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The ‘Political trilemma’ and the crisis in the West
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Context
The crisis of democracies in the western world — marked by deepening political polarisation, rising populism, mistrust in institutions, and insular policies — is increasingly seen as a real-world manifestation of Dani Rodrik’s "political trilemma of the world economy," highlighting the fundamental tensions between globalisation, national sovereignty, and mass democracy.
Rodrik’s Political Trilemma:
- Definition of the Trilemma: Dani Rodrik's 2000 paper "How Far Will International Economic Integration Go?" proposed that countries can achieve only two out of three goals — deep globalisation, national sovereignty, and mass democracy — but not all simultaneously.
- Limited Globalisation: Despite widespread globalisation narratives, real international economic integration remains restricted due to national barriers, transaction costs, and protectionist policies.
- Transition from Theory to Practice: Initially academic, Rodrik's framework is now manifesting in real political and economic crises, especially in the West where balancing all three goals has proven unachievable.
The Three Choices of the Trilemma and Their Manifestations
- Democracy + Globalisation (Sacrificing Sovereignty): The European Union serves as an example where countries ceded control over key policies, leading to economic success but fuelling nationalist resentment — visible in Brexit and the rise of far-right politics.
- Globalisation + Sovereignty (Sacrificing Democracy): Countries restrict popular political influence by empowering technocratic institutions like independent central banks; backlash examples include IMF-driven fiscal measures in Kenya that compromised public welfare.
- Democracy + Sovereignty (Limiting Globalisation): Developing nations like India, and East Asian countries like China, have prioritized domestic policies over unfettered globalisation, fostering high growth but often at the cost of political freedom and restricted individual rights.
The Current Crisis in the West:
- Economic Winners and Losers: Globalisation uplifted overall living standards but wiped out manufacturing jobs in regions across the U.S., U.K., and Europe, creating disenchantment among left-behind populations.
- Rise of Populism and Insular Policies: Leaders like Donald Trump, Geert Wilders, and Viktor Orbán leveraged these grievances, advocating protectionism, immigration control, and retreat from global commitments like climate action.
- Urgent Need for New Models: Without carefully navigating the trade-offs between sovereignty, democracy, and globalisation, Western democracies risk prolonged social unrest, institutional decay, and worsening inequality.
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