The Decline of the West?

The future of global governance in the face of the rise of Asia

By David Held 

Until recently, the West has, by and large, determined the rules of the game on the global stage. During the last century, Western countries presided over a shift in world power – from control via territory to control via the creation of governance structures created in the post 1945 era. From the United Nations Charter and the formation of the Bretton-Woods institutions to the Rio Declaration on the environment and the creation of the World Trade Organisation, international agreements have invariably served to entrench a well-established international power structure. The division of the globe into powerful nation-states, with distinctive sets of geopolitical interests, and reflecting the international power structure as it was understood in 1945, is still embedded in the articles and statutes of leading intergovernmental organizations, such as the UN, the IMF and the World Bank. Voting rights are distributed largely in relation to individual financial contributions, and geo-economic strength is integrated into decision-making procedures.

The result has been susceptibility of the major international governmental organizations (IGOs) to the agendas of the most powerful states, partiality in enforcement operations (or lack of them altogether), their continued dependency on financial support from a few major states, and weaknesses in the policing of global collective action problems. This was dominance based on a 'club' model of global governance and legitimacy. Policy at the international level was decided by a core set of powerful countries, above all the G1, G5 and G7, with the rest excluded from the decision-making process.

The rise of Asia

 Today, however, that picture is changing. The trajectory of Western dominance has come to a clear halt with the failure of dominant elements of western global policy over the last few decades. The West can no longer rule through power or example alone. At the same time, Asia is on the ascent. Over the last half-century, East and Southeast Asia has more than doubled its share of world GDP and increased per capita income at an average growth rate almost 2½ times that in the rest of the world.[1]| In the last two decades alone, emerging Asian economies have experienced an average growth rate of almost eight per cent – three times the rate in the rich world.[2]|

As a result, Asia has been both a stabilising influence on and steady contributor to world economic growth. According to the IMF, China alone accounted for around a third of global economic growth last year, more than any other nation, and its economy is the only one of the world's 10 biggest which is still expanding in the wake of the financial crisis.[3]| Other Asian economies have bounced back from the financial crisis far more quickly than anyone expected. As a recent New York Times article points out, the United States has always led the way out of major global economic crises, but this time, the catalyst is coming from China and the rest of Asia.[4]| They are no longer totally beholden to the US and other western countries as recipients of their exports, and this decoupling has to some extent allowed Asian economies to recover more quickly. Boosted by increased consumer spending and massive government-led investment,  the region as a whole is expected to grow by more than five per cent this year - at a time when the old G-7 could contract by 3.5 per cent or more.[5]| Simply put, we are seeing a fundamental rebalancing of the world economy, with the centre of gravity shifting noticeably to the East.

The trajectory of change is towards a multipolar world, where the West no longer holds a premium on geopo­litical or economic power. Moreover, different discourses and concepts of governance have emerged to challenge the old Western orthodoxy of multilateralism and the post-war order. At the same time, complex global processes, from the ecological to the financial, connect the fate of communities to each other across the world in new ways, requiring effective, accountable and inclusive problem-solving capacity. How this capacity can be ensured is another matter.

Paradox of our times

What I call the paradox of our times refers to the fact that the collective issues we must grapple with are of growing cross-border extensity and intensity, yet the means for addressing these are weak and incomplete. While there are a variety of reasons for the persistence of these problems, at the most basic level the persistence of this paradox remains a problem of governance.

We face three core sets of challenges – those concerned with sharing our planet (global warming, biodiversity and ecosystem losses, water deficits), sustaining our humanity (poverty, conflict prevention, global infectious diseases) and our rulebook (nuclear proliferation, toxic waste disposal, intellectual property rights, genetic research rules, trade rules, finance and tax rules).[6]| In our increasingly interconnected world, these global challenges cannot be solved by any one nation-state acting alone. They call for collective and collaborative action – something that the nations of the world have not been good at, and which they need to be better at if these pressing issues are to be adequately tackled. Yet, the evidence is wanting that we are getting better at building appropriate governance capacity.

One significant problem is that a growing number of issues span both the domestic and the international domains. The institutional fragmentation and competition between states can lead to these global issues being addressed in an ad hoc and dissonant manner. A second problem is that even when the global dimension of a problem is acknowledged, there is often no clear division of labour among the myriad of international institutions that seek to address it: their functions often overlap, their mandates conflict, and their objectives often become blurred. A third problem is that the existing system of global governance suffers from severe deficits of accountability and inclusion. This problem is especially relevant in regard to how less economically powerful states and, hence, their entire populations, are marginalized or excluded from decision making.

Tests ahead

Today, there is a newfound recognition that global challenges cannot be solved by any one nation-state acting alone, nor by states just fighting their corner in regional blocs. As demands on the state have increased, a whole series of policy problems have arisen which cannot be adequately resolved without cooperation with other states and non-state actors. There is a growing recognition that individual states are no longer the only appropriate political units for either resolving key policy problems or managing a broad range of public functions.

Moreover, the policy packages that have largely set the global agenda – in economics and security – have been discredited. The Washington Consensus and Washington security doctrines have dug their own graves. The most successful developing countries in the world are successful because they have not followed the Washington Consensus agenda, and the conflicts that have most successfully been diffused are ones that have benefited from concentrated multilateral support and a human security agenda. Here are clear clues as to how to proceed in the future. We need to follow these clues and learn from the mistakes of the past if a renewed multilateral order is to be advanced.   

The financial crisis has triggered some positive changes in global governance arrangements. The emergence of the G20 as the new de-facto governance coalition of powerful states – with the US and China at the forefront of all negotiations – is one such change. The shift from the G1, G5, and G8 to the G2 and the G20 reflects the altering balance of power in the world. Whether these developments will lead to effective new institutions is another matter. There are three key tests ahead: Copenhagen and a deal on global climate change; effective global financial market reforms; an enduring re-negotiation of the nuclear non-proliferation treaty. Passing these tests would be a hugely significant indication of the ability to transform the post-1945 multilateral order to take account of the changing balance of global power, and a reflection that there has been some learning from the policy failures of the past. Failing these tests would in all likelihood lead to the fragmentation of the global order and the further weakening of global governance arrangements.

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[6]| Jean-Francois Rischard, High Noon: Twenty Global Problems, Twenty Years to Solve Them, New York, Basic Books, 2002

October 2009