Managing Globalization

Experts agree that globalization is inevitable, offering both positive and negative effects, and that the major problem is the world’s lack of institutions to contain the negative effects. In 2003, the private-sector arm of the World Bank created the “Equator Principles” in an attempt to fill the missing role. The guidelines cover the social and environmental impact of major projects such as mines, roads and dams. Now an updated version of the principles will go before the board of the World Bank. Some critics suggest that the principles set low standards, as in the case of provisions for peoples displaced by infrastructure projects. Yet models that chase perfection can actually be counterproductive, raising the cost of new roads or water systems. Activists could bully small, private banks to reject such principles, which would allow developers to shop around and avoid the costs of environmental and other standards. In a world awash with capital, this Washington Post editorial says, the “Equator Principles” can make the World Bank relevant, by establishing guidelines and representing a start to managing globalization. – YaleGlobal