2009
Chapter
New Perspectives on Regulation

The Principles of Embedded Liberalism: Social Legitimacy and Global Capitalism

By: Rawi Abdelal and John G. Ruggie

Format:Print

Abstract

In this essay we revisit the principles of “embedded liberalism” and argue for their relevance to the contemporary global economy. The most essential principle is the need for markets to enjoy social legitimacy, because their political sustainability ultimately depends on it. From this principle we analyze three current sets of practices and institutions in which ongoing crises of legitimacy demonstrate the need for a renewal of embedded liberalism and a revitalization of global governance. They are as follows: the activities of transnational corporations, particularly with regard to core standards in labor and human rights; the organization of the international financial architecture; and the formal rules and informal norms of international organizations.

Keywords

Economic Systems; Ethics; International Finance; Globalization; Multinational Firms and Management; Corporate Governance; Governing Rules, Regulations, and Reforms; Labor

Citation

Abdelal, Rawi, and John G. Ruggie. "The Principles of Embedded Liberalism: Social Legitimacy and Global Capitalism." In New Perspectives on Regulation, edited by David Moss and John Cisternino, 151–162. Cambridge, MA: Tobin Project, 2009.