Tailoring Globalization to National Needs and Wellbeing: One Size Never Fits All

Abstract

This paper argues that political-economic trends referred to under the single heading of globalisation have distinct causes and manifestations in different countries. Institutional variables chosen by governments and their constituents play a dominant role in determining the character of those manifestations, few of which are inevitable. The political Left and Right often base their arguments on the common premise that nations have no choice but to adopt the US model of highly mobile investment capital, market-centred provision of most goods, minimal governmental regulation and minimisation of accounting costs. That countries possess considerable degrees of freedom in establishing rules for international flows of labour, capital and goods is insufficiently appreciated by critics and supporters of trade and labour market liberalisation. Variety in political-economic forms achieves institutional diversification on a global scale, providing a multi-dimensional spectrum of benchmarks that help individual countries measure policy performance and update institutional variables accordingly.