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By Timothy J Sinclair

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Governments have formal authority, but some cannot exercise this very effectively and have little ability to impose their laws on their own citizens. As governments, they have weak powers of governance. Lacking world government, this inability to rule in the formal sense means that there is no government over global relations. But governance, when used as part of the term ‘global governance’, suggests that the informal, sub- or supragovernmental systems it comprises may actually be better adapted for a world of new challenges than the formal legal mechanisms of government.

Given the emphasis on the private realm and the lack of overarching legal authority, it seems that global governance is much more dependent on epistemic authority than international organization, which drew expertise into the major 28 Global Governance international institutions. At first glance this seems to make global governance much more vulnerable than international organization because of the dependence of global governance on something as ephemeral as reputation and wisdom. But if you look at this another way, the base for the legitimacy of global governance is much wider and less vulnerable to criticisms compared with international organization, premised on US hegemony.

By the early 1980s, the LDCs were paying much more for their loans, but their exports had collapsed in volume and value because of weak demand in the recession-hit rich countries. So costs were up at the same time as income was down. The debt crisis developed rapidly, not just creating severe problems for these countries, but destroying the balance sheets of many richcountry banks, threatening the functioning of the global financial system. Ironically, this effort on the part of LDCs to get around the restrictions of the international financial institutions had the opposite effect and helped alter substantially the receptiveness of these states to market-based solutions to their problems during the 1990s.

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