Joseph Stiglitz, Michael Spence and a global team of leading thinkers are calling for new thinking & new rules for the world economy
EDINBURGH, U.K.—Following the dramatic political shocks to the industrialized world in 2016, worsening global poverty and inequality, and inadequate public and private sector responses to the challenges that continue to plague the world’s economy 10 years after the financial crisis, the Institute for New Economic Thinking (INET) has initiated a Commission on Global Economic Transformation (CGET), with support from the Center for International Governance Innovation (CIGI). The effort will be led by Nobel Prize-winning economists Joseph Stiglitz and Michael Spence.
As an independent entity, the Commission on Global Economic Transformation (CGET) is the first commission of its kind, initiated at a critical moment for the global economy. As political distrust and xenophobia are rising in the developed world in response to an economic system that serves only a very few wealthy people, developing countries continue to search for paths to prosperity, and people everywhere in the world are struggling with the challenges posed by widening inequality, technological disruption, and climate change. These problems are compounded by the ineffectiveness of current policy tools in many contexts, raising questions about the role of the state, of civil society, and of individuals along with national and international governance frameworks.
The CGET’s work—commissioning papers, synthesizing existing research and convening international working sessions in China, India, and other locations—will result in a final report in 2019 summarizing its findings and recommendations. Reflecting the consensus view of the Commissioners, the report will include an examination of problems and emerging crises in the world economy and apply the research findings and conclusions reached at CGET meetings to concrete policy challenges in specific countries and regions of the world.
The Commission will strive to ensure its report informs national governments and international organizations about the profound challenges facing us and outline a path forward to inclusive and sustainable global prosperity. To that end, CGET will convene meetings with elected officials and policymakers in countries around the world to share the report’s recommendations.
The Commission will tackle issues from macroeconomic balances to rethinking globalization, and from climate change to technology and the future of work. Among these core areas, it will focus on:
- Slow and stagnant growth in advanced economies;
- Continuing inadequacies with the international financial system;
- Disruptions to work, especially from new technology;
- Widening income and wealth inequality in the face of globalization and technological disruption;
- Political and social polarization resulting from economic and governmental failures to deliver inclusive prosperity;
- Trade and the ineffectiveness of traditional development strategies for emerging economies, given the changes in technology and global supply chains;
- Climate change;
- Increased migration, often driven by despair caused by economic and political disruption in developing countries, unresponsive governments, slow job growth, and climate change.
Joining the Commission are some of the world’s leading economists, policy experts and thought leaders. They include:
- Robert Johnson, President of INET and Former Chief Economist of the U.S. Senate Banking Committee;
- Lord Adair Turner, Chairman of INET and former chairman of the UK Financial Services Authority;
- Nelson Barbosa, Professor of Economics at the São Paulo School of Economics of the Getulio Vargas Foundation, Adjunct Professor at the Federal University of Rio de Janeiro, and former Brazilian Minister of Finance;
- Kaushik Basu, Professor of Economics at Cornell University and former Senior Vice-President and Chief Economist of the World Bank;
- Peter Bofinger, Professor of Monetary and International Economics at Würzburg University and a member of the German Council of Economic Experts;
- Winnie Byanyima, Oxfam International executive director; former member of the Ugandan Parliament, African Commission and Director of Gender and Development at the United Nations Development Program;
- Mohamed El-Erian, Chief Economic Advisor, Allianz, and former chair of U.S. President Obama’s Global Development Council;
- Dr Gaël Giraud, Economist and senior researcher at C.N.R.S. (French national center for scientific research);
- James Manyika, Director of the McKinsey Global Institute;
- Rohinton Medhora, President of the Centre for International Governance Innovation (CIGI);
- Mari Pangestu, Minister of Tourism and Creative Economy, Republic of Indonesia;
- Danny Quah, Professor of Economics at the Lee Kuan Yew School of Public Policy, National University of Singapore;
- Dani Rodrik, Professor of International Political Economy at Harvard’s John F. Kennedy School of Government, and President-Elect of the International Economic Association;
- Eisuke Sakakibara, Professor of Economics at Keio University and former Japanese Vice Minister of Finance for International Affairs;
- Andrew Sheng, Distinguished Fellow of Fung Global Institute, chief adviser to China Banking Regulatory Commission, and former deputy chief executive of Hong Kong Monetary Authority;
- Beatrice Weder di Mauro, Distinguished Fellow in Residence at Emerging Markets Institute of INSEAD Singapore, Professor of Economics, Chair of Economic Policy and International Macroeconomics at the University of Mainz, Germany and former member of the German Council of Economic Experts;
- Yu Yongding, former president of the China Society of World Economics and director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences; former member of the Monetary Policy Committee of the People’s Bank of China.
Commenting on the Commission’s launch, Robert Johnson, President of INET said:
“We are establishing the Commission because the existing paradigm can’t meet the challenges we face. That paradigm romanticizes unfettered markets while it overestimates the capacity of national governments to address human problems—at a time when the domain of the sovereign is smaller than the scope of the market. Bringing together some of the world’s leading economic experts and thinkers, we will dig deeply into pressing issues societies around the world are struggling with. The Commission for Global Economic Transformation will strive to offer not only new analytical frameworks to understand these problems, but also sustainable paths forward for governments and societies around the world.”
Commission Co-Chair Professor Joseph Stiglitz, commenting on the focus areas of the commission said:
“We need new rules and coordinated governance to address destructive tendencies rapidly emerging in the global economy, and to protect human communities subject to them. Whether it comes to reckoning with widening inequality, climate change or stagnating growth, it’s clear that our international governance frameworks are outdated and need to be reconceived in a globally interdependent world. The Commission looks forward to sharing our work with governments around the world to aid them in tackling these challenges to economies and our social fabric.”
Commission Co-Chair Professor Michael Spence added:
“The Commission has come together to address a number of challenges. One is rising inequality in growth patterns and increasing social, political, and economic upheaval. We suspect this has contributed to centrifugal forces within societies and across national boundaries. Political polarization in the U.S. and across Europe, coupled with widespread global poverty and inequality, may undermine our ability to address these challenges in a vigorous and pragmatic manner. A second set of challenges relates to the impact of rapidly evolving digital technologies on economies, jobs, and needed skills. We hope the Commission’s research and findings will help guide governments, international institutions, businesses, and CSO’s in coming together to address these challenges.”
Commissioner Winnie Byanyima added:
“Nothing short of a ‘Global Economic Transformation’ is needed to urgently reverse a long-term global inequality crisis and build a more human economy that benefits everyone, not the privileged few. It is my honor to join this esteemed Commission on behalf of Oxfam and to amplify the voices of those people we work with facing poverty—most of all women across the South. We must advance the ideas that lead to fairer societies in which work is dignified, taxation is fair, where businesses work in the interests of workers and producers, and in which governments are truly accountable to their people.”
Commissioner Rohinton Medhora added:
“The challenges this Commission will take on are central to the course of human welfare. These complex topics are exactly what INET and CIGI were created to tackle, and I look forward to working alongside this powerful group of commissioners.”