Bureaucrats Vs. Brexit

“Have the unelected heads of international institutions got too big for their boots?”

Marketplace

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. 

That remains the thinking behind the European Commission’s current dominant position in initiating and implementing EU legislation. It also motivates the phrase “the democratic deficit” to describe an accepted weakness in European integration as it has evolved in practice. The Commission itself sensibly stayed out of the referendum debate, but in truth the Commission is part of the larger supranational bureaucracy (of the IMF, the WTO and so on). Leading international civil servants — the Platonic guardians of the open world system — decided not only that Brexit was a mistake, but that they could and should become involved in the UK’s political exchanges.

Christine Lagarde, the IMF’s Managing Director, claimed that the impact of Brexit varied from “pretty bad” to “very, very bad”. Roberto Azevedo, the WTO’s Director General, said that leaving the EU would require British exporters to pay duties to non-EU countries if deals negotiated under EU auspices fell through after Brexit, leading to years of uncertainty. Angel Gurría, Secretary General of the Paris-based OECD, even managed to concoct “a Brexit tax on generations to come”. And so on.

These comments may be right or wrong. (They are almost certainly bunkum.) But that is not the only issue. A prior question is whether Lagarde, Azevedo, Gurría and their associates had the right to make the comments at all. The British public might suspect that unelected international bureaucrats intruded — in a plainly orchestrated and deliberate fashion — in a debate that affected their own independence as a democratic sovereign nation. The Permanent Secretary to the Treasury is not supposed to make provocative statements about the British economy in his own name in public for media attention.What was the basis for the interventions from Lagarde, Azevedo, Gurría and others? The political philosopher Kenneth Minogue once gave the label “Acronymia” to the supranational bureaucracy. The power of Acronymia has increased, is increasing, and threatens to increase further. Has the time come for elected politicians in national democracies to limit the bureaucrats’ boot sizes and make sure the bureaucrats stay inside them?