Economic Denationalization as an Antidote against Populism

JORGE C. ÁVILA
REVISTA DE INSTITUCIONES, IDEAS Y MERCADOS 55 (2011): 151-162

Ávila argues that international experience suggests that denationalization of key economic fields may prove a durable limit to Populism. His proposal for economic denationalization is based on the idea of taking away from the jurisdiction of the national government the key fields of international trade, money and banking, and tax collection. This would be done, for example, by placing foreign trade under the jurisdiction of free trade agreement with richer, and more stable states; substituting a world reserve currency for the national currency; placing local banks under the same jurisdiction as foreign resident banks; and decentralizing the collection of tax revenues.  The key motivation behind such a proposal is to protect vital economic areas from the discretion of the populist tendencies of governments. It is argued that since the reversibility of such measures is significantly costly, national governments would be discouraged from repudiating them based on electoral considerations.