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Global Governance Is At A New Cross Road
Views:1145 Updated:2020-07-20


Global governance has reached a new cross road since the world moved into the new century. A series of mechanisms and institutions within the global governance system have lost part of their efficiency; meanwhile a set of new mechanisms established since the beginning of the new century somehow haven’t got institutionalized and functioned well yet. The number of issues faced by the world today urged nations to make efforts to improve the system in order to better address the challenges under the new situation. Nevertheless, countries especially the big powers so far haven’t been able to reach a common understanding in general terms on what approach should be adopted to improve the current system. It appears that the world only super power, the United States, is in favour of a traditional approach, which basically means that the U.S. still plays a major role in global rule-making, while the rest of the world is mostly in a position of being the rule-taker. In the meantime, some developing countries and emerging economies, as well as those smaller countries with great potential and strength in particular areas would prefer to have fairer participation in regional and global affairs.

 

Developing countries and smaller industrialized nations have been making efforts to promote the democratization of international relations for decades already. Certain progress has been made. The establishment of the Group of Twenty (G20) mechanism can be a good example that represents a big progress of the global governance system. Through the G20 mechanism, developing and developed countries finally stand together to deal with the global economic and financial issues.

 

More progress in promoting the democratization of international relations in the coming years needs to be made, given that the world has been changing and the changes in a wide range of issue areas require an increasing and more balanced participation from different sectors, consisting of developing and developed states as well as the non-state actors in terms of their contribution to regional and global governance.

 

The purpose of analysis is to observe the main cause that has affected countries’ efforts - in particular the major players’ efforts - to improve the global governance system, and then suggest a possible solution to surpass the dilemmas that have constrained the cooperation among states. This analysis will begin by giving a brief historical overview of the development of the global governance system since the end of WWII.

 

A Brief Historical Overview of Global Governance


Global governance has roughly experienced three periods since the end of WWII: from 1945 to the 1970s, from the 1970s to the end of the 20th century, and from the end of the 20th century to the present.

 

From1945 to the 1970s, though the concept of “Global Governance” wasn’t created yet, state, as the main actor in international relations, had already been in a main position of practicing global governance. By then, inter-state relations and inter-state governance had mattered a lot in terms of their relevance to regional and global affairs. Some experts also name this type of governance during these years as “International Governance”.

 

Under the U.S. leadership, a post-war world order was forged, as reflected by the establishment of the United Nations as well as of the Bretton Woods Institutions mainly consisting of the General Agreement on Tariffs and Trade (The World Trade Organization), the International Monetary Fund, and the International Bank for Reconstruction and Development (the World Bank).

 

Over this period, many developing countries had just achieved national independence. Domestic construction and recovery had become the priority of these countries. Generally, developing countries had limited participation in global governance and international cooperation.

 

From the security, geopolitical, and ideological perspectives at the international stage, the U.S.-led capitalist camp and the former Soviet Union-led socialist camp competed for dominance. Ideology mattered a lot in affecting the relationship and cooperation among nation states. The developing world and the developed world generally had limited collaboration, coordination and communication.

 

To support its Cold War policy, the U.S. implemented the Marshall Plan right after WWII to help recover the European economy, which in turn strengthened the power and influence of the U.S.-led capitalist camp. Later during the 1960s-1970s, the U.S. had suffered a series of difficulties both domestically and internationally with the oil crises, the dollar crises, the uncontrolled movement of capital across borders, and the U.S.-Vietnam war etc. Nevertheless, it had finally managed to overcome the challenges and made a lot of achievements, particularly, in the economic field, as indicated by the formation of an economy driven by a Neo-liberal thought. Besides that, in the mid-1970s, the major developed countries established the Group of Seven (G7) mechanism, which served as one of the main platforms for dealing with global political and economic issues. 


Overall, during the post-war years, the U.S.-led major developed countries had been in a key position in leading the direction of global governance and international collaboration. By then the GDP of the G7 member countries accounted for around 70% of the global total, and the trade volume was over 50%.1

 

The second period of global governance was ranging from the 1970s to the late 20th century. A number of important events had taken place at the international stage over this period - the world turned from a bipolarity to an unipolarity with the dissolution of the former Soviet Union; China and the U.S. formalized their diplomatic relations in 1979; China had adopted a reform and opening-up policy starting from 1978, and later from the mid-1990s gradually developed a socialist market economy. 

 

Globalization was deepened, and it had greatly influenced the developing and developed world in both negative and positive ways.

 

The negative implications of globalization roughly manifested from the following aspects: it had generated uncertainties and vulnerabilities. Developing and less-developed regions and countries, as well as the small businesses in different countries could have suffered more from such uncertainties and vulnerabilities, due to the fact that, these less-developed regions and countries in the early stage of globalization generally lacked advanced technologies, capital, and governance capacity to help them endure the consequences of globalization. Also, the global businesses run by big transnational corporations, compared to the small businesses, were more competitive and obviously in more advantageous positions to benefit from globalization. Therefore, globalization somehow could have widened the gap between the rich and the poor.

 

In the meantime, globalization had also created positive outcomes. Countries from different parts of the world were more connected over this period. A large number of developing and less-developed countries, as well as a great deal of small businesses from different regions had got on to the regional and international level-playing fields and gradually grown stronger. The period from the 1970s to the late 20th century was also of a very significant time for countries, both developing and developed, to re-adjust their positions and policies. The developing and developed worlds were more integrated and inter-connected with each other.

 

In addition, apart from state actors, the emergence of a wide variety of non-state actors including the set of mechanisms in different areas promoted globalization and global governance up to a new stage. Apparently, the type of participants in contributing to global governance and problem-solving had been greatly widened. Though ideology was still of an issue, it had played a much less crucial role in affecting the relationship and cooperation among various actors.

 

Meanwhile, the concept of “Global Governance” was formulated. The former West German Chancellor Brandt and the then Swedish Prime Minister Carlson had greatly contributed to the process of forging this concept. As initially proposed by the then West German Chancellor in early 1990s that the world needed a new concept to handle the uncertainties and challenges in a more globalized world after the Cold War, and then after having gone through a series of discussions in international summits, this new concept appeared in a report titled “Our Global Neighbourhood”, which was released by the Commission on Global Governance. Soon the concept of “Global Governance” was widely recognized and applied at the global stage.2  


Overall, the first and second periods of global governance proved the U.S. ‘s confidence in ascertaining its leadership in rule-making and network-building. Meanwhile, the second stage of global governance also manifested the strength and potential of certain developing countries and small industrialized nations in terms of their engagement in global affairs.

 

From the late 20th century to present, a series of events including the 1997 Asian financial crises , China’s entry into the WTO, the 9.11 terrorist attack, and the 2008 global financial crises, as well as the current Coronavirus pandemic etc. have had big impacts on the global political and economic landscape. Dramatic progress has taken place in the global governance sphere, with the further growing role of developing countries and emerging economies in global affairs, as well as with the springing up of a number of new mechanisms and organizations such as the Shanghai Cooperation Organization (SCO), the G20, the BRICS, the Asian Infrastructure and Investment Bank (AIIB), and so on.

 

To better deal with the repercussions of the Asian financial crises, as well as to avoid further crises to happen, the G20 summit, as proposed by the Finance Ministers of the Group of Eight countries, was formed on 16 December 1999 in Berlin. Then years later in order to help rescue the developed world out of the 2008 global financial crises, the G20 summit was upgraded to the leader’s level in 2008. Soon in 2009, the G20 replaced the G7 to become the primary international platform for managing global economic and financial issues. The establishment of the G20 marked a big progress for the improvement of the global governance system, as for the first time, developing and developed countries worked together to formulate global rules.

 

A Unilateral and Hegemonic Approach - The Main Cause of Having Affected the Improvement of the Global Governance System

 

In retrospect, the U.S.-led major industrialized nations were able to independently deal with their own problems in the past century. By then, developing and less developed countries were in relative weak positions and they had played a minor role in global governance. Nevertheless, different parts of the world nowadays are more closely connected. The contribution of developing countries to the world has kept growing while the role of developed countries has diminished a bit. The management of the 2008 global financial crises as well as of the current pandemic proved that the developed countries are not capable of independently handle the series of crises anymore. They need a wider participation of various actors. Therefore, the new situation needs a new governance approach. The new approach basically means that developing and developed countries and other range of actors need to work together to promote the improvement of the global governance system in a substantial way. This is a general trend of global governance in the 21st century.

 

However, the U.S. doesn’t seem to be supportive of this new approach at the moment, instead, it would still prefer a traditional approach, a U.S.-led unilateral and hegemonic approach, which is supposed to meet the U.S. interest in the first place; yet a large number of others bear more international responsibilities without being able to enjoy the rights they are supposed to have.

 

Here is an example – upon the global financial crises, developing countries were invited to help get the developed world out of the financial turmoil by injecting large amount of fund into the IMF. Developed and developing countries through the G20 platform agreed to jointly reform the financial institutions including raising the voting share of developing countries and emerging economies within the IMF and the WB. However, this proposition was later blocked by the U.S. Congress. Then with developed countries’ economic and financial situation getting better, this issue has been downplayed.

 

Therefore, instead of contributing to the global governance system, the old approach, under the new situation, appears to have constrained the improvement of the whole system. The traditional approach might lead to the following consequences: global governance system risks being fragmented - a group of countries including developing countries, emerging economies, and less powerful developed countries might come together to form new mechanisms and rules in accordance with their common interests on certain areas of issues. The world has already seen this trend, as illustrated by the formation of a series of new institutions and platforms since the beginning of the new century.

 

Global governance is at a new cross road now. To surpass the challenges at this cross road, this piece would finally put the following: 

 

Sound and effective coordination and collaboration of great powers should still be the key for overcoming the current dilemmas in the global governance sphere. Great powers especially the U.S. need to make big concessions. In today’s world, a unilateral and hegemonic approach most likely cannot work anymore. Rules have to be made based on the consideration of fairness and equality, and of the interests of all relevant parties concerned, rather than of the interests of one or a few major powers. The concern of small countries should be taken into special consideration as well. A fairer and more balanced global governance system means more opportunities for all, and it is conducive to the U.S. interest in remaining as the most powerful country in the world.

 

 

 

 

Note

 

1. Figures were cited from He Yafei (2015) China’s Historical Choice in Global Governance.  Renmin University Press. pp17

2. Ibid. pp3

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