Raees Arif25/02/2021A level PoliticsGlobal PoliticsGlobal governance: EconomicThe IMFStarter:What problems can global cooperation in the economic sphere assuage (help solve)?Extension:What problems can it cause?In an interdependent world, states need to work together on economic matters as well as politicalmatters. Globalisation has quickened this process. International trade has increased ascommunications and transport have created better links between states. The number of states involvedin international trade has also increased. The impact, both positive and negative, of individual states’economic fortunes is increasingly felt in other states.Countries cooperate if they perceive it to be in their best interests, both economically and politically.Global cooperation in the aftermath of World War II—through a system of rules, shared principles, andinstitutions—has delivered major economic and social progress, lifting millions of people out ofdesperate poverty. And when countries joined ten years ago to coordinate their macroeconomicpolicies, they ensured that the Great Recession did not become another Great Depression. The firstGroup of 20 leaders’ summit in November 2008—bringing together the major advanced economies andbig emerging economies like Brazil, China, and India—symbolized an urgent spirit of cooperation.Evidently, countries can achieve a lot when they pull together.Yet, at a time when the world economy is more complex than ever and faces many sharedchallenges, some nations have become less willing to take collective action. The system ofglobal cooperation is currently under stress.There are understandable reasons for people to question the continuing benefits ofinternational cooperation today. Economic inequality within nations is widening, especiallyin advanced economies. Many households have seen little benefit from economic growth,and many communities have suffered from losing jobs and whole industries. Voters aretherefore readier to listen when politicians claim that global engagement preventsaddressing problems at home.But retreating from international cooperation would be a mistake, recreating some of theconditions that gave rise to past crises. Cooperative policies won’t happen, however,unless they have domestic political support. Thus, countries will lose out unlessgovernments can show voters the concrete benefits from international cooperation.International cooperation under stressThere are two main factors that have sapped people’s confidence in the benefits ofeconomic cooperation.First, while technological innovation and growing global trade have helped drasticallyreduce inequality between people living in different countries, they are part of the reasonfor greater inequality within many advanced economies. In the eyes of the public, tradeseems to get the lion’s share of the blame, making people leery of expanding trade furtherthrough ever more economic integration.
Second, the very success of international cooperation since World War II has, over time,reduced the share of world economic activity taking place in advanced economies inEurope, the United States, and Japan, while increasing that of emerging markets.