Are the United Nations collapsing?

Why is the UN now caught in a “death spiral”?

When contributions are not received, the Secretariat has little choice but to scale back implementation of the approved budget in order to avoid running out of cash. Under existing rules, however, this type of cash-driven reduction is recorded as “underspending,” as if it were the result of delays or inefficiencies rather than missing funds.

This classification automatically activates a mechanism that credits the unspent balance back to member states against their future assessments, even though the original contributions were never paid. In effect, the organisation is required to return funds it never actually received.

As a consequence, fewer resources are available for future budgets. The system operates on the mistaken assumption that unspent funds represent idle cash, when in reality they reflect a shortfall in income. The outcome is a self-reinforcing cycle: nonpayment leads to budget cuts; cuts reduce delivery; reduced delivery generates credits; and those credits further shrink the funding base in the next cycle.

Ultimately, this dynamic weakens the organization over time. Financial rules intended to enforce discipline end up eroding capacity, leaving the institution progressively less able to fulfill its mandates, even without any deliberate intent by member states.

Why have past responses been ill-conceived, and why do they make things worse?

For years, member states have treated what is fundamentally a political problem of nonpayment as if it were a technical issue of liquidity. This framing has been convenient: it enables delegations to criticize delinquent contributors while also blaming the Secretariat’s “cash management,” without addressing the deeper failure to enforce payment obligations.

In reality, the UN has been forced to depend on short-term measures such as internal borrowing, delaying expenditures, freezing hiring, managing vacancies, and imposing ad hoc restrictions. While these steps can provide temporary relief, they do not resolve the underlying issue of payment discipline. Over time, repeated reliance on such measures has eroded financial buffers and entrenched crisis management as a routine way of operating.

As a result, the system preserves the appearance of financial oversight while sidestepping the political costs associated with reforming the rules and ensuring that contributions are paid in full and on time.

What is the right response? 

The crisis cannot be addressed through a single measure. It requires a sequence of decisions, as different actions serve distinct political purposes and unfold over separate time horizons.

Phase I – Containment: Over the next six months, the priority is to halt further mechanical contraction and ensure the continuity of operations.

Phase II – Stabilization: Within twelve months, the aim is to rebuild liquidity buffers and restore resilience, without creating incentives for nonpayment.

Phase III – Consolidation: Over a twenty-four-month horizon, the focus shifts to reducing the risk of recurrence by reassessing burden-sharing arrangements, financial rules, and the discipline applied to mandates.

Containment creates the necessary breathing space, stabilization strengthens the system, and consolidation -through structural reform- addresses the root causes. Blurring these phases risks either political deadlock, if reforms are pushed too early, or deeper institutional decline, if temporary emergency measures become permanent.

At its core, the issue is one of responsibility. The Secretariat can manage cash flow, but it cannot enforce payment discipline or redesign financial rules without clear intergovernmental direction. Member states therefore face a choice: either reaffirm their commitment to paying assessed contributions in full and on time, or adapt the financial framework so the organization can withstand sustained nonpayment without gradually losing its capacity to deliver on its mandates.

Financial strain may be unavoidable. A steady erosion of the institution is not.

Financial crises are not an anomaly in multilateral governance but a recurring feature of it. Within the UN system, they have been described as “perennial,” reflecting a long-standing pattern that dates back to the era of the League of Nations. Periods of political disagreement -particularly over ambition, burden-sharing, and authority- have repeatedly placed the Organization under financial strain. In this context, a “financial crisis” goes beyond a simple cash shortfall; it arises when political disagreements disrupt the Organization’s ability to carry out an approved budget.

Across the UN and similar multilateral institutions, different types of crises have produced a range of responses, from technical cash-management tools to political compromises and structural adjustments. These responses vary in nature: some can be implemented administratively to preserve liquidity, while others require intergovernmental agreement and fundamentally reshape incentives or rules.

In practice, however, past crises have largely been managed through Secretariat-led measures aimed at conserving cash, rather than through timely political action by member states. When agreement on burden-sharing or payment enforcement has been lacking, the Secretariat has relied on tools within its authority (such as drawing down reserves, borrowing internally, freezing hiring, delaying reimbursements, and restricting expenditures). While these measures have helped maintain short-term operations, they have also shifted the costs of political deadlock onto programme delivery and onto those least able to absorb them, including troop- and police-contributing countries.

Importantly, no UN financial crisis has ever been resolved through technical measures alone. Over time, a pattern has taken hold: member states avoid confronting issues of payment discipline and financial rules, while the Secretariat manages scarcity and bears the reputational consequences of underperformance. This ambiguity can be politically advantageous. Some states point to underperformance as a reason to reduce funding further, even when it stems from underfunding, while others criticize arrears yet benefit from a weakened Organization that is easier to influence.

The current crisis, however, marks a clear break from the past in three key ways.

• First, the system can no longer absorb arrears. While delayed payments by major contributors are not new, they were previously treated as temporary disruptions managed through short-term adjustments. Today, sustained nonpayment has become structural, turning what was once a liquidity issue into a systemic governance problem that cannot be resolved through administrative means alone.

• Second, financial rules now amplify rather than cushion political shocks. These rules were designed on the assumption that approved budgets would broadly match actual contributions, and that underspending reflected implementation issues. In reality, the Secretariat is now unable to execute budgets fully because contributions are not paid. This forced under-execution is then translated into reduced future budgets, creating a feedback loop in which payment shortfalls drive ongoing contraction.

• Third, the Organization’s crisis-management capacity has been largely exhausted. Tools such as working capital, internal borrowing, hiring freezes, and cash pooling have been used repeatedly. While they were appropriate within the Secretariat’s authority, they are rooted in an outdated approach and have diminishing effectiveness. Rather than resolving the crisis, they redistribute scarcity, weaken delivery capacity, and limit future options.

Taken together, these shifts represent a significant escalation. Earlier crises occurred in a context where disagreements were intermittent, payments were broadly reliable over time, and supplementary funding could help offset imbalances. Those conditions no longer hold. Today, persistent nonpayment combined with rigid financial rules creates a self-reinforcing cycle: cash shortages lead to under-execution, which reduces future budgets, while temporary crisis measures become embedded as standard practice. The decline in extrabudgetary funding is removing one of the last remaining buffers, pushing the system closer to operational breakdown.

The UN is therefore facing not just a liquidity problem, but a structural political payment crisis. Improved management or stricter fiscal discipline will not be enough. Only political decisions (either to enforce payment obligations or to reform the financial framework) can address the situation.

Absent such action, the risk is gradual but profound: a steady erosion of the Organization’s capacity and relevance. Choosing not to confront the issue amounts to accepting the slow weakening of the multilateral system itself.

Edited: Gemma D. F.