Discussion Paper

No. 2019-6 | February 04, 2019
Toward global paradigm change: beyond the crisis of the liberal world order
(Submitted as Global Solutions Paper)


This vision brief may be summarized by the following points. First, the crisis of the liberal world order arises from a misalignment of our social, economic and political domains of activity, along with a resulting destabilization of our physical environment. The integration of the global economy has generated problems that extend beyond our current bounds of social and political cooperation. Second, extending our social cooperation – on which basis our political cooperation can be extended as well – requires the creation of the appropriate moral narratives. These narratives must guide business strategies, public policies and civic activities. Third, these narratives must be supplemented by multilevel governance structures that address challenges at the scale – micro, meso and macro – at which these challenges arise. Finally, past human experience in developing moral narratives, supported by multilevel governance structures, suggests guidelines for a future form of multilateralism that enables us to meet this challenge.

JEL Classification:

A12, A13, A14, B55, F02, H11


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Cite As

Dennis J. Snower (2019). Toward global paradigm change: beyond the crisis of the liberal world order. Economics Discussion Papers, No 2019-6, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2019-6

Comments and Questions

Rolf J. Langhammer - Report
February 14, 2019 - 10:25

This is an extremely insightful und thought-provoking analysis of the urgent need to anchor moral narratives in institutions of multilevel governance. The enormous social costs of a further subduction of the moral tectonic plate of human affairs below the two other plates, in particular the economic one, are very ...[more]

... convincingly stressed.

In my view, both the diagnosis of decoupling and the arguments pro recoupling require a companion piece of research on why moral narratives on the supranational level have been so little successful in the recent past relative to moral narratives at the national or local level as well relative to economic narratives at the supranational level. Let me point to three possible explanations.

First, differences in the perception of urgency at different levels could be one reason. The urgency of establishing social norms (driven by moral narratives) is much stronger perceived at the local level where people interact face-to face day by day and would directly suffer if such normal would not exist than at the national level and even less at the global level. We decide on social norms and values at the local level within months but show no sign of impatience if such norms and values take decades to be implemented at the global level after being decided on earlier.

Second, humans are most innovative to agree on common norms at the global level if they are under stress, especially after a global shock. Countries hosting humans which were exposed to economic, political and social shocks are likely to be more induced to invest in building common moral norms and values than humans from countries (especially from large rich countries) which were fortunate enough not to be exposed to such tipping points/shocks. Within the G20 group, both types of countries are represented and thus make agreements on such norms very difficult. Complacency is dominant in the latter group while lack of power and resources prevails in the former group.

Third, demographics takes its toll. Aging societies especially in the rich part of the world are less prepared to recognize the subduction of the moral tectonic plate below the two other ones and the costs of this process. In their view, they have a solid plate but they fail to see that this plate moves in the wrong direction. Furthermore, their focus is and more centered on the local level. Global issues, especially those which would require emphatics with the situation of poor people, are not on their screen.

It would be a fruitful exercise to see whether (non-binding) decisions (better recommendations)in the G20 group at the social level have reflected more the interests of the older and the more-inward-oriented part of population compared to the interests of the younger part of the population as this would be the benchmark for the national governments to act. My hypothesis would be that the weaknesses of anchoring social norms and values globally has very much to do with aging and with the strong selfish interest of the older people in rich countries carefully recognized by the national governments.

Dennis Snower - Response to report
March 04, 2019 - 08:48

This is a brilliant comment. The absence of success of moral narratives at a supranational level definitely needs explanation. A first step could be a better understanding of how moral narratives originally became established at the national level, when nation states became established.

The three potential explanations highlighted ...[more]

... are all worth exploring. The first two explanations also serve as a challenge for explaining how national moral narratives became accepted. The last explanation may be of particular importance, since it appears relevant as an obstacle for transnational moral narratives, but was largely absent in the establishment of most nation states.
Exploring these issues is however beyond the scope of this paper and will require, as the referee suggests, a companion piece of research. I am deeply grateful to Rolf Langhammer for suggesting this and plan to do so.