Dani Rodrik on the world political trilemma

You cannot have a fully globalized world economy without a significant amount of political integration and transnational cooperation.

“the political trilemma of the world economy”: economic globalization, political democracy, and the nation-state are mutually irreconcilable. We can have at most two at one time. Democracy is compatible with national sovereignty only if we restrict globalization. If we push for globalization while retaining the nation-state, we must jettison democracy. And if we want democracy along with globalization, we must shove the nation-state aside and strive for greater international governance.

The political trilemma can be used to explain the major problems within the EU. It can also explain some of the key international finance issues concerning China and the dollar. How much international governance should exist? It is hard to say, but we can agree that the concept of the nation-state will have to change. We cannot have it all and we have to recognize the limitations between forms of government and globalization.