The Future of the Liberal World Order. Scenarios for Germany

After the Second World War, a rule-based international order arose under American leadership, which overcame the chaos of the interwar years, enabled a long period of prosperity and peace, and ultimately helped to break down the antagonism between the East and the West. This order was significantly expanded after the end of the Cold War and from that point on, can be described as a liberal world order.

This kind of liberal world order includes incentives for the democratisation of states involved, builds upon international institutions for handling interdependency issues and protecting open borders, and aims for the recognition of individual rights. This liberal world order and the global governance associated with it have come under fire from two sides in the last few years.

The Liberal World Order under Fire

In Western democracies, right-wing populist movements and parties are gaining steam, attacking the foundations of this order from within. All right-wing populist groups are fighting against open borders and international institutions, positioning the supposed will of the majority culture against a comprehensive definition of individual and minority rights as well as tolerance. The movement’s most successful achievements come in the form of Brexit and Trump. Outside of the Western world, authoritarianism is making a comeback in many states. Recep Tayyip Erdogan and Vladimir Putin are the most notorious representatives of this development. In Western democracies, rightwing populist movements and parties are gaining steam, attacking the foundations of this order from within. But even in Europe, Viktor Orban and, in a somewhat milder form, Jaroslaw Kaczynski, are pursuing a similar course. These authoritarian governments denounce the liberal elements of global governance as a backdoor form of cosmopolitan elite rule in the West. Right-wing populist parties and authoritarian regimes are well connected. They work together against the liberal world order with notable success. Is the liberal age then approaching its end? Is liberalism losing its appeal, and are authoritarian political systems establishing a new world order?

This article strives to address these questions in a specific manner. I will employ a ‘Theory of Global Governance’ and the determinants of development identified in this theory to shed light on the potential futures of the liberal world order by discussing three possible scenarios, proceeding in three steps. After a brief note of caution on sociological prognoses in general and on theory-­based prognoses in particular, I proceed by outlining the theory underlying the projections of the future in order to then distinguish three scenarios for the development of the liberal world order. In the final stage, I will provide some recommendations for action that can be derived from the analysis.

The Limits of Prognoses and Scenarios

Different methods and procedures can be followed to create scenarios. In very broad terms, two basic forms can be distinguished. One is based on the careful analysis of the present, including current trends, and continues them in dependence on external influences. The simplest example of this procedure can be found in election forecasts. An election forecast generally consults the most recent surveys on party preferences and predicts the result based on these – provided that there are no unexpected developments. Forecasts of this kind are based on probability estimates and can be hinged on different developments using various scenarios. For example, two election results can be presented as two scenarios, depending on how the debate between the top candidates turns out. Such prognoses and scenarios are, however, often thrown into disarray by unexpected events (uncertainty) – such as unexpected reporting on candidates shortly before the election. In comparison, there are also theory-based prognoses which can more or less be formalised. In the example, such theory-based prognoses incorporate a range of election determinants such as growth, inequality, national pride, candidates’ reputations, or similar into an overall model and then determine the election result based on this calculation.

While these models can take apparent surprises into consideration, they fail at the point that unknown unknowns come into play. Theory-based prognoses are not necessarily better than status-quo projections, which prove fairly accurate by simply adjusting the result of the most recent Sunday poll. There are exceptions: the result of the last American presidential election was forecasted by some of the theoretical models, while most polling institutions missed the mark.

Expert Political Judgement

Nevertheless, theory remains a conditionally suitable forecasting instrument in social sciences at best. Philip Tetlock demonstrated this in his ground-breaking study on ‘Expert Political Judgement’. At the end of the 1980s, he persuaded 284 political experts of all sorts to make predictions about general political developments up until 2003 and assessed the data according to all the rules of modern methodology. The result is unflattering for social sciences. He writes:

“When we pit [the average of all] experts against minimalist performance benchmarks – dilettants, dart-throwing chimps, and assorted extrapolation algorithms – we find few signs that expertise translates into greater ability to make [good] forecasts.”

In other words: the average forecasting ability of the combined expert community is no better than that of chimpanzees equipped with darts.

Nevertheless, Tetlock does not succumb to epistemological scepticism. He investigates further and systematically finds variances, that is, characteristics of experts that are able to make significantly better predictions than mere chance alone. It is initially astounding to realise how many factors are irrelevant. Thus, the lack of forecasting ability is in no way a problem specific to political science: the study makes it clear that there are no systematic differences between historians, economists, journalists, and political scientists. Other disciplines fail to do better. What is more, there are a slew of factors irrelevant to forecasting ability: left or right-wing political orientation, institutionalists or realists, men or women, more or less experience – even, incidentally, having a doctorate or not.

The average forecasting ability of the combined expert community is no better than that of chimpanzees equipped with darts.

Then what does really make a difference? Who demonstrates above-average prediction capacities? To answer this question, Tetlock identifies the relevance of different ‘cognitive styles’, using Isaiah Berlin’s differentiation between hedgehogs and foxes. Hedgehogs usually know “one big thing”, usually expand the explanatory reach of their theory in a deductive manner, often work with demanding methodical instruments, and are full of self-confidence concerning the forecasting ability of their theory. However, they make bad forecasts. On the other hand, foxes know many different things, are constantly moving between theory and empiricism, commit to analytic eclecticism to a certain degree, and are sceptical concerning their own forecasting ability. And foxes make significantly better predictions than the average expert. A prognosis based on one theory should therefore be viewed with particular caution. Nevertheless, this is precisely what I attempt in the following.

The Undermining of Global Political Systems

In “A Theory of Global Governance. Authority, Legitimation, and Contestation”, the author explains how the global political system that arose in the 1990s has, as it were, undermined itself. It offers an endogenous explanation of the reasons behind the crisis plaguing the liberal world order for several years, and why it’s under attack from many sides. The argumentation can be summarised as follows.

After the end of the Cold War, within the context of a critical juncture, a global political system developed that is characterised by joint principles and ideas of public interest, specific international and transnational institutions, and the interplay between these institutions.

Three of the Constitutive Principles

Fundamentally, rudimentary forms of global public interest can be identified. When references are made to, for example, the common heritage of mankind, war and poverty as the scourge of humanity, and collective responsibility for future generations, joint goals are addressed which transcend the idea of interstate cooperation as a result of the mere aggregation of national interests. The recognition of a rudimentarily developed global public interest facilitates the recognition of possible exercise of authority through transnational and international institutions. Consequently, international institutions such as the United Nations Security Council can also make decisions that deeply impact national communities and conflict with the interests of individual states. The intervention in Iraq is an extreme example. The enforcement of austerity policies by the International Monetary Fund (IMF), the ban on certain product regulations as part of the World Trade Organization (WTO), or environmental policy provisions are other examples. The consensus principle of international policy therefore no longer applies without limits. International institutions that exercise authority, however, must justify themselves, and not just to states and governments, but also to the affected national societies and the global society. In this respect, the right to justification has also arrived in global society. Even an authoritarian ruler such as Vladimir Putin addresses the world’s populations, and not just governments, whenever he denounces the West as hypocritical.

Autonomous Decisions of the Courts

The analysis of specific international and transnational institutions does indeed demonstrate that the possibility of majority decisions or autonomous decisions by courts and international bureaucracies has significantly increased since 1990. While this naturally applies for the European Union (EU), it also applies for the Security Council, the WTO, the World Bank, the World Health Organization (WHO), and even for transnational authorities such as Standard & Poors. In general, especially the number and the significance of institutions with epistemic authority has increased. The recognition of a rudimentarily developed global public interest facilitates the recognition of possible exercise of authority through transnational and international institutions. In addition to the rating agencies, these include the International Accounting Standards Board, the Intergovernmental Panel on Climate Change, and in general the international evaluation entities in the field of environmental policy, the OECD in terms of educational policy, and the international courts of arbitration and dispute settlement authorities.

In many cases, this development has expanded the problem-solving capability of the international system. Political and epistemic authorities, however, produce both winners and losers, they refer to hierarchies and stratification as well as subordinate and superordinate relations. The global political system is like every political system: it produces discrepancies, injustices, and conflicts over policy content and the processes behind policy decisions.

For this reason, the exercise of public authority and the functioning of a political system are dependent on successful legitimation. The global political system functions in the same way. When international institutions still mostly functioned on the consensus principle, they did not experience legitimacy issues. The consent of all governments was required before an international obligation arose. In this respect, the legitimation of international institutions ensued as a direct derivative of the legitimacy of national governments. But as Max Weber already noted: the emergence of public authority is linked with the constant effort “to awaken and cultivate faith in their legitimacy”. The emergence of a global political system in the 1990s brought the legitimation problem to international politics.

The Interplay of Institutions

One crucial factor for the legitimation of political systems is the interplay of institutions. At this exact point, the liberal world order proves deficient. On the one hand, it is lacking international locations from where the different spheres of authority are coordinate transparently. Democratic political systems in the national framework resolve conflicts of objectives, for example between economic and environmental interests, either through the head of government, the constitutional court, or as a last resort public opinion. Institutions of this kind are missing in the global political system. While the number of conflicts between the international trade system and environmental system has continued to rise since 1990, there are no meta authorities to regulate them. As a result, there are no public confrontations about conflicts of objectives concerning global society, and all regulatory issues are handled in an encapsulated manner, within institutionally defined sectors. Overarching discussions which can fuel political competition between parties and world views are lacking. Consequently, technocratic legitimation efforts prevail on an international level. The justification of international authority therefore primarily takes place through expertise and effectiveness, instead of through democratic deliberation, political participation, or elections. The full depth of policy interventions by international institutions, however, is often no long covered by the democratic legitimation narrative. Military interventions by the international state community, or the enforcement of austerity policies, cannot be exclusively justified on technocratic grounds.

On the other hand, an effective separation of powers is missing. International institutions are mostly dominated by a few executives from powerful states. The problem can best be illustrated with the example of the UN Security Council. The five veto powers are crucial for legislative decisions (“What counts as a threat to international peace?”), for their executive application (“Is a certain state threatening the peace?”), and for the implementation of possible interventions (the states with the strongest militaries are required to implement interventions) – and all this in the absence of effective jurisdiction. This ‘institutional inequality’ leads to different treatment of systematically equal cases, which erodes the most fundamental source of legitimation of all: that a public authority treats equal cases in the same way. Nowadays, the criticism of the Western double standard can be declared almost universal.

Two Counter-movements to the Liberal World Order

As a result of these legitimation problems, the global political system is increasingly losing legitimacy and support. Signs of the crisis are increasingly materialising since the beginning of the new millennium. In this sense, the attack on the Twin Towers in New York on 11 September 2001 and the conceptual birth of BRICS a few weeks later can be viewed as a turning point. As the liberal enthusiasm of the 1990s fades, two counter-movements grown more influential. The exercise of public authority and the functioning of a political system are dependent on successful legitimation. On the one hand, an increasing politicisation of international institutions can be observed. Politicisation places the public spotlight on institutions and policies which acted technocratically or administratively within the non-political arena until then. The technocratic narrative of international authority was initially questioned by transnational anti-globalisation protest movements; however, within the political systems of Western Europe and North America, actors who call for a general cutback of international authority gain in significance. This first became unequivocally apparent with the rejection of the European Constitution through referenda in the Netherlands and France. The EU and international institutions became the subject of political dispute. Their democratic legitimation was challenged, and the retention of political authority at the nation state level grows increasingly attractive politically.

Simultaneously, rising powers such as China, Brazil, and India, as well as Russia and the Western powers, are increasingly relying on anti-institutionalisation; new institutions are created or existing ones used as instruments to weaken unpopular institutions and circumvent obligations. After the failure of the Doha Round for more trade liberalisation, Western states primarily trusted in bilateral investment and trade agreements. The West’s minority position in the WHO was overcome by establishing the Global Fund – with the help of private donors such as the Bill & Melinda Gates Foundation –, which forced the WHO to make policy changes through competition for scarce resources. Quite similarly, China recently founded its own development bank, and organisations were used to weaken the intellectual property rights policy of the WTO. An effective separation of powers is missing. International institutions are mostly dominated by a few executives from powerful states. These anti-­institutionalisation developments have weakened the ­effectiveness of existing international institutions while simultaneously creating a highly diffuse and opaque landscape of responsibility.

Politicisation and anti-institutionalisation signal a growing resistance against international institutions. They are no longer accepted as unquestioned framework conditions of policy, but have rather become part of political confrontation. However, politicisation and anti-institutionalisation do not necessarily have to lead to the decline of the liberal world order. The extent of the resistance, the underlying intentions, as well as the reactions from advocates of the liberal world order will play a crucial role.

Equal Treatment of Equal Cases

The future of the liberal world order remains open. The outlined Theory of Global Governance sees the further development of the global political system as particularly depending on two factors.

On the one hand, legitimation problems are not insurmountable. A change in institutional structures can mitigate the legitimation problems. This requires the international authorities and national governments behind them to develop mechanisms which ensure that equal cases are treated equally, enabling political competition within the institutions that can produce open outcomes. International and transnational institutions must avoid appearing as instruments of a small global elite, serving to implement their own interests. On the other hand, it must be noted that the opponents of global governance in no way represent a homogeneous group. There is a radical opposition that systematically opposes any transfer of political authority, fighting against any weakening of national sovereignty. However, there are also critics of the transnational and international institutions who recognise their fundamental importance and necessity, but consider a significant reform necessary. Three possible scenarios can be derived from combining both of these determination factors.

The Downfall Scenario

Many already consider the downfall of the liberal world order certain. From this perspective, the preservation of a liberal world order depends on the hegemony of a leading power, which imposes the liberal world order in the face of resistance and is prepared to unilaterally bear the costs for everyone. With the rise of new powers, the US has lost its hegemonic role. This has far-reaching consequences. On the one hand, it leads to the rise of new major powers that then compete with the US on a military and ideological level. These states strive to abolish the old order, creating a new order that corresponds to their own ideas.

The global political system that was established after the fall of the Soviet Union needs to be destroyed. The Chines government is expected to follow the example set by Germany at the end of the nineteenth century, which opposed the old hegemonic power of Great Britain and the old order. In addition, due to the increasingly competitive situation, the US is no longer willing no longer willing to bear the costs of the liberal world order. This is encapsulated by the motto of the Trump administration: ‘America first’. Costs for international cooperation are relocated, and support for the liberal world order can no longer be generated. The new domestic orientation of the US is undermining the global political system. The downfall is the result of this double movement.

The Transformation Scenario

The starting point of this scenario is globalisation. The possibilities and functional necessities of societal globalisation have spawned a global political system. This global political system produces winners and losers, just like globalisation itself. The winners are the global social classes of those with universally applicable competences, transnational social capital, and a liberal-minded way of life. They are committed to open borders, international institutions, and liberal fundamental rights, and lean towards cosmopolitanism. International and transnational institutions must avoid appearing as instruments of a small global elite. The losers are the social classes of those who are immobile, primarily feel at ease within their own national culture, and do not travel much apart from holidays. These groups, with a focus on communitarianism, advocate for fixed borders, national sovereignty, and the majority culture. According to this perspective, societal globalisation and the global political system have triggered a social revolution which has created a new line of conflict between cosmopolitans and communitarians that has supplemented and superimposed the primary line of conflict of the twentieth century – that between socialism and capitalism resulting from the Industrial Revolution. While the associated challenge for the liberal world order is fundamental and permanent, cosmopolitanism can gain the upper hand on communitarianism in the long term through skilful reforms. The line of conflict will change all political systems as we know them, but an appropriate reaction to these confrontations in the form of institutional reforms could ensure the continued existence of the foundations of the liberal world within the framework of a permanent confrontation. Similar to the capitalist and civil order, which ensured their existence through transformation, creating democracy and the welfare state.

The Backlash Scenario

The American political scientist Seymour Martin Lipset is one of the most important thinkers within the theory of Societal Lines of Conflict. A few years after writing an enormously influential essay with Stein Rokkan, he published an extensive book on the backlash in American history together with Earl Raab. He postulates that American history can be seen as a progression of liberal equality rights and successive breakdown of discrimination against certain ethnic groups, people of colour, women, and certain sexual orientations. This liberal progress has admittedly always been interrupted by phases of backlash and partly pushed back, upheld by old white men who have lost their privileges and special positions. These backlash movements mostly dissolved again without considerable concessions within a decade.

The numerous resistance movements against the liberal global political systems can be interpreted as a similar kind of backlash. In fact, many of them are primarily supported by white men who feel they have been robbed of their privileges and want to return to the world before the age of globalisation. With this scenario, the weaknesses and time limitation of resistance will primarily determine the future. The reaction of representatives of the liberal world order carries less importance.

Personally, I consider the downfall and backlash scenarios less likely. Above all, the functionality and necessity of global governance in the age of globalisation do not support the downfall scenario. Accordingly, the aspiring superpower is less likely to be China, who fundamentally challenges the liberal world order. While it is true that Chinese foreign policy readily emphasises national sovereignty, outside of the field of human rights, it has previously defended rather than attacked many components of the global political system. In contrast, the backlash scenario underestimates the mobilisation potential of nationalists and anti-cosmopolitans. They are not groups of old white men that have to become accustomed to the revocation of their privileges. Globalisation and the global political system have in fact created losers and winners on a transnational and global level, who will probably continue to oppose each other in political discourse in the national political systems and in the global political system. The outcome of this discourse will crucially depend on whether the global political system can be reformed to gain legitimacy.

If the future of the liberal world order therefore depends on political choices, then this poses the inevitable question of which policies and institutional reforms will be necessary to process the new line of conflict in a productive way. How can the liberal world order be defended in view of the internal and external challenges? What changes do representatives of the global policy of responsibility need to make compared to the past decades?

Liberal World Order

How We Must Act

The weakening of the liberal world order is based on normative challenges. An ideational defence programme is needed to retain it. Only then can the principal threat of our time be confronted: to defend internal and external attacks on the liberal world order. It will be a lengthy battle, which will take place at both the national and international level. Three measures must be taken:

  • The advocates of the liberal world order in Germany must stop defending themselves politically, but rather choose the offensive and proactively represent the cosmopolitan worldview in an offensive. The tendency to bring home reasonable global agreements and sell them as if they were without alternative may seem like an easy strategy in the short term. In the long term, however, it is detrimental, as it prevents societal debates and an open discourse on world policy without predefined outcomes.
  • The discourses that take place within European and international institutions on the right trajectories must be made transparent, and room for opposition must be created. Political opposition within international and European institutions helps prevent dissatisfaction with policies from structurally translating into institutional criticism. Germany must advocate for this.
  • Germany must look for coalition partners for a liberal world order in the Global South. The long-term work on such coalitions is more promising than relying solely on questionable deals with authoritarian potentates.

Prof. Dr. Michael Zürn (59) is Director of the Global Governance research unit at the Berlin Social Science Center (WZB) and Professor of International Relations at the Free University of Berlin. He was the Founding Director of the Hertie School of Governance and before that Professor of International Relations at the University of Bremen, where he co-founded the Collaborative Research Center “Transformations of the State”. Furthermore, he is a member of the Berlin-Brandenburg Academy of Sciences as well as the Academia Europaea and Director of the Berlin Graduate School for Transnational Studies.