Good Governance and Participatory Development

Linked with Hazel Henderson – England & USA, and with The Politics of Money.


By Ms. Hazel Henderson, Author, Futurist, Economist, during the Special Plenary Session of the International Conference on Governance for Sustainable Growth and Equity, United Nations, New York, 28-30 July 1997:

Since the end of the Cold War we have learned again that markets, regulations, social capital, and good governance are all necessary for environmentally sustainable, equitable economic development. Yet good governance is imperiled today in ways unimagined a few years ago.

But first, the good news is of growing democratization world wide and the widespread emergence of civic society as the third pillar of governance at every level – now beginning to check and balance the powers of both governments and global corporations. The globalization of technology, information, finance, and trade, as well as of poverty, pollution, arms and drug sales, crime, and diseases bring wholly new challenges to governments at all levels. This globalization is a fact – we cannot repeal the Internet, TV, or satellite communications. Thus, we must address the new governance issues of globalization, both with international agreements, new global institutions and standards and with user-fees on commercial exploitation of our global common heritage resources – our oceans, atmosphere, space, electromagnetic spectrum, and global financial cyberspace – as well as fines or taxes on the abuse of these resources.

Today we see a new phenomenon, government by “Mediocracy,” which has upended most traditional political science theory from left to right. I define “Mediocracy” as a new form of government, dominated by mass media, which emerged technologically in information-rich OECD countries over the past 30 years, and is now spreading globally. Mediocracies have preempted representative government and politics and spread across national borders in the convergence of entertainment, TV networks, computer giants, and telecoms – resulting in less than a dozen major global corporate conglomerates which have now captured “attention markets” of citizens all around the planet. All countries are now awash in their global images, music, software, commercial brand names, political sound bites, news, and information giving rise to “Attention Economies” where information-overload leads to attention-deficit societies, where time and knowledge become as valuable as money (see my Building a Win-Win World, Chapter 5: “Mediocracy and Attention Economies,” 1996). Many countries have transformed willy-nilly from feudalism into mediocracies, without ever passing through the intervening stages in building constitutional democracies. Others have also described some of these global social processes, including Ben Barber’s Jihad v. MacWorld and Samuel Huntington’s Clash of Civilizations. These books built on Mahdi Elmanidra’s Premier Guerre Civilisationelle, Morocco, (1992) and Canada’s great futurist, Marshall McLuhan, three decades ago in his Understanding Media.

Similarly, all countries are immersed in the rising tides of “hot money” sloshing around the planet in today’s $1.4 trillion daily currency flows in the global casino of financial cyberspace our newest global commons. These planetary electronic webs are woven evermore densely around today’s nation states – draining off their traditional sovereignty based on the older, geographical factors of economic production: land, labor, and material, tangible forms of capital. Surging new electronic markets confront nations with ever-diminishing options for domestic macro-economic management, taxation, regulation, social and environmental policy.

Few have focused on the structural economic issues posed by electronic markets and financial cyberspace. Beyond laissez-faire, “cyber-libertarian” views predominate in these new markets, making unfashionable the views of US Assistant Treasury Secretary Lawrence Summers in “When Financial Markets Work Too Well: a Cautious Case for a Financial Transactions Tax” (Journal of Financial Services, #3. 1989) and James Tobin’s similar proposa1 in 1978. The most sweeping changes have been wrought on economic theory – now in conceptual ruins. Today its equilibrium models have been outflanked by the forces of globalization and the hurricane of global change they have unleashed. Financial cyberspace and electronic, Internet-based markets are best understood using systems dynamics, game theory, chaos and complexity models. These disciplines provide clearer spectacles for viewing today’s global economy. They grew out of cybernetics earlier in this century and the complexity studies nurtured by the United Nations University since its ground-breaking conference in Montpellier, France, in 1984 in which I was privileged to participate (The Science and Praxis of Complexity, United Nations University Press, Tokyo, 1985).

The recently fashionable terms: “increasing returns” and “path-dependence” used by Santa Fe Institute economist W. Brian Arthur – are simply fast feedback effects in dynamic, non-linear systems. Such rapid feedback allow early entrants, like MicroSoft and Intel, into such global markets to capture them by capturing technical standards (such as Windows) and sometimes even by giving away their products. Traditional anti-trust economists at the United States Justice Department, for example, hewing to equilibrium models of competition, supply and demand, are conceptually – outflanked by companies who understand that network markets offer monopoly -opportunities and can be dominated by whoever gets there first or has the power to set the standards. Similarly, economists in the US Treasury Department shrink at taxing electronic commerce. They are responding to politicians’ kow-towing to the “cyber-libertarians” of electronic commerce in their vows to keep their hands off the Internet. (US Treasury Department Selected Tax Policy Implications of Global Electronic Commerce, Washington, DC, November 1996). Yet we see today that electronic markets are rife with fraud, larceny, money-laundering, pornography and other criminal activity.

Addressing all these issues has been the agenda of the Global Commission to Fund the United Nations, a civic society organization (CSO) I helped found and continue to fund, along with its other members. The Commission’s report, released at the UN World Summit on Social Development in 1995, is entitled, The UN: Policy and Financing Alternatives (US edition, 1996, available at bookstores and from the Global Commission, 2100 Connecticut Ave., NW, Washington, DC 20008, USA. Fax: 1-202-639-9459). Our Commissioners and Advisors, include parliamentarians, ambassadors, a Nobel Prize winner, business and civic leaders, academics, and independent authors, like myself from 32 countries. We all believe that global problems must be addressed globally and that the United Nations is the world’s indispensable organization – already in place to facilitate such international agreements, standards and norms. As a citizen of the United States of America, I feel obliged to apologize for the new bout of isolationist politicking in our Congress, fomented by hate radio programs and a small minority of fringe groups. The Commission’s full-page ad in the New York Times, September 26, 1996, pointed out that 70% of US citizens do not want the USA to be the world’s policeman while 64% want the USA to pay its back dues to the UN. I have publicly called on President Clinton to seize the initiative from these Congressional isolationists and pay our $1.3 billion in UN arrears as a matter of national security.

The Economist of London ran a cover story, “The Disappearing Taxpayer” (May 31, 1997), on the new taxation dilemmas of nation states, due to globalization and electronic markets. Ignoring the options for international agreements and for shifting to green taxes on waste and pollution, The Economist’s conclusion evidenced the same lag in economic textbook theory which still assumes that privatization, competition, deregulation, and the rise of global markets, governed only by the neo-classical assumptions of the World Trade Organization (WTO) and the “Washington Consensus,” will lead us forward to sustainable economic growth. I spoke about these fallacies in New York last week to a group of US asset managers of pension and mutual funds and why global markets run on such laissez-faire principles are now creating financial asset bubbles, over-built office real estate, excessive volatility, speculation and currency risks. In April 1997, Michel Camdessus, President of the IMF, told the New York Economic Club that the next Mexico-style crisis would probably start as a banking crisis. I predicted that this might be due to the new explosion of credit-derivatives. (See my “Looking Back from 2010,” Keynote speech at the Investors Conference, “Making a Profit While Making a Difference,” New York, NY, July 22, 1997). These global risks have resulted in $30 trillion of outstanding derivatives, as fund managers try to hedge their own portfolio risks by adding to global, systemic risks.

Global financial markets must be more effectively regulated, for the players themselves as the G-7 is coming to realize. Only thus can we prevent more debacles like the collapse of Barings Bank and the other scandalous losses incurred by Metallgesellschaft, Proctor and Gamble, Sumitomo, and NatWest. The global casino has also made heavy losers out of Thailand, Malaysia, the Philippines, Indonesia, and even Singapore, since it encourages the export-led growth favored by the “Washington Consensus,” which often proves unsustainable. I hope the Ministerial Conference on Finance will examine all these issues as they relate to the financing of Agenda 21. These global electronic markets need a “global SEC” to harmonize regulations: on accounting, disclosure, insider-trading, money-laundering, and to reduce speculation while addressing settlement problems and custodial reserve requirements. Central banking operations must be overhauled to address today’s absurdities where central bankers (charged with domestic macro-economic and currency management) still foolishly play at the same table in the global casino with profit-maximizing currency traders who daily arbitrage interest rates and government policies alike (see Futures, “Introducing Competition into Global Currency Markets,” Hazel Henderson and Alan F. Kay, 1996, UK).

Good government policies are medium and long-term and cannot properly be judged on a daily basis by currency traders operating in the unregulated global markets. The bankruptcy of macro-economic textbook models is also evident in the prescriptions offered by The Economist (May 31, 1997) to countries struggling with budget deficits following the widespread deregulation of capital markets in the 1980s and their subsequent loss of tax revenues. The Economist opined that nothing could be done about individual tax-refugees and that capital flight restrictions deter investors. Therefore governments would have to increase taxes on labor – since employees tend not to have sufficient savings to move offshore! The Economist has since cautiously endorsed the shifting of taxes from payrolls and incomes to waste and pollution, as I and others have urged for many years (see my articles ‘Introducing Green Taxes,” Christian Science Monitor, July 6, 1990; ‘Retooling Budgets and Taxes,” Christian Science Monitor, July 31, 1992; and “Where’s the Green in Clintonomics,” The Los Angeles Times, September, 1992).

The wide range of options available to nations through international agreements: innovations in central banking and currency exchange to restore domestic monetary and fiscal policy options; international standard setting; regulatory harmonization; a “global SEC”; and the many other new institutions and innovative revenue mechanisms are reviewed in our Global Commission report. Many of these proposals have now been assessed by experts and do not involve US taxpayers, for example, the United Nations Security Insurance Agency (UNSIA) now backed by several Nobel Prize winners and international dignitaries. UNSIA involves a public-private-civic society partnership between the United Nations, member states, the insurance industry and civic organizations involved in humanitarian aid and confidence-building in their own countries in an online network worldwide. UNSIA would offer countries wishing to lower their military expenditures, peace-keeping “insurance policies” (treaties) while the “premiums” would go toward financing UN rapid-deployment, standing humanitarian, peace and confidence-building contingents where requested. For insurers wanting out of underwriting weather-related disasters, this new class of political risk assessment and policy-writing is a huge new business opportunity, since these insurers will provide only these services, not indemnification. UNSIA, with its companion proposal, Anticipatory Risk-Mitigation Peacebuilding Contingents (ARMPC) for the network of humanitarian civic organizations, was discussed in the UN Security Council in April 1996.

Such proposals can restore billions to national budgets and restore social safety nets by reducing the cost of national security and freeing up funds for civilian needs and social infrastructure. Such international agreements and public-private-civic partnerships can augment official development assistance (ODA) and national budgets’ tax revenues lost in the global fast lane as a result of unwise deregulation. Governments can become partners with business and civic society in a host of exciting, innovative ways. But it is imperative that all such partnerships are built on the hard-won body of social norms and standards which comprise each countries’ precious “cultural DNA”: its diverse values, goals and culture (Building a Win-Win World, Chapter 8: ‘`Biodiversity and Cultural DNA Codes”) Robert Putnam describes this as social capital (in Reconceptualizing Governance, UNDP, discussion paper #2, January, 1997). Others refer to “the informal sector,” which I call the “Love Economy”; i.e., that 50% of all production and transactions occurring voluntarily and cooperatively in traditional communities outside of monetary systems, not accounted for in national accounts and therefore invisible to economists. The vast size of this unmeasured, unpaid, voluntary civic sector is estimated at $16 trillion by the Human Development Report of UNDP (1995) and which is still missing from global GDP.

Public-private-civic partnerships, at all levels, must also be based on global conventions on human rights, employee standards, and all of the painstaking agreements fostered by United Nations agencies over the past 50 years Private companies have always captured government standards to gain competitive advantage at the local and national level. Today corporations are busy capturing global standards – often narrowly based on technologies and rooted in obsolete economics which excludes social and environmental capital, values, and costs. Traditional corporate accounting permits this “externalizing” of social and environmental costs from balance sheet – resulting in 1ess-than-full-cost pricing. This distorts capital asset pricing models (CAPMs) leading to irrationally wasteful investments and huge hidden subsidies to today’s world trade in less-than-fully priced goods. All this disrupts efficient local producers whose products are unfairly undercut-resulting in the loss resources.

Today’s global and local battles over standards involve some 90% of traditionally operated corporations and institutional investors versus the other 10% of “contrarian” companies which are driven by social and environmental Codes of Conduct, best practices, which open their operations to external social and environmental audits. Their owners and managers seek to optimize among all stakeholders rather than being constrained by the narrow corporate charters inherited from 17th-Century Britain which focus exclusively on maximizing returns only to stockholders. These social-environmental-values-driven companies are swimming upstream – happy crusaders pursuing social justice and environmental stewardship constantly challenging the constraints of obsolete charters and short-term stock market evaluations. These are the pioneers of ethical investing and socially responsible business and they are succeeding!

Many are profitably recycling and remanufacturing, selling solar, renewable technologies and energy efficiency, environmental restoration, preventive healthcare, fitness, clean foods and organic agriculture, green products, and community development finance and microcredit. They include the members of Business for Social Responsibility, The Social Venture Network (USA and Europe), The World Business Academy, The Future 500 and The Investors Circle (all based in the USA), The Social Investment Forum (USA and UK) The Progressio Foundation (The Netherlands), and the UK’s Prince of Wales Business Leaders’ Forum, represented here by Jane Nelson, and the companies held in the portfolios of socially responsible and ethical mutual funds, such as the Calvert Social Investment Funds, on whose Advisory Council I serve.

I am happy to know that all these socially responsible businesses and investors will be introduced to UNDP thanks to the Progressio Foundation’s Marcello Palazzi and Thomas Cummings. In the USA, this group of “contrarian” companies have their own stock index which has been regularly outperforming the Standard and Poor’s Index since l990: the Domini 400 Social Index, pioneered by Amy Domini of Kinder, Lydenberg and Domini, Inc. of Boston. Socially responsible investing stands at $650 billion of managed assets in the USA alone. Other groups, including the Business Council for the Social Summit (BUSCO), sponsors of the Caux Principles of corporate responsibility, and the World Business Council for Sustainable Development (WBCSD) contain many socially concerned companies, but their members are predominantly the large global corporations in traditional economic sectors of the Industrial Age. Thus, such groups can often retard the shift to Solar Age, renewable-resource, information and services-based economies. Sometimes traditional business groups influence or capture standard-setting processes such as those of Agenda 21 at the Earth Summits of 1992 and of Rio + 5 in New York, 1997 (see my “Transnational Corporations and Global Citizenship,” UNRISD, Geneva, forthcoming).

Meanwhile the emerging, creative 10% of companies in the US, the UK, and other European and OECD countries lobby for higher standards. They know that in the long run their socio-technical innovations and financial successes will be enhanced by broadening the “clean, green,” social markets they serve. They are not encumbered by the enormous capital overhang of past investments in unsustainable technologies as are the giants. Raising the ethical floor under the global playing field will allow the most responsible companies and governments to win. This is a win-win for everyone, as I describe in Building a Win-Win World, rather than continuing today’s leveling and deregulating “race-to-the-bottom,” lowest-common-denominator markets, where players compete traditionally for the cheapest, fastest exploitation of the world’s people, social and environmental capital-at less-than-full-cost consumer prices. Thus, much of today’s world trade is irrational-directly subsidized by tax-supported infrastructure, energy and transportation (by at least $700 billion annually) with additional hidden subsidies of less-than-full-cost production and pricing. When economic and thermodynamic analyses are finally aligned, local and provincial efficiencies of scale will be revealed as correct.

Today, the United Nations is at a turning point – as it faces the financial crises imposed largely by the USA. The Secretary General’s report of July 16, 1997, Report on UN Reform, moves in the right direction. But as Thant Myint-U pointed out in the New York Times, July 24, 1997, no amount of administrative restructuring will prevent member-states from continuing to foist impossible new missions with messy mandates onto the UN. The UN cannot continue being made a scapegoat to hide the inadequacies of governance of its member states. We are all familiar with the debacles caused by members’ inadvisably taking the UN into Bosnia and Somalia and their inadequately providing the UN funding, clear mandates, and operational support for these missions. These unfortunate situations politically amplified in mediocracies – have been unfairly blamed on the UN itself for political reasons. Such national government inadequacies are what we must address. Meanwhile, we must make sure that the UN itself is revitalized, funded, and properly supported for all the new tasks that are global and beyond the scope of any member state to address alone.

Meanwhile, the UN is rightly seeking partnerships with corporations and other private sector actors in concert with civic organizations. The UNDP and OPS are gearing up for public-private-civic partnerships towards steering more foreign direct investment (FDI) toward the poorest and into the countries less-favored by global capital. Thus, it is imperative that the UN swiftly and clearly promulgates standards and conditions for participation in these new partnerships – far beyond their current conditions and specifications. CSOs welcome the UNDP’s upcoming Seminar on how to structure these partnerships and promulgate standards of corporate responsibility, transparency, and accountability. These standards must be clear and widely published. They can build on those already in place in most municipal governments, including New York City, London, Brussels, Sau Paulo, and Tokyo, as well as many similar standards and regulations of national governments. They can also build on 100 years of voluntary standard setting by industries from pharmaceuticals to electrical appliances. These have been set in cooperation with relevant government agencies and consumer groups, including the International Standards Organization in Geneva and its ISO 14000 and 14001 environmental standards (see Business Week Special Report, October, 1995 and 1996).

These regulations and standards can inform the general public by calling on corporate partners to promulgate and publish Codes of Conduct, best practices, ethical principles, and corporate mission statements, as well as product labeling-while allowing external social and environmental audits and making reports available to the public. They must include 1) open, transparent contracting and bidding procedures; 2) standards for compliance with all UN conventions on human rights, children, gender-balance, employee wages, benefits and conditions, as well as local norms and ordinances; 3) environmental protection and impact statements; and, most importantly, 4) all levels of government must be involved in the enforcement of such regulations and standards. All prospective companies seeking such partnerships with the UN and its agencies must be aware that the UN is chartered for the benefit of “We the Peoples” of the Earth and is singularly endowed with this trust and mandate. The UN is the most universal, transparent, and democratic of international organizations. Fifty global corporations, on the other hand, are now much larger and more powerful than dozens of nation states. These corporations’ charters allow them to operate with secrecy and to maximize their financial return to their investors at less-than-full-cost accounting. Many CSOs in the USA, Canada, and Europe are organizing to reform such narrow corporate charters and to further overhaul national accounts to include social and environmental capital, costs and benefits (as called for in Agenda 21 and initiated in the World Bank’s Wealth Index in 1995).

The well-known asymmetry between corporations’ charters and the UN Charter means that all UN agencies must proceed with the greatest caution in such partnerships – less they betray the trust of “We the Peoples.” The organizations of civic society, people like me and my colleagues in the civil society track, and millions in the emerging ranks of global citizens now linked as we are on the Internet, will all be watching closely. We are quite clear about the differences between the 90% of large, and global corporations run on the old economic textbook models of the Industrial Age and the 10% of emerging, smaller, socially responsible companies and mutual funds based in the new renewable resources, solar energy, community development sectors which are restoring and building social and environmental capital for the 21st Century.

We of civic society know well that the still-powerful 90% of global and national corporations grew by capturing markets and regulatory standards through lobbying and influencing politicians and legislatures. “We the Peoples” feel widely betrayed by such corporate government corruption, which is now visible in daily scandals on our TV screens in almost every country. We have been saddened, frustrated, and shocked at this betrayal of the promise of democracy and the selling of broadcast time and political commercials over the publicly owned airwaves. Many of us are alienated and do not bother to vote, preferring “politics by other means,” including shareholder actions at annual meetings, consumer boycotts, and “buycotts” and embarrassing corporate wrongdoers with publicity campaigns.

Even as the bright promise of democracy has ignited hope in people the world over, we see some democracies held up as examples, such as the USA and others, falling to these unhealthy influences of money, powerful global corporations and special interests. Such interests predominate at the IMF and the World Bank (in spite of recent reforms) and control the World Trade Organization with their narrow agendas of “free trade.” They influence the OECD, for example, in its now infamous Multilateral Investment Agreement (MIA) to make the world safe for traditional investors-at the expense of voters, employees, consumers, and socially responsible investors. (See my ‘let’s Clean Up Our Corrupted Democracies,” INTERPRESS Service, Rome, May, 1997.). Corporations can hide behind their charters as “natural persons” and write-off their influencing of voters and politicians with their advertising. They have pushed legal interpretations of both advertising and their political donations as “free speech” under the US Constitution. Meanwhile, they invoke the textbook rhetoric of promoting economic growth, profitability, and competitiveness as eventually trickling down to benefit everyone. The truth exposed by CSOs at the Copenhagen Summit in 1995, is that less-than-fully-costed economic growth can widen gaps between the rich and poor, increase social marginalization and jobless economic growth while destroying the environment.

The UNDP has reached out into the financial and corporate world since the 1995 launching of the Money Matters Institute with Boston-based WorldPaper (of which I am an editor); State Street Bank; Fidelity Investments; Arthur C. Andersen; Banque Nationale du Paris; Kuwait Investment Projects Company, K.S.C; AEW International; Amrop International; MBIA and Associates; and the World Bank Group. UNDP must be aware, as I have been while attending these meetings, that such global corporations are deeply embedded in today’s global casino and its economic assumptions. The gap is visible between such assumptions as stated by Marshall Carter, the well-meaning CEO of State Street Bank, who sees ” vast pools of capital in OECD countries must be invested in emerging markets, since OECD growth rates averaging 2.5% cannot deliver the expected rates of return compared with Asian countries with average 6-8% growth rates.” Meanwhile, I have pointed out at these Money Matters meetings that such “vast pools of capital” are sometimes financial asset bubbles, which often prove unsustainable sources of financing, and in any case, flow to less than half of developing countries and bypass the neediest, particularly in Africa. Thus, debt cancellation mechanisms and changing the rules at the World Bank to allow write-offs of their unwise, uncollectable country loans and replenishing concessionary finance and ODA are still the most important ways to underpin equitable and sustainable human development in those countries bypassed by FDI and short-term portfolio funds. Nevertheless, such forums as the Money Matters Institute should be encouraged, while their memberships need to be weighted in favor of small, socially responsible businesses, investors, and grassroots financial organizations.

Naturally, citizens are alarmed by such private clubs as the World Economic Forum in Davos, Switzerland, and its closed-door meetings between corporate CEOs, high government officials and a few token labor leaders and academics. The World Economic Forum’s “World Competitiveness Index” reflects the same “trickle-down” 19th-Century economics of the “Washington Consensus” still measured by conventional GDP-growth. All this is now converging in what might be called the “Davos Model,” where government leaders broker their citizens’ taxes, their regulatory safety nets, their work forces, and environmental resources on the daily auction block of the global capital markets to the highest corporate bidders (away from the eyes of voters, employees, CSOs, and socially responsible investors alike). The corporate CEOs in this bidding war seek manufacturing locations and relocations that are “sweetened” by such tax bribes and regulatory giveaways-which are considered as “trade restraints” even by the WTO and frowned upon by The Economist in its February 1, 1997, cover story. All this wheeling and dealing is now online in the World Economic Forum’s exclusive private intranet. Terminals cost $8,000 each – 20 of which the UN has now purchased. How is all this different from US President’s Bill Clinton’s “White House coffees” where corporate chiefs and big donors can meet privately with the US Treasury Secretary and other government officials?

As the UN joins in this daily global auction, CSOs were alarmed to hear, after the fact, of the June 24, 1997, private luncheon on the executive floor at the UN. Heads of large corporations met with high UN officials and US Assistant Treasury Secretary Lawrence Summers and other national officials with two academic “observers.” One token member of civic society was present, whose opposing views were dismissed in the general enthusiasm for more “Washington Consensus” style GDP-measured growth. One of the academic observers, David C. Korten, author of When Corporations Rule the World (1995), uploaded onto the Internet his dismayed reactions to this meeting and his letter to its host, General Assembly President, Ismail Razali of Malaysia. Similarly, another trusted CSO leader, Dr. Patricia Mische, President of Global Education Associates, critiqued the recommendations of the High-Level Working Group on: Strengthening the UN System. Dr. Mische pointed out that not only were civil society groups not invited to give input, but they were not even able to obtain copies of the group’s recommendations. While the recommendation for a new Civil Society Forum (CSF) at the UN, moves in the right direction, this Forum should not be organized along nation-state lines as the rest of the UN, since many CSOs are regional and transnational-and must remain so to be effective. Another CSO, the Women’s Environment and Development Organization (WEDO), also a transnational, has spearheaded the effort to have CSOs participate in all areas of work at the UN – as also recommended by ECOSOC. The Hon. Bella Abzug, former Congresswoman from New York and President of WEDO, has also urged all CSOs to remind Secretary General Kofi Annan of his commitment to gender-balance in all UN agencies and on the UN Task Force for Reform.

As systems thinkers, we can identify environmentally sustainable, equitable human development policies, many already being pursued via innovative governance and new public-private-civic partnerships at 7 levels in societies worldwide. While the most crucial and least-developed are at the planetary and international levels, activities at the other five levels give us hope and show the way.

1) Planetary Biosphere: imp1ementing agreements and the plan of action of the Cairo Conference on Population and Development, the Women’s Conference in Beijing in 1995, and the Social Summit in Copenhagen in 1995, as well as Agenda 21 and previous Action Plans that can move human societies toward sustainability and protect the planet’s biodiversity. Bringing women into full partnership at all decision levels, can lead to healthier societies, stable populations, and sustainable, truly human development;

2) International: redesigning and renegotiating trade agreements for democratic access for developing countries, democratizing all international financial institutions, central banks, and trade negotiations to include representatives of employee unions and voluntary civic society. Implementing full-cost pricing, life-cycle costing, and application of corrected national accounts and quality-of-life indicators. Implementing user-fees for all commercial uses of global commons and taxes and fines for abuses, including United Nations infrastructure, commercial protocols, and peace keeping operations. Moving the World Bank and the IMF toward democracy, transparency, equity, and bringing them back within the United Nations’ jurisdiction, reinvigorating ECOSOC, the UN Centre on Transnational Corporations, and creating a UN Forum for Civil Society;

3) Corporate: enacting redesign of corporate charters and governance toward the stakeholder models and re-engineering manufacturing processes in line with corporate obligations under the 1970 OECD Polluter Pays Principle; promulgating codes of conduct, standards, best practices, observing all UN conventions, and publicly reporting via external audits of social and environmental performance;

4) Civic Society: strengthening and fostering the growth of civic society and education for global citizenship, including favored tax status and free public access channels on all global telecommunications media through treaties such as those governing the electromagnetic spectrum and other common heritage resources;

5) National: governments can institute “green” taxes on resource waste and depletion and pollution, while removing taxes on incomes and payrolls and implementing the overhauling of GNP/GDP national accounts toward multi-disciplinary, unbundled quality-of-life indicators and broader policy tools beyond macro-economics, and observing WTO rules on tax holidays to lure corporate relocations;

6) Local Government: enacting government ordinances to encourage sustainable lifestyles, for example, pedestrian and cyclist options, zoning for mixed-use densities, encouraging local currencies, community development banks, solar and renewable resource options, recycling, while rejecting subsidizing via taxes and bond issues of global-scale corporate intrusions;

7) Family and Individual: de-materializing consumption in OECD countries and de-monetizing family and individual life-styles toward personal development, earth ethics, and sustainable values. Making sure that family law conforms with all human rights conventions.

Lastly, systemic improvement in governance can be rewarded in global capital markets by the new “Virtuous Country Global Bond Fund,” now in formation by socially-concerned, politically-active institutional investors. This bond fund will be composed of bonds (sovereign and selective corporate) of countries whose governments are ranked highest in global social and environmental performance (see, “Smarter Sanctions,” paper by H. Henderson and A.F. Kay, Global Commission to Fund the United Nations, January, 1997). Such countries will be open and democratic, in compliance with all UN conventions, and those which shift excessive military budgets into civilian investments in education, health, and infrastructure. The new funds’ social criteria will be published in a companion index on electronic media with the goal of lowering the cost of borrowing for such “good governance” countries. In today’s globalizations, we humans are beginning to see that in this larger context of social evolution, all our self-interests are becoming identical and ethical standards have become pragmatic.

This time I publish here the whole text, by fear it could be removed from the UNDP-site because of its age. For me this text is still valuable.

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