Market Integration and Governance: How Globalization Spurred a Backlash Against Itself

Critics of globalization associate contemporary economic ills, ranging from growing economic inequality to deindustrialization, with the integration of world markets since 1990. But economic integration also had a political effect: while fueling significant growth, governments in this era found that their autonomy to intervene in domestic markets was severely constrained. This constraint on economic intervention was due to market, institutional, and doctrinal factors. The result was that while the economy grew rapidly, limited political intervention engendered skepticism of both market activities and governance itself on the part of the mass public. We argue that the significant limits on government activism encouraged a backlash against neoliberal economic policies and opened political space for politicians who advocated a nativist and anti-democratic agenda. In short, we argue that the factors that spurred this era of globalization contributed to its hasty demise.