Anheier and Hallerberg present recommendations at Buenos Aires T20 meeting.
Berlin, 17 September 2018 – A decade after the biggest global financial crisis since the Great Depression, The Governance Report 2018, produced and edited by the Hertie School of Governance and published by Oxford University Press, offers lessons and recommendations that may help countries prevent or better manage such crises in the future. Professors Helmut K. Anheier, former President of the Hertie School, and Mark Hallerberg will present the report today (17 Sept) at the Think 20 (T20) Summit in Buenos Aires.
The T20 is a network of research institutes and think tanks that since 2017 has supported the G20 process. Its members meet annually before the G20 Summit of heads of state and government to discuss their policy recommendations.
The Governance Report 2018 shows how the global financial and economic crisis of 2008–9 and its repercussions threatened not only financial markets, but also affected entire economies and political systems. It discusses major governance shortcomings across a wide spectrum of policy fields.
In many EU countries, citizens’ trust in government eroded during the crisis, and remains so in countries where the crisis was most acute, while recovering in the more robust countries, the report finds. In places where it was most damaged, democratic legitimacy (measured by voting and satisfaction with democracy) was also affected, indicating the crisis may have provided the seed for undermining the democratic system under certain conditions. Nevertheless, recent electoral shifts towards far-right, ultra-nationalist or Eurosceptic choices could not be definitively traced to the crisis.
In addition, higher debt and social expenditures have left most OECD and G20 countries in a more vulnerable position today. They have little fiscal policy leeway if another crisis hits, and thus urgently need to strengthen public finances so they can react by raising debt, rather than through austerity, if need be.
To deal with these, the authors say countries need to arm themselves in times of relative economic stability, running crisis scenarios, setting up emergency plans and making a systematic assessment of multilateral governance arrangements. They must also carefully manage debt so they can be flexible enough to spend their way out of a crisis if needed. It is also vital after the crisis to resist early deregulation and to implement measures to restore trust. The authors also say strict sanctions on those accountable for crisis would help restore stability and trust.
Among other key lessons, the report also says that regulators often have trouble keeping ahead of major technological advances, which gives early adopters of technology an advantage, distorting markets and increasing vulnerability to crisis. Cyber-related technologies have, for example, largely eluded regulatory oversight.
The Governance Report 2018 ed. Hertie School of Governance, OUP 2018, is authored by a group of experts assembled by the Hertie School. It is the sixth in a series of annual reports, each highlighting specific governance challenges and solutions. The authors of the Report include Helmut K. Anheier, Luciana Cingolani, Mark Hallerberg, Jean Pisani-Ferry, Kai Wegrich und Sebastian Ziaja. The 2018 Report is based on research and analysis of developments in fiscal policy, administrative capacities, institutional trust and global governance from before the crisis began ten years ago to current times.
Find out more about the presentation of The Governance Report 2018 at the T20 Summit in Buenos Aires on 17 September here.
In Germany, the report will be presented on 17 October at 6:00 pm at the Hertie School in Berlin at an event with Helge Braun, Head of the German Federal Chancellery, alongside authors Luciana Cingolani und Mark Hallerberg, as well as the President of the Global Solutions Initiative Dennis Snower. Find more information and register here.
The Hertie School of Governance is a private university based in Berlin, Germany, accredited by the state and the German Science Council. It prepares exceptional students for leadership positions in government, business, and civil society. Interdisciplinary and practice-oriented teaching, first-class research and an extensive international network set the Hertie School apart and position it as an ambassador of good governance, characterised by public debate and engagement. The school was founded at the end of 2003 as a project of the Hertie Foundation, which remains its major partner. www.hertie-school.org
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More about the contributing authors
Helmut K. Anheier , Professor of Sociology, past President
Mark Hallerberg , Dean of Research and Faculty and Professor of Public Management and Political Economy
Luciana Cingolani , Assistant Professor for Public Administration
Jean Pisani-Ferry , Professor of Economics and Public Management
Kai Wegrich , Professor of Public Administration and Public Policy