Insurance and the Challenge of Governing Risks Beyond National Limits

Even as the legitimacy of states appears to derive ever more explicitly from nationalist claims, nation‐states and national economies remain deeply entangled. In the face of border‐spanning risks, governments face both rising pressures for self‐centered policies and demands for more extensive transnational collaboration. Well‐established insurance principles and practices clarify the trade‐offs implied by that tension. They can also guide the search for feasible policies aimed at governing global risks. Creative policymakers can use them to explain and justify constructive choices in the context of unavoidable political enmeshment. In fact, experiments informed by such principles and practices and combining public as well as private underwriting capacities are already underway in policy arenas ranging from nuclear energy production to capital market stability and public health. It is nevertheless true that the underlying logic of risk pooling, diversification, and burden sharing confronts profound constraints when it comes to complex and long‐term threats such as those posed by climate change, biodiversity loss, and artificial general intelligence. But even in such cases, metaphors drawn from the history of insurance can help rationalize and make feasible new forms of collaboration across national policy arenas that ultimately cannot be disentangled.