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Email this citationCIAO DATE: 07/01
Creating a New Global Economy
Joan E. Spero *
September 29, 1999
In the last decade of the twentieth century, other less visible but equally powerful seismic shifts have also taken place. The tectonic plates of the world's political, security and economic systems have shifted dramatically. The end of the Cold War, the creation of a global, capitalist economy, and the emergence of the United States as the world's only superpower – these and other seismic shifts have toppled the dangerous but stable bipolar international system that had endured for nearly fifty years. Power structures, relations among states, international institutions, and international norms have changed in fundamental ways.
The new international system offers great promise. The end of the Cold War has made possible a more stable and less dangerous political/military system. The global, capitalist economic system has brought the possibility and in many cases the reality of unprecedented prosperity. But the shift in tectonic plates has also led to new dangers and deprivations. From the Balkans to southern Africa to Indonesia, the last decade has been a time of civil war, regional conflict, and genocide. Terrorism and the proliferation of nuclear weapons threaten global peace. Global prosperity has been paralleled by rapid and disruptive economic change and economic crisis in Asia and Latin America.
Will the world of the twenty-first century be one of stability, prosperity and equity or will it be a time of chaos, conflict, and deprivation? The answer to that question depends to a great extent on the United States. As the sole superpower, the United States has a unique opportunity to create a more stable, prosperous, and equitable international order for the twenty-first century. Today, I would like to examine the role the United States can and should play in one arena: the international economic system. Let me begin by examining the seismic changes in the global economy.
The new global economy
The end of the Cold War has had a profound impact on the world's economic system. Before 1989, the world economy was divided roughly into three blocs: a Western capitalist bloc, an Eastern communist bloc, and a Third World or South of less developed countries. That structure was destroyed just ten years ago beginning with the fall of the Berlin Wall. Communism collapsed and the ideology and practice of capitalism spread to Eastern Europe, Russia, its former republics, and even to China and Viet Nam. With greater and lesser effectiveness, governments throughout the world adopted capitalist policies: deregulation, privatization, and international liberalization. Trade barriers were reduced; exchange controls removed; and investment bans eliminated.
This seismic shift in economic beliefs and practices was accompanied by a seismic shift in technology. New information technologies increased the capacity and decreased the costs of computing and communication and made possible the internationalization of production and finance. The result: what we call globalization. Today, goods, capital, technology, and even people move freely across international boundaries. Globalization has led to more open markets for goods and services, to global firms producing and distributing products in multiple markets, and to global financial markets where currency, debt, and equities are traded twenty-four hours a day around the globe. The technological earthquake known as the internet is in the process of creating yet another change in the nature of international trade, investment, and finance.
The impact of globalization has been uneven. The speed of economic change has multiplied geometrically causing rapid and sometimes wrenching changes for hundreds of millions of people. Many countries, companies, and individuals have thrived. Numerous developing countries in Asia and Latin America have prospered by attracting foreign investment and technology and expanding foreign trade. Others, unable to compete, have been left behind. The poorest countries, especially those in Africa, have been unable to expand their trade or attract investment and have become ever more marginal.
Globalization also altered the building block of the international system, the sovereign nation state. Globalization undermines the ability of governments to manage their economies by setting interest and exchange rates. In the new, open environment, financial crises spread rapidly, undermining not only economies but also political systems. As we shall see, globalization also overwhelmed the system of international rules and institutions that govern international economic relations.
Finally, the end of the Cold War and the creation of a global, capitalist economy altered power relationships. The United States emerged as the world's only superpower, able to project its economic, military, political and even ideological influence around the world. In the economic arena, the continental sized U.S. economy and U.S. businesses proved to be powerful, flexible and adaptable to the new, competitive global economy. American technological superiority, particularly the lead in information technology, put U.S. companies in a strong competitive position. Thus, U.S. businesses and financial institutions play a powerful role in international markets. Furthermore, with the collapse of communism and the success of the U.S. economy, American capitalism became the world's standard economic model.
While the United States became the global economic superpower, it was not the only economic power. Balancing the U.S. were a series of regional economic powers. Some were the traditional great powers. France, Germany, and the United Kingdom dominate Europe. Japan was the economic superpower of Asia. In addition, new powers including Brazil, China, and India began to emerge and vie for regional economic leadership. Economic integration also created new power relationships. The countries of the European Union have created an economic powerhouse of 320 million consumers, international trade exceeding that of the United States, common regulatory systems and a common currency. E.U. economic integration has become the basis for greater political unity including a common foreign and defense policy as well as military cooperation. While economic integration in Latin American is far behind that of Europe, regional economic cooperation through Mercosur and the Andean Common Market has emerged in a vibrant way in South America.
Global economic challenges
The end of the Cold War, globalization, and American hegemony have shaken and fundamentally altered the international economic system. We are at a turning point, much like the turning point at the end of the Second World War. At that time, the United States assumed a leadership role, pursuing policies and establishing international agreements and institutions that created a stable and prosperous global order. It is time once again to rebuild the international economic order. And it is time, once again, for the United States to play a leadership role. Indeed, without American leadership, there will be no new order. Let me describe what I see as the key elements of a new global economic order and explain what the United States can and should do to create that order.
Modernizing the global architecture
First, the United States must work to modernize the world's economic architecture. By economic architecture, I mean the rules and institutions that govern the international economic system. As any economics textbook explains, markets, both domestic and international, do not work perfectly. In particular, markets can be unstable or inequitable. That is why the United States has laws such as antitrust legislation and institutions like the Federal Reserve to improve the functioning of markets. The world economy also needs international institutions and rules of the game.
During and after World War II, the United States led the creation and evolution of an international economic system based on rules and institutions. The International Monetary Fund was created to manage exchange rates and balance of payments crises. The World Bank was set up to facilitate European reconstruction after the Second World War. The General Agreement on Tariffs and Trade or GATT established rules for international trade and a forum for reducing trade barriers among its members. Over the years, these and other international institutions evolved to address the changing needs of the world economy. The IMF helped to manage the Third World debt crisis of the 1980s. The World Bank became the source of financial and technical assistance for developing countries. The GATT promoted a series of international agreements that liberalized world trade.
Now, the process of change has outpaced the existing institutional structure. The quantum leap in global economic activity has left critical gaps in many areas. Fortunately, the Uruguay Round, which concluded in 1994, modernized many of the rules of the trading system and created the World Trade Organization or WTO to replace the GATT. However, there are no international regimes for foreign investment, e-commerce or competition policy.
The international financial system, in particular, is in urgent need of repair. International finance is a prototype of globalization. The revolution in information technology enabled financial institutions to trade and invest on a global scale. At the same time, developed and then developing countries reduced exchange rate controls and other barriers to international capital movements and opened their domestic financial markets to foreign investors. As a result, international financial flows increased dramatically. These flows helped to finance new investment, increases in productivity, and higher standards of living.
However, as a result of globalization, problems in one financial market can now spread rapidly around the globe. The wake up call was the Mexican peso crisis of 1994-1995. Economic mismanagement combined with several political shocks in Mexico led to a loss of confidence, an outflow of capital, and the collapse of the Mexican currency. In what came to be called the tequila effect, the crisis spread to other Latin American countries and disrupted financial markets around the world.
The peso crisis demonstrated that problems in an emerging market such as Mexico could threaten the world's financial system, and that the world lacked mechanisms to prevent and manage such crises. The Mexican crisis was contained through quick action by the Clinton Administration, which mobilized an international support package of $50 billion.
The most recent global financial crisis began in 1997 in Thailand and quickly spread throughout Asia – to Indonesia, Malaysia, Korea, and the Philippines. The contagion threatened China, Hong Kong, and even Japan and spread to other emerging markets, most significantly to Russia and then Brazil. Stock markets around the world, including in the United States, gyrated and debt markets dried up.
In an effort to calm the market turmoil, the International Monetary Fund loaned money to these troubled countries to prevent a collapse of their financial systems and, potentially, our own. The Fund also insisted on policy changes and financial reforms in borrowing countries as a condition for its lending. The United States played a key role in the recent crisis. The U.S. mobilized other lenders, put pressure on borrowers to back up IMF policy recommendations, and shaped the negotiations outside the IMF between banks and governments.
The global financial crisis revealed serious structural problems regarding the safety and soundness of the international financial system. It is time to address those problems. Many solutions lie within countries. Borrowing countries must address issues such as corruption, inadequate bank regulation and supervision, and fiscal policy. Private financial institutions from both lending and borrowing countries must improve their risk assessment and risk management.
Other problems require international attention. In fact, following the Mexican peso crisis in l995, the major industrialized countries led by the United States agreed to several changes to improve international crisis prevention and crisis management. These included greater disclosure of financial information by countries to the IMF and the markets; better international standards for supervision and regulation of financial institutions; and more resources for the IMF to use in the event of a crisis.
The United States must continue to take the lead in strengthening the global financial architecture. There is no shortage of proposals for fixing the international financial system. Ambitious proposals such as creating a world central bank or a world bankruptcy court are politically impossible and economically unworkable. However, a number of smaller stepsC improving the ability of the IMF to act before a crisis erupts, greater cooperation among national regulators, techniques for restructuring debt across national boundaries – would go a long way to improving the safety and soundness of the financial system.
Broadening membership in the new international economic order
A second element of a new global economic order and goal of U.S. foreign economic policy should be the inclusion of all major economic players in the system. Today, the major challenge is to bring Russia and China into the global economic order. Full participation by Russia and China is key to the creation of a stable and prosperous order.
The United States and the international community have been wrestling for a decade with how to bring Russia into the global system. Russia has become a member of the International Monetary Fund and the World Bank. Bilateral foreign assistance and significant support from the World Bank and the I.M.F. have been directed at helping Russia with the transition from communism to capitalism. As recent reports about corruption suggest, that transition is uneven and rocky at best. But it is critical.
Another important objective is to bring Russia and China into the World Trade Organization. The W.T.O. was created by the Uruguay Round Agreement of 1994. It provides rules, dispute settlement mechanisms, and a forum for trade negotiations for most countries in the world. Membership in the WTO would integrate these two important political players into a system that is based on international cooperation and the rule of law. Membership would be a force for opening their economies and for continued market-oriented reform. At a time of economic upheaval in both countries, WTO membership would provide a discipline to help Russian and Chinese reformers who want to make the transition from communism to capitalism and from closure to open markets.
Chinese membership in the WTO has been on the political front burner. The volume of Chinese trade and its role in international markets put in on the economic front burner. Negotiations between China and WTO members have been ongoing for years. In fact, most WTO members have reached agreements with China and are ready for Chinese membership. However, the United States and China have not come to terms and that gap is blocking Chinese membership in the global trading regime. The United States has supported China's membership, but has insisted that China open its markets and respect WTO rules. China, for its part, has been reluctant to open markets and expose its large, uncompetitive state-owned industries. China has also asked for exemptions from WTO rules. So, negotiations have been long and difficult.
In order to reach agreement, the United States and China will have to make politically difficult choices. China will have to challenge the power and protection of its state-owned industries. It will have to agree to abide by all of the main WTO rules. The President of the United States will have to take on the U.S. Congress. That is because Chinese membership in the WTO has become entangled in domestic politics in the United States.
One reason is our yearly political battle over Most Favored Nation (MFN) treatment for China. Bear with me while I explain MFN. Most Favored Nation is one of the key principles of the international trading order. Under MFN, members of the WTO agree to give all other members equal access to their markets. If the United States agrees to open markets for wheat or computers from one country, it must open markets on an equal basis for all countries with which the U.S. has MFN agreements. So, MFN is actually a misnomer. It should be called "normal trade relations". In fact, last year Congress changed Most Favored Nation to Normal Trade Relations (NTR) in U.S. law. The United States gives permanent, unconditional MFN treatment to members of the World Trade Organization.
Under U.S. law, China does not have permanent MFN status. So, our Congress must renew MFN every year. For years, the process was routine. However, since the Tienanmin events of 1989, the annual renewal process has been highly politicized. MFN for China has been a focus for an unusual alliance of domestic political forces: those who would like to link MFN to human rights, those concerned about the growing trade imbalance with China, and those opposed to a communist regime. The yearly battle has politicized U.S. trade relations with China and interfered with our negotiations for WTO accession.
This year, however, there is a window of opportunity. China would like to join the WTO so it can be part of an expected new trade round. The United States would like to complete accession negotiations before the next presidential election campaign when politics will make support for Chinese membership virtually impossible. That is why the two sides reached tentative agreement on a package last spring. However, the President hesitated to sign off on that package because of domestic politics. Reports that a spy at Los Alamos disclosed U.S. nuclear secrets to China, the NATO bombing of the Chinese embassy in Belgrade, and conflicts between a Democratic President and the Republican Congress have thus far blocked conclusion of an agreement and held up Chinese WTO membership.
Continuing liberalization
A third element of a stable, prosperous and equitable international economic order is to continue the process of removing barriers to international trade, finance, and investment. The most urgent need is to re-establish the momentum on trade liberalization. The U.S. has long played a central role in trade liberalization, including the Uruguay Round agreement of 1994. The Uruguay Round was a landmark in opening trade and modernizing the international trading system. It reduced tariff and non-tariff barriers; liberalized world trade in agriculture; established market-opening agreements in services, intellectual property and investment; and created the new World Trade Organization.
Trade liberalization brings significant benefits to the U.S. economy. It provides our businesses with international markets and low cost inputs for their products. It creates highly paid jobs, and it helps consumers with lower prices. Continuing liberalization is important because of the bicycle theory of trade: if you don't keep moving forward, you will fall flat. If liberalization doesn't move forward, protectionist pressures will prevail. Today, we risk falling flat. Ironically, as a result of the success of trade negotiations, opposition to liberalization is building around the world. French farmers, Korean auto workers, Japanese telecommunications companies to name but a few are pressing their governments for relief from international competition.
More troubling, however, are the challenges here at home to the ability of the United States to drive the liberalization process. Despite low unemployment and huge export growth, the right and the left blame globalization for a host of American problems. Ross Perot and Pat Buchanan have built political movements by blaming unemployment on international trade. The protectionist wing of the Democratic Party has opposed free trade agreements such as NAFTA. Yet others seek to use the trade lever to achieve goals such as improved human rights, international labor agreements, and environmental objectives. The trade bicycle is straining under the load.
The focal point of the trade debate is what is known as fast track authority. Under our constitution, Congress has the authority to approve trade agreements. Since the 1930s, Congress has delegated the authority to reduce trade barriers to the executive branch for a specific time and under specific conditions. Since 1974, Congress has also agreed to vote up or down on trade agreements without amendment and within a limited period of time. This fast track authority has made it possible for the U.S. to negotiate complicated trade agreements without the possibility that Congress will unravel them.
Currently, the executive branch has no such authority. Legislation has languished in Congress since the end of the Uruguay Round, blocked by a combination of interest groups: those who oppose free trade, those who want to use trade negotiations to achieve other goals, and those who oppose U.S. participation in international organizations. Our negotiating partners who want to liberalize are leery about engaging in serious negotiations unless the U.S. has fast track authority. The absence of that authority also enables countries that want to keep their markets closed to stall the liberalization process.
Thus far, the Clinton Administration has been able to lead on free trade without negotiating authority. But time is running out. When the Uruguay Round was concluded in 1994, signatories agreed to begin discussions in 1999 on further trade liberalization. Last year, President Clinton invited WTO trade ministers to meet later this year in Seattle to launch these negotiations. The upcoming WTO ministerial will be a critical opportunity to launch a new round of trade negotiations to open markets and build on the institutional capacity of the WTO. There are many issues that must be addressed. There is unfinished business in liberalizing trade in agriculture and services. There are new issues such as e-commerce and competition policy. It is highly unlikely that the U.S. Congress will pass fast track legislation this year or next. The question is whether and how long the United States can continue to lead the trade process without fast track.
Spreading the benefits
The global system may be stable and prosperous, but it will not be equitable unless it brings the benefits of global markets to the least developed countries. Successful development depends primarily on national policies that promote macroeconomic stability, human capital formation, and good governance, as well as trade and investment. But even the best economic and social policies may not be adequate to promote growth in some of the most economically distressed countries which are burdened by debt, lack export industries and markets, and are not attractive to foreign investors. The international community should help the poorest countries that are struggling to carry out sound economic policies. We have a future interest in their markets; we share one global environment; and, as the turbulence in central Africa and Indonesia have demonstrated, political instability is the byproduct of economic collapse.
One way to help is by opening markets to their exports. Another way is to encourage financial flows, especially direct investment, which brings technology and managerial expertise. Insurance programs like the U.S. Overseas Private Investment Corporation or OPIC guarantee investors against political risk and make possible financing foreign direct investment in the poorest countries. Another route is bilateral and multilateral foreign assistance to support good development policies. The multilateral development banks such as the World Bank and the regional development banks have not only important financial resources, but also the technical expertise and the political capability to encourage countries to adopt appropriate development strategies.
The problem is that political support for helping the poorest, marginal countries is evaporating, nowhere more quickly than in the United States. I have already mentioned the problems of the declining consensus for trade. Support for bilateral foreign assistance has plummeted with the end of the Cold War and with budget reductions in developed countries. Even OPIC has been threatened with extinction.
In the United States, opposition to foreign assistance has extended to multilateral institutions as well. This is ironic because the U.S. has increasingly turned to the multilateral organizations to achieve U.S. goals in an era of declining bilateral assistance. The IMF and the World Bank, for example, have been important tools in aiding Russia's transition. An unusual combination of forces has mobilized against U.S. support for the multilateral development banks: those opposed to foreign assistance more generally, those who dislike multilateral institutions because they are not controlled by the United States, and those who criticize the lending practices of those institutions.
As a result, Congress has refused to fully fund the multilateral development banks. The United States is in arrears to the World Bank and behind in payments to virtually every regional development bank. The Administration has worked mightily to reduce these arrears and has made some headway. But it is far from clear that Congress will agree to fulfill our commitments.
There is no doubt that multilateral institutions are far from perfect and that they must be improved. Indeed, the United States has worked hard and successfully to push the multilateral banks to promote sustainable development, alleviate poverty, and encourage economic reform as well as to reform their own bureaucracies. As with the IMF, the challenge is to improve these institutions which are an important part of the global order.
Leadership in the new order
The final, essential element for international order is leadership. As the world's economic superpower, the United States must play the central role in creating the new global economic order. At the same time, the U.S. must also plan for the end of American hegemony. U.S. leadership is essential now, but the United States cannot and should not dominate the international economic system forever.
First, other economic powers will not accept American hegemony indefinitely. American leaders describe the U.S. as the "essential" or "indispensable" nation. They see the United States as a benign and benevolent superpower – without imperial ambitions; seeking to expand democracy, capitalism; and human rights; serving as a model for both developed and developing countries. Others, however, increasingly see the United States as a triumphal power. They see a superpower that has a strong tendency to "go it alone," to reject coalitions, alliances and organizations that it does not dominate. They see a country that believes that it and it alone can lead the international system, which takes them for granted and sees them as "dispensable."
Thus, other countries are challenging U.S. dominance. They ask why the United States should have a predominant role in multilateral organizations when it does not pay its dues. UK Prime Minister John Major summed up the resentment several years ago with a new twist on an old theme. In a speech at the United Nations, he called for a new principle: "no representation without taxation." Some countries are pursuing regional economic integration as a strategy to offset U.S. power. The members of the European Union have used American dominance as a force for uniting Europe. Brazil has sought to extend its power and to keep the United States at bay through the regional economic organization known as Mercosur.
Furthermore, the American people are not willing to accept a perpetual role as sole economic superpower. Ironically, the end of the Cold War made the United States the world's sole superpower and, at the same time, led to a backlash against an activist leadership role for the United States. During the Cold War, American leaders could mobilize resources and public support for foreign economic policy by invoking the Soviet threat. The argument was simple: we must open our markets and dedicate our resources to strengthening our economic allies in order to prevent the spread of communism. Now, economic diplomacy must stand on its own. Explaining the Soviet security threat to the American people was much simpler and politically compelling than explaining why the United States should take a lead in opening markets or stabilizing the international financial system.
The end of the Cold War also led to what I call leadership fatigue. Without the Soviet threat, an activist U.S. foreign policy can seem less necessary, less important. That view is particularly true for members of Congress who were elected on domestic platforms and have little interest or experience in foreign policy. We won the Cold War, so why do we have to send aid to Bosnia or Kosovo? Why do we have to bail out Mexico or Thailand or Indonesia? Why do we need the IMF or the UN or the World Bank? Let's worry about problems here at home. Let's let others share the burden. This is really a new form of an old phenomenon: American isolationism.
As we learned in the 1930s, the United States and the world cannot afford a policy of isolationism. There is no doubt that the United States must play a leading role in the new global economic order. As the country that benefits the most from the new global economy, it is in our economic interest to create a stable, prosperous, and equitable system. As the largest economy and the largest power, the system will not be stable, prosperous, and equitable without the United States. But in the long run, the United States must be willing to share power.
The European Union and Japan should play a greater role. For example, Europe can and should take the lead in helping to rebuild and reform Bosnia and Kosovo. Now that it has a unified currency, the European Union should a have a voice on international financial issues. Japan should play a greater role in Asian financial issues. Regional powers such as Mexico, Brazil and India should be encouraged to play a leadership role in their regions.
Planning for the end of American hegemony will also mean accepting a more powerful role for international institutions, international rules, and international procedures. The United States will have to accept some constraints on its sovereignty. It will have to accept dispute settlement findings in the WTO and international investment rules. This is hardly a frightening or dangerous prospect. In fact, as the largest and strongest player in the system, the U.S. has the most to gain from a liberal international economic order.
Power sharing will not happen overnight and it will be most effective if it is part of our strategic planning. This does not mean the end of U.S. leadership; it does mean exercising leadership in a more multilateral way.
What is to be done at home
Finally, in order to achieve all of these objectives, the United States must build a new domestic consensus on foreign economic policy. The ability of the United States to lead the system will depend in part on reaching those who are threatened by the new global economy.
On the one hand, the creation of the new global market has strengthened the domestic constituency for liberalization and involvement in the world economy. More U.S. farmers, businesses, and workers depend on foreign markets for their livelihood to a much greater degree than ever before. Access to foreign markets, international financial stability, and vital global institutions affect the American domestic economy more than ever before. Indeed, most experts agree that globalization has brought increased productivity, faster growth, greater prosperity and higher standards of living to the United States and throughout the world.
However, there are losers as well as winners from globalization. Global markets increase competition in the marketplace and put pressure on many businesses. In the United States and other developed countries, globalization favors the skilled over the unskilled worker. Thus, many unskilled workers feared that competition with low wage workers in Asia and Latin America would lead to a decline in wages and living standards as well as a loss of jobs. That is why in the NAFTA of 1994 debate Ross Perot's "giant sucking sound" appealed so effectively to public anxiety.
Globalization also makes the United States vulnerable to new types of instability generated abroad. In the recent financial crisis, Americans learned that U.S. financial markets can be disrupted by turbulence in Asia, Russia, and Latin America. This new vulnerability leads some to question the desirability of open financial markets and to oppose helping foreign countries when they get into financial trouble. It also aggravates pressures for trade protection.
Despite the enormous benefits to the United States of participation in the world economy, domestic support for further trade liberalization and economic integration will erode unless the process is perceived as benefiting the majority of Americans. Today, the United States is enjoying a period of sustained growth with stable prices and low unemployment. Yet, over the past two decades, there has been a striking decline in the wages of unskilled workers and an increase in income inequality. It is tempting to blame globalization.
Most serious studies conclude that technological changes are a much more important factor than international trade. Technology is creating an information and knowledge based economy that is dependent on human capital. That is why education or lack of education is the key determinant of employment or unemployment in the U.S. and other developed countries. Today, the production process depends on workers with science, math and technology education and training and those capable of lifetime learning. For the United States to be competitive in the world of the future, we will need as many workers as possible with these skills. In my view, that means we must urgently address the problems of our education system; we must think of education as life long learning; and we must develop new and more effective ways to retrain those put out of work by technology or international competition.
We must also address what has come to be called the digital divide – the unequal access of individuals to the new internet technology. We must assure that all members of our society have the ability to use the new technologies that are increasingly the backbone of our economy.
Conclusion
In sum, the earthquakes of the last decadeCthe end of the Cold War, globalization, a new power structureChave shattered the old order. It is time to rebuild and create new rules and institutions; it is time to broaden the membership in the system, to continue the momentum of liberalization, and to bring the benefits of the new system to all its members. If the United States is willing to seize the day, to both lead and to share power the new order is within our reach. We did it before. We can and should do it again.
Endnotes
Note *: Dr. Joan Edelman Spero received a B.A. degree from the University of Wisconsin, and an M.I.A. and Ph. D. from Columbia University. Dr. Spero was an Assistant Professor at Columbia University from 1973 to 1979. She served as U.S. Ambassador to the United Nations Economic and Social Council from 1980 to 1981. From 1981 until 1993, Dr. Spero served in various vice presidential capacities with the American Express Corporation. In 1993, President Clinton appointed Dr. Spero to the U.S. Department of State as Undersecretary of State for Economic, Business, and Agricultural Affairs. She played a central role in formulating the administration’s foreign economic policy. She also served as a top advisor on the G-7 economic summits. She has authored several books, including The Politics of International Economic Relations and The Failure of the Franklin Bank. She has also contributed to numerous professional journals. Dr. Spero was named President of the Doris Duke Charitable Foundation in January of 1998. She is responsible for establishing and directing the activities of the $1.3 billion foundation. Back.
