SM | DEVELOPMENT
without genuine consensus that they are moving in the right direction. The backlash against globalization is fed by a climate of suspicion: experts, economists, international institutions are not trusted. During the 2000s, the G20 and the IMF moved to public assessments of how policy spillovers affected the world— and in particular examined the multilateral dimensions of trade imbalances and their various causes, including monetary policy stances and structural and demographic developments.
This public style of action looks more appropriate in an age of transparency— when information technology seems less secure, when secrets leak, when WikiLeaks flourish. Today it is unwise to assume that anything is secret.
The accessibility of information presents a fundamental dilemma. Policy advice is invariably quite complicated. Spillovers and feedback require a great deal of analysis and explanation and cannot easily be reduced to simple formulas.
Accessible information Should international institutions be more like judges, or priests and psychoanalysts, or persuaders? The traditional roles by themselves are no longer credible. But multilateral institutions will also find it impossible to take on all three roles simultaneously. Judges do not usually need to embark on long explanations as to why their rulings are correct. If they act as persuaders, maintaining a hyperactive Twitter account, they merely look self-interested and lose credibility. But if they are secretive— like the World Bank’ s International Centre for Settlement of Investment Disputes— they may be more efficient( as measured by the gains from their rulings) but will lose legitimacy.
It is easy to see why the institutions that built the stability of the post-1945 order might be despondent in the face of apparently insuperable challenges. It is hard to apply fundamental and widely shared principles such as human dignity and sustainability to the minutiae of policy. But the institutions might harness the new technologies to successfully mediate disputes that threaten to divide but also to impoverish the world.
In the postcrisis world, ever larger and more updated amounts of data are available. In the past, we had to wait months or years for accurate assessments of the volume of economic activity or trade. Data on a much broader set of measurable outcomes, including measures of health and economic activity, are now available in real time. Managing and publishing those data in accessible and intelligible ways can be critical to forming the debate about the future and about the way individuals, societies, and nations interact. Instead of a judge, multilateral institutions can become purveyors of the costs and benefits of alternative policies. They need to work on ways of letting data speak.
Some of the issues to be addressed are new, or appear in new forms, and are global public goods: defense against diseases that spread easily in an age of mass travel, against terrorism, against environmental destruction. In each case, the availability of large amounts of detailed information, available quickly, is essential to coordinate an effective response: for instance, where there is pollution and how it affects health and sustainability and where and why it originates. Even large countries cannot find the right response on their own.
Some of today’ s problems were already identified at Bretton Woods: How can countries avoid unsustainable current account deficits, which make them vulnerable to shocks and reversals of confidence on the part of capital markets? How can large surpluses that impose a deflation risk on the rest of the world be reduced? Regional agreements cannot find an answer to these problems. Simple global answers are also impractical and unlikely to sustain consensus. Instead, large amounts of data hold the key to effective action, identification of precisely how the financing of external imbalances is achieved, and the circumstances that make a major external imbalance harmful and destabilizing. Much more than in 1944 and 1945, governance will depend on information.
38 | NOV. 2017