Global Economic Governance: The Case of Trade, Economic Development, and AI | Douglas Lippoldt

The global economy has been governed by a system of multilateral and regional accords and institutions developed during the post-World War II period. The results have been impressive, though incomplete. For example, since the establishment of the World Trade Organization in 1995, globalization has been associated as one contributing factor in the greatest decline in poverty in human history, moving some 1.4 billion people out of extreme poverty. The system has ensured that smaller nations have a say in global governance and it has provided pathways for them to challenge abuses. Yet, in recent years challenges have emerged via a populist backlash against globalization and global governance institutions. In the aftermath, the United States has withdrawn from a number of multilateral and regional institutions (e.g., UNESCO and UNCTAD), obstructed the functioning of others (e.g., World Trade Organization), and withdrawn from the Trans-Pacific Partnership agreement (a relatively progressive accord covering issues such as environment and labor protections). In addition, the US launched a multi-dimensional trade war in contravention of its remaining international commitments. And, there are other manifestations of this backlash in other parts of the world (e.g., Brexit in the United Kingdom; multiyear delays in conclusion of the EU-Mercosur trade agreement). Now, entering the scene, we have a new general purpose technology in the form of Artificial Intelligence, which offers a tremendous potential upside for productivity. But, it also poses a potential risk in terms of economic dislocation and safety. And, AI lacks a coherent, comprehensive global governance framework.

In his presentation, Doug Lippoldt will illustrate manifestations of these systemic challenges using a sectoral case study approach focused on a set of middle-income developing countries striving to engage more deeply in the AI economy. The sample will include countries in Asia, Africa, and Latin America. What is their current situation with respect to engagement in the AI sector? What domestic policy settings are associated with local business development in the AI sector? Are there prospects for these countries to reduce their dependence on the AI superpowers via co-operation with other advanced economies working to combat their own potential AI marginalization by the US and China (e.g., Japan, Canada, and the United Kingdom)? How can these developing countries engage and have a say more directly in the emerging AI governance framework (such as it is)? Given the anticipated importance of AI in the future global economy, these issues are expected to matter materially to well-being in the case study countries (and potentially in their regional peers, as well).