Akyüz, Yilmaz --- "Multilateral Disciplines and the Question of Policy Space" [2010] ELECD 627; in Faundez, Julio; Tan, Celine (eds), "International Economic Law, Globalization and Developing Countries" (Edward Elgar Publishing, 2010)

Book Title: International Economic Law, Globalization and Developing Countries

Editor(s): Faundez, Julio; Tan, Celine

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781848441132

Section: Chapter 3

Section Title: Multilateral Disciplines and the Question of Policy Space

Author(s): Akyüz, Yilmaz

Number of pages: 33

Extract:

3. Multilateral disciplines and the
question of policy space
Yilmaz Akyüz*

1. INTRODUCTION

After a relatively short-lived, win-win hype about globalization, there is
now a widespread concern among developing countries that their ability
to control their economic and social development is increasingly circum-
scribed by their global economic integration. On the one hand, many of
the policy instruments widely used by both mature and late industrialis-
ers to reach their current levels of development are no longer available
because of international rules and obligations and rapid liberalisation
and opening up. On the other hand, increased reliance on global markets
is not generating broad-based improvements in living conditions. This
concern has grown as the promises of free market reforms advocated by
the Bretton Woods institutions (BWIs) and the benefits claimed from the
rules-based multilateral trading system have failed to materialise for large
segments of the population in the developing world.
Rapid integration into the global economic system diminishes national
policy autonomy in two ways. First, liberalisation of markets and disman-
tling of restrictions over cross-border movements of goods and services,
money and capital render economic performance highly susceptible to
conditions abroad and weaken the impact of national policy instruments
over macroeconomic and development policy objectives. Second, inter-
national rules and obligations diminish sovereign control over national


* Special Economic Advisor, South Centre, Geneva, Switzerland. This chapter
is an abridged version of Akyüz (2009) as a background paper for Trade and
Development Report, 2006. The author ...