Has the Rule-Based World Order, started after World War II, collapsed?

The Rule-based Order (RBO or the Liberal International Order, LIO) seems to be ending, the proximate cause being the Make America Great Again (MAGA) policies of the Trump II Administration. However, there are long-term structural changes in World System Geopolitics that are the underlying cause.

The RBO was embedded in a hierarchy of institutions (graphic above) that were imposed by the Allies after the Great Depression and  World War II (see the video at the beginning of this post). Needless to say, the Axis Powers were forced to agree to the imposed structure and were not happy about it. Also, because this was a International Liberal Order (ILO), illiberal, right-wing movements in all countries were also not happy and have been working since World War II to modify and even destroy the system. Commentators (see the video above) have been arguing that they are about to succeed. 

A more positive interpretation is that RBO Institutions were are product of the 20th Century and had a number of problems given 20th Century technologies. The primary problem is that the institutions are not democratic; citizens in member countries have not direct input on how the rules are written, enforced and evaluated. The democracy problem does not bother authoritarian regimes, but it encourage autocratic countries to undermine and attempt to destroy the system. Since the Trump II Administration is autocratic, it has attacked everyone of the RBO institutions (see the policy actions listed below).

My proposal for modernizing Federal Agencies in the US (here) could also be applied to the RBO institutions. It involves bringing government agencies into the 21st Century. The basic proposal is (1) Restate agency missions and make goals measurable, (2) Allow citizens to analyze in real time (on a cell phone app) how agency performance is meeting goals, (3) Require agencies to justify policy actions and link them to measurable goals and (4) allow citizens to vote (on the app, whenever they want) on agency performance.

DISCLAIMER: my proposal will not solve everything (or maybe anything) but it will allow me to construct models for evaluating the RBO. In future posts, I will construct measurement models for each institution based on how I understand their goals. Without data and results to support themselves, RBO institutions are quire defenseless against illiberal attacks. 

For the World Bank, the IMF an the Intergovernmental Panel on Climate Change (IPCC) the data is there and ready to be used to evaluate RBO institutions and member countries. 

For an example of my approach to evaluating institutions, see the Blog Roll on the US Federal Reserve.

Notes

How has the Trump II Administration tried to undermine and destroy the RBO Institutions:

• Tariffs and attacks on the WTO
• Withdrawal from treaties: the Nuclear Arms Treat (attack on NATO), the Paris Environmental Accords (attack on the IPCC)
• Invasion of Venezuela (attack on World Security)
• Threatening to invade Greenland )threats to World Security and European integrity)
• Withdrawal from the World Health Organization (WHO)--later reversed.
• Criticism of European Allies and NATO
• Praise of authoritarian Leaders (Vladimir Putin, Victor Orban, etc.)

ChatGPT Summary:

 

World-System (1950-2010) Trump Takes US on a Random Walk

In a prior post (here), I presented alternative futures for the US Economy. In terms of growth (the USL20 US1 state variable), the best models are the Business-As-Usual (BAU) model or the basic US state space model itself, both without input from the World System or other countries. From a statistician's perspective, this is the Make America Great Again (MAGA) model. Alternatively, the Random Walk (RW) model (history is just one damned thing after another) actually seems to be the best description of the Trump II administration's current (early) performance in office. Finally, from the Akaike Information Criterion (AIC, see the Notes below), the best description of US Growth from (1950-2010) is the RW model.

Does all this make your head hurt? First, no one can know the future. This is why the IPCC presents Alternative Emission Scenarios (here) rather than forecasts for CO2 emissions. The unpredictability of the future is why the Trump II administration (to be charitable) is behaving randomly (here) even though their preferred future is the BAU model with the US dominating the World-System.

The RW is a well-known but little acknowledge business strategy and Trump is trying to run the US government as if it was a business. The business theory is that if you are too predictable in your behavior, your competitors can easily predict your behavior and set up against you. The Left Wing cannot predict what Trump will do next so it is impossible to develop a strategy against him. The approach is similar to the Gish Gallop debating style which is also used by Trump and is difficult to rebut.

How reasonable is the RW model as a description of US growth? In the graphic above, I ran eight simulations of the US1 RW model, starting in 1950. Two of the models produced an upward growth trend, one of the models produced collapse. The other models produced weak performance with a slight negative trend. So, there is about an 88% chance that random management of the US Economy will not produce a crisis and might even produce an upward trend. Those are pretty good odds for a businessmen willing to take large risks and who has no idea how to run a government.

As a comparison, I've done a similar analysis for Mexico (here) where the RW is also the best short-term model and for Canada (here and here) where the BAU model is best. Argentina also is a favorite of the Trump II Administration for it's slash-and-burn policy approach (here); the RW model is also a good competitor (AIC = 76.58) for Argentina (you can run the ARL20 BAU model here) or read the verbal discussion (here).

Notes

 Akaike Information Criterion (AIC) for alternative models shows that the RW model is a strong competitor for US Growth, at least in the short-term.

You can run the USL20 BAU model here. It is also a strong competitor and produces uncontrolled exponential growth, a future growth path favored by many commentators.

 

State Space Model Estimation

The Measurement Matrix for the state space models was constructed using Principal Components Analysis with standardized data from the World Development Indicators. The statistical analysis was conducted in an extension of the dse package. The package is currently supported by an online portal (here) and can be downloaded, with the R-programming language, for any personal computer here. Code for the state space models is available on my Google drive (here) and referenced in each post.

Atlanta Fed Economy Now

My approach to forecasting is similar to the EconomyNow model used by the Atlanta Federal Reserve. Since the new Republican Administration is signaling that they would like to eliminate the Federal Reserve, the app might well not be available in the future.

While the app is still available, there have been some interesting developments. In earlier forecasts, the Atlanta Fed was showing GDP growth predictions outside the Blue Chip Consensus. Right now, after unorthodox economic policies from the Trump II Administration, the EconomyNow model is predicting a drastic drop in GDP (the Financial Forecast Center is only predicting a slight drop here).

Climate Change

Another comparison for what I have presented above are the IPCC Emission Scenarios. These scenarios are for the World System. Needless to say, (1) the new Right-Wing Republican administration plans on withdrawing the US from all attempts to study or ameliorate Climate Change and (2) the IPCC does not produce any RW modes for the World System (but seem my forecasts here).