Three options
Rodrik (2000) argued hyperglobalization plus the nation state means a 'golden straitjacket' that narrows democratic choice; hyperglobalization plus democracy requires global governance; and the nation state plus democracy requires limits on globalization.
History
Rodrik (2011) saw Bretton Woods as the third option. Ruggie (1982) called it embedded liberalism, allowing welfare and full employment behind capital controls. Rodrik (1998) found open economies have bigger governments, linked to the compensation hypothesis.
Monetary trilemma and critiques
The idea extends Mundell's (1963) monetary trilemma, confirmed historically by Obstfeld and colleagues (2005) but challenged by Rey (2015) as a dilemma. It is cited in debates on the race to the bottom and varieties of capitalism.
FAQ
- What is the globalization trilemma in simple terms?
- You can have only two of full globalization, national sovereignty and democracy.
- How is it different from the monetary trilemma?
- The monetary trilemma concerns exchange rates, capital and monetary policy; Rodrik extends the logic to politics.
Sources reviewed: 2026-10-26
References
- Rodrik, D. (2000). How far will international economic integration go? Journal of Economic Perspectives, 14(1), 177–186. The original statement of the trilemma.
- Rodrik, D. (2011). The globalization paradox: Democracy and the future of the world economy. W. W. Norton. The book-length argument.
- Rodrik, D. (1998). Why do more open economies have bigger governments? Journal of Political Economy, 106(5), 997–1032. Openness and government size.
- Ruggie, J. G. (1982). International regimes, transactions, and change: Embedded liberalism in the postwar economic order. International Organization, 36(2), 379–415. Embedded liberalism classic.
- Mundell, R. A. (1963). Capital mobility and stabilization policy under fixed and flexible exchange rates. Canadian Journal of Economics and Political Science, 29(4), 475–485. Basis of the monetary trilemma.
- Obstfeld, M., Shambaugh, J. C., & Taylor, A. M. (2005). The trilemma in history: Tradeoffs among exchange rates, monetary policies, and capital mobility. Review of Economics and Statistics, 87(3), 423–438. Historical test of the monetary trilemma.
- Rey, H. (2015). Dilemma not trilemma: The global financial cycle and monetary policy independence (NBER Working Paper No. 21162). National Bureau of Economic Research. A critique: dilemma not trilemma.