The Global Polity

When recessions are severe and global, like the one triggered by the global financial crisis, they tend to lead to competitive devaluations of currencies. Such interventions raise unnecessary trade tensions, especially if accompanied by protectionist measures. The result could be a large disruption of global trade and further worsening of the global recession.

In the past decade, advances in communications technologies and the “informatization” of society have converged as never before in human history. This has given rise to the industrialization of a type of crime where the commodity—personal information—moves far too quickly for conventional law enforcement methods to keep pace.

Rich countries tend to be more democratic than poor countries. Understanding the link between democracy and development could be crucial for policy-making at the national and international level. In addition to giving citizens more political freedoms, democracies are on average less likely to be at war with each other than dictatorships.

In response to the financial crisis, some governments have bailed out the large banks and some of the large companies in their countries, thereby taking equity stakes in these enterprises. In the process, these governments have accumulated massive deficits.

Poorer countries tend to be measurably more corrupt than richer countries. But the debate about causality is still open. Is corruption the single most important reason why many sensible reforms essential for economic development fail in developing economies, or does economic development raise demand for fighting corruption?

What are the implications for welfare state eform? What constellation of welfare state policies enables us to compensate the losers from globalization without harming incentives to work and acquire skills? What are the appropriate roles of the state, firms, housholds and civic organizations in the provision of welfare services?

The last decade has clearly demonstrated that the nature of threats to international security has changed significantly. Structural challenges, such as terrorism, cyber-attacks and nuclear proliferation, have created an entirely new security environment. National states’ monopoly on using force is eroding, state boundaries have lost much of their importance and private actors have become increasingly powerful in international security.

The rapid development of the internet has prompted a debate about how to shape internet governance, a project that is still very much in its infancy. It can be assumed that whoever controls the basic structure of the internet (what are known as “critical internet resources”) also has the power to exercise control over content.

The world may be on the cusp of an era of enormous capital investments. This boom will be driven by growth in emerging markets as well as the need to replace and repair part of the capital stock in developed economies. Demand for sustainable infrastructure in the broadest sense will be particularly high and it will come at a time when strained public balance sheets call for austerity, leaving little room for public investment programs.

The need to manage systemic global risks and to promote global social goods requires better global governance. The accountability of national leaders to their citizens is often in conflict with the need to act in the global public interest. This tension is apparent in problems as diverse as the global financial crisis and problems involving climate change, freshwater scarcity and ocean acidification.

Climate change and international trade are inextricably linked. An effective global climate agreement cannot ignore international trade; and the trading system cannot pretend that climate change can be addressed without changing the trade rules. At the same time, there is a gap between mostly rich countries, which are willing to cap greenhouse gas emissions through national legislation and emissions trading schemes, and mostly emerging economies, which are still relatively inactive in this respect.

Since 2007, there has been a series of financial shocks across the EU—at the household, firm and country levels—to which policy-makers have reacted vigorously with the aim of restoring confidence to the financial markets. But continuing turbulence in the euro area as a result of high budget deficits and high levels of government debt indicates that this aim has not been achieved.

At least 12 million people worldwide are trapped in conditions of forced labor, a fifth of them being exploited as a result of human trafficking. These forms of modern day slavery have become one of the most profitable and most horrifying businesses in the world. Human trafficking and coerced labor are said to be the fastest growing source of income for organized crime and its third most important source after drugs and the arms trade.

In their “Declaration on Strengthening the Financial System” made in London in April 2009, the leaders of the G20 have provided the foundations for reform of the global financial system. Important elements include the strengthening of the role of the IMF, and the expansion of the Financial Stability Forum into a Financial Stability Board with a stronger institutional base and enhanced capacities.

In all parts of the world the processes of globalization have produced winners and losers. Socioeconomic disparities, both between and within countries, and—probably more importantly—a lack of civil liberties are generally regarded as the main causes of political and religious radicalization.

State building—strengthening the legitimacy, robustness and resilience of the state—has steadily marched up the international community’s agenda in recent years. Unfortunately, the most common state building prescriptions— such as more aid, competitive elections and economic reform—do not seem to work well in practice.