The world’s economy is global; its politics are national. This, in a nutshell, is the dilemma of global governance.

Somehow policymakers must give private business activities security when making transactions that cross jurisdictional boundaries. They must deal with what economists call “cross-border externalities”, of which greenhouse gas emissions and the threat of pandemic disease are the best known examples. They must prevent governments’ policies from acting at cross-purposes, of which exchange-rate policies are a good current example.