Creating global governance mechanisms that are efficient but also responsive to national concerns will not be easy, says Pascal Lamy. But the WTO’s Director General and former EU Commissioner sees useful lessons to be drawn from Europe
This new decade is marked by the worst-ever economic crisis that’s also the first to have a global reach. The crisis has poured a good deal of cold water on the hopes and expectations created 20 years ago when the fall of the Berlin Wall ushered in an unprecedented era of economic openness and poverty reduction and a marked expansion of freedom, ideas, culture and technology.
The world today is in serious distress. Millions of jobs have been lost as a result of the economic crisis; we’ve also seen pandemics along with environmental problems, and this is impacting on millions of people in rich and poor nations alike. Nuclear proliferation, too, is on the rise, creating yet another of these global challenges that need global solutions. Our growing inter-dependence requires that the laws, social norms and values – all the mechanisms for framing human behaviour – need to be examined, debated, understood and operated together as coherently as possible. In sum, we need stronger and more effective global governance.
As with any system of power based on nation states, what is needed is “good” global governance; a system that offers a balance between leadership, efficiency and legitimacy, and which can ensure coherence.
Global governance posses a number of challenges. The first is the difficulty of identifying leadership at a global level. The second is legitimacy, and particularly what is often perceived as decision-making at an international level that is too-distant, non-accountable and not directly challengeable. The third relates to coherence. In theory there should be no problem here because coherent action by a nation state in the various aspects of international governance should be translated into coherent global action. But we all know that nation states also have a monopoly on incoherence because in practice they often act incoherently. This is where the third challenge to global governance lies; how to deal with efficiency that is at times only partial and is also incoherent. And the fourth and final challenge is the remoteness of power and the multiple levels of government that also call efficiency into question.
Managing global problems by using traditional models of national democracy has important limitations. And yet the very credibility of our national democracies is at risk if global governance fails to establish its own democratic credentials because citizens around the world feel that the issues that affect them daily aren’t being adequately dealt with.
In these troubled times for the European Union, it is no easy matter for it to present itself as a new paradigm of global governance. Yet the European construction is one of the most ambitious experiments to date in supranational governance, and the way Europe has coped with the sort of challenges I've just outlined is a useful reminder that defined and organised inter-dependency among nation states is perfectly possible.
The building of Europe is a work in progress, and the European paradigm is itself very specific to the conditions and pressures that prevail in Europe. Our continent was ravaged by two world wars and by the holocaust, leaving millions of men and women dead and many more millions in search of peace, stability and prosperity. One should therefore be cautious about ascribing universal values to what so far has only been a part of our European world. Other paradigms emerging elsewhere in the world reflect different conditions elsewhere.
At the heart of the European project has been the creation of a space of pooled sovereignty, a space in which the EU’s members agree to govern among themselves without having permanent recourse to international treaties. The essence of the European governance paradigm is the coming together of national political wills to act together in the framework of a common project and an institutional set-up that can make it work. It’s the combination of these three elements rather than just the governance methods used.
There is also the fact that Community law takes precedence over national law, and then there’s a supranational body like the European Commission that has been given the monopoly of initiating legislation. There is also the EU’s Court of Justice whose decisions are binding on national judges, and a parliament composed of a "senate" of member states, the council of ministers, and a "house of representatives" elected by the European demos, the European Parliament.
Taken together, these are the things that make the European Union a radically new economic and political entity when it comes to international governance. But today’s EU could never be the product of these innovations alone. Indispensable they may be, but all these institutional innovations stem from conductive political; it is agreement on the substance that permits agreement on the form.
I believe that the construction of the EU internal market, the European Monetary Union and trade policy are all areas where European integration has scored above average. The fact that the European Union numbers 27 member states and around 500m citizens, represents over a quarter of world trade and accounts for the world's largest GDP – and on trade speaks with one voice – gives Europe the capacity to defend its vision of trade opening accompanied by rules.
On the environment, Europe has played a global leadership role that reflects the large consensus existing within the EU on the need to protect and preserve the environment. Yet the institutional set-up within which Europe acts, the mixed competences and different voices, prevent Europe from being as effective in this area as it might, with the recent climate change summit in Copenhagen a warning. But it’s an area where Europe still has a chance to break even.
In my view there are two other areas where Europe is not punching its weight in the world. On development aid, the EU is the world’s largest donor and its flag can be seen at almost every major humanitarian crisis. Europe’s aid effort is backed by strong public support, with some 72% of Europeans polled recently in favour of honouring or going beyond aid commitments to the developing world. And yet for all that Europe has so far had only a limited influence on setting world development policies.
The second problem area is the Common Foreign and Security Policy. The good news is that European citizens demand more and better foreign policies from Europe. But this also touches on one of the areas where symbolic barriers – those of dreams and nightmares, of collective identities and myths – remain powerful. It’s why I think that building a European foreign and security policy requires a permanent compromise between interests and values. The EU’s new High Representative for Foreign and Security Policy, a Vice-President of the European Commission who now chairs the General Affairs Council is a step in the right direction. But it will also take a common will to act together and a common concept, a sort of shared project, to get there.
There are a number of lessons that we can draw from more than 60 years of European integration.
The first is that institutions alone cannot do the trick. Neither can political will without a clearly defined common project. Nor can a well thought through common project deliver results if there is no institutional machinery. The reality is that we need the three elements together to create an integration dynamic.
Even if these three elements are present there is a risk that a real or perceived legitimacy problem remains, creating a glass ceiling for further integration. The reality is that supranational institutions like the European Union require a long-term investment that is often incompatible with the short-term attention span of many of its leaders, who are often elected on thin majorities or with fragile coalitions. Global legitimacy requires long-term care and attention.
Governance systems can be likened to the three states of mass. The national level represents the solid state, the international system is more like gaseous mass and in-between these lies the European integration process as a kind of liquid state. But whatever the state of the mass, to make a governance system work demands a combination of political will, capacity to decide and accountability. In this respect, European integration offers some useful lessons for global governance.
Lesson one is the importance of the rule of law and of enforceable commitments. Global governance has to be anchored in stakeholders’ commitments and in rules and regulations with mechanisms that deserve respect. This is at the heart of the post-war multilateral trading system, which has developed over 60 years of trade regulation among nations and has a binding dispute settlement system to ensure compliance with its rules.
It’s also at the heart of what the international community is trying to do on climate change – achieve a multilateral deal where nations commit to emissions reduction accompanied by measures to facilitate adaptation and mitigation. And it is what the international community is striving to achieve on nuclear non-proliferation. It is true, too, for the regulation of finance, as the financial crisis so clearly demonstrated.
Commitments that are anchored in a multilateral context, and that can be monitored accordingly, allow for greater efficiency and coherence.
The second lesson for global governance is respect for the principle of subsidiarity; the international system should not be overburdened with issues better dealt with at the local, regional or national level.
The third lesson is that "coherence starts at home" because it lies first and foremost with the members of international organisations. Take the United Nations; we can and must have the "UN Delivering as One", but we also have to see "UN members behaving as One" in the different organisations that make up the United Nations family.
The last of these lessons is that since the political demos remains essentially national, the legitimacy of global governance would be greatly enhanced if international issues become part of domestic political debates. National governments need to be held accountable by their voters for their international level behaviour. Democracy at the national level has to have more of an international dimension to foster legitimacy at the global level. The fact that the governments which represent states in international organisations are the result of citizens' choices through domestic elections is not in itself enough to ensure those international organisations’ legitimacy. More is needed, so national actors – whether political parties, civil society, parliaments or citizens – must ensure that global level issues are discussed.
The good news is that many of these issues are already work in progress, so we need not expect a big bang. The global economic crisis has accelerated the move towards a new architecture of global governance in what I think of as the "triangle of coherence". On one side of the triangle lies the G20, replacing the former G8 to provide political leadership and policy direction. On another side lie the member-driven international organisations that provide expertise and specialised inputs such as rules, policies and programmes. The third side of the triangle is the G192, the United Nations that is the global forum for accountability.
In the longer term, we should have both the G20 and the international agencies reporting to the “parliament” of the United Nations. A revamping of the UN’s Economic and Social Council could lend support to the recent resolution adopted by the UN General Assembly on a UN-wide coherence system. This would constitute a potent mix of leadership, inclusiveness and action to ensure coherent and effective global governance. With time, the G20 could even be an answer to reforming the UN Security Council.
A structure of this type needs to be underpinned by core principles and values, and this is precisely what Germany’s Chancellor Angela Merkel proposed with the creation of a Charter for Sustainable Economic Activity. It is a commendable effort to provide a "new global economic contract" that would anchor economic globalisation on a bedrock of ethical principles and values, and so renew citizens’ trust that globalisation can work for them.
Globalisation poses a serious challenge for our democracies, and our governance systems must respond to that. If our citizens feel that global problems are insoluble, that will risk emasculating our democracies. The same will hold true if our citizens see that global problems can be addressed, but that they themselves have no influence on the result.
Our governance systems must more than ever offer citizens avenues for shaping the tomorrow's world they want their children to inherit. And the European Union remains the laboratory of international governance, a place where the new technological frontiers of international governance are being tested.