30 June 2026

Why Rules-Based Orders Fail

Council on Foreign Relations | Benn Steil

The rules-based international order, largely established by the United States post-World War II, is inherently susceptible to failure due to internal contradictions, drawing parallels from Douglas Hofstadter's work on recursive systems. Kurt GΓΆdel's incompleteness theorem demonstrates that complex rules-based systems inevitably confront questions their rules cannot answer, leading to contested norms.

Kenneth Arrow's impossibility theorem shows democracy struggles to convert individual preferences into coherent collective decisions, often producing incoherence, especially with increased inclusivity. These findings challenge Francis Fukuyama's "end of history" thesis. While Carl Schmitt argued the "sovereign is he who decides the exception," the article proposes an "Escher equilibrium" where temporary, bounded discretionary actions can reinforce constitutional legitimacy. However, recent US exceptions—including post-9/11 surveillance, the 2008 financial bailout, COVID-era mandates, and the January 6, 2021, Capitol attack—have eroded public confidence. Internationally, the erosion of US predominance and China's rise have shattered the "useful fiction" of rule-governed conduct, leading the US to increasingly reject institutional constraints, exemplified by the WTO's paralysis compared to GATT's earlier success.

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