By Kati Suominen

The global economic order – the post-war framework of global governance built on rules-based institutions and free and open markets – is largely America’s creation. It has been the midwife of growth and globalization that have produced prosperity around the world. Much debate in recent years has centered on the impact of such rising powers as China and India on the American order. The focus needs to turn to a different question: can the United States uphold the order it authored?

As the Great Crisis of 2008-09 unfolded from America around the world, a chorus of critics rose to declare the United States a declining nation and to call an end to the current global economic order. In countless depictions, America was passing the baton of global stewardship to emerging nations, and a new world order led by China was thought to be waiting in the shadows.

But the American order persists, and the aftermath of the crisis has in some ways only reinforced it. Its new institutions, the G-20 and Financial Stability Board, are but sequels to U.S.-created entities. Investors have deemed America the safe haven, and the dollar has persevered as the world’s reserve currency. The mission and capacities of the Bretton Woods twins, the IMF and the World Bank, have only been expanded. Protectionism has by and large been held at bay, and the WTO is alive. No country has resigned from these institutions; rather, outsiders are demanding a seat on the coveted IMF Executive Board or an invitation to the charmed club of the G-20. Nations have opted in, not out of, the American order.

The outcome to a good extent reflects a fact of global governance: there are no rival orders that would match the growth and globalization produced by the American order. But while the order is peerless, it is also periled. The deepening Eurozone troubles and the deadlocked Doha Round are among a few illustrations that the institutions of the American order are hard-pressed to deal with the challenges in the 21st-century world economy, let alone manage the competing demands of the old and new powers.

This is hugely problematic for the world and America’s place in it: a defective order will cease to garner support from the adherent nations. Instead of effectively coordinating policies and rallying behind common institutions, major powers are trapped in a Prisoner’s Dilemma, clashing over policies to restore growth, elbowing for an edge in global commerce, and jockeying for power in global economic institutions. Some, perhaps China, appear to be philosophically at odds with the American order itself.

The challenge is that the core of the global order, the United States, is ailing at home and failing to lead abroad. A central tenet of global economic governance is that someone has to coordinate the play; somebody has to keep it all together. During the critical 1945-1948 construction of the global economic order, the world came together — and was kept together — due to American strength, vision, and leadership, not because multilateralism was in vogue and everyone had a say. The leading nations were able to launch institutions that would shape the course of the 20th century because there was a towering actor aware of its national interest in an integrated world economy.

It was American power and leadership that created and sustained the world economic order. A global power with global interests, the United States kept it all together: paid a disproportionate share of the workings of global institutions, brokered differences among nations, and provided critical public goods – a global reserve currency, deep and predictable financial markets, an open trade regime, and vigorous economic growth. Coordination with other nations was seldom easy.

Today, leadership is again required. Again it must be American. Emerging economies prefer to free-ride rather than take responsibility in global governance, while Europe and Japan are neither able nor willing to lead. There are no substitutes for U.S. leadership: while the cast of characters on the global stage is larger and more disparate than before, leadership runs thin.

The quintessential question is not whether America can lead; it is whether Washington is willing. Solutions to the gaping deficits have lost out to political posturing, even though they undermine the dollar, exacerbate global imbalances, arrest America’s economic dynamism – and hurt U.S. credibility in world affairs. Europe’s crisis threatens America’s fragile economic recovery, but Congress is balking at an IMF response, and the administration, entering a re-election bid, is more interested in fiscal stimulus than solvency across the Atlantic. U.S. trade policy has been adrift far too long, and Doha’s travails jeopardize the very global trading system America has championed in the post-war era.

The United States must reform at home to lead abroad. Needed are uncompromising fiscal discipline, cuts in taxes and red tape on American businesses, and a lock on long-term policies that harness the productivity of America’s next generations and newcomers. Abroad, multilateral, regional and bilateral policies and instruments need to be upgraded and aligned to pre-empt instability and renew the drive to integrate the world economy.

America needs a thriving world economy as much as the world needs America. Promising unprecedented wealth in the United States and around the world, a stable, integrated, and growing 21st century world serves our national interests. But such a world is America’s to make.

Kati Suominen is a resident fellow at the German Marshall Fund of the United States. This essay draws on her new book, Peerless and Periled: The Future of America’s Leadership in the World Economic Order (Stanford University Press, 2012).