Category Archives: Global Governance

OECD to welcome new members

Together? Not for much longer... 

The Organisation for Economic Co-operation and Development (OECD) recently announced its intention to open membership negotiations with Chile, Estonia, Israel, Russia and Slovenia. In addition, enhanced engagement with a prospect of membership will be offered to Brazil, India, Indonesia, China and South Africa. Finally, it confirmed that candidates for future enlargement include the remaining EU members: Bulgaria, Cyprus, Latvia, Lithuania, Malta, and Romania.

The event was hardly picked up by the mainstream media, perhaps because few people know – or care about – what the OECD is or does. As Wikipedia explains:

The OECD is an international organisation of those developed countries that accept the principles of representative democracy and a free market economy. It originated in 1948 as the Organisation for European Economic Co-operation (OEEC), led by Frenchman Robert Marjolin, to help administer the Marshall Plan for the reconstruction of Europe after World War II. Later its membership was extended to non-European states.

This is an important shift in global politics, for those of us who still thought that the rise of the rest – in the words [PDF] of Alice Amsden – was going to leave the world unchanged. The OECD plays an important role in setting standards and norms amongst the world’s most powerful nations. Just like those Old Boys’ Clubs in London, where deals are struck amongst oversized men in suits over glasses of port, it offers one of those informal settings where politicians and businessmen can engage without the pressures of the media and of rioting crowds outside their windows.

Away from the public spotlight, and cocooned by their privileged status, OECD members have so far been able to reach important agreements on various political and economic issues, confident in their shared beliefs in the power of the market and of democracy. These informal agreements norms have – no doubt – framed the way other, more important decision were taken inside the WTO, UN and other multilateral bodies. Those left outside the club have had little choice but to grin and bear. But what happens when the club of the world’s super-rich opens its doors to countries until yesterday listed as ‘developing’?

Sure enough, by most standards these countries are not the Congos and Burmas of the world, but rural poverty, primary education, public health services, infrastructure and many other human and economic development indicators are still significantly lower than those of Western Europe and North America. Indonesia, for examples, ranks 108th in the UN Humand Development Index, below a country like Turkmenistan. Yet, there is no doubt that – from an economic perspective – the OECD’s decision was correct: these are the countries that will dominate the economic landscape of the XXI century.

But what about the political perspective? An incongruence jumps immediately to the eye. The OECD is committed to the principles of representative democracy and free market economy, yet it is opening membership negotiations with a country like Russia and laying the ground for similar talks with China, neither of which can be said to hold these two principles too close to their hearts. Is the OECD ready to betray its mandate to ensure the nouveau riches don’t start another club on their own? Or are the new entrants underestimating the efficacy of soft power and normative-compliance pressure in institutional settings? Hard to say, at this stage. But surely one prediction is easy to make: the OECD won’t be a quiet gentlemen’s club for much longer. Expect rowdy meetings in the years to come…

Pascal Lamy on Globalization and Governance

Governance at a crossroad? 

A really interesting article by Pascal Lamy on The Globalist, which I am reproducing extracts of it below, explores the meaning of global governance. Pascal Lamy has served as Director-General of the World Trade Organization since September 2005 and was Peter Mandelson’s predecessor as EU Trade Commissioner:

[…] Governance is a decision-making process that — through consultation, dialogue, exchange and mutual respect — seeks to ensure coexistence and, in some cases, coherence between different and sometimes divergent points of view. This involves seeking some common ground and extending it to the point where joint action can be envisaged. Globalization, for its part, reveals a new sphere of common interests that transcends states, cultures and national histories. We need to go beyond the classical inter-nations system. Indeed, the disproportion between the enforcement role of states and their actual capacity to handle issues calls for new forms of governance.

[…] What then are the specific challenges of global governance as opposed to the classical systems of national governance ? In my view, elements of legitimacy must be based on institutions and procedures. Classical legitimacy entails citizens choosing their representatives collectively by voting for them. But it also relies on the political capacity of the system to bring forward public discourse and proposals that produce coherent majorities and provide citizens with the feeling that they can debate the issues. In other words, the political system must represent the society, and allow it to see itself as a whole, with all its members using the same language and experiencing the same feelings. Since legitimacy depends on the closeness of the relationship between the individual and the decision-making process, the first challenge of global governance is distance.The other legitimacy challenge refers to the so-called democratic deficit and the accountability deficit, which arise when there are no means for individuals to challenge international decision-making. Although transparency remains crucial to ensure that governments are both accountable and challengeable at home, classical definitions of domestic accountability and democracy cannot be simply transposed and applied in the international institutions context.

We have to explore how to ensure that citizens have the feeling that they belong, that they can influence the choices made by their society — and that they can recognize themselves in their representatives. The specific challenge of legitimacy in global governance is therefore to deal with the perceived too distant, non-accountable and non-directly challengeable decision-making at the international level. The second element in the validation of power is efficiency. Citizens expect governments to be able to identify the problems and expect results from institutions with political responsibilities. But quantifying efficiency in concrete terms is not easy. When power is remote and when there are multiple levels of government, the task becomes even more complicated.

[…] Handling global problems in relying on classical models of domestic democracy has important limitations. Yet, we need to ensure feelings of legitimacy and efficiency otherwise citizens will lose trust in their local/national government if transnational issues that affect them daily cannot be adequately dealt with. In this sense, there is a continuum between the credibility of domestic democracies, which is at risk if global governance does not find its own democratic credentials.

[Editor’s note: Adapted from the Malcolm Wiener Lecture presented at the John F. Kennedy School of Government at Harvard University on November 1, 2006].

To read the full article, click here.

Global Accountability Index blog

Canary Wharf Skyline, 2010 

Following the publication in September last year of Pathways to Accountability: The GAP Framework, the One World Trust will be launching this December the Global Accountability Index, which will compare the accountability of 30 of the world’s most powerful organisations from the across the private, public and non-profit sectors.

Underlying the initiative is the realisation that problems such as climate change, conflict and poverty are global in nature and require global solutions. States alone are inadequate to respond to such complex issues. As a result, intergovernmental organisations (IGOs), transnational corporations (TNCs) and international NGOs (INGOs) have gained an increasingly important role in the governance of international affairs. The dispersal of decision making power has led to the rise of accountability as one of the key issues in the area of global governance.

The IGOs that are going to be assessed are:

  • Bank for International Settlements (BIS)
  • Food and Agriculture Organization (FAO)
  • Global Environment Facility (GEF)
  • International Labor Organization (ILO)
  • International Monetary Fund (IMF)
  • Organisation for Economic Cooperation and Development (OECD)
  • World Health Organization (WHO)
  • World Intellectual Property Organization (WIPO)
  • World Bank
  • World Trade Organization (WTO) 

The TNCs that are going to be assessed are:

  • Anglo American plc
  • Dow Chemical Company
  • Exxon Mobil Corporation
  • Microsoft Corporation
  • Nestle
  • News Corporation
  • Pfizer Inc
  • RWE
  • Toyota
  • Wal-Mart Stores Inc

And finally, the INGOs that are going to be assessed are:

  • ActionAid International
  • Amnesty International
  • Human Life International
  • International Chamber of Commerce (ICC)
  • International Confederation of Free Trade Unions (ICFTU)
  • International Federation of Red Cross and Red Crescent Societies (IFRC)
  • The Nature Conservancy
  • Oxfam International
  • World Vision International (WVI)
  • WWF International (WWF)

This is an impressive list and a huge task. I am looking forward to the results. In the meantime, should you wish to take part in the run-up discussions, check the Global Accountability Index blog, which is already hosting a really interesting debate on International NGOs: Who comes first – donors or beneficiaries?, which I’ll personally be contributing to soon, given my background in statutory funding.