GLOBAL GOVERNANCE

What is GLOBAL GOVERNANCE?

Lawrence S. Finkelstein

The name given this journal reflects inescapable ambiguity about the nature of
the "international system," indeed about what the international system is, or what it
encompasses. Does global mean what has been signified by international, interstate,
intergovernmental, or even, often, transnational? If so, why not use one of those terms,
instead of choosing a more ambiguous one? Evidently, something else is intended. That
intention reflects the great changes that have been occurring both in the dynamics of
relations in the world of states and in understandings of those dynamics. In the first
issue of this journal, for example, UN Secretary-General Boutros Boutros-Ghali
emphasized the internationalization of the problems of human rights and democracy,
previously thought of as issues for states to deal with within their own boundaries. He
also demonstrated how the pursuit of democracy as an international goal involves the
cooperation of a range of international agencies and also of many nongovernmental
actors? - including "political internationals," which he saw as "the first signs of an
emerging transnational democratic politics." We understand that there are many new
actors in the world of states and that they play increasingly significant roles. We
understand that nongovernmental actors are an important part, although by no means
all, of what drives the interdependence that presses on and qualifies sovereignty. We
recognize the interconnectedness of the decision processes among and within states in
that world. We know that international negotiations involve what has been termed "two
level games" or "double edged diplomacy." We appreciate what James Rosenau has
referred to as "the crazy-quilt nature of modern interdependence."

It is hence reason able to be uncomfortable with traditional frameworks and

terminologies associated with the idea of international relations in an interstate system.
Ambiguity affects not only what is meant by global but also what is meant by
governance. While the latter word turns up often in scholarly discourse about how states
relate to each other in the international system, little attention has been given to what it
means. At least, it must be clear that it does not mean "government," or we would say
that instead. Since the international system notoriously lacks hierarchy and government,
the fuzzier word governance is used instead. We use the word also in another case of
ambiguity as to the presence of government? - that is, when we refer to part of what
faculties are supposed to do in universities. In other words, we say "governance"
because we don't really know what to call what is going on. These ambiguities seem to
justify Rosenau's very broad use of the term global governance in his article in the first
issue of this journal: "systems of rule at all levels of human activity? - from the family to
the international organization? - in which the pursuit of goals through the exercise of
control has transnational repercussions."5 He goes on to broaden the definition even
further by saying that "rule" means "control" or "steering," which requires only that "the
controllers... seek to modify the behavior... of other actors."

Global governance, thus, is any purposeful activity intended to "control" or

influence someone else that either occurs in the arena occupied by nations or, occurring
at other levels, projects influence into that arena. It is not wrong to wish to understand
such phenomena. Quite the contrary. Rosenau is persuasive in arguing that our
conceptual scope must be broadened if we are to understand what we have until now
called international relations in the changed circumstances that surely will prevail in the
twenty- first century. His vigorous scholarly imagination generates a generous spectrum
of types of actors and activities that exemplifies his expansive definition of global
governance. The trouble is, however, how hard it is to know what is excluded by that
definition? - or where to dig into the spaghetti bowl he puts on the table. It is, of course,
correct that international crime syndicates, which Rosenau labels "TCOS" or
"transnational criminal organizations," are a factor to be dealt with in international
relations. Does it really clarify matters, however, or facilitate the research enterprise, to
toss them in a hopper along with states, intergovernmental organizations,
nongovernmental organizations, and Moody's Investor's Service?

"Global governance" appears to be virtually anything. It should be possible to

define global governance in a way that gives greater direction to the research enterprise
without abandoning concern for or sacrificing access to an expanding universe of
actors, issues, and activities. To begin with, we should be rigorous in insisting that
governance is an activity? that is, doing something. If we need to institutionalize it, we
must say the institution in question is a means of governance, a governance
organization or agency, or an actor in governance. Beyond that, it is important to
recognize that we need the term because government is lacking in the world of states.
What we need is a conceptualization that enables us to penetrate and understand the
government-like events that occur in the world of states even in the absence of
government. Those events occur, as Rosenau and others have insisted, across a
broadening range of issues. With governance defined as such activities, the way is
cleared to identify and examine the processes of influence, decision, and action that
shape or determine them; including relevant power and the means of exercising it;
diplomacy and politics between and within states; alliances and coalitions of states;
international pressure groups of nongovernmental actors, including political alliances
such as those referred to by Secretary-General Boutros-Ghali; individuals wielding
influence whether because of position or status or the power of their ideas; consensual
knowledge, as well as participants in and methods of developing it; propaganda and
communication; feedback loops between international, national, and subnational actors;
and institutional procedures and methods that channel inputs and determine their
efficacy. The governance activity being studied determines the factors of this kind that
need study.

Comparing governance will reveal differing patterns of factoral presence and

effect. There is no reason, moreover, why comparative study of the factors themselves
across governance issues should not contribute to understanding governance. Next it is
important to recognize that, although adopting rules may be a primary objective of
governance, as of government, and may even be the most important service performed,
it is not the only function of governance precisely because it is not the only thing
governments do. Viewing the matter this way leads to the following definition of global
governance: Global governance is governing, without sovereign authority, relationships
that transcend national frontiers.

Global governance is doing internationally what governments do at home. This

definition is concerned with purposive acts, not tacit arrangements. It emphasizes what
is done rather than the constitutional basis for doing it. It is neutral as between the
activities and their outcomes. Scholarship about global governance is concerned not
only with decisions but also with their consequences? - e.g., allocative effects, programs
and projects, efficacy, compliance, and domestic implementation. The definition is
flexible as to scope; it applies whether the subject is general (e.g., global security and
order) or specific (e.g., the WHO Code on the Marketing of Breast Milk Substitutes). It is
flexible enough as to reach; it applies whether the participation is bilateral (e.g., an
agreement to regulate usage of a river flowing in two countries), function-specific (e.g.,
a commodity agreement), regional (e.g., the Treaty of Tlatelolco), or global (e.g., the
NPT). The definition accommodates both governmental and "sovereignty free" actors.
And it accommodates both ad hoc and institutionalized, as well as both informal and
formal, processes. The approach is broader than Rosenau 's, from which it departs. It
seeks to impart greater system to the same factors by setting "governance as activity"
as the rubric for analysis. The definition points to a very broad research agenda. If it
should be charged that the challenge is overwhelming, there are two answers.

Defining governance this way merely mirrors the breadth of government as we

commonly understand it. Consider, for example, Austin Ranney's observation: "For
better or worse, modern governments do just about everything a complete list of all the
functions performed by governments today... would undoubtedly include activities which
directly and powerfully affect just about every conceivable aspect of human life? -
marriage, the rearing of children, education, the production and distribution of wealth,
religion, art, sport, and so on ad infinitum." Despite political initiatives to limit the
functions of government, it seems unlikely that Ranney's observation will be seriously
falsified.
Not every one of thirty-nine major functions he listed as performed by the U.S.
government under five headings is necessarily conducted internationally, but, perhaps
with modification, all the major headings are relevant and many of the specific functions
as well. That leads to the second answer to the objection. The definition is no broader
than the international agenda is already in the era of interdependence and disintegrating
boundaries between national and international arenas. What Ranney said about modern
national governments is incontestably true of the international system. It deserves
underlining also that the definition does not limit governance to the reaching of
decisions about rules. The term, however, has often been used that way. The
predominant definition of regimes, to cite an important example, is rule oriented,
although it also encompasses "principles, norms and decision-making procedures."

The definition stretches beyond rule making because, as do governments, the

international system does more than direct the behavior of the relevant actors. To do
that far from exhausts ways in which international expectations are shaped, behavior
influenced, and values allocated among actors in the international system. To cite just
one contemporary example, the International Monetary Fund (IMF), the UN
Development Program (UNDP), the UN Environment Program (UNEP) and the World
Bank sponsor the Global Environment Facility (GEF) to provide concessionary financing
necessary to offset costs of environmental protection programs in developing countries.
12 No rule is directly implicated in this activity, and certainly no rule enforcement?
although recipients will presumably be bound to carry out the undertakings they make to
receive the funds. Yet resources are directed to advancing a public purpose and to
influencing national decisions and behaviors.

Thus, governance should be considered to cover the overlapping categories of

functions performed internationally, among them: information creation and exchange;
formulation and promulgation of principles and promotion of consensual knowledge
affecting the general international order, regional orders, particular issues on the
international agenda, and efforts to influence the domestic rules and behavior of states;
good offices, conciliation, mediation, and compulsory resolution of disputes; regime
formation, tending, and execution; adoption of rules, codes, and regulations; allocation
of material and program resources; provision of technical assistance and development
programs; relief, humanitarian, emergency, and disaster activities; and maintenance of
peace and order. Accepting this meaning of global governance automatically disposes
of the argument that it is either synonymous with regimes or closely identified with them.
In any case, it is hard to find benefit in employing the term to duplicate another one
already in very wide use. The term governance has been applied to international
matters in a variety of ways that have been at best disorderly and perhaps confusing.
Perhaps there can be agreement on a common, reasonable usage, and it is that
purpose this foray in definition is intended to advance.

GLOBAL GOVERNANCE
Jan Aart Scholte

Global governance refers to the systems of rules and regulatory processes that
apply across the planet. Many societal norms, standards and laws today relate to
people and places spread over the globe. True, global governance arrangements are
only rarely completely universal, in the sense of touching every human being at every
location on earth. However, global regimes do apply across multiple continents or so-
called 'global commons' such as the seas and the skies. Moreover, global rules are
often administered through regulatory institutions whose jurisdiction and constituencies
cover much if not all of the earth.

Needless to say, contemporary global governance does not entail a world state,
on the model of a nation-state writ large. As current circumstances show, it is quite
possible to have substantial rules and regulatory institutions that operate on a planetary
scale without bringing those arrangements together in a unitary, centralized, sovereign
apparatus. Instead, present-day global governance is dispersed across many often only
loosely connected sites, none of which holds primacy over the others (even if the UN
has sometimes aspired to such a status). Nor does global governance negate the
nation-state. Certain rash claims of the 1990s regarding a purported decline of the state
in the face of globalization (e.g., Ohmae, 1995; Strange, 1996) have long been
effectively countered (e.g., Hirst and Thompson, 1996; Weiss, 1998). The state plainly
still figures prominently in the construction of social policy (Yeates, 2001). Indeed, it is
something of a red herring to seek to measure the relative importance of global versus
national governance in social policy. Analysis more fruitfully examines the interplay and
mutual constitution of global and national spheres of regulation (along with regional and
local arenas). As the following account indicates, global governance bodies do not exist
as a discrete 'level', separate from regional, national and local regulatory institutions.
Rather, the various tiers are thoroughly interpenetrated in trans-scalar governance
networks (Scholte, 2008). This trans-scalarity is manifest in the various forms of
multilateralism that constitute contemporary global governance. Some of the agencies
are intergovernmental organizations, that is, formal bodies based on state membership.
Others are trans-governmental networks, that is, informal arrangements of global
collaboration among national regulators.

Some are interregional apparatuses that bring together officials from different
macro-regional units such as Europe and Asia. Others are trans-local arrangements
that assemble sub-state authorities (e.g. provinces and municipalities) from various
continents. Still other global governance bodies are private regulatory mechanisms in
which commercial or civil society actors formulate and administer rules. And some are
trans-sectoral constructions (also called multi-stakeholder forums) that combine
elements from official and nonofficial circles. Thus, global governance has evolved over
recent decades to encompass several novel forms in addition to traditional 'international
organizations". As illustrated in the following paragraphs, each of these six institutional
types can be relevant to experiences of, and policy responses to, poverty in the global
north. Intergovernmental organizations tend to remain the best-known type of global
governance arrangement, and many have direct relevance to social policy (Yeates,
2008). These institutions include household names such as the UN and its specialized
agencies, among them the IMF and the World Health Organization (WHO). The IMF
monitors governments of 'developed countries' inter alia on conditions relevant to social
policy with its annual Article IV surveillance of national macroeconomic conditions. The
WHO advises all member governments north and south on epidemiological matters,
including its recommendation in 2009 for mass inoculation against swine flu. The United
Nations Children's Fund (UNICEF) monitors child poverty across the world, including in
the global north (UNICEF, 2007). The importance of the UN human rights machinery for
anti-poverty campaigns in 'rich countries' is detailed later. Outside the UN system, other
global intergovernmental organizations with implications for the generation and/or
alleviation of poverty in the 'developed world' include the WTO, the BIS, and the
Organization of the Islamic Conference (OIC). Global trade law through the WTO deeply
shapes patterns of advantage in the world economy, with major consequences for (un)
employment prospects in 'advanced economies'. The BIS and associated committees
set banking standards and other financial rules that affect access to bank accounts and
credit lines for deprived populations of the global north. Although governments of the
global north are not members of the OIC, that organization declares itself to be
concerned with the wellbeing of Muslims anywhere on the planet, therefore including
impoverished members of the Ummah resident in the global north (Ihsanoglu, 2010).
Trans-governmental networks are generally less visible than intergovernmental bodies,
but arguably these informal collaborations among state officials have on the whole
become as influential, if not more so, than old-style intergovernmentalism (Slaughter,
2004). Indeed, trans- governmentalism has often become a way for states of the north
to sideline much of the south in global policymaking. The most familiar instances of this
institutional form are the Group of Eight (G8) and its recently developed close relation,
the Group of Twenty (G20). Both of these bodies (through their working groups as well
as their well-publicized summits) coordinate a host of economic and social policies with
implications for poverty in the global north. Many other trans-governmental relations
occur through the 250 committees, working groups and expert bodies convened by the
OECD (Martens and Jakobi, 2010). OECD gatherings with particular relevance to
poverty issues include the Economic Policy Committee as well as the Employment,
Labour and Social Affairs Committee.

Whereas trans-governmental networks are already well embedded today, global

governance through inter-regionalism is more incipient. In this vein the European Union
(EU) has since the 1980s developed collaborations with the Andean Community, the
Gulf Cooperation Council (GCC), and the Southern Common Market (MERCOSUR). In
an example more specifically relevant to poverty questions, the Asia-Europe Meeting
(ASEM) has convened interregional conferences of labor and employment ministers in
2006 and 2008. ASEM has in recent years also organized interregional dialogues on
migration and on the welfare of women and children (Gilson, 2011). Inter-regionalism is
a trend to watch in future, as the EU grows in importance for social policy, and as EU
relations with other regional units may develop a larger social dimension. Like inter-
regionalism, global governance through trans-local networks is largely incipient today,
although some instances of global links among local councils date back to the early
twentieth century. The most prominent current example is United Cities and Local
Governments (UCLG), with many members from the global north. UCLG addresses
matters relevant to poverty inter alia in its Committee on Social Inclusion and
Participative Democracy as well as its Committee on Gender Equality. Mayors and local
counsellors from the global north also sit on the UCLG World Council and its Executive
Bureau. Town twinning is another mode of trans-localism where strategies of poverty
reduction can be advanced, for instance, through the exchange of experiences on social
policies. Local (also called 'complementary') currency schemes with the aim of
advancing an egalitarian solidarity economy have also pursued some global
connections among themselves (CC Database, 2010). In addition, local authorities and
civil society groups in 'developed countries' have engaged with global networks
regarding participatory budgets as a means to empower deprived circles (PBU, 2010).
Although common conception tends to associate governance with the public sector,
private-sector mechanisms can also fulfil regulatory functions, as the example of local
currency schemes just given illustrates. Other private global governance of finance
occurs through industry- based bodies such as the Wolfsberg Group (to combat money
laundering) and the Hedge Funds Standards Board (HFSB), as well as more informally
through the major credit rating agencies (Underhill and Zhang, 2008). Meanwhile, the
private-sector Internet Corporation for Assigned Names and Numbers (ICANN) is a
principal site for global communications governance whose operations have major
implications for digital access (Antonova, 2008).

Non-official schemes for corporate social responsibility (CSR) have proliferated

over the past two decades and often address poverty-related issues such as labor
standards and workplace safety. CSR initiatives have sometimes connected global
business actors to local poverty alleviation. In another area, Fairtrade Labelling
Organizations International (FLO) and the World Fair Trade Organization (WFTO)
uphold rules to ensure that designated commercial arrangements do indeed bring
greater returns to poor producers (Ullrich, 2011). Finally, among the six types of global
governance distinguished here are trans-sectoral regimes. One long-standing example
is the International Labor Organization (ILO), with its tripartite structure of governments,
employer federations and trade unions. Another is the International Organization for
Standardization (ISO), which brings together commercial associations, professional
societies, government agencies, universities and individuals. Trans-sectoral
constructions have recently multiplied under the label of multi- stakeholder forums. One
prominent example - the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM)
has a governing board composed of representatives of governments, nongovernmental
organizations (NGOs), business, foundations, and people living with the diseases.
Further new additions include the World Water Council and the Global Partnership for
Disability and Development. Some trans-sectoral bodies such as the ILO (with its
directives on employment and labor protection) have direct bearing on poverty in the
global north. Considering these multiple forms of transplanetary regulation in sum, it is
evident that global governance is quite substantial in contemporary society. Nowadays,
every public policy issue - including poverty alleviation is handled partly with global rules
and global regulatory institutions. Thus, an adequate understanding of - and an effective
strategy against - poverty in the 'developed world' today needs to include careful
consideration of global governance. It is somewhat surprising that a basic mapping
exercise such as undertaken in the preceding paragraphs has not been done before.

GLOBAL GOVERNANCE REFORM FOR THE 21ST CENTURY

The Central Challenge: The Mismatch of Global Institutions and Global

Challenges
There are several specific manifestations of institutional inadequacy that are currently
under scrutiny and which have generated proposals for reform. As comprehensive and
important as these four manifestations of incongruence are, they do not represent the
full nature of the mismatch but only illustrate several obvious gaps in adequacy. First,
the United Nations Security Council as a creation of the post-World War II alliance in
1945 is confronting a crisis of obsolescence.

Not only are Germany and Japan, the second and third largest economies in the
world, not represented as permanent members of the Security Council, but, with the
important exception of China, there are no developing countries represented either.
Second, since the WTO meetings in Seattle in 1999, there is a growing demand for
changes the voting shares in the Bretton Woods Institutions (the World Bank and the
International Monetary Fund) to better reflect current realities. Third, embedded in these
reform issues but beyond them is the growing reality and tension concerning the
unipolar nature of the military, economic, media, and political power of the United States
in its conduct of foreign policy. Fourth, global challenges in the global age seem to be
characterized more by interconnectedness rather than by isolation. This throws an
international system based on "specialized agencies" into a state of inadequacy as the
nature of contemporary interconnected problems exceeds their expertise based on
specialization.

These four challenges are sufficient by themselves to justify a strong push

toward international institutional reform, even if there were not more to the story. Yet,
reform on all four fronts is severely circumscribed by practical political constraints. What
seems to be needed to break the deadlock and move forward are several conceptual
innovations that together can reframe the discussion and possibly provide some
daylight in an otherwise gloomy set of prospects for global governance reform. What
follows is an effort to create a set of categories for thinking about reform which attempt
to contain the tensions and trade-offs involved in achieving reform rather than try to
avoid them.

It should be said at the outset that if the institutional framework today is

inadequate, it does not mean that it is possible to invent a new formulation that is fully
adequate and achieves unblemished enhancements on all fronts. The world is an
imperfect and messy place. And any proposal of global reform will fall short of the ideals
for democracy, equity, and justice for all.

SPECIALIZATION VERSUS INTEGRATION

If global governance reforms are necessary in order to adequately address the

challenges of the 21st century, the issue of the "adequacy" of the nation-state as a unit
of representativeness, agency and legitimacy in the global age could easily be
questioned. Many have argued that the increasing globalization of finance, trade,
migration, and media have weakened nation-states and their capacities to manage
domestic affairs. But the fundamentals of globalization do not seem to be juxtaposed to
the nation-state so much as they are to the Western notion of modernity.

One way to look at this is to realize that the 20th century was based on the
Western notion of progress rooted in the universality of human knowledge derived from
specialization in disciplines and problem areas. Western modernism for much of the
20th century was understood in the West especially as a universal form of modernism
which would be shared by all humanity as progress spread. The 21st century is already
being seen as posing challenges distinct from the 20th century. The challenges of this
century seem to be characterized by a fundamentally different construct.

Whereas 20th century challenges were seen as requiring specialization within

domains to develop the knowledge and approaches necessary to address them, the
challenges of the 21st century seem to be ones which require understanding the
interlinkages between challenges and the interfaces between them rather than only
burrowing deeper within the problem area itself as the primary means of developing
approaches. While the 20th century relied on specialists, the 21st century may come to
rely more on people who are integrationists, capable within their expertise but excelling
in their grasp of the relationship between their area of expertise and those adjacent to it
which increasingly drive results within it. As noted, biologist Edward O. Wilson has
written: "Most of the issues that vex humanity daily-ethnic conflict, arms escalation,
over-population, abortion, environment, endemic poverty, to cite several most
persistently before us- cannot be solved without integrating knowledge from the natural
sciences with that of the social sciences and humanities." (Wilson, 1998)
 The linkages among challenges and between disciplines and approaches are
fundamental drivers of institutional inadequacy and mismatch.

DISTINCTION BETWEEN INSTITUTIONS AND GOVERNANCE

There is a fundamental distinction between the configuration of international

institutions and the process for global governance. In the debate on global reform, there
seems to be a confusion between reform in the institutional arrangements and
governance reform, as if they were the same when in fact, they are related but separate
issues. The adequacy of the current configuration of international institutions to confront
global problems is a separate issue from that of global governance. One is an issue of
structure and framework; the other is one of process and dynamics.

AUTHORITY, AGENCY AND POLITICAL LEGITIMACY IN GOVERNANCE GLOBAL

For global governance reform to sufficiently enhance legitimacy, it is not enough

to generate greater performance legitimacy alone through greater efficacy nor is it
enough that reforms embody only greater representativeness legitimacy. Political
legitimacy is the perception that authorities with capacities to execute decisions
(agency) derive their authority from a foundational idea rooted in widely shared values.
Authorities can gain political legitimacy by political processes, by being elected, for
example, or by reflecting the values, interests and goals of their people even if they do
not formally represent them. This last source of political legitimacy can be seen as being
honored in the breach with recent examples of leaders who cease to reflect their
peoples' values, interests and goals being run off as leaders: Marcos; Pinochet; etc.

There are also broader processes involved in how leaders can achieve
legitimacy by reflecting the broad aspirations of people that embody common values but
go beyond narrow interests by articulating broader but specific goals which can be
addressed and even achieved by agency, process and institutions. Specific goals have
the advantage of laying out expectations of specific results for which quantitative
indicators can be created. By monitoring the evolution of critical indicators and
evaluating specific results, the political interaction of leadership, decision processes
(agency articulation) and institutions can become transparent and accountable which
enhances the legitimacy of the entire undertaking, even if progress is not as high as
anticipated. The openness, inclusiveness and integrity of the process reinforce
legitimacy beyond that derived from the values-aspirations- consensus-goal formation
sequence. This entire process enhances democratic accountability.

Therefore, summits consisting of national political leaders have greater authority,

agency and legitimacy for taking decisions than alternative leaders might. As Robert
Keohane has written recently: "the relevant question is whether, in light of feasible
alternatives, existing or attainable forms of multilateralism are legitimate relative to
these alternative. They can only be defended on the basis of comparative legitimacy:
the normative superiority of partial reliance on them for authorization of action, over
other feasible processes." (Keohane, 2005)

The issue of who decides on the future of the institutional configuration is an

issue of global governance by accountable national political leaders, as well. The role of
the United Nations is not to govern but to provide a forum for decisions. Even though
the Bretton Woods agencies, for example, or the WTO and the WHO are all UN
agencies, it is not for the UN Secretary General or the UN Secretariat or the heads of
the UN agencies among themselves (through the Chief Executive Board) to sort out the
foundational issue of institutional configuration. It is a global governance issue requiring
strategic guidance by political leaders.
There is at the moment no locus of authority, agency or legitimacy to provide
overall strategic guidance for defining the inter-institutional arrangements that are
needed for the future. Inter-institutional relations decisions are by nature not for
institutional heads to determine; the international institutions are accountable to national
governments so that it is necessary that national leaders in a political setting provide
guidance, oversight The and accountability regarding inter-institutional relations. current
void at the apex is a major reason for the mismatch between the international
institutional framework and 21st century global challenges.