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History The Asian financial crisis of the late 1990s proved that the G7 structure was not adequate to respond to the needs of a global economy. In light of this the G7 finance ministers and central bank governors proposed at their meeting in September 1999 ‘to establish a new mechanism for informal dialogue in the framework of the Bretton Woods institutional system, to broaden the dialogue on key economic and financial policy issues among systemically significant economies and promote cooperation to achieve stable and sustainable world economic growth that benefits all.’ (‘G7 Finance Statement’, 1999, paragraph 19). The G20 was created with this broad agenda bringing around the table ‘systematically significant’ industrialized and emerging economies (‘G20 Communiqué’, 1999, paragraph 2; Kirton, 2001).

The composition of this ‘new mechanism for informal dialogue’(‘G20 Communiqué’, 1999, p.2) arguably endeavours to be balanced in terms of geographic and population representation (G-20, 2012). It consists of 19 countries and the EU. 13 Other States are regularly invited to G20 meetings. 14 IFIs are also represented: the Managing Director of the IMF, the President of the World Bank and the chairs of the International Monetary and Financial Committee and of the Development Committee of the IMF and World Bank take part in G20 meetings ‘on an ex officio basis’ (G-20, 2012). Also the heads of WTO since the London Summit, OECD since Pittsburgh and ILO since Toronto have been invited to G20 meetings (for more information on the relationship between the G20 and the OECD, see J. Wouters and S. Van Kerckhoven, 2011). However, in practice all these actors influence G20 decision-making only to the extent that their views are asked for by the members of the G20 (J. Kirton, 2010).

G20 meetings have only been upgraded from the level of finance ministers and central bank governors to that of Heads of State or Government since the Washington D.C. Summit of 15 November 2008 convened by US President George W. Bush. The Summit aimed to provide a coordinated response to the financial crisis that had started in September 2008. For this purpose, leaders set themselves two overall priorities in the Washington Declaration: the restoration of global growth and the reform of financial regulation and institutions (‘G20 Washington Declaration’, 2008, paragraph 5–9).

Since the Washington Summit, five more G20 Summits were organized: in London (2 April 2009), Pittsburgh (24-25 September 2009), Toronto (26-27 June 2010), Seoul (11-12 November 2010) and Cannes (3-4 November 2011). 15 The next Summit is scheduled to take place in Los Gabos, Baja California in June 2012 under the Presidency of Mexico. In Pittsburgh, the Heads of State and Government decided to lift the G20 to the level of ‘premier forum for international economic cooperation’ (‘The Pittsburgh Summit’, 2009, paragraph 19, 50).

These 19 countries are (in alphabetical order): Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, the Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom and the United States.

For instance, Equatorial Guinea, Ethiopia, Singapore, Spain and the United Arab Emirates were invited to the Cannes Summit of November 2011.

The upcoming chairs of the G20 are Russia in 2013, Australia 2014 and Turkey 2015.

The G20 and Global Economic Governance: Lessons from Multilevel European Governance?

Functioning The post-2008 G20 has changed the international economic institutional architecture and thereby global economic governance as we knew it. It has introduced an informal element together with overtly political –rather than technocratic– imperatives at the top of the international system of economic governance.

The G20 is a very particular gathering of political leaders compared to formal international organizations or instruments. It is appropriate to call it a ‘club’ or a ‘network’ (Martinez-Diaz and Woods, 2009). 16 Its work is not governed, or constrained, by a commonly agreed upon legal text like a charter. It has no predetermined membership conditions or voting, decision-making or dispute resolution rules or mechanisms (Ngaire Woods, 2010, p.4; G 20, 2008, pp.5, 24). It purposefully lacks a permanent secretariat and a seat. G20 members depend on each other to reach agreements using diplomatic means in a culture of reciprocity and trust (Kjær, 2004, p.41, which compares markets, hierarchies and networks as systems of governance and notes that networks are based on reciprocity and trust). This informal structure has undeniably been sought for by the G20 Heads of State or Government when attempting to deal with the global financial crisis as well as with other acute international problems that have gradually been inserted in the agenda of the forum. See for instance ‘Cannes Summit Final Declaration’ (2011), where social, employment, economic, monetary and financial issues alongside food price, agriculture production, energy, marine environment, green growth and climate change, trade, development and corruption concerns were tackled. On several occasions, most recently the Cannes Summit (‘Cannes Summit Final Declaration’, 2011, paragraph 91), they reiterated their determination to maintain this modus operandi, avoiding any further institutionalization of the G20 (J. Kirton, 2005, p.7).

This particularity of the G20, that distinguishes it from international organizations to which States have delegated powers, is politically and legally significant. Based solely on political consensus the G20 enjoys the freedom and has the flexibility ‘to do other things: such as agenda-setting, coordinating policies and distributing tasks across existing institutions, and building consensus around norms and knowledge.’ (Ngaire Woods, 2010, p.4). This informal political forum moreover offers leaders the necessary space and freedom to make package deals across a wide range of fields and policies. In the same vein the lack of permanent staff or a secretariat prevents the gradual creation of a proper institutional logic with its own agenda and influence on the work of the forum. Nonetheless, being unencumbered by legal obligations may be a double-edged sword since the continued relevance and effectiveness of the forum depends exclusively on the political will of the participants therein.

The continuity in the G20’s work and management across host years is ensured by a Troika consisting of a revolving three-member management trio of past, present and future chairs (G-20 FAQ, 2012). Its chair rotates annually among members and regions represented. 17 Recognizing the significance of the Troika in the effectiveness of the work of the G20, it was decided at the Cannes Summit to formalize it (‘Cannes Summit Final Declaration’, 2011, paragraph 92). Therefore, the participants themselves play the biggest part in the agenda-setting process, with a particular role for the chair of the meeting. The chair will usually host an ‘agenda-setting meeting’ some months in advance of the actual meeting of the G20 finance ministers and central bank governors. There deputy finance ministers and senior central bank officials will discuss what the most prominent issues are that need to be on the agenda for the meeting at ministerial level. As for the G20 Summits, these are Martinez-Diaz and Woods characterize a network as a forum where participants are involved in repeated and enduring relations. There is no delegation of authority to the network to make decisions. There is also no dispute settlement mechanism that can solve disputes when they arise. Networks can be distinguished from formal organizations in that they have no formal rules of membership, or structure of representation. There are no formal decision-making rules, and there is no authority to make, implement or enforce rules. Networks are typically used for agenda-setting, consensus-building, policy coordination, knowledge production and exchange and norm-setting and diffusion.

In 2010, the G-20 chair was the Republic of Korea, and in 2011 it was France.

Jan Wouters and Thomas Ramopoulos

further prepared by the finance ministers and central bank governors always under the leadership of the chair. The political advisors of the Heads of State or Government, the so-called ‘Sherpas’, also play a significant role in this regard. Thus, during its chairmanship, Korea pushed hard to get development on the G20 agenda and succeeded in doing so (Kharas, 2011; Maxwell, 2011; for an insightful look into the agenda-setting process for the G-20 Summit in Seoul, Korea, in November 2010, see Se-jeong, 2010; and for a report on the concluding agenda-setting meeting, see ‘Deputy finance ministers of G-20 conclude agenda-setting meeting’, 2010), whereas France endeavoured to promote the strengthening of financial regulation during its 2011 Presidency (‘Cannes Summit Final Declaration’, 2011, paragraph 22–39). The chair will have the final say in the adoption of the agenda.

However, pressure will be exerted from all delegations to take desired topics on board.

The description of the purely political government-driven agenda-setting at the G20 reveals an absence of domestic institutions and civil society from the process. As to the latter, the G20 has been criticized for the lack of an institutional obligation to involve stakeholders. NGOs can only passively participate in G20 meetings, by way of accreditation. They cannot voice their opinion during meetings and their responses afterwards seem to indicate uncertainty about the role of the G20 in global governance. 18 However, some chairs discuss the agenda beforehand with other stakeholders whereas NGOs organize amongst themselves from time to time in order to have a stronger voice (Huffington Post, 2003). 19 The French Presidency of the G20 took the above criticism into account and convened Business 20 (B20) and Labour 20 (L20) Meetings in parallel with the G20 Summit. These meetings produced reports and a joint statement, of which the G20 took note in its Cannes Summit Declaration (‘B20 Final Report’, 2011, ‘B20 L20 Joint Statement’, 2011, ‘Cannes Summit Final Declaration’, 2011, paragraph 7). However, it is at least unclear, if not highly improbable, that these side events influenced significantly the outcome of the Summit. 20 Further, with regard to the use of experts from private institutions and non-governmental organizations (NGOs), the G20 provides the possibility to invite them on an ad hoc basis to G20 meetings ‘in order to exploit synergies in analysing selected topics and avoid overlap.’ (G-20, 2012) Similarly, domestic institutions can only indirectly exert some influence on the work of the G20 in holding their governments accountable in parliament. Evidently, this only holds true for democratic regimes where the legislature consisting of directly elected representatives of the people and functions as a genuine check on the executive branch. The notion of a concrete ‘multi-level partnership’ with sub-national institutions (above 2.1) is eminently absent in the functioning of the G20.

This being said, the G20 interacts closely with other international organizations –sometimes controversially bypassing the formal decision-making agenda of the latter(J. Wouters and S. Van Kerckhoven, 2011) – and primarily with IFIs. It is indeed the major task of the G20 to complement existing financial institutions pushing for necessary reforms (Patrick, 2010, p.38). It is not an exaggeration to suggest that IFIs handling the repercussions of the most recent financial crisis and endeavouring to set the conditions for the prevention of future crises are de facto subordinated to this informal political organ (Camdessus, 2011). Cooperation is close with the IMF, WTO and OECD, ‘as the potential to develop common positions on complex issues among G20 members can add political momentum to decision-making in other bodies.’ (Camdessus, 2011; see also J. Wouters and S. Van Kerckhoven, 2011) The G20 also works with the Financial Stability Board and the Basel Committee See ‘NGO Responses To The G20 Summit’ ( 2010) for a list of NGO responses to the G-20 Summit in Toronto, Canada.

The NGOs seem to be unsure what to make of the G20; as a result their reactions are more about future G20 agenda items or the gap left by the G8.

Amnesty International, Greenpeace, Oxfam, Care International and Save the Children joined forces to focus G-20 leaders attention on issues such as poverty and climate change.

In this regard, the ‘B20 L20 Joint Statement’ (2011) stressed the need to tackle unemployment and augment social protection. However, although agreeing on an Action Plan for Growth and Jobs as well as making extensive reference to these issues in the communiqué and the (‘Cannes Summit Final Declaration’, 2011), G20 leaders in reality addressed these indirectly within their fiscal and financial stability agenda and only in the medium-term at best.

The G20 and Global Economic Governance: Lessons from Multilevel European Governance?

on Banking Supervision so that international and domestic policy reforms can be progressed. This influence on behalf of the G20 has also been called ‘complementary effect’ (Martinez-Diaz and Woods, 2009). It is supposed to generate political support for the swift decision-making in international organizations, thereby pressurizing them to accelerate their initiatives (on the influence of the G20 on the IMF reform see Jan Wouters and Sven Van Kerckhoven, 2012). For example, a sound often heard in the corridors of the WTO is that for the Doha Development Agenda (DDA) to be completed, what is really needed is the political will to reach an agreement. The required technical work itself has often been completed years ago. The complementary effect of G20 should help the decision-making process move forward. However, precisely the story of the DDA indicates that there are limits to such complementary effect: at the Cannes Summit, after years of encouraging statements (‘The Pittsburgh Summit’, 2009, paragraph 48–49, ‘G20 Seoul Summit Declaration’, 2010, paragraph 9 where the G20 recognizes ‘that 2011 is a critical window of opportunity, albeit narrow’), the G20 had to admit that ‘it is clear that we will not complete the DDA if we continue to conduct negotiations as we have in the past.’ (‘Cannes Summit Final Declaration’, 2011, p.66).

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