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Opinion

Brexit in Context

By A. Michael Spence

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Regardless of the outcome of the Brexit referendum (like many outsiders, I hope Britain votes to stay and advocates for reform from within), the British vote...should bring about a major rethink of European governance structures and institutional arrangements.

I do not believe that foreigners contribute usefully by issuing strong opinions about how a country’s citizens, or those of a larger unit like the European Union, should decide when faced with an important political choice. Our insights, based on international experience, may sometimes be helpful; but there should never be any confusion about the asymmetry of roles.

This is particularly true of the British referendum on whether to remain in the EU. Just days before the vote, the outcome is too close to call, and there appear to be enough undecided voters to tip it either way. But, with political and social fragmentation extending well beyond Europe, outsiders may be able to add some perspective on what is really at issue.

First, it will come as no surprise that, in terms of the distribution of income, wealth, and the costs and benefits of forced structural change, growth patterns in most of the developed world have been problematic for the past 20 years. We know that globalization and some aspects of digital technology (particularly those related to automation and disintermediation) have contributed to job and income polarization, placing sustained pressure on the middle class in every country.

Read the full article as published in Project Syndicate.

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A. Michael Spence is a William R. Berkley Professor in Economics & Business.