There are two recurring themes that continue to stir interest in the topic of economic globalization. One concerns the character of the global system that is apparently being created through the integration of production, finance, and trade. Can the world economy be selfequilibrating, as many of the more neoliberal commentators claim, or does it condemn countries caught up in the system to endure destructive swings of capital inflows and outflows? The other theme is the scope left to industrial countries to pursue their own policy preferences. Under what circumstances can governments implement programmes supportive of social protection and productivity, which are more socially ambitious than those anticipated by neoliberalism?

Two recent books address these themes in particular. Global Instability (GI) and Globalization and Progressive Economic Policy (GPEP)footnote make three important points. First, globalization does not have to take a neoliberal form. Economic openness does not require or compel state retreat from social protection and wealth creation. On the contrary, openness is more likely to be sustained and served by effective governance of such processes. Not only do international differences in socio-economic régimes and their management continue to exist; such differences may be quite sustainable in a global economy, thus offering scope for more ‘progressive’ policies at the national level. Second, the domestic institutional context matters: it shapes the way that capital mobility impacts domestically. Indeed, whether and to what extent country X benefits or not from investment flows, foreign direct investment (fdi), and so forth depends to a large degree on the prevailing rules and institutions. Multinational corporations’ (mnc) bargaining power to attain tax holidays, for example, may be offset by linking these inducements to the upgrading projects of state agencies. Third, finance is the most genuine face of ‘globalization’. It is also the most fleeting, the most volatile, the most disconnecting. It follows that the benefits of openness may be served least by undiscriminating exposure to global flows.

These concerns are dispersed across two multi-authored collections. Because it concentrates on the Asian crisis, the sources of instability, and the reforms required to reshape the global financial system, GI is the more tightly focused of the two. GPEP—also written by a group of prominent economists, but based largely in the United States rather than Britain—ranges over a wider variety of issues and topics, from trade, fdi, and finance to housing, migration, and macroeconomic policy. It is hard to do justice to the quality, variety, and scope of these volumes, or indeed to the many provocative insights that emerge from collections that together comprise thirty chapters. Nevertheless, the three concerns I have identified, though at times more implicit in the material than fully developed as arguments, are sufficiently striking and important to deserve some sustained discussion. I address each in turn.

Globalization appears to confront nation-states with stark options. On the one hand, countries are told they must open up to the world for fear of being left behind. On the other, opponents of openness urge putting up the shutters—re-imposing capital controls and trade protection—for fear of letting in a socially and economically destructive ‘virus’. But neither resignation nor resistance define the real range of options, as the books under review make clear. Such options involve being open to the opportunities and benefits of international trade, capital, technology, and production networks, while maintaining prudent and responsible control of the national domain in order to foster wealth creation and furnish social protection.

This is not to suggest a ‘third way’, but rather to indicate that between the extremes of passivity and closure that have attracted most attention lies a substantial area for analysis, institutional reform, and policy action. Many of the proposals discussed in GI and GPEP imply a framework of analysis and policy choice that is both ‘open’ to the benefits of international economic flows and relationships, but ‘managed’ in terms of their effects. I propose that we call this set of options that of ‘managed openness’. Managed openness implies that global and national are not necessarily competing principles of organization, that they can be—and indeed in many ways already are—complementary.footnote1