Global Data Stability
We can have a new international approach to data governance that draws inspiration from the Bretton Woods Agreement. This would call for the creation of a global alliance with a commitment to data protection as well as a Data Stability Board to coordinate regulatory dialogue, aiming for harmonization and interoperability in global data governance.
This article was first published in The Mint. You can read the original at this link.
In September of 1929, when the US stock market crashed, countries around the world scrambled to put in place measures to protect their economies from the economic repercussions that began to reverberate around the world. However, rather than stemming the rot, these protectionist measures - tariff barriers, currency devaluation and discriminatory trading blocs - created an unstable international environment that ended up making things much worse.
Many historians believe that, had it not been for the advent of World War II, the repercussions of the Great Depression would have stayed with us for much longer.
Bretton Woods
The experience of living through the 1930s was so unnerving to world leaders that in July of 1944, while the Second World War was at its height, 44 Allied nations came together in Bretton Woods, New Hampshire to try an address this concern. The event was officially called the United Nations Monetary and Financial Conference and by the time it had concluded, participating countries decided that instead of each continuing to use the gold standard, they would make the U.S. dollar the global currency that would in turn be benchmarked against gold.
In order for this new global arrangement to work, participating nations committed to maintain a fixed exchange rate between their domestic currencies and the dollar and to refrain from engaging in trade wars where they lowered their currencies to increase trade. This agreement, which came to be known as the Bretton Woods Agreement, also resulted in the establishment of the International Monetary Fund, a multilateral agency from which member countries could borrow in order to adjust their currency’s value when they didn’t have the funds to do so themselves.
While opinion is divided as to the success of the Bretton Woods agreement (particularly given that President Nixon permanently decoupled the US dollar from the gold standard in 1971), there is little doubt that the agreement was responsible for the way in which the world approaches the international flow of funds to this day. It created a playbook for multilateral policy-making that requires nations of the world co-operate with each other in order to achieve global objectives — even if that calls for them to make short term domestic sacrifices.
The Great Divergence
In my article last week, I pointed out that there were, at present, three different approaches to data governance being practiced by countries around the world. With each passing year, these differences were hardening to the point where it was becoming hard to find common ground. And yet, given our increasing dependence on data for almost everything we do, I argued that the fragmentation that this divergence causes will cause complications we can ill afford.
I made a case for the need to build bridges:
What we urgently need is to find common ground between these different approaches so that we can come up with a base normative framework for governance that everyone agrees upon. We need to hard-code that into our technical and regulatory systems. Once that is done, we will be able to layer on top of that the regional variations which reflect the historical, cultural and developmental objectives of individual nation-states, incorporated to address their own unique concerns.
A New Bretton Woods
In a speech delivered at the Oxford Internet Union in September last year, Elizabeth Denham, the former Information Commissioner of the United Kingdom, made an impassioned plea for a new Bretton Woods for data. “Our current approach to data protection,” she argued, “considered nation by nation, can only take us so far. If we are to unlock the full potential of data driven innovation, supported by public trust in how data is used, we need an international approach to data protection standards. We need an international solution.”
How would this work in practice?
In the first place, Denham suggests that we should give up trying (as the Europeans have been doing since the coming into effect of GDPR) to get all the countries in the world to enact a uniform global law. Instead we should look to create a global alliance, membership to which is open to nations with a demonstrated commitment to data protection that has been backed by independent regulation, which allows them to transfer low risk data to fellow member countries.
To be clear, this sets the bar for membership far lower than the GDPR adequacy requirement but still provides individuals the assurance that their data is subject to the same basic protections around the world.
Data Stability Board
If we take this idea to its logical conclusion we would need to create a brand-new multilateral institution for data that could be tasked with the responsibility of coordinating a regulatory dialogue between nations in order to achieve a sufficient level of regulatory harmonisation. In keeping with the role that such an organisation needs to play, it has been suggested that it should be established along the lines of the Financial Stability Board - with the mandate to monitor and make recommendations about global data governance and cross-border data flows.
Given the velocity of modern data flows and the variety of different digital pathways that they can traverse, nothing short of a technological solution will ensure compliance with the common regulatory principles that are eventually agreed upon.
This will call for the development of a normative framework that can be directly embedded into national digital infrastructure - so that we are assured that data flowing through these systems, meet basic data governance requirements. One of the primary objectives of this Data Stability Board could be to develop a common set of technical standards and protocols for all aspects of data governance that member states could hard-code into their national systems ensuring that they are interoperable, not just domestically but between each other.
