Globalization and fragmentation in the international economy

Abstract

Globalization is moving much more rapidly in finance than in international trade and production. The international financial system is at present undergoverned. Necessary public goods — in furtherance of the objectives of stability, order, equity and efficiency in the global economy — are undersupplied. The world economy would benefit from stronger and more democratic macroeconomic and financial management, preferably centred in the International Monetary Fund. Development finance might best be decentralized from its present over‐concentration in the World Bank. The Chrétien Government has an opportunity, as host of the Group of Seven Summit, to lead the way to a credible and representative review of global economic governance.