Vital Interests: Thanks for participating in the Vital Interest forum. You and your fellow authors, Arthur Dahl and Maja Groff, have just published Global Governance and the Emergence of Global institutions for the 21st Century - certainly a timely and important new book. Can you explain why you and your co-authors undertook this effort.

Augusto Lopez-Claros: The starting point for this book was an award that we received from the Swedish Global Challenges Foundation in 2018. This Foundation was established with the aim of stimulating innovative rethinking of the multilateral framework that, seventy-five years ago in San Francisco, created the United Nations Charter and the associated infrastructure of UN organizations. Under the leadership of Franklin Roosevelt and Winston Churchill and against the background of the chaos and destruction brought about by World War II, the allied nations committed to create an international organization that would establish a firm foundation for peace and security, that would allow us to avoid future wars and refocus our energies and resources on social and economic development.

The Swedish Foundation felt that the United Nations system was no longer fit for purpose - it no longer fulfilled the aims for which it was established. Clear evidence for this is the fact that we are confronting a range of global catastrophic risks which are putting enormous pressure on our existing institutions, which have remained largely frozen in time in their essential features and find themselves increasingly unable to cope with the challenges that we face in a world that bears little resemblance to the one we had in 1945, at the outset of the postwar period. To take a few examples.

On the issue of climate change, scientists are increasingly alarmed about the consequences of rising sea levels, extreme weather conditions, and biodiversity loss and what these might mean for food production in the context of steady population growth. The recent reports of the IPCC (Intergovernmental Panel on Climate Change) highlight the rapid narrowing of opportunities over the next decade, to take urgent actions to mitigate possibly large-scale disruptions to our social, economic and political order.

Another issue is nuclear proliferation, which has been a constant during much of the last 75 years and has not disappeared as a problem with the end of the Cold War. Add to this a renewed arms race and 9,000 nuclear warheads, with enough firepower to convert our planet into what Jonathan Schell termed “a republic of insects and grass.” 

There is a sense that economic inequality has ceased to be purely an economic issue and it has very much entered into the political realm and it’s leading to political instability and other undesirable consequences. The data is fairly sobering; my colleague Branko Milanovic estimates that 62% of the gains in global income during the past 30 years have gone to the top 5 percent of the income distribution. Quite aside from issues of equity and ethics associated with a perverse distribution of the benefits of economic growth, there is solid empirical evidence that speaks to the connection between inequality and political instability.

Then, of course, we still have a very serious problem of poverty. My colleagues at the World Bank will tell you that we have made great progress in reducing extreme poverty in recent decades and while this is true, the data suggest that it is largely a Chinese phenomenon, reflecting very high economic growth rates there over the past several decades. In Sub-Saharan Africa we have well in excess of 400 million people living on less than $1.90 per day, the extremely austere poverty line adopted by the World Bank to measure “extreme poverty.” When you adopt a poverty line that is not so austere, but you raise it to say $5.50 (which the economist Nancy Birdsall says still leaves people struggling to make ends meet) then about 46% of the world's population falls under that poverty line. So, we still have a problem of widespread poverty in the world which interacts in increasingly toxic ways with high levels of income inequality. Add to this, if you wish, the continued treatment of women as second class citizens in the vast majority of the countries of the world, as reflected in multiple discriminations embedded in their national laws. 

Against this background we felt that it would be a useful exercise to think creatively about the changes one would wish to contemplate to our current multilateral framework with the aim of empowering the United Nations and many of its associated organizations to actually deal more effectively with these problems. Could one come up with a set of proposals that would strike a middle ground between overly ambitious ideas that would have little likelihood of being endorsed by stakeholders (governments, civil society and business organizations) on the one hand, and proposals that while more “politically feasible” would, in fact, be no more than tinkering at the edges and inadequate to the urgency of the challenges that we face?

VI: The book begins with the historical context of international organizations and international cooperation. Can you give us a quick overview of where the ideas for international organizations such as the UN developed from - what the original ideals were?

Augusto Lopez-Claros: The last time that there was a serious debate about the kind of global order that needs to be created to ensure peace and security and to create a basis for human prosperity was when the United States entered World War II and President Roosevelt called for the creation of the United Nations, in January of 1942. In the initial consultations for what would eventually become the UN Charter, the thinking centered on the future establishment of some type of international entity founded on federalist principles, not unlike the model adopted by the United States during its Constitutional Convention in 1787. This would have implied the creation of a legislative body with some powers to enact laws that would be binding on member states.

But this expansive vision soon confronted two major constraints. First, the need to get the support of the Soviet Union. At a conference in Moscow in October of 1943 Stalin made clear to Roosevelt and Churchill that his highest priority was the defeat of Hitler and for this he wanted the allies to open a Western front against Nazi Germany. He would be ready to join a United Nations after the war, provided the organization would never interfere with Soviet sovereignty and prerogatives. This was the origin of the Security Council veto, allowing the major powers to violate every principle set forth in the Charter, while remaining a member of the organization by the lawful use of the veto granted to it. 

Second, Roosevelt himself knew of the need to ensure U.S. Senate approval of the UN Charter to avoid a repetition of President Wilson’s failure in 1920 to secure U.S. participation in the League of Nations. The U.S. Constitution establishes a high bar (two-thirds majority in the Senate) for the approval of international treaties and there was little likelihood that there would be sufficient support in the Senate for anything other than an organization that would defer to the United States on major questions of peace and security and that would, likewise, not interfere with American power and prerogatives. Indeed, the very weakness of the UN was used as an argument to gain Senate ratification of the UN Charter which was adopted without reservation in July of 1945 by a vote of 89-2.

In the late 1950s, Grenville Clark and Louis Sohn, in their wide-ranging World Peace Through World Law, offered a comprehensive range of proposals to address the built-in flaws of the UN. But, while much admired in many policymaking circles, their proposals had little impact. By then the world was in the midst of the Cold War and we were already well into a decades-long process of arms build-up by the major powers, with multiple conflicts across the planet, great losses in human life and delayed economic and social development. In a sense, you could say the UN Charter was flawed from the outset. On the one hand, it calls upon the members of the United Nations to do all kinds of very laudable things, especially on the peace and security side. On the other hand, by design, it was not given the instruments that were necessary to achieve those aims. This was very much commented upon at the time by leading scholars and people who were very interested in this debate. 

Sixty years later, we need to go back to the proposals put forth by the likes of Grenville Clark, Albert Einstein, Bertrand Russell and others, because it is becoming increasingly evident that our current UN-based order is not a problem-solving system and has not led to a sufficient strengthening of the mechanisms of international cooperation that are so vital to address common global problems. 

We feel strongly that the argument can be made that the time is ripe to do this now in a way that was not possible in the 1940s and 1950s because there are other catalysts for the development of global organizations that have emerged and that we cannot ignore. First, few credible people think that the current system is sustainable, that we can just muddle through the next several decades without meaningfully addressing some of the risks that cast a shadow over the future of mankind. Climate change, vulnerabilities in the global financial architecture, the heightened risk of war as China displaces the U.S. as the world’s largest economy – they all explain why our current system has few defenders. Indeed, in a way that was clearly not the case in the 1950s and 1960s, there is a degree of alarm about our near future today that is palpable and that is reflected, for instance, in multitudes of young people going out into the streets all over the world to peacefully demonstrate against the lack of action on climate change. 

Second, the world is a thousand times more integrated today than half a century ago. The costs of non-cooperation are much higher today. A war between two global powers, in the age of nuclear weapons, is infinitely more catastrophic in its consequences than it would have been before 1945. And we saw in 2008 how a financial crisis in one country can rapidly spillover and become a global, deeply destabilizing, phenomenon. 

Third, civil society and the business community are empowered today in a way that was not the case back in the 1950s. All of the major successful initiatives in the area of international cooperation in the past two decades, from the creation of the International Criminal Court to the Paris Agreement on Climate Change, to the Treaty on the Prohibition of Nuclear Weapons, could not have been undertaken without the involvement of other non-governmental stakeholders. Indeed, one of the most salient features of our political landscape in recent decades has been this massive power shift away from governments to civil society and the business community, as governments have increasingly failed to address the problems that keep people awake at night.  And, last but not least, science and technology have made it much easier to mobilize public opinion and there is much greater awareness, globally, of the problems we face and the risks that they carry.

VI: We see that today with the rapid spread of the coronavirus from China into the rest of the world.

Augusto Lopez-Claros: Absolutely. Of course, the only way to cope with this particular challenge of a pandemic is by collaborating, by cooperating, by joining forces together. That is going to be very much the underlying theme in many of these global risks that I have mentioned, where the solution is going to be ultimately in heightening the dynamics of international cooperation. It has become fashionable to say that the nation state is in crisis. At its core, the nation state is defined by a geographical border, with governments getting elected—at least in the context of democracy—to safeguard the interests of citizens, to improve the quality of available services, to manage scarce resources, and promote gradually rising living standards. However, as made abundantly clear by events in the financial markets and, more generally, the onward march of globalization, the economic system is now no longer confined to national borders but straddles them in a way that is gradually forcing governments to relinquish control in a growing number of areas. Indeed, one of the main lessons to emerge from the 2008-2009 global financial crisis, as then noted by senior British EU official is that “a global economy needs global economic governance.” Of course, the same can be said for the environment.

Alongside the stresses put on institutions by the accelerating pace of global change, publics everywhere are showing growing dissatisfaction with the inability of politics and politicians to find solutions to a whole range of global problems. This trend is likely to intensify and is giving rise to a “crisis of governance,” the sense that nobody is in charge, that while we live in a fully integrated world, we do not have an institutional infrastructure that can respond to the multiple challenges that we face. Indeed, existing mechanisms to tackle global issues are woefully inadequate.

VI: With the UN system deadlocked and no other international organization seemingly capable of confronting the powerful nationalist and authoritarian states that we see throughout the world, do you think that the recommendations that you make about reforming the UN are going to get meaningful support from civil society and the business community?

Augusto Lopez-Claros: We think that that is feasible. I think our recommendations are fairly sensible. I think it is evident that there are growing segments of the population feeling that we have a whole range of unresolved global problems that are bringing our future under extreme pressure and heightened risk. There is an active process of searching for solutions. How can we empower the system, the organizations that we have to deal with these risks in a way that will deliver real solutions?

It's no longer feasible to say these problems are going to be solved in some miraculous way without the need for important initiatives and government action. This is certainly the case with climate change. Absent actions on the part of governments, the business community, all of us together, I think that the implications of climate change are fairly dire. Yes, we think that as the world increasingly comes under pressure, as we realize the very high cost of non-cooperation, that there will be a shift in consciousness and there will be a push for reconsidering our current global governance structures and coming up with the kinds of reforms that we are advocating.

VI: The systems that you described before, the proposed League of Nations after World War One and the United Nations that came into being after the Second World War, were motivated by global catastrophes, because of the horrors of the wars that had taken place. Is it going to take a major catastrophe in the world to bring this new consciousness that you're talking about into existence?

Augusto Lopez-Claros: We would certainly hope not because that particular path is very costly in terms of human suffering and can cause extreme dislocation. If you look at the history of the 20th century you notice that most of the major initiatives that we're talking about, from the League of Nations to the United Nations, and the creation of the European Community in 1957, which is now called the European Union - all of those were actually against the background of calamity, of suffering, of structural and economic collapse.

To suggest that we don't take important initiatives in the area of international cooperation unless we're against the wall, and unless there is really no alternative, might be a reasonable lesson to draw from the 20th century. However, we do derive some optimism from some of the latest initiatives that have taken place in the last 20 years, such as those I mentioned before.

For instance, the Paris Agreement on Climate Change is an important step. It's a recognition on the part of the political leadership, civil society, and the business community that we have a serious problem that needs to be immediately addressed. You can fault it because the pledges made for emissions reductions are non-binding; the scientists are certainly correct in pointing out that even if every country abides by the promises they have made, it won't prevent a perilous rise of temperature that will have a major impact on sea levels and aberrant weather and have other unforeseen consequences.

But maybe it is the beginning of a process. Maybe as climate change begins to kick in, and we see more evidence of its global repercussions, maybe in the context of the Paris Agreement successive events and meetings will take place with regularity, nations will come together and ultimately adopt meaningful, binding commitments and propose other imaginative solutions. 

At least that's the hope. I don’t want to think that the only way we're going to rethink our system and take the important actions to deal with problems like climate change, nuclear proliferation, or inequality, is to see the complete collapse of society first.

I don't think it is inevitable that we have a serious calamity before we actually begin to take effective action. I derive some hope from what's happening among young people in the world today. They seem much more energized about change than people of our generation, which makes sense. They will be the ones whose futures will be impacted if these changes do not materialize.

Their insistence and enthusiasm for global solutions may have an impact as well on domestic politics all over the world. The reality is in many countries a good percent of the voting public are people in their 20's and 30's. Younger populations in many different parts of the world will bring into power a new generation of much younger leaders.

We already see this in many countries, in some of the more mature democracies. The voters are actually opting for younger people. You see this in New Zealand, in Finland and Canada. This could be part of a trend, where the voters will gradually argue to themselves that we need a more imaginative, more responsive political leadership that is more in tune with what we perceive are the needs of this age.

VI: The conclusion of your book suggests necessary reforms of the United Nations system that will make it a more responsive, effective, and forward-looking, problem-solving organization. Can you explain some of the ideas that you have about how that would come about?

Augusto Lopez-Claros: Many of the proposals that we put forward have been in various forms articulated since the time that the United Nations was created. Let me just give you two or three examples. 

One key problem is that the General Assembly (GA) operates under the principle of one-country-one vote. China, with a population of close to 1.4 billion people, has the same voting power as Nauru, a country with a population of about 13,000.  Switzerland’s contribution to the UN budget (1.15 percent of the total) exceeds the cumulative contributions of the 120 countries with the smallest contributions. In Global Governance, we suggest the allocation of voting power in the GA on the basis of three factors: a country’s population share; its share of world GNP; and a membership share, which would be equal for all 193 UN members. This latter factor is to avoid a situation where a handful of populous states would end up dominating the GA, the polar opposite of the situation today. Under this system there would be a reallocation of voting shares that would be more representative of current economic and geopolitical realities, and this new distribution of power would empower the GA to do much more because its legitimacy would be enhanced. This in turn could allow a Charter amendment giving the GA power to legislate in a narrow set of areas, mainly to do with peace and security and management of the global environment. 

A second reform proposal concerns the setting up of a Second Chamber or World Parliamentary Assembly (WPA). The idea has been around since the UN’s inception, as a way to enhance its democratic character by establishing a firmer linkage between the organization and the peoples it was meant to serve. The preamble to the UN Charter starts with “We the peoples,” but the men and women who serve in the GA are diplomats representing the executive branches of their respective governments. 

There is no meaningful, direct linkage between them and the people they represent. In fact, for non-democratic member states one could say there is no linkage at all between the governments and the people they rule over.  In time, because changing voting weights in the GA would require amendments to the UN Charter, proposals emerged for the creation of a second chamber, a WPA, complementary to the GA and which could be established within the existing Charter and initially play a largely advisory role. It could be initially set up by governments designating members of their national parliaments and eventually by direct election in the member states; this is the model adopted by the European Parliament, which at the outset consisted of members from the 6 founding members of the European Community and in the 1970s moved to direct national elections.

A WPA would establish a direct connection between the UN system and the global citizenry which now either does not exist or is too weak to make a difference. Having a larger measure of democratic legitimacy, its deliberations and recommendations would be imbued with a degree of credibility and urgency that existing organs such as the Security Council and the GA have lacked, at great cost to global welfare and our collective future. It could thus become a powerful catalyst for actual change. 

In this respect, we think that there is great merit to the idea of formalizing in some way what was done by the UN in 2000. Ahead of the Millennium Summit that year, the Secretary General invited 1,400 civil society representatives to the NGO Forum to consult on critical global problems and issue recommendations to Heads of State. The representatives came together later that year in what was the largest such gathering ever. Such a Forum, meeting regularly, would recognize that solutions to some of our most critical problems require multi-stakeholder engagement and could over time facilitate the transition to a WPA.   

But our book takes an expansive view of global governance and we have proposals on a range of other areas that go beyond reform of the UN system. For instance, we think that our global financial system is ill-prepared to deal with the next crisis, which will find countries with historically high levels of public debt and much reduced space to take the kind of active measures that were taken in 2008 and the following years. Are there reforms at the International Monetary Fund that would empower the organization not to be caught by surprise during the next crisis (as happened in 2008) and to be a much better manager of it when it comes? What are some of the options that we have to deal with the problem of income inequality? We argue that there are multiple instruments that could help us mitigate this problem that we are not making effective use of. Corruption, like inequality, is no longer just an issue of resource allocation; in many parts of the world it is undermining the legitimacy of governments and the very basis of democracy. We address these and several other such global challenges.   

VI: This has been an interesting conversation about the state of global governance and how it needs to change to meet the challenges the world community is facing. Your book offers some optimism and ideas that hopefully will be a welcome contribution to the dialogue on how to best move forward in these challenging times.

Augusto Lopez-Claros: I hope so. 

I am convinced that one way or the other we're going to have to confront these issues and find a solution to them. Otherwise, our future is fairly bleak. We basically have two paths. One path is that of consultation and international cooperation in ways that are peaceful and constructive, which I think is the desirable path. In the absence of much greater levels of international cooperation the other possibility is a collapse of the present system which would have devastating consequences on a global scale.  If we do not act now to strengthen the international order, we may be forced to rebuild a global institutional framework after a third world war; the collapse of the global economy; a pandemic wiping out a significant part of the world’s population; or extreme climate change producing famines and mass migrations, any of which would overwhelm existing institutions.

I would like us to avoid a scenario whereby, confronted with government inaction, you will see people out on the streets protesting everywhere. Not only in the developing world but also in London and Washington and New Delhi and Tokyo calling for solutions and then governments will have to react.

With over two thirds of the world’s population now living under some form of democratic governance, governments indifferent to the plight of the people will be voted out of the office. I think that change will come, one way or the other. We are, of course, in favor of constructive, evolutionary, peaceful change. Because reshaping international governance is not ultimately about institutions, structures or even funding. Reshaping international governance is about protecting all that we hold dear. It is about ensuring mankind has a safe path during and past the 21st century. It is about leaving our children a better world than the one we were born into, not one in which they will have to deal with the consequences of unprecedented global catastrophes.

Augusto Lopez-Claros is an international economist with over 30 years of experience in international organizations, including most recently at the World Bank. For the 2018/2019 academic years Augusto Lopez-Claros was on leave from the World Bank as a Senior Fellow at the Edmund Walsh School of Foreign Service at Georgetown University. Between 2011 and 2017 he was the Director of the World Bank’s Global Indicators Group, the department responsible for the Bank’s Doing Business report and other international benchmarking studies. Previously he was Chief Economist and Director of the Global Competitiveness Program at the World Economic Forum in Geneva, where he was also the Editor of the Global Competitiveness Report, the Forum’s flagship publication, as well as a number of regional economic reports. Before joining the Forum he worked for several years in the financial sector in London, with a special focus on emerging markets. He was the International Monetary Fund’s Resident Representative in the Russian Federation during the 1990s.