Global Rules and Markets: Constraints on Policy Autonomy in Developing Countries

Abstract

Recent years have seen a rapid opening up and integration of developing countries into the world economy to a degree unprecedented in modern history. This has, no doubt, brought benefits in several areas, particularly through international trade and investment, even though their incidence varied among and within countries. But it is also true that rapid liberalization and integration have also caused dislocations in the developing world, particularly among the poor and unprivileged. While these challenges have placed growing demand on policy-makers and called for greater flexibility in the policy-making process, many of the traditional instruments of development and macroeconomic policy have become ineffective or simply unavailable because of proliferation of international rules, obligations and practices. Consequently, questions have been raised about whether such constraints over national economic policy are compatible with development, including the capacity to foster conditions for steady quality employment growth.