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Economic Power and Global Governance: Correlation or Causation?



As development and globalization swept the world over the past several decades, states have become more interconnected than they’ve ever been. This interconnectedness brought with it not only chances of cooperation and commerce but also, as seen in the past regional and world wars, looming conflict. From this, the concept of global governance emerges: it is defined as how states cooperate to create order, often through laws, norms, and others, to achieve goals that are in the interest of all associated countries. Global governance often manifests itself in institutions that bring states together; however, within those institutions, power is not always balanced. An important claim, thus, is often made that economically powerful states are able to manipulate global governance institutions to their advantage. Examining this claim, one would come to the conclusion that it is justifiable but makes assumptions about the existence of global governance and that there is an underlying connection between two words embedded in the claim: “economically powerful” and “global governance”.


To start, the claim is justifiable: “economically powerful states” are indeed “able to manipulate global governance institutions to their advantage”. The United Nations (UN), as an obvious example, places executive power exclusively within the hands of the Security Council (UNSC), which permanent members include China, the US, the UK, France, and Russia. Four of the five members are developed countries, not to mention the US being the most powerful economic power in the world; the only developing country in the five members, China, is the country that holds the second-largest Gross Domestic Product value globally. The overlap between economically powerful countries and the UNSC is huge, and a seat on the Security Council is most certainly in the state’s interest. As UNSC members, states hold absolute power over the passing of resolutions; whatever the rest of the states think, if, for example, China vetoes the resolution, it has been completely rejected. This is a classic case of economically powerful countries manipulating the rules of global governance institutions to their advantage, as the veto power ensures that all resolutions passed are in the interest of the five members. Many similar cases to this exist, and the proposed claim is justifiable.


Despite this, the claim does make an assumption about the existence of global governance itself. Global governance is, again, an idea that is based on multilateral cooperation among states and the creation of norms that are beneficial to all associated countries. With the mention of this, one might easily think of the JCPOA (Joint Comprehensive Plan of Action) proposed by Obama’s cabinet, which amended the long-broken relationship between the US and Iran. The JCPOA seemed a lot like global governance, as the reformation of this relationship seemed to be in the interest of both parties and more — the US gains access to Iranian oil reserves, Iran gets to enter the global market and form economic relationships normally again, and regional instability decreases across the Middle East on average. The UN, UK, France, Germany, and the European Union were all included in the deal, agreeing to lift sanctions off of Iran. However, after Trump was elected president, representing the US, he unilaterally made a decision to pull out of the deal and put back former sanctions. This entire agreement simply fell apart, as even with the UN and others still upholding their promises, the US sanctions alone made it pointless for Iran to continue to comply with the deal. The event ended with Iran’s nuclear plans seemingly resurfacing again. Realistically, this turn of events could mean that the case wasn’t global governance from the very start — cooperation didn’t actually take place; Iran’s interests were inferior, and the match between US-Iranian interests perhaps can be seen as nothing but a convenient coincidence because the US’s voice and interest were the only true things that mattered all along. This leads people to wonder whether it is the case for all seemingly “global governing” institutions and agreements, and thus the existence of global governance itself. The claim “economically powerful states are able to manipulate global governance institutions to their advantage” cannot uphold itself if global governance doesn’t exist in the first place — it is an underlying assumption embedded within the statement.


Similarly, there is inherently a connection between the formation of global governance institutions and economically powerful countries. This implies that the claim can be taken even farther — to a certain extent, all global governance institutions that currently exist were established by economically powerful countries and used towards their advantage. It is easy to say that it takes money and legitimacy for a state to create global governance institutions in the first place. The founding of a global governance institution requires funding — the International Monetary Fund must have a principal before it lends money to countries that need it; the UN needs to be able to pay thousands of employees across the globe; the BRICS own financial assets such as banks across many of its member states, which requires money to sustain. Countries that aren’t powerful enough economically, for example those that aren’t regional hegemonies, may simply not be able to start these institutions. Even if they do create intergovernmental organizations (IGOs), like the ASEAN (Association of Southeast Asian Nations) or the African Union, they often would not count as “global governance” institutions, as the member states that adhere to the IGO’s rules aren’t “global”, but regional. Moreover, compared to economically weaker states, strong states usually have more external legitimacy, which would make the laws and norms created by these countries more legitimate as well.


Structural realists argue that states operate under an anarchic system, in which only hard power can be relied upon. Thus, in the realist model, to say the least, states that have money, and therefore can afford to make weapons and such, make more reliable promises, as they have the power to execute. There is no higher authority in the world to punish states when they commit wrongdoings, but since the International Court of Justice is funded by the US, even if the court isn’t technically a higher authority, it almost feels like one, as the US has the ability to do things to make countries feel the weight of the court’s sentence if it so desires. Alternatively, without the economically strong state providing support, many of such global governance institutions could simply lose their voice altogether.


All of this means that the claim: “economically powerful states are able to manipulate global governance institutions to their advantage” may be weak, since it’s stating something that is considerably obvious. If economically strong countries are the reason why the said institutions exist in the first place, it is only logical that these institutions would function towards the advantage of these countries. The claim states a phenomenon but does not recognize that the reason for the occurrence of the phenomenon is already somewhat embedded within the statement itself.


The claim “economically powerful states are able to manipulate global governance institutions to their advantage” is justifiable, but makes assumptions and could be taken further due to underlying interconnections. Economic power often comes with political power, as money can buy one many things. Ultimately, inequality in the world persists, and the balance is tilted towards the side of the powerful.



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