Policy evolutions in North American and European capitals have prompted debates about ongoing shifts in global economic governance from a primary emphasis on promoting markets to a more extensive role for the state in steering economic relations. This article interrogates such discourses through the prism of the developmental state and of “green” industrialisation strategies in resource-dependent developing countries. Beyond the diversity of approaches and situations, these strategies aim to promote the development of supply-chain “ecosystems” ranging from innovation to value addition. Adopted in the context of growing demand for energy transition minerals, the strategies challenge trading relations that have long positioned these countries as exporters of raw materials. The article highlights the ways in which international economic law restricts space for such strategies. It argues that while large economies have signalled greater preparedness to depart from established trade rules, developing countries often face harder constraints. These result not just from structural factors but also from longstanding patterns and novel developments in international economic law. The findings call for more granular analyses on what is shifting, where and for whom. From a policy standpoint, the findings call for international arrangements that are more responsive to policy efforts aimed at enabling domestic value addition in resource-dependent countries.
Policy implications
- Rigorously assessing shifts in global economic governance and distilling their policy implications requires fine-grained analyses that consider the specific legal and structural constraints on state action faced by resource-dependent developing countries.
- Aligning international economic law with green-developmental objectives requires states to rethink blanket restrictions on industrial strategy measures and to pursue instead policy approaches supportive of domestic value addition in resource-dependent countries.
- “Green-developmental” policies should eschew narrow approaches that conflate development with industrialisation and should fully integrate social and ecological as well as economic objectives.
Photo by Aron Weerakoon