John Kirton is Co-director of the G20 Research Group, University of Toronto, and author of the recently published book G20 Governance for a Globalized World. He talks here about the book and about his wider interest in the G20.
What contribution does this book make to scholarship and understanding the G20?
G20 Governance for a Globalized World offers a comprehensive, detailed, systematic account of what the G20 did, and why it did it, from its start in 1999 as a forum of finance ministers and central bank governors through to the end of its fourth summit, in Toronto in June 2010. The book offers a history of how each meeting was prepared and produced. It carefully charts the performance of each meeting according to six basic dimensions of global governance. And it creates and applies a causal model of “systemic hub governance” with six components to explain how the G20 has evolved and why it has performed in the particular way it has.
A vast amount has already been written on the G20. Indeed, the world is awash with those who criticize what the G20 does and tell it what to do. My book, in contrast is the first, full-scale account of how it works — what it has done and why. Only on the basis of such disciplined description and explanation can one base sensible prescriptions about how to build a better G20 and, through it, a better world.
Where did the inspiration for this book come from?
I had been researching and publishing articles and chapters on the G20 since 1999, when the Group of Seven and Group of Eight helped bring it to life. Since 2008 Madeline Koch and I have produced for each G20 summit a multi-coloured, popular but high-level “briefing book” to explain to the many stakeholders what that specific G20 summit is all about. By the start of 2010, it was clear that the G20 summit was here to stay and that it was coming to our hometown of Toronto that summer. It was time to give it a serious, scholarly book of its own.
More basically, the story of the G20 is central to the way global politics works in our intensely interconnected, complex, 21st-century world. That world began with the Asian-turned-global financial crisis of 1997–99. It went prime time with the American-turned-global financial crisis that began on September 15, 2008, the day that U.S. investment bank Lehman Brothers died. In response, all the multilateral organizations created to govern the post–World War Two order failed, led by the International Monetary Fund and the World Bank. It was thus necessary to create a new kind of international institution to govern the new world — first the G20 at the level of finance ministers and central bank governors in 1999 and then the G20 at the leaders’ level in 2008.
The G20 is a genuinely new kind of institution. It is not just another G group with a bigger number, with more countries contained as equals inside — twenty rather than just seven or eight powers. It is not just a group with members located in more places around the world than the old concerts of the G8, or the Permanent Five members of the United Nations Security Council, or the IMF’s Executive Board. Rather, membership in the G20 is based on systemic significance: countries that have enough connectivity as well as capability, so if they fail, they can bring the whole system down, or can ride to the rescue when others fail. Unlike the slow, static world of Westphalia in 1648, in a world of globalization, defined by the death of distance and the death of delay, it is connectivity as well as capability that counts. The G20 is the first international institution to be designed in recognition of that fundamental fact.
Did the G20’s performance decline or rise after its first few summits?
Conventional wisdom sees a decline in G20 performance since its first few summits in 2008 and 2009. But it is wrong in several ways.
First, the financial crisis never went away. It was just contained by the G20 before it could go global yet again. The Greek installment erupted just before the Toronto Summit in June 2010. Ireland went down on the eve of the Seoul Summit in November 2010. Greece and almost Italy exploded at the Cannes Summit in November 2011. And Spain’s banks went critical just before the Los Cabos Summit of June 2012. All these recent G20 summits had to cope with the successive installments of the continuing, compounding Euro-crisis. And they did — successfully containing the crises before they could go global, as had happened in 2008 and 1997. Thus the G20 has moved effectively from being a global crisis first responder to being a global crisis preventer, just as its inventors had hoped.
Second, well beyond crisis response and prevention, the G20 summit has produced some very big breakthroughs in its second phase. At the Seoul Summit, in the ultimate zero-sum game, leaders agreed to give the rapidly rising powers of the 21st century the enhanced voice and vote at the IMF that they richly deserved, at the expense of the shrinking European powers of old. They were following in the footsteps of the finance ministers’ G20, which had brokered the first stage of IMF reform in 2006–07. In both cases, the G20 succeeded where other international institutions, including the IMF itself, had failed. The same can be said for the Basel 3 standards on banking capital, leverage and liquidity, where the G20 succeeded at Seoul on an issue where many other bodies had long failed.
Third, in my book and subsequently, I systematically measure the performance of each G20 summit according to six basic dimensions of global governance: domestic political management, deliberation, direction setting, decision making, delivery and the development of global governance. The evidence overwhelmingly shows the G20’s rising performance, rather than a declining one.
Has anyone has been particularly important in shaping G20 governance?
The international system may now have a new structure in today’s globalized, post-Westphalian world. But it still takes an agent — an individual human being — to see the unfolding future and to design, amidst the competition, uncertainty, complexity and at times chaos, a new international institution tailored for that new world. It is no accident that I dedicated my book to the Right Honourable Paul Martin, former Canadian finance minister and prime minister, and his 1999 co-creator of the G20, Larry Summers, former Treasury Secretary of the United States. Paul had the vision. Larry was wise enough to listen, learn, advise, adjust and agree. Together they got it right. The same twenty members they chose in 1999 to respond to the crisis of the moment were still the right ones to respond to the bigger one ten years later, and remain the right ones to confront crises yet to come, from Cyprus on. To be sure, neither Paul nor Larry were present at the creation of the Washington Summit in November 2008 when G20 summit governance was born. But without them, it would not have been created there nor have been continued to this day.
What does the future hold for the G20?
At their third summit, in Pittsburgh in September 2009, in carefully chosen words the G20 leaders proudly proclaimed that henceforth the G20 would be permanent, primary forum for their own international economic cooperation. In the future it will increasingly become the primary forum for the cooperation not only of the G20 but also of the G192 beyond and indeed the world as a whole. It will become the primary forum for global cooperation on economics, social and political-security affairs, well beyond terrorism, where it hit a home run as early as 2001. And it could become not just the primary but the only such forum, once all its members become democratic polities, just like those of the G7 and G8 have been since its start.
To secure such a future, and to improve G20 performance in the meantime, several simple reforms are needed now. First, its leaders must return to full-time work, by holding two summits a year, as they did from 2008 to 2010, rather than just once a year as they have since. Second, they have to meet for longer than the less than 24-hour encounters that they have averaged thus far, so that their meeting lasts longer than the time it takes for them to fly to and from the event. And third, they should bring civil society into G20 governance in a bigger, broader way, starting with the creation of the academic twenty (A20) that they promised at their Seoul Summit, but have not yet produced. There are many ways that academics can contribute to G20 governance and through it to the global good.
G20 Governance for a Globalized World is published in Ashgate’s Global Finance series