The global crisis, social protection and jobs

Policy responses to the global financial meltdown of 2008 and the collapse of aggregate demand have largely been driven by domestic interests. Resurgent protectionism, bank bail-outs and national-level stimulus packages are distorting competition and incentives to the detriment of developing countries, much-needed spending on social protection and, ultimately, rapid global economic recovery. Warning against underestimation of the job-destruction potential of the current crisis, the author argues for a truly global stimulus package, together with a rethink of economic paradigms and regulatory policies, financial assistance to developing countries, a less constraining IMF, and stronger social protection as an automatic stabilizer of economies.