Presentation by Renata Lok-Dessallien, UN Resident Coordinator/UNDP Resident Representative in China at China High Level Symposium Rio+20, Beijing, September 8th

14 Sep 2011

The topic of institutional coordination for sustainable development at country level is very important. As a UN Resident Coordinator, I have spent a lot of time in many countries working on coordination for better development results. This includes coordination of the UN system, coordination with other development partners and working with national institutions to help them with their coordination challenges, both horizontal and vertical. Many times, I have observed that the effort involved in trying to coordinate better is not commensurate with the results achieved. This is not only because institutional coordination is very difficult, it is also because sometimes the problem we are trying to address requires more than mere improvements in coordination.

When I was asked to give this presentation, I thought of providing examples of different institutional coordination mechanisms I’ve observed in the countries where I’ve served. But after thinking a little deeper, I felt that would not be so useful. Each country is unique and has its own set of institutions and coordination systems which cannot easily be transplanted successfully. So rather than talking about specific institutional configurations at country level, I thought it would be more useful to extrapolate the big, common underlying dynamics that I’ve observed, at a more conceptual level. Because only once we are clear about the underlying dynamics can we come up with effective solutions.

When we talk about institutional coordination for sustainable development, there may be a tendency to think that more coordination will bring us the balanced results we seek – balanced between the 3 pillars: economy, social, environmental for a better world. But is this really the case? Coordinating a group where one member is tremendously powerful and the others are weak, and where the coordinator is often limited by the rules of coordination that themselves have been overly influenced by a powerful member of the group, this kind of institutional coordination is bound to be an exercise in frustration.

The bigger issue here lies in the relative power of some institutions over others and the ways and means that have allowed this disequilibrium to come about and persist. Only once we have addressed this fundamental issue at country and global level, can we hope for effective institutional coordination for sustainable development.

Most developing countries where I have worked have or are building market economies. They have opened their doors to international trade and investment and the rules of global commerce, and they are modelling much of their basic, institutional framework along the designs of industrialized countries. Of course they also have institutions for social development and environmental protection but of the three pillars, the economy pillar and its associated institutions are almost inevitably the strongest. Governments may say they love their three children (economy, social development and environment) equally, but in reality they have given considerable concessions and privileges to their economy child. This‘economy child preference’often does not stem from society’s traditional roots. Back in the old days, social solidarity and harmony with the natural environment seemed to matter much more than they do today. But as market capitalism proved its worth and societies opened themselves to the forces of consumerism and globalisation, they almost invariably internalised an ‘economy child preference’.

It may have made sense to do this when capital was scarce and nature was more abundant and pristine. And it certainly worked brilliantly in stimulating growth. Look how China used the market economy to lift hundreds of million Chinese people out of poverty in the last 30 years. The market economy is clearly the most efficient economic system that mankind has come up with to date. But like almost everything else in life, too much of a good thing is not always a good thing.

Most countries I know are struggling with this disequilibrium. They know all three pillars are important but they have allowed the agents and institutions of capital accumulation to dominate, while the institutions for social wellbeing and environmental preservation lag behind, often far behind. It is not merely a question of strengthening the social and environmental ministries, compared to the economic and finance ministries. It is deeper than that. What are the driving forces behind this imbalance? What are the archetypal institutions that need balancing?

The principal agents of the market economy are corporations and corporate interest groups. The power of corporations grew exponentially in many countries during the last century. In the US, a significant turning point occurred when the Supreme Court gave corporations the same legal rights as people (the right to legal representation, the right to lobby elected representatives, the right to ‘marriage’ – mergers and acquisitions). These rights, combined with limited liabilities, sometimes gave corporations more advantages than average citizens. While these provisions were accepted over the decades without much question, the collateral damage caused has now reached such proportions that we must take a very hard look at this before it is too late. If we want to enhance our social and environmental wellbeing, we must start questioning the underlying dynamics of our systems. Why, for example, do we continue to accept GDP as the single dominant measure of human progress, 20 years after Rio? Coordination alone is the not the answer. We have to level the playing field under the three pillars of sustainable development.

Since market forces are now so strong world-wide, and given the current sorry state of the world economy, it is not realistic to dwell too much on stronger economic regulation at this time. But what is stopping us from levelling the playing field by strengthening the other side of the ledger – the collective sphere – the commons – social and environmental “capital”? Most of you will be familiar with the premise behind ecologist Garret Hardin’s 1968 “Tragedy of the Commons”, that mankind has derived effective solutions for managing private interests but we are unable to manage our collective goods and interests. This has caused many to throw up their hands in despair, accepting that there is no way out. But it was mankind’s ingenuity that invented market capitalism, so surely that same genius can come up with innovative solutions to strengthening the institutions for social wellbeing and the environment.

There have been many important contributions to promoting the commons over time. Social security, for example, is actually a brilliant inter-generational trust fund promoting social equity and solidarity. We have also seen innovative work on green accounting, designated protected areas, the sale of pollution rights, environmental trusts, collective user rights systems, etc. Some have worked better than others. Some thinkers suggest that because money speaks so loudly to us, we must monetize our collective interests and give them legal collective ownership. And there are some innovative models of this, such as nature trusts, being tried in various parts of the world that merit greater attention. Some governments have tried striking the balance in a bold way at the centre. For example, the government of Bhutan established a GNH Commission to vet national policies and programmes for their compliance with the country’s balanced concept of progress. Bhutan’s Constitution also stipulates that 60% of the country’s land must remain perpetually under forest cover in perpetuity. And in China, the government has developed a balanced concept of development known as the Harmonious Society – harmony between man and nature and between man and man. Important elements of this concept are now embedded in the 12th Five Year Plan, along with serious national and sub-national targets for things like energy efficiency, clean energy use and carbon efficiency. Oversight for meeting these targets lies with one of the government’s most powerful ministries so the prospects for implementation are good. Each country is unique and must find its own appropriate institutional solutions, but these are the kinds of bold efforts needed to turn the tide. The UN system at country level through the UN Resident Coordinator system can play a useful role – sharing innovative experience across countries, building national capacities, helping countries to meet their own and international standards, etc. But of course the real directional changes can only be made by governments themselves.

Unfortunately, too often the Commons have not only been a victim of market failure, they have often suffered from “government failure”. As corporations have grown in size, some in fact becoming so huge they are considered “too big to fail”, the state has often fallen under their influence to the detriment of the commons. So at the same time that we work to build the institutions necessary to protect and preserve the interests of the Commons, governments must enhance their vital role as neutral balancer between the interests of the private and collective spheres. It is too restrictive to think about this in terms of private versus public sectors. That bogs us down in debates on the desirable size of governments. I think it is more helpful to think about it as governments balancing the private and collective spheres.

To summarize, institutional coordination for sustainable development at country level needs to focus around three fundamental concerns: First, we need to recognize that the big, higher-level question of institutional coordination relates to corporations, government and the commons. The dominant model of progress must shift from one that values capital accumulation above, and often at the expense of, natural capital and social capital, to one where all three are equally valued. For this to happen we need a shift in the dominant discourse and in our mindset for analysing the problems. Second we need to find ways to strengthen those institutions underpinning the Commons to achieve that balance. This involves changing the way we view and value non-monetized public goods, currently taken for granted. It may mean monetizing them so they factor into the balance sheet of our model of human progress. In the long run it will certainly mean measuring and monitoring that progress differently. And third, governments need to strengthen their role as neutral guardians of the balance between economic, social and environmental imperatives – between the private and collective spheres. The UN system at country level is well placed to play a vital, supportive role as we have this balance engraved in our DNA.