Multilateral Meltdown

It's time for another walk in the Bretton Woods.

No nation can survive, prosper, and be safe without the cooperation of others. On its own, no country can guarantee its citizens clean air and water, and none can manage its tax systems, its markets, or even its airline schedules without global and regional agreements and institutions. Challenges that must be globally managed keep popping up: genetic engineering, aids, and global terrorist networks. Yet the extent of these borderless forces has exploded faster than the institutional, moral, and political capacity to cope with them has. The global landscape has dramatically changed in the last 50 years, but the institutions serving the world have not. The international architecture was crafted in 1944 at the Mount Washington Hotel in Bretton Woods, New Hampshire, when a different set of challenges was foremost in its creators’ minds. Intergovernmental agencies still bear the imprint of the Cold War, whose priorities determined their roles, agendas, and even their locations.

The array of institutions is bewildering. Within the U.N. system alone, there are 112 agencies. More than 20 agencies deal with water, for example. And when one small South American country was experiencing problems with its customs system, five different expert groups descended on its soil simultaneously to help.

Functions overlap, mandates conflict, and each agency has its own standard of accountability (or unaccountability) to member governments. A few weeks before China joined the World Trade Organization (WTO), a senior official from the U.N. Committee on Trade and Development tried to persuade the Chinese not to join. At a critical time during the Doha trade negotiations, when the deal was ready to roll, officials from other agencies urged developing countries to hold out for more.

The world’s leaders often decry the incoherence of the institutions of global governance, and they’re right to do so. But agency leaders face many obstacles to improving the way agencies work together. U.N. Secretary-General Kofi Annan and World Bank President James Wolfensohn were always supportive of the WTO negotiations; but when I thanked one of Annan’s senior advisors for the secretary-general’s leadership at a conference for less-developed countries, he turned his back on me and snarled that Annan had played this role against his advice. And it took several months for one Geneva-based agency to accept an invitation to sit on a management board for the WTO Training Institute, which I established to help achieve greater coherence and savings between institutions.

Another case in point: About 30 WTO members are too small and poor to establish a mission in Geneva, so I launched "Geneva Week," in which these countries’ senior officials would come to Geneva for an annual briefing. Officials of these countries suggested that a modest trust fund be set up to pay for the event, one that would generate about $1.4 million annually for the purpose. I set about to raise that trust fund and, foolishly, contacted other agencies for donations.

All hell broke loose. All the agencies wanted credit for filling this gap in international governance. As a consequence, agencies and countries now compete to host once neglected groups of countries, at a cost of millions of dollars. The issue never seems to be about serving countries or customers; the real question is whether a program increases an agency’s influence. One way to judge whether agencies are effective, I’m convinced, is to gauge the amount of criticism they receive. Of all the global institutions, the WTO has attracted the most criticism — because it counts. Parliaments and congresses must ratify WTO decisions, and the key to the organization’s effectiveness is its binding dispute mechanism. Why, many ask, is such a mechanism in place for trade but not for human, indigenous, environmental, or labor rights? That’s a good question. But rather than remaining a magnet for criticism, the dispute mechanism should become a model for other agencies. The energy spent attacking the WTO, World Bank, and International Monetary Fund ought to be channeled into making other international institutions more accountable, transparent, and coherent.

I’ve met with the heads of other agencies, and I understand how difficult these institutions are to manage. The institutions cannot reform themselves: Two generations of institutional contamination and tenured self-interest ensure that this deadlock continues. But this lack of coherence damages their collective credibility, frustrates their donors and owners, and gives rise to public cynicism. There is a consensus that something must be done, but no consensus on how to go about it.

I would like to suggest one concrete step toward reform. It’s time for a small group of national leaders to take on the challenge of reforming and rebuilding global governance. They should build this effort around the issue of the democratic deficit in multilateral institutions. This leadership must come from the top. That may sound undemocratic and elitist, but success is only possible if serious leaders grasp the challenge. Otherwise, endless seminars and conferences will inevitably bog down the process in the name of consensus, and good ideas will become hostage to narrow ambitions.

One reason I put so much effort into involving parliamentarians, congresses, and ministers in the work of the WTO — in the face of both bureaucratic and diplomatic resistance — was to address this democratic deficit by encouraging greater national engagement. Similarly, a group of senior parliamentarians, serving in their national legislatures, should form a democratic caucus to provide systematic oversight of international institutions, focusing particularly on increasing the transparency of these institutions. I’m not arguing for another formal organization. Rather, I believe a small, informal group would best ensure that the aims of shareholder nations prevail over bureaucratic self-interest. The caucus would not replace national governments, but only strengthen their role in holding these agencies to account.

Wars can be won. It’s peace that tests international resolve. The brave vision of the Bretton Woods generation gave the world its most peaceful, progressive, and successful half century. Those visionaries were right; the isolationists and appeasers were wrong.

In 1919, when President Woodrow Wilson urged the U.S. Senate to accept the Treaty of Versailles, he said, "Dare we reject it and break the heart of the world?" I’m a Wilsonian internationalist, mugged by reality and hard labor in the cynical international bureaucracy. What breaks my heart is that I know leaders who can change things; I saw them in forums in Monterrey, Doha, and in the rubble of ground zero. The Mount Washington Hotel still stands at Bretton Woods. Who is going to book it, so that the world community can audit and renew not only its objectives but also the mechanisms and institutions by which to manage new global challenges?

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