Global standard institutions as a core theme in global business management study

In reviewing a country's economic policy formulation in the prevailing global business setting, I think it is useful to consider the ideas from the management literature as related to the "global standard institutions" (GSIs). GSIs refers to a conherent set of recommended institutional set-up in a country that is supposed to promote the economic well-being of a country: The main recommneded practices are: (i) liberalised financial market with a mature stock market (ii) free labour market, (iii) minimum state-owned enterprises, (iv) shareholder-based capitalism, and (v) prudent management of banks and the economy. These GSIs are considered to be Anglo-american and promoted  by the IMF and World Bank, especially around the 1990s. GSIs reflect neoliberal thinking in Economics (re: http://en.wikipedia.org/wiki/Neoliberalism) and they endorse global shareholder capitalism.

Based on global shareholder capitalism logic, adoption of GSIs shifts financial capital from poorly managed firms to well managed ones. This implies good use of capital. Participation of foreign capital in a country, especially in a developing country, will lead to more transfer of technologies and well-class management practices in the local enterprises in a developing country. In short, GSIs are good for a country's economic health. The underlying rationales of GSI have been challenged by some academics; the experiences of certain Asian countries with GSI practices, e.g. South Korea, do not support the ideas of GSIs. It has been said that GSIs could lead to social/ economic instability, as well as economic stagnation.

I think the discussion of GSIs remains highly relevant for the discussion of economic policies in 2011. For example, we could discuss to what extent China should adopt certain GSIs in view of its current (and future) role(s) in the global economy. Thus Global Business Management students should study this key topic seriously.

References

1. On neoliberalism: http://en.wikipedia.org/wiki/Neoliberalism
2. Shin, J.S. (editor) (2007) Global Challenges and Local Responses: The East Asian Experience, Routledge.