“When we last saw our hero…”, sorry I couldn’t resist writing that. In any event, this is the second part (the first part is the previous blog post, ” The Origins and Consequences of the Two Global Governance Galaxies“) of remarks I was supposed to have delivered at the ISA’s Friday Panel (13:45 at Viger C) , “the G8/G20 and International Organisations” chaired by Dries Lesage, Ghent University and John Kirton Munk School of Global Affairs at the University of Toronto. My sorrow at being unable to attend has turned to opportunity.
Now what is the meaning of “new galaxy” above. Well as I pointed out in the earlier blog post, John Kirton and his colleagues in their edited volume Making Global Economic Governance Effective: Hard and Soft Law Institutions in a Crowded World spoke of two galaxies but the reference to the Gx was principally about the G8. And in fact my reference to new galaxy is really about the G20 Leaders Summit.
Now why do I say this? For those who tend to follow these sometimes esoteric matters, there remain significant questions over the new G20 Leaders Summit. Created in the 2008 global financial crisis, questions linger over whether the abatement of this crisis – assuming that is what we are seeing – will forestall the transition of the G20 – structured for a crisis – to a permanent steering committe for at least global economic and financial issues.
Then there is the ambivalence of some key actors with respect to the G20. The United States – with the concurrence of the other G20 leaders – inaugurated at the Pittsburgh Summit the G20 as a permanent organization for global economic matters. But it would appear that US ardor has waned since then. From public though anonymous statements from US officials at Pittsburgh that the G8 was finished – I am paraphrasing – and that the future was the G20, the US has suggested that there will be an unspecified period of transition between leaders clubs to quiet hints that the US would be perfectly willing to proceed in global governance with ad hoc bodies that worked. For the US there is some inevitable friction in the flattening of the global governance hierarchy – meaning the US has insisted that others take greater responsibility – but it would seem that it is harder to accept that the US may no longer get its way in the course of global governance decision-making.
And then there are those from the G7/8 that always remained skeptical – for a variety of reasons – over enlargement – read that at least as Canada, Italy and Japan.
But there is support for the newly rising powers and an acceptance of the new enlarged leadership – if not the responsibilities necessarily. We have come to understand – if we needed the evidence – that China is a supporter of the new leaders club. Indeed in a cable – released by WikiLeaks – this a cable to Jim Steinberg from US officials at the US Embassy in Beijing, dated September 29, 200 – reflecting a meeting with Chinese officials where the Chinese official,
“… thanked President Obama for his leadership in institutionalizing the G-20, which has created a “comfortable” platform for countries like China and India to play a larger role.” This official also expressed the hope, “that the United States would coordinate closely with China as we established new rules for the organization, and that it would not become an organization that duplicated the United Nations or the G-8.”
Now the reality is that it is unclear whether there is any appetite among the key rising powers to take on greater responsibility. In an earlier time I’ve called China “a part-time global leader”. But as pointed out by colleagues in China, and mirroring in part the sentiment expressed by the Chinese official in the US cable, China supports the G20 and views it as a legitimate institution, at least with respect to tackling the challenges presented in the global economy. But still China’s leaders, though accepting the role of the G20 and acknowledging its legitimacy, still are determined to retain full sovereignty over domestic economic matters. And you can see that in the G20 struggle to fashion a sensible global imbalances framework.
The bottom line is that the G8 and G20 continue to exist in the same Gx space. And that this, in my opinion, has the unhappy prospect of inhibiting the emergence fully of a permanent G20 steering committee. Yet notwithstanding this – and in part as a result of the G20 creation in the midst of an all too apparent global financial crisis – what appeared to all of a crisis of biblical proportions – the G20 has grabbed authority and seized the reins of global governance decision-making.
As a result of this leadership, the G20 has moved ahead forthrightly. It has created or reformed institutions – most notably the reform of the Financial Stability Forum into the Financial Stability Board (FSB). As early as Washington, it began tasking the International Monetary Fund (IMF) – notably with what has become the MAP (Mutual Assessment Process). It has called on the original G20 – the G20 Finance Ministers – established some 10 years earlier – to take on the technical work – see the efforts to advance the global imbalances framework and the Leaders pressed ahead to revise the quotas and shares in the World Bank and the IMF. The efforts would appear to be Gx governance with the support of multilateral institutions – that is the G20, both Leaders and Finance Minister, acting as an inner cabinet and the IFIs and other bodies acting as a kind of civil service being tasked to implement commitments made by Leaders and Ministers at their summits. There has been grumbling from the IFIs – certainly some of the executive elements – but for most the tasking is coming from their own leaders.
There certainly are “outs” in these commitment compliance and implementation G20 settings. An obvious loser is the WTO. While tasked to monitor protectionism with the OECD and UNCTAD, the WTO plays no role in the assessment of trade and current accounts in the global imbalances effort.
But it looks at this moment as though a structured hierarchy has been created with the G20 acting as the executive and the IFIs as civil servants and experts in seeking global economic and financial reforms. Now these linkages may not continue. The G20 Leaders may not be able to make the transition to a permanent steering committee. We may see a widening of the scope of the G20. Many critics of the structure of the G8 reflected the multiplication of institutions – IFIs, other UN institutions, ministerial bodies, expert bodies. With this multiplication of bodies there was a growing complexity without a corresponding increase in implementation: less expertise, compliance and monitoring; more deliberation, conversation and failure to implement. So while the relationship of the Bretton Woods-UN with the Gx systems are apparently more productive – the eye will have to ‘remain on the ball’ to insure effective commitment and compliance in the new global governance system.