This paper analyzes the progress of the G20 by situating it in the general historical-institutional evolution of the contemporary global economy. Albeit in a primitive form, the G20 resembles post-WWII efforts to institutionalize the global economy under the rubric of the Bretton Woods system. Important differences remain, however. Most evident is the lack of a natural hegemon that can act as a the trailblazer and overcome the problems of collective action.
The second point emphasized in the paper is the role of the 2008 economic crisis in the evolution of the G20. Without a doubt the 2008 crisis was a catalyst for the emergence of a new economic platform that brought together world’s top 20 economies. Numerous analysts and policymakers have highlighted the fact that the scale and scope of the 2008 crisis compelled the leading economic actors (G8) to expand their exclusive club. Emerging economies were offered seats at the commanding heights of global economy, for they proved to be more resilient than the members of the G8 in the face of this protracted recession.
Thirdly, the paper discusses the power dynamics within the G20. Given the diverse size and nature of the economies that constitute the G20, the organization embodies significant opportunities as well as drawbacks. Compared to the exclusive league of the G8, which only included the advanced North American and European economies, the G20 certainly has more representative and democratic leverage. However, this greater representation also expands the overall agenda, making it harder to synchronize the priorities of all members and reach an accord.
Despite certain criticisms from the technocratic circles and financial sectors, the paper concludes with an optimistic note regarding the future of the G20. It states that the G20 has the potential to become a viable platform for economic collaboration. It is the most high-profile organization that brings together both advanced industrialized and developing countries on an equal footing, in an effort to tackle the pending issues of global economy. Moreover, the G20 might have some positive spill-over effects in international collaboration, as seen with the inception of the Business 20, Think 20 and Youth 20 summits. However, it would be prudent to maintain our caution. In the absence of a clear protagonist, the G20 can only achieve the goals to which its members collectively aspire.
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