Ways out of the Globalization Trilemma

Abstract

Abstract Based on Rodrik’s diagnosis of a “globalization trilemma” in designing the institutions of international economic exchange, this chapter suggests a solution that applies Sen’s argument favoring realization-focused comparisons over transcendental institutionalism in evaluating institutions. In the paradigm of deliberative trade policy, this contribution approaches the World Trade Organization (WTO) as a regime of deliberation, reaching beyond the scope of interactions with civil society. This prepares the ground for normative principles of WTO reform that shift the emphasis from efficiency to justice, mainly in the procedural sense. The central operational criterion is the inclusiveness of international trade and trade policy. This is applied on the issues of multilateralism versus regionalism and the design of the dispute settlement process. A WTO renewed under the auspices of deliberative trade policy can meet the challenges of new trade policy issues such as coordination of regulatory regimes under the conditions of rapid and unpredictable technological change, and can resolve the tension between democracy and globalization as laid out in the globalization trilemma.