Risk and the World Market

Abstract

This paper sees ‘new’ market-building in Asia as part of a larger project of the construction of a global market economy, which can be traced back to Adam Smith, and more recently to the founding of a set of global liberal institutions in the post-World War Two period. In the last two decades the global liberal impulse behind the creation of these institutions has gained momentum, in step with the emergence of a ‘world market’ of genuinely global scale. The issue of risk is central to the project of building a world market. Following an introduction to the global liberal project, the first section addresses the question of risk through a critical analysis of the difference between negative risks (both external and internal) that pose a threat to the global liberal project, and the positive risks that the project seeks to embed and incentivize. The second section outlines the treatment of risk in the literature on the ‘political economy of reform’ developed by a number of organic intellectuals who shuttled between leading US universities and the international organizations from the mid 1980s on, and the third provides a detailed analysis of Social Risk Management at the World Bank over the last decade. The conclusion briefly surveys the field of risk management across the wider range of global institutions, and reflects on the implications for ‘building markets in Asia’.