The Mythical Liberal Order

March 1, 2013 Topic: Global Governance

The Mythical Liberal Order

Mini Teaser: A cooperative, law-based international system remains an aspiration, not a reality.

by Author(s): Naazneen BarmaEly RatnerSteven Weber

Ask yourself this: Have developing countries felt and manifested over time the increasing magnetic pull of the liberal world order? A number of vulnerable developing and post-Communist transitional countries adopted a “Washington Consensus” package of liberal economic policies—freer trade, marketization and privatization of state assets—in the 1980s and 1990s. But these adjustments mostly arrived under the shadow of coercive power. They generally placed the burden of adjustment disproportionately on the most disempowered members of society. And, with few exceptions, they left developing countries more, not less, vulnerable to global economic volatility. The structural-adjustment policies imposed in the midst of the Latin American debt crisis and the region’s subsequent “lost decade” of the 1980s bear witness to each of these shortcomings, as do the failed voucher-privatization program and consequent asset stripping and oligarchic wealth concentration experienced by Russians in the 1990s.

If these were the gains that were supposed to emerge from a liberal world order, it’s no surprise that liberalism came to have a tarnished brand in much of the developing world. The perception that economic neoliberalism fails to deliver on its trickle-down growth pledge is strong and deep. In contrast, state capitalism and resource nationalism—vulnerable to a different set of contradictions, of course—have for the moment delivered tangible gains for many emerging powers and look like promising alternative development paths. Episodic signs of pushback against some of the excesses of that model, such as anti-Chinese protests in Angola or Zambia, should not be confused with a yearning for a return to liberal prescriptions. And comparative economic performance in the wake of the global financial crisis has done nothing to burnish liberalism’s economic image, certainly not in the minds of those who saw the U.S. investment banking–led model of capital allocation as attractive, and not in the minds of those who held a vision of EU-style, social-welfare capitalism as the next evolutionary stage of liberalism.

There’s just as little evidence of sustained liberal magnetism operating in the politics of the developing world, where entrenched autocrats guarding their legitimacy frequently caricature democracy promotion as a not-very-surreptitious strategy to replace existing regimes with either self-serving instability or more servile allies of the West. In practice, the liberal order’s formula for democratic freedom has been mostly diluted down to observing electoral procedures. The results have been almost uniformly disappointing, as the legacy of post–Cold War international interventions from Cambodia to Iraq attests. Even the more organic “color revolutions” of Eastern Europe and Central Asia at the beginning of the twenty-first century have stalled into equilibria Freedom House identifies as only “partly free”—in reality affording average citizens little access to political or economic opportunities. Only two years past the initial euphoria of the Arab Spring a similar disillusionment has set in across the Middle East, where evidence for the magnetic pull of a liberal world order is extremely hard to find.

Contemporary developments in Southeast Asia illustrate where the most important magnetic forces of change actually come from. The Association of Southeast Asian Nations (ASEAN) has successfully coordinated moves toward trade liberalization in the region, but this has not been underpinned by a set of liberal principles or collective norms. Instead, the goals have been instrumental—to protect the region from international economic volatility and to cement together some counterweight to the Chinese economy. And ASEAN is explicitly not a force for individual political and economic freedom. Indeed, it acts more like a bulwark against “interference” in internal affairs. The aspirations one occasionally hears for the organization to implement collective-governance measures come from Western observers much more frequently than from the people and states that comprise the group itself.

Global governistas will protest that the response to the global financial crisis proves that international economic cooperation is more robust than we acknowledge. In this view, multilateral financial institutions passed the stress test and prevented the world from descending into the economic chaos of beggar-thy-neighbor trade policies and retaliatory currency arbitrage and capital controls. The swift recovery of global trade and capital flows is often cited as proof of the relative success of economic cooperation. The problem with this thesis is that very real fears about how the system could collapse, including the worry that states would retreat behind a mercantilist shell, are no different from what they were a hundred years ago. It’s not especially indicative of liberal progress to be having the same conversation about global economic governance that the world was having at the end of the gold-standard era and the onset of the Great Depression. Global economic governance may have helped to prevent a repeat downward spiral into self-defeating behaviors, but surely in a world order focused on liberal progress the objectives of global economic governance should have moved on by now. And the final chapter here has yet to be written. From the perspective of many outside the United States, the Federal Reserve’s unprecedented “quantitative easing” policies are not far off from monetary warfare on the exchange and inflation rates of others. Astute analysts have observed that as banks have operated more nationalistically and cautiously, the free flow of capital across borders has declined. A global climate that is at serious risk of breeding currency and trade wars is hardly conducive to the health and expansion of any liberal world order.

On matters of war and peace, the international community is fighting similar battles and for the most part experiencing similar failures to provide a system of collective security. In Africa’s Great Lakes region, more than five million people have died directly and indirectly from fifteen years of civil war and conflict. Just to the north, the international community stood by and watched a genocide in Sudan. In places more strategically important to leading nations, the outcome—as showcased in Syria—is geopolitical gridlock.

The last time the Security Council managed to agree on what seemed like serious collective action was over Libya, but both China and Russia now believe they were intentionally misled and that what was sold as a limited humanitarian mission was really a regime-change operation illegitimately authorized by the UN. This burst of multilateralism has actually made global-security governance down the road less likely. Meanwhile, international cooperation on security matters has been relegated to things like second-tier peacekeeping operations and efforts to ward off pirates equipped with machine guns and speedboats. These are worthy causes but will not move the needle on the issues that dominate the international-security agenda. And on the emerging issues most in need of forward-looking global governance—cybersecurity and unmanned aerial vehicles, for example—there are no rules and institutions in place at all, nor legitimate and credible mechanisms to devise them.

Assessed against its ability to solve global problems, the current system is falling progressively further behind on the most important challenges, including financial stability, the “responsibility to protect,” and coordinated action on climate change, nuclear proliferation, cyberwarfare and maritime security. The authority, legitimacy and capacity of multilateral institutions dissolve when the going gets tough—when member countries have meaningfully different interests (as in currency manipulations), when the distribution of costs is large enough to matter (as in humanitarian crises in sub-Saharan Africa) or when the shadow of future uncertainties looms large (as in carbon reduction). Like a sports team that perfects exquisite plays during practice but fails to execute against an actual opponent, global-governance institutions have sputtered precisely when their supposed skills and multilateral capital are needed most.

WHY HAS this happened? The hopeful liberal notion that these failures of global governance are merely reflections of organizational dysfunction that can be fixed by reforming or “reengineering” the institutions themselves, as if this were a job for management consultants fiddling with organization charts, is a costly distraction from the real challenge. A decade-long effort to revive the dead-on-arrival Doha Development Round in international trade is the sharpest example of the cost of such a tinkering-around-the-edges approach and its ultimate futility. Equally distracting and wrong is the notion held by neoconservatives and others that global governance is inherently a bad idea and that its institutions are ineffective and undesirable simply by virtue of being supranational.

The root cause of stalled global governance is simpler and more straightforward. “Multipolarization” has come faster and more forcefully than expected. Relatively authoritarian and postcolonial emerging powers have become leading voices that undermine anything approaching international consensus and, with that, multilateral institutions. It’s not just the reasonable demand for more seats at the table. That might have caused something of a decline in effectiveness but also an increase in legitimacy that on balance could have rendered it a net positive.

Instead, global governance has gotten the worst of both worlds: a decline in both effectiveness and legitimacy. The problem is not one of a few rogue states acting badly in an otherwise coherent system. There has been no real breakdown per se. There just wasn’t all that much liberal world order to break down in the first place. The new voices are more than just numerous and powerful. They are truly distinct from the voices of an old era, and they approach the global system in a meaningfully different way.

Image: Pullquote: International cooperation on security matters has been relegated to things like second-tier peacekeeping operations and efforts to ward off pirates equipped with machine guns and speedboats.Essay Types: Essay