Leadership: Less global, more regional

We’ve talked about the need for new models of global governance as we explore this transition period at a forward-looking Davos summit. Let’s delve deeper and unpack the trend toward regionalism that we’re already seeing, as highlighted in the WEF’s Global Agenda Council report.

As I’ve discussed, old institutions are increasingly ineffectual when it comes to supplying global leadership. We have institutions that are relics from the post-WWII era — including the IMF and the U.N. — that haven’t kept up with the evolving threats they are tasked with addressing. More recently, G20 collaboration among world leaders proved fleeting, limited to financial crisis response.

At the same time that institutions are waning, a global power vacuum is undermining the ability for any nation or durable alliance of nations to set the international agenda on their terms. Diminishing international coordination of all kinds comes precisely when the need for it is at a premium, with more challenges that transcend borders than ever before: climate change, cyber-threats, and the proliferation of nuclear weapons, to name a few.

So how do these global trends tie into a rise of regionalism?

We’re witnessing a sweeping return to geography as a primary organizing principle for international politics. A nation’s regional placement will increasingly determine its friends and enemies, trading partners, and policy objectives. Countries are already gelling in new ways on a regional level — or at least attempting to — as they fill the void left by global institutions with more granular coordination within limited spheres of influence. This will extend beyond nations to institutions, as regional bodies pick up some of the slack from their obsolete global counterparts. They will be organized in their region’s self-image, promoting and reflecting narrower interests that contribute to the ascendancy of neighborhood governance.

But this isn’t just sliced and diced global governance in keeping with the old model. We won’t merely see localized globalization, where the free flow of information, goods, and people plays out regionally instead of globally. More importantly, we’ll see how the degree of cohesion in each region — and what exactly these nations cohere around — will differ around the world.

Some groupings are more formalized — the European Union is the most formal and mature integration of states. There’s significant institutional capacity at a regional level. Others will be more informally arranged, such as Eurasia, where sheer power dynamics drive cohesion. This is also a more coercive arrangement, where Russia acts as a local hegemon that imposes integration on unwitting neighbors that may or may not benefit but don’t always have the capacity to hedge against it.

Likewise, the rallying points that produce coordination of all stripes — formal or informal, voluntary or coercive — will be different all over. Every region will have a unique mix of security, energy, economic, political, cultural, and religious concerns that inform the process. We see the Middle East operating largely along sectarian lines, with the Arab League and GCC serving as regional forums and Sunni-Shia conflicts informing regional politics. The EU coheres more along economic and political lines. Asia splits between two opposing trends: economic integration with China, and political/security integration between the United States and China’s neighbors as they look to offset it. Eurasian states integrate with energy and security at the heart of it.

The rise of regionalism isn’t a good development for the broader challenges that global institutions can’t handle in the first place. After all, even the most integrated region cannot address climate change without a broader coalition of support. Bottom line: regional governance beats none at all. But it will leave a mess of important problems unsolved.

Ian Bremmer is president of Eurasia Group and author of End of the Free Market: Who Wins the War Between States and Corporations?