G20 & Global Governance
In the wake of the 2008 global financial and economic crisis, a new
global governance structure emerged: the Group of Twenty (G20). During and
subsequent to the global crisis, the G20 emerged as a new coordinating body
among international governance institutions. The international institutions
created after the World War II and their governance structures are no longer
able to reflect the economic and political realities of today’s world. As the
first decade of the 21st century sketched to a close, policy-makers, the media
and academic research have been increasingly discussing the new role of the G20
in the world economy and in global governance. To begin with, does the informal
G20 process and mechanism offer legitimacy to overcome the growing challenges
of the globalization? Would G20’s enlarged leadership club be able to overcome
the inherent problems of the decision making process at the international
arena? How could multipolarity be translated into changes in authority and
influence within multilateral organizations like the G20? Last, but not least,
what kind of global economic governance is emerging at the beginning of the
second decade of the 21st century?
In the aftermath of the 2008-2009 global financial and economic crises,
the G20 was elevated to a leaders’ summit forum for international economic
cooperation. The rise of the G20 can be seen as an echo of the world’s current
multipolarity. The current global order confronts several challenges
simultaneously, including tackling numerous and increasingly complex issues
such as global financial and macroeconomic instability, climate change, rule of
law, public health, food security, sustainable development, trade protectionism
and several other issues that have been strengthened through globalization. As global challenges are interconnected, neither
G20 leaders are able to discuss only the international financial and economic
system without also discussing other issues, such as trade, sustainable
development and the reform of international institutions.
In recent decades, far-reaching shifts have transformed the world
economy and geo-politics at the global level. Emerging countries have grown
faster than developed countries in the last decade. This assumption has as a
result a shift in the distribution of the world’s income. Indeed, China is
currently the second largest economy in the world, behind the United States. As
the relative economic weight of the emerging nations exceed that of the
middle-ranking Group of Seven (G7) economies, the world economy has actually
shifted from “unipolarity” toward “multipolarity”. The rise of the G20 brings
challenges to the global governance system, as it is structurally and
procedurally in contrast with the earlier organizations of the post-World War
II.
The G20 model is structurally and procedurally in contrast with the
earlier organizations of the post-World War II, in particular the World Bank
(WB) and the International Monetary Fund (IMF). It is true that the G20 is
nothing more than a process and a mechanism for leaders to meet and agree on
coordinated policies and to provide guidance on demanding global challenges.
The rise of the G20 brings also challenges to the global governance system, as
it is a process and a mechanism with structure and procedures completely
different from the post-World War II current international institutions. For
the G20 to be a sustainable forum of international economic cooperation and
balanced growth, it must be legitimate. To be legitimate, it must be effective,
efficient and more representative than the G7 and the G8. On the assumption
that the world’s economy is in a transitional period, some reforms in the G20
may boost its role and legitimacy in a more multipolar world. It is true that
the G20’s coordination of institutions shows innovation and a new form of
global governance. In brief, the G20 may represent the new dynamic of global
politics. Despite the limitations that the G20 faces, it is currently the best
option for convening the challenges of complex global governance issues.
Ligia Maura Costa. Partner at Ligia Maura Costa, Advocacia, full
professor at FGV-EAESP and associated professor at Sciences Po. Paris.
