One strange and negative fallout of globalisation which seems to have gone unnoticed not just by the laity but also professional economists and political scientists is this. Even if every country becomes more democratic, the world as a whole is firmly on course to becoming less democratic.This paradoxical process is a consequence of globalisation, the increasing ease with which countries can exert influence on the society, economy and politics of one another. It has never been more transparent than in the wake of the East Asian economic crisis, South Asian nuclear tests and also the recent political and military skirmishes around the world, especially the Middle East.What is noteworthy here is that the increase in the power of nations to influence one another has been asymmetric. The well-being of the Cubans, for instance, depends a lot on what the American president does. The United States, because of its enormous international power, can cut off much of Cuba's trade lines, prevent it from exporting goods and can also pursue policies which result in inflationary pressures in Cuba - all without having to step beyond the shores of the US. There is, however, very little Cubans can do to influence the quality of American lives.Similar asymmetries can be found all around the world: India and Sri Lanka; Japan and Korea. If "democracy" means people having the power to elect those who have influence over their lives, then even if one by one each country adopts democratic procedures for choosing its leader, as long as this process happens to be accompanied by an increasing globalisation it is entirely possible that the world as a whole will become less democratic.This is because we do not have a system of transnational voting. Thus a more democratic Iraq may be able to vote in favour of or against Saddam Hussein. But Iraqis have no say in the choice of the US president, even though the latter has an enormous influence on their lives. Hence, the current policy in the US and elsewhere to push for greater democracy in every country may not be good enough for establishing more democracy in the world.Strictly speaking, for greater global democracy we need to give people in weaker nations a say in the choice of leaders of stronger nations. Now that is not about to happen. So the trend of global de-democratisation is probably going to be with us for some time, with its concomitant tensions.These tensions are most evident in the management of the global economy. Thanks to globalisation, the fates of different economies have become intertwined like never before. A bank in Japan can influence the trajectory of the Korean economy. A crisis in Asia can spark trouble in Brazil.The current system of intervening in these international problems is highly oligarchic, with not even a pretence of democracy. It is not just a linguistic lapse that the standard solution advocated the world over by the International Monetary Fund (IMF) is called the "Washington consensus".The package put together some time ago by the IMF, with backing from the US and Japan, to rescue the South Korean economy was - as was widely recognised - a package meant primarily to help the rescuers. A donor of credit naturally wants to impose conditions to ensure that the borrowing country is able to repay the loan.But when those conditions include virtually unconnected demands - such as the Koreans being required to lift the ban on imports of certain Japanese products or to open up to foreign banks, an old American demand - there is a loss of credibility.Some of the effects of the policy chosen by the more powerful nation for the weaker one may be good for the latter; but that is not the issue here. From the point of view of assessing global democracy what is relevant is that people in weaker nations have no say as to who become the leaders in the powerful ones.What does one do about this? Since the citizens of Iraq being allowed to vote in the next US presidential election or the Koreans in the next Japanese polls is not quite on the cards, one must think of realistic ways to compensate for the retreat of global democracy. Essentially, this means the need for democratically constituted international organisations is greater today than ever before.This will need a vast reconfiguration of agencies such as the IMF, the World Bank and the United Nations, making their leadership structure much more transparently democratic and more distanced from the wealth of the interested parties - just as we do not allow Dhirubhai Ambani to cast several votes in the elections on the ground that he has more money than the next voter.The increasing globalisation of capital markets has made it possible for poor countries to grow at rates that were once beyond anyone's expectation. But it has also brought with it new hazards. The Asian (and increasingly global) economic crisis is simply a reminder that we need better international monitors and new rules of the game to take account of the changed world economy.But for the global monitoring agency to have credibility, it must be recognised as a democratic institution - and not an instrument of global oligarchy.The author is C. Marks professor of economics, Cornell University.Published By: AtMigration Published On: Oct 12, 1998--- ENDS ---
