New State Practices at a Time of System Disturbance and the Nasty Business of Protectionism - The Expectation for Global Demand Management

This paper examines the new state practices of demand management and rescue policies. States have become innovative in the current crisis developing highly divergent responses to re-insert government in the management of the economy. The paper will argue that protectionism of the classical variety is a peanut-sized problem today and that states learned from the mistakes of the Great Depression when Everest-sized trade walls brought global trade to a halt. The new state practices of the Great Recession of 2008-09 require attention and analytical scrutiny for two important reasons. First, global neoliberalism had reduced the role of the state in the economy through downsizing and privatizing many of its activities. However, the state is no longer missing in action in the global south or north. It is back in full throttle with a massive presence in all leading jurisdictions. Secondly, governments are gaining valuable experience in managing structural change. The twin ideas of the need to map new state practices to take account of new policy communities and the need for far-reaching institutional stabilization and re-regulation have shifted the focus from deepening market access to getting the institutional response right