Global economic governance in question: Africa's adverse position and policy reform
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Date
2009-02
Authors
Van Niekerk, Arno Johan
Journal Title
Journal ISSN
Volume Title
Publisher
University of the Free State
Abstract
In essence, the central focus of this study is the governance of globalisation, and more
specifically, the (supra-national) economic governance of economic gobalisation. At its
core, the challenge concerning globalisation in the 21st century is not to stop the
expansion of global markets. The challenge is to find the rules and institutions for
stronger governance – local, national, regional and global – to preserve the advantages of
global markets and competition, and to provide sufficient space for human, community
and environmental resources to ensure that globalisation works for people – not just for
profits. Unfortunately, at present globalisation is primarily working for the rich nations at
the cost of mainly the poor nations and it is increasingly becoming a source of serious
global instability, which inhibits global economic prosperity for all. Making matters
worse, global economic governance is found to be increasingly inadequate in providing
good governance to the global economy and, in fact, contributes – whether intended or
not – significantly to the marginalisation of the majority of the world’s poor countries.
This, however, is not to suggest that the International Monetary Fund (IMF), the World
Bank and the World Trade Organisation (WTO) only contribute to these countries’
marginalisation as they have, indeed, especially over the last decade, made notable
attempts to help these countries develop and grow economically. The concern is that the
global economic governance that is currently provided is incongruent to the needs for
better supra-national governance as presented by globalisation and marginalisation, in
particular. In the latter’s case, the marginalisation of a region such as Africa is of specific
concern, mainly due to the fact that, as a continent, it best illustrates the serious
significance of the problem of global inequality the global economy is facing.
Hence, at issue in this study are two critical concerns regarding the progression of the
global economy: a governance void, i.e. the inadequacy of global economic governance
arrangements coupled with the declining authority of the nation-state in the global market
place, and global inequality, i.e. the divide that is opening up between the developed and
most of the developing countries, which appears to be perpetuated by globalisation and
the technology revolution, thus making it harder for the latter countries to catch up.
Importantly, this presents the rationale behind the need for structural reform in global
economic governance as well as policy reform in developing countries, most notably
Africa, to ultimately improve the governance of globalisation and the enabling capacity
of a region like Africa – to put itself in a better position to reap more of the benefits of
globalisation. In its investigations, the study found that global economic governance is
indeed severely deficient, that Africa is grossly underdeveloped and that its marginalisation
is worsening, and that structural policy reforms in both Africa and global economic
governance need to be complementary and be based on a clear and agreed-upon set of
norms, goals and principles that is mutually beneficial to the interests of both the
developed and the developing countries. In fact, in the case of global economic
governance, it was found that not only reform, but a remodelling of this system is
required. The key areas investigated in this study include conceptual interpretations and
the co-historical progression of economic thinking and global economic governance,
deficiencies in global economic governance and a number of contributing factors,
Africa’s marginalisation, reform and remodelling of the system of global economic
governance and critical areas where economic reform is most needed in Africa. Finally,
this study is important – as the current global financial crisis is once again revealing –
because there is a pressing need for structural change in global economic governance
arrangements and, given the severity of global inequality, a corresponding change (i.e.
reform) is required on the part of developing countries, especially Africa, to become
more globally competitive and restore some balance to current global asymmetries.
Description
Keywords
Economic policy -- Africa, Globalization -- Economic aspects -- Africa, Economic stabilization, International economic relations, Thesis (Ph.D. (Economics))--University of the Free State, 2008