The horrors of the Second World War provoked unprecedented determination to establish a global framework of international cooperation. Under the auspices of the United Nations (UN), new international institutions were established to govern cross-border issues, initially focusing on peace and human rights, before targeting stability of the global financial system and the expansion of world trade.
The governance of these international bodies reflected an uneasy compromise between principled democracy and desire of the victors of the conflict to call the shots. Whilst the UN General Assembly and its specialist agencies offered equal voting rights to every country, the all-important UN Security Council retained powers of veto for US, UK, France, Russia and China. Governance of key financial institutions such as the World Bank and IMF was weighted in favour of the richer countries which underwrote the investments.
Inevitable dissent over this profile of global governance coalesced into two broad factions. Richer countries, obsessed with optimising economic growth, rail at the power of the majority to prioritise the needs of low income economies and reducing global poverty. Principles such as the transfer of financial and technology resources from richer to poorer countries come under constant attack by the former.
The US has been the most strident critical voice, refusing to participate in the UN Convention on Biological Diversity and, more recently under President Trump, giving notice of withdrawal from the landmark Paris Agreement on climate change.
The very different perspective of the world’s poorest countries observes that their right to development has been impeded by undemocratic global governance. They argue that the international rules for conduct of a globalised economy have been created by the dominant participants, inevitably offering few favours to those yet to gain a foothold. Regulations for international trade, investment, tax and intellectual property rights are the principal examples of economic injustice, too often blind to national development goals and individual human rights.
For example, whilst economic and digital integration powered by private capital has advanced at lightning speed, political globalisation moves at snail’s pace. In more than twenty years since the fall of the Berlin Wall, governance structures of the World Bank, IMF and the World Trade Organization (WTO) have remained largely unchanged.
Control of policy and senior appointments is dominated by the richer countries; governance continues to be driven by economic power rather than democratic principles. The UN Conference on Trade and Development (UNCTAD), established in 1964 to strengthen the voice of developing countries in international trade negotiations, has been deprived of resources necessary to sustain its role.
Poorer countries therefore argue that strong nation states remain more powerful than global institutions established for the common good. They point out that 69 of the world’s top 100 economic entities are corporations, answerable to no electorate. Horizons of accountability have become incompatible with the global consequences of actions. International finance in particular has moulded an earthly paradise from the stardust of globalisation; too big to fail, too complex to regulate, and too mind-blowingly lucrative to care.
The fitness of these international institutions to manage the forces of globalisation is therefore no longer taken for granted. Belated recognition of current global governance shortcomings emerged in the Sustainable Development Goals, approved by world leaders in 2015. Target 10.6 calls for “enhanced representation and voice for developing countries in decision-making in global international economic and financial institutions.”