Governance in spotlight at Davos

Davos gets under way this week. If you’re disappointed not to be going, you can at least console yourself by reflecting on all the money you’re saving – at least $71,000, says The New York Times!

What will you be missing? Failures in global governance look set to be a key agenda item for movers and shakers at the Swiss mountain resort this year. What the World Economic Forum defines as “weak or inadequate global institutions, agreements or networks” is identified as one of two “cross-cutting global risks” in the latest edition of the forum’s Global Risks report . (The other is “economic disparity”, which we’ll come back to next week.)

The report’s findings, which were informed by a survey of “580 leaders and decision-makers around the world”, make for gloomy reading, as the BBC says. The problem, says the report, is that while the world has become increasingly interconnected, our capacity for global governance is now “highly fragmented”.

In a sense, this is another of the many fruits of globalisation. On the one hand, the increasing integration of the world economy has brought forward important new economic players like India and China. On the other hand, there’s now a far wider range of economic models on offer and what the report calls a “a growing divergence of opinion between countries on how to promote sustainable, inclusive growth”.

That creates a paradox, says the report, where “the conditions that make improved global governance so crucial – divergent interests, conflicting incentives and differing norms and values – are also the ones that make its realization so difficult, complex and messy”.

Separately, a report released in the run up to Davos shows that levels of trust in business are rising in much of the world, with the exception of the United States. The annual Trust Barometer suggests global trust in business rose two percentage points to 56%, reports the Financial Times ; in the US, however, it fell to 46%, an eight-point drop since 2009.

Overall, NGOs were at the top of the trust scale, on 61%; at the other end were insurers and banks. “Just 25% of Americans and 16% of Britons said they trusted banks to do the right thing,” reports Reuters. In Ireland, the figure was just 6%.

Useful links

OECD: Restoring public trust

Brian Keeley

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  1. Lena Bäcker - 29/01/2011 Reply

    “The Nordic way” at the World Economic Forum in Davos.
    What’s so special about the Nordics? In international comparisons, not least the World Economic Forum’s global competitiveness index, the Nordic countries are almost always found at or near the top. In one meta-index that is an aggregate of 16 different global indices (competitiveness, productivity, growth, quality of life, prosperity, equality etc) the four main Nordic countries − Sweden, Norway, Denmark and Finland − top the list. What are the reasons? Is there such a thing as a common “Model” particular to the Nordics and if so, will it last? Is it sustainable, even transferable to other parts of the world?

    In this little brief we would like to provide bits and pieces of what we believe are some plausible explanations for the relative success of the Nordic societies. If these experiences can improve the understanding of our way of doing things and inspire debate and development in other parts of the world we will be very pleased.

    Shared values are also about sharing values and experiences with others. The fact that Nordic countries showed resilience during the recent financial crisis largely seems to be the result of previous deep crises in the Nordic region in the 1980s and 90s. During these crises, the Nordic countries renewed and modernized their respective economies in ways which sometimes constituted a break with previous regulations and tax systems.

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