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Article 2.1 of the ICESCR states the need for‘international assistance and co-operation’,suggesting that a coordinated approach tomacroeconomic policy is necessary if rights are tobe realized. However, international coordination ofmacroeconomic policies to support the realizationof rights is rudimentary, at best. This lack of effectiveglobal governance places significant constraintson the ability of many governments to implementpolicies that would support the achievement ofsubstantive equality for women.GLOBAL ECONOMIC INTEGRATION ANDPOLICY SPACEGlobal economic integration constrains theability of governments, to varying degrees, touse macroeconomic policy to create an enablingenvironment for the realization of economic and socialrights.The free flow of finance, for example, has the potentialto destabilize national economies. A rapid inflow ofcapital, in the form of short-term investments, caneasily reverse itself, leading to the depreciation ofa country’s currency and a more general financialcrisis—as was the case with the East Asian financialcrisis and similar subsequent crises. 123 The UnitedStates financial crisis, which affected countries aroundthe world, was due in part to inadequate regulatorysafeguards. Innovative financial products are oftenpoorly regulated and contribute to systemic risksthat, in the event of a meltdown, generate enormoushuman costs extending beyond national borders. 124Monetary policy is constrained by unhindered capitalflows. A central bank may not lower interest ratesbelow those in other countries in an effort to keepcapital from leaving. Yet, high interest rates makedebt servicing more costly and may increase overallmacroeconomic fragility, threatening the sustainabilityof employment and social policies. 125Not all countries are equal in terms of their ability toimplement independent macroeconomic policies in aglobally integrated world. Larger, more systemicallyinfluential economies have a wider range of policyoptions available when responding to economicshocks compared to smaller, more dependenteconomies. 126 For example, China and the UnitedStates were able to respond to the 2008 crisis byimplementing counter-cyclical stimulus policies inan effort to offset the negative consequences of thefinancial shock. 127 Less well-positioned economies,however, experienced different effects of the crisis,including capital outflows as financial investorssought out safe havens. 128 These economies oftenimplement pro-cyclical policies such as higherinterest rates and cuts to government spending inan effort to stem financial outflows, often under theinfluence of global institutions such as the IMF. 129 Forexample, the austerity programmes implementedin countries such as Greece due to the sovereigndebt crisis represent a type of pro-cyclical policy—drastically cutting spending after a country hasalready received a substantial negative shock.As a result, national capacities to respond to globalcrises are highly uneven. Countries that are able toimplement independent macroeconomic policies cantake steps to mitigate backsliding on economic andsocial rights due to economic shocks. Meanwhile,other countries are obliged to adopt macroeconomicpolicies that contribute to, rather than alleviate, suchretrogression. The options for conducting independentmacroeconomic policy are particularly constrained inpost-conflict countries (see Box 4.7).BOX 4.7Constraints on macroeconomic policy in post-conflict settingsConflicts undermine the normal functioning of economies and destroy the institutional infrastructureneeded to implement macroeconomic policies. Effective macroeconomic management requires thatcertain key institutions are in place, but in post-conflict situations those institutions have often beendamaged or destroyed. Macroeconomic strategies for post-conflict countries must therefore rebuildmany of the institutions that are often taken for granted elsewhere.