Addressing the Global Governance Deficit

Our world has experienced a sustained period of positive change. The average person is about eight times richer than a century ago, nearly one billion people have been lifted out of extreme poverty over the past two decades, living standards have soared, life expectancy has risen, the threat of war between great powers declined, and our genetic code and universe have been unlocked in previously inconceivable ways. Many of today's goods are unimaginable without the collective contributions of different parts of the world.

While the future is full of opportunity, it is also highly uncertain and characterized by growing systemic risks. In many cases, these risks are the consequences of our success, arising from rising incomes, population growth, interconnectedness and technological advances. Risks arising from the plundering of our planet's natural capital, growing inequality, and the potentially devastating results of accidental or deliberate use of new technologies are among the reasons we urgently need to deepen our understanding of the threats posed by business as usual.

Given the scale of the challenges and the prospect of very positive but also possibly disastrous change, it is time for nations, civil society, businesses and global governance institutions to think afresh about how we collectively manage these extraordinary shifts. In an increasingly integrated and hyper-connected world, our individual future depends more than ever on our collective future and our capacity to work together to deepen our understanding of the critical challenges.

Harnessing Globalization

Globalization is not new but the global breadth and depth of its impact has changed. The question is how can we reap these benefits of globalization while minimizing its costs? Given the predominant role of market forces as one of the engines of globalization, how can we address classical issues of elite capture, insider rents, benefit sharing and welfare creation that traditional governance systems have had to cope with since the Industrial Revolution of the 19th century?

Many of the answers to these questions do not pertain to global governance. They lie in classical political systems. After all, every country swims in the same global sea. Some are doing well, others are not. Economic science tells us that the factors that make a difference in the performance of economic and social systems are deeply rooted in local conditions, institutions, behaviors, and beliefs. This is obviously true in terms of education and social security systems which play a major role in spreading or preventing the welfare effects of globalization. The same goes for the quality of regulatory and legal systems.

Yet so many of today's challenges lie beyond the scope and power of any one country to address, not least in areas like climate change, pandemic preparedness, financial stability and cyber security. Regrettably, our global governance system has not kept pace with the scale and complexity of these challenges.

Beyond the Westphalian Nation State

Building an international system of governance has never been and never will be easy, due to its intrinsic structural handicaps when compared to more localized and individualized governance systems embedded within nation states, corporations, and civil society. Although often imperfect, these systems can broadly provide what we expect good governance to deliver: leadership, legitimacy, efficiency, and coherence. For policy or political purposes, the Westphalian nation-state paradigm retains an indisputable comparative advantage. It reflects the conventional wisdom that all politics are local. It is based on a sense of togetherness, of community, on an "affectio societatis" linked to proximity and sociocultural similarity.

This feeling is obviously lacking globally, which is why the international system remains inter-national (between nations) but not global. It requires cooperation. All the treaties, codes, deals, institutions, and programs that constitute the bricks and mortar of this system are dependent on the willingness of sovereign states. By definition, they can opt in or out.

Escaping the pull of Westphalian gravity necessitates a very powerful political energy. Only the horrors of major catastrophes such as world wars and genocides have so far generated such an energy. History has shown us that when the pressure of collective or individual culpability recedes, when chaos is forgotten, progress stalls. The paradox of today's system is that Western-led globalization has catalyzed the rise of new stakeholders, including emerging economies, and has generated the need for global structures capable of managing, for example, international trade and migration, yet has simultaneously led to a destabilization of the previous western-based power balance, without yet providing a new sovereignty-based order.

Are emerging countries rich countries with many poor people, or poor countries with many rich people? Depending on how one answers this question, the level of rights and obligations in the present international order may vary significantly. Negotiations at the WTO on a new multilateral trade regime, or at the UNFCC on carbon emissions burden-sharing have stalled for the last 10 years because of our incapacity or unwillingness to answer this question. Developed countries refuse to recognize that development takes time. Developing countries refuse to acknowledge that, as they develop, the future playing field has to be level.

The present global governance deficit is both permanent and provisional. Permanent because emulating or cloning national governance at the global level is a distant dream in the absence of a critical mass of global citizenship. Provisional, or transitional, because the process of rebalancing geopolitics as a consequence of the rebalancing of geo-economics generated by globalization is still under way and will be for some time to come.

Now for the Long Term

Identifying new approaches to bridge the global governance deficit was a central priority of the Oxford Martin Commission for Future Generations. In our report, Now for the Long Term, we propose an agenda for action, offering innovative solutions to ensure we can collectively harness the extraordinary opportunity as well as manage the unprecedented uncertainties and risks of our globalized world.

The Commission recommends embedding sunset clauses in the governance structures of publicly funded international institutions to ensure regular reviews of organizational performance and purpose. Since the establishment of the UN and the Bretton Woods institutions over 60 years ago, the number of international institutions has steadily grown, resulting in an inefficient and confusing amalgam of overlapping mandates yet not one agency has been closed down.

We argue that institutions that have fulfilled their mandate or proved unable to respond effectively to changing demands should cease to function, and their resources redirected to more productive endeavors. In order to escape that fate, existing institutions must adapt to shifting global power dynamics. This means increasing representation not only for the major emerging economies, such as China, India, and Brazil, but also for countries like Nigeria and Indonesia, which together are home to more than 400 million people.

International affairs and organizations largely operate under mid-twentieth-century arrangements, which has two serious shortcomings. First, countries with a diminishing stake retain disproportionate power. Second, global decision-making now involves four times as many countries as it did in the immediate post-war era, not to mention a plethora of non-governmental organizations and civil-society groups, making for a messy -- and often unproductive -- process.

With the world's problems becoming increasingly complex and interconnected, global decision-making processes must be as streamlined and efficient as possible. When numerous committees meet in parallel, the countries with the largest teams of experts dominate proceedings, effectively locking most countries out of key decisions and impeding meaningful dialogue.

Creative Coalitions and Exchange Platforms

In order to increase the productivity of global negotiations, the Oxford Martin Commission recommends creating coalitions of motivated countries, together with other actors, such as cities and businesses. As outcomes improve, international bodies' legitimacy would be strengthened, which over time would enhance countries' willingness to delegate powers to them.

Moreover, the Commission proposes creating voluntary platforms to facilitate the creation of global treaties in vital areas. For example, a taxation and regulatory exchange would help countries to tackle tax avoidance and harmonize corporate taxation, while promoting information sharing and cooperation. Likewise, a cyber-security data-sharing platform could prove vital to understanding, preventing, and responding to cyber attacks.

As governments learn to collaborate with each other and with other actors, such as businesses and civil-society groups, faith in the power of international cooperation would be restored. In such an environment, breaking the gridlock on urgent global issues would be far easier than it has become in the current atmosphere of disillusionment and mistrust.

The simple fact is that with interconnectedness comes interdependence. In order to protect the global commons, world leaders must pursue shared solutions as inclusively and efficiently as possible -- a process that can be accomplished only through international institutions. Failure to do so would threaten the tremendous progress that globalization has facilitated in recent decades.

The necessary changes will not happen overnight. But if governments, businesses, and civil society work together, they are feasible -- promising a more sustainable, inclusive, and prosperous future for all.

To download a copy of Now for the Long Term, visit: www.oxfordmartin.ox.ac.uk/commission