Center for Governance and Sustainability

at the University of Massachusetts Boston

Readers’ Guide: Concluding Observations

The World Economic Forum started a global conversation about a new concept for governing globalization. This Readers' Guide has endeavored to provide a way into that conversation for non-members of the Davos community.

The Readers' Guide has shared some of the WEF’s provocative ideas for moving beyond the UN system as the backbone of international relations and for redefining the key Actors in global governance today. The Readers' Guide has also noted what fundamental issues were not addressed by the GRI and what ways the GRI approach missed the mark as a viable, people-centered, ecologically-sensitive system for international governance.

The path forward will require two very challenging tasks. One is a challenge of imagination and ethics – what alternate form of international governance would better capture the needs and aspirations of peoples, cultures, ecosystems, and nations around the world? The other is a challenge of knowledge and customs – what are better ways to understand and explain the formal and the informal, the power-centered and the people-centered, the pull of a uni-polar, bi-polar, or multi-polar world today so that clearer concepts can evolve to meet the ever growing numbers of billions of people today and tomorrow?

GRI’s conversation takes as its starting point an atypical view of global governance. Most analysts and scholars center their work on the nation-state, its various bilateral departments and ministries, and its multilateral extension into the UN system. GRI, however, sees the nation-state as just one of the many forces acting in the global governance space. From its perspective, executives at multinational corporations are both the central Actors in Davos and the central Actors in international governance. These central Actors need to have alliances with crucial sets of stakeholders in order to make their system work well. These stakeholders include the leaders of key civil society organizations, senior scholars in the academy, media leaders, prominent members of the clergy, and leading government officials. For Davos, the interaction of these Actors and the decisions that evolve from their interaction are what has effectively constituted global governance for the past decades. Most of those in specialized international nation-state tied communities and the wider general public do not share this view of reality.

Following the first phase of 2007/2008 financial crisis, WEF saw two significant failures of the existing global governance structure. First, the highly fragmented way this governance system worked meant that it lacked the necessary resilience in the face of the global ramifications of a US mortgage crisis and bankruptcy on Wall Street. In the global economy, the macroeconomic and financial ramifications of this crisis were so strong and so rapid that no one set of Actors – nor any combination of Actors -- truly knew what to do in order to bring back normalcy, whatever that meant. The extreme intervention tools used by central banks and OECD governments were very costly and risky. They themselves set in motion economic and social forces that limited the ability of central banks and nation-states from using similar tools again and again, should the need arise.

The second perceived failure in WEF’s understanding of existing global governance was that, at the time of the financial crisis, a significant share of the world’s population saw at one moment the structural weakness of the corporate-centered global governance system. For them, this loss of confidence in global institutions of governance endangered the continued operation of the global governance system. The threats to the legitimacy of the global governance system were coming from many directions. For Davos, the 2007/2008 global fiscal crisis and all its continuing implications meant that the de facto marginalization of the nation-state and UN system from global governance needed an urgent re-think.

With this economic challenge, WEF saw an opportunity to make a difference. It could draw upon the Davos experience and generalize it to the global level as a model for the future; it could propose ways that the corporate-center de facto governance system could ‘improve’ the nation-state system and incorporate into that mix key elements of leadership of international civil society; and it could use the economic crisis as a jumping off point to recommend policy modifications in a broad range of other non-economic areas.

The macro-economic crisis that started in 2007 and continues today is no doubt significant enough on its own to prompt a change in global governance. Witnessing massive uncontrolled capital movements and wondering how the global economy is going to re-stabilize itself is very uncomfortable. GRI’s analytic frame is itself uncomfortable in another manner.

 

Related Ideas: Sweeping changes; Appetite for reform waned; Historic error to revert to complacency; Limitations of universal frameworks; Strengthen UN rule-making and capacities

The Readers' Guide welcomes comments with alternative examples or counter examples and commentary – critical or otherwise – of the above interpretation of GRI’s perspective.

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