Rohinton Medhora: The Failure of Global Cooperation in a Time of Crisis


Rohinton Medhora—economist and President of the Centre for International Governance Innovation—talks to Rob about how our economic institutions, such as the global intellectual property regime and central bank independence hamper our ability to address the global crisis that the COVID-19 pandemic has unleashed. They also talk about the state of populism, US-China relations, and the effect of the pandemic on Africa.

Transcript

Rob Johnson:

I’m here today with Rohinton Medhora. He’s the president of the Centre for International Governance Innovation, and he has vast experience in trade, finance, academic work, philanthropic work, and in a very broad vision of things happening throughout the world. I’m very fortunate that his organization, the acronym CG is the founding partner of INET through its founder Jim Balsillie. Rohinton and I’ve worked together for many years, and he is a commissioner on the Commission on Global Economic Transformation that INET sponsors. Rohinton, thanks for joining me today.

Rohinton Medhora:

Rob. Good to be with you and thank you for having me on

Rob Johnson:

This pandemic all around the world. It’s not a local thing. It’s touching every corner of the planet. People are being forced to respond, things are being revealed. I’m just curious. I want to hear you paint the picture. What is it that you see happening? What parts of the response are encouraging? What do you think is omitted? And where are you critical of what you’re seeing unfolding?

Rohinton Medhora:

To begin with your first point, I’d say that there were of course, some people who always highlighted the risk of this kind of thing happening. Pandemics. Certainly people in the public health world, some famous people like Bill Gates. But at the end of the day, what we’re seeing happening is a very low probability event that has huge impacts. And as societies and as polities, no matter what your orientation, no matter what kind of political system you work or live under. We all have difficulty truly planning for something that is very low probability but high impact. That’s what we’re seeing happening in terms of the mixed responses and the mixed outcomes around the world. Is that countries that were inherently resilient or could act quickly, it appears, and we should say we’re still in the early stages of the crisis phase. So we can’t procrastinate too far. But countries that were resilient and had social cohesion, or strong leadership, or faith in public action seem to be fairing better than those that don’t.

There aren’t that many surprises in what I observe around me in terms of how different regions and parts of the world are doing. The big unknown is the countries that either haven’t reported or haven’t been hit yet. Regions like Sub-Saharan Africa. And the extent to which places that were what I’d call late hot spots, be it the U.S. or Sub-Saharan Africa, become the sources of second and third waves that would lay to waste the good efforts that many countries have made in the first wave. So that’s something I worry about.

What hasn’t worked? I’d say the bit that is the most disappointing, and if you compare with the SARS epidemic, or 9/11, or the financial crisis, all of which were of course a magnitude smaller than what we’re facing now. Is the world was a different place then. And global cooperation, however imperfect, still meant something. This time we’ve seen, it doesn’t seem to be working almost at any level.

Protection in medicine and medical devices has increased, not decreased at a time when you would want it to be freer. Trade in this area is not. Countries that creating ad hoc measures, which as Simon Evenett and the Global Trade Alert people point out. Countries are not even reporting their measures as they’re supposed to, to the WTO or to the G20, or to each other. They’re simply erecting barriers ad hoc and individually.

We have at this stage not seen any concerted effort to address the crossover effects of global macroeconomics. We’re in the early stages of figuring out how an organization like the IMF might respond with creating liquidity.

And the final point I’d make here, and it’s not too late. So if we want to get something right, we could. Is to jump ahead 12, 18 months. Let’s say we have a vaccine in place or several. Unlike smallpox, we’re not going to have decades to wipe this virus out. We want to do it quickly. We want almost everyone to be vaccinated within a short period of time. And there should be no barriers such as supply, or weather conditions, or price, or anything else. Think of the intellectual property regime that we would like and the supply chain that we would like for this to happen.

We don’t have that now. We still have a very proprietary based intellectual property regime whose job is to slow down actually the spread of IP. In an instance where you want the exact opposite to be happening. So again, we need to go back to some of the lessons from the HIV/AIDS crisis and examine ways such as advanced market commitments or compulsory licensing, or plain old philanthropy. To get the vaccines out to every corner of the world. A, because we’re in it together and it’s the right thing to do and it’s the human thing to do. But B, out of enlightened self interest. Because if we don’t wipe it out and there are these important pockets that remain because the vaccine was not affordable or just didn’t get there, or whatever. We will all continue to pay the price for years to come.

So I do hope that we revisit TRIPS, the global convention on IP, and revisit some of the processes we have to make sure that technology with positive externalities is implemented quickly. And you can see Rob, the analogies with green tech, with some kind of breakthrough technology on the climate side. Where you want the same thing to happen. And we know currently it wouldn’t.

Rob Johnson:

Well, that’s an interesting question. Many people are exploring right now the fiscal burdens associated with meeting this crisis. Many have drawn the analogy to war preparation. The war of, it’s not another country, it’s like an alien. But there are a lot of people who are saying this is a wake up call and it will help us recognize that we have to embrace much more vigorously the collective responsibility of climate change.

Others are saying the fiscal exhaustion, the exhaustion of people who’ve been displaced from their jobs, may lose valuable time as we wallow and delay. Which you might say the fatigue that battling the pandemic brought to the fore will retard our response to climate. Do you have a perspective on that? Is it optimistic? Is it pessimistic? How do you see it playing out?

Rohinton Medhora:

I recognize both sides. And I guess I’d say I am hopeful that it’s your first scenario prevails. But it is not a given. My reasons for hope are that some of the skepticism that we had around science and expert advice I hope is being alleviated during this crisis in which even people who are otherwise skeptical of these things understand why public action matters, why it has to be evidence-based, and how technology can be harnessed for the good.

The flip side to that is if we rush a treatment or a vaccine that has horrendous consequences, then of course that whole issue becomes moot and we’ve set ourselves back, not forward. But I do hope, and I don’t know quite what it’s like in the U.S. and in parts of the world where there was the skepticism, you would know Rob. But I do hope that this is bringing to the fore all the old fashioned values about community, listening to advice, understanding the value of expertise, which have kind of fallen by the wayside these past few years. So that’s one.

The second point you made was about physical and economic exhaustion. And that really worries me because if you’re on April 16 telling me people are exhausted, what will it be like in September and October? Or beyond. I’m not saying we’ll be lockdown then, but certainly the effort required to be vigilant will go on until at least we have a vaccine that’s widely used. And that’s a year or two away. So on the exhaustion one, we’re simply going to have to dig deep and have our leadership help us use all our resources to persevere and to be disciplined, and to do all the good things we’re now doing.

And your third point, which was on the economic side of the exhaustion, is in my view the big unknown. Is we’re currently going on a spending spree to avoid calamity. I think it’s the right thing to do. I think the cost of not doing something would be even bigger. Although that’s a counterfactual that you could never demonstrate to skeptics. But we’re doing all the right things. And if it means spending the next generation repaying as it were, that’s not much different than what we saw after World War II in many parts of the world. That analogy, the warlike footing is not a bad one. With the caveat you put that there’s no winner or loser. We’re all fighting united in fighting an alien.

So my final point there would be I’m deeply troubled by the schism between the U.S. and China. I think one of the geopolitical things, orientations that we should look out for is how these two countries and Western Europe come out five or 10 years down the road. Whether this ushers in an era in which we value cooperation. We don’t have to love each other to cooperate with each other, or whether this leads to fracture. And here, I’m still hopeful, even though the G7 and the G20 so far has been pretty ineffective. That we will recognize that whatever our misgivings about other parts of the world and other powers, we have to be in concert on this one.

Rob Johnson:

I think that’s particularly true in the how we say, the connection between the United States and China. There are so many places where U.S. China relationship has become bogged down. And the stakes vis-a-vis the pandemic and vis-a-vis climate are very, very high and almost compel a cooperation that appears very difficult to achieve right now.

Rohinton Medhora:

And on the economic side as well. There’s macroeconomic consequences to all of this spending. China is the number one or two buyer still of American debt and so on. So it’s not just on things like pandemics and climate change that we need China. We really have to find a way to have global citizenship mean something. And there’s nothing more important than the U.S. China relationship at this point.

Rob Johnson:

I think the question, and as you and I both know, the Commission on Global Economic Transformation has a subcommittee related to globalization and inequality. But whether it’s global supply chains or these large public goods, the nature of governance and the nature of the nation state in relation to a global society, I think that architecture is what we might call in play again now. I think it has to be discussed and thought through.

I remember just to provoke the conversation for a moment, years ago I took a walk with Andy Haldane from the Bank of England. And we were talking about the Dodd-Frank legislation in the aftermath of the financial crisis. And he said to me, “It’s very interesting. Because in economics and finance, everybody acts like removing all obstacles to integration in every dimension and every direction promotes efficiency.” He said, “In biology, there’s another notion of compartmentalization to stop disease from propagating.” He said, “So you want the goods to be freed, but you want the bads to be contained. And economics never talks about the bads.” I think, how would I say, maybe it’s time to reinvigorate Andy Haldane’s vision or his inspired vision.

Rohinton Medhora:

We stole the word contagion from the public health domain without understanding its full implications.

Rob Johnson:

Yeah, I hadn’t thought of that. That’s good. Another, you had mentioned and I had used the notion of preparation for war. You’re sitting in proximity to Toronto, but looking south at the United States. And one of the things that concerns me most right now is that in the aftermath of the depression, the New Deal response led by Franklin Roosevelt invigorated the confidence, the trust in the integrity and goodness of governance. So when the war preparation began, call it 1939, the population was behind that and enthusiastic and trusting to a large degree.

In the present circumstance, we had the calamity of 2008 in the financial sector. And as you know, INET was founded in response to that, what I’ll call traumatic birth experience. And many people said, “Well, you just got to get finance and financial regulation things back on track, and we’ll be back in business. Everything will be fine.”

But what did unfold was a bailout that seemed unjust and unfair. A deterioration of confidence in financial regulation under a democratic administration under Barack Obama. The control of the house shifted to Republican. The control of the Senate shifted to Republican subsequently. And the control of the White House went to Donald Trump who ran around our country saying, “The system is rigged.” And surrounding this were things like Occupy Wall Street on the left and the Tea Party on the right. I think we’re in a very place regarding confidence in governance now than we were at the time that FDR mobilized us for a war. Do you look at the United States now, and does the dysfunction and acrimony, does that give you pause? How do you see it from the north?

Rohinton Medhora:

Absolutely. Wherever in the world that might be, but I’ll come back to the north in a second. The way in which U.S. resolve and leadership has dissolved in the last few years, and it predates Trump too, this growing sense of alienation from the forces of change, a sense of marginalization from improvement, the stagnation in middle class incomes, the hollowing out of the Midwest. That has all been a tendency the world over in my travels, I see people lament. Now that’s not the same as saying that the U.S. does not have a right to do what’s right for it. And I think there’s a sense, there was a bit of a sense of free riding on American ideals and American action, which also hadn’t been done constructively, was probably a good thing for a U.S. president to pursue. But the way in which we’ve seen it unfold in the last three or four years in the U.S. has been destructive not just of perceived enemies, but also of actual allies like Western Europe and Canada. So the U.S. even when it was right, and it often is in things like, for example, the future of NATO. Or in aspects of the work of the WTO, or in confronting China. Instead of building allies on these points and doing the confrontation, the U.S. chose to A, do it on its own. And B, actively in some cases diss its historic allies.

So, sitting in Canada, and we also have in our case, the what I might call sudden and ad hoc renegotiation of NAFTA as an example of that. It’s not that it didn’t need to be revisited. It absolutely needed to be modernized. But how we went about doing it could have been done better. Could have been done in a way in which Canada and Mexico felt were dealt in, rather confronted. That we see with some regret.

For a while there was this talk. And you remember this Rob, some weeks ago of the U.S. fortifying its border with Canada. Again, bewilderment at this end on why that might be.

Social fracture in the U.S. is not something Canadians can afford to be smug about, although frankly some are. It’s often easy here to find people who simply feel smugly content vis-a-vis the U.S. But that’s not the way to do it. The U.S. is our biggest friend and ally, we share a long border with it. It is our economic and social gravity deals are south and we have every interest in seeing a strong and stable and cohesive neighbor to the south. So some of the more Blade Runner type scenarios that are played out for the U.S. cannot be seen in Canada with any sort of aloofness. We’d be part of that if it happened. So for Canada, the biggest risk, and I’ll stop on this point of a second or third wave of the pandemic, would be if the U.S. doesn’t get its act together. If that doesn’t wake Canadians up to having a strong and secure U.S., I don’t know what would.

Rob Johnson:

Yeah, it might be that you want fortify your border vis-a-vis us in that context.

Rohinton Medhora:

The notion was going around that maybe this isn’t a bad thing for that reason. But practically speaking, it’s not possible to me. There’s just no reason to believe that when there’s other options open.

Rob Johnson:

No, I understand that. I remember years ago attending a seminar with a Canadian scholar named Thomas Naylor. People were talking about U.S. and Canada and he said, “Look, it’s like there’s a big elephant to the south and I’m a flee.” And he said, “Part of surviving is not getting trampled under the feet of the elephant. So you want to stay very close to the elephant so you know where it’s going to put its feet down.” It was a humorous, but interesting metaphor for the kind of challenges that you face. And as you mentioned, there can be very positive elements of that interaction. But I think in recent times, perhaps dread is a little bit bigger part of the equation.

When you look at this notion of fiscal response, what people talk about in recent months, the Green New Deal. Modern monetary theory, essentially central bank socialization of our public debts onto their balance sheet. How are you seeing what you might call that financial dimension of this challenge and the role of central banks? And how would I say modes of financing in response to crisis.

Rohinton Medhora:

Historically, this move to have central banks as being, “independent” in which independence meant not being burdened with any function other than keeping inflation low is a relatively recent phenomenon. Started around the eighties, I’d say. Driven by almost ideology. There’s no reason why central banks shouldn’t. And historically they had been. And in some countries, they still are, be in the business of financial sector regulation. Of doing a range of economic tasks including unusual debt operations. They’ve done it in the past. And we’ve kind of created this artificial edifice off of an ivory tower, of an ivory monitoring tower. And if you’re looking for silver linings in the current cloud, being forced to rethink some of our shibboleths might not be a bad thing.

In a crisis like this, we need every stream of the economy and society working towards the same goal. So fiscal policy has a role up to a point. Community action has a role up to a point. But for these to be backstopped or to be provided opting by a central bank that is actively taking on some of these debts. Especially in the kind of low inflation, in some countries, almost deflationary environment that we have. Cannot be a bad thing.

And the final point I’d make on that is this crisis as other such incidences do, should change the way we consider what an investment is and what an expenditure is. And for too long again the last two or three decades, we’d fallen into this trap of government expenditures being expenditures. Expenditures on public goods being expenditures. When in fact, they’re almost like savings. They’re investment in future productive capacity.

So if some of what the central banks are now doing is investing in future productive capacity through infrastructure investment, job creation, and simply avoiding the worst of the pandemic. Then these are all things that will pay off in future. And therefore, in my view, worth pursuing today.

Rob Johnson:

It reminds me of a dinner I once held with Wall Street executives with Jim Heckman. And Heckman as you know works on the early childhood education, prenatal nutrition, and things of that nature. And he essentially said to them, “With a 1% interest rate, if I could show you a project that created an annualized rate of return of 7%, would you do that? Would you finance that 7% return with 1% money?” And they all looked him and said yes. And he said, “Okay. What you all have to do is convince your government to put together money for women of color who are mothers to provide nutrition, education, adjunct support of daycare to preschools. Because if those children receive the proper training, the benefits to society throughout their lifetime will be enormous and will be analogous to a 7% annual return.” Which means essentially doubling in value every 10 years. He said, “If these people live to 50 or 60 years old, the savings are enormous. Why do we neglect doing that?” And it was kind of spellbinding to see him working in that framework with people about what you might call missing the opportunity for public good expenditure or public good investment. And I think that’s the distinction you make. These are not consumption expenditures. These are investment expenditures that give back returns and benefits of substantial scale in the medium term.

Rohinton Medhora:

Exactly. In many parts of the world. And we now increasingly look at the Scandinavian model as not something exotic to be studied or indeed the Canadian model, but something to be actively considered in other parts of the world.

The case for national daycare and national health was being made even when interest rates were considerably higher. But at zero and 1%, I don’t know why we don’t go on an even bigger spending binge so long as it’s wisely spent. Now I do take the point that with low interest rates, decision making sometimes becomes irresponsible and distorted. But that again comes back to the point of having strong institutions that ensure as the best sovereign wealth funds do, that investment decisions are based on transparent and publicly accepted criteria.

Rob Johnson:

In our work together, the Commission on Global Economic Transformation, we’ve opened a chapter or another dimension related to the challenges of Africa. And you’re I know very engaged in that realm. But you’re also very knowledgeable about South Asia and other things. In this pandemic environment where I’m very concerned is that fiscal capacity was needed for very important and basic elements of development. And now emerging countries, underdeveloped countries have no choice but to redirect the capacity towards this emergency. Are they likely in your mind to suffer much more, whether from the pandemic or from the deterrents to development? And is there grounds once this is over, for the equivalent of a global north south Marshall Plan to alleviate what you might call disproportionate burden that they may face?

Rohinton Medhora:

I mean, think about what’s going on in India currently. We kind of see it as this emerging power second only to China as an example of in many ways successful development. And yet, here you have a country of billion plus in lockdown, in conditions and in infrastructure that is considerably lesser than what we have here.

Africa is a slightly different dimension because of the population density outside the urban areas. But I still think that action, strong action. Not just by the G7, but I’m going to come to China in a minute. Developing countries will of course disproportionately pay the price, as indeed will poor people in rich countries. We’re already seeing the data from the U.S., from Canada, from the UK, of how the impact of this pandemic is worse on the marginalized sections of society than it is on others. And globally, the north south divide is the same thing.

It’s not too late. I mean, you said should we think about a Marshall Plan coming out? It’s not too late to be thinking about it now. There’s a G7 meeting later today. Nothing like that is on the table. There’s a virtual bank fund spring meeting going on this week. Nothing like that is on the table. The G20 met two weeks ago. Had the most anidine statements about trade and finance you can imagine. This ain’t no Bretton Woods moment that we’re going through, that’s for sure.

That’s it. It’s not too late. And I began our conversation by saying let’s think about vaccine rollout as an example of the world banding together to do something that’s both morally correct and in self-interest.

The second such might be China. Whatever else, this did originate in China. There was a suppression of information early on that led to contagion. And China is looking for a larger role globally and has created its own mechanisms like Belt and Road to do so.

The suggestion has been made that China could forgive its debt to African countries, which is now by the way, considerable in many parts of the world. I think that’s a good thought. If China succeeds in creating a vaccine, it could create the Marshall Plan as it were, on the score. Or take the lead in public health and development issues. So this is also a moment for China to step up to the plate. But for others, particularly the U.S., to accept that. And back to my point about getting over this confrontational stance, which is unhelpful for anyone.

Rob Johnson:

When you look at Africa, you mentioned it in the context of China. But we see on the horizon a tremendous increase in population. You are very, very sophisticated in the realm of technology. And it’s quite clear that the East Asian development model of essentially infant industry protection and relying on manufacturing and the learning by doing is not, how we say the past is not prologue for the next stage of developing countries. And climate affects equatorial regions like parts of India and in much of the continent of Africa. And destabilizes subsistence farming. We’ve learned a great deal through the turmoil within Europe that human beings in a globalized world are not like other factors of production. That large scale migration is not as easy as what you might call digesting railroad cars of iron brick or other elements of trade and production. The human factor affecting what you might call the composition of society, the implicit trusts, customs, religious tendencies. I feel that Africa is on a horizon that the world needs to rise to. That precedes the pandemic. How do you see us, what you might call preempting in Africa, the kind of breakdown at very, very large scale? People are talking about over 2 billion people by 2060. How do you see that in light of both China, the crisis that we’re experiencing, and these longer term pressures?

Rohinton Medhora:

Your point about the disappearing development model is well taken. I think with, and as you say, it preceded pandemics. With artificial intelligence, robotics, 3D printing. If you’re Ethiopia, you simply cannot specialize in low end manufacturers and then move up the value chain, and call that process development. Because the lower ends of the value chain are becoming robotized by more and more percentage points every year. So the entry points in the value chain for the Ethiopias of the world have literally disappeared. They already have. Meanwhile, as you say, population is increasing. And China’s interest other than some kind of geopolitical ambition, is natural resources. So the sweet spot there is for Africa and African countries. Because it’s not a unified continent as there are at least four zones or regions that culturally, politically, and economically are in fact distinct.

Has to create its own development processes. It is now most African countries having had high growth rates for the better part of a decade or two, are now in a position to actually have the institutional processes and the wherewithal to be selective in who they deal with. And that goes for their dealings with China as much as it does for the dealings with France, the UK, or the U.S. Through organizations like the African Economic Research Consortium, African negotiating capacities vis-a-vis the World Bank and the IMF have increased considerably. So Africa is not simply a receiver of wisdom anymore. There is something called the Next Einstein Initiative.

Which simply says statistically if you think about where the next Einstein is likely to emerge, it’s likely to be in Africa simply because of how much more scope there is to invest in education and find that missing gem than in any other part of the world. So investing Heckman style in human capital, in early childhood development, is where the action should be rather than in the 1950s style commanding Heights of the economy. Make sure you have your steel mill, then your airline and so on. I think investments in public goods, in creating strong societal systems will make African countries resilient and be able to deal with change. To participate in technological change rather than simply purchase it from elsewhere and deal with its consequences. But there’s no easy answers. If there were, we wouldn’t need the commission and we wouldn’t be having this conversation.

Europe has the most by the way, to lose if Africa as a continent collapses simply because of the surge of migration and other ills that would flow north as it were. So I think Europe more than anyone else has an interest in seeing Africa as a valued investment partner in some of these things, at exactly the time when Europe has become insular. But again, it should be seen as an investment, not an expenditure.

Rob Johnson:

So you and I worked together on the global commission, and we’ve worked together in partnership between INET and CG. And how I say, in the evolution of new economic thinking. We’ve been talking about things happening in the world, specific challenges, policy responses. But upstream from all of that is the question of ideas.

I’ve often said, and you know as I worked in the United States Senate for about six years. That senators work on a spectrum of what some call The Overton Window, or what I might call the conventional wisdom of the time, the challenges of climate, the experience of last 40 years. And I date that from when Ronald Reagan was enthusiastically embraced for saying that government is not the solution, it’s the source of the problem.

We’re seeing social unsustainability, we’re seeing resource unsustainability, and we’re seeing the terrifying consequences of this pandemic for prosperity and security all over the world.

How do you see this permeating the conventional wisdom of the future? The idea structure that INET at its core embraces the evolution of, and particularly related to our commission on global economic transformation. How would you recommend that we, what you might call reset our course in the realm of ideas for the commission’s work?

Rohinton Medhora:

I think we should be properly skeptical of authority always, and always vigilant about encroachment on civil liberties and human rights. The pandemic, and we didn’t talk about this earlier. One of the issues that would be interesting to watch and more than just watch shape. Is how with digital technologies coming to the fore and being used for epidemiological purposes such as cell phone data to track the pandemic, how they encroach on our civil liberties and how much of this is something we’re willing to tolerate to fight the crisis. And how much of this will stay on with us thereafter and become a permanent part of our life. If it’s the latter, I’d be hugely disappointed. So my starting point is let’s always be vigilant about the abuse of authority.

But the Reagan maxim you cited was hugely, hugely destructive, I think. To see governments and public as nothing but a negative is exactly the ideology that insinuated itself into the public psyche the world over in the last two or three decades to our detriment. I think this pandemic has shown, once again, the value of public action. Has shown up weak, nonsensical governments and government action versus strong government action in the public interest. And if we can now separate the wheat from the chaff, that would be a positive outcome from this pandemic.

So back to my point about respect for science, respect for expertise, technocracy, and indeed even some authority. And that connects with our condition. Because if you think of the kinds of transformation we’re looking at. Technology, financial sector, relations between the state and society. None of these subjects are value free. None of them are purely about government action or about free markets. They’re about finding the sweet spot between the two.

The analogy I’ve used in the past, which I know you and I have talked about Rob, is the FDA. I could go to a store. And the cheapest home blood pressure monitoring machine will have gone through a number of tests before it came, because typically it’s been made somewhere else, before it came into the U.S. or Canada. It’s gone through safety checks, it’s gone through accuracy checks. There’s different stickers on that.

If you download an app on your smartphone that claims to measure some aspect of your health. There is no sticker, there’s no import content, there’s no FDA approval as far as I can tell. Technological change in this area seems to happen without any semblance of a filter. And that can’t be right. We can’t be seeing technology as manna from heaven, something exogenous. Nor is it simply something that can be controlled. And it’s finding that balance. Same with financial innovation. Same with how states and societies interact. It’s about the interaction. So it’s mixed models that are the way forward. And our commission I think would do a great value, because there’s no single mixed model leader. So our commission would do great value if it laid out the spectrum of possibilities and mixture so that different countries in different parts of the world can select how they choose to operate. But always understanding that public action and private action go hand in hand. And this business about one being the enemy of the other is absolutely to be laid to waste.

Rob Johnson:

I’m always reminded of a comment that’s attributed to Bismarck. That no one should ever see sausage or legislation being made. And yet, I think the skepticism about governance that the Reagan gesture or comment elevated can go too far. And the how to say, INET has always been struggling between dispelling the romance of unfettered free markets. And on the other hand, puncturing the fantasy that the government will always do things right if there is a challenge.

But I think you’re in exactly the right place Rohinton, which is understanding what constitutes integrity of public administration, integrity of expertise, the public good nature of social design. And the structures of how governance is organized and implemented, are at the core of the challenges that we face in our commission and in our societies. And I think in many ways, that’s what this pandemic and the challenge of climate, and the challenge of social sustainability are screaming at us to comprehend.

Rohinton Medhora:

I agree with you. I mean this is why INET was created. This is why a generation previously CG was created. Our commission is a way to tie all of that together. And I think you’ve laid out our work going forward really well, Rob. I very much look forward to being a part of it.

Rob Johnson:

Well, I very much, how would I say, I sleep much better at night knowing that you’re on that commission with me and helping shape the agenda for INET more generally. And I’ve enjoyed talking with you today. And I hope that as a few months pass, we can reconvene, get together, and look at this from a slightly different vantage point and hopefully one that’s more hopeful. But thank you for being with me today.

Rohinton Medhora:

Thank you for having me, Rob. Always a pleasure to talk to you and to work with you.

Rob Johnson:

The pleasure is mine. Bye bye.

About the Host

ROB JOHNSON serves as President of the Institute for New Economic Thinking.

Johnson is an international investor and consultant to investment funds on issues of portfolio strategy. He recently served on the United Nations Commission of Experts on International Monetary Reform under the Chairmanship of Joseph Stiglitz.

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About the Guest

ROHINTON P. MEDHORA is president of the Centre for International Governance Innovation (CIGI), joining in 2012. He served on CIGI’s former International Board of Governors from 2009 to 2014. Previously, he was vice president of programs at Canada’s International Development Research Centre. His fields of expertise are monetary and trade policy, international economic relations and development economics.

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