Professor Branko Milanovic has recently published an essay called Does the United Nations still exist? In this emotional piece, Milanovic accuses the United Nations of failing in its role of a collective-security organization, whose primary duty is to protect the territorial integrity of its members. Relatedly, he lashes at the UN Secretary-General for not exercising his moral authority in the ongoing conflict between Russia and Ukraine. Milanovic mentions two other factors which he believes to be responsible for the decline of the United Nations. One is a “mission creep”, reflected in a growing number of subsidiary issues, with which, in Milanovic’s opinion, the organization should have never been involved. The other is inadequacy of the resources provided by governments for this expanded mandate followed by “infiltration of private interests into organizations created by states”, which allows the big business to dictate the new agenda for international organizations.
October 24th is celebrated as the United Nations Day. This year it marks the 77th anniversary of the entry into force in 1945 of the UN Charter. With the ratification of this founding document by the majority of its signatories, including the five permanent members of the Security Council, the United Nations officially came into being. As we’re going to celebrate the UN Day this Monday, it appears a very appropriate moment to discuss the role of the United Nations.
The simple answer to Milanovic’s question is that the UN still exists. But the question is whether the organization was properly designed for this role. My argument explained below is that the design of the UN bodies responsible for maintenance of peace and prevention of conflicts has an in-built mechanism to minimize the cost of conflict for great powers. This mechanism is known as the power of veto.
Although I belong to the development branch of the United Nations (the one that Milanovic criticizes as a mission creep), I’m asked from time to time by different people (for whom those internal differences in the organization do not matter) why the UN is not doing this or that or why it is not reacting to this or that situation. My short answer is always “because our members don’t want it”. My longer answer runs approximately like this. Whatever people may think, the UN is not the world government, it’s an intergovernmental organization established by states to serve their interests, not the interests of the organization. If its member states refuse to take action for whatever reason, there is nothing the organization can – or even should – do.
Every comparison is imperfect but if you think about the UN as an international corporation, it consists of the management under the Chief Executive Officer (UN Secretary-General) and the shareholders (states), on whose behalf the management runs the business. The shareholders are represented by the Board (Security Council) where some members have a controlling interest that allows them to veto business decisions they view detrimental to their interests. These are, of course, the permanent members of the UN Security Council.
In a company, shareholders are subject to capital gains (or losses) and/or dividend payments as residual claimants on a firm’s profits. The gains or losses of the UN member states are a combination of intangible and tangible benefits, such as political influence and national prestige, access to the UN technical assistance and finance, etc. As usual, the shareholders (member states) strive to maximize gains and minimize losses.
If we assume the usual profit maximization approach as the analytical framework, minimization of conflict costs for the party involved in a conflict becomes a critical consideration that could allow it to have a positive balance after the costs are deducted from the revenues representing the spoils of the conflict. A state involved in a conflict will incur a cost that can be represented as a function of (1) the probability UN sanctions, (2) intensity (scope) of the sanctions and (3) a residual cost representing all these other influences. These factors are positively correlated with the cost of conflict.
To minimize the total cost, a state behind the conflict and facing the prospect of punishment can try to reduce the probability and/or severity of the sanctions. However, the permanent members of the Security Council have the privilege of the power of veto, which serves as a cost minimization mechanism. It operates as a kind of a tax shield (1-v) and drives down the probability and intensity of the sanctions and, therefore, the total cost. Note however that the term (1-v) never equals zero because even in the absence of sanctions by the UN Security Council, other costs, such as reputational loss, are possible and are likely to happen as the recent voting of the General Assembly after Russia’s annexation of Ukrainian territories demonstrate.
What actually happens when the cost of sanctions is minimized? Let’s assume that “production” of conflict requires two inputs, labor and capital. The possible combinations of these two factors that will produce a given level of output is represented by a curve known as an isoquant. The cost of producing a given level of output depends on the price of inputs, presented by the isocost line. The lowest isocost is the cheapest. Assume that a state produces conflict through an optimal combination of resources in point x. Sanctions add to the total cost of conflict and push the isocost line upwards increasing the cost of inputs. Any other combination of inputs will be more expensive than x. If available resources are finite (as they are), the only option is to reduce the level of conflict production. But when a state can minimize the cost of sanctions, it can reduce the difference between the original and new isocosts (or prevent the new isocost altogether) and continue the conflict at the same level of intensity.
Why and how was this mechanism built into the UN decision-making process? The veto was the result of extensive discussion during the negotiations for the formation of the United Nations at Dumbarton Oaks (August–October 1944) and Yalta (February 1945). The veto provision became known as the Yalta formula. The evidence is that the United States, Soviet Union, United Kingdom, and China all favored the principle of unanimity, not only out of desire for the major powers to act together, but also to protect their own sovereign rights and national interests. Harry S. Truman, who became President of the United States in April 1945, wrote: “All our experts, civil and military, favored it, and without such a veto no arrangement would have passed the Senate.”
The veto statistics are presented below. Russia (USSR) is the champion having used its veto right 122 times since 1946 (although most of the vetoing took place in 1946-1969). France and China are at the bottom of the list although they differ significantly in their timelines. France hasn’t used its veto at all after 1991 whereas China has used its veto almost exclusively after 1992.
Of course, there may be multiple reasons for exercising the veto power other than to minimize the cost of the direct (or indirect) involvement of a great power in a conflict. About one-quarter of all vetoes cast have been regarding the admission of a new member to the United Nations. Initially this led to a deadlock, from 1946 to 1955, as both the Western allies and the Soviet Union prevented each others’ preferred candidates from joining, which was resolved with a 1955 agreement which allowed the admission of 16 new members at once. In total, the Soviet Union used its veto 51 times to block new applications. The United States vetoed Vietnam’s application six times, while China has vetoed new applications twice (Mongolia in 1955 and Bangladesh in 1972). When adjusted for the vetoes cast against the admission of new members, the Soviet (Russian) record does not look that impressive.
Hence, there is no correlation between the number of conflicts in which a great power may be involved and the number of veto votes it cast. But whenever a great power was implicated, it didn’t hesitate to use its veto power like the USSR in 1956 against a UN Security Council resolution on the situation in Hungary or the UK on the situation in the region of the Falkland Islands in 1982 or indeed the United States on the situation in Grenada in 1983.
The veto remains a controversial issue, and various ideas have been floated how to reform the organization, but the permanent members are unlikely to give up this privilege. It is difficult to say if the veto makes us safer or less safe. But since the Security Council continues to apply it, it would be unreasonable to accuse the United Nations (or indeed its Secretary General) of ineffectiveness and decay on this account. The organization was designed with this feature built in, it was done intentionally and with the full (and enthusiastic) consent of the parties involved. We can only hope that it serves a purpose, and the great powers know how to use this power for common good.