The choice of who will lead the World Bank has been made. Earlier this week, on April 16, the US nominee Jim Yong Kim was selected over Nigerian Finance Minister Ngozi Okonjo-Iweala and former Colombian Finance Minister Jose Antonio Ocampo. It was a much-watched contest, as many had thought it might turn out otherwise—that the old boys’ bargain, under which an American gets to lead the World Bank and a European gets the IMF, would cave in to pressure from everyone else.

With the decision now made, will we go back to business as usual? Not a chance, because the challenge was about more than international status, prestige, and a corner office at an international financial institution. This was just one round in a developing fight over the rules and norms that govern the international political economy.

Conventional wisdom has it that the traditional arrangement raises hackles because it is a dated relic of the bipolar Cold War Western power era. That’s correct so far as it goes—but it doesn’t go nearly far enough. There is a much more important change in the global distribution of power underway, and the play for leadership of the World Bank signals that emerging markets will be increasingly bold in asserting their views about the management of the global economy. In short, the age of Post-Western globalization is upon us.

But haven’t we heard this before? Yes, with regard to what the emerging powers are asking for. In the 1970s, particularly following the oil crisis of 1973, developing countries used the United Nations Conference on Trade and Development (UNCTAD), which had been set up in 1964 as a counter to the General Agreement on Tariffs and Trade (GATT, the forerunner of the World Trade Organization, WTO), to press for changes in the management of the global economic system. Their demands were embodied in the Declaration for the Establishment of a New International Economic Order (NIEO), adopted by the United Nations General Assembly in May 1974.

It’s stunning today to read the NIEO demands—because they are almost exactly the same as what Supachai Panitchpakdi, head of UNCTAD and previously Director General of the WTO (2002-2005), is now calling for. Then as now, the emerging market players called for management of volatile commodity markets, preferential trade access to rich country markets, greater stability in exchange rates, monitoring of trans-border capital flows, greater aid to the least developed, favorable debt rescheduling, and regulation of multinational corporations to ensure that they comply with national laws and foster technology transfers. All this represents a considerable turn away from anything resembling a Washington Consensus and towards a more highly managed system favoring preferential terms for developing countries and redistribution over competition and efficiency.

Writing in 1979, Roger Hansen (in Beyond the North-South Stalemate) succinctly characterized the choices faced by developed and developing countries in the face of these demands. Rich countries could simply reject the agenda, or they could co-opt a few key developing countries into the existing system. They could supplement the existing system by moving to reduce the burden of poverty in the poorest developing countries. More radically, they could agree to restructure global economic institutions or change the agenda of existing institutions. For their part, developing countries could ignore the rich world and pursue self-reliance, or press for either institutional change or a change in the agenda as well.

So, what choices were made and what did happen to the NIEO demands of the 1970s? In retrospect, not very much. Some efforts were made to provide developing countries with additional trade preferences. The IMF created a trust fund to help developing countries by selling off a third of its gold holdings, particularly by the Europeans. A few commodity agreements were signed, for example in sugar and rubber. But for the most part, the general strategy of the rich countries was to reject the NIEO broadly. This meant rejecting the idea that the problems of the developing countries were the responsibility of the rich countries, brushing off the idea that developing countries had meaningfully shared interests, and more or less dismissing the notion that any good would come from having these countries participate at a higher level in international institutions. The rich countries were confident they could win the argument because they believed the developing countries had little or no power to push their position—and that what power they did have as a result of control of oil supplies could be countered and would fade.

In light of this history, many observers suspect that the new NIEO-style demands of 2012 are just more of the same, and will meet with the same outcome. We believe otherwise, for the simple reason that a massive shift in economic power is underway, in favor of the demanders for change. Consider the differences in various shares of the top ten emerging markets in comparative perspective. This time around (looking at 2010 data), the emerging markets account for over 23% of global GDP as opposed to 11% in 1975 (at current, not purchasing power parity, prices, which give them an even greater share). From less than 10% of world exports, they account for nearly 20%. Their gross capital formation has gone from 12% to 35%. Even outflows of investment have increased from near-nothing to 13%. Finally, the same states have 47% of the world’s foreign exchange reserves as compared to under 13% in 1975.

Many Western analysts think these numbers don’t change the game. It is possible, for example, to point to the same data and argue that because the developing countries are getting richer, what they want out of the global economic system will come to more closely match the preferences of today’s rich countries. This convergence hypothesis is reassuring on many fronts. Consider, for example, this familiar argument: as Chinese companies run up against the limits of fast-follower copying, approach the technology horizon, and begin to generate fundamental innovation capacities, they will drive the Chinese government toward compliance with a US-style patent regime, and today’s global fights over intellectual property will fade.

But where’s the evidence for convergence? Certainly not in the NIEO-style demands of the BRIC countries at their summit meetings or UNCTAD. And apparently not in the fight over leadership of the World Bank.

Another way to discount the demands is to argue that there is no such thing as “the developing world” or “the emerging markets” as a unified force. Agreement on a set of broad NIEO principles among these countries could be extremely shallow, and possibly just a rhetorical exercise. It’s certainly correct to say that India, China, Brazil, and others have different interests in the global economy. But it’s at least as accurate to say that the United States, France, and Japan have different interests—and yet analysts are comfortable talking about the shared interests of “rich countries” or “The West.” It would be better to recognize that in both cases, there is a mix of shared and different interests. And that if The West can act (enough) in concert to shape broad principles of global political economy, it might just be the case that the developing economies can do so as well.

What should countries and companies do if we are right and the challenge this time around is a serious one? The rejectionist stance that worked pretty well in the 1970s won’t work this time. Instead, Western governments need to take the demands of emerging markets quite seriously. This doesn’t mean agreeing to a new NIEO lock, stock, and barrel, or accepting a move away from global capitalism. It simply means that Western governments need to engage in substantive negotiations over the restructuring of the global economic agenda at a minimum, and possibly agree to significant reform of institutions as well. It means recognizing that not everyone is, at the end of the day, a neo-liberal. State capitalism and greater government control of markets is going to continue, with real economic power behind it. The demands associated with those trends aren’t going away. If the ‘West’ pretends otherwise, it is certain to see more ugly incidents like the World Bank presidency fights, and the possibility that things could get much worse, up to and including a broad breakdown of institutional cooperation.

For globally oriented firms (which will be almost all firms, if it isn’t already) doing business as they were in the decade before the financial crisis will not work. Thinking about how to influence the evolving global rules may seem very far from the daily pressures of managing one’s company. But rules affect profits and long-term sustainability. Managers need to think about different scenarios for the rules that govern the global economic system, and understand both the global transformation in the relative economic power of states, and the international regimes that manage the system. Without sustained attention to proactively developing integrated market and nonmarket strategies, firms will be like generals fighting the last war.

The authors would like to thank Patricia Sun for research assistance.