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Global Governance: Three Futures International Studies Review (2018) 20, 239–246 ANALYTICAL ESSAY Downloaded from https://academic.oup.com/isr/article-abstract/20/2/239/5018662 by ISA Member Access user on 06 August 2019 Global Governance: Three Futures M ILES K AHLER American University Since the end of Cold War, three sets of actors have produced change in global governance, change that could be threatening and transformative for existing global governance institutions and the future of international cooperation. Three alternative futures have emerged: fragmentation, stag- nation, and transformation. Emerging powers—and some established powers—have promoted new regional institutions that offer useful com- petition but also the threat of fragmentation. Divergence of preferences between emerging and incumbent powers have also produced stagnation, but the greatest threat of stagnation has come with the rise of populist and nationalist movements that have now found a voice in two powerful countries, the U.S. and the U.K. Finally, non-state and subnational actors have produced new modes of governance, in which national governments and intergovernmental organizations play a reduced, though often strate- gic role. United States withdrawal from or disruption of global governance would alter the likelihood that these futures will emerge. Keywords: Global governance, intergovernmental organizations (IGOs), nongovernmental organizations (NGOs), multinational corporations (MNCs), United States Introduction Throughout the post–Cold War decades, two powerful constituencies supported the demand for global governance: multinational corporations, which benefited from an open international economy and the trade and investment agreements that sup- ported it, and nongovernmental organizations (NGOs), operating across national boundaries to set global agendas and implement programs in human rights, cli- mate, global health, and other sectors. These two growing constituencies, although they often disagreed over the content of global governance, shared a belief in the need for global governance. For internationally active corporations, rules that guar- anteed the security of their activities and their property were essential to the stable business environment that they desired. For NGOs, the success of their interna- tional agendas was tightly linked to intergovernmental organizations (IGOs) and agreements that could influence the behavior of national governments and other actors. If corporations wanted rules to confirm the expansion of international capi- talism, NGOs typically sought to regulate globalization and mitigate its effects. The support that these constituencies offered to global governance institutions were generally reflected in the national policies of the industrialized countries. Kahler, Miles. (2018) Global Governance: Three Futures. International Studies Review, doi: 10.1093/isr/viy035 © The Author(s) (2018). Published by Oxford University Press on behalf of the International Studies Association. All rights reserved. For permissions, please e-mail: [email protected] 240 Global Governance Futures They faced opponents—anti-globalization activists on the left and free market pro- ponents on the right—who challenged the global economic multilaterals and their support for a managed globalization. Throughout these decades, however, another set of voices were largely suppressed by a broad elite consensus in the industrial- ized world. Those voices were skeptical of the benefits of economic globalization, hostile to any encroachment on national autonomy by international rules, and sup- portive of less entanglement with the outside world. This isolationist and nationalist Downloaded from https://academic.oup.com/isr/article-abstract/20/2/239/5018662 by ISA Member Access user on 06 August 2019 strand found expression in parties and movements that championed restrictions on immigration, trade protection, and withdrawal from international agreements and commitments. Labeled as fringe elements in the political landscape of Europe and North America, the growth of social media and the 2007–08 financial crisis and re- cession granted them a larger audience. No longer fringe, they remained outside government in the major industrialized democracies. Their fortunes changed dra- matically with the 2016 British referendum on exiting the European Union (EU) and the election of Donald Trump as President of the United States (US) in the same year. The electoral outcomes in the United Kingdom (UK) and US should not be overstated as a signal of an irresistible political wave of populist and nationalist backlash against globalization and existing governance institutions. The 2015 elec- tion of Justin Trudeau’s Liberals in Canada, the 2016 defeat of a far-right candi- date for president in Austria, the 2017 victory of Emmanuel Macron in the French presidential election, and the subsequent loss of the Conservative parliamentary majority in the UK have revealed the distinct limits to this wave. Nevertheless, the embrace of “hard” Brexit by the UK Conservative government and the Trump ad- ministration’s withdrawal from the Trans-Pacific Partnership (TPP) and the Paris Climate Agreement portend a different stance toward global collaboration by two governments that have been drivers and supporters of post-1945 global governance. Global Governance: Three Trends—and Alternative Futures Even before Brexit and Trump, the effectiveness of global governance was contested by its supporters. For example, the Doha Round of trade negotiations at the World Trade Organization (WTO) was declared moribund in December 2015, in large measure because of a stalemate between the US and other industrialized countries on the one hand and the emerging economies on the other. The failure of Doha ap- peared to symbolize the gridlock characteristic of conventional global governance (Hale, Held, and Young 2013). Conversely, in the same month, the Paris Climate Summit (COP 21) reached agreement on a pledge and review system of national contributions that broke a similar stalemate in national commitments to limit cli- mate change. The adoption of the Kigali Amendment to the Montreal Protocol in October 2016 marked another step forward in limiting greenhouse gases. These contrasting outcomes underscore that global governance and its effective- ness are not uniform: variation by issue area is marked. The trade and climate issue areas also symbolize three recent trends in global governance that could predict alternative futures for international order: fragmentation, stagnation,and transformation. Each of these alternatives is related to influential new actors that had appeared in the new century. Risks of Fragmentation: The New Regionalism The largest emerging economies—China, India, and Brazil—had played an impor- tant role in both the breakdown of the Doha Round and the success of the Paris Climate Summit. Their demands for reform of existing global governance institu- tions, particularly gaining more influence at the IMF and World Bank, had met with some success until domestic stalemate in the US delayed a promised reallocation of MILES KAHLER 241 quota shares at the IMF for five years. The slow pace of reform encouraged the emerging economies, especially China, to consider regional arrangements in which they would play a leading or dominant role. The threat that regional institutions would become stumbling blocks rather than building blocks for global multilateralism had been recognized since the 1990s. However, twenty-first-century regionalism differed from earlier initiatives, such as the North American Free Trade Agreement (NAFTA) or the Common Market of Downloaded from https://academic.oup.com/isr/article-abstract/20/2/239/5018662 by ISA Member Access user on 06 August 2019 the South (Mercosur), in ways that could create both more risks for existing institu- tions of global governance and opportunities for new forms of collaboration. Many new regional institutions have been created or led by emerging economies such as Brazil (Union of South American Nations) and China (Asian Infrastructure Invest- ment Bank, AIIB) or the BRICS group (New Development Bank, Contingent Re- serve Arrangement). These institutions were often founded because of discontent with global institutions that were viewed as dominated by the industrialized North. Even regional arrangements negotiated by the US, Japan, and Europe were often more ambitious in scale and scope than earlier agreements. The membership of megaregional trade agreements (TPP; Transatlantic Trade and Investment Partner- ship [T-TIP]; and Asia’s Regional Comprehensive Economic Partnership [RCEP]) constituted large shares of world trade and product. Regional financial arrange- ments (RFAs) and new regional development banks appeared less threatening to the global status quo in the short term but could also eventually pose a competitive threat.1 Regional institutions need not mean disruptive fragmentation; strategies for in- suring compatibility with the core principles of global institutions and managing competition in constructive directions can be devised. Their success will require a tempering of regional ambitions, particularly on the part of emerging powers, a new level of innovative response from the global IGOs, and a commitment to re- form from the industrialized countries. Stagnation: Domestic Political Change and International Stalemate The emerging economies could exercise their option for exit into a more region- alized world order. As the Doha Round has demonstrated,
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