International organisations have a bad reputation these days. The United Nations is widely seen as ineffective. There’s a retreat towards “localism”: within Britain, the EU is unpopular; within Scotland, Britain is unpopular. And any talk of “giving up sovereignty” is deeply unpopular.
However, lack of effective international organisations and supra-national governance is arguably the root cause of many of the biggest crises facing humanity in the early 21st century.
That was the thesis which Ian Goldin, Oxford University Professor of Globalisation and Development, very ably shared yesterday evening in the Hong Kong Theatre in the London School of Economics. He was quietly spoken, but his points hit home strongly. I was persuaded.
The lecture was entitled Divided Nations: Why global governance is failing and what we can do about it. It coincided with the launch of a book with the same name. For more details of the book, see this blogpost on the website of the Oxford Martin School, where Ian Goldin holds the role of Director.
It’s my perception that many technology enthusiasts, futurists, and singularitarians have a blind spot when it comes to the topic of the dysfunction of current international organisations. They tend to assume that technological improvements will automatically resolve the crises and risks facing society. Governments and regulators should ideally leave things well alone – so the plea goes.
My own view is that smarter coordination and regulation is definitely needed – even though it will be hard to set that up. Professor Goldin’s lecture amply reinforced that view.
On the train home from the lecture, I downloaded the book onto my Kindle. I recommend anyone who is serious about the future of humanity to read it. Drawing upon the assembled insights and wisdom of the remarkable set of scholars at the Oxford Martin School, in addition to his own extensive experience in the international scene, Professor Goldin has crystallised state-of-the-art knowledge regarding the pressing urgency, and options, for better supra-national governance.
In the remainder of this blogpost, I share some of the state-of-consciousness notes that I typed while listening to the lecture. Hopefully this will give a flavour of the hugely important topics covered. I apologise in advance for any errors introduced in transcription. Please see the book itself for an authoritative voice. See also the live tweet stream for the meeting, with the hash-tag #LSEGoldin.
What keeps Oxford Martin scholars awake at night
The fear that no one is listening. The international governance system is in total gridlock. There are failures on several levels:
- Failure of governments to lift themselves to a higher level, instead of being pre-occupied by local, parochial interests
- Failure of electorates to demand more from their governments
- Failure of governments for not giving clearer direction to the international institutions.
Progress with international connectivity
80 countries became democratic in the 1990s. Only one country in the world today remains disconnected – North Korea.
Over the last few decades, the total global population has increased, but the numbers in absolute poverty have decreased. This has never happened before in history.
So there are many good aspects to the increase in the economy and inter-connectivity.
However, economists failed to think sufficiently far ahead.
What economists should have thought about: the global commons
What was rational for the individuals and for national governments was not rational for the whole world.
Similar problems exist in several other fields: antibiotic resistance, global warming, the markets. He’ll get to these shortly.
The tragedy of the commons is that, when everyone does what is rational for them, everyone nevertheless ends up suffering. The common resource is not managed.
The pursuit of profits is a good thing – it has worked much better than central planning. But the result is irrationality in aggregate.
The market alone cannot provide a response to resource allocation. Individual governments cannot provide a solution either. A globally coordinated approach is needed.
Example of several countries drawing water from the Aral Sea – which is now arid.
That’s what happens when nations do the right thing for themselves.
The special case of Finance
Finance is by far the most sophisticated of the resource management systems:
- The best graduates go into the treasury, the federal reserve, etc
- They are best endowed – the elite organisation
- These people know each other – they play golf together.
If even the financial bodies can’t understand their own system, this has black implications for other systems.
The growth of the financial markets had two underbellies:
- Growing inequality
- Growing potential for systemic risk
The growing inequality has actually led to lobbying that exaggerates inequality even more.
The result was a “Race to the bottom”, with governments being persuaded to get out of the regulation of things that actually did need to be regulated.
Speaking after the crisis, Hank Paulson, US Treasury Secretary and former CEO of Goldman Sachs, in effect said “we just did not understand what was happening” – even with all the high-calibre people and advice available to him. That’s a shocking indictment.
The need for regulation
Globalisation requires regulation, not just at the individual national level, but at an international level.
Global organisations are weaker now than in the 1990s.
Nations are becoming more parochial – the examples of UK (thinking of leaving EU) and Scotland (thinking of leaving UK) are mirrored elsewhere too.
Yes, integration brings issues that are hard to control, but the response to withdraw from integration is terribly misguided.
We cannot put back the walls. Trying to withdraw into local politics is dreadfully misguided.
Five examples
His book has five examples as illustrations of his general theme (and that’s without talking in this book about poverty, or nuclear threats):
- Finance
- Pandemics
- Migration
- Climate change
- Cyber-security
Many of these problems arise from the success of globalisation – the extraordinary rise in incomes worldwide in the last 25 years.
Pandemics require supra-national attention, because of increased connectivity:
- The rapid spread of swine flu was correlated tightly with aircraft travel.
- It will just take 2 days for a new infectious disease to travel all the way round the world.
The idea that you can isolate yourself from the world is a myth. There’s little point having a quarantine regime in place in Oxford if a disease is allowed to flourish in London. The same applies between countries, too.
Technology developments exacerbate the problem. DNA analysis is a good thing, but the capacity to synthesise diseases has terrible consequences:
- There’s a growing power for even a very small number of individuals to cause global chaos, e.g. via pathogens
- Think of something like Waco Texas – people who are fanatical Armageddonists – but with greater technical skills.
Cyber-security issues arise from the incredible growth in network connectivity. Jonathan Zittrain talks about “The end of the Internet”:
- The Internet is not governed by governments
- Problems to prosecute people, even when we know who they are and where they are (but in a different jurisdiction)
- Individuals and small groups could destabilise whole Internet.
Migration is another “orphan issue”. No international organisation has the authority to deal with it:
- Control over immigration is, in effect, an anarchic, bullying system
- We have very bad data on migration (even in the UK).
The existing global institutions
The global institutions that we have were a response to post-WW2 threats.
For a while, these institutions did well. The World Bank = Bank for reconstruction. It did lead a lot of reconstruction.
But over time, we became complacent. The institutions became out-dated and lost their vitality.
The recent financial crisis shows that the tables have been turned round: incredible scene of EU taking its begging bowl to China.
The tragedy is that the lessons well-known inside the existing institutions have not been learned. There are lessons about the required sequencing of reforms, etc. But with the loss of vitality of these institutions, the knowledge is being lost.
The EU has very little bandwidth for managing global affairs. Same as US. Same as Japan. They’re all preoccupied by local issues.
The influence of the old G7 is in decline. The new powers are not yet ready to take over the responsibility: China, Russia, India, Indonesia, Brazil, South Africa…
- The new powers don’t actually want this responsibility (different reasons for different countries)
- China, the most important of the new powers, has other priorities – managing their own poverty issues at home.
The result is that no radical reform happens, of the international institutions:
- No organisations are killed off
- No new ones created
- No new operating principles are agreed.
Therefore the institutions remain ineffective. Look at the lack of meaningful progress towards solving the problems of climate change.
He has been on two Bretton Woods reform commissions, along with “lots of wonderfully smart, well-meaning people”. Four prime ministers were involved, including Gordon Brown. Kofi Annan received the report with good intentions. But no actual reform of UN took place. Governments actually want these institutions to remain weak. They don’t want to give up their power.
It’s similar to the way that the UK is unwilling to give up power to Brussels.
Sleep-walking
The financial crisis shows what happens when global systems aren’t managed:
- Downwards spiral
- Very hard to pull it out afterwards.
We are sleep-walking into global crises. The financial crisis is just a foretaste of what is to come. However, this need not be the case.
A positive note
He’ll finish the lecture by trying to be cheerful.
Action on global issues requires collective action by both citizens and leaders who are not afraid to relinquish power.
The good news:
- Citizens are more connected than ever before
- Ideologies that have divided people in the past are reducing in power
- We can take advantage of the amplification of damage to reputation that can happen on the Internet
- People can be rapidly mobilised to overturn bad legislation.
Encouraging example of SOPA debate in US about aspects of control of the Internet:
- 80 million people went online to show their views, in just two days
- Senate changed their intent within six hours.
Some good examples where international coordination works
- International plane travel coordination (air traffic control) is example that works very well – it’s a robust system
- Another good example: the international postal system.
What distinguishes the successes from the failures:
- In the Air Traffic Control case, no one has a different interest
- But in other cases, there are lots of vested interest – neutering the effectiveness of e.g. the international response to the Syrian crisis
- Another troubling failure example is what happened in Iraq – it was a travesty of what the international system wanted and needed.
Government leaders are afraid that electorate aren’t ready to take a truly international perspective. To be internationalist in political circles is increasingly unfashionable. So we need to change public opinion first.
Like-minded citizens need to cooperate, building a growing circle of legitimacy. Don’t wait for the global system to play catch-up.
In the meantime, true political leaders should find some incremental steps, and should avoid excuse of global inaction.
Sadly, political leaders are often tied up addressing short-term crises, but these short-term crises are due to no-one satisfactorily addressing the longer-term issues. With inaction on the international issues, the short-term crises will actually get worse.
Avoiding the perfect storm
The scenario we face for the next 15-20 years is “perfect storm with no captain”.
He calls for a “Manhattan project” for supra-national governance. His book is a contribution to initiating such a project.
He supports the subsidiarity principle: decisions should be taken at the most local level possible. Due to hyper-globalisation, there are fewer and fewer things that it makes sense to control at the national level.
Loss of national sovereignty is inevitable. We can have better sovereignty at the global level – and we can influence how that works.
The calibre of leaders
Example of leader who consistently took a global perspective: Nelson Mandela. “Unfortunately we don’t have many Mandelas around.”
Do leaders owe their power bases with electorates because they are parochial? The prevailing wisdom is that national leaders have to shy away from taking a global perspective. But the electorate actually have more wisdom. They know the financial crisis wasn’t just due to bankers in Canary Wharf having overly large bonuses. They know the problems are globally systemic in nature, and need global approaches to fix them.
dw2 