Source: Brookings

Date: 9.16.2025

Link: The community investment fund: An efficient, scalable vehicle for tax-incentivized place-based investment

The Brookings research article examines the challenges and growing fragmentation of the global digital economy, focusing on the critical issue of cross-border data flows. The piece highlights that data is the lifeblood of modern commerce, facilitating services, e-commerce, and global supply chains. However, this essential flow is increasingly hampered by a trend toward data nationalism, where nations implement divergent and often restrictive domestic regulations.

These measures include strict data localization requirements, national security-driven content restrictions, and varying standards for data privacy, such as the EU’s GDPR. This regulatory divergence is driven by legitimate concerns over national security, user privacy, and sovereignty, yet its cumulative effect is to fragment the internet, raise costs for businesses, and introduce significant uncertainty into digital trade. The article argues that existing international institutions have struggled to keep pace. Therefore, it asserts an urgent need for new multilateral or plurilateral international agreements that establish predictable rules for digital trade. The core goal of such cooperation must be to promote regulatory interoperability and find a sustainable balance between enabling the massive economic benefits of data flows and protecting critical public policy interests, thereby preventing further balkanization of the global digital space.