Over four decades, from the 1970s until the early 2000s, convergence in per capita incomes accompanied increased economic and political openness worldwide, suggesting a positive three-way interaction between indicators of globalization, good governance and relative development. There is also evidence that the quality of policy design and the speed of execution of structural reforms is part of good national governance. In that spirit, this paper looks at the implications of the financial crises of the last decade on international governance. It claims that the European Union turning inward while Germany chairs the G20 would trump the United States appearing more skeptical than China, the previous chair, about the virtuous cycle of governance, globalization and development. Moreover, the complementarity of reforms within and between nations is crucial for both the European Union and the euro zone to continue having global political and economic salience. It suffices to say that inward-looking EU countries, no matter how large, would frustrate the social, democratic and security aspirations of their citizens, including those of the United Kingdom. The perspective of Portugal, a mid-sized founding member intent on being a “good student” of regional integration, takes into account that, in spite of the successful completion of the adjustment program in 2014 and a “feel good” factor prevailing about the minority government in place since late 2015, economic prospects remain more uncertain than they would if structural reforms had been sustained.
Reform Complementarity and Policy Coordination in Europe: A View from Portugal
CIGI Paper No. 132