As Karl Polanyi observed many years ago, if the dislocation created by an open market goes beyond a certain point, protectionism is society’s natural response.2 So a central element of efforts to raise productivity growth – and build a dynamic global economy – must involve responding to these concerns about openness. And this is a feat countries cannot accomplish by themselves.
Although domestic welfare policies are, of course, essential to the task, a commitment to working together through multilateral institutions is just as important. This is because fears about fairness, safety and equity ultimately reflect a lack of trust in other countries’ regulation and enforcement.