Managing the World Economy
| Published date | 01 July 1990 |
| Author | Aaron Segal |
| DOI | 10.1177/019251219001100306 |
| Date | 01 July 1990 |
| Subject Matter | Articles |
361
Managing
the
World
Economy
AARON
SEGAL
ABSTRACT.
The
nature
and
extent
of
world
economic
interdependence
is
producing
a
search
for
institutions
capable
of
global
economic
management.
GATT,
the
World
Bank,
the
International
Monetary
Fund,
and
the
United
Nations
system
have
been
tried
for
aspects
of
global
economic
management
with
mixed
results.
Recently
there
has
been
increasing
use
of
the
Group
of
Seven
nations,
and
a
series
of
ad hoc
arrangements.
The
problem
of
coordination
of
fiscal,
monetary,
trade,
and
other
policies
has
yet
to
be
resolved.
This
study
surveys
and
analyzes
the
efforts
to
institutionalize
management
of
the
world
economy.
Current
discussions
of
global
economic
problems
and
responses
rely
on
certain
key
words
and
phrases.
These
include
&dquo;global
interdependence,&dquo;
&dquo;consultation,&dquo;
&dquo;policy
coordination,&dquo; &dquo;stability,&dquo;
&dquo;growth,&dquo;
and
&dquo;engines
of
growth.&dquo;
These
terms
are
found
in
the
final
statements
of
important
meetings
such
as
the
Tokyo
summit
of
seven
nations
in
May
1986,
in
the
annual
reports
and
documents
of
international
organizations
such
as
the
World
Bank,
and
in
the
commentaries
of
leading
economists.
The
terms
used
suggest
a
widespread
search
for
consensus
in
global
economic
goals
and
policies
to
achieve
them.
It
is
this
search
that
constitutes
the
contemporary
effort
to
manage
the
world
economy.
Management
is
used
here
to
mean
both
a
process
and
the
institutions
whereby
sovereign
governments
can
pursue
compatible
and
mutually
beneficial
policies.
The
policies
in
question
are
monetary,
fiscal,
and
trade,
with
particular
emphasis
on
exchange
rates,
public
sector
fiscal
deficits
and
interest
rates,
and
tariff and
non-tariff
barriers
to
trade
in
goods
and
services.
The
essence
of
the
management
problem
is
that
no
government
in
an
increasingly
interdependent
world
can
achieve
its
goals
unilaterally
while
multilateral
processes
and
institutions
for
global
economic
policy
making
do
not
exist.
Moreover,
no
single
nation-state,
including
the
United
States,
or
group
of
states,
including
the
European
Community
(EC)
constitutes
a
hegemonic
or
even
a
dominant
actor.
What
is it
that
may
need
managing?
The
world
economy,
defined
as
the
global
value of
international
trade
in
goods
and
services,
was
approximately
$2.5
trillion
in
1985.
This
makes
the
world
economy
about
20
percent
of
total
global
product
and
greater
than
the
gross
national
product
of
any
single
nation
except
the
United
States
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