How to manage a fragmented world?

When G7 leaders gather in Evian on June 15, they will face the fact that the post-war order has exhausted its possibilities. The United Nations, the Bretton Woods institutions, and other pillars of international cooperation—all founded on the belief that universal rules can provide the foundation for global governance—have provided decades of relative stability and economic integration. Yet today’s world is too multipolar, too digitally connected, and too politically heterogeneous for broad consensus alone to remain the primary mechanism for managing global affairs.

As national interests increasingly diverge, economic interdependence is increasingly used as a tool of pressure and coercion, leading to the formation of rival strategic blocs at a time when global challenges, such as climate change, migration, and artificial intelligence (AI), are growing faster than existing institutions can respond to them. While it may be tempting to cling to a disappearing order or to reconcile ourselves with enduring geopolitical rivalries, what is needed today is a shift to a new model of international cooperation based on governance through coalitions.

In many ways, this change is already underway, though it goes largely unnoticed. From semiconductor supply chains to climate and security, countries are increasingly collaborating through coalitions formed around specific issues—flexible partnerships that reflect the reality of a fragmented yet deeply interconnected world.

The question before the G7 is therefore not whether coalition-based governance will emerge, but whether democracies will shape this transition or allow it to be driven solely by the logic of power politics. Few forums are better placed to guide this process than the G7, which brings together economic strength, technological capacity, institutional capacity and broadly agreed political values. But this also requires a corresponding re-examination of existing models of governance.

For starters, policymakers must move beyond the pursuit of universal consensus. Consensus increasingly leads to decision-making paralysis, and even when broad agreements are reached, their implementation is often inconsistent. The 2015 Paris Climate Agreement clearly illustrates this problem: while it established common goals, national commitments vary significantly, while enforcement mechanisms remain weak. Similar problems are now evident in the areas of digital governance, taxation, trade, and migration policy.

Coalition-based governance offers a more practical alternative. Rather than requiring universal consent, it allows states to cooperate to address specific challenges, while accepting common standards, monitoring mechanisms, and enforcement instruments. Participation remains voluntary, but membership also carries certain obligations.

Artificial intelligence is a good example of such an approach. States could form a coalition to establish common standards for advanced AI systems, common rules for data management, coordinated oversight of AI supply chains, and safeguards against systemic risks. Access to markets, financial systems, research networks, and digital infrastructure of coalition members could be conditioned on compliance with these standards. The same logic could be applied to climate policy, trade, key mineral resources, biotechnology, cybersecurity, and financial transparency.

This approach does not represent an abandonment of multilateralism, but rather its adaptation to today's multipolar reality. Coalition-based governance provides a more flexible and effective framework for cooperation in a world where major powers no longer share the same interests, values, or political models.

At the same time, governance must become more integrated. Today’s most important challenges are deeply interconnected, but governments continue to approach them through separate bureaucratic sectors. That approach no longer makes sense. Trade policy cannot be seen in isolation from environmental sustainability and technological security. Financial regulation must take climate change and geopolitical risks into account. And digital governance must strike a balance between innovation and market competition, on the one hand, and the resilience of democratic institutions and national security, on the other.

The Group of 7 could lead this change by forming coalitions focused on interconnected systemic challenges that require integrated policy responses, such as food, water and energy security; artificial intelligence, employment and digital human rights; as well as climate change, biodiversity loss and industrial transformation. Bringing together finance ministries, regulators, central banks, security agencies, business actors and civil society organisations, these coalitions would not only align policies, but also link economic, technological and security priorities into a single framework for action.

Perhaps more importantly, governments need to rethink how they define success. For decades, economic growth and the volume of economic output have been the primary measure of success. Recent experience, however, has shown that strong GDP growth can coexist with economic insecurity, social fragmentation, political polarization, declining trust, and environmental degradation.

Governments that measure success narrowly tend to govern narrowly. One promising alternative is the SAGE indicator system, which offers a simple framework for assessment. It organizes the main drivers of human prosperity around four factors that have historically enabled societies to thrive: solidarity, agency (effectiveness), material gain, and environmental sustainability. Rather than defining success solely in terms of economic outcomes, this framework assesses whether people live in connected and cohesive communities, have real influence over their own lives, and enjoy a healthy and sustainable environment.

Crucially, such measures would not replace GDP; they would place economic performance in a broader context. The G7 could encourage this change by requiring that all major initiatives be assessed against a broader set of social, economic and environmental objectives. For example, infrastructure projects would be evaluated not only on their contribution to economic growth, but also on their impact on social cohesion and environmental resilience. AI systems would be assessed not only on the productivity gains they bring, but also on their consequences for democratic participation and citizens’ ability to influence the decisions that shape their lives. Trade agreements, in turn, should contribute to sustainability, labour market resilience and digital responsibility, not just economic efficiency.

No new international order will revolve around a single center of power, a single development model, or a single set of priorities. At best, it will consist of a network of overlapping coalitions focused on different issues and sectors. The challenge is to ensure that these overlaps are mutually reinforcing and complementary, rather than creating friction, fueling conflict, and deepening institutional misalignment.

The future of global governance depends on the ability to manage an increasingly diverse and fragmented world. The upcoming G7 summit provides a unique opportunity to articulate a vision of coalition-based international cooperation, which could be expanded and developed by including new partners from the G20 and beyond. In this way, it is possible to lay the foundations for a more adaptive, resilient and sustainable world order.

The author is founding president of the Global Solutions Initiative and honorary president of the Kiel Institute for the World Economy; he is a visiting professor at University College London and a senior research fellow at the Institute for New Economic Thinking, University of Oxford (INET Oxford)

Copyright: Project Syndicate, 2026.