If the West can no longer set or control the agenda of international policy discourse and action, what is the best global leadership grouping that can strike deals through process of bargaining and accommodation?
The global financial crisis brought home the necessity of reforming the international financial architecture where the perils are global, the risks are socialised internationally, but the benefits remain privatised.
The crisis was the product of serious shortcomings in domestic financial governance, which highlighted gaps in the global governance of international finance and capital for containing the contagion. The world now requires cross-border supervision of financial institutions, shared global standards for accounting and regulation, and international institutions to provide early warning systems for the world economy to contain the systemic contagion effects.
Which institutions can meet these needs?
The paradigmatic institutions at the ends of the spectrum of global governance are the Group of Eight (G8) and the UN. These institutions cannot solve problems like the global financial crisis.
A narrow club of self-selected countries, the G8 lacks legitimacy, but for some years at least, it reflected economic and geopolitical weight. No longer. The fiasco of the Copenhagen climate talks showed how the UN is struggling to remain relevant and effective. It is often missing in action on many major global issues. The prominent role of the BASIC countries (Brazil, South Africa, India and China) at the same conference underlined the waning ability of the status quo economic powers.
Indeed, on almost all pressing global challenges, the top table of decision-makers must include Asian giants China, India and Japan. Yet only one of them is a permanent member of the Security Council and only one a member of the G8. This is an indictment of both the UN and the G8 as key sites of global governance.
A new architecture of global governance must bring together the existing G8 and the globally and regionally powerful, including Australia.
The Group of 20 (G20) offers the best crossover point between legitimacy (based on inclusiveness and representation), effectiveness (where those who make the decisions have the greatest ability to implement or thwart them), and efficiency (which requires a compact executive decision-making body).
The purpose of the G20 would be to steer policy consensus and co-ordination and mobilise the political will required to drive reform and address global challenges while navigating the shifting global currents of power, wealth and influence.
Only the G20 leaders can provide the leadership to manage the transition from crisis to recovery. Systemic resilience requires international regulatory, surveillance, coordinating and sanctioning mechanisms.
What are the major structural challenges facing the G20, and what are the answers?
The G20’s major challenge is to retain the positive attributes of the existing major nodes of global governance while shedding their pathologies. The answer is to configure and operate the G20 as the hub of networked global governance.
The G20 must be a steering group for the world, not an exclusive club of, by, and for self-interested members. It must complement its core composition with a consultative network that reaches out to other governments as well as business, think tanks and civil society. Its governance model should be consult and cultivate, not command and control.
No forum can guarantee resolution of clashing interests, but an intimate yet representative group whose members get to know, understand and trust one another is likelier to succeed than the G8 or the UN.
The G20 should replace the G8 as the grouping that counts, with the UN serving as a universal validator rather than a creaky negotiating forum.
Ramesh Thakur is professor of political science at the University of Waterloo, Canada and adjunct professor at the Institute for Ethics, Governance and Law based at Griffith University, Australia.