Understanding Crisis-Induced Change in Global Governance: The Diplomatic Management of the Global Financial Crisis of 2008-2009

Publication type: 
Report
Citation: 

Journal: Oxford Department of International Development Working Paper Series

Authors: 
Iaydjiev, Ivaylo
BSG People: 
Publication Date: 
Friday, 1 August, 2014
Publication Abstract: 

This paper seeks to open the “black box” of how global crises such as the global financial crisis lead to change in global governance institutions. It finds that current approaches to institutional design and crises are inadequate in explaining change under crisis conditions as they fail to take into account the centrality of uncertainty by reducing it to risk. Therefore, it draws on complexity theory and collective intentionality to develop the concept of crisis by focusing on causal and ontological uncertainty. It then combines them to propose a dynamic sequential model that traces the causal chain of crisis-induced pressure on global institutions and outlines a set of conditions that make successful crisis management more likely. Finally, the model is applied empirically to the diplomacy of the global financial crisis and to the adjustments made to international financial institutions during the crisis management period. Overall this article demonstrates that understanding the exact causal pathways and conditions under which crises can drive change in global governance is a promising research area.