Multinational Management

How far will International Economic

Integration go?

Team : Rachit Srivastava | Viraj Narendra Patil | Anjan Kumar | Anu Prakash | Charles Rachelson | Villaverde Carlos
Author’s viewpoints
• Perfectly integrated market restricted by
national sovereignty

• International economic integration, nation

state and mass politics cannot co exist

• 2/3 will remain ; most likely nation-state

system disappears
Markets are not perfectly integrated
• Far from perfectly integrated market
– National borders have depressing effects on
commerce (US Canada, India China trade policies)
– International price arbitrage in tradable
commodities occur slowly why?
• Home Bias , I=S
• Restrictions on international mobility of labor
• Local relevance – cultural issues Amazon UK vs. US
– Political and legal systems – contract enforcement
• Fear of social ostracism – ethnic network advantage
• International markets vs. local politics
 Parallel framework for determining the future
direction

Retain Remove Effects

International Economic Nation- Global federalism
Integration & Mass state National govt. power restricted world govt. – world market
politics Politics won’t shrink , will relocate
Nation state & Mass Domestic regulation harmonized to international standards
International Economic Politics Govt. compete to attract trade and capital inflows
Integration Golden Straitjacket – ruling – opposition parties
Mass Politics IEI Countries dance to own tune after removing border restrictions
Nation-State GATT negotiation –gaping exceptions
Western Europe – Social insurance
Japan – Distinctive Capitalism
China – Private initiative
Future Outlook - Which one gets dropped?
• Author bets on global federalism, why?
– Technological progress
– Consumerism (Unwillingness to give up goodies &
efficiency)
– Accountability of elected representatives
• What could happen
– Perceived losers from economic integration (labor
groups and environmentalist)
– Perceived winners (Exporters, MNCs, Investors)
– Win –win for both with supranational rules
• Global federalism : Amalgamation of traditional
form of governance with modern legislative
bodies (Global govt. with local representatives)
Thank You