Public institutions worldwide are in crisis. Trust in them is declining, and US President Donald Trump’s administration, working hand in glove with the world’s richest man, Elon Musk, views them as enemies that need to be dismantled. In the face of funding cuts and geopolitical fragmentation, multilateral organizations look weaker than ever. The attacks by Trump and Musk, who boasted about “feeding” USAID “into the wood chipper” and preparing to abolish the Department of Education, may be ill-conceived and set to backfire. But they are reminding us that there is no good reason why public institutions have to be just as they were a half-century ago. Simply defending existing institutions looks ever less like an adequate response. Few of humanity’s biggest challenges – from shaping artificial intelligence and addressing mental health to managing energy transitions and industrial policy – are likely to be handled well without effective institutions. But today’s ministries, agencies, commissions, public services, and regulators often look ill-suited to meet these new needs. So, what should the alternatives look like? Governments have always depended on institutions to do their work – to enforce laws, educate children, collect taxes, or provide security – and they have often invented new ones for new tasks, like reducing carbon dioxide emissions or fighting organized crime. Amid the funding cuts and attacks, reformers must focus on creating better expressions of the public interest, making the most of new tools and technologies to improve efficiency, and restoring public trust. But the options for designing institutions today are very different from a generation ago. Global businesses like Alphabet, ByteDance, Amazon, and Alibaba have pioneered radically new business models and tapped into unprecedented economies of scale. A generation ago, few would have imagined that companies like Uber or Grab could provide a taxi service without owning any taxis. Meanwhile, civil society has also developed new models, such as Wikipedia, Ushahidi (data crowdsourcing), and Buurtzorg (home care), and there are many new forms of public-private partnerships, as well as thousands of B-corps (like Natura in Brazil) guided by social and environmental principles. There has also been some remarkable innovation within the public sector. Since its launch in 2009, India’s Aadhaar program has provided biometric IDs to more than one billion people and helped vastly expand access to financial services.
Over the past decade, Narendra Modi has been implementing his motto of “maximum governance and minimum government,” while China created the world’s first Cyberspace Administration in 2011, and its Government Guidance Funds have mobilized trillions of dollars for new technology since 2002. But, in much of the world, public institutions have hardly changed. Most are still pyramid structures, as they were a century ago, and are too often opaque and unresponsive. When new institutions are created, they are typically designed by committees of relatively elderly politicians or civil servants and tend to be siloed, hierarchical, and inflexible. Artificial intelligence shows starkly the gap between what’s there and what’s needed. It has been 20 years since AI started being widely used in some public services (including law enforcement and healthcare) and many private ones (such as credit scoring and search engines). But the world is only just starting to create institutions to govern it well – from procurement to maximize its value for public services to regulation to mitigate abuses, as well as multilateral institutions to pool global knowledge about the risks and opportunities associated with the technology. One reason for the delay was clever positioning by the industry, which discouraged governments from acting by framing AI as a fait accompli that should just be accepted. As Microsoft’s chief economist, Michael Schwarz, put it in 2023: “We shouldn’t regulate AI until we see some meaningful harm that is actually happening.” Such arguments are obviously favorable to private interests. But public institutions’ duty is to the public. And as Daron Acemoglu, one of last year’s Nobel laureate economists, and others have shown, it is institutions that determine why some countries prosper so much more than others.
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Still, it is one thing to tout the successes of the Central Provident Fund and Temasek in Singapore, Brazil’s Ministry of Social Development, the US Defense Advanced Research Projects Agency (DARPA), and the Development Bank of Southern Africa. It is quite another to devise equivalents for our current needs. What will it take to create agile, flexible, and trustworthy institutions? What is the best design for making the most of AI, data, and collective intelligence (as the Intergovernmental Panel on Climate Change does for climate science)? Can we build on successes like Icarus, which mobilized satellite technology to build the “internet of animals” in an effort to help us track the state of animal populations on the planet? These crucial questions are already a major focus within global bodies like the United Nations Development Programme. Its Istanbul Innovation Days conference in late March will feature innovators who are pioneering new methods to improve how institutions function.
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These innovators are drawing as much from biology as from bureaucracy, thinking more in terms of mycelia (branching fungal networks) than pyramids. They are designing lighter mechanisms that can operate much faster during crises, and others that move more slowly and deliberately – like the establishment of a Future Generations Commissioner in Wales, which has inspired the creation of a similar post at the European Commission. Work is underway to build new institutions to protect against misinformation and election interference; to mobilize capital for urban energy transitions; to empower indigenous communities; and to help young people navigate the labor market during a period of turmoil and uncertainty. UN Secretary-General António Guterres described the challenge well in 2023: “We cannot effectively address problems as they are if institutions don’t reflect the world as it is. Instead of solving problems, they risk becoming part of the problem.” Institutions are like buildings: we shape them, but they then subtly influence us and how we operate. We may be in an era of dismantling, disruption, and disorder. But history suggests that such circumstances eventually lead to rebuilding and reinvention. When that time comes, we will need to have already done the work of exploring better options. As the Brazilian sociologist and politician Roberto Mangabeira Unger observes, “the world remains restless under the yoke of a dictatorship of no alternatives.” Fortunately, such restlessness can be fuel for imagination.
