Retooling Global Development and Governance

image of Retooling Global Development and Governance

This publication provides a whole new set of ideas on how to overcome the deficiencies in the ongoing process of globalization and in the existing mechanisms for global economic governance. It points out promising directions for reform, including: strengthening government capacities for formulating and implementing national development strategies; doing more to ensure that official development assistance is aligned with national priorities; strengthening the international trade and financial systems so that countries with limited capabilities can successfully integrate into the global economy; and creating new mechanisms for dealing with deficiencies. The authors do not pretend to offer a blueprint, but aim instead at presenting ideas that could become the basis for a new, coherent “toolbox” designed to guide development policies and international cooperation.



Retooling global trade

Export-led growth emerged as a pillar of development strategies in the last three decades. The progressive reduction of tariff and non-tariff barriers to trade between countries has been instrumental in generating a fivefold expansion of the volume of world exports since 1980. Paradoxically, economic growth in most developing countries has not matched the rates of economic progress achieved in the decades following the Second World War when many followed import-substitution strategies. Notably, exceptions to this pattern—China and the newly industrializing countries in East Asia—have systematically followed a pragmatic approach that combines gradual exposure to external markets with effective collaboration between the private and the public sector in order to build dynamic longterm competitiveness. Their experiences suggest that neither protectionism nor abrupt liberalization is the best strategy to achieve high and sustained rates of economic growth.


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