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Christine Lagarde: Claimed the impact of Brexit would be "very bad" (International Monetary Fund CC BY-NC ND 2.0)


According to the tabloids, the Prime Minister “runs” Britain and the Chancellor of the Exchequer “runs” its economy. Are there equally recognisable figures who “run” the world and the international economy? The question would once have sounded utopian or even crazy, but since 1945 a range of institutions with a global remit has been established, and their top brass are responsible not to individual nations and specific governments, but to memberships of many nations that embrace (more or less) the entire planet. 

The postwar achievements of the main international institutions — the United Nations, the General Agreement on Tariffs and Trade (now the World Trade Organization), and the International Monetary Fund, to name only the most prominent — have been immense. Most obviously, relations between the major powers (except Russia) have been peaceful for 70 years. Moreover, contacts between the citizens of these nations in terms of trade, investment, tourism and culture have been friendlier, and more productive and extensive, than ever before.

Given the achievements, the senior functionaries in the various organisations — the UN’s Secretary General, the WTO’s Director General, the IMF’s Managing Director and so on — ought to be big for their boots. They worry about the whole world, whereas national politicians concern themselves with particular countries. They facilitate cooperation between nations, a grander task than settling grubby disputes between interest groups at the national level. Understandably, supranational bureaucrats place themselves above the indecent squabbling about local issues that occurs in legislatures.

But is there a maximum boot size for these individuals? And, once those limits are set, are there ever occasions when they can swagger around as if the boots were even larger? The trouble is that none of them is democratically elected. Unlike national politicians, they do not have the legitimacy that comes from endorsement by an electorate.

The tensions arising from the undemocratic nature of the top-level international bureaucracy were salient in the EU referendum debate. It is well-known that, from the outset of European integration in the late 1940s, the precursors of today’s EU institutions were not democratic. Jean Monnet’s design of the European Coal and Steel Community was that it should be under a High Authority staffed by high-minded unelected experts, with decisions taken for the good of the entire union of participating nations. Monnet ensured that the High Authority should not consist of political representatives from each country, driven by selfish and narrow-minded national interests. 

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