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Global Governance In A Globalizing World: Is It Possible?

Written by: Joel D'Silva (BGL. LLB (Hons) - Goa University)
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Abstract: "Global governance" has increasingly become political-economic common sense — often articulated in the call for transparency and accountability. But the question is: transparency and accountability to whom and towards what end? This essay examines the Nature and Need of Global Governance; Governance, as it is expressed in association with Power, Ethics and Accountability. It is argued that Power Structure, Ethics and Accountability are the most important aspects of governance. It concludes with the basic and relatively evident limits of the concept of Global Governance and recommendations.
"The Central challenge we face today is to ensure that globalization becomes a positive force for all the world’s people, instead of leaving billions of them in squalor" - Kofi Annan (Secretary-General UN)

Globalization today is not working for many in the world. To some, the answer is, Abandon Globalization. However, realistically this is neither feasible nor desirable. Globalization has brought huge profits as well as huge implications. Reversing globalization, even if it could be done, would be an enormous setback. It must be understood that the major problem is not with Globalization but with how it is managed. As Stiglitz rightly points out that part of the problem lies with the international economic institutions, with the IMF, World Bank and WTO, which basically hold the strings. They do so in many ways often serving the interests of advanced industrialized countries rather than those of the developing countries.

Globalization has to be reshaped, reformed to allow it to realize its true potential. This requires a review of interests and ideology, the need for stronger International Public Institutions which focus on issues of collective action, transparency in decision making, and finally general reform. However, the most fundamental and crucial change that is required that will enable globalization to be a force for good, is a change in governance.

This concern has given rise to a now-fashionable interest in "global governance," or the design of institutions that authoritatively manage and regulate actions, processes, and problems of global scope or effect. While some believe such governance is desirable but lacking, others think it is in fact emerging in the work of various international organizations and groups active in civil society. Though advocates of global governance portray it as enhancing democracy, defenders of traditional democratic values and state interests have questioned such claims.

The Nature of Global Governance

The study of Globalization appears rather abstract and ‘out there’ rather than part of our daily lives. This is not surprising and, indeed is one of the fundamental problems of globalization. According to Leslie Sklair , there are two sides to globalization a subjective and an objective. Subjective looks at globalization from an individual’s perspective (what can be called the ‘worm’s eye’ view) while objective looks at the global perspective (‘bird’s eye’ view). Global governance is part of this objectivity. There is no universally accepted definition of ‘governance’, but this term is often used to refer to interpretations of order, stability and politico-economic management. The Commission on Global Governance has, for instance, defined governance as ‘the sum of the many ways individuals and institutions, public and private, manage their common affairs’. It has posited that governance is ‘a continuing process through which conflicting and diverse interests may be accommodated and cooperative action may be taken’. The World Bank and the International Monetary Fund, on the other hand, use ‘good governance’ to refer to a particular type of political and economic order. For them, ‘good governance’ is associated with the spread of democracy and transparency in governments and free markets . ‘Good governance’ is the opposite of arbitrary and self-seeking rule, corruption and cronyism, which have been endemic in some Third World societies. However, the World Bank and IMF’s version of ‘good governance’ has been costly to Third World peoples. Although the World Bank and the IMF started to emphasize different priorities following the crises in East Asia in the late 1990s, their ‘good governance’ is still associated with reduction in public expenditures, emphasis on exports and charges in hospitals and schools.

The concept of global governance, as distinct from ‘good governance’, refers to formal and informal sets of arrangements in global politics. It implies that states alone cannot manage global affairs, and therefore it accords roles to international governmental organizations (IGOs), non-governmental organizations (NGO’s) and multinational corporations (MNC’s). Global governance refers to transnational networks, institution building, norm entrepreneurship, regime creation and the management of global change. It covers many issues, such as women’s rights, human rights, development, democratization, the environment, security and investments. Its recent achievements include the treaty banning landmines, the Kyoto climate convention, the international criminal court, the World Trade Organization, and the ‘new generation’ UN peacekeeping operations. In a nutshell, global governance describes regimes or systems of rule, embracing both formal and informal regulatory mechanisms.

Underlying global governance is tolerance and a willingness to manage differences and reconcile self/other, us/them and inside/outside. This can take place only where there is a common set of values, norms, beliefs, ideas and institutions. As these values evolve, the nature of global governance has necessarily to change. Indeed, global governance ‘is a broad, dynamic, complex process… that is constantly evolving and responding to changing circumstances’.

The need for Global Governance

Contemporary policy challenges commonly require co-operative international approaches to transnational policy challenges that have a direct impact on individual states, requiring both the strengthening of global governance mechanisms and also its continuous extension to address new policy challenges. Globalization brings with it both new opportunities and many challenges. Pollution does not respect international boundaries while terrorism, drugs, the proliferation of small arms, and other transnational problems not only dominate the political agendas of individual states, but require international co-operation if they are to be dealt with effectively.

These new global policy challenges share several common features:
a. They are often transnational and have direct domestic impacts.
b. No one can successfully control them.
c. Solutions therefore require a multilateral approach which accounts for, and where possible incorporates the interests and inputs of key stake holders.
d. Decisions have an effect and it is impossible to isolate policy options and outcomes from each other.
e. Policy development must be holistic to the maximum possible.
f. Multilateral institutions must adapt to accommodate these challenges. States must therefore work to strengthen and where necessary create the processes needed for effective global governance.

The individual processes which, in aggregate represent globalization can to a certain extent be regulated and shaped, though imperfectly. Successful regulation of these trends requires multilateral co-operation and domestic institutions capable of managing international governance in the absence of government.
Given the complexity of global governance it is helpful to think in terms of increasingly interdependent levels of governance. Decisions at the international level have direct impacts on both states and their citizens, conversely individuals acting through a variety of channels are increasingly able to influence the international system, whether mobilized in favour of policy by an NGO or other group or by appealing directly to multinational legal bodies instead of domestic legal systems. Thus policy challenges cut across these different levels as transnational trends, the governance challenge is for institutions at all levels is to co-operate. States must balance the sovereignty they are required to sacrifice in order to achieve the benefits of a global governance model.

Governance and Power

Power in world politics clearly matters; new realties have changed the nature of power necessary to affect policy as well as the forums in which that power is exercised. Some continue to argue that power remains the key and the search for security, the inescapable purpose of international relations. It can be said that there is an increasing ability shown by states to work with non-state actors. The nature and exercise of power has, in short changed. States exercise power not only when they influence a decision, but perhaps more importantly when they shape the context, framework and norms by and within which any decisions are arrived at.

Recent trends such as the growth of treaty law, human rights declarations and other similar institutions and organizations suggest this. The state still plays a central role both in aggregating domestic influence and as a primary participant in a multilateral process. The sovereign functions of the state have therefore been transformed and not simply been eroded. However, it cannot be denied that it is power that determines whose interests, rules and standards become ‘global’. The development discourse has crystallized in practices that contribute to regulating the everyday goings and comings of people in the third world. How is its power exercised in the daily social and economic life of countries and communities? How does it produce its effect on the way people think and act?
Thus, while global governance requires tolerance and accommodation of conflicting interests across national, racial, class, gender and ethnic boundaries, it is often the preferences of the most powerful actors that are accommodated. This is and will be a fundamental challenge to the concept of global governance.

Global Governance and Ethics

Increasingly matters relating to global governance are faced with ethical decisions. The British have to take decisions about proposed Europe-wide forms of governance pertaining to the control of migrants and asylum seekers. These involve difficult issues concerning the rights of migrants to freedom of movement versus the rights of citizens to protect their own interests. Israeli citizens face questions with explicit ethical content about an appropriate structure of governance for Palestinians in the region. In both these cases we are aware, from the outset, that whatever decision will be made will be based on both ethical and political considerations. Sometimes the decisions are easy to make but at most they are difficult. If Country X proposes to buy equipment and arms from Country Y, which ‘Y’ knows will be used in a war. – will Y be ethically justified in going ahead with the sale. Governments often have to confront with such questions.

It is ironical that though the importance of ethics is stressed upon, it is power that determines not only the actors, the influences as well as the ideas behind the ethics itself. The focus remains on power rather than on ethics, which is a huge stumbling block in the path of international governance as a whole.

Various questions that raise ethical questions in a governance - globalization perspective are:
a. Reform of the UN.
b. Distribution of financial aid - to whom, by whom and what conditions.
c. Environmental standards.
d. International Monetary Fund (IMF) - To be or not to be.
e. Land reform in developing countries.
f. Labour reform in developing countries etc.

Thus it can be strongly perceived the debate on ethics and governance as one of the most important in international governance. The concept of global governance and its ability to succeed in developing countries in particular will hinge a lot on ethics and ethical decisions on governance considering that many countries are quite frankly worse off than were they started from. Progress in the arrangement of global governance will be made only through a decent attempt to bring into coherence the ethics which underpin the overall power structure within which the various actors are placed. The emergence of a global ethics and rule of law in international conduct will prove impossible unless the powerful nations are as willing to submit themselves to such common rules as the rest of the global community. Equality under the law, democratic accountability, and transparency of information are fundamental concepts which took centuries to develop within nations. It is time to extend the same principles to global ethics.

Global Governance and Accountability

One of the greatest problems of globalization has been undoubtedly accountability. From linking the World Bank and the Narmada Dam exploit in India; to Texaco's Oil Production in the Ecuadorian Rainforest various actors have exploited conditions in the garb of globalization with little if no accountability at all. This is only reiterating what is now become an international governance mantra; All Actions have to be accounted for. There can be no substitute for accountability.
Democratic accountability within a constitutional framework is a relationship in which the power wielders are accountable to broad publics. Accountability in a global governance sense would be as of now a seemingly hypothetical system in which various players and agents making a sufficiently great impact on the lives of people in other societies would have to report on those people and be subject to sanctions for them.

Accountability can thus be perceived on three levels, which I would call the three A’s;
a. Authority: Hobbes and many others have emphasized the process by which one entity authorizes certain actions or confers rights to agents.
b. Assistance: Those who provide financial, logistical or political assistance are also to be held accountable.
c. Affect: those who are choice determining for others have to be fully accountable for their actions as they clearly affect others.

The four players that require a mention in the sense of accountability are powerful states, TNC’s, NGO’s and Institutions. What happens in cases of powerful states like the USA and its actions in Afghanistan and Iraq, the actions of Israel in the West Bank, etc. how are they to be made accountable. What happens when states act unilaterally dismissing demands for external accountability? This is an extremely important aspect of global governance that has to be tackled. Indeed, an ironic observation is that with respect to accountability, the two sworn enemies "Al-Qaeda and the United States" have in common their relative lack of accountability, compared to other actors in the world.

A Key principle in establishing accountability is to ensure that the fox is not invited to guard the chicken coop - that corporations to be regulated do not exercise undue influence over the regulatory process. In these circumstances and given all the scandal surrounding Enron and WorldCom, many non-governmental organizations and citizens’ groups have increased their efforts to bring transnational corporations (TNC’s) within a framework of global governance, not just a patchwork of national laws, rules and regulations. At the same time, corporate actors, through their own codes of corporate conduct, publicize that they are acting voluntarily to ensure that their actions become more transparent and accountable. According to the United Nations, transnational corporations are central actors in today’s world. In the beginning of the 1990s there were over 37,000 Transnationals worldwide. As the spread of TNC’s widens and deepens across the world in every sector, from production to finance, global regulation is even more urgently needed. From a governance perspective this is treading on a very fine line; differentiating between the good and the bad without being too negative and also not to do injustice to the positive things which businesses do to assist sustainable development.

If a popular voice requires detachment from government, then indeed in governance concerned with global human rights, there is a popular voice. It emanates from non-governmental organizations. The character of that voice, however, is far from self-evident and demands sophisticated examination. Various NGO’s purporting to speak for affected peoples gain legitimacy on the basis of this belief. How are they to be brought within the purview of an accountable structure? NGO accountability is a highly debated issue which has strong implications on global governance.

In order to analyze the practices of development, we have to analyze what development institutions actually do. Institutional practices are crucial not so much because they account for most of what is earmarked as development, but mostly because they contribute to producing and formalizing social relations, divisions of labour, cultural forms etc. Global Institutions like the International Monetary Fund and the World Bank which have set standards of good governance for their borrowing members need to apply it to themselves through reform of constitution rules, and decision-making procedures and practices. While good governance within international organizations is often described as balancing between requirements of effectiveness and legitimacy, the two are seldom separable. Overall, the effectiveness of an institution depends to a large degree on its members' perceptions as to how representative, inclusive and procedurally fair the institution is. Even the reforms and decisions taken to improve access to information and consultations are "rather frail" in such institutions. Critics quite rightly argue that developing countries have too little voice within them and the institutions are too unaccountable and too unrepresentative.

These are questions that need urgent answers if global governance is to succeed. The principal task for those who believe in more accountability is to build support within powerful, rich countries for acceptance of more effective and legitimate multilateral governance to achieve human purposes, for stronger transnational bonds of empathy and for the increased accountability that is likely to follow.

Limits of Global Governance

The limits to what global organizations and rules can achieve are often defined in terms of the difference between ‘global government’ and ‘global governance’. Global government would have powers which only national governments now possess, e.g., in taxation, control, and entitlements for individuals. Under global governance, global public organizations are funded and governed by states. They are mainly opt-in organizations, with rules made by their members, and binding only on them. The exceptions are the International Court of Justice and the UN General Assembly and Security Council, whose rulings are meant to apply to all states. In practice, there is much pressure on states to join global organizations to demonstrate their international legitimacy and, in the case of developing and transition economies, to attract investment by demonstrating that they abide by international rules. The limit to what global governance can achieve appears to be dictated by:
1. The demonstrated need for international rules (e.g., on trade and protecting the environment)
2. Transparency regarding compliance with international rules;
3. The ability of global organizations to create win-win outcomes in disputes between states;
4. The ability of global organizations to deliver needed international public goods and services.

Some Illustrations of the limits of Global Governance:

Environmental protection: Implementation of the Kyoto targets to limit CO2 emissions to reduce global warming is hindered by non-cooperation of the USA, questioning the scientific basis of the targets and faced with major reductions in its emissions if it were to meet the targets.

Poverty reduction: The World Bank and IMF have sought to strengthen their poverty orientation by launching the Comprehensive Development Framework and Poverty Reduction Strategy Papers. But calls for radical reform continue. The Meltzer Commission concluded that the lending basis of World Bank assistance is inconsistent with social Programmes for the poor, its operations overlap substantially with regional development banks, and performance of its assistance is low. It recommended converting the World Bank into a World Development Agency, privatizing its lending activities. Others note that redefining GDP in terms of purchasing power parity would raise the voting weights of developing countries in the World Bank and IMF.

Human rights: Human rights are seen as the moral base of global governance: hence the rights-based approach. However, widespread human rights violations continue. Human Rights violations occur all over the world. From disappearances and extra-judicial executions, to the use of torture and police abuse, to violations of the rights to food, housing and health care, human beings are seldom able to enjoy the full extent of their recognized rights. The implementation of Human rights principles, enforcement and accountability is a severe test to Global Governance and hence can also be regarded as a limitation.

Civil conflict: The UN’s modest role in recent international security actions has produced calls to give the Security Council greater legitimacy, and to raise the UN’s efficiency and funding. But feasible proposals are lacking.

Trade and investment inequities and disputes: The collapse of commodity agreements has focused concern on the over dependence of many developing countries on exports of commodities with falling relative prices. Policy emphasis is now on export diversification. No new international agreements to support commodity prices are likely.

What should be the strategy for better global governance? There are several recommendations that have been proposed but five perspectives can be said to be the most fundamental to make globalization a workable force. The First is effective, representative national governments are essential for democratizing global institutions - The international system does not weaken national governments; rather, it relies on them. This perspective is very important considering the debate on the erosion of state sovereignty by global governance. Weak states are threats to themselves and to global governance.
The efficiency of the state is increasingly threatened where legitimacy is weak (‘rogue states’, semi-authoritarian regimes, facade democracies), but enhanced where the freedom and effectiveness of civil society are high. Second, An ethical and accountable structure is required - Global governance will succeed if there is a global acceptance that ethics and accountability are fundamental pillars in its structure. This has to be cultivated. Thirdly, Effective regional governance is needed for infrastructure development and management of natural resources - The emergence of strong regional governance is often seen as hostile to global governance. But as long as they do not restrict trade, effective regional arrangements act as the building blocks of global governance by facilitating the movement of people, development of trade and infrastructure, and natural resource management. Fourthly, Reform - There should be reform, de-bureaucratization, and democratization of global organizations such as the World Bank, the International Monetary Fund, the World Trade Organization, and the United Nations system so that proposals, programs, and agreements can be made viable. These should conform with and strengthen institutionalism and mechanisms for global governance responding to present and future challenges. Reform of the United Nations system should reflect the new world geopolitical reality; the Security Council should be expanded, and the right of veto enjoyed by certain States to sanction issues of global interest should be eliminated.

Finally, Strengthen International law and international juridical arrangements. This is required in the context of a new reality in which relations have Globalized rapidly and surpass the territorial dimension of laws currently in effect. The International Courts should be strengthened like the ICJ, ICC etc.

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ISBN No: 978-81-928510-1-3