ABSTRACT
Governing Incomplete Globalization1 D. M ario Nuti
1. Introduction
It is a commonplace that the last thirty years have seen a process of fast globalization, understood as increasing world economic integration2 through international trade and investment. In the period 1970-2000 the share of exports in world GDP has risen threefold from about 8 per cent to 24 per cent.3 Capital flows grew tenfold over the period. Foreign direct investment by advanced to lessdeveloped countries boomed from USD 28bn in 1970 to a peak of USD 306bn in 1997, and has only declined slightly since then. Portfolio investment grew from USD lObn in 1970 to a peak of USD 103bn in 1996 (World Bank, 2000). Global transactions in foreign exchange are an increasingly large multiple of central banks’ reserves (see Frankel, 2000; Feldstein, 2000; DfID 2000).
