The fragile interregnum: Between the old order and the unknown

The world is entering a dangerous phase that feels uncomfortably familiar. A century ago, similar conditions produced interwar instability. Today, a pandemic has shaken societies, great-power rivalry is intensifying, governance lags technological change, and institutions managing trade and competition are losing authority.

What makes this moment dangerous is not simply rising conflict, but the erosion of the restraint that once kept competition from becoming disorder. International orders rarely collapse because they are destroyed from the outside. More often, they erode from within, when the states that built them no longer believe they serve their interests.

In the twilight of the Pax Americana, the United States is reassessing the costs of leadership, China is expanding its strategic reach, and pivotal states such as Russia, Israel, and Iran are testing the system's limits. The result is a world drifting from rules toward discretion, undermining both security and prosperity.

We have seen this movie before, especially during the interwar years. The real parallel is not intensifying rivalry but the normalisation of rule-breaking by the very powers that built the system. Periods between orders are often marked less by conflict than by erosion of norms sustaining restraint. The current decade may prove to be such an interregnum – one that could produce prolonged disorder before any new equilibrium emerges.

The relative stability of the international system between roughly 1950 and 2020 rested on three conditions. First, the United States provided public goods, including security guarantees and financial stability. Second, international institutions such as the United Nations, the World Trade Organization, and the Bretton Woods institutions reduced uncertainty and made cooperation rational. Third, domestic political bargains ensured that globalisation remained politically sustainable.

Even during periods of intense rivalry, most states found it in their interest to operate within this system rather than outside it. That calculation is now changing.

The United States is increasingly reluctant to bear the costs of maintaining the order it once led, as globalisation is viewed less as a strategic advantage than as a potential vulnerability. At the same time, international institutions are struggling to function as geopolitical competition leads major powers to bypass rules that conflict with their strategic priorities. Meanwhile, domestic coalitions that once supported economic openness have weakened under pressure from inequality, deindustrialisation, financial crises, and migration.

The result is a gradual shift from rule-constrained competition toward competition increasingly shaped by power.

This erosion of restraint is visible across multiple domains. Three developments in particular – global crises, geopolitical conflicts, and technological and financial disruption – illustrate how weakening commitment to shared rules is turning shocks into structural inflexion points.

First, global crises now reveal the fragility of cooperation. The Covid-19 pandemic, like the influenza pandemic a century earlier, accelerated social change, widened inequality, and expanded state authority. It also showed how geopolitical rivalry undermines collective responses to shared threats. Vaccine distribution, for example, reflected industrial capacity and diplomatic leverage as much as epidemiological need, as major producers prioritised national advantage over coordination. Such dynamics weaken trust precisely when cooperation is most needed.

Second, contemporary conflicts demonstrate how weakening rule enforcement encourages strategic testing. During the interwar period, rising powers such as Japan, Italy, and Germany challenged a weakening international system. Today, Russia's invasion of Ukraine, China's Indo-Pacific assertiveness, and conflicts involving Israel and Iran test the limits of the US-centered security system. Nowhere is this erosion of restraint more visible than in Asia, where deep economic integration now coexists with intensifying strategic rivalry. When enforcement weakens and no new framework of restraint emerges, states increasingly probe the system through coercion.

Such pressures also reshape domestic politics. Just as the Treaty of Versailles strengthened nationalist forces in Germany, external pressure on contemporary adversaries often strengthens hardline factions rather than moderates. As domestic politics harden—Iran being a contemporary case in point—the space for compromise shrinks and the willingness to operate within shared rules declines.

Third, technological and financial change is exposing the limits of existing governance structures. Like the breakthroughs of the 1920s, today's advances in artificial intelligence and digital finance have generated optimism about growth. But the danger lies not in technology itself so much as in the belief that innovation can compensate for weakening institutions. As capital concentrates and markets evolve faster than governance can adapt, stability depends increasingly on technocratic crisis management rather than durable political cooperation.

Trade policy is again becoming less about efficiency and more about insulation. Protectionist pressures in the 1930s reflected declining confidence that international trade would support domestic stability. Today's more targeted tariffs and industrial policies similarly reflect growing scepticism that globalisation benefits the domestic coalitions that once sustained it.

Together, these trends point to a common pattern: the weakening of the political foundations that once made competition manageable.

What distinguishes the current moment is not the return of rivalry–which never disappeared–but the declining confidence that competition can still be restrained. Power is becoming more contested even as institutional authority continues to reflect an earlier distribution of influence. Rising powers resist constraints they see as outdated, while established powers increasingly bend or ignore rules they once championed.

As a result, the international system risks becoming formally intact but politically hollow. Universal institutions may persist, but real coordination is shifting toward transactional arrangements. Such periods of disequilibrium, when the old hierarchy is rejected and no new one has emerged, have historically been among the most dangerous phases of international politics.

The greatest danger today is not great-power competition but the possibility that major powers no longer believe competition requires restraint.

History suggests that such periods are not necessarily irreversible. During the Cold War, stability emerged not because rivalry disappeared but because both sides gradually recognised that competition required limits. Arms-control agreements, crisis-management mechanisms, and tacit recognition of red lines helped ensure rivalry did not escalate into systemic collapse.

International rules endure not because states become more cooperative, but because restraint aligns with their interests. When major powers believe the costs of breaking rules outweigh the benefits, compliance becomes rational. When they no longer do, institutional erosion follows.

Whether such a recognition can emerge in today's more fragmented and technologically contested landscape remains uncertain. But history offers a clear warning: international orders rarely fail because rivalry returns. They fail when restraint disappears.

The 1920s were one such moment. The 2020s may prove to be another—unless major powers rediscover the value of restraint.

Zahid Hussain is a former economist at the World Bank. Tom Felix Joehnk is a former correspondent for The Economist.