Review: The Governance Report 2013 – Governance Under Policy Interdependence: Measuring Performance and Stimulating Innovation
Cédric Dupont continues Global Policy’s Responses to the The Governance Report 2013 by Hertie School of Governance. Oxford: Oxford University Press, February 2013. 176 pp, £9.99 (paperback), 978 0199674428. For a quick introduction to the report and other Responses please click here.
In today's world still struggling with the long tail of the global economic crisis, many policy-makers lament a situation that has become "ungovernable," either because of a lack of leadership or because of a lack of adequate governance or both. Problems have become increasingly global while governments have remained national. The world in short is in search of good governance. The first Report on Governance (thereafter the Report) by a team at the Hertie School of Governance aims at helping policy-makers in this search: a timely, important but herculean task.
There is much to commend in the Report, starting from the objective of raising broad awareness of governance challenges, to the systematic effort to build a framework for assessing gaps, and lastly to the description of recent innovative solutions. It benefits from the expertise of an impressive array of scholars and draws (at least implicitly) on previous experiences or efforts to think creatively about interdependence and governance (in particular various initiatives on policy making and public goods). Thus anyone interested in governance should pay careful attention to it. Yet, given the level of ambition of the Report, one should not expect the first version to be fully convincing, and it is not.
A first general concern is a mismatch between the willingness of the Report to address governance performance at three levels—transnational, national and local (city)—and the expertise and experience of most of the authors who are scholars focusing on, and mostly interested in, transnational issues. This creates a kind of theoretical and empirical tension (or misfit) in the Report that could have been avoided by dropping in this edition (or maybe permanently) any attempt to talk about local governance. As the Report stands, it gives a sense of an enterprise that tends to promise more than it can really provide.
Whereas one of the strengths of the Report lies in its theoretical foundations, the overall coherence of those foundations also needs some additional work. In particular, the complementarity between the governance performance model (with a focus on actors' behaviour in policy fields) developed in Chapter 1 and the governance readiness framework (with a focus on actors' governance requirements) needs further elaboration, which in turn would allow for a better integration of the various indicators presented in Chapter 5. One possible suggestion would be to clearly restrict the governance performance model to a sub-group of actors, in particular states, and then use it as an explicit building block in the evaluation of the governance readiness of larger organizations at the transnational level or of a government across different policy fields. The empirical illustrations in Chapter 5 seem to fit this pattern but too much is currently left for the reader to find out by himself/herself.
Each of the two conceptual blocks also remains wanting. The governance performance model considers performance as the outcome of the interaction of three concepts – legitimacy, efficacy and effectiveness. Each of those terms is challenging as one turns to their empirical implementation and the Report does a respectable job in addressing this challenge. Yet, efficacy ("do they know what they are doing?") and effectiveness ("Do they achieve acceptable results with reasonable means?") may be hard to disconnect. To illustrate this point, consider the efforts by the European Union to deal with integration differentiation among its membership. Since the treaty of Amsterdam in 1997, the EU has developed the so-called mechanism of enhanced cooperation to deal with this problem. The mechanism is a fairly sophisticated way to allow for different speeds while preserving a strong cohesion. One could therefore argue that the EU has been efficacious in addressing the problem. Yet the mechanism has rarely been used so far. For some analysts this may be due to the fact that in practice the requirements of the enhanced cooperation framework are too demanding. So is the problem at the conception stage or implementation stage or both? One could also think of the current discussion on monetary union: a problem of design, or implementation or both? The more general point here is that it may be hard to evaluate effectiveness or efficacy separately as both may often go hand in hand. One possible potential reason for this problem is that unlike in domestic political systems from which the conceptual model was "imported," international governance often lacks clear dividing lines between various branches of "government." Those who design the solutions may also be the ones implementing them. And it may be unclear a priori (post hoc it is always easier to declare that a solution was a bad one) what is a good solution, in the sense that it has any chance to be implemented with success.
The framework on governance readiness developed in Chapter 2 relies on a series of six criteria that one should expect from "good" governance systems. Although it is hard to disagree with the potential relevance of the six chosen criteria (called requirements) for assessing the governance needs for an adequate provision of global public goods, one may wonder how they connect to problems of governance at city levels. In other words, this seems to be a tool for global governance that would fit perfectly in a Report on Global Governance, which rejoins a point highlighted above on the targeted audience or objective of the Report. This left aside, the framework is wanting in its discussion on links between the various requirements and on possible priorities among them. Are efforts to address the lack of global leadership via the creation of the G-20 more important in the short term than taking care of fairness in international cooperation, which allegedly has not been the raison d'être of the G20?
The Report pays attention to this issue of links between different requirements for one type of actors -, national governments - , through the concept of responsible sovereignty that puts stronger emphasis on selected requirements. The problem is, however, that there is an apparent mismatch between Chapter 2 and Chapter 5 on the specific list of those selected requirements. While both chapters concur on the importance of the requirement of externality management (GR3) and of mitigating risks linked to policy interdependence (GR6), Chapter 2 also emphasizes the requirement of fairness in cooperation (GR2). In contrast, Chapter 5 adds the requirement on global policy space and leadership (GR5). Furthermore, as revealed by the empirical illustrations of Chapter 5, those core groups of requirements need to be combined with one or the remaining three requirements to produce any meaningful results.
The thematic focus of this first Report on financial and fiscal governance is a bit of a missed opportunity to fine tune the conceptual foundations discussed so far. Whereas discussion could have been framed with both the performance model and the governance readiness framework, the chapter discusses challenges along three trade-offs identified in the relevant literature in economics and international political economy, that is: (1) liquidity vs. moral-hazard; (2) accountability vs. effectiveness; (3) domestic politics vs. international commitments. It nicely highlights difficult choices associated with adjustment to imbalances of current and capital accounts. No doubt that readers will appreciate the intrinsic quality of the discussion but they may wonder why it figures some prominently in a report on governance and about how to improve it. From this perspective, it would have been more useful to discuss the distributive politics of governance reform, which allegedly is a way more difficult/complex thing to do. In particular the politics of different regulatory choices does not bring as determinate expectations as the politics of adjusting macroeconomic imbalances because the welfare implications of different regulatory systems are much more difficult to assess. Debates within federal systems about the optimal fiscal coordination mechanisms could have been useful here as a way to flash out some governance issues. It would have pushed the authors to discuss the key notion, hardly mentioned in the whole Report, of subsidiarity, central not only to many national states but also to the current EU governance system (article 5 of the Treaty on the European Union).
A strong ambition of the Report is to become an advocate of innovative solutions to address gaps assessed through the analytical lenses of governance performance and governance readiness. Chapter 4 provides an interesting way to tackle the key issue of what is a governance innovation (defined as a novel rule, regulation or approach) with a three by two categorization of different types of change. Without delving into the details of the typology, a key concern here is that fitting specific examples in specific cells is less straightforward than it may appear from reading the Report. To illustrate this, let us take the example of Chiang Mai Initiative Multilateralisation (CMIM) between ASEAN, China, Japan and South Korea. It is the latest development of a process of monetary cooperation that started in 2000. According to the Report, there was a significant discontinuity in moving from an initial set of bilateral swap agreements to the collective management system envisaged by the CMIM. Accordingly the latter is for the Report an example of innovation rather than a "recombination" or "refunctionality" of existing solutions in Asia or elsewhere. But it is hard not to think that this novel system has not been shaped by the practice of the previous system and is not from this perspective an upgrading of previous cooperative solutions in the Chiang Mai Initiative. Furthermore it is hard not to see serious borrowing from solutions used in Europe prior to EMU. Interestingly, EMU itself is considered by the Report to be a case of "refunctionality" of the Monet "coal and steel" principle. So, one is really left wondering about what is innovation in contrast to more gradual processes of change.
The high point of the Report is the introduction in Chapter 5 of a "new generation of governance indicators" derived from the conceptual foundations presented in Chapter 1, 2 and 4. Chapter 5 is a fascinating, although difficult, read. It clearly reveals the huge potential of the approach chosen by the team at the Hertie School. But there is still a long road from the potential to actual provision of ready to use governance indicators. There are way too many things offered to the reader in that chapter and one easily gets lost or confused by the different lists of indicators and dashboards, and the lack of clear connection with the empirical illustrations. Whereas the full blown operationalisation and coding of indicators cannot be expected at this stage of the enterprise, the loose connections between the empirical illustrations and the future indicators is more regrettable. To be provocative, does one really read the heavy machinery proposed by the Report to come up to the assessment that the UN has been overly politicized, and that UN peacekeeping missions have mostly relied on relative poor countries? A frank response would be negative and there is thus an urgent need for redressing this problem as soon as possible.
Disappointment also comes from the final recommendations of the Report but this is hardly surprising given the breadth of the objectives of the Report. To remain meaningful to the largest audience, recommendations have to remain general, most likely too general for analysts and practitioners of governance who may quickly walk away from the Report and consider it as yet an additional failed effort to make a difference. This would be a pity: the Report of Governance should be given a real chance because it clearly goes beyond previous efforts to address governance problems. But patience of readers, particularly policy-makers, tends to be very limited, and the imperfections of this first version should therefore be quickly and seriously addressed. Given the expertise mobilised behind this Report, we should remain confident that this will indeed be the case.
Cédric Dupont is Professor of Political Science and Director of Executive Education at the Graduate Institute of International and Development Studies, Geneva.
