US President Donald Trump’s recent speech at the United Nations has gotten a lot of attention for its bizarre and bellicose rhetoric, including threats to dismantle the Iran nuclear deal and “totally destroy” North Korea. Underlying his declarations was a clear message: the sovereign state still reigns supreme, with national interests overshadowing shared objectives. This does not bode well for the Sustainable Development Goals.
Adopted by the UN just a year before Trump’s election, the SDGs will require that countries cooperate on crucial global targets related to climate change, poverty, public health, and much else. In an age of contempt for international cooperation, not to mention entrenched climate-change denial in the Trump administration, is achieving the SDGs wishful thinking?
The SDGs were always bound to meet strong headwinds, owing to technological disruption, geopolitical rivalry, and widening social inequality. But populist calls for nationalist policies, including trade protectionism, have intensified those headwinds considerably. Simply put, populations are losing faith that the global development orthodoxy of good governance (including monetary and fiscal discipline) and free markets can benefit them.
With all of the advanced countries confronting serious fiscal constraints, and emerging markets weakened by lower commodity prices, paying for global public goods has become all the more unappealing. Budget cuts – together with accountability issues and new technological challenges – are also hurting those tasked with delivering good governance. And markets increasingly seem to be captured by vested interests.
Economic outcomes often have their origins in politics. Harvard Law School’s Roberto Unger has argued that overcoming the challenges of knowledge-based development will demand “inclusive vanguardism.” The democratization of the market economy, he says, is possible only with “a corresponding deepening of democratic politics,” which implies “the institutional reconstruction of the market itself.”
Yet, in the US, the political system seems unlikely to produce such a reconstruction. Harvard Business School Professors Katherine Gehl and Michael Porter argue that America’s two-party system “has become the major barrier to solving nearly every important challenge” facing the country.
Political leaders, Gehl and Porter continue, “compete on ideology and unrealistic promises, not on action and results,” and “divide voters and serve special interests” – all while facing little accountability. A forthcoming book by University of San Francisco Professor Shalendra Sharma corroborates this view. Comparing economic inequality in China, India, and the US, Sharma argues that both democratic and authoritarian governance have failed to promote equitable development.
There are four potential combinations of outcomes for countries: (1) good governance and good economic policies; (2) good politics and bad economics; (3) bad politics and good economics; and (4) bad politics and bad economics. Other things being equal, there is only a one-in-four chance of arriving at a win-win situation of good governance and strong economic performance. That chance is diminished further by other disruptions, from natural disasters to external interference.
There are those who believe that technology will help to overcome such disruptions, by spurring enough growth to generate the resources needed to mitigate their impact. But while technology is consumer-friendly, it produces its own considerable costs.
Technology kills jobs in the short term and demands re-skilling of the labor force. Moreover, knowledge-intensive technology has a winner-take-all network effect, whereby hubs seize access to knowledge and power, leaving less-privileged groups, classes, sectors, and regions struggling to compete.
Thanks to social media, the resulting discontent now spreads faster than ever, leading to destructive politics. This can invite geopolitical interference, which quickly deteriorates into a lose-lose scenario, like that already apparent in water-stressed and conflict-affected countries, where governments are fragile or failing.
The combination of bad politics and economics in one country can easily produce contagion, as rising migration spreads political stress and instability to other countries. According to the UN High Commission for Refugees, there were 65 million refugees last year, compared to just 1.6 million in 1960. Given the endurance of geopolitical conflict, not to mention the rapidly growing impact of climate change, migration levels are not expected to decline anytime soon.
The SDGs aim to relieve these pressures, by protecting the environment and improving the lives of people within their home countries. But achieving them will require far more responsible politics and a much stronger social consensus. And that will require a fundamental shift in mindset, from one of competition to one that emphasizes cooperation.
Just as we have no global tax mechanism to ensure the provision of global public goods, we have no global monetary or welfare policies to maintain price stability and social peace. That is why multilateral institutions need to be upgraded and restructured, with effective decision-making and implementation mechanisms for managing global development challenges such as infrastructure gaps, migration, climate change, and financial instability. Such a system would go a long way toward supporting progress toward the SDGs.
Unger argues that all of today’s democracies “are flawed, low-energy democracies,” in which “no trauma” – in the form of economic ruin or military conflict – means “no transformation.” He is right. In this environment, reflected in Trump’s embrace of the antiquated Westphalian model of nation-states, achieving the SDGs will probably be impossible.
Copyright: Project Syndicate, 2017.