## Multilateralism Can Survive the Loss of Consensus

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**Canonical URL:** [Multilateralism Can Survive the Loss of Consensus](https://www.imf.org/-/media/files/publications/fandd/article/2025/09/quah.pdf)

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### The problem: geopolitical competition and splintering multilateralism
- Geopolitical competition is straining the multilateral system that helped maintain global stability since the Cold War.
- Multilateralism is splintering not only because of geopolitical competition but because it is an expensive global public good that benefits all humanity while distributing costs unevenly across nations.
- Key collective goals remain shared even among rivals: a hospitable planet, control of future pandemics through sensible public health safeguards, and global economic policy that yields prosperity for all.
- Tensions arise over how to divide burdens (examples: past vs present carbon emitters; responsibility for financial stability and restoring global growth) and accusations of free riding.

### Role of middle powers and incentive compatibility
- Middle powers—those with sufficient economic and financial firepower—may take on roles historically filled by great powers when great powers withdraw.
- Example: The Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the 12-member free trade pact that rolled out after the US failed to ratify its precursor, the Trans-Pacific Partnership; this new agreement even includes the United Kingdom.
- Middle powers can more easily provide global public goods than small states, but they still require visible, self-interested gains to support multilateralism.
- “If the international system is to endure, it must have more than just great- or middle-power leadership.”
- Incentive compatibility must replace the idea that size matters; all nations must contribute in ways that deliver visible gains for everyone.

### Pathways to sustain cooperation
- The author proposes three pathways to restore international cooperation even without full consensus among great powers.

- Inadvertent cooperation
  - Definition: countries cooperate even when they disagree—doing the right thing even if for the wrong reason.
  - Mechanism: positive spillover benefits can make competitive or self-interested actions yield public goods.
  - Examples cited:
    - COVID vaccines: faster vaccine development enabled by mRNA technology and competition between companies in different countries; competition built on previous discoveries and yielded vaccines that benefited everyone.
    - Energy transition: a country that subsidizes electric vehicle production as a riposte to a competitor’s subsidies can increase supply of affordable clean-energy vehicles and reduce carbon emissions—benefiting all, despite adversarial motives.

- Prisoners’ dilemma and nudging
  - Problem: when all countries act in individually optimal but collectively destructive ways, a prisoners’ dilemma can entrench suboptimal outcomes.
  - Small nations can nudge the international system out of gridlock by persuading great powers to change course and pursue collectively preferred outcomes.
  - Example: Advanced economies often restrict market access to emerging economies, reducing opportunities for development and increasing outward migration; if developing economies persuade advanced economies to act as a group, imports are spread across advanced economies and rising incomes reduce migration pressure.
  - Nudging helps great and middle powers do what they want but cannot for fear of losing out to adversaries.

- Pathfinder multilateralism
  - Definition: subgroups of nations committed to multilateralism act together when broader consensus is absent.
  - Example institutions and developments:
    - World Trade Organization’s Multi-Party Interim Appeal Arbitration Arrangement (MPIA) provides an independent appeals process when the main appellate body lacks a quorum. MPIA membership has tripled to more than 50 nations since 2020.
    - The Regional Comprehensive Economic Partnership is described as a 1 5-nation free trade agreement committed to rules-based order, inclusive, and comprising ASEAN members plus Australia, China, Japan, New Zealand, and South Korea.
  - Pathfinder arrangements resemble what the IMF has called “pragmatic multilateralism.”

### Policy implications and recommendations
- Pursue incentive-compatible arrangements so middle powers and smaller nations see visible, self-interested gains from supporting multilateralism.
- Seek opportunities for inadvertent cooperation where competitive action produces positive spillovers that serve global public goods.
- Empower smaller nations to nudge great powers out of prisoners’ dilemma equilibria through coordinated appeals and collective persuasion.
- Support and expand pathfinder multilateralism—coalitions and interim arrangements that preserve rules-based order even when global consensus has frayed.

*Source: Danny Quah, Point of View, F&D, SEPTEMBER 2025.*

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_Source: https://www.imf.org/-/media/files/publications/fandd/article/2025/09/quah.pdf_