Typical street scene in Santa Ana, El Salvador. (Photo: iStock)
IMF Survey: Global Governance: New Players, New Rules
December 21, 2007
A refrain often heard in international circles is that global problems—HIV/AIDS, trade disputes, climate change, financial contagion, and many others—require global solutions.
New housing in Sebokeng, South Africa: absorbing demographic change is a key objective for 21st-century global governance (photo: Odd Andersen/AFP)
NEW INTERNATIONAL ECONOMIC ORDER
But there are questions about whether today's global governance system is up to the job.
After all, the system is based on the post-World War II model, characterized by the dominance of a few advanced economies. Yet the new global economic order, which has been shaped by decades of rapid economic integration, features new regional and even global powers.
The December 2007 issue of the IMF's quarterly magazine Finance & Development tries to further the debate on global governance by asking experts in economics, finance, trade, and health—from inside and outside the IMF—to explore what works and what does not. A running theme is that to entrench the progress made in all these areas in recent decades, emerging market economies and developing countries must have a bigger say in decision making.
Articles in the package argue it is increasingly vital that the global community revamp the post-World War II model to cope with the challenges of the 21st century. These include absorbing demographic change, reducing poverty, expanding the provision of safe and clean energy without aggravating climate change, and alleviating health risks. The answer is seen to lie in rationalizing the relationships among sovereign states, updating the existing multilateral institutions, and creating an effective oversight body.
Future crises
The series also asserts that future crises, much like the crises of the 1990s, are likely to include an element of contagion, meaning that adequate liquidity will be an issue. The recent U.S. subprime mortgage crisis—which revealed broader weaknesses in the international financial system—has breathed new life into the debate over whether and how international financial flows should be regulated.
The articles acknowledge that the global trading system has been very successful to date. Challenges remain, however, in managing the increased role of developing countries—whose share of world trade grew from 22 percent in 1980 to 32 percent in 2005 and is expected to hit 45 percent in 2030—and in the sensitivity of the unfinished liberalization agenda in agriculture, manufactures, and services.
The three Millennium Development Goals on health—reducing child mortality; improving maternal health; and combating HIV/AIDS, malaria, and other diseases—are shown to remain stubbornly out of reach. A big reason, according to the articles, may be that the current global health governance system is not adequate to oversee the changing array of players and ensure that the right health issues are being tackled fairly, effectively, and efficiently. A number of health experts suggest solutions, ranging from better disease surveillance to taking greater advantage of market dynamics.
Global Governance: New Players, New Rules
James M. Boughton and Colin I. Bradford, Jr.
Why the 20th-century model needs a makeover.
Subprime: Tentacles of a Crisis
Randall Dodd
The mortgage market turmoil is as much about the breakdown of the structure of U.S. financial markets as it is about bad debt.
Governing Global Trade
Uri Dadush and Julia Nielson
The multilateral system that has underpinned world trade for over 50 years is facing challenges.
Financial Crises of the Future
Paolo Mauro and Yishay Yafeh
Will they resemble the contagious crises of the 1990s or the country-specific ones of the 1890s?
Governing Global Health
David E. Bloom
How better coordination can advance global health and improve value for money.
Point of View
Is the Global Health System Broken?
Joe Cerrell, Helene Gayle and J. Stephen Morrison, and Tore Godal
Three points of view on how the global health system can be improved.