My post last week on the dubious legitimacy/effectiveness of the G-20 has prompted a few responses. Let's take them in order, shall we?
Colin Bradford responds by arguing that I'm judging the G-20 strictly by its summitry, which is unfair:
The G-20 is not just a summit meeting of leaders. The G-20 has a very active track, which has been in existence since the Asian financial crisis in the late 1990s, of at least biannual meetings of finance ministers and central bank presidents. In addition, G-20 deputies and G-20 sherpas often meet to advance the agenda for the leaders. More than that, as a result of the activities in the finance ministers/central bank presidents track, there is now a network of senior officials continuously active not only in preparation for G-20 meetings, but also in dealing with crises and unexpected challenges.
What this means is that the new, more inclusive configuration of major economies from every region of the world that constitutes the G-20 is a process -- communicating, consulting, and even, on good days, coordinating among 20 countries, not eight. The G-20, in other words, is not an event.
Lest this sound too pie-in-the-sky, it should be pointed out that even former Bush administration sherapas are echoing Bradford's point.
As someone who worked on both G-20 and G-7 policy coordinaion while at the Treasury, I've experienced Bradford's point about the value of process first-hand. The thing is, the value-added of said process does require the occasional concrete outcome -- and the last 18 months have been underwhelming on that score. Bradford makes a valid point in observing that the kinds of policy coordination under debate in the G-20 are much more intrusive than anything that was talked about in the old G-7. Still, at some point you want to see some outcomes, and based on what happened over the weekend, I'm fairly confident in my pessimism.
CIGI's The Munk School of Global Affairs' Alan Alexandroff thinks I'm being too pessimistic because I'm relying on the international press coverage:
I and others have pointed out... the persistently negative international financial press – read this as the WSJ, the NYT and the FT at least. Differences are always played up; and agreements are generally characterized as inadequate. And it is here that Dan and I differ.
Fair enough, but I will say that my astringent evaluation of the G-20's recent activities are not only informed by press coverage, but also by off-the-record conversations I've had with both developed and developing-country participants in the G-20 process. [Oh!! Snap! Boom!!--ed. Yeah, that's right, I'm going all insider-y sources on you!] I'll be happy to hear feedback from those sherpas who think the process is working better than my "dead forum walking" characterization.
Art Stein argues that these blog exchanges are missing the key point:
The core issue, then, is whether for the G8 or the G20 disagreement and divergence over policy options are preferable to agreement, coordination, and a concerted response. There is a small literature among economists about whether macroeconomic policy coordination makes things better or worse. Implicit in Bradford’s argument is that disagreement and its policy consequences are not so bad and, implicitly, to be preferred to agreement between a less diverse set of actors. Perhaps. But what is the evidence? Is that true for every policy?
This is an excellent point, and one I made in All Politics Is Global -- sometimes noncooperation is actually the most efficient outcome. On macroeconomic policy coordination in particular, sometimes successful cooperation has brought about underwhelming policy consequences (see: Maastricht criteria).
That said, one could argue that part of the reason for the Great Recession was the absence of any serious effort to rein in mcroeconomic imbalances five years ago. Furthermore, Bretton Woods II is still persisting in the global economy. So, yes, I do think coordination in this case would be a good thing, and for a variety of excellebnt domesticf political reasons in the United States, China and Europe, it ain't happening.
Am I missing anything?