is necessary if their nations are to be powerful and respected in the world, capable of safeguarding and advancing their interests. Chinese rulers know from their nation's long and often turbulent history that political disruptions and divisions at home invite foreign interference and depredation. What the world applauded as a political opening in 1989, Chinese leaders regard as a near-fatal display of disagreement.
So the Chinese and Russian leaders are not simply autocrats. They believe in autocracy. The modern liberal mind at "the end of history" may not appreciate the attractions of this idea, or the enduring appeal of autocracy in this globalized world; but historically speaking, Russian and Chinese rulers are in illustrious company. The European monarchs of the seventeenth, eighteenth, and nineteenth centuries were thoroughly convinced, as a matter of political philosophy, of the superiority of their form of government. Along with Plato, Aristotle, and every other great thinker prior to the eighteenth century, they regarded democracy as the rule of the licentious, greedy, and ignorant mob. And in the first half of the twentieth century, for every democratic power like the United States, Great Britain, and France, there was an equally strong autocratic power, in Germany, Russia, and Japan. The many smaller nations around the world were at least as likely to model themselves on the autocracies as on the democracies. Only in the past half-century has democracy gained widespread popularity around the world, and only since the 1980s, really, has it become the most common form of government.
The rulers of Russia and China are not the first to suggest that it may not be the best. It is often claimed that the autocrats in Moscow and Beijing are interested only in lining their pockets--that the Chinese leaders are just kleptocrats and that the Kremlin is "Russia, Inc." Of course the rulers of China and Russia look out for themselves, enjoying power for its own sake and also for the wealth and luxuries it brings. But so did many great kings, emperors, and popes in the past. People who wield power like to wield power, and it usually makes them rich. But they usually believe also that they are wielding it in the service of a higher cause. By providing order, by producing economic success, by holding their nations together and leading them to a position of international influence, respectability, and power, they believe that they are serving their people. Nor is it at all clear, for the moment, that the majority of people they rule in either China or Russia disagree.
If autocracies have their own set of beliefs, they also have their own set of interests. The rulers of China and Russia may indeed be pragmatic, but they are pragmatic in pursuing policies that will keep themselves in power. Putin sees no distinction between his own interests and Russia's interests. When Louis XIV remarked, "L'Etat, c'est moi," he was declaring himself the living embodiment of the French nation, asserting that his interests and France's interests were the same. When Putin declares that he has a "moral right" to continue to rule Russia, he is saying that it is in Russia's interest for him to remain in power; and just as Louis XIV could not imagine it being in the interests of France for the monarchy to perish, neither can Putin imagine it could be in Russia's interest for him to give up power. As Minxin Pei has pointed out, when Chinese leaders face the choice between economic efficiency and the preservation of power, they choose power. That is their pragmatism.
The autocrats' interest in self-preservation affects their approach to foreign policy as well. In the age of monarchy, foreign policy served the interests of the monarch. In the age of religious conflict, it served the interests of the church. In the modern era, democracies have pursued foreign policies to make the world safer for democracy. Today the autocrats pursue foreign policies aimed at making the world safe, if not for all autocracies, then at least for their own.
Russia is a prime example of how a nation's governance at home shapes its relations with the rest of the world. A democratizing Russia, and even Gorbachev's democratizing Soviet Union, took a fairly benign view of NATO and tended to have good relations with neighbors that were treading the same path toward democracy. But today Putin regards NATO as a hostile entity, calls its enlargement "a serious provocation," and asks, "Against whom is this expansion intended?" In fact, NATO is no more aggressive or provocative toward Moscow today than it was in Gorbachev's time. If anything, it is less so. NATO has become more benign, just as Russia has become more aggressive. When Russia was more democratic, Russian leaders saw their interests as intimately bound up with the liberal democratic world. Today the Russian government is suspicious of the democracies, especially those near its borders.
This is understandable. For all their growing wealth and influence, the twenty-first-century autocracies remain a minority in the world. As some Chinese scholars put it, democratic liberalism became dominant after the fall of Soviet communism and is sustained by an "international hierarchy dominated by the United States and its democratic allies," a "U.S.-centered great power group." The Chinese and Russians feel like outliers from this exclusive and powerful clique. "You western countries, you decide the rules, you give the grades, you say, 'you have been a bad boy,'" complained one Chinese official at Davos this year. Putin also complains that "we are constantly being taught about democracy."
The post-Cold War world looks very different when seen from autocratic Beijing and Moscow than it does from democratic Washington, London, Paris, Berlin, or Brussels. For the leaders in Beijing, it was not so long ago that the international democratic community, led by the United States, turned on China with a rare unity, imposing economic sanctions and even more painful diplomatic isolation after the crackdown at Tiananmen Square. The Chinese Communist Party, according to Fei-Ling Wang, has had a "persisting sense of political insecurity ever since," a "constant fear of being singled out and targeted by the leading powers, especially the United States," and a "profound concern for the regime's survival, bordering on a sense of being under siege."
In the 1990s, the democratic world, led by the United States, toppled autocratic governments in Panama and Haiti and twice made war against Milosevic's Serbia. International nongovernmental organizations (NGOs), well-funded by western governments, trained opposition parties and supported electoral reforms in Central and Eastern Europe and in Central Asia. In 2000, internationally financed opposition forces and international election monitors finally brought down Milosevic. Within a year he was shipped off to The Hague, and five years later he was dead in prison.
From 2003 to 2005, western democratic countries and NGOs provided pro-western and pro-democratic parties and politicians with the financing and organizational help that allowed them to topple other autocrats in Georgia, Kyrgyzstan, and Ukraine. Europeans and Americans celebrated these revolutions and saw in them the natural unfolding of humanity's destined political evolution toward liberal democracy. But leaders in Beijing and Moscow saw these events in geopolitical terms, as western-funded, CIA-inspired coups that furthered the hegemony of America and its European allies. The upheavals in Ukraine and Georgia, Dmitri Trenin notes, "further poisoned the Russian-Western relationship" and helped to persuade the Kremlin to "complete its turnaround in foreign policy."
The color revolutions worried Putin not only because they checked his regional ambitions, but also because he feared that the examples of Ukraine and Georgia could be repeated in Russia. They convinced him by 2006 to control, restrict, and in some cases close down the activities of international NGOs. Even today he warns against the "jackals" in Russia who "got a crash course from foreign experts, got trained in neighboring republics and will try here now." His worries may seem absurd or disingenuous, but they are not misplaced. In the post-Cold War era, a triumphant liberalism has sought to expand its triumph by establishing as an international principle the right of the "international community" to intervene against sovereign states that abuse the rights of their people. International NGOs interfere in domestic politics; international organizations like the Organization for Security and Cooperation in Europe monitor and pass judgment on elections; international legal experts talk about modifying international law to include such novel concepts as "the responsibility to protect" or a "voluntary sovereignty waiver."
In theory, these innovations apply to everyone. In practice, they chiefly provide democratic nations the right to intervene in the affairs of non-democratic nations. Unfortunately for China, Russia, and other autocracies, this is one area where there is no great transatlantic divide. The United States, though traditionally jealous of its own sovereignty, has always been ready to interfere in the internal affairs of other nations. The nations of Europe, once the great proponents (in theory) of the Westphalian order of inviolable state sovereignty, have now reversed course and produced a system, as Robert Cooper has observed, of constant "mutual interference in each other's domestic affairs, right down to beer and sausages." This has become one of the great schisms in the international system dividing the democratic world and the autocracies. For three centuries, international law, with its strictures against interference in the internal affairs of nations, has tended to protect autocracies. Now the democratic world is in the process of removing that protection, while the autocrats rush to defend the principle of sovereign inviolability.
For this reason, the war in Kosovo in 1999 was a more dramatic and disturbing turning point for Russia and China than was the Iraq war of 2003. Both nations opposed NATO's intervention, and not only because China's embassy was bombed by an American warplane and Russia's distant Slavic cousins in Serbia were on the receiving end of the NATO air campaign. When Russia threatened to block military action at the U.N. Security Council, NATO simply sidestepped the United Nations and took it upon itself to authorize action, thus negating one of Russia's few tools of international influence. From Moscow's perspective, it was a clear violation of international law, not only because the war lacked a U.N. imprimatur but because it was an intervention into a sovereign nation that had committed no external aggression. To the Chinese, it was just "liberal hegemonism." Years later Putin was still insisting that the western nations "leave behind this disdain for international law" and not attempt to "substitute NATO or the EU for the U.N."
The Russians and the Chinese were in good company. At the time, no less an authority than Henry Kissinger warned that "the abrupt abandonment of the concept of national sovereignty" risked a world unmoored from any notion of international legal order. The United States, of course, paid this little heed: it had intervened and overthrown sovereign governments dozens of times throughout its history. But even postmodern Europe set aside legal niceties in the interest of what it regarded as a higher Enlightenment morality. As Robert Cooper puts it, Europe was driven to act by "the collective memory of the Holocaust and the streams of displaced people created by extreme nationalism in the Second World War." This "common historical experience" provided all the justification necessary. Kissinger warned that in a world of "competing truths, " such a doctrine risked chaos. Cooper responded that postmodern Europe was "no longer a zone of competing truths."
But the conflict between international law and liberal morality is one that the democracies have not been able to finesse. As Chinese officials asked at the time of Tiananmen Square and have continued to ask, "What right does the U. S. government have to ... flagrantly interfere in China's internal affairs?" What right, indeed? Only the liberal creed grants the right--the belief that all men are created equal and have certain inalienable rights that must not be abridged by governments; that governments derive their power and legitimacy only from the consent of the governed and have a duty to protect their citizens' right to life, liberty, and property. To those who share this liberal faith, foreign policies and even wars that defend these principles, as in Kosovo, can be right even if established international law says they are wrong. But to the Chinese, the Russians, and others who do not share this worldview, the United States and its democratic allies succeed in imposing their views on others not because they are right but only because they are powerful enough to do so. To non-liberals, the international liberal order is not progress. It is oppression.
This is more than a dispute over theory and the niceties of international jurisprudence. It concerns the fundamental legitimacy of governments, which for autocrats can be a matter of life and death. China's rulers have not forgotten that if the democratic world had had its way in 1989, they would now be out of office, possibly imprisoned or worse. Putin complains that "we are seeing a greater and greater disdain for the basic principles of international law," and he does not mean just the illegal use of force but also the imposition of "economic, political, cultural and educational policies." He decries the way "independent legal norms" are being re-shaped to conform to "one state's legal system," that of the western democracies, and the way international institutions such as the Organization for Security and Cooperation in Europe have become "vulgar instruments" in the hands of the democracies. As a result, Putin exclaims, "no one feels safe! Because no one can feel that international law is like a stone wall that will protect them."
The western democracies would deny any such intention, but Putin, like the leaders of China, is right to worry. American and European policymakers constantly say they want Russia and China to integrate themselves into the international liberal democratic order, but it is not surprising if Russian and Chinese leaders are wary. How can autocrats enter the liberal international order without succumbing to the forces of liberalism?
III.
Afraid of the answer, the autocracies are understandably pushing back, and with some effect. Rather than accepting the new principles of diminished sovereignty and weakened international protection for autocrats, Russia and China are promoting an international order that places a high value on national sovereignty and can protect autocratic governments from foreign interference.
And they are succeeding. Autocracy is making a comeback. Changes in the ideological complexion of the most influential world powers have always had some effect on the choices made by leaders in smaller nations. Fascism was in vogue in Latin America in the 1930s and 1940s partly because it seemed successful in Italy, Germany, and Spain. Communism spread in the Third World in the 1960s and the 1970s not so much because the Soviet Union worked hard to spread it, but because government opponents fought their rebellions under the banner of Marxism-Leninism and then enlisted the aid of Moscow. When communism died in Moscow, communist rebellions around the world became few and far between. And if the rising power of the world's democracies in the late years of the Cold War, culminating in their almost total victory after 1989, contributed to the wave of democratization in the 1980s and 1990s, it is logical to expect that the rise of two powerful autocracies should shift the balance back again.
It is a mistake to believe that autocracy has no international appeal. Thanks to decades of remarkable growth, the Chinese today can argue that their model of economic development, which combines an increasingly open economy with a closed political system, can be a successful option for development in many nations. It certainly offers a model for successful autocracy, a template for creating wealth and stability without having to give way to political liberalization. Russia's model of "sovereign democracy" is attractive among the autocrats of Central Asia. Some Europeans worry that Russia is "emerging as an ideological alternative to the EU that offers a different approach to sovereignty, power and world order." In the 1980s and 1990s, the autocratic model seemed like a losing proposition as dictatorships of both right and left fell before the liberal tide. Today, thanks to the success of China and Russia, it looks like a better bet.
China and Russia may no longer actively export an ideology, but they do offer autocrats somewhere to run when the democracies turn hostile. When Iran's relations with Europe plummeted in the 1990s after its clerics issued a fatwa calling for the death of Salman Rushdie, the influential Iranian leader Akbar Hashemi Rafsanjani made a point of noting how much easier it is to maintain good relations with a nation like China. When the dictator of Uzbekistan came under criticism in 2005 from the administration of George W. Bush for violently suppressing an opposition rally, he responded by joining the Shanghai Cooperation Organization and moving closer to Moscow. The Chinese provide unfettered aid to dictatorships in Asia and Africa, undermining the efforts of the "international community" to press for reforms--which in practical terms often means regime change--in countries such as Burma and Zimbabwe. Americans and Europeans may grumble, but autocracies are not in the business of overthrowing other autocrats at the democratic world's insistence. The Chinese, who used deadly force to crack down on student demonstrators not so long ago, will hardly help the West remove a government in Burma for doing the same thing. Nor will they impose conditions on aid to African nations to demand political and institutional reforms they have no intention of carrying out in China.
Chinese officials may chide Burma's rulers, and they may urge the Sudanese government to find some solution to the Sudan conflict. Moscow may at times distance itself from Iran. But the rulers in Rangoon, Khartoum, Pyongyang, and Tehran know that their best protectors--and in the last resort, their only protectors--in a generally hostile world are to be found in Beijing and Moscow. One wonders how much Beijing officials can chastise Burmese generals for crushing Buddhist monks' protests when the Chinese are themselves crushing Buddhist monks in Tibet. In the great schism between democracy and autocracy, the autocrats share common interests and a common view of international order. As China's Li Peng told Iran's Rafsanjani, China and Iran are united by a common desire to build a world order in which "the selection of whatever social system by a country is the affair of the people of that country."
In fact, a global competition is under way. According to Sergei Lavrov, Russia's foreign minister, "For the first time in many years, a real competitive environment has emerged on the market of ideas" between different "value systems and development models." And the good news, from the Russian point of view, is that "the West is losing its monopoly on the globalization process." Today when Russians speak of a multipolar world, they are not only talking about the redistribution of power. It is also the competition of value systems and ideas that will provide "the foundation for a multipolar world order."
This comes as a surprise to a democratic world that believed such competition ended when the Berlin Wall fell. The world's democracies do not regard their own efforts to support democracy and Enlightenment principles abroad as an aspect of a geopolitical competition, because they do not see "competing truths," only "universal values." As a result, they are not always conscious of how they use their wealth and power to push others to accept their values and their principles.
In their own international institutions and alliances, they demand strict fidelity to liberal democratic principles. Before opening their doors to new members and providing the vast benefits that membership offers in terms of wealth and security, they demand that nations that want to enter the EU or NATO open up their economies and political systems. When the Georgian president called a state of emergency at the end of 2007, he damaged Georgia's chances of entering NATO and the EU anytime soon. As a result, Georgia may now live precariously in the nether region between Russian autocracy and European liberalism. Eventually, if the democracies turn their backs on Georgia, it may have no choice but to accommodate Moscow.
Again, this competition is not the Cold War redux. It is more like the nineteenth century redux. In the nineteenth century, the absolutist rulers of Russia and Austria shored up fellow autocracies in post-revolutionary France and used force to suppress liberal rebellions in Germany, Poland, Italy, and Spain. Palmerston's Britain used British power to aid liberals on the continent; the United States cheered on liberal revolutions in Hungary and Germany and expressed outrage when Russian troops suppressed liberal forces in Poland. Today Ukraine has already been a battleground between forces supported by the West and forces supported by Russia, and it could well be a battleground again in the future. Georgia could be another. It is worth contemplating what the world would look like, what Europe would look like, if democratic movements in Ukraine and Georgia failed or were forcefully suppressed, and the two nations became autocracies with close ties to Moscow. It is worth considering what the effect would be in East Asia if China used force to quash a democratic system in Taiwan and install a friendlier autocracy in its place.
The global competition between democratic governments and autocratic governments will become a dominant feature of the twenty-first-century world. The great powers are increasingly choosing sides and identifying themselves with one camp or the other. India, which during the Cold War was proudly neutral or even pro-Soviet, has begun to identify itself as part of the democratic West. Japan in recent years has also gone out of its way to position itself as a democratic great power, sharing common values with other Asian democracies but also with non-Asian democracies. For both Japan and India the desire to be part of the democratic world is genuine, but it is also part of a geopolitical calculation--a way of cementing solidarity with other great powers that can be helpful in their strategic competition with autocratic China.
There is no perfect symmetry in international affairs. The twin realities of the present era--great power competition and the contest between democracy and autocracy--will not always produce the same alignments. Democratic India in its geopolitical competition with autocratic China supports the Burmese dictatorship in order to deny Beijing a strategic advantage. India's diplomats enjoy playing the other great powers against each other, sometimes warming to Russia, sometimes to China. Democratic Greece and Cyprus pursue close relations with Russia partly out of cultural solidarity with Eastern Orthodox cousins, but more out of economic interest. The United States has long allied itself with Arab dictatorships for strategic and economic reasons, as well as to successive military rulers in Pakistan. As in the Cold War, strategic and economic considerations, as well as cultural affinities, may often cut against ideology.
But in today's world, a nation's form of government, not its "civilization" or its geographical location, may be the best predictor of its geopolitical alignment. Asian democracies today line up with European democracies against Asian autocracies. Chinese observers see a "V-shaped belt" of pro-American democratic powers "stretching from Northeast to Central Asia." When the navies of India, the United States, Japan, Australia, and Singapore exercised in the Bay of Bengal last year, Chinese and other observers referred to it as the "axis of democracy." Japan's prime minister spoke of an "Asian arc of freedom and prosperity" stretching from Japan to Indonesia to India. Russian officials profess to be "alarmed" that NATO and the Organization for Security and Cooperation in Europe are "reproducing a bloc policy" not unlike that of the Cold War era, but the Russians themselves refer to the Shanghai Cooperation Organization as an "anti-NATO" alliance and a "Warsaw Pact 2." When the Shanghai Cooperation Organization met last year, it brought together five autocracies--China, Russia, Uzbekistan, Kazakhstan, and Tajikistan--as well as Iran. When the ASEAN nations attempted to address the problem of Burma last year, the organization split down the middle, with democratic nations like the Philippines and Indonesia, backed by Japan, seeking to put pressure on Burma, and the autocracies of Vietnam, Cambodia, and Laos, backed by China, seeking to avoid setting a precedent that could come back to haunt them someday.
IV.
The global divisions between the club of autocrats and the axis of democracy have broad implications for the international system. Is it possible any longer to speak of an "international community"? The term implies agreement on international norms of behavior, an international morality, even an international conscience. But today the world's major powers lack such a common understanding. On the large strategic questions, such as whether to intervene or to impose sanctions or to attempt to isolate nations diplomatically, there is no longer an international community to be summoned or led. This was exposed most blatantly in the war over Kosovo, which divided the democratic West from both Russia and China, and from many other nonEuropean autocracies. Today it is apparent on the issues of Darfur, Iran, and Burma.
One would imagine that on such transnational issues as disease, poverty, and climate change the great powers ought to be able to work together despite their diverging interests and worldviews. But even here their differences complicate matters. Disputes between the democracies and China over how and whether to condition aid to poor countries in Africa affect the struggle against poverty. Geopolitical calculations affect international negotiations over the best response to climate change. The Chinese, along with the Indians, believe the advanced industrial nations of the West, having reached their present heights after decades of polluting the air and emitting unconscionable levels of greenhouse gases, now want to deny others the right to grow in the same way. Beijing suspects a western attempt to restrict China's growth and to slow its emergence as a competitive great power. Similarly, the nuclear nonproliferation regime will continue to suffer as the clashing interests of great powers and differing forms of government overwhelm what might otherwise be their common interests in preventing other nations from obtaining nuclear weapons. Russia and China have run interference for Iran. The United States has run interference for India, in order to enlist New Delhi's help in the strategic competition with China.
The demise of the international community is most clearly on display at the U.N. Security Council, which, after a brief post-Cold War awakening, is slipping back into its long coma. The artful diplomacy of France and the tactical caution of China for a while obscured the fact that on most major issues the Security Council has been sharply divided between the autocracies and the democracies, with the latter systematically pressing for sanctions and other punitive actions against autocracies in Iran, North Korea, Sudan, and Burma, and the former just as systematically resisting and attempting to weaken the effect of such actions. This rut will only deepen in the coming years.
Calls for a new "concert" of nations including Russia, China, the United States, Europe, and other great powers are unlikely to be successful. The early-nineteenth-century Concert of Europe operated under the umbrella of a common morality and shared principles of government. It aimed not only at the preservation of a European peace but also, and more important, at the maintenance of a monarchical and aristocratic order against the liberal and radical challenges presented by the French and American revolutions and their echoes in Germany, Italy, and Poland. The concert gradually broke down under the strains of popular nationalism, fueled in part by the rise of revolutionary liberalism. The great power concert that Franklin Roosevelt established at the U.N. Security Council similarly foundered on ideological conflict.
And now, once more, there is little sense of shared morality and common values among the great powers. Instead there is suspicion and growing hostility, and the well-grounded view on the part of the autocracies that the democracies, whatever they say, would welcome their overthrow. Any concert among these states would be built on a shaky foundation likely to collapse at the first serious test.
Can these disagreements be overcome by expanding trade ties and growing economic interdependence in this ever more globalized world? Clearly economic ties can help to check tendencies toward great-power conflict. Chinese leaders avoid confrontation with the United States today both because they could not count on a victory and because they fear the impact on the Chinese economy and, by extension, the stability of their autocratic rule. American, Australian, and Japanese dependence on the Chinese economy makes these nations cautious, too, and the powerful influence of American big business makes American leaders take a more accommodating view of China. In both China and Russia, economic interests are not just national, they are also personal. If the business of Russia is business, as Dmitri Trenin argues, then its leaders should be reluctant to jeopardize their wealth with risky foreign policies.
Yet history has not been kind to the theory that strong trade ties prevent conflict among nations. The United States and China are no more dependent on each other's economies today than were Great Britain and Germany before World War I. And trade relations are not without their own tensions and conflicts. Those between the United States and China are becoming increasingly contentious, with Congress threatening legislation to punish China for perceived inequities in the trade relationship. In both Europe and the United States, concerns about the growing strategic challenge from China are increasingly joined or even outstripped by fears of the growing economic challenge it poses. Fifty-five percent of Germans believe China's economic growth is a "bad thing," up from 38 percent in 2005, a view shared by Americans, Indians, Britons, the French, and even South Koreans. Today 60 percent of South Koreans think China's growing economy is a "bad thing."
The Chinese, meanwhile, may still tolerate pressure to adjust their currency, crack down on piracy, and increase quality standards for their products, as well as all the other hectoring they receive from the United States and Europe. But they are starting to feel that the democratic world is ganging up on them and using these disputes as a way of containing China not only economically but strategically. And there is also the matter of the international scramble for energy resources, which is becoming the primary arena for geopolitical competition. The search for reliable sources of oil and gas shapes China's policies toward Iran, Sudan, Burma, and Central Asia. Russia and the democracies led by the United States compete to build oil and gas pipelines that will provide them leverage and influence, or deny it to their competitors.
Commercial ties alone cannot withstand the forces of national and ideological competition that have now so prominently re-emerged. Trade relations do not take place in a vacuum. They both influence and are influenced by geopolitical and ideological conflicts. Nations are not calculating machines. They have the attributes of the humans who create and live in them, the intangible and immeasurable human qualities of love, hate, ambition, fear, honor, shame, patriotism, ideology, and belief--the things people fight and die for, today as in millennia past.
V.
Nowhere are these human qualities more on display than in the Islamic world, especially the Middle East. The struggle of radical Islamists against the powerful and often impersonal forces of modernization, capitalism, and globalization that they associate with the Judeo-Christian West is the other great conflict in the international system today. It is also the most dramatic refutation of the convergence paradigm, since it is precisely convergence, including the liberal world's conception of "universal values," that the radical Islamists reject.
As a historical phenomenon, the struggle between modernization and Islamic radicalism may ultimately have less impact on international affairs than the struggle among the great powers and between the forces of democracy and autocracy. After all, Islamic resistance to westernization is not a new phenomenon, though it has taken on a new and potentially cataclysmic dimension. In the past, when old and less technologically advanced peoples confronted more advanced cultures, their inadequate weapons reflected their backwardness. Today the more radical proponents of Islamic traditionalism, though they abhor the modern world, are using against it not only the ancient methods of assassination and suicidal attacks, but also modern weapons. The forces of modernization and globalization have inflamed the radical Islamist rebellion and also armed them for the fight.
But it is a lonely and ultimately desperate fight, for in the struggle between traditionalism and modernity, tradition cannot win--even though traditional forces armed with modern weapons, technologies, and ideologies can do horrendous damage. All the world's rich and powerful nations have more or less embraced the economic, technological, and even social aspects of modernization and globalization. All have embraced, with varying degrees of complaint and resistance, the free flow of goods, finances, and services and the intermingling of cultures and lifestyles that characterizes the modern world. Increasingly, their people watch the same television shows, listen to the same music, and go to the same movies. Along with this dominant modern culture, they have accepted--even as they may also deplore--the essential characteristics of a modern ethics and aesthetics. Modernity means, among other things, the sexual as well as political and economic liberation of women; the weakening of church authority and the strengthening of secularism; the existence of what used to be called the counterculture; and the exercise of free expression in the arts (if not in politics), which includes the freedom to commit blasphemy and to lampoon symbols of faith, authority, and morality. These are the consequences of liberalism and capitalism unleashed and unchecked by the constraining hand of tradition, or a powerful church, or a moralistic and domineering government. Even the Chinese have learned that while it is possible to have capitalism without political liberalization, it is much harder.
Today, radical Islamists are the last holdout against these powerful forces of modernity. For Sayyid Qutb, one of the intellectual fathers of Al Qaeda, true Islam could be salvaged only by warring against the modern world on all fronts. He wanted to "take apart the entire political and philosophical structure of modernity and return Islam to its unpolluted origins." A very different kind of Muslim leader, Ayatollah Khomeini, clearly identified modernity with the Enlightenment and rejected both. "Yes, we are reactionaries, " he told his opponents, "and you are enlightened intellectuals: You intellectuals do not want us to go back 1,400 years."
These most radical Islamists, along with Osama bin Laden, also reject that great product of the Enlightenment and modernity: democracy. Abu Musab al-Zarqawi denounced elections in Iraq on the grounds that "the legislator who must be obeyed in a democracy is man, and not God." Democratic elections were "the very essence of heresy and polytheism and error," for they made "the weak, ignorant man God's partner in His most central divine prerogative--namely, ruling and legislating." As Bernard Lewis has written, the aim of Islamic revolution in Iran and elsewhere has been to "sweep away all the alien and infidel accretions that had been imposed on the Muslim lands and peoples in the era of alien dominance and influence and to restore the true and divinely given Islamic order." One of those "infidel accretions" is democracy. The fundamentalists want to take the Islamic world back to where it was before the Christian West, liberalism, and modernity polluted what they regard as pure Islam.
Their goal is impossible to achieve. The Islamists could not take their societies back 1,400 years even if the rest of the world would let them. And it will not let them. Neither the United States nor any of the other great powers will turn over control of the Middle East to these fundamentalist forces. Partly this is because the region is of such vital strategic importance to the rest of the world. But it is more than that. The vast majority of the people in the Middle East have no desire to go back 1,400 years. They oppose neither modernity nor democracy. Nor is it conceivable in this modern world that a whole country could wall itself off from modernity, even if the majority wanted to do so. Could the great Islamic theocracy that Al Qaeda and others hope to erect ever completely block out the sights and sounds of the rest of the world, and thereby shield its people from the temptations of modernity? The mullahs have not even succeeded in doing that in Iran. The project is fantastic.
The world is thus faced with the prospect of a protracted struggle in which the goals of the extreme Islamists can never be satisfied because neither the United States, nor Europe, nor Russia, nor China, nor the peoples of the Middle East have the ability or the desire to give them what they want. The modern great powers will never retreat as far as the Islamic extremists require. Unfortunately, they may also not be capable of uniting effectively against the threat. Although in the struggle between modernization and tradition the United States, Russia, China, Europe, and the other great powers are roughly on the same side, the things that divide them from one another--the competing national ambitions, the divisions between democrats and autocrats, the transatlantic disagreement over the use of military power--undermine their will to cooperate.
This is certainly true when it comes to the unavoidable military aspects of a fight against radical Islamic terrorism. Europeans have been and will continue to be less than enthusiastic about what they emphatically do not call "the war on terror." As for Russia and China, it will be tempting for them to enjoy the spectacle of the United States bogged down in a fight with Al Qaeda and other violent Islamist groups in the Middle East and South Asia, just as it is tempting to let American power in that region be checked by a nuclear-armed Iran. The willingness of the autocrats in Moscow and Beijing to protect their fellow autocrats in Pyongyang, Tehran, and Khartoum increases the chances that the connection between terrorists and nuclear weapons will eventually be made.
Indeed, one of the problems with making the struggle against Islamic terrorism the sole focus of American foreign policy is that it produces illusions about alliance and cooperation with other great powers with whom genuine alliance is becoming impossible. The idea of genuine strategic cooperation between the United States and Russia or the United States and China in the war on terror is mostly a fiction. For Russia, the war on terror is about Chechnya. For China, it is about the Uighurs of Xinjiang province. But when it comes to Iran, Syria, and Hezbollah, Russia and China tend to see not terrorists but useful partners in the great power struggle.
The great fallacy of our era has been the belief that a liberal international order rests on the triumph of ideas alone, or on the natural unfolding of human progress. It is an immensely attractive notion, deeply rooted in the Enlightenment worldview of which all of us in the liberal world are the product. Our political scientists posit theories of modernization, with sequential stages of political and economic development that lead upward toward liberalism. Our political philosophers imagine a grand historical dialectic, in which the battle of worldviews over the centuries produces, in the end, the correct liberal democratic answer. Naturally, many are inclined to believe that the Cold War ended the way it did simply because the better worldview triumphed, and that the international order that exists today is but the next stage forward in humanity's march from strife and aggression toward a peaceful and prosperous co-existence.
Such illusions are just true enough to be dangerous. Of course there is strength in the liberal democratic idea, and in the free market. It is logical, too, that a world of liberal democratic states would gradually produce an international order that reflected those liberal and democratic qualities. This has been the enlightenment dream since the eighteenth century, when Kant imagined a "perpetual peace" consisting of liberal republics and built upon the natural desire of all peoples for peace and material comfort. Although some may scoff, it has been a remarkably compelling vision. Its spirit animated the international arbitration movements at the end of the nineteenth century, the worldwide enthusiasm for a League of Nations in the early twentieth century, and the enthusiasm for the United Nations after World War II. It has also been a remarkably durable vision, withstanding the horrors of two world wars, one more disastrous than the other, and then a long Cold War that for a third time dashed expectations of progress toward the ideal.
It is a testament to the vitality of this Enlightenment vision that hopes for a brand new era in human history again took hold with such force after the fall of Soviet communism. But a little more skepticism was in order. After all, had mankind really progressed so far? The most destructive century in all the millennia of human history was only just concluding; it was not buried in some deep, dark ancient past. Our supposedly enlightened modernity had produced the greatest of horrors--the massive aggressions, the "total wars," the famines, the genocides, the nuclear warfare. After the recognition of this terrible reality--the relationship of modernity not only to good but also to evil--what reason was there to believe that humankind was suddenly on the cusp of a brand new order? The focus on the dazzling pageant of progress at the end of the Cold War ignored the wires and the beams--the actual historical scaffolding--that had made such progress possible. It failed to acknowledge that progress toward liberalism was not inevitable, but was contingent on events--battles won or lost, social movements successful or crushed, economic policies implemented or discarded. The spread of democracy was not merely the unfolding of certain ineluctable processes of economic and political development. We do not know whether such an evolutionary process--with predictable stages, with known causes and effects--even exists.
What we do know is that the global shift toward liberal democracy coincided with the historical shift in the balance of power toward those nations and peoples who favored the liberal democratic idea, a shift that began with the triumph of the democratic powers over fascism in World War II and that was followed by a second triumph of the democracies over communism in the Cold War. The liberal international order that emerged after these two victories reflected the new overwhelming global balance in favor of liberal forces. But those victories were not inevitable, and they need not be lasting. Now the re-emergence of the great autocratic powers, along with the reactionary forces of Islamic radicalism, has weakened that order, and threatens to weaken it further in the years and decades to come. The world's democracies need to begin thinking about how they can protect their interests and advance their principles in a world in which these are, once again, powerfully contested.
Robert Kagan is senior associate at the Carnegie Endowment for International Peace and senior transatlantic fellow at the German Marshall Fund. His new book, The Return of History and the End of Dreams, will be published by Knopf later this month.
The article was originally published at this link.