The Three Global Innovating Forces

In Oxford University’s Ngaire Woods’ recently published report “Power Shift: Do we need better global economic institutions?” for the Institute for Public Policy Research, she detailed why and how international agencies (WTO, IMF and the World Bank) should be reformed. The penultimate chapter outlines “three innovating forces” in global politics that are pushing towards the reshaping of the international institutions:

“The first change is the rewriting of rules by new powers claiming a place on the international scene. Individually, countries such as China, Russia, India, Brazil, Argentina and Venezuela have begun to change the rules governing exchange rates, energy, trade, and sovereign debt rescheduling.

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…A second driver of change is the transformation of global regulation. The old model was state-centred. Governments regulated within their borders with some cross-cutting commitments to other governments entrenched in treaties. …The new model harnesses communications technology, nongovernmental organisations, and consumers. It opens up and redefines the interests of some companies to include labour and environmental standards. It uses multiple sources of information… It is carefully tailored to the needs of the private sector, as we are seeing in codes of conduct in capital markets. …The new regulation is not enforced by formal sanctions. Rather, it relies on bloggers, newspapers, transnational advocacy groups, third-party monitors, and pressures on companies from shareholders, auditors, insurers, and clients.

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…Networks present a third source of innovation in global governance. It has become popular to describe global politics in terms of networks of regulators, firms, lawyers, accountants, and judges. Experts in each of these areas are increasingly connected. As they work together, learn from one another, and emulate each other, this leads to a global convergence in norms and rules. …The benefits of networks are clear for the powerful. They offer a way to coordinate, quietly and informally. (emphases added)”

While these forces are specifically applied here in the context of reformation of international agencies, they nonetheless underscore very important emerging innovations that are reshaping the future global economic and political landscape.

Elanor