1 Introduction: Aims and Ways
The main question to which authors and editors of this publication seek an answer is: How fit is the present system of global governance to respond to the considerable challenges that the system faces? This question is not new; it has been asked by statesmen and scholars ever since the world saw that globalization processes brought about the need for global governance and the first global institutions appeared. Since then a literature has developed of an overwhelming size and complexity, condensed in recent textbooks.
In order to contribute to the answering of the central question of this publication we have chosen to concentrate in this introductory chapter on three concrete sets of more concrete questions:
What is the scope of globalization? What was the growth of global institutions capable to deliver new global public goods? Can this be expressed in a single indicator?
How can these developments be explained theoretically? What are the main characteristics of the system of global governance as it has evolved up till present? And how strong is the ensuing shift in authority to IO s?
What are the main weaknesses of the system of global governance? How can the lack of legitimacy of existing institutions be improved? What can be done to improve the performance of institutions?
We will seek to answer these questions by using the results of recent studies that deal with the theoretical understanding, the definition of empirically observable variables, and the quantification of developments. So, the ambition of our short contribution is limited; it does not try to review all relevant studies – it just aims to give a summary of recent research results. We devote a section to each of the three sets of questions articulated above.
2.1 Globalization of Human Activities
Over the past centuries human activities have increased their geographical span from local via national to global; a process called globalization. Initially, globalization was mainly driven by economic, technological, and security developments. However, since the 1960s other factors have come to the fore, such as the environment and health. Hence the term “globalization” has got a much wider scope; it must be seen now as the intensification of cross-national interactions (such as trade and capital movements) that promote the global integration of political, security, technological, economic, environmental and sociocultural processes. Therefore, all countries in the world have become more and more interdependent on an increasing range of points (Graff et al., 2013; Baten, 2016; for definitions along these lines see among others: Dreher et al., 2008, p. 15; Held, 2014, p. 62).
There are many ways in which this increased interdependence can be illustrated. One of the early drivers of globalization has been economic policy; that is, the reduction or elimination of restrictions to international trade and to financial transactions. A common indicator to measure growth on this score is the ratio of growth of international trade compared to the growth of total GDP (WTO, 2008, p. 15). In the period 1850 to 1913 trade grew by about 4% a year, while GDP grew by about 2%. During the interwar years there was a period of stagnation, but in the decades after World War II trade increased by 8% a year while GDP grew by 5%. Since then, this differential growth has continued. As over the last half century more complete data have become available so growing trade interdependence can now be better illustrated with the change in the average ratio between total world trade and total world GDP. This indicator increased between 1960 and 2010 from about 25 to 55. Other indicators convey the same message (OECD, 2010). The liberalization of international capital movements, for instance, led to a very large increase in cross-border investment; world foreign direct investment (FDI) as percentage of GDP grew from 5% in 1980 to 25% in 2006.
In the non-economic fields, a wide array of indicators is used. In environmental matters alone the World Meteorological Organization (WMO, 2021) monitors atmospheric pollution with a range of indicators. There are many other international organizations that monitor developments by other indicators. Together this produces a wealth of information to give guidance to policy measures for emission reduction and climate change adaptation. Examples for other fields of IO activity are not hard to find. But for our purpose these example will suffice.
In the beginning of globalization most transactions between traders were based on simple unwritten rules. However, the increase in interactions on the economic, technological, environmental, security, human rights, and sociocultural fields that occurred over the past could not have developed without the setting of clear, formally agreed international rules that can be enforced in some way. So, in an increasing number of fields both sovereign states and private actors have set up regimes and institutions. The diversity of situations has given rise to a set of governance forms in which actors, ranging from states to multinational corporations and civil society organizations, cooperate formally and informally to efficiently provide global public goods. Examples of such public goods are a stable regulatory environment for trade in goods, mechanisms for international conflict settlements, etc. (Reinalda, 2009; for the evolution of the socioeconomic complex, see, among others, Molle, 2008, 2014). The global governance complex is characterized by a fragmented locus of authority.
This institutional complex is formed by rule-setting organizations. They consist essentially of three types. The main ones are intergovernmental organizations (IGO s) that have states as members. The most visible of them is the United Nations complex of universal, multilateral, treaty-based intergovernmental organizations supported by their bureaucracies and implementing their policies through legally binding and enforceable rules. A second category is formed by organizations that set the standards by which a certain segment of the economy can function. Their members are often specialized technical bodies (often government departments or state enterprises). A typical case of this type was already created in the 19th century: the International Telegraph Union. Finally, a third category is formed by private standard setting organizations that are generally created under domestic law, such as internet regulators or Standard & Poor’s.
Around this core of rule setter has developed a multilayered complex of partly overlapping, often competing and even conflicting entities. Many of them are non-governmental organizations (NGO s). They provide certain services (such as the Red Cross) or monitor developments (such as Amnesty International). They pursue objectives such as the ban on nuclear weapons, the safeguarding of wildlife, etc. Most of them lobby the IGO s to adopt regulation that can bring positive change in their field of concern. In order to lobby effectively, they mobilize considerable sums of money and employ increasing numbers of highly qualified staff.
The growth of the number of institutions over the past centuries can be followed using the different issues of the Yearbook of International Organizations (Rittberger et al., 2012, pp. 66–68). During the period from 1850 to 1913 the total number of IO s grew to some 50 and the average number of members of these organizations grew to some 15. During the 1920s some 30 IO s were set up in order to cope with problems that emerged after the first World War. During the 1930s stagnation followed. But after World War II there was a boom in IO creation, in order to accommodate peacekeeping, industrial expansion, third world development, etc. In 1980 there were some 340 IO s, of which only 32 had a worldwide coverage, 50 had members spread over several continents and 255 were regional organizations.
In the last half century, the boom continued. Most of the increase in the number of IO s in recent decades are NGO s. The number of NGO s increased from some 3,400 in 1970 to some 27,000 in 2006. Many of these have a global vocation. To give an idea; around 2005 about 3,000 NGO s had consultative status in ECOSOC (United Nations Economic and Social Council). Since then, this growth has continued, but it is difficult to measure due to lack of comparability of the data. The latest Yearbook (2020) gives some 42,000 active international organizations, of which most are non-governmental ones. Each year some 1,200 new entries are made to the Yearbook.
What explains this proliferation of NGO s? The literature mentions three main causes. The first is the increase in demand; civil society has recognized that many problems need to be addressed at an international level and due to increased wealth have been able to find the money necessary to finance their activities. The second is the differentiation of interests; many NGO s operate in the same field with slightly different agendas. The third reason is the emergence of enabling technologies; the internet has made it much easier to organize and operate NGO s.
IO s once created tend to be robust and long-lived. In cases where they have outlived their original objectives they tend to use their experience to change their remit and move into an adjacent area. Yet some cease to exist. Statistics are difficult to come by. They do not permit the creation of a complete demography of IO s, but they allow us to analyze the reasons why, and under what conditions, international organizations cease to exist. An analysis over the period 1815–2016 (Eilstrup-Sangiovanni, 2021) showed that exogeneous shocks are a leading proximate cause of IO termination and that organizations that are newly created, have small memberships, and/or lack centralized structures are more likely to succumb.
Because of the trends depicted global governance has reached an unprecedented scope; it affects every area of policymaking. However, measuring the increase in scope is not easy. The partial economic and institutional indicators discussed in the previous sections convey only a fragmented idea of the increase in globalization. A more comprehensive indicator of globalization is needed. For a long time, its construction was precluded by the poor availability of data. Recently, this situation has changed.
Based on a very large set of data for all countries in the world for the 1970–2020 period a group of researchers has set up, refined, and updated a multidimensional index of globalization (Dreher et al., 2008; Haelg, 2019; Gygli et al., 2019). The three dimensions they used are economic, social, and political. In all three dimensions a distinction is made between de facto indicators (for instance, trade in goods in % of GDP for the economic dimension) and de jure indicators (for instance, internet access for the social dimension). In total, 43 variables are measured. On that basis weighted indices are calculated for each dimension and for the overall average. The results are very illuminating. The Index of overall globalization has steadily increased from about 40 in 1970 to about 60 in 2016. Some differences between subperiods can be distinguished. From 1970 to 1990 the index increased only moderately. Since then (the end of the Cold War) it increased dramatically up to 2008, while the growth flattened off since. One can see here the effects of the financial crisis and policy shifts of major countries. Some differences can be observed for the various dimensions, although their picture is largely in line with the overall index.
4 Defining and Measuring Shifts in Characteristics and in Authority
4.1 A Long Development Leading to Three Streams of Thought
Realism explains international governance as the result of strategic choices made by independent states which exist in the absence of
overarching authority. We concur that states are the most powerful actors in international politics and they vary widely in their power capabilities. There is, indeed, no coercive authority above states capable of sustaining international organization. Liberal institutionalism […] [poses] the idea that states act rationally in dealing with the collective action problems produced by interdependence. This approach conceives IO s as means to reduce the transaction cost of cooperation in areas where states have overlapping interests, thereby facilitating international governance under the structural constraints imposed by anarchy. Functionalist theory is indispensable if one wishes to explain two puzzling features of international governance: Why do states delegate authority to independent IO bodies and why do states collectivise decision making in binding majoritarianism? […] Constructivism, [a third stand of thought], explores how norms, identities, and discourse shape international cooperation. The character of international governance depends not only on its benefits, but on what the participants make of each other. Constructivism draws attention to the social fabric of international cooperation. To explain variation in international governance one needs to theorize the conditions under which the participants will be prepared to surrender some national self-rule for international shared rule. (Hooghe et al., 2019, pp. 2–5)
This overlaps largely with the synopsis made in Rittberger et al. (2012, p. 33) and Hasenclever et al. (2000).
4.2 Main Past Trends and Present Characteristics of Global Governance
Central in the three strands of thought given above is the idea that the increase in interactions creates the need for the effective delivering of global public goods and for compliance with international rules and norms. To that end sovereign states must give up part of their ruling power and hand over competences to international organizations. This did not occur in a same way and at the same time in all fields of emerging global public goods. So, a set of specialized idiosyncratic organizations has developed. Together, they form a global governance system that can be characterized as a multi-sectoral, multi-actor, multi-institution, multi-principle, and multi-instrument. For each of these features some major developments can be discerned.
Subjects. Collective action problems tend to lead to sector-specific organizational solutions for the creation of public goods. Different policy areas such as trade, climate change, or peacekeeping have developed differentiated governance systems. The global multi-sector system is thus not monolithic but rather segmented. Over time the issue coverage of the system has greatly
Actors. The system is to a large extent supported by sovereign states that have formed international intergovernmental organizations. In some cases, other IO s are powerful actors alongside states; this applies in particular to regional organizations such as the EU that represent their interest in global for a. However, from the beginning the global governance system is far from being the exclusive prerogative of public sector bodies; it increasingly consists of a bemusing multitude of non-governmental actors, among which we find corporations, civil society organizations, advocacy groups, substate public actors, etc. All these types of NGO s have organized themselves on a global scale. There has indeed been a clear trend of an increased role of powerful non-state actors in the development of transborder governance.
Legal forms and competences. These actors work together in diverse networks being vested in a variety of legal forms. Some global governance institutions are large, treaty-based intergovernmental organizations with a strong bureaucratic support and strong instruments to enforce compliance with rules. Others are made of transnational private or hybrid arrangements. Apart from the structures with a strong formal base the need for collective action has expressed itself in a host of different flexible venues, such as regimes, forums, networks, platforms, summits, and public-private partnerships.
Principles. Cooperation becomes facilitated if partners agree on basic values and ideologies. However, even with differences on those scores, cooperation can be facilitated by formulating basic principles of conduct. Principles tend to be subject-specific. A basic set of principles concerns sovereign equality, the non-intervention of states in domestic affairs of another country. The consideration that humanity is the custodian of the global environmental patrimony has led to the adoption of the precautionary principle. In economics, the recognition of the scientific finding that free trade is advantageous has
Instruments. The components of the system vary widely in power, resources, and competences from issue to issue. These differences express themselves in a wide variety of regulatory and other instruments of governance. They produce a plethora of regulations, norms, standards, etc. Over time most IO s have become more powerful and use more constraining instruments for insuring compliance with their rules, leading to a decrease in the room of maneuver of both public and private actors. Now compliance tends to rely less on obedience to formal international law, that if broken triggers sanctions and punitive actions. Much more now tends to be done thorough non-coercive soft instruments, such as monitoring, persuasion, norm diffusion, information exchange, etc.
The great diversity and multiplicity of institutional forms, cooperating partners, and instruments is very difficult to navigate for users, including the policymakers and legislators who must make them operational in their own jurisdictions.
4.3 Measuring the Shift of Authority
National states have handed over authority to IGO s because they believed they would benefit from the transaction; they reckoned in this way to enjoy new public goods that could not be provided on the national level. So, once the shift in authority is operated member states and their citizens comply in their own interest with supranational rules that are in everybody’s interest. The trends depicted above suggest that this has been the case for an ever-increasing number of issues. Can we therefore conclude that more and more authority is transferred from the national to the international level?
To answer this question a group of researchers has attempted to measure the degree to which authority has shifted (Hooghe et al., 2019). To do so they have followed a three-stage approach. In the first stage they distinguish between two sources of authority of IO s, or ways in which authority is shifted. A first way is delegation: national states hand over authority to independent international bodies. After delegation these IGO s have an autonomous capacity to govern. Often the secretariat of an IGO is empowered to set the agenda and oversee implementation. More rarely states delegate powers to an international court that can deal with the consequences of non-compliance by
In the second stage they translate these notions of delegation and pooling in terms of observable components. For delegation they measure the role of IO s in agenda setting, decision-making, and dispute settlement. For pooling they measure deviations from consensus in each stage in policymaking, such as constitutional reform, the budget, financial non-compliance, membership accession, and suspension.
In the third stage they quantify all components and integrate the results in a two-dimensional measure of international authority (MIA). They find that delegation has increased slightly between 1975 and 1995 to increase steeply after that up to 2010 (from 0.16 to 0.24). Pooling on the contrary did develop in a much more gradual way: from 0.29 to 0.35 in the same period (Hooghe et al., 2019, p. 148).
5 Challenges to the System: Ways to Improve it
5.1 Contested Governance and Its Consequences
The increase in the authority of IO s induces contestation. In the first instance, contestation comes from member states that are negatively impacted by IO decisions. They had agreed to the rules of the IO, because participating in the common public good gave them benefits. But once a particular case occurs with negative consequences for their particular interest, they will tend to devise strategies to avoid compliance with IO s’ decision-making. It is not only states that are affected; in more and more cases, IO decisions also have a negative affect on the daily lives of citizens and the daily operations of business and civil society. For instance, the world economic institutional system is blamed for locking workers into low-wage activities and stimulate corporate tax evasion, leading to high wage taxes. A prominent critic in this respect has been Nobel Prize winner Joseph Stiglitz (2002). In some cases, popular and state contestation join forces. For example: the WTO has been under attack from anti-globalist popular movements and from populist governments. Consequently, it has been unable to make progress on major issues and its dispute settlement system has become non-operational.
Contestation often leads to a further fragmentation of authority in organizations that can be difficult to avoid. A case in point is the monetary/financial
Japan (although an ally of the US on many fronts) and notably China (the challenger for world hegemony) together with other Asian nations have heavily criticized the IMF for its inadequate management of the latest financial crises. They have attempted to set up an Asian Monetary Fund to bypass the IMF (Narine, 2003). These attempts have until now been unsuccessful, due to the diversity of views of major partners and strong US lobbying (Hyun & Paradise, 2019).
To improve the preventive part of the global financial system the International Financial Stability Forum was created in 1998 which set up an early-warning system for crises. After the financial crisis of 2008 and the meeting of the G20 in 2009 it was transformed into the Financial Stability Board (FSB). The FSB cooperates with the IMF, the OECD, and the Bank of International Settlements on the supervision of the financial sector.
5.2 A Systemic Dysfunction?
This not just a problem for the IMF; almost all major IO s are heavily criticized for either lack of efficiency, institutional sclerosis, ideological infighting, duplication, excessive bureaucracy, obsolescence, inaccessibility, lack of transparency and accountability, or loss of control. Many IO s are criticized for a combination of such defaults. Populist movements and governments contest the fundamentals of the liberal international order that characterizes most of the post-World War II institutions. In that slipstream some contest all multilateralism and all concerted action for new global public good provision. They do that mainly by contesting the legitimacy of IO s.
Overshadowing these questions is a major geopolitical factor: the gradual shift in power from the US to China and the increase of the role of the largest countries in the former Third World. This tendency of increased multipolarity, which is going hand in hand with a fundamental clash of societal systems, contests the foundations of many of the constituting elements of the present global governance system.
In view of this state of affairs some observers (e.g., Hale et al., 2013) have concluded that the global governance system has come to a gridlock. Since then,
In order to empirically analyze this, Zuern (2018) distinguishes between two complementary sources of legitimacy: procedure and performance. In terms of procedure IO s can refer to the generally accepted norms that they apply and to the expertise they have, and the impartiality of decisions. The term of performance translates in responsiveness to articulated needs, preferences, and effectiveness; in other words, delivering what was agreed on. Both elements have given rise to new research (Pisani-Ferry, 2018; Stephen, 2018; OECD, 2021). In the following sections we will address both improving procedural legitimacy and improving practical implementation.
5.3 Improving Procedural Legitimacy
Legitimacy is granted to an IGO at the moment it is set up by the fact that sovereign states have handed over authority to it (even though that authority may erode over time). Such de-legitimation may occur, for instance, due a change in the standards by which the relevant stakeholders of the IO evaluate its performance. Once a legitimacy deficit has occurred, it does hinder the development of an IO. Member states will no longer consider the IO as the proper venue for discussing and solving problems. The IO in question will have difficulty in making members comply with the rules and decisions of the IO. Naturally, under such conditions member states will shy away from the idea to entrust new tasks and responsibilities to such an organization. This can only be countered by a process of re-legitimation, for instance, by adapting the remit, governance practices, etc.
The literature on these phenomena has primarily used case studies and narratives to shed light on them. Recently attempts have been made to go beyond that. Tallberg and Zuern (2019), for instance, have conceptualized a theoretical model in which legitimacy, as the dependant variable, is influenced by three intermediate variables (public opinion, political behavior, and political communication) each operationalized by a set of concrete measurable variables. The latter are based on the quantitative results of surveys (experts or population), field experiences and content analysis of relevant documents and media texts.
The approach has delivered some promising results. One example is that IO s contested for lack of democratic control have tended to add parliamentary assemblies to their institutional setup. Another example: de-legitimation and re-legitimation processes were found to be particularly intense the higher the authority of an IO.
Another main source of legitimacy is performance. Critics agree that the performance of IO s individually and of the system collectively must be improved. Given the complexities of the global governance “system” depicted in the previous sections, one may wonder how it can function effectively. The more so in cases where it is confronted with issues that are intricately related (for instance, in international migration, where problems of economic development, security, human rights, and environmental degradation interfere). In such cases effective international policymaking and implementation requires cooperation and coordination between a range of actors. For example, humanitarian relief operations often require the coordinated efforts of global, regional, national and local, and public and private agencies. To that end, problem-based complexes of governance have been formed that have become structurally enmeshed and whose boundaries tend to be in continuous flux.
In numerous instances the expansion of the scope of international organizations has created overlap. On the one hand, the resulting conflicts between competences need to be arbitrated in order to avoid stalemates. On the other hand, numerous instances occur where existing organizations fail to address problems that go beyond their competence and require the cooperation of various specialized organizations. However, organizing the solution to both the problem of “too much” and the one of “too little” is complicated as the most concerned organizations have different rules and operating modes.
To discover a solution to the problem outlined here, the OECD (2019, 2021) has launched a voluntary partnership of some 50 secretariats of IO s to promote and discuss the conditions for greater quality, effectiveness, and impact of international rules, regardless of their substantive scope. This collective effort has led to an unprecedented collection of information on the rulemaking activities of IO s and the exchange of practices and tools on implementation, stakeholder engagement, evaluation, and coordination of international instruments. They show that overcoming fragmentation and institutional inertia, although a complicated exercise, is a feasible way forward. Efforts in this respect are beginning to produce some effects.
6 Conclusions
Over time the global governance system has grown in numbers and types of partners, size, issue coverage, intrusiveness of instruments, and complexity of operational forms. However, all IO s taken together show a considerable rise in IO authority and a shift away from national states and private organizations. This IO authority is increasingly contested, leading to a decrease in legitimacy.
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“Three patterns can be discerned. First IO s have seen a secular expansion of their policy portfolios, from an average of 2.9 policies in 1950 to eight policies in 2010. Second there is less movement in IO s’ core policies over time, from an average of 1.4 core policies in 1950 to 2.5 in 2010. Third and by implication, the dynamism of an IO’s policy portfolio derives mostly from adding flanking policies” (Hooghe et al., 2019, p. 148).