Tuesday, February 28, 2012

Regulations or More Moral Minds: Which Way to go concerning Global Issues?

In comments about the global economy we often can read that we need responsible capitalism today but not new regulations. But what is meant by a responsible capitalism without new regulations? One often heard answer is that such capitalism can be established through a change of mind towards more moral thinking. But it is rather unlikely that this change of mind would be so fundamental and action-guiding that the global problems, which for example became obvious with the financial crisis, can be solved in this way alone.

Let us do a short analysis of the global situation: Today there are many issues that know no boundaries (transboundary), such as the global financial crisis, climate change, migration, trade etc. The territorially bound nation-states can’t solve these issues on their own. Therefore, in the world of international relations where anarchy still rules (the monopoly of power is still on the level of the nation state: there is no ‘world-government’ or state over the nation-state) states often come together to coordinate activities and cooperate concerning global issues. But cooperation between states is insufficient today. In the concept of “global governance” of political science not only state-actors but also stakeholders from the societal sectors of business and civil society are considered to be important political actors in contributing to solutions of transboundary or global issues.

Such new global governance systems exist already (e.g. Climate-Conferences, WTO, ILO, ISO14000 or private regulation-standards in different consumer-goods industries like e.g. ETI [Ethical Trade Initiative] etc.). Although they vary widely as to the specific issues, structure, actor participation and success, there is no other way in a politically still anarchic but globalised world to try to solve global issues.

Of course, it is difficult to bring together the relevant stakeholders of an issue and it is even more difficult to achieve a constructive dialogue, cooperation and meaningful coordination among them. It is already a significant success when regulatory designs can be established and when implementation and evaluation of effectiveness of the rules is seriously done. And it is also obvious that a certain change of mind is a precondition to bring the stakeholders together. These components are all parts of building-up global institutions, and regulatory designs are one integral part thereof.

But, to propagate the development of highly skilled moral competencies of humankind which make regulations unnecessary may indeed be a noble demand but won’t work in reality. Moreover, to let a global issue drift around in an anarchic environment without trying to manage it actively is simply irresponsible. There is no way to circumvent the building-up of global institutions including regulations. On the national level states have also established rules to solve issues, i.e. to provide common goods (e.g. protecting property rights, legal certainty).

Global institutions have not the aim to restrict individual rights or freedom but to provide common goods (e.g. protection of property rights, clean air). Of course, to fight the right of the stronger, which identifies the anarchic space, it is necessary to reduce the possibilities of powerful actors to exhaust certain individual freedoms by power exclusively for their private gains and at the costs of all others. Regulatory designs thus help to provide common goods by aiming to substitute the rule of the jungle through a ‘rule of regulation’. In this way, also innovative individual freedom can be protected from anarchic arbitrariness. The building up of global institutions, based on stakeholder cooperation establishing regulatory designs, is unavoidable for a responsible handling and solving of global issues. Another question, of course – not considered here – is the democratic legitimacy of such global institutions.

Claude Meier

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