Globalisation, economic freedom and strategic decision making:a role for industrial policy?

Abstract

This article links the radical institutionalist approaches of Tool and Dugger with the strategic choice perspective to better understand the linkages between freedom, knowledge and participation in the context of a global economy dominated by transnational firms. A concern by economists with ‘negative’ freedom has been challenged by a renewed interest in the ‘positive’ dimension, drawing on Sen’s pioneering work on capabilities. The authors argue that overemphasis on either type of freedom could lead to strategic failure. Economic freedom thus constitutes consideration of what type(s) of freedom are emphasised, where freedom resides within the system, and how freedoms are realised. Public policy responses are then seen as appropriate in a globalising economy dominated by negatively free strategic decision-makers within transnational firms, tackling both the nature of the firm itself as well as the environment within which such decisions are made. This would constrain negative freedom for some so as to expand freedoms for others, enabling a more democratic form of globalisation to better serve the interests of a wider set of actors.