Successful Responses to Globalisation at Home and Abroad
It is not necessary to reinvent the wheel in all these areas. Developed countries have a range of overall policy responses to the challenges of globalisation. These fall into three broad categories: the Anglo-Saxon Model; the Continental European Model; and the Nordic Model. The Anglo-Saxon model has emphasised deregulation, especially of labour markets, and low taxation as the keys to continued prosperity, but these economies have also seen growing inequality. The Continental model has sought to protect workers from the adverse consequences of globalisation through legal employment protection and a degree of resistance to trade liberalisation, however growth and unemployment performance in these economies has generally been poor. Positive examples of liberal responses to globalisation can be found in the ‘Nordic Model’ countries (which include Canada and Holland as well as Scandinavia). This model combines exceptionally open economies with more or less successful welfare systems and high levels of social cohesion. Care must be taken not to exaggerate their similarities with the UK, which has a far larger economy and a more heterogeneous population, but detailed exploration of some of their policies may prove beneficial.
The UK also has some brilliant success stories in responding to globalisation. It would be interesting to explore the ways in which many sectors, cities and regions have responded to globalisation’s various challenges and opportunities, looking both for successful strategies and particular challenges. Examples that stand out are:
- London – both a successful region and a global leader in the financial services sector. Issues include increasing inequality for example in the extreme polarisation of property in Central London between social housing and luxury flats with almost nothing in between.
- The creative industries (music, film etc.). Issues include the protection of global copyrights and the retention of both human resources and profits.
- Liverpool – among the beneficiaries of a much earlier period of globalisation. Now successfully regenerating under a Liberal Democrat administration in a region that has not previously done so well out of contemporary globalisation, due to the decline of traditional industries.
Issues to consider
- Do very high City wages worsen services and slow the London economy as a whole (e.g. by pushing up property prices)? Or is it to Britain’s credit that we have attracted talent from all over the world in the financial services sector, helping to stimulate our economy? Or both?
- What lessons can be learned from the success of UK creative industries? What has been the role of government and how should it differ?
- What specific successes and difficulties has Liverpool experienced? How does it compare with other towns and cities in the UK?
- What more can be done to encourage local and regional governments and businesses to share ideas and positive examples of responses to globalisation?
May 7th, 2008 at 3:03 pm
Submitted in a personal, not an official capacity
I work in the Investment Division of the OECD on investment policy co-operation with China, India and other Asian economies. From my perspective, your paper could benefit from the addition of material from OECD studies of many aspects of the response to globalisation, which are evidence-based and reflect the experience of both OECD Member countries like the ones you refer to above and also many in the developing world, including “key” emerging economies including Brazil, Russia, India, Indonesia, China and South Africa. This work generally supports the position you outline above, combining free market economics with government responsibility for mitigating negative effects of globalisation. I would be happy to send relevant publications in .pdf form to save you having to locate and buy them from our online store. If I have time, I would also like to submit some comments, but I would first need to know to what extent they are likely to be taken into account, i.e. read by decision-makers, before deciding how much time to invest in this. The work we are now engaged in includes, for example, the development of guidelines for recipient countries of sovereign wealth fund investment and discussions with key emerging economies on application of responsible business conduct standards such as the OECD Guidelines for Multinational Enterprises, the only such standard that is the subject of an international agreement among 40 countries, and which covers a wide range of business conduct, including transparency and disclosure, employment and industrial relations, discrimination, environment, fighting corruption, consumer protection, science and technology, competition and taxation. We are also promoting the Policy Framework for Investment among developing countries; this was developed by 60 countries, half of them OECD Members, the other half non-member developing countries. I would be happy to explain the relevance of these initiatives to your work on policy towards Globalisation.