The changing face of global institutions

While the Canadian government asserts its
support for multilateralism, international cooperation is not done as it once
was. Still, opportunities for impact and innovation abound. 

By: /
2 February, 2016
Canada's Prime Minister Justin Trudeau, second at left, at the start of the G20 summit in Antalya, Turkey, Nov. 15, 2015. REUTERS/Jonathan Ernst
Rohinton P. Medhora
By: Rohinton P. Medhora

President of the Centre for International Governance Innovation

Rohinton Medhora was recently a panellist at Canada 2020’s Ottawa Forum on the topic of international institutions. Following the discussion, he shares his thoughts on the topic here.

In his most complete statement of the Government of Canada’s foreign policy orientation yet, at The Ottawa Forum on January 28, Minister of Foreign Affairs Stéphane Dion underscored the twin principles of multilateralism and engagement in guiding Canada’s actions with its allies and detractors alike.

But what does global engagement look like now, more than 70 years after the Bretton Woods Conference inspired the family of existing international institutions? 

The principal developments since then have been the transformation of the GATT Secretariat in 1995 to a full-fledged treaty-based organization, the World Trade Organization; the creation of the International Criminal Court (ICC) in 2002; the creation of the Financial Stability Board (FSB) in 2009 to succeed the more informal Financial Stability Forum (FSF); and the creation of new lending institutions such as the Asian Infrastructure Investment Bank (AIIB) and the New Development (“BRICs”) Bank by rising powers.

But, despite these developments, globalization isn’t getting any less complicated.  This is a good time to reflect on the institutions we have or require to manage the world’s varied issues. 

The gaps

The G20 group of world leaders has at times provided significant leadership in the evolution of international institutions.  In 2009, for instance, the Financial Stability Forum was beefed up to become the Financial Stability Board, a “fourth pillar” in the management of the global economy.  While as a group , the G20’s pronouncements on, say, the Doha Round or IMF reform have been of the right order, in practice progress has been spotty as events in both these instances demonstrate.  After several years of drift, the G20 Presidency now lies with China this year, Germany the next and either Brazil or India in 2018, three countries that have the heft to provide this group greater purpose and impact. 

Beyond the G20, there is a new generation of global public goods and bads where existing institutions either overlap or do not adequately exist.  A short list would surely include managing the internet; dealing with climate change; preventing and, when they occur, mitigating the effects of pandemics; and creating a regime to handle sovereign debt problems.

The context within which existing institutions are reshaped and new problems addressed matters.  There is precious little appetite to create new bricks and mortar organizations, much less engage large swaths of international civil servants to staff them.  The role of the private sector and of civil society is now recognized as integral to addressing a range of global issues.  Flexible, networked processes appear to be more apt than the solemn inauguration of a shiny new headquarter.

There is no such thing as the perfect institution.  Fault-lines and actual or perceived defects in the operation of existing institutions need not indicate that wholesale changes are in order, for the current gamut of institutions has mostly served the global community well.  The question is one of addressing gaps in global governance, and finding the right balance between continuity and change by supporting existing institutions where they exist.  The case of the World Health Organization is a good example.  Although it has been correctly criticized for its inadequate response to the recent Ebola crisis, years of financial cutbacks and internal reorganization surely contributed to the organization’s scleroticism.

Opportunities for Canada

Climate change perhaps poses the biggest and most immediate challenge to global governance.  There is no single institutional “fix” that is required here; rather what are needed are many small and medium-sized ones.  But the international issues at the core of the problem relate to creating a level playing field in the pricing of carbon globally, and finding and distributing the technologies that will lead to a greener future.  My colleague Maria Panezi has proposed a series of measures that would harness the WTO-based global trade rules to effectively create a global price for carbon in traded goods and services, thus removing the free-rider problem otherwise inherent. 

The second suggestion here builds on an under-appreciated facet of global development, the international agricultural research partnership known as the CGIAR.  Since 1971, a network of research centres now numbering 15 spread across the world has conducted research on the science and policy of agriculture, aquaculture and nutrition.  The system is funded by dozens of national governments, and private and public organizations.  Patents are held in the public interest and advances in technology and technique are disseminated swiftly and freely across countries.  Might this be the time for a “CGIAR for green technology”?  Through its official aid agency and the work of the International Development Research Centre, Canada has played a seminal role in the founding and evolution of the CGIAR.  We have the resources and the expertise to take the lead in doing something similar for a greener world.

Canada has been a pioneer in another important development for the public good, so-called Advanced Market Commitments (AMC).  An AMC creates a fund to guarantee a profitable market for a technical advance that is pre-specified and unlikely to be produced without such an incentive.  Building on the experience that Canada (with Italy, Norway, Russia, the United Kingdom and the Bill & Melinda Gates Foundation) gained on pneumococcal vaccines, there is no reason why this method might not be applied to other areas in health and new sectors such as clean energy and agriculture.

My colleagues Richard Gitlin and Brett House have proposed a Sovereign Debt Forum, to address the gap in tracking debt and when required, managing sovereign debt crises in a transparent and systematic manner that includes all key stakeholders.  This coupled with making the FSB a formal treaty-based organization would go some way in getting beyond the incoherence that characterizes key aspects of the management of the global financial system currently.

Finally, for Canada, there is a relatively straightforward way it might participate in the emerging IFI order, which is to sign up as a member of the AIIB.  There is puzzlement in China and elsewhere why Canada did not sign up as a founding member, as 57 other countries did during 2014 and 2015.  To be sure, the bilateral relationship with China is a complex one with much to give and take.  But in terms of the twin principles of multilateralism and engagement, membership in the AIIB is likely a question of when not if.

This is a time of great ferment in global governance and the institutions that constitute its core.  It is formulaic but also true to aver that Canada has historically played an outsized role in the global system.  Now is the time to continue that fine tradition and build on it.  The world would quite literally be the better for it.

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