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Bonaglia, Federico; de Macedo, Jorge Braga; Bussolo, Maurizio --- "How Globalisation Improves Governance" [2009] ELECD 389; in Yueh, Linda (ed), "The Law and Economics of Globalisation" (Edward Elgar Publishing, 2009)

Book Title: The Law and Economics of Globalisation

Editor(s): Yueh, Linda

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781845421953

Section: Chapter 7

Section Title: How Globalisation Improves Governance

Author(s): Bonaglia, Federico; de Macedo, Jorge Braga; Bussolo, Maurizio

Number of pages: 32

Extract:

7. How globalisation improves
governance
Federico Bonaglia, Jorge Braga de Macedo
and Maurizio Bussolo*

INTRODUCTION
Globalisation, governance and economic performance affect each other in
very complex mutual relationships, not least because of severe measurement
difficulties. We try here to establish whether there is an effect of globalisation
on governance and, even more specifically, to test how openness can affect
the quality of domestic institutions. To do so, we survey available theoreti-
cal explanations of causal relationships between globalisation and govern-
ance. In the last 20 years or so, economists have changed their views on these
relationships more than once. At the time of the fall of the Berlin Wall and
after the disillusions of the inward looking economic policies of many devel-
oping regions in the world, the shared view was that liberal democracy had
triumphed worldwide, Communism was over, and the advent of true global
economic progress would be brought by free markets and minimal states.
A `Washington Consensus' based on these ideas had emerged. A few years
later, innovative and cheaply available communication possibilities and the
ensuing new economy revolution reinforced the view that the market and its
globalising forces would bring huge benefits for all.
However, the main problem of this Washington Consensus is that, even
after repeated attempts, it has not really delivered a `Moscow Success', or
a `Latin American Miracle'. Indeed, even the East Asian one, which super-
ficially looked like a diligent application of the Washington paradigm, had
to sail through stormy waters. Due ...