In his article Taking Embedded Liberalism Global: the Corporate Connection John Gerard Ruggie argues that during the era of globalization the embedded liberalism is taking, and has to take, new global forms. He examines the positive and negative roles played by the different phenomena produced by globalization in the process of expanding of the scope of social responsibility and liberal values on the global scale.
Ruggie defines the embedded liberalism as an agreement of all sectors of society to “share the social adjustment costs that open markets inevitably produce” (2003: 94). The author argues that this balance faces new challenges that are the results of globalization. As the main shortcomings of globalization he views unequal distribution of its benefits, imbalance in global rule making, and vulnerability of open societies to new and unpredictable forces. He notes that lowering of wages and growth of unemployment rates coincides with the growth of openness but doubts whether it is globalization that caused wage stagnation and unemployment (Ruggie 2003: 101).
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Referring to several studies, Ruggie describes the common attitudes towards globalization that is perceived as a process in which positive elements moderately overweigh the negative ones, and which brings fears of not only potential economic risks but also of identity losses (2003: 102-103). He argues that these anxieties have played a positive role as they helped generate civil society initiatives. According to Ruggie, non-state actors and civil society organizations (CSOs) play a major role in building a new balance. They provide help directly to people in developing countries and create pressure on international institutions, governments, and corporations to take greater social responsibility (Ruggie 2003: 105-106). Estimating the role of social initiatives, Ruggie also gives special attention to Kofi Annan’s initiative called The Global Compact. Despite its limited character, Ruggie views it positively and underlines the “broader second-order consequences” of similar initiatives (2003: 114), as they have given a priority to socially responsible investment and stipulated the emergence and expansion of the public sector. He argues that because of these activities, business itself has become an advocate for public sector growth, which is seen as the most significant achievement (Ruggie 2003: 115).
Ruggie concludes with the prediction that prolongation of these trends will lead to the move from “good” to “best” practices and even to their formal codification (2003: 115). Thus, his views on the globalization and its perspectives are optimistic though he acknowledges its certain shortcomings. He believes that the public-private sector is being recalibrated, and the embedded liberalism compromise is emerging on the global arena (Ruggie 2003: 117). A key role is this process is ascribed to the expansion of civil society and growth of the public sector.