In WEF’s view, the post-WWII international system functioned tolerably well until recently. By the time of the 2008 financial crisis however, it was no longer a creditable, effective, or efficient governance system. The legitimacy and the fragility of the system 1 were too clearly evident to be ignored 2 . As John DeGioia, chair of GRI’s Global Agenda Council on Faith and President of Georgetown University, explained in his introductory essay:
The 2008-09 economic and financial crisis put an end to a familiar and comforting narrative: the story of uninterrupted growth made possible by markets, trade, and innovation on a worldwide scale. In that narrative, institutions and the values they embody were left implicit and all but invisible. Institutions embodied the rules of the game, to be tinkered with when necessary in the name of efficiency. The crisis revealed a more complex picture – institutions grounded on values of narrow self-interest, short-term thinking, and a lack of concern with the global common good. 3
The systemic failures came from a number of directions. The most challenging for the international elite was the speed and severity of the transformation of a simple housing bubble and subsequent bankruptcy in one country to a global financial crisis. During this period, major internationally important institutions from central banks, OECD governments, corporate suites, to national ministries of finance were unsure what they could do to prevent the cascading of events or even to re-stabilize the system. 4 In the end the OECD nation-states could think of no better solution than a wholesale bailout of the international banking sector, a public intervention tool that, should the need arise, they cannot invoke year after year.
As events since the publication of Everyone’s Business have shown, there are more uncontrolled international financial crises looming on the horizon. Concerns continue to be expressed by international elite community about the resilience of the current system, about the effectiveness of intervention tools to contain these crises and about who at the national level will cover the costs of systemic failures. As the joint US-EC intelligence study, Global Governance 2025 explained, “[t]hree features of rapid globalization are driving demands for more effective global governance: deepening interdependence, interconnected problems, and the mingling of domestic politics with international issues.” 5
At the other end of the global social structure, there is another perspective about the fragility and failures of globalization itself. The claim that globalization would bring benefits world-wide was not holding up. There were the realities of the food, energy, and water crises; the increased knowledge of inequality in income and assets within and between societies; the ongoing wars of “choice”; the disproportionate potential and actual consequences of climate change; and the increased assertions of narrow national self-interest undermining potential benefits of globalization. As Samans, Schwab, and Malloch-Brown explained in their joint introduction:
. . . [A] global population that is more informed about global challenges is by definition more conscious that its priorities are not being translated adequately into action. This fuels popular frustration and cynicism about whether international institutions genuinely reflect popular will and are fully accountable. 6
From this perspective, what was working was the dynamics of the World Economic Forum. WEF had evolved into a corporate-centric body with a wide network of related stakeholders that grappled regularly and creatively with the tough issues of the day, something that the existing world governance system was simply not willing to do. Although there were academic and civil society conferences and papers published on a wide range of governance topics and the UN system regularly hosted open-ended seminars and panels, these on their own, according to WEF, were ineffective in re-conceptualizing global governance. It needed a body securely tied to the international business community to get the process of redesigning governance going and going in the right direction.
The Readers' Guide welcomes comments with alternative examples or counter examples and commentary – critical or otherwise – of the above interpretation of GRI’s perspective.