The Liberal International Order – a health check

This article is part of the World Economic Forum's Geostrategy platform

The Liberal International Order, which has been relatively stable since the end of World War Two, may now be facing significant perils that could cause fatal damage to its dominance, according to the US think tank, RAND Corporation.

In a comprehensive assessment, RAND analysts highlight a series of key developments since 2014 that “suggest that the order could be in much more peril than the data through 2014 would suggest.”

These events include Russian aggression in Ukraine, the vote in the UK to leave the European Union, the election of Donald Trump as US President, and the ongoing influence of far-right political parties in Europe. The authors do note, however, that, “This conclusion is tentative, based on trends that could reverse themselves, and not mature to the degree that some fear (or hope)."

The International Order is defined as the body of rules, norms, and institutions that govern relations between the key players on the international stage. Today, this body includes a nexus of global institutions, such as the United Nations, and the World Trade Organization; bilateral and regional security organizations; and liberal political norms, as well as what the authors describe as “liberal political norms”.

To measure the health of the order, RAND researchers examined 18 indicators, including development assistance, membership of formal institutions and alliances, territorial changes following conflict, peace among major powers, and global indices of democracy, and public opinion.While the authors of Measuring the Health of the Liberal International Order acknowledge their evaluation cannot be reduced to a single objective value and “ultimately requires a value judgment”, the data they assemble led them to reach a number of broad conclusions, and a number of US policy recommendations.

Foundational promise

The existential threat to the order – and from which many others spring – comes from what the report describes as its “foundational promise”, that of economic prosperity. “If public and governmental audiences perceive that the order can no longer make this promise, support for its rules, norms, and institutions could be fatally weakened, partly because so many other variables are affected by economic ones.

“In this sense, economic growth and stability represent a basic source of equilibrium in the order. Such a finding has obvious historical parallels. In the 1930s, for example, the Great Depression played a critical role in the collapse of the League of Nations and the rise of extreme nationalism in Germany and Japan.”

This warning contrasts with the impressive degree of stability the order has brought about since 1945, and especially since the mid-1980s.

The report draws attention to the recent upsurge in populism globally, which it says, “is placing the popular consensus on key elements of the order in jeopardy.” These elements include the desirability of open markets and open borders, the value of multilateral solutions, and the very notion of the rule of law.

The study's overall conclusion is that the post-war order continues to enjoy many elements of stability, but it is increasingly threatened by major geopolitical and domestic socioeconomic trends that are calling into question the order's fundamental assumptions.

Levels of foreign aid can indicate states’ commitment to an underlying order

Significant pressure

It suggests, however, that, despite current threatening trends, and the fact that “there can be little question that the order is now under significant pressure”, it is still robust enough to withstand some negative effects.

Whether this resilience will be enough to protect the order is in question, however; the authors warn: “… if negative trends were to accelerate in all three sources of equilibrium — economic indicators, US leadership, and governing systems (via the rise of authoritarian populism) — at the same time, the order could sustain fatal damage.”

An overarching finding is that pressure to reform the post-war order is increasing at a pace few observers foresaw, and these pressures are “now more treacherous than ever.”

In particular, the authors highlight Russia’s frustration with elements of the order, specifically Western alliances, and the active promotion of democracy. This frustration has become “intense and has led to outright conflict.”

In addition, India, Turkey, Brazil, and other major powers are speaking up more urgently about a number of issues, such as the reform of international institutions and the limits of the Western-centric, neoliberal economic model.

China critique

“Most profoundly,” says the report, “China is both steadily increasing its participation and influence in the order’s institutions — including contributing to the United Nations peacekeeping function, and adding its currency to the International Monetary Fund’s Special Drawing Rights list — and making a hard-edged critique of the order’s perceived inequities.”

In parallel, the degree of frustration with the costs and pressures of a globalizing order has risen significantly, especially among the working classes of the developed world. Evidence suggests, the authors say, that this has both economic and sociocultural roots: stagnating economic prospects, along with a sense of cultures under siege, combine to create growing resentment of a global order that is felt to be out of control.

The result is that nationalism is challenging global narratives as the fundamental defining mindset of political action. “State-directed capitalism, mercantilism, and masked trade protection are achieving new-found legitimacy in competition with the neoliberal economic consensus of the post-war era. Illiberal approaches to domestic politics are rising and becoming more popular in the eyes of many populaces,” the authors conclude.

Conclusions and policy recommendations

The report makes a number of key policy recommendations as a result of its findings.

· The post-war order is at a perilous moment, and given the many signs of stress already evident, US engagement is vital. Were the US to end contributions to international institutions, and abandon free-trade accords, the result could do fatal damage to any concept of a meaningful international order. It is no time to conduct large-scale experiments in US global retrenchment.

· Maintaining the stability of global economic markets, institutions, and rules is fundamental to sustain the Order. If global trading networks were to collapse into beggar-thy-neighbour protectionism (economic policies that benefit a state, but worsen the economic problems of other countries), or even increasingly exclusive regional trading blocs, the effects on a shared global order would be devastating.

· The US needs to develop a more nuanced and patient style of leadership to sustain the current order, given the multi-polarity of the emerging system, and the “high sensitivity of populist and nationalist great powers.” The US should not take a step back from its decisive leadership role, but it should exercise leadership that is less domineering.

· The US must also work towards a more shared and equitable order. The two growing areas of vulnerability are the rising challenges to the order’s rules and principles, and the growing resentments on the part of major powers, whose leaders argue that it is inherently biased against their states. Dealing with both at the same time calls for US policies that preserve the order’s norms, and enhance its legitimacy in the eyes of other leading powers.

· The authors conclude that, if the existing post-war Liberal International Order is to be preserved, business as usual is not an option. A new approach is necessary, one that does not simply reaffirm the values that have inspired the order, and makes renewed threats about the willingness of the US to enforce those values. A two-part agenda for the US is suggested: new strategies for allaying the negative impacts and fears engendered by an integrationist era, and a new vision for US leadership of a more shared, and at times less intrusive, order.

Measuring the Health of the Liberal International Order, Michael J. Mazaar, Astrid Stuth Cevallos, Miranda Priebe, Andrew Radin, Kathleen Reedy, Alexander D. Rothenberg, Julia A. Thompson, Jordan Willcox.