Issue Overview

The rise in emerging economies is creating a need for stronger global rules and cooperation. These new global players are spreading their production, trade and demand for raw materials across all continents. They are becoming dependent on global rules that ensure secure access to markets. Yet, existing mechanisms of global governance are not entirely fit for purpose. The poorest countries in the world, further impoverished by the 2008 financial crisis, need more robust global governance to ensure that the benefits of globalization are distributed more widely and equitably. In all regions of the world, countries are weighing up the benefits and relying more on alternative national and regional strategies. One consequence is de-globalization in several sectors. According to a recent article in The Financial Times, “it’s clear that the gears of globalization are going into reverse”. The consequences for stakeholders vary. De-globalization may harshly affect those without the resources or political organization to use alternative national, bilateral or regional means of protection. Conversely, for some emerging economies, in the short term at least, de-globalization may seem an attractive alternative to multilateralism. It may give them more freedom and control in their relations with other countries, pursued bilaterally and in new regional forums. For global businesses, however, de-globalization creates barriers that are costly and an impediment to production and delivery on a global scale. 

Did You Know?

• Belgium is the most globalized country in the world, according to the KOF Index of Globalization, which takes into account economic, political and social globalization.
• Between late 2008 and early 2009, global trade collapsed by 20% in volume.
• Strong growth in domestic demand in developing countries has made outsized contributions to world gross product growth in recent years, highlighting the shifting balance in the world economy that has been accelerated by the global crisis.

Quotes

“Shared values, multilateralism, subsidiarity, coherence, enforceability, legitimacy: our task in the years to come is to reinvent a system of global governance founded on these elements.”
Pascal Lamy, Director-General, World Trade Organization, Geneva; Chair, Global Agenda Council on Institutional Governance Systems

“Governments cannot be buffeted by the tremendous winds of globalization that we have set up. Globalization means we need smarter, more effective and more responsive governments and we should hold each of our own governments to account.”
Ngaire Woods, Dean, Blavatnik School of Government, University of Oxford, United Kingdom; Vice-Chair, Global Agenda Council on Institutional Governance Systems

Further resources

Institutional Governance Systems Annual Report, 2011
Democratic Governance, United National Development Programme
Public Sector and Governance

Calendar

9th Asia-Europe Meeting Summit of Heads of State (ASEM)
5-6 November 2012
Vientiane, Laos 

Annual Meeting of the International Monetary Fund and the World Bank Group
9-14 October 2012
Tokyo, Japan

G20 Summit
September 2013
Saint Petersburg, Russian Federation

Council Insights

The Global Agenda Council on Institutional Governance Systems will focus on three main issues in this term. 

It plans to conduct a study and produce a report on de-globalization. To date, globalization has been driven by a combination of government (and intergovernmental) policy, the entrepreneurial ambition of companies and civil society organizations, and technological innovation. The result has been internationalization (increases in cross-border transactions), de-territorialization (the diminishing relevance of geography to social organizations or to the production of goods and services), and westernization (and its rejection). Through this activity, the Council hopes to assess whether these forces are diminishing and, if so, what the consequences are for globalization. It will also investigate whether the 21st century is really witnessing de-globalization and who is benefitting, and also whether de-globalization is an attractive alternative to multilateralism. Finally, the Council will assess whether de-globalization permits more freedom and control over relations with other countries, pursued bilaterally and in new regional forums.

The Council plans to initiate a strategic dialogue on how global institutions could be redesigned if they had to be conceptualized in today’s world. The Council will encourage its Members and other key Members of the Council Network to engage in a “start from scratch” thought experiment.

Finally, the Council recognizes the need for evaluation of some of the world’s biggest decision- and policy-makers. The Council plans to develop a metric for measuring the performance of heads of international organizations – a Performance Index for Heads of Organizations – which will be constructed and applied by a network comprising Members of the Council, other World Economic Forum stakeholders and the evaluation units of the organizations. 

Contact Information

Council Manager: Shubhra Saxena Kabra, Knowledge Manager, Global Agenda Councils, shubhra.saxena@weforum.org
Forum Lead: Martina Gmür, Senior Director, Head of the Global Agenda Councils, martina.gmur@weforum.org