Why, amid unmatched prosperity, is anxiety about future economic prospects so great? The framework that has guided international economic relations for the past 50 years has delivered results. What is behind the growing dissatisfaction with the international economic order, and what is to be done?
The problem is, in a word, political: There is a lack of democracy. The governing institutions and guiding principles of the global order were created nearly 50 years ago by a small number of states, remarkably homogeneous in makeup and outlook. The world has been transformed since. There are more countries, and hence, more governments, demanding input into the rule-making process; nongovernment organizations assert their right to speak. More money is sloshing with unprecedented rapidity through the system, and in forms never before seen.
Each of these changes has exposed inadequacies in the existing financial architecture. Taken together, they have shifted the balance of power. Ironically, just as more governments protest their exclusion from international economic decision-making, the structure of the economy is changing in ways that render all governments powerless. The seamless web of global communications permits financiers to move funds at the push of a button, lowering every global standard to the lowest common denominator.