Dis-embedding Liberal Internationalism
The premise of the postwar global political economy under the Bretton Woods system was that economic integration was desirable, but risky. Embedded liberalism enabled governments to embrace global trade while minimizing the vulnerability and economic dislocation that might follow. The premise of the post-Bretton Woods global world order was also liberal, holding that further increasing economic integration would increase popular welfare. What unites these two eras of the postwar global economy is the common understanding that economic integration—if it generated material prosperity—would be politically self-sustaining. Voters would realize the gains of economic integration, and would reward politicians for making integration work.
This essay asks what happens to a global liberal order if economic interests are not decisive in explaining economic policy. This may be the case if voters come to vote for identity-based reasons, or alternatively, if the winners from integration are less sensitive to the gains from integration than the losers are from the losses. In either of these worlds, economic integration is no longer politically self-sustaining. Assuming that popular sovereignty through democratic elections is to be preserved, re-embedding liberalism in the post-Bretton Woods global political economy requires either changing how voters understand their interests or balancing economic integration with national autonomy. There are few signs that either of these is possible, at least in the short term.
Link to full paper here.