The Rules of the Global Game: A New Look at U.S. International Economic Policymaking

by Kenneth W. Dam

Economic news once confined to the business pages of the newspapers now receives headline coverage, whether it involves protests in Seattle or sweatshops in Asia. As attention is increasingly focused on economic policy, it becomes even more important for noneconomists to be able to make sense of these stories. Is the Asian economy sinking or rising? What effects will a single European currency have on the US economy? Kenneth W. Dam's The Rules of the Global Game provides, in clear and practical language, a framework to help readers understand and answer such questions. Dam takes us beyond the headlines and inside the decision-making process as it is populated by lobbyists, special interest groups, trade associations, and public relations firms. While some economists and thinkers have idealized plans for US international economic policy, Dam, currently the deputy secretary of the treasury, manages to merge this idealism with a consideration of what it means to govern at the intersection of competing groups with competing claims.

In The Rules of the Global Game , Dam first lays out what US international economic policies are and compares them to what they should be based on how they affect US per capita income. With this foundation in place, Dam then develops and applies principles for elucidating the major components of economic policy, such as foreign trade and investment, international monetary and financial systems, and current controversial issues, including intellectual property and immigration. Underlying his explanations is a belief in the importance of worldwide free trade and open markets as well as a crucial understanding of the political forces that shape decision making. Because economic policy is not created in a political vacuum, Dam argues, sound policymaking requires an understanding of "statecraft"-the creation and use of institutions that channel the efforts of interest groups and political forces in directions that encourage good economic outcomes.

Dam's vast experience with the politics and practicalities of economic policy translates into a view of policy that is neither academic nor abstract. Rather, Dam shows us how policy is actually made, who makes it, and why, using examples such as GATT, NAFTA, the US-Japan semiconductor agreement, and the Asian financial crisis. A rare book that can be read with pleasure and profit by layperson and economist alike, The Rules of the Global Game allows readers to understand the policies that shape our economy and our lives.

358 pages, Hardcover

First published October 25, 2001

About the author

Kenneth Dam is Max Pam Professor Emeritus of American & Foreign Law and Senior Lecturer at the University of Chicago Law School.

Kenneth Dam has devoted his career to public policy issues, both as a practitioner and as a professor. In the former capacity he served as deputy secretary (the second-ranking official) in the Department of Treasury (2001-2003) and in the Department of State (1982-1985). In 1973 he was executive director of the Council on Economic Policy, a White House office responsible for coordinating U.S. domestic and international economic policy. From 1971 to 1973 he served as assistant director for national security and international policy of the Office of Management and Budget. He began his Washington career as law clerk to U.S. Supreme Court Justice Charles E. Whittaker (1957-1958).

Mr. Dam's entire academic career has been devoted to the University of Chicago, beginning in 1960 and extending, with various leaves of absence, to the present. From 1980 to 1982 he served as provost of the University of Chicago. Most of his academic work has centered on law and economics, particularly with respect to international issues. His publications include a number of books, of which the best known are The GATT: Law and International Economic Organization; Economic Policy Beyond the Headlines (with George P. Shultz); and, most recently, The Law-Growth Nexus: The Rule of Law and Economic Development.

His other activities include serving as IBM vice president for law and external relations from 1985 to 1992, and as president and chief executive officer of the United Way of America for a six-month period in 1992, when he was chosen to clean up a scandal in that organization and put in place a new system of governance. He has extensive experience as an arbitrator, including five years as the system arbitrator for professional basketball. He is an honorary member of the board of the Brookings Institution and serves as a nonresident senior fellow of that organization. He also is a board member of the Committee for Economic Development. He is a member of the Shadow Financial Regulatory Committee. He was chairman of the German-American Academic Council and a board member of a number of nonprofit institutions, including the Council on Foreign Relations (New York) and the Chicago Council on Foreign Relations. He served for 13 years on the board of Alcoa.