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Dani Rodrik

Dani Rodrik

I am an economist, and a professor at the Harvard Kennedy School. My most recent book is Economics Rules: The Rights and Wrongs of the Dismal Science (Norton, 2015). I was born and grew up in Istanbul, Turkey. I still follow Turkish politics very closely, as you will find out if you spend any time with this blog.

Articles by Dani Rodrik

The G7 Tax Clampdown and the End of Hyper-Globalization

16 days ago

The G7 agreement on taxation of global corporations still needs formal approval from a wider set of countries, and there remain many details to be worked out for it to be effective. Nonetheless, it would not be farfetched to describe the deal as historic.

CAMBRIDGE – On June 5, the world’s leading economies announced an agreement that will bolster their ability to raise taxes on global corporations. The agreement still needs formal approval from a wider set of countries, and there remain many details to be worked out for it to be effective. Nonetheless, it would not be farfetched to describe the deal as historic.
Making America Global Again

Al Drago/Pool/Getty Images

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Beware Economists Bearing Policy Paradigms

May 11, 2021

US President Joe Biden’s administration has embarked on a bold and long-overdue departure from the economic policy orthodoxy that has prevailed in the US and much of the West since the 1980s. But those who are seeking a new economic paradigm should be careful what they wish for.

CAMBRIDGE – Neoliberalism is dead. Or perhaps it remains very much alive. Pundits have been calling it both ways these days. But either way, it is hard to deny that something new is afoot in the world of economic policy.

Waking the Norwegian Green Giant

Sustainability Now

JAN KARE NESS/AFP via Getty Images

Will Corporate Greed Prolong the Pandemic?

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How Economists and Non-Economists Can Get Along

March 9, 2021

Understanding the advantages and limitations of economists’ methods clarifies the value they can add to analysis of non-economic questions. Equally important, it underscores how economists’ approach can complement but never replace alternative, often qualitative methods used in other scholarly disciplines.

CAMBRIDGE – Economists have never been shy about taking on the big questions that disciplines such as history, sociology, or political science consider their own province. What have been slavery’s long-run implications for contemporary American society? Why do some communities exhibit higher levels of social trust than others? What explains the rise of right-wing populism in recent years?

The COVID

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Poor Countries’ Technology Dilemma

February 8, 2021

Recent patterns of technological change in the rich world have made it more difficult for low-income countries to develop and converge with income levels in the developed world. These changes have contributed to deepening economic and technological dualism even within the more advanced segments of developing countries’ economies.

CAMBRIDGE – Economic development relies on the creation of more productive jobs for an ever-rising share of the workforce. Traditionally, it was industrialization that enabled poor countries to embark on this transformation. Factory work may not have been glorious, but it enabled farmers to become blue-collar workers, transforming the economy and society as a result.

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Europe’s China Gambit

January 11, 2021

The new EU-China agreement underscores a fundamental question of the post-pandemic world order: How should strategic and economic relations between major powers with very different institutional and political arrangements be managed? Can democracies remain true to their values while engaging in trade and investment with China?

CAMBRIDGE – Just as 2020 was ending, the European Union and China announced the completion of a Comprehensive Agreement on Investment (CAI) between the two economic giants. This “will be the most ambitious agreement that China has ever concluded with a third country,” boasted the official announcement from the European Commission.

Remove and Ban Trump Now

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How Biden Can Create Good Jobs

December 8, 2020

Long before the pandemic, the United States had been losing middle-class jobs, owing to automation, deindustrialization, global competition, and the advent of the “gig economy.” Fortunately, if President-elect Joe Biden’s administration heeds the evidence about what works, it can mitigate this trend and boost economic recovery.

CAMBRIDGE – The COVID-19 pandemic will leave the US economy with a deeply scarred labor market. More than 20 million jobs have been lost during the crisis, and only half have been regained. Not surprisingly, job losses have hit disadvantaged and less educated workers especially hard.

Can Joe Biden’s America Be Trusted?

Mark Makela/Getty Images

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The Public’s Business

October 9, 2020

By promoting behavioral norms that balance market and society, "stakeholder capitalism" is supposed to enable private firms to fill the vacuum created by the decline of traditional forms of regulation by national governments. Ultimately, though, the only viable solution is to make business itself more democratic.

CAMBRIDGE – Fifty years ago, Milton Friedman published an article in the New York Times that articulated what has come to be known as the Friedman doctrine: “the social responsibility of business is to increase its profits.” It was a theme he had developed in his 1962 book Capitalism and Freedom, where he argued that the “one and only” responsibility business owes to society is the pursuit of profits within

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The Coming Global Technology Fracture

September 8, 2020

Today’s international trade regime was not designed for a world of data, software, and artificial intelligence. Already under severe pressure from China’s rise and the backlash against hyper-globalization, it is utterly inadequate to face the three main challenges these new technologies pose.

CAMBRIDGE – The international trade regime we now have, expressed in the rules of the World Trade Organization and other agreements, is not of this world. It was designed for a world of cars, steel, and textiles, not one of data, software, and artificial intelligence. Already under severe pressure from China’s rise and the backlash against hyper-globalization, it is utterly inadequate to face the three main challenges these new

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Democratizing Innovation

August 11, 2020

Policymakers and the public at large understand the importance of innovation to economic growth and well being. What is less well appreciated is the degree to which the innovation agenda has been captured by narrow groups of investors and firms whose values and interests don’t necessarily reflect society’s needs.

CAMBRIDGE – Innovation is the engine that drives contemporary economies. Living standards are determined by productivity growth, which in turn depends on the introduction and dissemination of new technologies that allow an ever-wider variety of goods and services to be produced with fewer and fewer of our planet’s resources.

How to Prevent the Looming Sovereign-Debt Crisis

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China as Economic Bogeyman

July 9, 2020

Many Western economists presume that governments are not very good at identifying industries that merit support, and that domestic consumers and taxpayers incur the bulk of the costs. By the same logic, if Chinese policymakers effectively targeted activities where social benefits exceed private benefits, then it is not clear why foreigners should complain.

CAMBRIDGE – As COVID-19 spread from China to Europe and then the United States, pandemic-stricken countries found themselves in a mad scramble for medical supplies – masks, ventilators, protective garments. More often than not, it was to China that they had to turn.

Understanding the Pandemic Stock Market

Drew

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Economics’ race (and other) problems

June 13, 2020

There’s been much discussion in recent days about Economics’ race problem. Some of what has come out is quite disturbing. I have not said much, but I have listened and thought. Here are a few reflections I want to add.
It doesn’t surprise me that the field, as a whole, reflects the ingrained attitudes and practices of the society of which it is part. But there are some features of the discipline that magnify and aggravate the problem.
First, Economics is clubby. While good research does get recognized, the ability to produce good research depends on the networks one has access to. If you don’t start with those networks in place – a Ph.D. from a top department, a well-recognized advisor — you start with a significant handicap that is difficult to overcome.
Second, the field is very

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The Post-Pandemic Social Contract

June 11, 2020

While many recent proposals for reforming capitalism would substantially change the way our economies operate, they do not fundamentally alter the narrative about how market economies should work; nor do they represent a radical departure for economic policy. Most critically, they elide the central challenge we must address: reorganizing production.

CAMBRIDGE – COVID-19 has exacerbated deep fault lines in the global economy, starkly exposing the divisions and inequalities of our current world. It has also multiplied and amplified the voices of those calling for far-reaching reforms. When even the Davos set is issuing calls for a “global reset of capitalism,” you know that changes are afoot.

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The Post-Pandemic Social Contract

June 11, 2020

While many recent proposals for reforming capitalism would substantially change the way our economies operate, they do not fundamentally alter the narrative about how market economies should work; nor do they represent a radical departure for economic policy. Most critically, they elide the central challenge we must address: reorganizing production.

CAMBRIDGE – COVID-19 has exacerbated deep fault lines in the global economy, starkly exposing the divisions and inequalities of our current world. It has also multiplied and amplified the voices of those calling for far-reaching reforms. When even the Davos set is issuing calls for a “global reset of capitalism,” you know that changes are afoot.

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Technology for All

March 6, 2020

Technological change does not follow its own direction, but rather is shaped by moral frames, incentives, and power. If we think more about how innovation can be directed to serve society, we can afford to worry less about how we should adjust to it.

CAMBRIDGE – We live in a world with an ever-widening chasm between the skills of the “average” worker and the capabilities demanded by frontier technologies. Robots, software, and artificial intelligence have increased corporate profits and raised demand for skilled professionals. But they replace factory, sales, and clerical workers – hollowing out the traditional middle class. This “skills gap” contributes to deepening economic inequality and insecurity and ultimately to political

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New Firms for a New Era

February 12, 2020

In recent years, large corporations have become increasingly aware that they must be sensitive not only to the financial bottom line, but also to the social and environmental effects of their activities. But societies should not allow firms’ owners and their agents to drive the discussion about reforming corporate governance.

CAMBRIDGE – Firms are the cornerstone of the modern economy. The bulk of production, investment, innovation, and job creation takes place within them. Their decisions determine not only economic performance, but also the health and wellbeing of a society. But who should govern firms, and on whose behalf should those decisions be made?
Money and Empire

PS OnPoint

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The Changing Face of Economics

January 10, 2020

Economists necessarily lack evidence about alternative institutional arrangements that are distant from our current reality. The challenge is to remain true to empiricism without crowding out the imagination needed to envisage the inclusive and freedom-enhancing institutions of the future.

CAMBRIDGE – Responding to pressures from within and without, the economics profession is gradually changing for the better. Not surprisingly, the populist backlash sweeping advanced democracies in recent years has produced some soul searching in the discipline. After all, the austerity, free-trade deals, financial liberalization, and labor market deregulation that caused it rested on the ideas of economists.
Was Killing

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Tackling Inequality from the Middle

December 10, 2019

The rise of populist movements and street protests from Chile to France has made inequality a high priority for politicians of all stripes in the world’s rich democracies. But a fundamental question has received relatively little attention: What type of inequality should policymakers tackle?

CAMBRIDGE – Inequality looms larger on policymakers’ agenda today than it has in a long time. With the political and social backlash against the established economic order fueling the rise of populist movements and street protests from Chile to France, politicians of all stripes have made the issue an urgent priority. And whereas economists used to fret about the adverse effects of egalitarian policies on market incentives or the

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Tackling Inequality from the Middle

December 10, 2019

The rise of populist movements and street protests from Chile to France has made inequality a high priority for politicians of all stripes in the world’s rich democracies. But a fundamental question has received relatively little attention: What type of inequality should policymakers tackle?

CAMBRIDGE – Inequality looms larger on policymakers’ agenda today than it has in a long time. With the political and social backlash against the established economic order fueling the rise of populist movements and street protests from Chile to France, politicians of all stripes have made the issue an urgent priority. And whereas economists used to fret about the adverse effects of egalitarian policies on market incentives or the

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How to Get Past the US-China Trade War

November 7, 2019

China and the United States, like all other countries, should be able to maintain their own economic model. But international trade rules should prohibit national governments from adopting “beggar-thy-neighbor” policies that provide domestic benefits only by imposing costs on trade partners.

CAMBRIDGE – China’s economic rise poses significant political and strategic challenges to the existing global order. The emergence of a new superpower in Asia has inevitably produced geopolitical tensions that some have warned may eventually result in military conflict. Even absent war, the hardening of China’s political regime, amid credible allegations of myriad human-rights abuses, raises difficult questions for the West.

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Announcing the US-China Trade Policy Working Group

October 27, 2019

Concerned about where the US-China trade relationship is going, we recently formed a “US-China Trade Policy Working Group.” Yang Yao, Jeff Lehman and I are co-conveners. Other members are Meredith Crowley, Robert Howse, Jiandong Ju, Feng Lu, Justin Yifu Lin, Eric Maskin, and Rob Staiger. We released our statement today.
The statement is signed by 27 additional economists and legal scholars, including Philippe Aghion, Kaushik Basu, Robert Engle, Gang Fan, Robert Frank, Gene Grossman, Gordon Hanson, Ann Harrison, Kala Krishna, Ned Phelps, Alvaro Santos, Greg Shaffer, Anne-Marie Slaughter, Mike Spence, Joe Stiglitz, Michael Trebilcock, David Trubek. That is 5 Nobelists in all, in case you are counting!
The basic idea is that we need a different narrative about how the two nations can

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Democracy on a Knife-Edge

October 9, 2019

The failure to protect minority rights is a readily understood consequence of the political logic behind the emergence of democracy. What requires explanation is not the relative rarity of liberal democracy, but its existence.

CAMBRIDGE – In Mohammed Hanif’s novel Red Birds, an American bomber pilot crashes his plane in the Arabian desert and is stranded among the locals in a nearby refugee camp. He finds himself talking about thieves with a local shopkeeper. “Our government is the biggest thief,” he explains. “It steals from the living, it steals from the dead.” The shopkeeper replies, “Thank God we don’t have that problem. We just steal from each other.”
The Impeachment Trap

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Should We Worry About Income Gaps Within or Between Countries?

September 10, 2019

The rise of populist nationalism throughout the West has been fueled partly by a clash between the objectives of equity in rich countries and higher living standards in poor countries. Yet advanced-economy policies that emphasize domestic equity need not be harmful to the global poor, even in international trade.

CAMBRIDGE – At the beginning of classes every autumn, I tease my students with the following question: Is it better to be poor in a rich country or rich in a poor country? The question typically invites considerable and inconclusive debate. But we can devise a more structured and limited version of the question, for which there is a definitive answer.
The Trump Narrative and the Next

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Follow my commentary

August 13, 2019

Even though I post here occasionally, my regular monthly pieces are published on the Project Syndicate website and you can read them here. For a full list of my opinion pieces, go here. My research papers and books are here and here, respectively. Finally, if you want to follow me in the news, check out here.

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Elizabeth Warren’s Trade Makeover

August 8, 2019

Senator Elizabeth Warren’s plan is not inherently protectionist. But if it occasionally requires some degree of trade protection – to shield labor, local communities, the tax regime, or environmental rules – it would be because there is a domestic program worth protecting.

CAMBRIDGE – US Senator Elizabeth Warren’s new trade plan solidifies her credentials as the Democratic presidential candidate with the best policy ideas. United States trade policy has long been shaped by corporate and financial interests, enriching those groups while contributing to the erosion of middle-class earnings and undermining many local communities. Warren’s plan represents a radical reimagining of trade policy in the interests

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Some (very brief) words for graduates

July 29, 2019

I was asked to provide in less than 3 minutes some inspirational and aspirational comments to graduates at the University of York this month, on the occasion of being awarded an honorary degree from the University. This is what I intended to say, though I think I forgot to include some of it when I rose up to make my remarks.
As graduates, you are part of a small minority of the world’s population whose lives will be shaped by decisions you make, individually and collectively, instead of decisions made for you.
What can an economist like me advise you? As economists, our advice has not always been, shall we say, problem-free. As a great economist once said, god created economists to make astrologers look good. I can only offer a few principles I’ve tried to live by.
Question the

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What’s Driving Populism?

July 9, 2019

If authoritarian populism is rooted in economics, then the appropriate remedy is a populism of another kind – targeting economic injustice and inclusion, but pluralist in its politics and not necessarily damaging to democracy. If it is rooted in culture and values, however, there are fewer options.

CAMBRIDGE – Is it culture or economics? That question frames much of the debate about contemporary populism. Are Donald Trump’s presidency, Brexit, and the rise of right-wing nativist political parties in continental Europe the consequence of a deepening rift in values between social conservatives and social liberals, with the former having thrown their support behind xenophobic, ethno-nationalist,

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Can Global Rules Prevent National Self-Harm?

June 11, 2019

Most policy mishaps in the world economy today – as in the case of US President Donald Trump’s tariffs – occur as a result of failures at the national level, not because of a lack of international cooperation. And, with the exception of two types of cases, countries should be allowed to make their own mistakes.

CAMBRIDGE – US President Donald Trump has used national security as a justification for his tariffs on steel imports, his threatened tariff hikes on autos, and the tariffs he recently vowed to impose on Mexican imports. “If you don’t have steel, you don’t have a country,” he declared (to cite just one example). While Trump’s national-security claim seems absurd on the face of it, it

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An Industrial Policy for Good Jobs

May 8, 2019

So-called productive dualism is driving many contemporary ills in developed and developing countries alike: rising inequality and exclusion, loss of trust in governing elites, and growing electoral support for authoritarian populists. But much of the policy discussion today focuses on solutions that miss the true source of the problem.

CAMBRIDGE – In developed and developing countries alike, a combination of technological and economic forces has created a segment of advanced production, concentrated in metropolitan areas, that now co-exists with a mass of relatively less productive activities and communities. This productive dualism lies behind many contemporary ills: rising inequality and exclusion, loss of trust in

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Peaceful Coexistence 2.0

April 10, 2019

Today’s Sino-American impasse is rooted in “hyper-globalism,” under which countries must open their economies to foreign companies, regardless of the consequences for their growth strategies or social models. But a global trade regime that cannot accommodate the world’s largest trading economy is a regime in urgent need of repair.

CAMBRIDGE – The world economy desperately needs a plan for “peaceful coexistence” between the United States and China. Both sides need to accept the other’s right to develop under its own terms. The US must not try to reshape the Chinese economy in its image of a capitalist market economy, and China must recognize America’s concerns regarding employment and technology leakages, and accept

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The Case for a Bold Economics

March 11, 2019

Although economists are well positioned to imagine new institutional arrangements, their habit of thinking at the margin and sticking close to the evidence at hand encourages an aversion to radical change. But, when presented with new challenges, economists must envision new solutions – as a new group is determined to do.

CAMBRIDGE – At the end of 1933, John Maynard Keynes sent a remarkable public letter to US President Franklin Delano Roosevelt. FDR had taken office earlier that year, in the midst of an economic slump that had pushed a quarter of the labor force into unemployment. He had launched his ambitious New Deal policies, including public works programs, farm subsidies, financial regulation, and labor reforms. He had

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