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The retreat of the advanced economies from the global economy – and, in the case of the United Kingdom, from regional trading arrangements – has received a lot of attention lately. At a time when the global economy's underlying structures are under strain, this could have far-reaching consequences.In exchange, the advanced economies are supposed to fulfill certain responsibilities that help ensure the system's functioning and stability.The result of excessive risk-taking and lax regulation in the advanced economies, the financial system's near-meltdown disrupted global trade, threw millions into unemployment and almost tipped the world into a multiyear depression.The advanced economies – particularly Europe – have shown little appetite for reforming outdated elements of governance and representation at the international financial institutions, despite major changes in the global economy.The first is the relationship between small and large economies. For a long time, small, well-managed and open economies were the leading beneficiaries of the Bretton Woods system and, more generally, of multilateralism. But, at a time of surging nationalism, these small and open economies, however well-managed, are likely to suffer.
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