The Postwar Order Under Strain
The institutions, alliances, and norms built after 1945 are not holding the way they used to. A look at what is fraying, why, what is holding, what may replace it, and what is at stake.
(1945 to 2026; older than most of its current critics and most of its current defenders)
(US, China, EU, India, and a flexible Russia-plus group)
(31 in the UN system; its exits from the WHO and the Paris Agreement took effect that month)
A note on framing. "The postwar order" is a phrase that carries different things for different readers. It can mean specific institutions (UN, NATO, World Bank, IMF, WTO), a set of norms (democratic governance, open trade, freedom of navigation), or a power arrangement (American leadership of a Western bloc). All three are real and all three are changing. This page is the synthesis piece for The Now and references the other pages by name where they go deeper on specific threads.
What "the postwar order" was
The system built after the Second World War was a deliberate response to the failures of the period between the two wars. Its architects wanted institutions that could prevent the next major war, prevent the next great depression, and bind countries to each other tightly enough that pulling apart was costly. The result was the most ambitious construction of international institutions in human history, all built within a few years and around the United States as the dominant builder.
The economic side started at Bretton Woods in 1944 with the International Monetary Fund (the IMF, set up to provide emergency lending to countries in monetary crisis) and the World Bank (development lending). Exchange rates were fixed to a US dollar that was itself anchored to gold. The trade side was added through the General Agreement on Tariffs and Trade (the GATT) in 1947 and later the World Trade Organization (the WTO) in 1995.
The political side started with the United Nations in 1945. The Security Council with its five permanent members (the US, the UK, France, the Soviet Union, and the Republic of China, whose seat later passed to the People's Republic) was meant to keep the great powers talking. The General Assembly was meant to give every member a voice. The various UN agencies (the World Health Organization, UNICEF, the UN High Commissioner for Refugees, and many others) tried to handle specific problems globally.
The security side started with bilateral and multilateral defense treaties, especially NATO (1949) and the US-Japan treaty (1951). A network of US security commitments came to cover Australia, South Korea, the Philippines, Taiwan informally, and a long list of other partners. The arrangement underwrote European reconstruction, contained the Soviet Union, and provided most of the security architecture of East Asia for decades.
Underneath the formal institutions sat a set of informal norms: the dollar as the world's main reserve currency, freedom of navigation in international waters under US Navy guarantee, open markets among allied countries, and the assumption that the United States would convene the system whenever it needed convening. The whole thing rested on an asymmetry. The United States provided most of the security and most of the institutional leadership; allied countries got prosperity, predictability, and protection in exchange for accepting US-led rules.
That arrangement is what people now call "the postwar order" or sometimes "the rules-based international order" or "the liberal international order." It was real, it was built by specific people for specific reasons, and most of it is still in place. The question that has emerged over the last decade is whether it will keep working as well as it used to. A second is what is replacing the parts that have started to fail. Since 2025 a third has joined them: how much of the order its chief builder still wants to lead.
What is fraying
Several of the central pieces of the postwar order have visibly weakened in the last fifteen years. None has fully broken; several are working much less well than they used to. Freedom of navigation, long underwritten by the US Navy, is strained too: shipping through the Strait of Hormuz has been restricted since March 2026, during the US-Israeli war with Iran.
The dollar's dominance of international finance has begun to erode. The dollar is still by far the dominant reserve currency, but its share of disclosed central-bank reserves has fallen from about 71% in 2000 to about 57% in early 2026 (IMF). Whether sanctions are speeding the shift is disputed: central banks have bought gold heavily since the 2022 sanctions on Russia, yet Federal Reserve economists found no notable move out of the dollar itself. The Dollar page goes deeper on what this means.
The United States no longer leads on every measure of power. China's economy passed the United States around 2014 at purchasing-power parity (a World Bank measure that adjusts for lower prices in China) and was about a third larger on that basis in 2025. At market exchange rates the US economy is still nearly 60% larger, and which measure matters for which question is itself contested. China overtook the United States in manufacturing value added around 2010. US military spending was about 2.8 times China's in 2025 on the estimates of the Stockholm International Peace Research Institute (SIPRI), and nearly four times Beijing's official budget, which leaves out items such as military research. That ratio fell from about seven to one in 2010 to about three to one by 2015 and has hovered there since; the China Rise page covers the shifting balance in the Western Pacific. Whether China's slowing growth and shrinking population will reverse the trend is disputed.
The WTO has been hollowed out. Its Appellate Body, which heard appeals in trade disputes, has been unable to sit since December 2019 because the United States has blocked new appointments since 2017. New trade agreements increasingly happen bilaterally or among small groups (the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the Regional Comprehensive Economic Partnership in Asia, the EU's web of bilateral deals) rather than through the multilateral system. In March 2026 members could not agree to renew a 1998 pledge not to put customs duties on electronic transmissions, and it lapsed. The WTO still exists; it does not do what it used to.
NATO has both expanded and become more contested. NATO membership has grown to 32 countries, including Sweden and Finland after the Russian invasion of Ukraine. American leadership of the alliance has become more conditional, with serious questions raised in successive US administrations about how reliable the security commitment is for partners who do not pay enough. In January 2026 President Trump threatened tariffs on Denmark and seven other allies over Greenland, dropping them after agreeing on a "framework" for Arctic security with NATO's secretary general. European allies are building their own defense capability and, in the words of NATO's July 2026 summit declaration, "assuming greater responsibility" for the alliance's defense.
The UN Security Council works only when the great powers agree. Russia's invasion of Ukraine in 2022 (a permanent member vetoing any meaningful response to its own war) made plain what had long been true: the Council can act only when none of the permanent members cares enough to veto. The United States has vetoed six draft resolutions calling for a Gaza ceasefire since 2023; in November 2025 the Council endorsed a US plan for Gaza. UN agencies still do useful work, but the UN itself has cut its 2026 budget and nearly a fifth of its regular-budget posts as unpaid dues left it short of cash.
Public support for international institutions is softening in places. A median of 55% across 37 countries viewed the UN favorably in 2026, but views had worsened since 2025 in ten of them, the United States included (Pew Research Center). Trust in domestic institutions has fallen in many countries, a pattern the Trust and Legitimacy page covers. Lower trust makes coordinated action through any institution harder.
Open trade and multilateral membership have become contested even in the countries that built the system. US trade policy under both major political parties has shifted toward tariffs, export controls, and "domestic content" requirements. The average effective US tariff rate rose from 2.3% in January 2025 to 6.7% in July 2026, even after the Supreme Court struck down the emergency tariffs (Penn Wharton Budget Model). In January 2026 the United States also left the World Health Organization and the Paris Agreement and ordered its exit from 66 other bodies it judged "contrary to the interests of the United States." The European Union has launched its own industrial policy. The post-1990s consensus that open trade was simply better for everyone has fragmented in ways that are unlikely to fully reverse.
What is more durable than the headlines suggest
Counter-balancing the fraying, several pieces of the postwar order are more durable than the loudest political voices acknowledge.
The dollar is still the center of the global monetary system. The slow erosion of its reserve share has not been matched by the rise of any single rival currency. The euro has structural limits. The yuan is constrained by Chinese capital controls. Gold now outweighs the euro in central-bank reserves at market prices (27% against 15% at the end of 2025, European Central Bank), mostly because its price soared, but it stores value rather than settling payments. Digital alternatives remain marginal. The dollar was still on one side of 89% of all currency trades in April 2025 (Bank for International Settlements). This is closer to "first among many" than to "displaced."
NATO is larger than it has ever been and is spending more. Its European members' military spending has roughly doubled in current dollars since 2014, to $559 billion in 2025 (SIPRI). At The Hague in June 2025 allies pledged to spend 5% of GDP a year by 2035, at least 3.5% of it on core defense. The alliance has backed Ukraine in ways most observers in 2010 would have considered impossible; allies pledged at least €70 billion in military aid for 2026. American security commitments to Europe and East Asia, despite all the political turbulence, remain in place.
The major Western alliance system has held through serious tests. The 2022 Russian invasion of Ukraine produced the most coordinated Western response since the end of the Cold War - sanctions, military aid, refugee absorption, and energy decoupling, all delivered with unusual speed across the US, EU, UK, Canada, Japan, Korea, and Australia.
The international development and health institutions still do useful work. The World Bank still finances infrastructure across the developing world. The IMF still steps in during emergencies. The World Health Organization, despite real failures and the budget cuts that followed the US decision to leave, is coordinating the response to the 2026 Ebola emergency in the Democratic Republic of the Congo. Multilateral aid agencies still deliver vaccines, food, and emergency relief at scale, though official development assistance fell 23% in 2025 (UN). The headline institutions have problems; the operational layer underneath them functions better than is often portrayed.
Globalization has slowed but has not reversed. Trade as a share of the world economy has moved sideways since 2008, between about 52% and 62% of GDP (56.7% in 2024, World Bank), rather than collapsing. Most of it still follows WTO rules: 72% of world trade ran on most-favored-nation terms in February 2026 (WTO). Foreign direct investment continues. International supply chains have been partially reshored or "friendshored" but most of them still operate. The fragmentation is real and is reshaping who trades with whom; the underlying interconnection is largely intact.
In sum, most of the postwar order is bending rather than breaking. Since 2025 the sharpest pressure has come from its chief builder as much as from its rivals. The deep infrastructure (treaties, institutions, network effects of the dollar, alliance commitments, supply chains) is more durable than either dramatic decline narratives or confident continuity narratives suggest.
How the institutional health compares
Different parts of the order are in different conditions. The table below gives a rough qualitative picture, as of September 2026, of what is working, what is wobbling, and what is largely broken.
The takeaway: the order is not one thing. Some parts are stronger than ever; some are working badly; some are not working at all. The reform agenda is different for each piece. Critics who treat all of it as failing are as wrong as defenders who treat all of it as fine.
What is replacing it
Inside and around the cracks of the postwar order, new arrangements have been forming. Some are deliberate alternatives; some are just the practical results of countries adapting to a more multipolar reality. None has the scale or coherence to replace the old order outright; together they describe what the next system will probably look like. China, for its part, has launched four "global initiatives" - on development, security, civilization and, in September 2025, governance - which Beijing presents as upholding the UN's "irreplaceable" role and critics read as a bid to reshape the order's rules.
Smaller, more flexible coalitions. The defining feature of the new arrangement is that countries cooperate in shifting groupings depending on the issue, rather than through one umbrella alliance. The Indo-Pacific Economic Framework, AUKUS (Australia-UK-US), the Quad (US-Japan-India-Australia), the I2U2 (India-Israel-UAE-US), the EU-Mercosur deal, the Board of Peace set up under the US plan for Gaza, and a long list of others are coalitions of the willing rather than expansions of single institutions. The architecture is more like a web than a hierarchy.
Parallel financial infrastructure. China's Cross-Border Interbank Payment System (CIPS), Russia's SPFS (System for Transfer of Financial Messages), India's UPI (Unified Payments Interface) extending across borders, central-bank digital currencies, and dollar-denominated stablecoins together form a nascent alternative to the SWIFT-and-correspondent-bank system that has run cross-border payments for decades. None replaces the old system today; together they reduce the leverage of any single point of control.
Industrial policy as the new common ground. The US CHIPS Act and Inflation Reduction Act (whose clean-energy credits Congress cut back in 2025), the EU's Net-Zero Industry Act and Critical Raw Materials Act, China's Made in China 2025, India's Production-Linked Incentive scheme, and similar programs in Japan, Korea, the UK, and elsewhere share a common feature. In each, governments actively shape where particular industries get built rather than letting private markets decide alone. This is a reversal of the post-1990s consensus and is producing a different global pattern of investment than the 2000s did.
Regional spheres of influence reasserting themselves. The Gulf states act increasingly on their own account in economics and politics. India is building deeper ties across South Asia and the Indian Ocean. Russia is rebuilding influence in Central Asia and parts of Africa, often through the Wagner group and the Kremlin-backed Africa Corps that replaced it in Mali in 2025. China is deepening its role in Southeast Asia, parts of Africa, and Central Asia through Belt and Road and bilateral deals. These regional patterns coexist with the global institutions; they do not replace them but they constrain them.
Non-state actors with state-scale weight. Major technology companies (the US frontier AI labs covered on the AI page, Chinese platforms, ASML in lithography, TSMC in chip manufacturing, covered on the Taiwan page) now hold strategic positions that previously belonged only to states. Sovereign wealth funds (Norway's, Saudi Arabia's, Singapore's) move money at scales that affect international markets. Private military companies blur the line between state and private security.
The view from outside the West
The postwar order as it has actually been experienced varies dramatically depending on where the reader sits. A US or UK reader is most likely to think of the order as something built by their country, broadly working in their country's interests, and now being challenged by external rivals. That framing is mostly accurate from inside the Western core. It is much less accurate from outside it.
From an Indian, Brazilian, South African, Indonesian, or Egyptian perspective, the postwar order has often been Western rules applied selectively, with permanent advantages locked in for the powers that wrote those rules in 1945. The five permanent Security Council seats are still held by the World War II winners. The IMF leadership is European by tradition. The World Bank leadership is American by tradition. The "rules-based international order" that the West appeals to has, from this perspective, been routinely bent or ignored when it cuts against Western interests (the 2003 Iraq war is often cited; so is selective sanctions enforcement; so is the slow pace of climate finance commitments).
That perspective is partly true and partly self-serving. The serious version of it is that the postwar order has worked better for some countries than others, and the countries it has worked less well for are increasingly numerous, large, and capable. They are not seeking to overthrow the order so much as to modify it - more representation, less Western leverage, more flexibility on which rules apply when. The countries the West sometimes calls "the Global South" are mostly not anti-Western; they are not pro-American the way Cold War allies were either. They are looking out for themselves in a more multipolar world.
The paths from here
Dated September 2026, as leaders meet at the UN General Assembly and the United States prepares to host the G20 in Miami in December. The next twenty years are unusually open. Some trajectories extend trends already under way; others depend on choices not yet made, in the West or among the rising powers.
A managed multipolar order
The major powers (US, China, EU, India, Russia, plus key middle powers) reach a working accommodation. Some institutions are reformed (UN Security Council expansion, IMF voting weights, WTO appellate body). Some are accepted as serving particular interests rather than as universal. New institutions emerge for specific issues (climate, AI safety, digital governance). The system is more contested than the unipolar moment but also more resilient because no single power can break it alone.
Will it happen? Possible, but it requires sustained statesmanship that has been in short supply. The reforms listed have not moved: the Security Council is unreformed, the WTO's appeal seats are empty, and the largest power is leaving bodies rather than reforming them. Whether reform comes through agreement or only after a crisis is the open question.
Two competing blocs harden
The world organizes into a US-led Western bloc and a China-led non-Western bloc, with the major middle powers (India, Brazil, Indonesia, the Gulf states) having to choose sides or carve out a third position. Trade, technology, finance, and security increasingly run on parallel tracks that overlap less each year. Reminiscent of Cold War 1.0 but with more economic interdependence and different ideological battle lines.
Will it happen? Partly already happening. Whether it deepens into full blocs depends substantially on how the US-China relationship handles its critical pressure points, especially Taiwan. For now the two have extended their trade truce, to January 2027 by the US Treasury's account, and US tariffs on allies blur the lines. Most middle powers say they want to avoid having to choose, and would join the bloc system reluctantly if at all.
A genuine multi-aligned middle
The "non-aligned" group of the Cold War is reborn at a much larger scale. India, Brazil, Indonesia, Saudi Arabia, the UAE, Turkey, South Africa, Mexico, and a long list of others maintain working relationships with both Washington and Beijing without joining either bloc. International institutions adapt to this multi-aligned middle being the deciding bloc on most votes.
Will it happen? Largely already happening. Voting at the United Nations shows it: in February 2025, 65 countries abstained on a General Assembly resolution upholding Ukraine's territorial integrity, which the United States voted against alongside Russia. The middle powers are themselves more confident and more capable than they were in the 1960s, and treat their non-alignment as a positive strategy rather than as a default.
A drifting fragmentation
No major confrontation, no decisive crisis, no clean reform. The institutions keep going through the motions while delivering less. Countries increasingly free-ride or work around the formal system. Bilateral and small-group deals replace multilateral ones. The world becomes less coordinated, more transactional, and less able to handle global problems that need large-scale coordination (climate, pandemics, AI safety, financial stability).
Will it happen? This is in many ways the path of least resistance, and 2025-26 fit it: aid budgets fell, a WTO trade pledge lapsed for want of consensus, and the largest power left dozens of bodies. The cost of drift is paid in slow erosion of the capacity for coordinated action when it is most needed. It is hard to see in any given year and very visible across decades.
A new architecture built around new problems
Rather than reforming the 1945-vintage institutions, the world builds new ones around the actual problems of the 21st century: climate, AI governance, pandemic preparedness, cybersecurity, biotechnology safety. The old institutions handle their original missions (or fail to); new institutions handle the new ones. The system becomes layered rather than hierarchical.
Will it happen? Partly already happening. The Paris Agreement on climate, the various AI governance forums, the WHO Pandemic Agreement adopted in 2025, and various cybersecurity coordination groups all represent attempts at this. Whether they are strong enough to be effective is the harder question: the United States has left the Paris Agreement and the WHO, and the Pandemic Agreement cannot be ratified until an annex on sharing pathogens is adopted, now sought for May 2027.
Some version of managed multipolarity is still possible, but on the evidence of 2025-26, drift and the multi-aligned middle are the trends most clearly under way. Hardening blocs is the most visible alternative if the US-China relationship deteriorates. The multi-aligned middle is large enough to shape outcomes whichever way the major powers move. Drift is its own form of failure even when it does not look like one. The serious work of statecraft over the next two decades is choosing among these paths rather than letting drift decide.
Where serious analysts disagree
The postwar order is one of the topics where serious people who agree about most of the facts reach different conclusions about what to do. Realism, liberal internationalism, and the "America First" view now governing in Washington frame much of the argument; reformers and scholars of a multipolar world add their own readings. Each reading below is held by named scholars or officials whose work is worth engaging directly.
The order is being reformed, not replaced
The visible erosion is real but the underlying structure is bending under pressure rather than breaking. Most international institutions still work most of the time. Most alliances still hold. The reform agenda is concrete: expanded representation, modernized voting weights, new mandates for new issues. The work is hard but is the work, and doing it well is what determines whether the next two decades are constructive or fractious.
Held by: Anne-Marie Slaughter (former US State Department), G. John Ikenberry (Princeton), and a substantial fraction of the working international-relations community. Critics reply that the US withdrawals of 2025-26 show the obstacle is political will, not institutional design; supporters answer that most institutions kept working.
A new multipolar order is emerging whether the West likes it or not
The economic and demographic trends underneath the visible institutions point clearly toward a world where no single power has the relative weight the United States had after 1945. Western strategy that assumes American primacy as a recoverable default is making itself increasingly out of touch with actual relative weights. The realistic course, in this view, is to plan for a world in which the United States is the largest single power but is not the indispensable one.
Held by: Hugh White (Australian National University), Amitav Acharya (American University), and a body of work on the multiplex world order. The capability data they cite is not in dispute; critics reply that GDP comparisons miss America's lead in alliances, finance, and technology.
The liberal order overreached, and power politics is back
Orders reflect the balance of power. The Western order of the Cold War worked because it was bounded and faced a common rival. The attempt after 1991 to make it global - spreading democracy, enlarging NATO, pushing hyperglobalization, drawing China in - provoked nationalist and great-power resistance and sped China's rise. What comes next is a thin global order for limited cooperation and rival blocs led by the United States and China. The prudent course is restraint: fewer commitments and allies carrying more of their own defense.
Held by: John Mearsheimer (University of Chicago), whose 2019 essay "Bound to Fail" sets out this case, Stephen Walt (Harvard), and the realist school. Critics reply that the countries that joined NATO chose to, and that accepting spheres of influence rewards aggression. Realists point to Russia's war and China's rise as the great-power reactions they warned of.
The institutions still serve American interests well and should be defended
Despite the rhetoric of decline, the United States remains the largest economy, the strongest military, the center of finance, the home of frontier technology, and the convener of the most important alliance system on Earth. The institutions of the postwar order continue to amplify American power and interests in ways that few rivals can match. Defending and selectively reforming the system is more useful than retreating from it.
Held by: G. John Ikenberry, Robert Kagan, and the broader "liberal internationalist" tradition of US foreign-policy thinking. The American advantages they cite are real; the open question, sharper since 2025, is whether American politics will sustain the engagement the position requires.
The old order became a bad bargain for the United States
In this reading the institutions of 1945 now work against the country that built them. Allies grew rich under American protection while spending little on their own defense. China used its WTO membership to win market share while subsidizing its industry. International bodies spend American money on agendas American voters never chose. The answer is not isolation but leverage: tariffs and bilateral deals, allies paying for their own defense, and leaving bodies that do not serve American interests.
Held by: the Trump administration. Secretary of State Marco Rubio told the Senate in January 2025 that "the postwar global order is not just obsolete; it is now a weapon being used against us." Supporters point to NATO's 5% pledge as proof that pressure works; critics reply that Americans pay much of the tariffs and that leaving bodies such as the WHO cedes influence to China.
What the available evidence supports: the postwar order is bending in real and serious ways. The bending is partly a consequence of relative power shifts and partly a result of choices made by all major actors, the United States included. Most institutions still do work their members value, and new arrangements are emerging in the gaps. What the system looks like in 2040 depends substantially on choices being made now in Washington, Beijing, Brussels, Delhi, Brasilia, and a dozen other capitals. Treating the current moment as a fixed end-state in either direction is the most reliable way to be wrong.
What this means for you
Whether the postwar order is unwinding or reforming touches every reader through the value of currencies, the security of supply chains, the structure of careers, the prices of imported goods, and the politics of the country one lives in. A few practical observations:
If you are a citizen of a Western country
The institutions your country built and led are real and harder to rebuild than to maintain. Whether they are worth what they cost is now an open political question, above all in the United States. Voting on the merits of specific policies (alliance commitments, multilateral engagement, trade rules, climate finance) rather than on slogans about decline or restoration is more useful than the political conversation typically suggests. The costs of engagement and of disengagement alike tend to show up over decades rather than in a single dramatic confrontation.
If you are a citizen of a non-Western country
The current period is unusually rich in options. Most non-Western governments have more meaningful choices on infrastructure, finance, security partnerships, and education partnerships than they did even fifteen years ago. Many governments use this leverage to negotiate better terms with each major power. Engaging seriously with how your country navigates this multi-aligned moment is one of the more consequential parts of citizenship over the next decade.
If you do business internationally
Plan for more friction, more political risk, more compliance complexity, and more sudden rule changes than you would have expected ten years ago. Companies that have built robust supply chains, multi-jurisdiction legal capacity, and political-risk awareness are positioned for the new environment. Companies that assumed the post-1990s consensus would continue indefinitely are increasingly being surprised by it.
If you invest
The single safest assumption in a more multipolar world is that asset diversification across regions, currencies, and political jurisdictions matters more than it did under American single-power dominance. The home-country bias that worked when home was always the safest harbor works less well when no single harbor is unconditionally safe. None of this is investment advice; it is observing what kind of asset structure the underlying world is moving toward.
If you are thinking about the long arc
Major institutional transitions in human history have tended to be slower than the dramatic narratives suggest and to produce more continuity than the revolutionary or declinist frames imply. The postwar order is not collapsing this year and is unlikely to be replaced by 2030. The most useful posture is to take the long view and to take specific institutions seriously rather than only treating them symbolically. The next twenty years are a period during which choices are made, not a script that has already been written. The other pages in The Now each describe one thread of the larger picture this synthesis tries to draw together, and none is fully separable from the others.
The mechanics behind this
The postwar-order story sits on top of three deeper mechanisms covered elsewhere on this site. If the analysis above depends on ideas you want to understand first, these fundamentals make the conversation more legible:
