A Conversation with Ngaire Woods, Founding Dean of the Blavatnik School of Government.

Ngaire Woods

Professor Ngaire Woods is one of the world’s preeminent experts in global government, and governance. She is the founding Dean of the Blavatnik School of Government and Professor of Global Economic Governance at Oxford University. Her research focuses on how to enhance the governance of organizations, the challenges of globalization, global development, and the role of international institutions and global economic governance.

Previously, she founded the Global Economic Governance Programme at Oxford University and co-founded (with Robert O. Keohane) the Oxford–Princeton Global Leaders Fellowship programme. She serves as a member of the International Advisory Panel of the Asian Infrastructure Investment Bank, on the Board of the Mo Ibrahim Foundation and as a Rhodes Trustee. She is Co-Chair of the World Economic Forum’s Global Future Council on Values, Technology and Governance. In 2018 she was made CBE for services to higher education and public policy.

In this exclusive interview, I spoke to Ngaire woods about the impact of globalization on global governance, the realities of international trust and cooperation, and how we can build better governments, and governance for the future.

Q: How has globalization impacted governance?

[Ngaire Woods]: Over the last century, we’ve seen several experiments on how governments deal with globalization. The huge globalization at the end of the 19th century broke down after the first world war and led to a re-nationalization of economies. When individual countries hit a crisis, they’ve got 2 options, they can either look after themselves (at the cost of their neighbours) or they can create rules which they (and everyone else) will abide by, which requires institutions. At the end of World War II, you saw all these institutions springing-up or being reinforced as forums for setting, monitoring and enforcing rules. The post-war period of globalization saw industrialised countries carefully combine measures that ensured each nation could protect its population –building welfare states, and building opportunity at home through wealth, education and housing. At the same time, they started opening up trade-relations whilst keeping their capital accounts closed- stopping money sloshing around the world but creating global opportunities and markets. This all started to change in the late 70s and 80s when governments accelerated the globalization of finance and trade but began to “roll back” the state and government spending at home. For large corporations, globalization opened up  opportunities without the correlate responsibilities which usually travel with that- so things that banks must do at home (in terms of being carefully regulated) they didn’t have to do abroad… the things that multinational companies had to do at home (in terms of safe factories and good working conditions), they didn’t have to do abroad. This took globalization out of balance, into a vicious cycle – and we’re now dealing with the consequences of that.

Q:  What are the tensions in the creation and operation of international institutions?

[Ngaire Woods]: There’s a tension amongst the countries who belong to, and who have led, international organisations. Are the international organisations we have principally there to ensure that collective-action problems are solved? Are they solving the problems which no country can alone solve such as climate change, international financial stability, lending for infrastructure which otherwise will not be built? Or – are they there to impose one particular view of the world on the rest of the world? After 1990, there was a widely shared view that international organisations should advance particular values, but only some of these values were universal. The millennium development goals, and sustainable development goals are good examples of universal values because all countries of the world played a role in forging those values and agreeing on them. In the 1980s and 1990s, however, you saw global contestation about the ideology and priorities being advanced by the IMF and World Bank.  you Today’s great powers, such as the United States, the European Union, China and Russia might want to push international institutions towards their views on how other countries should be. This opens up the question about how far international institutions should go in advancing particular values, and if so, whose values. That’s where were going to run into difficulties in a world where there is not a consensus about how best you regulate an economy and there is no consensus about which political system is going to work best for any particular society around the world.

Q: Are we seeing a move from multilateral to bilateral relationships between nations?

[Ngaire Woods]: What we’re seeing today is a sharp strategic rivalry between the United States and China, and that’s having knock-on effects for every multilateral. We’re seeing this in the selection of leaders for every international organisation- it’s become China vs. the United States… we’re seeing it in the questioning of what each institution is doing (such as the US withdrawal from the World Health Organisation). At the same time, faced with the need to rebuild the global economy after Covid, we’re seeing a lot of cooperation at the global level. It is significant that, at the height of antagonistic rhetoric, the G20 have agreed on a baby-step towards the suspension of debt payments from the world’s poorest countries. Even at a moment of the very highest ‘America First’ rhetoric, as the United States moves into a presidential election cycle, the Federal Reserve is patiently continuing to extend and expand the way it supports other central banks across more than a dozen countries- it’s sustaining a pathway for the global economy to pull out of the Covid crisis. We’re also seeing (for example) a high degree of cooperation going on among medical scientists in the United States, China, Europe and Britain. The world simply cannot manage Covid-19 without international cooperation around the production and distribution of medical equipment… on the research, product and distribution of a vaccine… and the cooperation between economies needed to ensure that we all return to growth. It’s dangerous to think that we can move into a world purely of bilateral and regional cooperation.

Q:  What should be the relationship between government and the media?

[Ngaire Woods]: Government and the media have always had a robust and changing relationship. People think that social media is something new because it’s a forum on which people can say things anonymously, often polarising positions, without taking responsibility… Several hundred years ago, after the printing press was invented, we saw pamphleteering where the printing presses were used to anonymously print incredibly libellous things about people; and these pamphlets caused riots, eventually leading to regulations that meant that printing houses had to start keeping the names and addresses of anybody whose pamphlets they created. In other words, they started to build responsibility for what was being said. When television emerged onto the scene, the United States ensured that fair comment rules applied to television, appreciating that this medium would have a huge effect on the way Americans understood or responded to specific issues. Fair comment rules meant that if you were going to present one view, you actually had to present the other view so that viewers could adjudicate their position. This was dismantled by President Reagan in the 1980s and gave rise to the FOX vs CNN style spectrum we now see, where the vision of fair comment has been given-up. Alongside this protection of free speech, balanced with responsibility, governments also have a role in monopoly regulation. If you look at the battle that Rupert Murdoch had to go through to acquire SKY Television, this fight was anchored around the recognition that it was incredibly dangerous for society to have one monopoly owning the principle source of information. Today, we see Facebook, and the companies it owns (WhatsApp, Instagram) having a huge monopoly on the news that people have access to. When Facebook gives people free data and access in the Philippines for example, they have a monopoly position. This is an issue of anti-trust along with the perennial issue of ensuring that free speech is balanced with a responsibility for what is said.

Q: What are the consequences of the breakdown of trust between government and civil society?

[Ngaire Woods]: You’re absolutely right to identify a breakdown of trust between civil society and government, and one place we’re going to see that trust breakdown illustrated very proximately is that even if we can produce enough vaccines to vaccinate everybody in the world we’re nevertheless going to face a massive obstacle in the form of a large percentage of the population who refuse to be vaccinated because they do not believe that its safe or necessary or- rather more darkly- because they believe there’s some kind of conspiracy to infect them, weaken them, or change their minds. This is a direct consequence of social media and the lessened human interaction it has created.

Polarisation presents as a spectrum where people go from disagreeing with each other, to disliking each other and eventually to dehumanising each other. Psychologists have a lot to tell us about what happens when people dehumanise each other, and what it takes to prevent that happening. We know that the most important thing it takes to prevent dehumanisation is systemic, regular face to face interaction with the people that might otherwise be dehumanised. Where is it in our very diverse society that people actually meet and interact, discovering the people they’ve been dehumanising do not have horns and a tail, but are actually just human beings like them? This is why public spaces are so important to social cohesion- the government provided kindergartens, playgrounds and parks. In private spaces, you immediately segregate society into those who can or cannot afford to enter, they fragment and polarise. There are creative people thinking about how to create these public spaces online, but they have a difficult road ahead. Psychologists tell us that it’s the most extreme forms of information that are the most salacious clickbait for people… that even people who think it’s wrong to click on that stuff, still do, and it sticks in the mind more, and you pay attention to the sources less, because of the voracity and compelling nature of it. We have to think about how we create that path to prevent the extreme stuff from moving us from disagreement to dehumanisation (which is dangerous for society). We need to create public spaces (online and offline) where people come together and discover they are all human beings.

If the role of government is, as Thomas Hobbes put it, to stop life being nasty brutish and short because humans unregulated are at each other’s throats, then government has to step up to that plate now and start rethinking what it can do to ensure cohesion in societies where you will always have, and you need to have disagreement.

Q:  How can we engage in effective global development? 

[Ngaire Woods]: One of the lessons of development assistance is that it only really works in partnership with local communities and local government. You can go and build a schoolhouse in any village or community, but it will do nothing without impassioned and brilliant teachers. In many ways, the teacher is more important than the building because a good teacher can teach anywhere. To get a good teacher, you have to engage with the local community and think about what’s important to them, who will be able to teach, and what it will take to keep that teacher in the community. This lesson of partnership is one that people find too tempting to override. It’s much easier to go into a community and say, ‘I can see exactly what you need… here, let me build you a clinic…’ instead of saying, ‘what do you think you need? And why has that not happened already?’ At an international level, that means forging partnerships with countries in the spirit of cooperation. I realise this is fairly idealistic, and the reality is that countries and organizations face mercantilist pressures- they have to represent themselves in the world and will increasingly face demands by the United States or China to be in one camp or the other. That’s really difficult for countries, and particularly so for the poorest countries in the world. The industrialised nations will have to work hard to ensure that there are multilateral alternatives for the small countries in the world, as well as for themselves.

Q:  Why do we see such a publish pushback against aid and development?

[Ngaire Woods]: In some of the wealthy democracies of the world, the less well-off 50% of their populations have been left behind and the United States and Britain are right at the head of this. If we look at what’s happened over the past 30 years since the end of the Cold War, governments have felt that the heat has been taken off them. During the Cold war, there was a real necessity for policies that stopped voters from voting for communist parties… governments had to prove they could do a better job than the communists, and that meant they had to ensure a standard of housing and education that was better than a communist government could provide. The end of the Cold War sparked a 35 year process of regulatory change which shifted opportunity and reduced the equality of opportunity in society. McKinsey’s Global Institute did a study which asked- over a period of time- what percentage of households have seen their household revenue decline or stagnate (in my view this tells you in real terms the percentage of a population who have a stake in the system).  The results were startling. 80% of households in the United States, and 70% of households in Britain saw their household revenues decline. To me represents people who feel that they have had something stripped from them, that their lives are not improving, and they will not see that commensurate increase in wellbeing and opportunity for them- or their children- from working hard. The evidence shows that they’re not wrong. There is a degree to which entitlement has been ripped from them. Against this background it becomes a harder sell to say to those people, ‘well actually you should be supporting us to ensure that other people’s children have more opportunity in their countries…

My own view is that we cannot get hung up on arguments about equality, we have to provide much more equal opportunity – in a deep way, which means every child has access to an education which could take them to the top, and healthcare which ensures they are not stopped along the route- domestically and internationally. We’ve seen a dramatic political crisis in the Western democracies where the majority of voters have signalled a loss of faith in establishment parties and governments. We have an opportunity now to start to rebuild people’s faith in government, and to rebuild opportunity.

Q:  What are your hopes for the future?

[Ngaire Woods]: There are several things that give me real hope. Even when the most powerful two countries in the world, China and the United States, are at odds and antagonistic towards one another (in some cases projecting that into international institutions), cooperation is continuing. It’s not just at the government level, but at state, city, business and academic levels too. Even in a world where politicians seem determined not to cooperate, there are so many other parts of society that are determined to keep cooperating, and that will continue.

We are also seeing a shift in business leadership from a decade ago, where business leaders are saying that there has to be a new compact between business and government. Capitalism is no longer sustainable in its current form. It’s not sustainable that the share of GDP that goes to capital keeps increasing, but the share that goes to workers drips away to nothing. If that continues, we’ll have anarchy.

Communities are also organising at a local level, and that’s really positive and has an impact on city and regional levels too. I think it is these movements that will help us start to see trust in government being rebuilt; a Jeffersonian vision of local democracy that builds up from local to central government level. To do this however, will require central or federal governments in democracies to really start paying attention to subnational government, and learning much more collaboratively to govern – in collaboration with local governments, with business, with communities, and with other countries.

Thought Economics

About the Author

Vikas Shah MBE DL is an entrepreneur, investor & philanthropist. He is CEO of Swiscot Group alongside being a venture-investor in a number of businesses internationally. He is a Non-Executive Board Member of the UK Government’s Department for Business, Energy & Industrial Strategy and a Non-Executive Director of the Solicitors Regulation Authority. Vikas was awarded an MBE for Services to Business and the Economy in Her Majesty the Queen’s 2018 New Year’s Honours List and in 2021 became a Deputy Lieutenant of the Greater Manchester Lieutenancy. He is an Honorary Professor of Business at The Alliance Business School, University of Manchester and Visiting Professors at the MIT Sloan Lisbon MBA.