Please note - this article was originally published on the id21 website which has now closed. This and other articles produced by id21 were archived by Eldis in 2009 and are not actively maintained. If you find links and references which are no longer valid please email eldis@ids.ac.uk.

Brave new world? Reforming global governance

Today the world is run by rich, powerful transnational organisations. How can they be made more accountable? How can social, political and environmental concerns be re-integrated with economic governance? This report argues that unless international institutions are reformed, we will not be able to manage the political, economic and environmental threats facing the future.

The UN is still the only representative forum in the international system, with almost universal membership. Its original mandate included responsibility for economic well-being. Yet the levers of economic power have been captured by institutions like the IMF, World Bank and WTO which are dominated by the narrow economic vision of rich countries. Recent research from the New Economics Foundation suggests that these powerful bodies are also among the least democratic and inclusive. The report argues that it was a fundamental error to separate economic issues from social, political and security concerns. It is this that has undermined the role of the UN.

The research suggests that lessons can be drawn from the European Union in terms of economic democracy. Here, some success has been achieved in reducing market instability and challenging the concentration of market power. It has also managed to bring social and environmental factors into economic accounting. Yet major issues remain about top-down integration and the so-called ‘democratic deficit’ at the heart of the EU’s institutions.

As it stands, the international system is unable to manage globalisation or to handle the ongoing crisis of environment and development. Several factors lie behind this, for example:

The cold war has left a legacy of (1) poverty, (2) conflict and (3) weak global institutions.
These institutions are (1) undemocratic, (2) dominated by the rich countries and (3) mirror the inequalities in the world economy.
During the 1990s, rich countries turned their backs on the poor countries that they had used as pawns in the cold war.
Aid has consequently fallen short of earlier trends.

The study argues that democratic reform of institutions like the World Bank, IMF and WTO is crucial. Furthermore, there is already a shelf-full of proposals on how such reforms could be made. These include:

a new constitutional settlement for global governance – this should emerge from an open, democratic and inclusive process with citizens, and not civil servants, in control
support for Charter 99 – a document calling for global democracy
democratic reform of voting and decision-making in the multilateral economic institutions
clarification of the confused hierarchy between the UN and the World Bank, and the WTO and IMF.

Source(s):
‘‘It’s democracy, stupid’ - The trouble with the global economy – the United Nations’ lost role and democratic reform of the IMF, World Bank and the World Trade Organisation’, New Economics Foundation by Andrew Simms, Tom Bigg and Nick Robins, September 2000 Full document.

Funded by: NEF and World Vision

id21 Research Highlight: 8 November 2002

Further Information:
Andrew Simms
New Economics Foundation
Cinnamon House
6-8 Cole Street
London SE1 4YH
UK

Tel: +44 (0) 20 7388-2117
Fax: +44 (0)20 7388-2826
Contact the contributor: andrew.simms@neweconomics.org

New Economics Foundation (NEF), UK

Tom Biggs
International Institute for Environment and Development
3 Endsleigh Street,
London
WC1H 0DD, UK

Tel: +44 (0) 20 7388-2117
Fax: +44 (0)20 7388-2826
Contact the contributor: tom.bigg@iied.org

International Institute for Environment and Development (IIED), UK

Views expressed on these pages are not necessarily those of DfID, IDS, id21 or other contributing institutions. Articles featured on the id21 site may be copied or quoted without restriction provided id21 and originating author(s) and institution(s) are acknowledged. Copyright © 2009 IDS. All rights reserved.

id21 is funded by the UK Department for International Development. id21 is one of a family of knowledge services at the Institute of Development Studies at the University of Sussex. id21 is a www.oneworld.net partner and an affiliate of www.mediachannel.org. IDS is a charitable company, No. 877338.