By Rutger Hoekstra and Annegeke Jansen
Institutions need to become more inclusive and representative to ensure further change benefits people and the planet, argue Annegeke Jansen and Rutger Hoekstra in their opinion piece for Sustainable Views.
The world has seen remarkable progress over the past two centuries. Life expectancy has more than doubled, literacy rates have surged, and material wellbeing has increased tremendously.
Human rights are more widely respected and the world is safer. However, global inequality remains stark, with life expectancy varying by up to 30 years between countries and differences in average income per country more than 200-fold.
Progress has come at a price, often enabled by the exploitation of people and natural resources, leading to deep societal and environmental imbalances and threatening a safe living space for humanity. True progress towards sustainable and inclusive wellbeing is yet to be made.
Historically, institutions have been a decisive force, channelling how shifts in key drivers such as demography, technology and globalisation translate into wellbeing outcomes. This is also emphasised by the recent Nobel Prize in economic sciences awarded to Daron Acemoglu and James Robinson.
In their work Why Nations Fail and other publications, they demonstrate that for a nation to prosper, it matters whether institutions are inclusive or extractive, highlighting the distinction between those that distribute prosperity broadly across the population and those that concentrate wealth and power in the hands of a small elite who manipulate the system for their own benefit.
Today, institutions are faltering. Conflicts are on the rise, with the number of refugees tripling in the past decade, amounting to more than 120mn people. Democratic governance is also in retreat. Only 29 per cent of the world’s population lives in democracies, down from more than half in the early 21st century. Meanwhile, national and international institutions continue to lose influence to powerful multinational corporations and social cohesion is fraying in many countries.
These trends, combined with shifting geopolitical powers, signal a break from the stability of the post-second world war international order.
This brings us to a critical paradox: while we urgently need institutions to address global challenges such as climate change, biodiversity loss, growing wealth inequality and rising migration, the institutions designed to provide these solutions are struggling.
What can we do to overcome this paradox and save our institutions? In Why Nations Fail, Acemoglu and Robinson underscore how difficult it is to move from extractive to inclusive institutions. There is no specific recipe for success, but one factor stands out as being crucial: the empowerment of a broad segment of society. Centralised social orders, pluralism and civil society institutions are important in that regard.
The authors also point towards the role of free media in enabling empowerment. The censorship of media that we have seen in recent years is an alarming sign of democratic breakdown.
At the other end of the spectrum, we are experiencing how “free” social media fosters polarisation. Social media — by its current design — rewards divisive content, allowing for the mobilisation of relatively small groups of like-minded people, while failing to foster the kind of broader social cohesion that is needed.
Given the difficulty of institutional change, it is essential to preserve and strengthen existing democratic frameworks. Institutions need to be made more inclusive and representative, as underscored in the UN’s Pact for the Future, a recent global declaration aimed at strengthening multilateral co-operation to address pressing challenges such as climate change, conflict and risks posed by artificial intelligence.
More specifically, national and international governance systems must evolve to address these global challenges while simultaneously responding to local needs and realities.
Fundamentally, a compelling and relatable vision of progress is needed — a new societal narrative of progress that speaks to people’s everyday concerns and unites behind a common purpose. A focus on wellbeing for all, now and in the future, can provide a basis for such a vision as it brings together human needs and natural limits. Citizen participation is essential to further specify societal goals.
Finally, it is important to recognise and break free from societal lock-ins that limit our ability to create system change. These lock-ins include our dependence on constant economic growth, reliance on Big Tech, and entrenched consumer habits. Only by letting go of these deeply ingrained structures, we can pave the way to transform our redefined goals into concrete actions that individuals, businesses and governments can embrace.
We are at a critical crossroads where the prosperity of some is increasingly undermining the wellbeing of many. The stakes are far higher than Acemoglu and Robinson suggest. It is not just about nations failing, but about the collective global failure to tackle these pressing concerns. The need for inclusive institutions has become an existential imperative.
This situation is alarming and promising, highlighting the urgency of our challenges while presenting a unique opportunity for transformative change.
By reforming our governance structures, redefining societal goals, and breaking free from the lock-ins that impede progress, we can make true progress towards sustainable wellbeing for all.