Should we give up on global governance?
https://bruegel.org/reader/global_governance
Introduction
Flash back to 1995. After an eight-decades-long split, the world economy was in the process of being reunified. To manage an ever-growing degree of interdependence, the global community had initiated a process aimed at strengthening the existing international institutions and creating new ones. The World Trade Organisation (WTO) had just been brought to life, equipped with a binding dispute-resolution mechanism that would, among other things, provide an effective channel for managing China’s transition from a closed, planned economy to an open economy that plays by the rules of global markets. A new round of multilateral trade negotiations was in preparation. The Multilateral Agreement on Investment (MAI) was being negotiated under the aegis of the Organisation for Economic Co-operation and Development (OECD). The creation of a global competition system was contemplated. The International Monetary Fund (IMF) would soon be given a broader mandate to oversee cross-border capital flows. A legally binding international agreement, the Kyoto Protocol on climate change, was being negotiated, and plans were drawn for an international environment organisation that would provide a fifth pillar to the global order, alongside the WTO, the Bretton Woods institutions, and the (less effective) International Labour Organisation (ILO). There were strong hopes that the institutional architecture of globalisation was being built.
The intended message to the people was clear: globalisation—a new concept at the time—was not just about liberalising flows of goods, services and capital. It was also about establishing the rules and public institutions required to steer markets, foster cooperative behaviour on the part of governments, and manage a single global economy. Global public goods—another new concept that was loosely applied to a series of issues from biodiversity to climate and from public health to financial stability—would be taken care of through jointly agreed rules of the game. The successful Montreal Protocol on eliminating ozone-depleting gases, agreed in 1987, provided an encouraging template.