The institutions built in the wake of crises carry the crisis's lessons and the crisis's distortions in equal measure.
The Post-Crisis Institutional Moment
The period immediately following a major crisis is one of the most fertile moments for institutional construction. The crisis has demonstrated the failure of existing arrangements in ways that make the case for new ones vivid and politically compelling. The political will to build something new is at its peak. The resources required for institution building are more readily mobilised than in non-crisis conditions. And the coalitions required to establish new institutional arrangements can be assembled around the shared experience of the crisis and the shared desire to prevent its recurrence.
This institutional fertility is real and has produced some of the most durable and consequential institutions in history: the Bretton Woods institutions built in the wake of the Depression and the Second World War, the WHO built in the wake of the Second World War's public health emergencies, the Bank for International Settlements built in the wake of the First World War's financial aftermath. Each of these institutions reflects both the genuine lessons of the crisis that motivated their construction and the distortions of the crisis moment in which they were built.
The Distortions of Crisis-Moment Institution Building
The institutions built in crisis moments are shaped by the specific character of the crisis that motivated them in ways that can be maladaptive once the crisis has passed. They are designed primarily to prevent the specific failure mode that the crisis demonstrated — which may produce protection against that failure mode at the cost of reduced adaptability to failure modes that the crisis did not demonstrate. They reflect the power dynamics of the crisis moment — which may not reflect the equilibrium power dynamics of the post-crisis period. And they carry the emotional urgency of the crisis response — which may produce institutional designs that are more aggressive than the ongoing governance challenge requires.
Post-crisis institutions are built by people who have just been through something terrible and are determined to prevent it from happening again. That determination produces institutions that are genuinely valuable. It also produces institutions shaped by the specific crisis that motivated them in ways that are sometimes appropriate and sometimes not — and that are very difficult to change once the crisis that justified them has faded from institutional memory.
Discussion