The Future of Global Institutions

International arbitration at The Hague recently ruled against China’s south sea claims. In other news, I’ve decided to issue a ruling against my neighbors for their encroaching garbage system- system is a generous word to describe a trash pile outside your front door. I have yet to decide the exact pecuniary punishment or how it will be enforced.

Does anyone really care about what the International Court of Justice has to say? I, for one, certainly do not.  Did anyone at any point in time think that The Hague ruling would resolve the situation?

*Persons who answered in the affirmative are highly encouraged to email the writer what hallucinogens they take.

The biggest result of the ruling has been to increase nationalism and establish an ‘us versus them’ dialogue in China. I just can’t help but think that it all feels so 1930’s.

south-china-sea

(中国一点都不能少: This is China, not one bit less)

In no way is globalization ending or receding, however it is worth considering the efficiency of our current global institutions which were built after WWII.  For example, the World Trade Organization is far from useless, but the WTO is increasingly taking a back seat to bilateral and multilateral trade deals.  Whether it is the political boxing that has characterized the TPP or China’s freeze on Philippine bananas, current global institutions seem unfit and too archaic to be a place to resolve disputes for countries that need it most.

strong-anti-tpp-anti-nafta-sentiment-grows-at-dnc

If these facilities cannot resolve disputes, what good are they? Furthermore, these institutions hardly seem able to enforce global standards. Even writing the phrase ‘global standards’ feels disingenuous.

So what we are left with is individual countries pursuing common ambitions via closed door policy making.  It is all extremely reminiscent of The Great Game.  Which country isn’t ‘pivoting’ to Asia now?  Even Asian countries are pivoting towards Asia. Which Asian country isn’t trying to create the new silk road?  Perhaps more poignant to my topic today, which pivoting country is using post WWII global institutions to further their goals? We have to look no further than China’s Asian Infrastructure Investment Bank to get an answer. Globalization’s frontier is working bilaterally or creating new institutions.

We, a rather ambiguous term for the world, have already done this. It was not long ago that globalization’s frontier; then defined as North America, Europe, and Japan; was characterized by extreme nationalism, increasing international capital flows, and no official channels in which to resolve disputes. So it should be no surprise to see the same nationalism and economic conflict rising in the new frontier.

In the same way that emerging countries that have defaulted on their debt repayment obligations in the past are more likely to default again in the future than are non-defaulters, globalization’s frontier players (emerging countries) are less likely to use post WWII global institutions. In short, global institutions on the frontier are not wanted and toothless. This is why The Hague’s ruling is so eye roll inducing.

It took two world wars and economic collapse to create our current institutions, but now their rulings seem like a grandfather scolding an inattentive pre-teen.  He is just too old. He just doesn’t get me. 

Worse yet, global institutions have done an incredibly poor job at predicting the future and aligning expectations with the public. Looking at political frustration in developed countries or economic stagnation in developing ones, it’s easy to understand an unwillingness to play via old rules.

The lack of organization is disconcerting.  It all feels so 1930’s.

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