Governance in a Time of Economic Crisis

Centre of Government and Delivery

Governance in a Time of Economic Crisis

Posted on: 3rd December 2012
Tony Blair
Former Prime Minister of Great Britain and Northern Ireland and Executive Chairman of the Tony Blair Institute for Global Change

We are living through the deepest economic shock the world has seen in a lifetime. Its effects have been felt in more countries and in more homes than any other since the Great Depression. 

Yet people rightly still expect the state to deliver; to create opportunities for employment, provide high-quality health, education and welfare services, and ensure safety and security. Today, these implementation challenges look increasingly similar whether you're in London, Beijing, Monrovia or Brasilia. The question is how can they be met post-financial crash. 

As we look to emerge from the global economic crisis we face a choice: restore or renew. Do we restore the system we had before the crisis, or can we be bolder and look to renew our institutions and our thinking? I want to make the case for renewal in two areas: one in domestic, public service reform; and one in international, global governance. 

It is clear that if we were designing our public services today they would look very different from those we inherited from the great post-war reforming governments. We would do things very differently, we would build systems that make the best use of technology and which fit for today's economy, lifestyle, and demographics. 

"As budgets are squeezed we need to look to renew our government for the modern world, not just make do by doing things in the same way with fewer resources. "

Luckily, reformers in the West can learn from countries doing just that, whether it's mobile payment technology pioneered in Africa or the Georgian local government offices where you can access 250 government services from a single computer screen. 

We also have the big picture evidence to tell us which countries are doing best at achieving more with less. For example, according to the Boston Consulting Group's new "Sustainable Economic Development Assessment" which was released in late November, while it has had an average GDP growth of 5.3% over the last five years, Brazil has generated living standard gains that would be expected of an economy expanding by an average of over 13% annually; many of the eastern European accession countries also do well. 

It may seem strange to learn lessons from countries which are still behind the UK in terms of standards of living, but emerging economies are often where the most radical innovation is happening. 

Internationally, we also have to take on the challenge of renewing global governance. Global governance sounds detached from the current debates about austerity and public services. But if you think about it, it really means nations coming together to take on problems that they can't solve alone. And if there's one thing the world financial crisis has taught us, it's that many of today's biggest problems are global and need global solutions. 

So, what does renewal look like in global governance? First, it means strengthening regional bodies. To compete globally with the likes of China, India and the U.S., smaller nations must work together. That's why I have said that the European Union will become more -- not less -- important for Britain as a way of achieving global influence. The EU is no longer just about peace in Europe, it's about power in the world. The same logic applies to other regional groups like Asean, which will grow in both size and influence in the coming decades. 

Second, we need to look again at the major international organisations. The current architecture of international decision-making was stretched to breaking point by the economic crisis, and will be stretched further by the emergence of the new powers. The G8 looks increasingly anachronistic, and the lines of power and responsibility between the emerging G20 and the U.N. are becoming ever-more blurred. We need a reformed international system which is robust and representative. 

Finally, I want to mention Africa. As we grapple with policy interventions to spark even single digit growth, governments across Africa have been overseeing growth levels of between 5% and 8% for the last five years. Managing such rapid growth comes with its own challenges, yet Rwanda has lifted a million people out of poverty, Ghana is steadily moving towards total independence from aid, and Nigeria is virtually a BRICS nation in all but name. 

Through my charity, the Africa Governance Initiative, I have seen the pace of change in Africa and it's dizzying. How this emerging powerhouse is integrated into the world economy, not as a recipient of aid but as a genuine partner, will be critical for all of us. 

For world leaders today the challenges are vast, but I remain an optimist. I believe if we are bold, if we renew rather than rebuild along the old lines, we can emerge from this crisis stronger than we went into it.


The work described here was carried out by the Tony Blair Africa Governance Initiative, it is now being continued by the Tony Blair Institute for Global Change.

Find out more