Rebuilding the world order: Two strategies for a fragmented world

As the postwar international order fragments and universal agreement becomes increasingly elusive, policymakers face a pressing question: what form of cooperation can replace the postwar hegemon-led, rules-based system? This column examines two complementary answers. Mark Carney argues that coalitions of middle powers can preserve stability, resilience, and strategic autonomy in an era of great-power rivalry. The author of this column proposes a broader architecture of pivotal power coalitions organised around human flourishing, policy alignment, and polycentric governance. Their dialogue illuminates one of the defining policy challenges of our time: how to combine geopolitical realism with effective collective action. Together, these approaches offer a practical roadmap for building a more resilient, cooperative, and problem-solving world order.

The postwar international order is no longer functioning as its architects intended. Rules remain, but their authority has weakened. Institutions remain, but their capacity to organise collective action has declined. Economic interdependence remains, but it is increasingly treated as a source of vulnerability rather than only mutual gain. Recent VoxEU contributions describe this condition as geoeconomic fragmentation: a world in which trade, finance, investment, supply chains, technology, and payment systems are increasingly shaped by geopolitical rivalry (Aiyar and Ilyina 2023, Aiyar et al. 2023, Chari et al. 2025).

Two recent approaches offer responses to this changing world order. The first is the middle-power strategy of Mark Carney, articulated in his 2026 speeches at the World Economic Forum and the Lowy Institute. The second is the pivotal-power strategy, summarised in my paper “Toward a New World Order” (Snower 2026), as part of The New Alignment Initiative of the Institute for Global Prosperity at University College London. Both start from the same premise: the old order cannot simply be restored. But they differ in their diagnosis, their theory of agency, and their implications for national policy and international agreements.

The middle-power approach

Carney’s argument begins with geopolitical realism. The rules-based international order helped countries such as Canada prosper, but it was always partly dependent on American hegemony. That bargain, he argues, no longer works. Great powers increasingly use trade, finance, technology, and supply chains as instruments of coercion. Middle powers must therefore stop pretending that the old order still operates as advertised and instead build institutions and agreements that actually function (Carney 2026a). 

In his Lowy Institute speech (Carney 2026b), Carney develops this into a strategy of middle-power cooperation based on ‘variable geometry’: different coalitions for different issues, reducing vulnerability to coercion while renewing international cooperation one issue at a time. The Carney approach is therefore a strategy of middle-power renewal. 

The pivotal-power approach

The pivotal-power approach begins from a different starting point. The central problem is not only the decline of the rules-based order, but the mismatch between global problems and existing governance structures. Climate change, biodiversity loss, financial instability, food insecurity, cyber insecurity, artificial intelligence, pandemics, and migration are interconnected problems requiring collective action at a scale that universal multilateralism can often no longer deliver (Snower 2026).

The proposed response is the ‘New Alignment’: a framework for state-enabled polycentric governance. Cooperation is organised through issue-specific ‘pivotal power coalitions’. A pivotal power is not defined by its general rank in the international hierarchy, but by whether its capabilities, interests, institutional influence, and legitimacy are indispensable for addressing a particular problem. A country may be pivotal in climate governance but not in digital governance; pivotal in food security but not in finance.

The New Alignment is structured around three forms of alignment. Goal alignment orients cooperation toward human flourishing, operationalised through ‘SAGE’ (Solidarity, Agency, material Gain, and Environmental sustainability). Capacity alignment organises the capabilities required to address each challenge, including public authority, technology, finance, science, regulatory capacity, and implementation capacity. Policy alignment integrates instruments across ministries, sectors, jurisdictions, and institutions so that policies reinforce rather than undermine one another.

The main differences

The first difference concerns the unit of agency. Middle powers (states located between hegemons and small powers) are the key actors in one approach, while pivotal powers (actors whose participation is necessary for solving a specific problem) are the key actors in the other approach. The former is status-based; the latter is function-based.

The second difference concerns the organising purpose. The middle-power approach is principally about strategic autonomy and renewal of the rules-based order. The pivotal-power approach is about organising effective governance under conditions of partial non-cooperation. The first approach examines how middle powers can defend and rebuild an international order. The second approach examines how global problems can be solved when universal agreement is unavailable.

The third difference concerns coalition design. Carney’s coalitions are primarily among like-minded middle powers. Pivotal powers are problem-specific and may include great powers, middle powers, developing countries, firms, international organisations, cities, investors, and civil society organisations. Coalitions are defined by functional necessity rather than political affinity. 

The fourth difference concerns the normative foundation. The middle-power framework is grounded in sovereignty, territorial integrity, legality, human rights, and rules-based cooperation. The pivotal-power framework adds a broader evaluative purpose: human flourishing. This matters because the legitimacy of international cooperation now depends not only on rules, but on whether cooperation improves the lived conditions of citizens: solidarity, agency, material security, and environmental sustainability.

The fifth difference concerns governance architecture. The middle-power approach remains largely within a state-centric diplomatic framework. The pivotal-power approach moves toward polycentric governance, in which states enable cooperation among multiple decision-making centres: governments, firms, cities, universities, development banks, investors, regulators, and civil society. This reflects the dispersion of relevant capabilities across public and private actors.

The sixth difference concerns enforcement. The middle-power approach emphasises trust, legitimacy, and coalition-building. The pivotal-power approach adds institutional guardrails: transparency, peer review, shared metrics, conditional access to coalition benefits, dispute resolution, and graduated sanctions. 

Implications for national policies

For national governments, the middle-power approach implies a strategy of resilience. Countries should diversify trade, reduce strategic dependencies, build domestic productive capacity, invest in critical minerals and energy security, and cultivate trusted partnerships. Foreign policy becomes credible only when economic vulnerability is reduced. Middle powers must therefore combine domestic renewal with external coalition-building.

The pivotal-power approach implies a broader reorganisation of domestic policymaking. Governments must identify the transnational challenges for which they are pivotal, then align national goals, capacities, and policies accordingly. Climate policy cannot be left to environment ministries alone; it must involve finance, industry, trade, agriculture, energy, cities, firms, and investors. Digital governance cannot be confined to technology regulators; it must involve competition policy, education, labour markets, privacy, security, democratic accountability, and social protection.

This implies that national strategies should be designed around problems rather than ministries. Governments need cross-cutting policy architectures, common metrics, investment pipelines, public-private coordination mechanisms, and institutional capacity to participate in multiple coalitions simultaneously. In economic terms, the state’s role shifts from correcting isolated market failures to orchestrating capabilities around systemic challenges.

Implications for international agreements

Carney’s approach points toward a new generation of middle-power agreements. These would focus on trade diversification, supply-chain resilience, critical minerals, defence cooperation, AI governance, energy security, and trusted investment channels. They would be pragmatic, sectoral, and flexible. This corresponds to Carney’s idea of ‘variable geometry’: not one grand bargain, but many coalitions.

The pivotal-power approach goes further. International agreements should be designed as modular coalition agreements around specific global challenges. They should specify shared goals, identify the capabilities required, align policies across jurisdictions, and include guardrails to maintain compliance. Agreements should remain open to accession, using benefits such as finance, technology transfer, market access, data-sharing, regulatory recognition, or infrastructure participation to attract additional members. Recent analyses likewise argue that international cooperation must adapt to fragmentation through flexible coalitions and institutional innovation (Aiyar and Ilyina 2023, Campolmi et al. 2023, Garicano 2025, Hoekman 2024, Chari et al. 2025).

The implication is that international agreements should become more problem-specific, more capability-based, and more enforceable. They should neither wait for universal consensus nor dissolve into ad hoc transactionalism. The central design challenge is to combine flexibility with credibility.

Conclusion

The middle-power and pivotal-power approaches offer complementary but distinct responses to the same historical moment. The middle-power strategy is a diplomatic and geopolitical response to the decline of hegemony and the weaponisation of interdependence. It tells countries such as Canada and Australia how to act when great powers no longer reliably sustain the rules-based order.

The pivotal-power strategy is a broader governance response to fragmented interdependence. It tells the international community how to organise cooperation when global problems require action but universal agreement is unavailable.

The difference matters. Middle powers can help defend the remnants of the old order and build new coalitions of trust. Pivotal powers can help construct the architecture of the next order: issue-specific, polycentric, capability-based, and oriented toward human flourishing.

The future international order will require both approaches: the middle-power strategy to preserve strategic autonomy and the pivotal-power strategy to organize effective cooperation on transnational challenges. Without the former, states remain vulnerable to domination. Without the latter, coalitions may remain too narrow, too state-centric, and too disconnected from the systemic challenges they are meant to address.

Source : VOXeu