It is again high season for “global governance”. The global economic crisis has shifted the climate of ideas against free markets in favour of Big Government. The pro-market, pro-globalisation political centre has lurched to the left. The new consensus espouses “Keynes at home and Smith abroad”. Greater government macro and micro interventions at home are needed to stimulate recovery, reduce inequality and preserve social stability. Stronger international co-operation (or global governance) is needed to make this work in tandem with open markets abroad.

Votaries of global governance aver that since more problems are global, more solutions should be global. That means strong co-operation among governments, big business and non-governmental organisations, and extra authority for international institutions. Climate change has been the lead issue, a “global commons” problem demanding a global co-operative solution. Hence calls for a UN-centred post-Kyoto developed-developing country grand bargain. The science and economics of climate change are problematic , its political economy more so. Every realist knows a post-Kyoto global compact on tackling climate change could be neither strong nor enforceable. That does not stop the bien pensant climate-change commentariat from dreaming out loud.