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“Globalization is something
that we design ourselves.”
Laura Alfaro (Harvard Business School) addressed the issue
of globalization losers and the government’s responsibility.
Dani Rodrik (Harvard University) advocated for a fairer, more
sustainable globalization.
Dialogue and Events
Forum
she served as Minister of National Planning in her
home country Costa Rica, often called the Switzerland
of Latin America. The country is one of the major
beneficiaries of globalization and has given its citizens
unparalleled opportunities for professional and eco-
nomic progress, of which she is a good example. Using
the 1990s hit movie The Full Monty as an example,
she acknowledged that many people feel left behind
and like the steelworkers in the film they are often
reluctant to embrace change. She listed a number of
measures that governments can use to redeploy the
benefits of prosperity more evenly, while reemphasizing
the close interrelationship between social and economic
development.
Fix the problem, not the blame
The final session was a disputation on „How much
globalization do we want?“ – focusing on the political,
social, and cultural aspects of globalization. It noted
the tendency to blame globalization for all kind of
things that are wrong in the world while ignoring the
underlying mechanisms. In line with this presumption,
populist political groupings are gaining more and more
ground by exploiting anti-globalization issues and
fueling many people’s fear. There is no doubt that
society is facing major challenges due to globalization-
related changes, such as digitalization and global trade.
These challenges need to be addressed with sound
policies and agreements, both on a national and on an
international level. More important, as the former
Prime Minister and former Foreign Minister of Sweden
Carl Bildt concluded, we should not forget that the last
quarter of a century – which has really been globaliza-
tion coming back with force – has probably been the
best quarter of a century for mankind ever.
The economics of populism
Dani Rodrik closed off the forum by addressing
what he calls the political trilemma of the world
economy. When it comes to free trade, democracy,
and national sovereignty, you have to pick two and
abandon one, so he emphasized. Herein lies the
trilemma, which is related to a particular kind of
globalization that we have been striving for since
the 1980s, and which Rodrik calls hyperglobaliza-
tion. It is an attempt to get rid of all the transac-
tional costs associated with the national borders.
This conception of globalization – which has been
taken to its most extreme form in the Eurozone
– runs into severe problems in practice, he argued.
The trilemma manifests itself in all globalized
sectors, such as trade, finance, and migration.
Furthermore, the trilemma implies tension between
democracy and globalization. Indeed, historical
data show that there is a clear link between popu-
list movements and the rise and fall of globaliza-
tion. In this context, Rodrik outlined the concept of
populism based on the demand and supply sides of
politics. Thus, populist parties mobilize voters by
addressing fears and concerns, such as economic
anxiety, discontent, or fairness concerns. Conse-
quently, there is a need for a fair globalization in
order to counteract populist movements.
This means that there can be many different types
of globalization, including a fairer and more sus-
tainable one than we have now. Aiming for a fair
globalization would mean to revert to an earlier
conception of globalization, explained Rodrik.
Paradoxically, this would mean a safer, more sound,
and more sustainable globalization, he concluded.