Lamy ponders the Triangle of Coherence

by Pascal Lamy, Director, World Trade Organization (WTO)

I define global governance as the system assisting human society to achieve common objectives in a sustainable (i.e., fair and just) manner. Growing interdependence means that our laws, standards, and values, as well as the other social mechanisms that shape human behaviour, need to be analyzed, discussed, understood, and articulated in the most coherent way possible. This, in my opinion, is the condition for truly sustainable development in economic, social, and environmental terms. Today, three levels of governance meet these requirements, if unevenly. To illustrate this, imagine the three physical states of matter: gases, liquids, and solids.

Today, three levels of governance meet these requirements, if unevenly. To illustrate this, imagine the three physical states of matter: gases, liquids, and solids.

Gas is the coexistence of particles devoid of hierarchical differentiation. In my analogy, the gas state of governance is the international system, composed of sovereign states organized in a logic that is essentially horizontal with a decentralized accountability mechanism. Most international organizations, e.g., the World Trade Organization (WTO), operate in this mode.

An example of the liquid state is the European Union, the very incarnation of an international organization of integration in which Member States have agreed to relinquish sovereignty in order to strengthen the coherence and effectiveness of their actions.

The solid state, finally, can be seen as the nationstate, the holder of “hard power,” able to compel individuals to pay taxes or to respect the speed limit, i.e., real force.

Our challenge today is to establish a system of global governance that provides a better balance between leadership, effectiveness, and legitimacy on the one hand, and coherence on the other, to bring the system of global governance out of its gas state.

What are the specific challenges of global governance, and what are the first obstacles to overcome?

The initial challenge of global governance is to identify leadership. But who is to lead? Should it be a superpower? A group of national leaders? Chosen by whom? Or should an international organization lead? In accord with classical legitimacy, the identification of leadership involves choice by vote among the representatives of the community. This implies that the system has the political ability to deliver a public message and proposals that bring together coherent majorities and give citizens the feeling that they are participating in a debate. Because legitimacy depends on closeness between the individual and the decision-making body, the second specific challenge of global governance is its inherent distance, which causes the so-called “democratic deficit” and lack of accountability. In sum, it means fighting the widespread perception that international decisionmaking is too remote, lacking in responsibility, and not directly accountable.

As for legitimacy, coherence is unique to the nation-state and is transmitted to specialized international organizations with a limited mandate in which these states are members. In theory, this should not be a problem: the coherent action of nation-states within the various fields of international governance should result in coherent global action. In practice, however, states often act inconsistently at the international level.

The distance from power and the multiple levels of governance are a challenge in terms of efficiency. Nation-states resist (more or less strongly) the transfer or sharing of power within the framework of international institutions. Often national diplomatic systems do not reward international cooperation: I know few diplomats whose careers have suffered for saying  “no.” Saying “yes” is definitely more risky. The resolution of global problems by applying traditional models of national democracy has its limits. And the credibility of national democracy itself is threatened if global governance fails to attain its own democratic credentials and if citizens feel that the issues that affect them daily, because they have become global, are avoided by the political will they express at the polls.

A new paradigm of global governance exists, and its name is Europe.

If there is one place on earth where new forms of global governance have been tested since the Second World War, it is in Europe. European integration is the most ambitious supranational governance experience ever undertaken. It is the story of interdependence desired, defined, and organized by the Member States. In no respect is the work complete—neither geographically nor in terms of depth (i.e., the powers conferred by the Member States to the E.U.), nor, obviously, in terms of identity. Secondly, the European paradigm is a special case. It is the result of the geographical and historical heritage of the European continent, a continent ravaged by two world wars and the Holocaust, which claimed millions of lives. Europe is a continent of nightmares that gathered the survivors of the era into a collective dream of peace, stability and prosperity. But we should, today, use great caution in drawing universal values from the experience provided by this specific place and time.

The European Coal and Steel Community in the 1950s was created out of the political will to overcome these nightmares and to see peace take root in what French Prime Minister Robert Schuman called “de facto solidarity.” The men and women of that era placed their commitment in a concrete project: to combine the two essential pillars of the economies of the time, coal and steel. To these two elements they added a third: the creation of a supranational institution sui generis—the High Authority of the European Coal and Steel Community.

The essence of the E.U. is already at the heart of this first initiative: the creation of an area of joint sovereignty, a space in which members agree to manage their relationship without the constant need for international treaties. What characterizes the paradigm of European governance is, thus, the combination of three elements: political will, a defined goal, and an institutional structure. The method of governance employed is certainly a major technological leap from Westphalian principles. One innovation is the primacy of E.U. law over national law; another is the existence of a commission with a monopoly on legislative initiative; a third is the creation of a court whose decisions are binding on national courts; a fourth is the creation of a bicameral parliamentary system with, on one side, the Council that represents member states, and on the other, the European Parliament that represents the citizens. These are major institutional innovations, of course. However, they are a supplement, not a substitute, for agreement on a specific collective objective. And global governance is not absent from this objective, at least if we are to believe Jean Monnet, chief architect of the Action Committee for the United States of Europe, when he wrote, “The sovereign nations of the past are no longer the framework in which today’s problems can be solved. And the community itself is merely a step toward the organizational forms of tomorrow’s world.” From this point of view, how is the European system performing today in terms of leadership, consistency, efficiency, and legitimacy? In terms of internal leadership, European governance is doing well, as illustrated by the creation of the internal market of the early 1990s or the euro in the late 1990s. These are two examples of successful synergy between will, the identification of objectives, and the creation of an institutional machinery.

In terms of external leadership (i.e., the ability to influence world affairs), the outcome is weaker, due to the absence of the three basic ingredients already mentioned. International trade is an exception in that it has brought together these three ingredients for the past 50 years into a single trade policy aimed at opening trade, with one negotiator speaking with one voice and through one mouth.

In terms of consistency, then, Europe is doing reasonably well, thanks notably to its institutional structure. Indeed, the principle of collegiality that governs the functioning of the Commission, the monopoly of legislative initiative conferred on the Commission in most areas of community competence, the expanding powers of the European Parliament, and the strengthening of community expertise (including through the Treaty of Lisbon) are the vectors of greater coherence in the E.U.’s actions.

But the fact remains that the blurred boundary between the national and community domains, characteristic of all federal systems, remains a source of inconsistency. Some examples are the poor level of coordination in such areas as macroeconomic policy or budgetary issues, which the present crisis has brought to the forefront, or in other sectors such as energy and transport.

In terms of efficiency, here again Europe has achieved quite remarkable results, thanks to the action by

European Court of Justice, which enforces the rule of law, the extension of voting rights to the majority, and the ability of the Commission to ensure compliance of European rules.

If there is one area where Europe gets poorer results, it is legitimacy. We are seeing a growing gap between European public opinion and the building of the E.U. Despite ongoing efforts to adapt European institutions to the demands of democracy, democratic sentiment remains outside the institutional arena of the E.U. The reasons for European “frigidity,” as

Elie Barnavi, professor and director of the Center for International Studies at the University of Tel Aviv, has called it, are still mysterious and deserve more attention from intellectuals. Look at what remains a blind spot in the construction of the E.U., its anthropological dimension, at the heart of which lies a complex relationship between identity and belonging, between the representation of history, geography, and everyday life. It is as if human societies, that have built so many of their myths upon war, cannot manage to invent a myth built upon peace.

European integration’s rapid development over the past 60 years offers us useful lessons for global governance.

The first is that institutions alone cannot achieve a goal, nor can political will in the absence of a clearly defined common project. A well-thought-out common project does not get results, either, if there is no institutional machinery. Dynamic integration requires the combination of all three elements. But even when all three are present, the lack of legitimacy—real or perceived—may persist. The fundamental problem is that supranational institutions like the E.U. require longterm commitment from national leaders, and that is often incompatible with short-term national politics driven by domestic electoral demands.

The second lesson is the importance of the rule of law and enforceable commitments. Global governance must be rooted in the commitments made by stakeholders in the various laws and regulations backed up by mechanisms that ensure compliance. These principles are at the heart of the multilateral trading system that, for over 60 years, has regulated trade between nations and whose system of binding dispute settlement compels Member States to honour their commitments. Enforceable commitments are also central to the governance structures that the international community seeks to establish concerning climate change and non-proliferation.

The third lesson concerns the principle of subsidiarity, whereby action should be carried out at the level of governance guaranteeing the greatest efficiency. This is one of the points of Pope Benedict XVI’s latest encyclical, in which he states, “The governance of globalization must be marked by subsidiarity, articulated into several layers and involving different levels that can work together. Globalization certainly requires authority, insofar as it poses the problem of a global common good that needs to be pursued. This authority, however, must be organized in a subsidiary and stratified way if it is not to infringe upon freedom and if it is to yield effective results in practice.” The international system should, indeed, not be overloaded with issues that can be more effectively addressed at the local, regional, or national level.

The final lesson for global governance that we can derive from European integration is that insofar as the demos policy is essentially national, the legitimacy of global governance would be greatly enhanced if international issues were more integrated into the national political debate, i.e., if national governments were held accountable for their behaviour at the international level. To establish the legitimacy of international organizations, it is not enough that states are represented by elected governments at the national level, nor that decisions within an organization are taken by consensus on the principle “one state, one vote,” as is the case at the WTO. It will require erasing the borders of democracy between the local, national, and global. National actors—political parties, civil society, parliaments, trade unions, and citizens—must ensure that the issues relevant at the global level are debated at the national and local levels. The good news is that many of these issues are already being examined and we need not wait for a big bang in global governance. The economic crisis we are experiencing has accelerated the transformation of global governance toward a new architecture characterized by what I call a “triangle of coherence.”

The first side of this triangle is the G20, which replaces the old G8 and which provides political leadership and policy guidance. The second side of the triangle includes the intergovernmental organizations and their affiliated NGOs, providing expertise in terms of rules, policies, programs, or reports. The third side of the triangle is made up of the G192, the United Nations, providing a comprehensive framework of legitimacy that allows those responsible to answer for their actions.

Today, globalization is a major challenge to our democracies, and our systems of governance must address this challenge. If our people feel that global problems are insoluble, our democracies risk being weakened and eroded from within by populism with xenophobic tendencies. And even if our citizens believe that global problems can be solved, democracy will be at risk if they feel left out of the decisionmaking process. Today, more than ever, our systems of governance, whether in Europe or globally, must give citizens the means to shape tomorrow’s world, the world they want their own children to inherit.

Model of the future WTO headquarters