Dani Rodrick is an eminent international economist working in the field of
globalization and international trade. He wrote a book called Straight Talk on
Trade where he discussed in length nations, globalizations, trade and the world
economy as a whole. He attempted to answer several questions like:
- Whether democracy, sovereignty and globalisation are compatible?
- Whether the possibility of the combination of all three exist?
- How the combination of all three is putting a constraint on the world
He wrote about the tensions that occur between national democracy and global
markets wherein the States have to choose between the three options ie restrict
democracy to reduce international transaction costs; adopt democracy in such a
way that national sovereignty is lost, or; restrict globalisation to have
democracy. To sum up, Rodrick writes that the Globalisation Trilemma is that it
is impossible to have hyper-globalisation, democracy and national sovereignty
all at once.
Globalisation means the flow of goods and services across the nation's sovereign
boundaries making the world more of an interconnected and interdependent place
to trade, invest and live in. Globalisation has definitely bought the nations
closer to each other but also closed the space of breathing their own's
sovereignty and democratic principles.
Hyper-globalisation is a global market that is as integrated as a national
market is. It means a world economy where national borders are not associated
with any transaction costs on international trade and finance.1 I have further
discussed the inter-relationship of globalisation with sovereignty and
Globalisation And Sovereignty:
Both terms mean the opposite of each other. To elaborate, sovereignty means to
have an independent and autonomous State with no interference from any other
States and Globalisation means opening the doors of State boundaries to welcome
the outputs of other States. Both cannot survive together if taken in a strict
sense. But both are needed in a balanced manner in this transformative century.
If one of them is applied higher than the other then it can negatively affect
Meaning, if a State closes its boundaries and upholds only its sovereignty then
it shall fail to survive alone because of the advancement of technology and
interdependence of other resources. And on the hand, if a State welcomes only
globalisation with open arms, forgetting about its sovereignty then it shall
fail to control its autonomy and its full dependence on others shall push it
back in the competition driver market. Both together are only possible in a
world of "freely floating exchange rates." 2
Globalization And Democracy:
Democracy means the power of people. The power to govern the State comes from
the people and is for the people and of the people. There are rights and duties
for the citizens, freedom of participation, free and fair elections, rule of
law, freedom to form unions, peaceful assembly, freedom of speech and
expression, etc. The policies that are developed are for the welfare of all the
people. The objective is inclusive growth, leaving no one behind.
Whether the policy of the State shall contain globalisation features or not
becomes the decision of the States. Any decision shall be taken keeping in mind
the democratic ideologies that are followed by them. In simple terms, it means
that democracy and globalisation can very well harmoniously co-exist. This is
very well evident in the case of India, being a democratic nation and also a
The only problem that can occur in their co-existence is to what extent a State
would go to change its policies to adopt globalisation regulations. If any
drastic changes are made then that would affect the democratic principles,
harming the will and welfare of the people. Therefore, a balanced inculcation of
globalisation principles is required to maintain democracy.
Professor Rodrick Suggested Three Possible Responses To This Challenge:
- He suggested ignoring the problems that arise due to holding on to
democratic principles and sovereignty. He asks to accept globalisation fully
and face the resulting consequences.
- He suggested framing such strict and similar rules on all that harmonise
trade. He asks to ignore all the negative effects that these rules bring to
- He suggested restricting globalisation at all costs even if that means
losing on trading with other states.
Although the recipe given by Rodrick cannot be fully implemented in the real
world because, in this century, all the nations survive with the support of each
To conclude, the ultimate paradox of globalisation is that a system that moves
in this direction may look like it is retreating from economic globalisation,
but will provide a much more healthy foundation for a global economy.3 A
balanced integration of all the three, globalisation, sovereignty and democracy
shall go a long way toward a prosperous world. A better-managed will be better
- Dani Rodrik, 'Globalisation Dilemmas and the Way Out' (2012) 47 IJIR
- Arthur A. Stein, 'The Great Trilemma: Are Globalisation, Democracy and
Sovereignty Compatible' (2016) 8 IT 297.
- Rodriks (n1).