China, Europe and the Netherlands: Opportunity Is Knocking at Our Doors

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Since LSE’s foundation in 1895 the School has engaged with China
 
LSE 
and
 China
The School runs a range of programmes in  
China, including 
•
 A Joint Summer School with Peking University
•
  Double Master Degree Programmes with  
Peking and Fudan Universities 
•
 Public Lectures and Conferences 
•
 Collaborative Research and PhD Exchange
•
 Visiting Scholars Programmes 
•
  Advising and Training on public policy  
and management 
The School’s motto rerum cognoscere causas – To know the cause of things – remains just as relevant in 
our engagement with modern day China. LSE strives to increase understanding of a complex and changing 
world, and China’s place within it, through excellent teaching and research in the social sciences. 
For more information on LSE in China, visit 
www.lse.ac.uk/china
 
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By Pascal Lamy
Macro Economy 
The Past, Present and Future 
of Global Governance
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A
lthough human history has witnessed vari-
ous periods in which technological advances 
transformed societies, we have never seen the 
giant, forceful and rapid changes like those wrought 
by globalization over the past several decades. Such 
forceful globalization has presented immense opportu-
nities and huge economic and social benefits, but also 
concomitant inequalities, instability, contagion, and 
stresses to humanity and the earth.
This combination represents a challenge to global 
governance: how can we harness globalization in order 
to maximize its benefits and minimize its costs? While 
many of the answers to globalization’s questions reside 
within domestic political systems, our current global 
governance system is insufficient to address borderless 
challenges like reducing carbon emissions, reversing 
ocean depletion, combating protectionism, currency 
volatility, tax evasion or cyber criminality. These and 
other problems can only be addressed with some form 
of global governance.
Arduous evolution of current international 
organization system
Advances in global governance have nevertheless 
been hindered by specific difficulties, which are often 
underestimated. Whether national, corporate, or other-
wise, we know what we should expect from traditional 
governance: legitimacy, coherence and efficiency. We 
also know that these elements must be carefully in-
terwoven if they are to produce results. However, the 
architecture of our international system, based on the 
Westphalian concept of the primacy of sovereign nation 
states, is hardly capable of producing such outcomes. 
Such a system presents clear obstacles to progress 
in producing leadership, legitimacy, coherence and 
efficiency at the global level. How can a leader be 
appointed when all sovereign states are equal? How 
legitimate can a global decision be when its account-
ability exponentially decreases the further it is taken 
from the world’s 7.2 billion citizens? How coherent 
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can international governance be when it is based on 
clustered organizations with the very specific roles and 
mandates permitted by their sponsoring sovereign na-
tions? Finally, how efficient can the decisions of these 
organizations be when they are necessarily adopted by 
consensus, and thus few and far between?
These questions explain why the emergence of the 
current international organization system—which 
began 150 years ago with the International Telegraph 
Union, and of which the latest substantial episode 
was International Criminal Court’s creation in 1998—
has been such an arduous and painful process. But 
it has emerged, underpinned by the treaties through 
which state entities have gradually agreed to renounce 
portions of their sovereignty. Comprising both formal 
institutions like the UN system and Bretton Woods 
Institutions, and informal structures like the G5/G7/
G8 and now G20, this system is somewhat like a map 
of an island chain connected by dotted lines—far from 
covering all the necessary fields of global governance.
We should note that it took several major world dis-
asters in the 20th century to gather the extraordinary 
political energy necessary to take these few small steps 
away from state sovereignty and the “security blanket” 
of the Westphalian system. We should also acknowl-
edge that the ideological infrastructure of our global 
governance, while not exclusively derived from the 
Washington Consensus, has been produced in the West 
and reflects the development of globalized market capi-
talism and a political system of liberal democracies.
Stalling of global governance system
Over the past 20 years, the gradual pace of the con-
struction of this global governance system has stalled 
to a near standstill due to a sequence of geotechnical, 
geoeconomic and geopolitical developments that have 
intensified the obstacles of the previous era.
The last development is, in reality, more of a revo-
lution: the emergence of developing economies in the 
While many of the answers to globalization’s 
questions reside within domestic political 
systems, our current global governance 
system is insufficient to address borderless 
challenges. Globally, we should focus 
on maximizing the utility of our present 
system and find an acceptable point of value 
convergence, to improve global economic, 
political and social integration. 
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