Correlated Trade and Geopolitics Driving a Fractured World Order

Published (Open Access from July 2025) // Local PDF

Ing, L.Y., and Rodrik, D. (Eds.). (2026). The New Global Economic Order (1st ed.). Routledge. https://doi.org/10.4324/9781003571384 Published (Open Access from July 2025)
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As anti-globalization reshapes the world, the divide between East and West, developed and developing countries, and North and South, deepens, creating new challenges for economic policy and global governance. This book provides a nuanced and balanced analysis of economic transformation over the past century, exploring critical themes such as structural change, resource mobilization, and the future of global growth.

Featuring insights from leading economists, this volume offers expert commentary on economic transformation, development strategies, and the evolving global order. It further examines into pressing governance questions surrounding AI, green technology, and the financing of health crises, future pandemics, and energy transitions.

A vital resource for economists, policymakers, and researchers, this book provides strategic guidance on navigating global shifts and mobilizing resources to drive sustainable development in an emerging new global economic order.

From Introduction by Lili Yan Ing and Dani Rodrik

Chapter 5 by Danny Quah explores how the relationship between trade interconnectedness and geopolitical tensions influences the current global order. During the so-called centripetal era (1980–2010), economic integration and geopolitical alignment played a crucial role in bridging the interests of developed and developing nations, contributing to a relatively stable world economy. However, the author notes a significant shift that began in the early 2000s, primarily driven by factors such as China’s economic rise (i.e., ‘China shock’), the emergence of a multipolar world, and evolving practices in multilateral cooperation. These changes have disrupted the previous alignment of interests and played an instrumental part in ushering in the so-called centrifugal era of world economy, where economic and geopolitical forces work in ways that exacerbate global fragmentation. To mitigate the growing fragmentation, the author offers three key proposals. First, he suggests fostering inadvertent cooperation, whereby mutual benefits emerge even without deliberate collaboration. Second, he advocates for breaking political gridlocks among the Great Powers to mitigate tensions. Finally, the chapter emphasises the potential of plurilateralism and innovative multilateral frameworks to restore global unity in a fractured world. By implementing these strategies, the author argues, the international community can begin to counteract the divisive impacts of current economic and geopolitical dynamics.

Recommended citation: Quah, Danny. 2026. "Correlated Trade and Geopolitics Driving a Fractured World Order." Ch. 5, pp. 54-66, in Ing, Lili Yan and Rodrik, Dani (eds.) The New Global Economic Order, Routledge.
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