By Simon Johnson
Writing in the FT on Tuesday, Nick Stern made the case for a new international organization to monitor global risks. Drawing on a decade of dealing with governments as board members of such organizations, he is blunt - keep them out of day-to-day oversight, by giving the institution an endowment and a leader appointed for 7 years without possible recall.
Lord Stern is right to be cynical about governments in this context, but his solution feels a bit too much mid-20th century. If the organization got off the ground, governments would compete madly to appoint the leader - trying for someone over whom they have a hold (it has happened). And if the organization really were independent, who would pony up the endowment or be comfortable with the (low) implied level of democratic accountability - it’s hard to see Senate Foreign Relations or Banking (both of which have jurisdiction over the IMF) getting excited about this arrangement. Without the US there can be no meaningful deal.
And, thinking more about 21st century formats, don’t we already have - albeit in still emergent form - exactly what Professor Stern wants?
I’m not suggesting that today’s blogs do a great job addressing the need for early and clear warning about emerging global problems. But the broader debate on and around the Internet is definitely moving us in the right direction.
If you want to know what is going on and why, you have a range of sources - some more news analysis, others more commentary - readily available. The depth of coverage improves every day. There are technical explanations (and these increasingly confront officials on the details), as well as broader expositions. Readers’ comments are an essential advantage, both as an input into the debate and as feedback on what makes sense or has been explained well or is seriously off-track.
The exact structure that will emerge remains unclear, and I’m not suggesting that it will completely supplant more traditional national or international economic organizations and their reports. But, in terms of early and frank warnings, I would look much more to the blogosphere than to anything officially backed by the G20 - you’ll never get the same level of directness in anything that involves governments.
I would also suggest that President Obama is likely the last US President who will say something along the lines of, “we don’t spend a lot of time looking at blogs.”