ABSTRACT
The crossing of national borders is the fundamental character of international economic activities. This chapter discusses issues in more principal terms and then in the context of the major existing global and regional institutions that deal with economic globalization. The basic argument for the existence of a globalisation paradox is that full economic integration, dubbed as hyper-globalisation, limits the policy space at the national level. In such a ‘flat world’ nation states are under the discipline of a fully globalised market – the ‘golden straitjacket’. The European Union as a supranational institution is an interesting application of the political trilemma. If free global markets would benefit all – at least after losers from globalisation are compensated sufficiently – there would be no conflict between global economic integration and democracy. Standard trade theory suggests that jobs losses in one industry will be overcompensated by the creation of new jobs in other industries.
