Global institutions have failed to adapt to today’s political-economic realities. What went wrong, and how can we reverse our descent into chaos?

The United States is no longer the world’s undisputed superpower. China and India increasingly flex their economic muscle, as the West’s share of global GDP steadily declines–and America’s rules-based system risks becoming irrelevant. In business, competition brings efficiency, balance, and innovation. But not in the marketplace for global power.

Acclaimed economist Eswar S. Prasad argues that the very forces expected to stabilize the world order are fuelling disarray. Globalization has deepened inequality in many countries, stoked political backlash and triggered trade wars. Economic institutions like the IMF and WTO are no longer fit for purpose. The rise of “middle powers” like South Africa, Brazil, and Indonesia once suggested multipolar stability; but today, such economies are forced to pick sides in the intensifying US-China struggle for hegemony.

Prasad’s clear-eyed, bracing prose contends that we are caught in a destructive feedback loop between economics, domestic politics, and geopolitics. With instability the new status quo, we need radical solutions to reinvigorate the world economy, prioritize common aspirations–and halt the downward spiral.