Economic and political world order: Trends, issues and prospects

This paper is extracted from my forthcoming book on the World Order. The main theme relates to the disillusionment in our day following the euphoria at the end of the last century. Globalization, which was heralded as the key to worlwide economic paradise, has not delivered; nor has the world entered a political era of Kantian “perpetual peace” at the “end of history.” New issues have arisen. Vindicating the factor price equalization theorem, increased mobility of technology has eroded the competitiveness of the old industrial countries while improving the economic growth prospects of the developing world. In Western economies, current concerns relate to adjustments to slow growth. On the other hand, although many developing countries are expected to catch up with the material prosperity of the Western world in the next generation or two, it is not clear that they will also provide their inhabitants with higher levels of communal civic life. And on the political front, with the dissolution of the Soviet Union and the weakening of American military power, it is not clear what will replace either the stalemate of the Cold War or the American Hegemony.