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National Sovereignty’s Silver Lining

Despite the dire predictions that have accompanied the decline of global governance, less international cooperation does not necessarily mean disaster. In fact, national governments can prioritize domestic prosperity and social cohesion over multilateralism without harming the global economy.

CAMBRIDGE – Commentary on the world economy has never been short of exhortations for greater global cooperation. “What happens anywhere affects everybody … [so] it is pretty clear that the world needs more … international coordination and cooperation,” wrote a leading International Monetary Fund official in 2013. “[V]irtually every problem destabilizing the world … is global in nature and can be confronted only with a coalition that is global,” echoed a leading columnist in 2019.

Worries about the inadequacies of global governance and weakening multilateralism have heightened in recent years, because the United States and other leading advanced economies have increasingly put their domestic agendas first. Unilateral approaches have dominated in trade, industrial policies, and the climate transition. The World Trade Organization – the crowning achievement of global governance in the hyper-globalization era we are leaving behind – has been reduced to an ineffective bystander.

For the globalist commentariat, this is clearly bad news. For the global economy, however, the consequences are less clear – and could be salutary. In fact, in a world in which national governments focused on their own sustainable prosperity and social cohesion, the global economy would do just fine. Upon closer scrutiny, the case for global economic governance turns out to be considerably weaker than is commonly presupposed.