[Editor: This is the first of hopefully many blog posts by my colleague Art Stein of UCLA and the host at Grand Strategy.]

The Colin Bradford piece in FP, “Seven New Laws of the G-20 Era”, Dan Drezner’s blog comment, “Learning to Embrace the Policy Deadlocks” and then Bradford’s rebuttal – again in FP – “Don’t Judge the G-20 by Its Summits,” and finally the Alexandroff retort in Rising BRICSAM “Punching Below Its Weight” strike me as eliding omitting [editorial comment – you can tell this is one smart academic] the crucial issue: is disagreement in a broader venue such as the G20 a problem for global governance, and especially economic governance?

The original Bradford piece argued that disagreement is not so bad.  The G20 should not be judged by outcomes but as constituting a process and one that was broader and more diverse.  The argument contains a core implicit argument – one never articulated, much less examined and substantiated.  More on this below.

Drezner’s critique was largely focused on mass public reactions to G20 disagreements.  Interesting, but tangential at best.  Mass reaction would presumably be secondary to the concrete consequences of such disagreements.

The Alexandroff reaction to the Bradford-Drezner exchange is to focus on “effectiveness”, and this gets closest to the heart of the matter.  He notes that disagreement is a feature of the G7/8 as well.  Even the small number G set exhibits all kinds of “varieties of capitalism”:  more or less corporatism;  larger and smaller welfare states;  more or less industrial policy.    A substantial variety of types existed/exist even in that small club.

The core issue, then, is whether for the G8 or the G20 disagreement and divergence over policy options are preferable to agreement, coordination, and a concerted response.  There is a small literature among economists about whether macroeconomic policy coordination makes things better or worse.  Implicit in Bradford’s argument is that disagreement and its policy consequences are not so bad and, implicitly, to be preferred to agreement between a less diverse set of actors.  Perhaps.  But what is the evidence?  Is that true for every policy?  From the perspective of one of the world’s largest economies – California – dysfunctional politics does not seem so great.

All this reminds me of the argument about whether market failure or government failure is worse.  Government action is often encouraged to deal with market failure.  But government failure is also a problem.  Is government failure a problem in global economic governance?  Is the failure to coordinate and sustained disagreement preferable?  That was certainly the argument of states that wanted to impose capital controls and thought the Washington consensus was wrong and that they should be free to experiment with a different policy.  The acceptance of policy divergence and experimentation did mean that the experience of the global financial crisis of 2008 was not same everywhere.

So, whether the G20 works or not depends on: the issue, and what is required to deal with the particular problem.

1) It will depend on the nature of the disagreements, whether they are fundamental (about the desirability of markets), substantive (about how to deal with a specific problem), or distributional (about how to allocate the costs).

2) It will depend on how the parties respond to disagreement.  Will the response be 20 separate uncoordinated responses to problems?  Will the response to disagreement among the 20 be to form smaller clubs of agreement, say a G7 and a G13 set of separate responses but coordinated within each subset?

3) It will depend on time and the consequences of delay.  One proposition: the larger the group the greater must be the crisis to generate a consensus response, and the greater the delay in responding to crises.   The consequences of delay are also likely to vary.  Note the national responses undertaken before the first G20 meeting was even held.

In short, the commentaries and blog posts are correctives.  Yes, a stampede of lemmings is undesirable.  Yes, disagreements can lead to better policy.  There is an argument known in business schools as the “Abilene paradox” about the consequences of “mismanaged agreement” (the international relations literature refers to this as “groupthink”).  So we should not respond in despair to disagreement.  After all, bargaining occurs in situations of disagreement and it takes time to arrive at bargaining solutions, and initial disagreement and even stalemate do not preclude eventual agreement.  But sometimes, available bargains are not struck and the even when they are, the costs of delay are enormous.  Few international conferences result in an agreement at the first meeting and in immediate resolutions to problems.  Yet many international conferences have resulted in breakdown, a failure to deal with underlying issues, and, in the national security sphere, as precursors to war.

One’s view of the consequences of disagreement will thus depend on one’s answer to some of the questions posed above and to the specific issues and experiences (not surprisingly, Pacific island nations fearing their disappearance have been the ones most urgently pressing for responses to global warming).

And a comparison with historical assessments of other institutions should make us wary both of snap judgments or even generic views.  Think of NATO, and all the times people decried its disagreements, the problems in obtaining consensus, and the divergent assessments depending on the issue.  I would guess the G-20 will look no different, assuming it has some successes.

Colin Bradford of Brookings and CIGI, has set out in FP what he – possibly the editor calls – “Seven New Laws of the G-20 Era“.  Daniel Drezner in his blog post “Learning to Embrace the Policy Deadlocks” takes Colin to task – rightly I think – for trying to apply spin to the question of effectiveness for this new global governance institution.

But Colin has come back in a Rebuttal at FP called “Don’t Judge the G-20 by Its Summits“. Colin’s basic position is there is a continuous interaction of G20 officials and that the “G-20 in other words is not an event.” Colin argues that the “G-20 is a process — communicating, consulting, and even, on good days, coordinating among 20 countries, not eight.”  Well Colin makes a valid point that there is a continuing effort by officials to describe and reach agreement  and that to just look at the Leaders summits misses the decision-making structures and negotiating behaviors. But in the end the G20 will be judged on effective decision-making and the communiques at the end of the summits set out what has been agreed to by leaders. That – the commitments – plus then national implementation – is the stuff of global governance today.  It is what can be measures and evaluated.

It is rather trite to point to the divergences of this enlarged club made up of rising powers and traditional G7 powers and suggest that in fact these differences can be positive.  It is not like there weren’t differences between leaders in the G7.  In general I would not regard them as positive but the inevitable outcome of interest differences.  What needs to be accomplished then is a concerted effort to negotiate agreed outcomes despite these significant and numerous differences.

Now Colin does point out – and I and others have pointed out as well – the persistently negative international financial press – read this as the WSJ, the NYT and the FT at least. Differences are always played up; and agreements are generally characterized as inadequate.  And it is here that Dan and I differ.   Dan insists on adding his own spin – that is he characterizes the efforts of the G20 in 2010 as “a friggin disaster’.  Now talk about spin!

So the G20 has to prove its effectiveness – that is agreement on global imbalances – how to reduce volatility in the global economy –  and further collective agreement on international financial reform.  The G20 can reasonably judged on that.  But some time needs to be granted to the leaders summit.  And success needs to be acknowledged.

Today in Nanjing – March 31st – the G20 have brought together the G20 Finance Ministers and Central Bankers for what is billed as a Seminar on the International Monetary System.  The seminar has been organized by the French President as host of the G20 Leaders Summit scheduled for November in Cannes – and says the press invitation – with close cooperation with the Chinese authorities.

Only one problem – the Chinese do not want to discuss the Chinese policy with respect to the renminbi.  As is evident from commentary and analyses from many finance ministers in the G20, they see China’s renminbi policy as a major element of the global imbalances.  The criticism of the undervaluing of the renminbi is strongly expressed by US officials but it is not limited the traditional advanced countries.  It is also an object of criticism by rising powers including most notably Brazil – see this week’s Feature of the Week by Roberto Luis Troster  at the Munk School Portal entitled, “Brazil’s Currency Strategy Problem“.

The described issue is of two sorts.  The Chinese – and the French Presidency – have pressed for reform of the global monetary system.  Read that as finding a way to end the reserve currency status of the United States dollar.  At best this policy is a long term policy change.

Additionally, the French support the effort to structure a global economic system to reduce volatility in the current global economy – to deal with global imbalances – in other words.  In this discussion most agree that there is a need to move the renminbi from a fixed rate to a market rate currency.  The US has pressed this strongly and to varying degrees many other G20 countries see the undervaluation of the renminbi and the collateral enormous reserves of China as a continuing aspect of that volatility.

So the French continue to push both issues – one favored by China; one favored by the United States.  Such is the complexity of global governance.

“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.

I know it’s a bit of cheat but I’ve decided that a blog post is the right place to be.  What am I talking about?

Well, this week the International Studies Association (ISA) gathers  for its annual meeting in Montreal Canada.  Dries Lesage from Ghent University with the assistance of John Kirton of G8/G20 research fame – Munk School of Global Affairs at the University of Toronto, organized a fine panel entitled “The G8/G20 and International Organisations”.  Chaired by these two and adding Greg Chin from York University and CIGI as the official discussant, the two chairs recruited a number of experts to tackle the global governance architecture question.  The panelists include:

• Peter Debaere, “The European Union and the G20: A Central Role for the European Commission”;
• Thijs Van de Graff, “The International Energy Agency and the G8/G20:  Causes and Consequences of the Close Interaction Process”;
• John Kirton and Jenilee Guebert, “G8, G20 and the the IMF: From Rivalry to Mutual Reinforcement’;
• David Shorr, “G8, G20 and the UN Relationship in Global Security and Development”; and
• Yours truly preparing  remarks on: “Two Great Galaxies of Global Governance”.

This Panel goes off this Friday (March 18th) at 13:45.  One slight problem.  I won’t be able to be there.  And so I thought that the solution – certainly not a perfect one , but I think a rather good one – if I do say so myself – is to blog my remarks.  So here goes.

So what are these two great galaxies that are referenced in the title of my presentation.  Well John Kirton applied the label (See most recently, John Kirton, Marina Larionova and Paolo Savona, eds., Making Global Economic Governance Effective:  Hard ad Soft Law Institutions in a Crowded World, especially John Kirton, “Multilateral Organizations and G8 Governance: A Framework for Analysis”, pp. 23-42 (Aldershot, UK: Ashgate Publishing Limited, 2010)  As John inquired:

How do international institutions, led by the formal, hard law bodies of the Bretton Woods-United Nations (UN) system, and informal plurilateral bodies, led by the Group of Eight (G8) [John unfortunately fails to examine – limiting the evaluation of the institutions], help  each other govern the world?  More specifically, how have and can the world’s many multilateral organizations (MOs) assist the G8 in enhancing its members’ ability to consider, reach consensus on, commit to and comply with ambitious, appropriate agreements  to address key global needs? … Yet little is known about how well, how, where, when and why MOs help or harm G8 governance, and which MOs can be counted on in particular situations to help the most.

John and most experts focus on the formal-informal distinction between the Bretton-Woods-UN system and the Gx system – principally G8 and G20 Leaders’ Summits.  Experts focus on the hard law, broadly multilateral and heavily organized bodies of the Bretton Woods-UN system and contrast it with the far more informal lighter legal, less bureaucratic and heavily reliant on voluntary, open and flexible approaches of the Gx system.  The contrast is real but as any  observer will tell you hard law in international law and in the international system is a rather relative term.  How many Article VII (binding) resolutions of the UN Security Council (UNSC) does it take to underline the limited prospect of hard law commitment and compliance.

From my perspective, it is not the characterization of formal/informal institutions that best describes the differences but the fact is that the principal organizations of the Gx system – the G8 and now the G20 Leaders Summit are leaders clubs as opposed to the international organizations including international bureaucrats and officials.  In fact the most similar organizational form  to the Gx system is the UNSC – but even here national participants are permanent officials, occasionally home country officials, e.g.  foreign ministers, but rarely heads of government. Now this is not the time to make further comparisons on decision-making between the Gx Leaders summits and the UNSC – but it is evident how impaired the UNSC decision-making system is with the differential attribution of the veto is.  The incentives change dramatically  in permitting some countries the right to veto and other not.

Let’s return to the interaction and consequences in having these two galaxies of global governance.  Frequently proponents and critics have emphasized the possible zero sum nature of the two systems [again remember that much of this discussion and critique has taken place between the UN-Bretton Woods system and the G8]  – one formal and one informal.

John Kirton, and perhaps some of his colleagues in this volume suggest that a  central aspect this two-system global governance environment arises from the fact that the new institution building of the Gx process did not follow on from the destruction of the prior system.  Rather, following the demise of the Cold War system in 1989, “The institutions and ideals of a new and old order thus had to compete, converge and cooperate with each other as they sought to govern this ever more demanding and globalizing system.  This of course contrasts dramatically from the architectural building efforts after say World War II (We are reminded of this course by G. John Ikenberry’s seminal volume After Victory: Strategic Restraint, and the Rebuilding of Order after Major Wars i(Princeton, NJ,: Princeton University Press, 2001). Furthermore, and critically in my estimation, is the fact that the creation of the Gx system –  first in the 1970s and then in 2008 – came about as a result of what was perceived to be the inadequacy of the global governance institutions.  I think its fair to say that these institutions were called forth because of identifiable major economic crises where some officials and leaders determined – rightly or wrongly – that the current institutions were not capable of dealing with the challenges facing the states in the global economy.   And as a result they created these informal institutional leaders clubs.

As with so much of the analysis on the Gx process – whether G8 or now G20 –  there is no consensus here of the relationship between the two galaxies of global governance.  Views range from the two isolated from each other, through the two systems acting as rivals towards each other, to a perspective where the G7/8 and now the G20 act as a kind of ‘inner cabinet’ and the international organizations provide a civil service that can be tasked to implement commitments made at the Gx summit or at the ministerial level.  Certainly in the global financial crisis the G20 leaders summit, especially in the Washington communiqué, tasked the IMF to carry out a number of leaders’ commitments identified at the summit.

It is likely, of course,  that the truth lies somewhere in-between.  The relationship of these two systems is one is one where there is a “pulling together” with, “support flowing both ways,” as suggested by Kirton.  Indeed there is collaboration and support through many of the Gx phases from preparation, commitment and finally implementation.  In that continuum the international organizations can provide, among other things, expertise, officialdom, and compliance monitoring.  In addition the heads of some of the key institutions such as the UN, the IMF, and the World Bank do attend the G20 summits.  Two great galaxies and the effort to support each other, if only grudgingly at times, is probably the best description of this complex relationship.

Let’s look somewhat more closely at the relationship of the G20 to the Bretton Woods-UN system.  I shall do that in the followup blog post.  Kinda of a little bit like a thriller.