Robert Keohane, in a recent Foreign Affairs review article, warns that pundits pondering US decline inevitably draw the wrong conclusions when they neglect the broader institutional context in which US power, for better or worse, is firmly substantiated. He is absolutely right. One of the key lessons instilled in any student of international relations of the 20th century is that hegemonic power is often embedded in and exercised through international organizations. These multilateral organizations lock in systems of global governance that preserve the influence of their creator states even when their relative power wanes. One need only look briefly at the history of venerable postwar international institutions to observe how these organizations have served US interests in the world over the past several decades.
Yet for the US today, facing an inevitable decline in relative material power, engagement in multilateral institutions represents both an opportunity and constraint. On the one hand, the US lock on disproportionate authority in IOs such as the UN, World Bank and IMF, secured through veto powers and weighted voting rights granted when these institutions were created nearly 70 years ago, means that the US will continue to punch above its weight well into the future. Such large, long-standing organizations rarely die. And bureaucratic mandates, norms, and operating rules are also notoriously sticky, tending more towards incremental adaptation than revolution. Thus, even as the balance of power in the world shifts towards emerging economies, such as the BRICS, the dominant rules and principles that guide international security, trade, finance and development, as embedded in multilateral institutions, will continue to reflect the ideals of the powers that created them – in this case, the US. It is therefore firmly in the US interest to exploit any opportunity to maintain its institutionalized power by continuing to support and exert leadership in these multilateral organizations, even when doing so entails the inherent costs of hegemonic responsibility and strategic constraint.
Therein also lies the key constraint. As Celeste Ward Gventer argued in her recent post, “decline will come, but its timing may depend on choices that will either enhance or weaken the U.S. position.” While her point was an incisive critique of America’s misguided foreign policy of nation-building, one might offer the same statement in the context of US engagement in global governance. The US ability to sustain its power in the world via multilateral institutions is inherently a function of its willingness and ability to help sustain the relevance, legitimacy and effectiveness of these institutions so that these institutions, in turn, can exercise authority and influence in the world.
Yet sustaining the relevance and legitimacy of multilateral institutions, in the zero-sum game of multilateral representation and governance, may invariably require status quo powers, including the US, to cede power and influence within these institutions to rising powers. The alternative to this inclusive multilateralism, which binds rising powers into existing institutions, is the proliferation of competing venues of global governance that ultimately diffuse power and undermine the authority and leverage of those institutions in which the US enjoys a preponderance of influence. We have already seen ample evidence of such governance diffusion, in the form of a shocking proliferation of new preferential trade agreements in the wake of stalled WTO talks, the increased lending power of regional development banks and the threat of a new BRICS development bank, and efforts to create new regional monetary funds (such as the Chiang Mai initiative). While such counterbalancing in global governance has thus far been relatively weak due to elusive collective action among rising powers, a pattern is emerging.
In the end, this leaves us with a rather unsettling and paradoxical conclusion with respect to US decline: to sustain power in and through global governance, the US must in fact learn to let go of power. This is especially true in instances of accommodating rising powers in existing institutions (such as the aforementioned Bretton Woods Institutions), forums (e.g., Financial Stability Forum) and clubs (e.g. G20). Many such steps have already been taken, for example, in recent governance reforms at the IMF and World Bank, which granted more formal votes and informal influence to the BRICS (especially China). Yet even here, the modest concession of power (which in the case of the IMF and World entailed no real loss of formal voting power by the US) risks being seen as empty gestures (or worse, insults) when the end result is a balance of power within the institution that looks more like 1982 than 2012. The same lesson can be taken from recent leadership selection processes at the World Bank and IMF, which reaffirmed the 70-year-old gentlemen’s agreement to let the US chose the President of the Bank and Europe dictate who runs the Fund. The clear lack of effort to allow for a more open and meritocratic process reaffirmed many critics’ beliefs that the US and its Western allies have no intent of upholding their espoused democratic ideals in these institutions. This is even a view held by many within the institutions, as evident in the recently leaked, scathing resignation letter of a senior IMF economist.
This ultimately leads me to believe that one key way the US can stem the decline of its power is to rethink its strategic engagement in global governance. And this means supporting international institutions not only in material terms, through the sustained provision of critical resources. It also means that US must support these key institutions of global governance on principled terms, truly abiding by the core values embedded in the mandates of these organizations even when it means forsaking short-term self-interest. The legitimacy the US accrues by working through multilateral institutions (as opposed to going it alone) is only good insofar as these institutions are themselves perceived as legitimate governors.
Dr. Catherine (Kate) Weaver is Associate Professor at the LBJ School of Public Affairs and Distinguished Scholar at the Robert S. Strauss Center for International Security & Law at the University of Texas at Austin.