*{Redefining the Role of Government in the 21st Century [http://www.weforum.org/site/knowledgenavigator.nsf/Content/Redefining%20the%20Role%20of%20Government%20in%20the%2021st%20Century?open&topic_id=300250000&theme_id=300] 27.01.2001 Annual Meeting 2001} Will the information age lead to more decentralized government and does globalization spell the end of the welfare state? asked moderator Joseph S. Nye Jr, Dean, John F. Kennedy School of Government, Harvard University, USA. The problem for South American countries is how to build a welfare state where previously there has been nothing, remarked Jorge G. Castaņeda, Secretary of Foreign Relations of Mexico. Who will do it? There is a move away from inefficient central bureaucracies towards decentralization but the problem is that regional and municipal structures cannot take on the responsibilities normally assumed by a national government. Removing central government leaves a vacuum that is all too often filled by organized crime, drug cartels or local despots. "It seems better to have a big government than a decentralized system that leaves too many jobs undone," Castaņeda said. Countries like Russia face a problem where they have too little central government, said Aleksey L. Kudrin, Deputy Prime Minister and Minister of Finance of the Russian Federation. Russia has not created an efficient state to create economic growth. The country must provide a level playing field in the business, tax and legal systems, he stated. While the heavy hand of the state must be avoided, the state should do more to protect the interests of citizens and provide welfare where appropriate. Integration into the world economy requires deregulation and the reform of a government that has too many ministries and committees. Five factors that will determine the shape of national governments were outlined by Laurent Fabius, Minister of Economy, Finance and Industry of France. Governments have to be more internationally oriented as the decisions they make are determined more and more by international rather than national forces. A multi-disciplinary approach is needed as decisions have implications that stretch beyond traditional ministerial boundaries. Governments need long-term vision: policies in areas such as health and bioethics have far-reaching consequences -- since governments are checked by elections, independent bodies are required to fulfil this role. There is a growing distinction between reality and the perception of reality, and governments must ensure that the perceived reality is correct -- the need for education before a decision is as strong as the need for results after the decision. Decisions have to be made quickly in a rapidly moving environment and this requires new systems of evaluation, benchmarking and review. A worrying fact in Western Europe is that bright young people are disinclined to become politicians who are seen as dishonest and poorly rewarded. "Globalization is a fact," said Joschka Fischer, Federal Vice-Chancellor and Minister of Foreign Affairs of Germany. Power is being transferred from nation-states to international players and markets. We are moving to a knowledge-based economy and this is impossible to achieve without an open society and the creativity of free citizens. Without freedom, rule of law, division of power and democracy there is not the stability necessary to develop human resources and a knowledge-based economy. People who are not part of this economy cannot develop. Avoiding this destabilizing state of affairs requires cooperation at a multilateral level through international structures. Maintaining a unilateral perspective will not work, and the absence of such structures makes development precarious. Governments will also be reshaped by the new need to explain decisions made internationally (by member states within the European Union, for example) to a national audience. Global problems require transgovernmental solutions, declared Paul Martin, Minister of Finance of Canada. Networks of officials and national governments should work together or within established structures to solve individual problems. Problems of sovereignty often arise if attempts are made to lay down "international" standards. A solution is to use a system of peer review to make suggestions for change. If countries are not part of this decision-making process, they will not change. Weak links in the chain can prompt crises, as the Asian banking crisis in 1997 demonstrated. The nation-state will not disappear, and indeed it is the guarantee of democracy. *{Contributors: Castaņeda Jorge G. Fabius Laurent Fischer Joschka Kudrin Aleksey Martin Paul Nye Joseph S. Obasanjo Olusegun}