Rethinking Global Governance: Cooperation in a World of Power

The chapter starts from the fact that the world is highly integrated and interdependent: climate change, pandemics, and knowledge spillovers all create a demand for global governance. Yet actual cooperation is limited, because policy is made by national governments pursuing perceived national interests, and global institutions often reflect the preferences of powerful countries and special interests. Stiglitz and Rodrik argue that, given these political realities, a minimalist framework for global governance is preferable to overly ambitious agendas that can backfire. They set out general principles for designing global rules and then apply them to policy domains such as intellectual property, trade, capital flows, monetary arrangements, investment treaties, and debt management. The framework identifies areas where strong international agreements are desirable (“green light”), where they should be tightly circumscribed (“red light”), and where caution is warranted (“yellow light”).