Published in late April by the Peterson Institute for International Economics, "The New Economic Nationalism," authored by Jérémie Cohen-Setton, Madi Sarsenbayev, and Monica de Bolle, offers a timely and critical analysis of a resurgent global trend. This book delves into the historical context, contemporary manifestations, and potential consequences of economic nationalism in the 21st century.For centuries, empires and nation-states have employed protectionist trade and fiscal policies to accumulate wealth. The post-Great Depression and post-World War II era witnessed a consensus favoring international trade liberalization, economic cooperation, and free markets. However, this consensus has demonstrably fractured, giving rise to a “new economic nationalism” characterized by industrial policies, tariffs, and various forms of state support for domestic economies.
The central question the book poses is whether this resurgence of economic nationalism represents a rational response to the perceived failures of globalization, such as unemployment, societal fragmentation, and the marginalization of certain groups. Alternatively, is it a detrimental form of isolationism that threatens global stability and economic growth? The authors challenge readers to consider whether economic nationalism genuinely leads to improved developmental outcomes in both developing and developed nations, or if it more frequently results in corruption, inflation, and resource misallocation.
Through a series of case studies, the book reveals a mixed record of results. In some instances, nationalistic economic policies have demonstrably fostered growth and reduced unemployment, albeit often at the cost of financial inefficiencies. However, in a significant portion of the developing world, these policies have been associated with corruption, debt burdens, inflation, and, ultimately, economic stagnation.
“The New Economic Nationalism” provides a historical and empirical overview of nationalistic economic policies across different eras and geographical regions. The authors emphasize that this trend is not entirely new, having been linked to the formation of modern states and recurring throughout the 18th and 19th centuries in Europe and America, and later in post-colonial nations, particularly in Asia and Africa.
The book clarifies that not all inward-looking policies are necessarily nationalistic in the narrow sense. Socio-economic, environmental objectives, or even temporary measures to mitigate external shocks can drive policies that superficially resemble nationalistic ones. The authors offer a precise definition of economic nationalism, outlining seven key dimensions that define state interventionist policies characteristic of this phenomenon. These include: trade protectionism, restrictions on foreign direct investment, immigration controls, rejection of multilateral constraints, tolerance of market power (especially in fostering “national champions”), vertical industrial policy (sector-specific support), and macroeconomic risk-taking for nationalistic reasons such as economic populism.
Ultimately, the book underscores that the nationalist impulse…
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Written by Noor Eleslam
